IMPLEMENTING RULES AND REGULATIONS OF EXECUTIVE ORDER NO. 153 – “AUTHORIZING THE UTILIZATION OF OFFSHORE AREAS NOT COVERED BY APPROVED MINING PERMITS AND CONTRACTS AS SOURCES OF…

Pursuant to Section 4 of Executive Order No. 153 “Authorizing the
Utilization of Offshore Areas Not Covered by Approved Mining Permits and
Contracts as Sources of Dredgefill Materials for Government Reclamation
Projects and for Other Purposes”, the following Implementing Rules and
Regulations are hereby promulgated:

SECTION 1.       Rationale .  It is in the public
interest to prioritize government projects to enhance the delivery of
services vital to the Government’s economic and social development
programs, and that it is very necessary to ensure adequate, low cost and
continuous supply of raw materials in order not to hamper or delay the
implementation of projects by the Government, or of large scale projects
that involve the interests of the State, such that sand, gravel and
other dredgefill materials from offshore submerged lands which are
highly suitable raw materials for Government Reclamation Projects and
other civil works related to government projects, may be developed and
utilized by the State.

SECTION 2.       Definition of Terms .  The following terms whether singular or plural shall mean:

a.      “Aggregates” refer to unconsolidated or
loose sand, gravel or boulder on the seafloor that is suited for
reclamation, concreting and other engineering works.

b.      “Borrow area” refers to an area that had been technically delineated or identified as source area of Seabed Quarry Resources.

c.      “DAO 96-37” as revised refers to the DENR
Administrative Order No. 96-37 of 1996 which revises and strengthens
the implementing rules and regulations of the Environmental Impact
System (EIS).

d.      “DAO 96-40” refers to the revised implementing rules and regulations of RA 7942 otherwise known as the Philippine Mining Act of 1995.

e       “Dredgefill Materials” refer to suitable materials taken from the seabed which may be used for reclamation without undergoing processing.

f.       “Environmental Compliance Certificate (ECC)”
refers to the document issued by the Secretary or the Regional
Executive Director certifying that based on the representations of the
proponent and the prepares (the proponent’s technical staff or the
competent professional group commissioned by the proponent to prepare
the environmental impact statement and other related documents), as
reviewed and validated by the Environmental Impact Assessment Review
Committee (EIARC), the proposed project or undertaking will not cause a
significant negative environmental impact; that the proponent has
complied with all the requirements of the Environmental Impact System;
and that the proponent is committed to implement its approved
Environmental Management Plan in the Environmental Impact Statement or
mitigation measures in the Initial Environmental Examination.

g.      “Environmental Impact Assessment (EIA)”
refers to the process of predicting the likely environmental
consequences of implementing projects or undertakings and designing the
appropriate preventive, mitigating and enhancement measures.

h.      “Environmental Protection and Enhancement Program (EPEP)”
refers to the comprehensive and strategic environmental management plan
for the life of the offshore mining project on which the EPEP’s are
based and implemented to achieve the environmental objectives, criteria
and commitments including protection and rehabilitation of the disturbed
environment.

i.       “Environmental User’s Fee” refers to the
fee to be collected from any Contractor or Permittee/Permit Holder who
makes use of the nearshore/offshore areas or its tributary rivers and
streams for the purpose of seabed quarrying/dredging operations.

j.       “Environmental Work Program (EnWP)”
refers to the comprehensive and strategic Coastal and Offshore
environmental management plan to achieve the environmental objectives,
criteria and commitments including protection and rehabilitation of the
disturbed environment during the exploration period.

k       “Exploration Work Program (ExWP)” refers
to the detailed outline of activities and financial plan to be followed
in searching or prospecting for marine mineral resources by geophysical,
geological, drilling and other means for the purposes of determining
their existence, extent, quality and quantity and the feasibility of
mining them for profit.

l.       “Government Reclamation Projects” refer
to reclamation of areas under water whether foreshore, offshore or
inland being or to be undertaken by the National Government by and
through the Public Estates Authority (PEA) or by any person or entity
authorized by the latter under a proper contract including reclamation
projects of any government units or agencies or corporations authorized
to reclaim under existing laws. All these reclamation projects are
undertaken with the approval of the President of the Philippines and in
consultation with PEA pursuant to P.D. 3-A and E.O. 525.

m.     “Government Seabed Quarry Permit” refers
to permit issued by the Secretary, upon the recommendation of the
Director, to a Qualified Person or Government Agency/Instrumentality to
utilize the areas not covered by approved mining permits/contracts,
including areas covered by pending mining rights applications, in
connection with Government Reclamation Projects and for other purposes.

