Presidential Decree No. 1385 (PD 1385) — Amending Certain Sections of Presidential Decree No. 463, Otherwise Known as "The Mineral Resources Development Decree of 1974".
WHEREAS, the speedy exploration, development and
exploitation of our mineral resources is a matter of national concern;
WHEREAS, in the implementation of Presidential Decree No.
463, the implementing agencies concerned have noted that certain provisions
thereof are not in keeping with the objectives for which the said Decree was
promulgated; and
WHEREAS, there is a need to amend the said provisions to
attain optimum development of the mineral resources and minimize the impact of
mineral resources development to the national economy;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree the amendment of Presidential Decree No. 463, as follows:
SECTION 1. Section 2 of Presidential Decree No. 463 is
hereby amended by amending paragraphs (f) and (o) thereof and by adding a new
paragraphs (g) after paragraph (p) thereof, to read as follows:
"SEC. 2. Definition of Terms. As used in and for
the purpose of this Decree, the following terms, whether in the singular or
plural, unless the context indicates otherwise, shall have the following
meanings:
"x x x x x
"(f) "Minerals" means all naturally occuring inorganic substances in solid,
liquid, or any intermediate state. Soil which supports organic life, sand and
gravel guano, coal, patroleum, geothermal energy and natural gas are included in
this term but are governed by special laws or by regulations promulgated by the
Secretary.
"(o) "Lessee" means a qualified person issued a mining lease contract by the
Secretary.
"(g) "Claimowner" means a qualified person who has registered mining claims
under previous mining laws or under the Decree."
SEC. 2. Section 6 of the same Decree is hereby amended to
read as follows:
"SEC. 6. Establishment and Reversion of Mineral
Reservations. Upon the recommendation of the Secretary, based on the report
submitted by the Director, the President may set aside and establish an area of
the public domain as a mineral reservation and prescribe the terms and condition
for its disposition and operation, or may alter or modify the boundaries thereof
from time to time or revert any mineral reservation to the public domain without
prejudice to any prior subsisting rights.
"When lands within reservations which have been established for purposes
other than mining are found more valuable for their mineral contents, they may,
upon recommendation of the Secretary, be withdrawn from such reservation by the
President and established as a mineral reservation."
SEC. 3. Section 8 of the same Decree is hereby amended to
read as follows:
"SEC. 8. Prospecting, Exploration and Exploitation of
Minerals in Reserved Lands. Prospecting, exploration and exploitation of
minerals in reserved lands other than mineral reservation may be undertaken by
the proper Government agencies. In the event that the said agencies cannot
undertake the prospecting exploration and exploitation of minerals in reserved
lands, qualified persons may be permitted to undertake such prospecting,
exploration and exploitation, in accordance with the rules and regulations
promulgated by the Secretary. The right to exploit the minerals found therein
shall be awarded by the President under such terms and conditions as recommended
by the Director end approved by the Secretary: Provided, That the party
who undertook prospecting, exploration and exploitation of said area shall be
given priority.
"Notwithstanding the provisions of the preceding paragraph, a special permit
may be issued by the Director to the exploration permittee to extract, remove
and dispose of minerals in limited quantities as verified by the Bureau of
Mines."
SEC. 4. Section 9 of the same Decree is hereby amended to
read as follows:
"SEC. 9. Exploration and Exploitation of Minerals in
Mineral Reservations. The Management of mineral reservations established
under Section 6 hereof and the manner of the disposition of the minerals found
therein shall be under the jurisdiction of the Mineral Reservation Development
Board. Mineral reservations are closed to mining location from the time of their
establishment."
SEC. 5. Section 11 of the same decree is hereby amended to
read as follows:
"SEC. 11. Location in Public and Private Lands. A
qualified person may locate mining claims within public and private lands.
However, a person may locate and register mining claims for another:
Provided, That the former is first authorized by the latter by means of
a public instrument duly registered with the Mines Regional Officer concerned
before the registration of such mining claims."
SEC. 6. Section 12 of the same decree is hereby amended to
read as follows:
"SEC. 12. Entry into Public and Private Lands.
Subject to the provisions of Presidential Decree No. 512, a qualified person
and/or his authorized representative shall not be prevented from entry into
private lands by surface owners and/or occupants thereof when prospecting,
exploring and exploiting for minerals therein. No prospecting, exploration and
exploitation of mineral resources inside a forest concession shall be allowed
unless proper notice has been served upon the licensee
thereof."
SEC. 7. Section 13 of the same decree is hereby amended to
read as follows:
"SEC. 13. Areas Closed to Mining Location. No
prospecting and exploration shall be allowed:
"(a) In military or other Government reservations except when authorized by
the proper Government agency concerned;
"(b) In mineral reservations;
"(c) In lands covered by valid and subsisting mining claims located, and
leases acquired, under previous mining laws and in accordance with the
provisions of this Decree; and
"(d) Near or under buildings, cemeteries, bridges, highways, waterways,
railroads, reservoirs, dams or any other public or private works unless
otherwise authorized by the agencies concerned.
