AMENDMENTS TO SECTION 16 (ANCESTRAL LANDS) AND TO CHAPTER XIV (DEVELOPMENT OF MINING COMMUNITIES, SCIENCES AND MINING TECHNOLOGY) OF DENR ADMINISTRATIVE ORDER NO. 96-40, AS AMEN…

Pursuant to Section 8 of Republic Act (R.A.) No. 7942, otherwise
known as the “Philippine Mining Act of 1995”, and Section 275
of DENR Administrative Order (D.A.O.) No. 96-40, entitled “Revised
Implementing Rules and Regulations of Republic Act No. 7942, otherwise
known as the ‘Philippine Mining Act of 1995”, and in line with the
policy of the Government to continuously provide for a responsive
regulatory framework, the following Sections of D.A.O. No. 96-40, as
amended, are hereby further amended for the guidance and compliance of
all concerned:

Section 1. Section 16 of the said D.A.O. is hereby amended to
read as follows:

“Section 16. Ancestral Lands

xxx

The implementation of this Section shall be in accordance with
Republic Act No. 8371, otherwise known as “The Indigenous Peoples Rights
Act of 1997” and other pertinent laws.”

Section 2. Sections 134 to 136-D of the said D.A.O. are hereby
further amended to read as follows:

“Section 134. Development of Mining Community, Mining
Technology and Geosciences, and Institutionalization of Public Awareness
and Education on Mining and Geosciences

a. The Contractor/Permit Holder/Lessee shall assist in the
development of the host and neighboring communities in accordance with
its Social Development and Management Program (SDMP) to promote the
general welfare of the inhabitants living therein. Host community refers
to the barangay(s) where the mining area is located, and neighboring
community refers to the barangay(s) adjacent to the host community;

b. The Contractor/Permit Holder/Lessee shall develop a program for
the advancement of mining technology and geosciences to build up
resources and mineral discoveries, improve operational efficiency and
resource recovery, and enhance environmental protection and mine safety;

c. The Contractor/Permit Holder/Lessee shall develop and
institutionalize an Information, Education and Communication (IEC)
Program for greater public awareness and understanding of responsible
mining and geosciences; and

d. The Contractor/Permit Holder/Lessee shall allot annually a
minimum of one and a half percent (1.50%) of the operating costs
necessary to implement Subsections (a), (b) and (c) of this Section.
Provided that of this amount, 1.125% (75% of 1.50%) shall be apportioned
to implement the SDMP in Subsection (a) hereof, 0.150% (10% of 1.50%)
for the implementation of Program for the Development of Mining
Technology and Geosciences in Subsection (b) hereof and 0.225% (15% of
1.50%) for the implementation of IEC Program in Subsection (c) hereof.
Provided, further, That any unspent amount and/or savings, for any given
year, allotted for the implementation of the various programs shall be
added to the succeeding year’s allotment and may be re-programmed after
consultations with host and neighboring communities.

For the purpose of this D.A.O., the term Operating Cost shall mean
the specific costs of producing a saleable product on a commercial scale
incurred in the calculation of the net income before tax, as confirmed
by the Bureau/Regional Office. This shall include all costs and
expenditures related to mining/extraction and treatment/processing
(inclusive of depreciation, depletion and amortization), exploration
activities during operation stage, power, maintenance, administration,
excise tax, royalties, transport and marketing, and annual
progressive/environmental management.

The Contractor/Permit Holder/Lessee shall submit to the Regional
Office concerned a sworn statement of its previous year’s operating
costs within sixty (60) days after the end of each calendar year as
basis for the implementation of Subsections (a), (b), and (c) hereof in
the case of an operating mine: Provided, That, in the case of new mining
operations, the basis for the initial SDMP implementation shall be the
operating costs estimates contained in the approved Mining Project
Feasibility Study: Provided, further, That the expenditures for the
implementation of Subsections (a), (b), and (c) hereof shall not be
credited to the royalty payment for Indigenous Peoples/Indigenous
Cultural Communities per Section 16 hereof.