n.      “Law of Seas” refers to the International
covenant approved by UNCLOS in 1982 that establishes the comprehensive
framework for the regulation of all ocean spaces and contains provisions
governing the limits of national jurisdiction over ocean spaces, access
to the seas, navigation, protection and preservation of marine
environment, and exploitation of its living and non-living resources,
scientific research and seabed mining.

o.      “Marine Habitat” refers to the natural
breeding, spawning and feeding places of marine organisms that are
ecologically important for their preservation and propagation such as
fish sanctuary, refuge and protected areas.

p.      “Mineral Reservations” refer to areas established and
proclaimed as such by the President upon recommendation of the Director
through the Secretary, including all submerged lands within the
Philippine Territory and Exclusive Economic Zone.

q.      “Mineral Resources” mean any concentration of ores, minerals and/rocks with proven or potential economic value.

r.       “Mining Operations” mean mining activities involving exploration, feasibility study, development and utilization of mineral resources.

s       “NIPAS Act (R.A. 7586)” refers to
Republic Act No. 7586 of 1992, an Act providing for the establishment
and management of the National Integrated Protected Areas System.

t.       “Qualified Person” means any Filipino
Citizen of legal age and with capacity to contract; or a corporation,
partnership, association or cooperative organized or authorized for the
purpose of engaging in mining, with technical and financial capability
to undertake mineral resources development, duly registered in
accordance with law, at least 60% of the capital of which is owned by
Filipino Citizens, with a minimum authorized capitalization of 10
Million pesos and a minimum paid up capital of 2.5 Million Pesos, with a
satisfactory environmental and community relations track record, if
applicable.

u.      “PD 1152” refers to the Philippine Environmental Code of 1977.

v.      “PD 1586” refers to the Presidential
Decree establishing an Environmental Impact System including
environmental management related measures and for other purposes.

w.     “R.A. 7942” refers to the Philippine
Mining Act of 1995, An act institutionalizing a new system of mineral
resources exploration, development, utilization and conservation.

x.      “Seabed Quarry Resources” refer to sand,
gravel, boulders and other aggregates or loose materials from the seabed
which may be used without undergoing processing: Provided, That such
seabed quarry resources do not contain metals or metallic constituents
and/or other valuable minerals in economically workable quantities:
Provided, further, That nonmetallic minerals such as, bull quartz,
quartz or silica, sand, sand and pebbles, precious and semiprecious
stones and other nonmetallic minerals that may later be discovered and
which the Director declares to be of economically workable quantities,
shall not be classified under the category of “Seabed Quarry Resources”.

y.      “Seabed Quarrying” means the process of extracting, removing and/or disposing quarry resources found in offshore areas.

z.      “Special Exploration Permit” a permit
issued by the Secretary, upon recommendation by the Director to an
applicant of a GSQP who has not conducted any exploration work, or to a
qualified Government Entity/Instrumentality that is going to conduct
exploration over the offshore/submerged land area.

aa.    “Winning Bidder/Awardee” refers to an
entity duly accredited under Philippine Laws who is financially and
technically capable to finance and undertake a reclamation project in
accordance will PEA approved guidelines, and is an awardee of a
government reclamation project.

All other terms which are not defined herein, shall have the same meaning as those in Sec. 5 of DENR-DAO 96-40.

SECTION 3.       Authority of DENR/NRDC.   The
Department of Environment and Natural Resources (DENR) shall be the
primary government agency responsible for the conservation, management,
development and proper use of the State’s marine mineral resources
including those in reservations, watershed areas and public domain.

Mineral exploration and development in existing Mineral Reservations
and such other reservations that may thereafter be established, shall
be undertaken by the DENR or through a Qualified Person in accordance
with the DAO 96-40. The right to explore, develop and utilize the
minerals therein shall be awarded by the Secretary of DENR under such
terms and conditions as recommended by the Director of the Mines and
Geosciences Bureau (MGB) and approved by the Secretary of the DENR.

The DENR shall issue the permits, to include those providing for the
exploration and utilization of Borrow Areas covered by Government
Reclamation Projects. Likewise, the DENR shall regularly monitor,
verify, validate and regulate all exploration and dredging activities of
Government Reclamation Projects, subject to all applicable valid and
existing rules and regulations.

The Natural Resources Development Corporation (NRDC), as the
corporate arm of the DENR, is responsible to help promote the
development of the country’s natural resources. NRDC, as a Government
Corporation, may conduct Mining Operation for the development of Mineral
Resources, including seabed quarrying in existing Mineral Reservations,
offshore areas and submerged lands within the Philippine Territory.

If applicable, the DENR, or through NRDC, shall collect the
management fees, service fees, environmental user’s fees and other fees
in connection with Government Reclamation Projects.

SECTION 4.       Authority of the MGB. 
The Mines and Geosciences Bureau (MGB) shall have the direct charge in
the administration and disposition of mineral lands and mineral
resources, and shall undertake geological, mining, metallurgical,
chemical and other researches as well as geological and exploration
surveys.