"The Secretary shall, upon recommendation of the Director, prescribe in
detail the regulations implementing the various restrictions under this
Section.
x x x x x"
SEC. 8. Section 15 of the same Decree is hereby amended to
read as follows:
"SEC. 15. Declaration of Location of a Mining
Claim. The declaration of location covering the meridional block or
fraction thereof constituting the mining claim shall be filed with the Mining
Regional Officer concerned in a form prescribed for the
purpose."
SEC. 9. Section 16 of the same decree is hereby amended to
read as follows:
"SEC. 16. Recording of Declaration of Location
Ministerial. Upon payment of the prescribed fees and compliance with the
requirements under existing rules and regulations on the matter, recording of a
duly accomplished and notarized declaration of location of a mining claim shall
be ministerial on the part of the Mining Recorder concerned."
SEC. 10. Section 21 of the same decree is hereby amended to
read as follows:
"SEC. 21. Voluntary Abandonment of a Mining Claim.
A claimowner may, before the grant of the mining lease contract, totally or
partially abandon his mining claim by filing with the Mines Regional Officer an
affidavit of abandonment. From the date of the recording of such affidavit all
his rights and interests in such claim or to the portion thereof abandoned shall
be deemed to have ceased: Provided, That in case of partial abandonment
in any one claim, the area so retained shall be contiguous and the same shall be
duly surveyed and the survey returns submitted within one (1) year from date of
abandonment: Provided, Further, That the original locator or his
successors or assigns shall not be allowed to relocate directly or indirectly
the abandoned area."
SEC. 11. Section 22 of the same Decree is hereby amended to
read as follows:
"SEC. 22. Creation of Positions of Mines Regional
Recorders. The Mines Regional Officer shall be responsible for the proper
recording of mining instruments and documents, and to ensure effective and
proper recording of the same, the positions of mines regional recorders are
hereby created in every mining region."
SEC. 12. Section 23 of the same Decree is hereby amended to
read as follows:
"SEC. 23. Mining Regions. The existing mining
regions with offices at Baguio City, Metro Manila, Daet, Cebu City and Surigao
City shall be retained. Upon the recommendation of the Director, the Secretary
shall establish other mining regions as the need for them arises, the boundaries
of which shall so far as practicable coincide with the boundaries of the
corresponding provisions: Provided, However, That mineral districts may
be established by the Secretary in existing mining regions subject to such rules
and regulations as he may promulgate."
SEC. 13. Section 24 of the same Decree is hereby amended to
read as follows:
"SEC. 24. Expenditures Required. A
claimowner/lessee under this Decree and under the Mining Act (Commnonwealth Act
No. 137), as amended, shall perform annual work obligations on his mining claim,
the value of which shall not be less than the following amounts:
"Before the lease contract is granted,
per hectare per calendar year
P 20.00
"After the lease contract is granted,
per hectare per calendar year
P100.00
"The annual work obligations for each mining claim registered under this
Decree shall start from the date of recording thereof.
"Holders of mining claims required to file lease application under
Presidential Decree No. 1214 shall perform annual work obligations (the value of
which is as stated above) on the mining claims from the date of filing of said
applications."
x x x x x x x x x x
SEC. 14. Section 25 of the same decree is hereby amended to
read as follows:
"SEC. 25. Group Development. The claimowner/lessee
may concentrate all the annual work obligations on any one or more of several
contiguous or geologically related mining claims in one province if it can be
shown to the Director that such concentration of work will be most advantageous
and beneficial in the development and operation of said mining claims:
Provided, That any expenditure in any calendar year in excess of the
minimum amount required for work obligations per hectare may be carried forward
and credited to the work obligations of the group claims for the suceeding year
of years: Provided, Further, That if the expenditure incurred for any
claim is less than that required in any year, the difference shall be paid and
accrue to the Bureau of Mines to be used exclusively for the purpose mentioned
in Section 95 of the Decree.
"x x x x"
SEC. 15. Section 27 of the same Decree is hereby amended to
read as follows:
"SEC. 27. Proof of Annual Work Obligations. The
claimowner/lessee shall submit proof of complaince with the annual work
obligations by filing an affidavit therefor and the statement of expenditures
and technical report in the prescribed form in support thereof with the Mines
Regional Officer within sixty (60) days from the end of the year in which the
work obligation is required: Provided, That failure of the claimowner
to comply therewith for two (2) consecutive years shall constitute automatic
abandonment of the mining claims: Provided, Further, That, if it is
found upon field verification that no such work was actually done on the mining
claims, the claimowner/lessee shall likewise lose all his rights thereto
notwithstanding submission of the aforesaid documents."
SEC. 16. Section 32 of the same Decree is hereby amended to
read as follows:
"SEC. 32. Period for Submittal of Lease Survey
Returns. A geodetic engineer ordered to survey mining claims shall submit
the survey returns thereof to the Director within one (1) year from receipt of
the survey order. Failure to submit the same within said period shall cause the
automatic forfeiture of the surveyor's surety bond and the cancellation of the
survey order. No extension of the period within which to submit the survey
returns shall be allowed unless for reasons of force
majeure."