Section 135. Credited Activities or Expenditures

Programs/Projects/Activities (P/P/As) under the following areas of
concern shall be considered as creditable activities or expenditures:

a. For the development of the host and neighboring communities:

1. Human Resource Development and Institutional Building – P/P/As
geared towards strengthening existing local institutions, fostering the
creation of new community organizations, and providing
marginalized/disadvantaged groups the opportunity to participate fully
in the development of their communities. These shall include, but not
limited to, capacity- and capability-building on project management,
organizational development, entrepreneurship, and skills
development/training;

2. Enterprise Development and Networking – P/P/As geared towards
the development and promotion of economically viable community
enterprises by providing members of the community access to capital and
thereby enhance and stimulate existing livelihood industries and other
income generating activities, help create new ones, and develop market
diversification. These shall include income generating activities, such
as animal husbandry, provision of farm implements, establishment of
small/micro-businesses, such as household-based food processing,
horticulture and agronomy, traditional handicrafts, support to small
local businesses through preferential procurement of goods and services
from local sources, as well as cooperative development, market linkaging
and networking, among others;

3. Assistance to Infrastructure Development and Support Services –
P/P/As geared towards stimulating and facilitating other forms of
economic activity, such as the development, construction, improvement,
and/or maintenance of farm-to-market roads, water systems, post-harvest
facilities, bridges, and electric power, among others;

4. Access to Education and Education Support Programs – P/P/As
geared towards providing educational opportunities to members of the
community, including scholarships from primary to tertiary education,
technical/vocational education, provision of apprenticeship programs,
construction/repair/improvement of school buildings and related
facilities, provision of school furniture and fixtures, and subsidy to
teachers, among others;

5. Access to Health Services, Health Facilities and Health
Professionals – P/P/As geared towards achieving overall improvement in
the living conditions and health of the host and neighboring
communities, such as the provision of health facilities, access to
health services, medicines and professionals, health education and
preventive measures, training of health paraprofessionals,
maternal-child health care and family planning, provision of health
insurance, establishment of nutrition and immunization programs, access
to clean and potable water, and provision of waste and sewage disposal
facilities, among others;

6. Protection and Respect of Socio-Cultural Values – P/P/As geared
towards safeguarding the existing socio-cultural values of the host and
neighboring communities to promote social cohesion and cultural
awareness, and to instill community pride; and

7. Use of facilities/services within the mine camp or plant site,
such as hospitals, schools, among others, by members of the host and
neighboring communities, the expenditures of which shall be apportioned
pro-rata according to the number of people from said communities
accommodated in such facilities.

Provided, That expenditures for P/P/As for the mine camp accruing to
the Contractors’/Permit Holders’/Lessees’ employees and their families
shall not be included in the computation of the cost of the SDMP.

b. For the development of mining technology and geosciences:

1. Basic and applied research on mining technology, geosciences,
and related subjects such as, but not limited to, the socioeconomics
related to mining operations, environmental protection, mineral
economics, among others;

2. Advanced studies, related to mining which are conducted by
qualified researchers who are not employees of the mine, following
current guidelines by the Department of Science and Technology,
including the cost of publication thereof in refereed technical journals
or monographs accessible to the local scientific community;

3. Expenditures for scholars, fellows and trainees, including
grants for dissertations, on mining technology and geosciences and
related subjects; and

4. Expenditures on equipment and capital outlay as assistance for
research and/or educational institutions which serve as a venue for
developing mining technology and geosciences.

Provided, further, That the Provincial and Municipal Governments
concerned shall be consulted in the determination of beneficiaries of
scholarships and trainings, as well as the subject of researches and
training programs.

c. For the promotion of public awareness and education on mining
technology and geosciences:

1. Establishment/enhancement/maintenance of information and
publicity centers where stakeholders can access information on the
performance of a mining project;

2. Publication of IEC materials on social environmental and other
issues/ concerns relative to mineral resources development and
responsible mining operations;

3. Expenditures for continuing public awareness and education
campaigns such as radio and web-based broadcasts, publications, and
other forms of mass communication, on mining-related information, issues
and concerns; and

4. Expenditures on equipment and capital outlay as assistance to
the institutionalization of public awareness and education on mining
technology and geosciences.