The management of Mineral Reservations established by law and those
declared by the President, and the manner of disposition of the minerals
found therein shall be under the jurisdiction of the MGB.

The MGB shall promulgate the necessary rules and regulations for the
implementation of the Philippine Mining Act (R.A. 7942), including the
procedural guidelines that shall govern offshore mining and seabed
quarrying.

SECTION 5.       Authority of PEA .  All Government
Reclamation Projects shall be undertaken by the Public Estates
Authority (PEA) or through a proper contract executed by it with any
person or entity: Provided, That reclamation projects of any National
Government Entity/Instrumentality authorized under its charter or other
existing laws shall be undertaken in consultation with and under the
supervision and regulation of PEA.

All Government Reclamation Projects shall be approved by the
President of the Philippines upon recommendation by the PEA. PEA shall
also be responsible for the identification of Borrow Areas as sources of
Dredgefill Materials for all Government Reclamation Projects, subject
to verification by DENR with respect to environmental concerns.

The PEA shall be responsible for the approval of bids or awards for
contracts of work for Government Reclamation Projects. The winning
bidder or Project Contractor/Awardee shall have priority for the use of
PEA-identified borrow areas not covered by approved mining
permit/contract including those offshore areas covered by pending mining
application, subject to the qualification requirements under R.A. 7942
regarding the right to explore, develop, utilize and dispose of mineral
resources.

SECTION 6.       Authority to Utilize Areas Not Covered by
Approved Mining Permits/Contracts as Borrow Areas for Government
Reclamation Projects.   The Government thru the DENR, NRDC and
PEA, has the right to utilize offshore areas not covered by approved
mining permits/contracts, including areas covered by pending mining
applications, as borrow areas for dredgefill materials for existing and
future Government Reclamation Projects.

Surveys, sampling, site selection, dredging, and related operations
in borrow areas shall be subject to monitoring by the DENR, for
compliance with R.A. 7942, DAO 96-40, PD 1152, PD 1586, DAO 96-37 as
revised, NIPAS Act (R.A. 8556), UN Law of the Seas and all their
implementing rules and regulations.

SECTION 7.       Authority to Utilize Areas Not Covered by
Approved Mining Permits/Contracts as Borrow Areas for Government
Projects Other than Government Reclamation Projects.   When
public interest so requires, to ensure adequate, low-cost and continuous
supply of raw materials, and in order not to hamper or delay the
implementation of its priority projects, the Government may exercise its
right to utilize the areas not covered by approved mining
permits/contracts, including areas covered by pending mining rights
applications. Provided, That the proposed permit/borrow area(s) shall be
first subjected to technical and environmental evaluation/verification
by the Bureau at the expense of the concerned Government
Entity/Instrumentality or a Qualified Project Contractor.

SECTION 8.       Scope of Seabed Quarrying.  The following areas are open to Seabed Quarrying applications:

a.         Offshore areas not covered by valid and existing mining rights;

b.         Offshore areas covered by expired/abandoned/cancelled offshore mining and quarrying rights;

In addition to the areas closed to Mining Applications (MA) under
Sec. 15(a) of DAO 96-40, the following offshore areas are also excluded
from seabed quarrying/dredging applications:

a.      Less than 1,500 meters (m) distance from the nearest
coastline (mean low tide level) of land or island(s) and where the
seabed depth is less than 30 m measured at mean sea level;

b.      Less than 1,000 m distance from the nearest boundary of a
declared National Integrated Protected Area System (NIPAS) component or
Protected Area such as marine park/reserve, fish sanctuary, etc.;

c.      Less than 500 m from all sides of production oil rigs and platforms, piers/ports, navigational sea lanes;

d.      Less than 2,000 m distance from both sides of submarine
cables, pipelines, bridges and other facilities/infrastructures, unless
written consent is obtained from the concerned party;

e.      Less than 1,000 m distance from coral reefs, shoals and
banks with endangered Marine Habitat as delineated by PAWB-DENR; and,

f.       Exclusion/buffer corridors of 15 seconds of geographic
coordinates, approximately measuring 450 m wide, as reckoned from the
boundary/perimeters of valid and existing Permit/Contract Mining Areas.

Areas closed to mining application, however, may be declared open by
the President, upon recommendation of the Secretary, for the expedient
delivery of priority government programs/projects of national interest
with due consideration to technical, environmental and social aspects.