Section 136. Duties and Responsibilities of the
Contractor/Permit Holder/ Lessee on the Development of the Host and
Neighboring Communities

a. Coordinate with proper authorities in the provision and
implementation of development plans for the host and neighboring
communities;

b. Promote community service and volunteerism by encouraging members
of the host and neighboring communities to impart time, knowledge,
skills and talents in the development and implementation of community
P/P/As as a way of instilling community ownership and achieving a more
cohesive and stronger community;

c. Help create self-sustaining income generating activities such as,
but not limited to, reforestation and production of goods and services
needed by the mine and the community. Where traditional
self-sustaining income generating activities are identified to be
present within the host and/or neighboring communities, the
Contractor/Permit Holder/ Lessee shall work with such communities
towards the preservation and/or enhancement of such activities; and,

d. Give preference to qualified Filipino citizens in the hiring of
personnel for its mining operations, the majority of which shall
originate according to priority from the host and neighboring
communities, the host municipality and province where mine is located:
Provided, That the Contractor/Permit Holder/Lessee shall organize, at
its own expense, skills enhancement programs in the absence of the
needed skills: Provided, further, That it shall give its firm commitment
to skills re-formation and entrepreneurship development for people in
the mining communities as an integral part of the mine closure process.

Section 136-A. Social Development and Management Program
and Community Development Program

All Contractors/Permit Holders/Lessees shall prepare an SDMP, in
consultation and in partnership with the host and neighboring
communities. The SDMP shall be actively promoted and shall cover and
include all P/P/As towards enhancing the development of the host and
neighboring communities in accordance with Sections 135 and 136 hereof.
To meet the changing needs and demands of the communities, the
Contractor/Permit Holder/Lessee engaged in mining operations shall
submit every five (5) years an SDMP to the Regional Office for approval
as provided for in Section 136-B hereof.

In the case of a holder of an Exploration Permit or a Mineral
Production Sharing Agreement or Financial or Technical Assistance
Agreement in the Exploration Stage, the Permittee/Contractor shall
develop and implement a Community Development Program (CDP) which
implementation shall be supported by a fund equivalent to a minimum of
ten percent (10.0%) of the budget of the approved two (2)-year
Exploration Work Program: Provided, That the CDP shall be developed in
consultation and in partnership with the host communities within the
area subject of active exploration activities and may include P/P/As
identified in, but not limited to, Subsection (a) of Section 135 hereof:
Provided, further, That the CDP shall be submitted to the Regional
Office concerned, for approval, within six (6) months upon registration
of the approved Exploration Permit.

The second (2^nd) or succeeding CDP shall be submitted to the
Regional Office concerned not later than 30 days from the completion of
the preceding CDP.

Section 136-B. Processing and Approval of the SDMP, and the
Programs on Development of Mining Technology and Geosciences, IEC and
CDP

The Contractor/Permit Holder/Lessee shall submit at least three (3)
legible copies and a complete electronic file of the five (5)-year SDMP
and the Programs on Development of Mining Technology and Geosciences
and on IEC to the Regional Office concerned.

Within five (5) days upon receipt thereof, the Regional Office
concerned shall conduct an evaluation of the submitted programs as to
its form, substance, and completeness. Additional documents or
information which are deemed necessary to supplement the programs may be
required by the Regional Office concerned.

A technical conference shall be held among the Contractor/Permit
Holder/Lessee, Regional Office concerned and appropriate experts for the
final evaluation of the programs. During the technical conference, the
Contractor/Permit Holder/Lessee shall present the highlights of its
programs, while the Regional Office concerned and the concerned experts
shall present their comments on the submitted programs. If the proposed
programs conform to the standards, these shall be duly approved by the
Regional Office concerned through the issuance of a Certificate of
Approval. The Regional Office shall provide the Bureau with a copy each
of the approved SDMP and Programs on the Development of Mining
Technology and Geosciences and on IEC, and the Certificates of Approval,
within seven (7) days upon approval.

If the Programs require some revisions/additional information, the
Contractor/Permit Holder/Lessee shall be required to address the
deficiencies within ten (10) days from the date of the technical
conference. Should the Contractor/Permit Holder/ Lessee fail to address
the deficiencies within the prescribed period, the Programs shall be
returned to the proponent for revision/rectification and resubmission.

Within thirty (30) days from the approval of the SDMP, the
Contractor/Permit Holder/Lessee shall enter into a Memorandum of
Agreement (MOA) with the host and neighboring communities as represented
by the Barangay(s)/Municipality(ies) concerned and shall register the
same in the Regional Office concerned, to ensure the implementation of
the various P/P/As.

The Contractor/Permit Holder/Lessee shall provide each of the Local
Government Units concerned and the host and neighboring communities
with a copy each of the approved programs within five (5) days after the
registration of the approved Contract/Permit or five (5) days after
receipt of the order approving the Declaration of Mining Project
Feasibility, as the case may be.

The succeeding 5-year SDMP and the Programs on Development of
Mining Technology and Geosciences and on IEC shall be submitted to the
Regional Office concerned not later than thirty (30) days from the
completion of the preceding five (5)-year Programs.

A copy each of the succeeding approved Programs shall be provided
to the Local Government Units concerned and the host and neighboring
communities within five (5) days from its approval.

Based on the approved Programs and for effective implementation of
the same, Annual Programs shall be submitted, at least thirty (30) days
prior to the beginning of every calendar year, to the Regional Office
concerned, for approval and implementation the following year. The
Regional Office concerned shall furnish the Bureau with the approved
annual Programs within seven (7) days from its approval.

A copy of the CDP is a mandatory requirement for the acceptance of
the following applications:

1. Exploration Permit renewal

2. Mineral Production Sharing Agreement – renewal of Exploration
Period

3. Financial or Technical Assistance Agreement – renewal of the
Exploration Period or application for Pre-Feasibility/Feasibility Period

Provided, That an approved CDP is required prior to commencement of
the implementation of the approved Exploration Work Program under the
renewed Exploration Permit/ Exploration Period or approved
Pre-Feasibility/Feasibility Period.

The Bureau shall retain oversight function over the evaluation,
approval and implementation of the Programs.

Detailed guidelines in the preparation of and on compliance with
the different Programs shall be prescribed by the Secretary through the
Director.

Section 136-C. Organization of Community Relations Office

The Contractor/Permit Holder/Lessee shall incorporate in its
organizational structure a Community Relations Office (CRO) that is
primarily tasked to marshal the resources needed and serves as
facilitator/coordinator for the successful implementation of the SDMP,
and the Programs on Development of Mining Technology and Geosciences and
on IEC. A Community Relations Officer (ComRel) shall head the CRO and
shall be reporting directly to the highest company on-site official.
The ComRel must be a graduate of any social science course, or any
person with experience and training on community development work and,
preferably, with strong knowledge of the local culture.

During the Exploration Stage, the Permittee/Contractor may hire
and/or designate community development professional(s) and/or community
liaison officer(s) to ensure the effective implementation of the CDP.

Section 136-D. Monitoring and Auditing of Annual SDMP and
Annual Programs on Development of Mining Technology and Geosciences and
on IEC and CDP

Monthly internal monitoring of the Annual SDMP (ASDMP) shall be
done jointly by the CRO and representatives of the host and neighboring
communities to determine
the level of implementation of the P/P/As in accordance with the
ASDMP.

The CRO shall provide the Regional Office with the quarterly
reports of accomplishments on the implementation of ASDMP, Annual
Program on the Development of Mining Technology and Geosciences and
Annual Program on IEC. It shall likewise prepare and submit annual
report to the Regional Office, copy furnished the Bureau.

The Regional Office shall conduct semi-annual monitoring of the
implementation of the approved programs and submit its monitoring
report(s) to the Bureau as basis for periodic audits.

An annual status report on the implementation of the CDP shall be
submitted to the Regional Office concerned, subject to periodic
monitoring/audit.”

Section 3. Section 136-E of the same D.A.O. is hereby
retitled to read as follows:

“Section 136-E. Review and Evaluation of the Approved
Programs

On the initiative of the Bureau, Regional Office concerned,
Contractor/Permit Holder/Lessee and/or the host and neighboring
communities, the approved SDMP and Programs on Development of Mining and
Mineral Processing Technologies and Geosciences and on IEC can be
reviewed and/or revised during their period of coverage to account for
changes in the nature and cost of activities: Provided, That prior to
the end of the five-year term of the approved Programs, they shall be
subject to performance review by the Bureau to determine and measure the
impact of the various Programs, the results of which shall serve as an
integral guide in the preparation of the new Programs.”