SECTION 9.       Special Exploration Permit .  The
Secretary, upon recommendation by the Director, may issue a Special
Exploration Permit (SEP) to an applicant of a GSQP who has not conducted
any exploration work over the applied area or to a Qualified Government
Entity/Instrumentality that is going to conduct exploration over the
offshore/submerged land area: Provided, That the applicant has paid the
required filing and processing fees: Provided, further, That the
Applicant shall submit to the Bureau a location map on 1:50,000 scale,
an Exploration Work Program (ExWP) and an Environmental Work Program
(EnWP), proof of technical and financial capability, and a certificate
of environmental and community track records, if applicable.

The term of an SEP shall be for a period of two (2) years from date
of issuance thereof, renewable for like period: Provided, That no
renewal of Permit shall be allowed unless the Permittee has complied
with all the terms and conditions of the Permit and has not been found
guilty of violation of any provision of the Mining Act and these
implementing rules and regulations.

SECTION 10.    Mandatory Requirement of SEP.   Any
Qualified Person may apply for an SEP with the Bureau, through payment
of the required fees and submission of five (5) sets of the following
mandatory requirements:

a.      Location map/sketch plan of the proposed Permit Area
showing its geographic coordinates/meridional block(s) and boundaries in
relation to major environmental features and other projects using
National Mapping and Resource Information Authority (NAMRIA) topographic
map in scale of 1:50,000 duly prepared, signed and sealed by a
deputized Geodetic Engineer;

b.      Two-year Exploration Work Program (ExWP) (MGB Form No.
5-4) duly prepared, signed and sealed by a licensed Mining Engineer or
Geologist;

c.      When applicable, a satisfactory Environmental Management
record and Community Relations Record as determined by the Bureau in
consultation with the environmental Management Bureau and/or the
Department Regional Office. The detailed guidelines for the
determination and applicability of such records shall be specified by
the Secretary upon the recommendation of the Director;

d.      Environmental Work Program (EnWP) (MGB Form No. 16-1 or 16-1A) as provided for in Section 168 of DAO 96-40;

e.      Proof of Technical Competence including, among others,
curricula vitae and track records in exploration and environmental
management of the technical personnel who shall undertake the activities
in accordance with the submitted Exploration an Environmental Work
Programs;

f.       Proof of financial capability to undertake the Exploration and Environmental Work Programs such as the following:

1.      For individuals — Statement of assets and liabilities
duly sworn in accordance with existing laws, credit lines and income tax
return for the preceding year; and

2.      For corporations, partnerships, associations or
cooperatives — Latest Audited Financial Statement and where applicable,
Annual Report for the preceding year, credit lines, bank guarantees
and/or similar negotiable instruments.

g.      Photocopy of Articles of Incorporation/Partnership/
Association, By-Laws and Certificate of registration, duly certified by
the Securities and Exchange Commission (SEC) or concerned authorized
Government agency(ies), for corporations, partnership, associations or
cooperatives;

h.      A stipulation that the Permittee shall undertake
exploration work on the area as specified in its Agreement based on an
approved Work Program: Provided, That a negative variance of at least
twenty percent (20%) in the Work Program and corresponding expenditures
shall be subject to approval of the Director;

i.       The name, port of registry, tonnage, type and class of survey vessel(s)/platform(s): Provided,
That if a foreign vessel is to be used, the expected date of first
entry or appearance and final departure of the survey vessel shall be
provided and all the necessary clearances obtained;

j.       A certification from the Coast and Geodetic Survey
Department of the NAMRIA that the proposed Exploration work Program was
duly registered to provide update in the publication of “Notice to
Mariners” together with a list of safety measures to be regularly
undertaken to ensure the safety of navigation at sea and prevent
accident;

k.      An Agreement to:

•      Properly identify all installations, vessels and other
crafts involved in exploration recognizable to all vessels within
reasonable distance;
•      Notify the Bureau thirty (30) calendar days prior to the
intention to remove all scientific installations or equipment and
apparatus; and
•      Allow the Bureau’s authorized personnel, Philippine Coast
Guard and other authorized persons during reasonable hour to board the
vessel(s) while within the Exclusive Economic Zone.

l.       Other supporting papers as the Bureau may require or the applicant may submit.

If the applicant conducts or has conducted exploration in a foreign
county(ies), the DENR shall verify the relevant requirements through the
Philippines Embassy(ies) or Consulate(s) based in such county(ies).

SECTION 11.    Area Status/Clearance for SEP/GSQP Applications
.  The applicant of an SEP/GSQP in connection with a Government
Reclamation Project, shall secure area clearances for the proposed
borrow sites from the following agencies:

a.         Mines and geosciences Bureau (MGB);
b.         Public Estates Authority (PEA);
c.         Bureau of Fisheries & Aquatic Resources (BFAR) Office concerned;
d.         Department of Transportation and Communications (DOTC) office concerned;
e.         Local Government Unit(s) concerned if within municipal waters;
f.          Department of Energy (DOE); and,
g.         Other government agencies/entities concerned, if applicable.