Section 4. Section 136-F is hereby added to contain the provisions of
the former Section 136-E of the same D.A.O. with amendments, to read as
follows:

“Section 136-F. Penalties

Contractor/Permit Holder/Lessee found not implementing its approved
SDMP and Programs on Development of Mining Technology and Geosciences
and on IEC, or operating without such approved Programs shall, on the
first offense, be liable to a fine not exceeding Five Thousand Pesos
(P5,000.00). A succeeding offense shall be sufficient ground to suspend
its mining/milling operations in the mining areas, in addition to a fine
not exceeding Five Thousand Pesos (P5,000.00).

Provided, further, That approved Programs shall be deemed revoked
if the mining operation of the Contractor/Permit Holder/Lessee is
suspended or stopped for a period of at least two (2) consecutive
years.”

Section 5. Section 137 of the same D.A.O. is hereby amended
to read as follows:

“Section 137. Contribution to the Advancement of Mining
Technology and Geosciences

As part of its obligations under the mining contract/permit, the
Contractor/ Permit Holder/Lessee shall have the following
responsibilities as contribution to the advancement of mining technology
and geosciences:

a. In the course of its operations, produce geological,
geophysical, geochemical and other types of maps and reports that are
appropriate in scale and which in format and substance are consistent
with the internationally accepted standards and practices. Such maps
shall be made available to the scientific community in the most
convenient and cost effective forms, subject to the condition that the
Contractor/Permit Holder/Lessee may delay release of the said
information for a reasonable period of time which shall not exceed three
(3) years;

b. Systematically keep the data generated from the Contract/Mining
Area such as cores, assays and other related information, including
economic and financial, and may make them accessible to students,
researchers and other persons responsible for developing mining
technology and geosciences subject to the condition that the
Contractor/Permit Holder/Lessee may delay release of data to the science
and technology community within a reasonable period of time which shall
not exceed three (3) years; and

c. Replicate the data, maps and reports cited in Paragraphs (a) and
(b) and furnish the Bureau for archiving and systematic safekeeping
which shall be made available to the science and technology community
for conducting research and for undertaking other activities which
contribute to the development of mining technology and geosciences and
the corresponding manpower training and development: Provided, That the
release of such data, maps, and the like to the science and technology
community shall be similarly constrained in accordance with Paragraphs
(a) and (b) above.”

Section 6. Section 139 of the same D.A.O. is hereby amended
to read as follows:

“Section 139. Transfer of Social Assets and Services

The Contractor/Permit Holder/Lessee shall, within one (1) year from
the abandonment, cancellation or termination of the
Agreement/Permit/Lease and consistent with the social aspect of the
Final Mine Rehabilitation and/or Decommissioning Plan, remove all
improvements deemed no longer socially usable after consultation with
Local Government Unit(s)/community(ies) concerned, on the mining
premises found on public land(s). Otherwise, all the social
infrastructure and facilities shall be turned over or donated tax-free
to the proper Government authorities, national or local, to ensure that
said infrastructure and facilities are continuously maintained and
utilized by the host and neighboring communities.”

Section 7. Separability Clause – If any clause, sentence,
section or provision of these implementing rules and regulations is held
or declared to be unconstitutional or invalid by a competent court, the
remaining parts hereof shall not be affected thereby.

Section 8. Repealing and Amending Clause – All existing
orders, rules and regulations, memorandum circulars or directives or
part(s) thereof inconsistent with or contrary to the provisions of this
Administrative Order are hereby repealed, amended and/or modified
accordingly. The Secretary shall furthermore have the authority, inter
alia, to amend, revise, add to, clarify, supplement, interpret, delete,
or make exemptions (to the extent not contrary to the provisions of the
Act) to any provision of these implementing rules and regulations with
the end in view of ensuring that the Act is appropriately implemented
and enforced.

Section 9. Effectivity – This Administrative Order shall
take effect fifteen (15) days after its complete publication in a
newspaper of general circulation and fifteen (15) days after
registration with the Office of the National Administrative Register.

Adopted: 05 May 2010

(SGD.) HORACIO C. RAMOS
Secretary