Within fifteen (15) working days from the receipt of the SEP
Application, the Bureau shall check in the control maps if the area is
free/open for seabed quarrying applications. The Bureau shall also
transmit a copy of the location map/sketch plan of the applied area to
the pertinent Department sector(s) affected by the application for area
status, copy furnished the concerned municipality(ies)/city(ies) and
other relevant offices or agencies of the government for their
information. Upon notification of the applicant by the Bureau as to the
transmittal of said document to the concerned Department sector(s)
and/or Government agency(ies), it shall be the responsibility of the
same applicant to secure the necessary area status/consent/clearance
from said Department sector(s) and/or Government agency(ies). The
concerned Department sector(s)/government agency(ies) must submit the
status/consent/clearance on the proposed borrow area within thirty (30)
working days from receipt of the notice: Provided, that the concerned
Department sector(s)/government agency(ies) can not unreasonably deny
area clearance/consent without legal and/or technical basis. Any denial
on Area clearance by the concerned Department sector(s)/government
agency(ies) shall be appealable to the DENR Secretary/Office of the
President.

If the proposed Permit Area is open for Seabed Quarrying
applications, the Bureau shall give written notice to the applicant to
pay the corresponding Bureau clearance fee: Provided, That if a portion
of the area applied for is not open for quarrying/mining applications,
the Bureau shall, within fifteen (15) working days from receipt of said
written notice, exclude the same from the coverage of the SEP
application.

SECTION 12.    Postings of SEP/GSQP Applications.  
Within fifteen (15) working days from receipt of the necessary area
clearances, the Bureau shall issue to the applicant the Notice of
Application for SEP/GSQP for posting which shall be done within fifteen
(15) working days from receipt of the Notice. The Notice must contain,
among others, the name and complete address of the applicant, duration
of the agreement applied for, extent of operation to be undertaken, area
location, geographical coordinates/meridional block(s) of the proposed
Permit Area and location map/sketch plan with index map relative to
major environmental features and projects and to the nearest
municipalities.

The Bureau shall cause the posting for one (1) week of the Notice on
the bulletin boards of the Bureau and concerned Regional Office(s).

Within fifteen (15) calendar days from the last date of posting the
authorized officer(s) of the concerned office(s) shall issue a
certification(s) that the posting have been compiled. Any adverse claim,
protest or opposition shall be filed directly, within fifteen (15)
calendar days from the last date of posting with the Bureau for purposes
of its resolution by the Panel of Arbitrators pursuant to the
provisions of the Act and these implementing rules and regulations. Upon
final resolution of any adverse claim, protest or opposition, the Panel
of Arbitrators shall issue a Certification to that effect within five
(5) working days from the date of finality of resolution thereof. Where
no adverse claim, protest or opposition is filed after the lapse of the
period for filing the adverse claim, protest or opposition, the Panel of
Arbitrators shall likewise issue a Certification to that effect within
five (5) working days therefrom.

No SEP/GSQP shall be approved unless the requirements under this
Section are fully complied with and any adverse claim or dispute
involving rights to mining areas and concessionaires thereto is finally
resolved by the Panel of Arbitrators.

SECTION 13.    General Terms and Conditions of the SEP

a.   Conduct a preliminary ecological profiling to establish
pre-quarrying conditions and submit a preliminary environmental
examination of the area.

b.   The Permit shall be for the exclusive use and benefit of the
Permittee or its duly authorized representative and, shall under no
circumstances, be used by the Permittee for purposes other than
exploration.

c.   The term of the SEP shall be for a period of two (2) years
from date of issuance and registration thereof, renewable for a like
period. Renewal of the permit shall cause the relinquishment of at least
fifty percent (50%) of the permit area.

d.   The Permittee shall post a Financial Performance Surety of P1
million to cover any accidental damages of property, loss of lives, or
destruction of seabed during the conduct of the exploration work.

e.   The Permittee shall submit to the Bureau a separate report on
the relinquishment with a detailed geologic report of the relinquished
area incorporating therein borehole and sampling data, seismic
data/profiles and geophysical/oceanographic data accompanied by maps at a
scale of 1:50,000, results of analyses and corresponding expenditures,
among others. The minimum exploration expenditures for the remaining
area after relinquishment shall be based on the approved ExWP.

f.    The Permittee shall submit to the Bureau within thirty (30)
calendar days after the end of each semester a status report under oath
on its compliance with ExWP implementation and expenditures showing
discrepancies/deviations including the results of the survey, laboratory
reports, geological reports/maps subject to semiannual inspection and
verification by the Bureau at the expense of the Applicant: Provided,
That any negative deviation of at least twenty percent (20%) in the Work
Program and corresponding expenditures shall be subject to approval of
the Director.

g.   The Permittee shall submit to the Bureau within thirty (30)
calendar days from the end of six (6) months after the approval of the
EnWP and every six (6) months thereafter a status report on its
compliance with the said EnWP;

h.   In case of core sample drilling, the Permittee shall, upon
request of the Director, submit to the Bureau a quarter of the core
samples which shall be deposited in the Core Library for reference and
safekeeping;

i.    The Secretary or his/her duly authorized representative shall annually review the performance of the Permittee;

j.    Right of the Government to exercise visitorial powers over
the Permit Area, including the right to station representative(s)
thereat and at the Permittee’s survey platform;

k.   Exploration shall be carried out in accordance with the
United Nations Convention on the Law of the Sea (UNCLOS) and in a manner
that will not adversely affect the safety of navigation at sea and will
ensure accommodation of other marine activities, such as, fishing,
aquaculture, transportation, etc.;

l.    No exploration and/or extraction of minerals shall be undertaken within the areas closed to mining/quarrying;

m.  The Permit shall be subject to cancellation, revocation and termination as provided for in Section 20 hereof;

n.   The Permittee shall comply with pertinent provisions of the Mining Act and these implementing rules and regulations;

o.   Other terms and conditions which the Bureau/concerned Regional Office may deem appropriate.

SECTION 14.    Identification and Prioritization of Borrow Pit Areas for Government Reclamation Projects
.  The DENR may directly undertake the exploration, identification and
delineation of potential Borrow Areas as sources of dredgefill materials
for reclamation projects upon initiative or request for technical
assistance from PEA.

The PEA and its Contractor(s) may undertake the identification of such borrow areas, subject to the following requirements:

i.    Initially conduct exploration survey over selected offshore
areas under a Special Exploration Permit (SEP) to be issued by DENR
subject to compliance with the mandatory requirements under Section 11
hereof;

ii.   In the event that the PEA or its Project Contractor/Awardee
has undertaken the necessary exploration to the effect that there are
sufficient data for the identification and delineation of potential
borrow areas as validated by the DENR-MGB, PEA or its Project
Contractor/Awardee shall be exempted from securing an SEP and instead
secure a GSQP.

Areas already identified by PEA as Borrow Areas for Government
Reclamation Projects shall be prioritized for utilization in connection
with said reclamation projects. For this purpose, PEA shall submit to
DENR the list of identified Borrow areas, their technical descriptions
and location maps within two (2) months after the effectivity of these
implementing guidelines, subject to the verification/validation by the
DENR with respect to environmental concerns. Areas being utilized
already by PEA as borrow areas for reclamation projects prior to the
effectivity of E.O. 153 shall be governed by the provision of Section 25
hereof.

SECTION 15.    Government Seabed Quarry Operations
.  Seabed Quarrying may be undertaken by the DENR through its corporate
arm, the NRDC, or through a Qualified Person or Government
Entity/Instrumentality under any of the following modes:

a.      Government Seabed Quarry Permit (GSQP) — to be
issued to any Qualified Government Entity/Instrumentality or a Qualified
Project Contractor/Awardee of a government priority project for a
period co-terminus with the particular project;

b.      Government Dredging Permit (GDP) — to be issued
to any Qualified Person or Government Entity/Instrumentality for
projects that require declogging, clearing, widening and deepening of
flood control waterways, sealanes, ports and harbors as part of
maintenance dredging. Dredging activities related to government
reclamation projects are exempted from securing a GDP.

The DENR shall formulate the guidelines for issuance of a GDP.

In the case of a GSQP, the Secretary, upon the recommendation of the
Director, may issue a GSQP to a Qualified Person or Government
Agency/Instrumentality: Provided, That the proposed permit/borrow
area(s) shall be first subjected to technical and environmental
evaluation/verification by the Bureau at the expense of the concerned
Government Entity/Instrumentality or a Qualified Project
Contractor/Awardee.

In the case of Government Reclamation Projects under PEA which is a
Government Entity/Instrumentality mandated to administer and coordinate
all Government Reclamation Projects, the Secretary shall issue the GSQP
to the winning Bidder or Project Contractor/Awardee of a particular
Government Reclamation Project: Provided, That the said Project
Contractor/Awardee satisfies the requisites of a Qualified Person as
defined in DENR Memorandum Order No. 99-10: Provided, further, That a
Qualified Government Entity/Instrumentality may also be issued the GSQP
in lieu of the Project Contractor/Awardee which fails to meet the
requisites of a Qualified Person.

In the event that a Winning Bidder or Project Contractor/Awardee of a
Government Reclamation Project is deemed not to be a Qualified Person
by the DENR, the NRDC shall be issued the GSQP by the Secretary to
undertake the Seabed dredging/quarrying operations for the particular
Government Reclamation Project: Provided, That the NRDC may avail of the
services of a Qualified Service Contractor(s) or, enter into a
Memorandum of Agreement (MOA) with other Qualified Government
Entity(ies)/ Instrumentality(ies) to undertake the said Seabed
dredging/quarrying operations.

The coverage of the GSQP shall specifically be for DENR-evaluated
borrow areas, which shall be not more than 10,000 hectares and with a
term co-terminus with the particular Government Reclamation Project:
Provided, That the borrow areas shall, ipso facto, revert back to the
jurisdiction of DENR after the Government Reclamation Project: Provided,
further, That offshore areas which are not utilized for any existing or
proposed reclamation projects or programs of PEA or the concerned
Government Entity/Instrumentality shall remain within the jurisdiction
of the DENR.

SECTION 16.    Requirements for a GSQP Application.
  Subject to full compliance with the requirements of the SEP, a
Qualified Government Entity/Instrumentality or Qualified Project
Contractor/Awardee may apply with the Bureau for a GSQP (MGB Form No.
8-3c) upon payment of the required filing and processing fees, for the
extraction, removal and commercial disposition of Seabed Quarry
Resources: Provided, That the GSQP shall be co-terminus with the
project.

SECTION 17.    Area Clearance and Posting of GSQP Applications
.  The procedural guidelines on Area Clearance and Posting of GSQP
Applications shall be in accordance with those embodied in Sections 11
and 12, respectively, hereof.

SECTION 18.    General Terms and Conditions of the GSQP .  The following terms and conditions shall be incorporated in the GSQP:

a.      No extraction, removal and/or disposition of materials
shall likewise be allowed in offshore areas within one thousand five
hundred (1,500) meters distance from the coast, and within two hundred
(200) meters landward from the mean low tide level along the beach and
wherein the seabed depth is less than 30 meters as measured from the
mean sea level;

b.      The extraction, removal and/or disposition of materials
under the Permit shall be confined within the area specified therein,
the boundaries of which, according to the application, are established
on the ground with prominent marks;

c.      The Permit shall be for the exclusive use and benefit of
the Permittee and shall not be transferred or assigned without prior
written approval of the Director;

d.      The Permit Holder shall assume full responsibility and be
liable for damages to private and/or public property(ies) that may be
occasioned by its operations under the Permit;

e.      The Permit Holder shall post a Financial Performance
Surety of P1 Million to cover any accidental damages to property, the
loss of lives, or the destruction of the seabed during the conduct of
the dredging operations;

f.       The Permit Holder shall manage its operations in a
technically and environmentally responsible manner to achieve a safe,
non-polluting and self-sustaining post disturbance landform;

g.      The Permit Holder shall conduct its operations in
accordance with the provisions of the Mining Act and these implementing
rules and regulations;

h.      The Permit Holder shall not discriminate on the basis of
the gender and that the Permit Holder shall respect the right of women
workers to participate in policy and decision-making processes affecting
their rights and benefits;

i.       The Permit Holder shall conform to laws, rules and
regulations regarding, among others, labor, safety and health standards;

j.       The Permit Holder shall not interfere with the rights of other Permit Holders/Operators/Contractors/Awardees.

k.      The Permit Holder shall recognize and respect the rights,
customs and traditions of local communities, particularly Indigenous
Cultural Communities;

l.       The Permit Holder shall immediately stop digging and
extracting materials the moment man-made articles or artifacts are
found. It shall notify the Director of the National Museum of such
findings, in which case, the digging shall be under the supervision of
the National Museum until such artifacts are recovered;

m.     The Permit shall be subject to cancellation, revocation and termination as provided for in Section 20 hereof; and,

o.      Other terms and conditions that the Bureau may require.

SECTION 19.    Environmental Protection, Health and Safety
.  Applicants for, and Holders of Government Seabed Quarrying and/or
Dredging Permit(s), including Project Contractors/Awardees, shall be
governed by the provisions in Chapters XVI, XVII, and XVIII of DAO
96-40.

Every Project Contractor/Awardee/Permit Holder/Project
Sub-Contractor operating in the seabed areas shall abide by the
provisions of Sec. 181 of DAO 96-40: Provided, That the Monitoring Trust
Fund mentioned in Sec. 181 (a) of DAO 96-40 shall not be less than One
Hundred Thousand Pesos (P100,000.00).

A Permit Holder/Project Contractor/Awardee shall submit an annual
Safety and Health Program covering its area of operations within fifteen
(15) working days before the start of every calendar year, Provided,
That the Bureau shall have jurisdiction to conduct inspection of all
mining operations and installations: Provided, further, That the Bureau
shall undertake safety and health audit annually or as often as
necessary to assess the effectiveness of the Safety and Health Program.

SECTION 20.    Cancellation/Revocation/Termination of Permit. 
After due process, an SEP, GSQP or GDP may be cancelled/revoked/
terminated by the Secretary, upon recommendation of the Director, based
on any or all of the following grounds:

a.    Failure to comply with the terms and conditions of the Permit and/or ECC/EPEP/SHP;

b.    Failure to pay fees, royalties and taxes due the government for two (2) consecutive years without valid ground;

c.    Any misrepresentation in any statement made in the application or those made later in support thereof;

d.    Violation of any provision of the Mining Act and these implementing rules and regulations.

Upon cancellation of the Permit, the dredged areas shall be
rehabilitated immediately by the Permit Holder in accordance with his
approved EPEP and rehabilitation plan.

The foregoing provisions notwithstanding, cancellation/revocation/
termination of a GSQP shall not release the Permit Holder from any legal
and financial obligations it may have.

SECTION 21.    Taxes, Royalties and Fees .  Save in
cases provided by law, taxes and royalties shall be collected from the
Permittees/Permit Holders and/or Contractors/Subcontractors.

The DENR or thru NRDC is authorized to collect management, service,
environmental user’s and other fees from the Permittees/Permit Holders
and/or Contractors/Subcontractors.

A basic fee of Five Pesos (P5.00) per cubic meter of seabed
dredgefill material quarried/dredged by the contractor/Permit Holder
shall be collected by DENR/NRDC as Management/Service/Environmental
User’s Fees. The fees collected shall be shared among the DENR/NRDC, PEA
and the Local Government Units concerned(s) in the following manner:
40% to NRDC; 40% to PEA and 20% to Local Government Units concerned.

SECTION 22.    Inter-Agency Coordinating Committee.
  There shall be created a permanent Inter-Agency Coordinating
Committee composed of two (2) representatives each from the DENR, MGB
and PEA who shall promote cooperation, coordinate the agencies
activities and administer technical assistance concerning the
identification, selection and evaluation of borrow areas. Funds for the
said Committee shall be provided by PEA and NRDC.

SECTION 23.    Penal Provisions .  As per Sec. 102
of RA 7940, any person undertaking exploration work without the
necessary permit shall, upon conviction, be penalized by a fine of not
exceeding Fifty Thousand Pesos (P50,000.00).

As per Sec. 103 of RA 7942, any person extracting minerals and
disposing the same without a mining agreement, lease, permit, license,
or steals minerals and ores or the products thereof from mines or mills
or processing plants, shall, upon conviction, be imprisoned from six (6)
months to six (6) years or pay a fine from Ten Thousand Pesos
(P10,000.00) to Twenty Thousand Pesos (P20,000.00), or both, at the
discretion of the appropriate court. In addition, he shall be liable to
pay damages or compensation for the minerals removed, extracted, and
disposed of. In the case of associations, partnerships, or corporations,
the president and each of the directors thereof shall be responsible
for the acts committed by such association, partnership, or corporation.

SECTION 24.    Non-Impairment of Vested Rights . 
Borrow areas which are utilized for any existing and proposed
reclamation projects of PEA shall be within the jurisdiction of PEA.

All existing extraction permits issued, or valid contracts entered
into by the PEA involving borrow areas already surveyed, assessed,
quantified, and tested, as of the date of effectivity of E.O. 153 shall
remain valid, shall not be impaired, and shall be recognized by the
DENR-MGB: Provided, That Section 21 hereof pertaining to the collection
of fees shall apply.

SECTION 25.    Transitory Provision .  Upon signing
of the IRR, the MGB-DENR shall issue a permit to PEA for the continued
use of all its existing and identified borrow pits prior to issuance of
E.O. 153, for the following approved and on-going government reclamation
projects:

Manila Bay Reclamations	–	San Nicholas Shoal and Maragondon Borrow Pit Area
Cebu South Reclamation	–	Maasin Borrow Pit Area
North Cebu Reclamation	–	Malapascua Borrow Area

PEA and DENR shall jointly undertake the exploration of proposed
borrow areas for purposes of technical and environmental evaluation and
verification.

SECTION 26.    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 of these implementing rules and
regulations shall not be affected thereby.

SECTION 27.    Repealing and Amending Clause .  All
orders, rules and regulations inconsistent with or contrary to the
provisions of these implementing rules and regulations are hereby
repealed or modified accordingly.

SECTION 28.    Effectivity .  These implementing
rules and regulations shall take effect fifteen (15) days following its
complete publication in two newspapers of general circulation, and
fifteen (15) days after registration with the office of the National
Administrative Register.

Adopted: 09 Mar. 2000

APPROVED BY:

(SGD.) ANTONIO H. CERILLES
Secretary, Dept. of Environment and Natural Resources

(SGD.) FRISCO F. SAN JUAN
Chairman, Public Estates Authority