SEC. 17. Section 33 of the same Decree is hereby amended to
read as follows:
"SEC. 33. Mines Temporary Permit. Pending the
issuance of a mining lease contract, a claimowner may, upon proper application
duly filed with the Mines Regional Officer concerned, be issued a mines
temporary permit by the Director upon compliance with all the obligations due on
the mining claims subject thereof and the posting of the surety bond in an
amount to be approved by the Director. The Mines temporary permit shall be for a
period of one (1) year, renewable once only for a like period.
"A special permit may be issued by the Director for the removal, extraction
and disposal of minerals found to exist in limited quantities. Subject to the
approval of the Secretary, the Director shall issue rules and regulations to
ensure proper removal, extraction and disposition of such
minerals."
SEC. 18. Section 40 of the same Decree is hereby amended to
read as follows:
"SEC. 40. Issuance of Mining Lease Contract. Except
protests pending at the time of publication, it shall be conclusively presumed
that no adverse claim exists if no such adverse claim is filed within fifteen
(15) days after the first date of publication of the notice of the application
and thereafter, no objection from third parties to the grant of the lease shall
be heard. Adverse claims based on mining claims registered on or after the first
publication of the notice of application shall not be entertained. After the
mining claim has been verified as to its mineral contents and it, actual
location on the ground as determined through reports submitted to the Director,
the Secretary shall approve and issue the corresponding mining lease contract,
which shall be for a period not exceeding twenty-five (25) years, renewable upon
the expiration thereof for another period not exceeding twenty-five (25) years
under such terms and conditions as provided by law. After the expiry of the
renewal period, the operation of the mine may be undertaken by the Government
through one of its agencies or through a qualified independent contractor. The
contract for the operation of the mine by an independent contractor shall be
awarded to the highest bidder in a public bidding held after due publication of
the notice thereof; Provided That the lessee shall have the right to
equal the highest bid upon reimbursement of all reasonable expenses of the
highest bidder.
"x x x x"
SEC. 19. Section 42 of the same Decree is hereby amended to
read as follows:
"SEC. 42. Mining Lease on Private Lands. A Mining
lease may be granted on mining claims located on private lands subject to the
submittal of proof of compliance with Section 2 of Presidential Decree No.
512."
SEC. 20. Section 44 of the same Decree is hereby amended to
read as follows:
"SEC. 44. Mining Lease Rights. A mining lease
contract shall grant to the lessee, his heirs, successors and assigns, the right
to extract all mineral deposits found on or underneath the surface of his mining
claims covered by the lease, continued vertically downward; to remove, process
and otherwise utilize the mineral deposits for his own benefit and to use the
lands covered by the lease for the purpose or purposes specified therein:
Provided, That the Secretary shall reserve the right to grant and use
easements in, over, through or upon on the said claims as may be needed by other
leases for right-of-way to enable them to have access to and/or facilitate the
operation of their mining claims: Provided, Further, That in case of
conflict of interest between the lessees for this purpose, the Director is
hereby authorized to mediate: Provided, Furthermore, That in granting
any lease under this Decree, the Government reserves the right to lease or
otherwise dispose of the surface of the lands embraced within such lease which
is not needed by the lessee in extracting and removing the mineral deposits from
his mining claims or in the beneficiation of the ores extracted therefrom:
Provided, Finally, That a lessee may on his own or through the
Government, enter into a service contract with a qualified domestic and/or
foreign contractor for the exploration, development and exploitation of his
claims and the processing and marketing of the products thereof, subject to such
rules and regulations that shall be promulgated by the Director with the
approval of the Secretary.
"Service contracts entered into pursuant to this Section shall contain, among
others, the following salient features, to wit:
"a) A stipulation that the foreign service contractor shall not be entitled
to any other fee except a service fee which shall in no case exceed forth
percent (40%) of the net proceeds of the operations, and in case the foreign
service contractor or another foreign company holds an equity in the local
mining corporation involved in a service contract the equity participation
including the service fee shall in no case exceed forty percent (40%) of the net
proceeds of the operations;
"b) The financing, technical, management and other services committed to be
rendered under the service contract, specifying a minimum amount of
expenditures, which should be over and above the minimum work obligations of the
lease and acceptable to the Secretary of Natural Resources as recommended by the
Director of Mines;
"c) Scheme for the repayment of service fees and repayment of advances which
may include the following:
"i) Foreign exchange payments duly approved by the Central Bank;
"ii) Except for repayment of pre-production expenses which shall adhere as
closely as possible to international practice, a provision that the interest
charged on the fair value of the services rendered and actual funds advanced by
the foreign entity shall not be more than the prevailing international interest
rates charged for similar types of transaction; and
"iii) A stipulation allowing payment of service fees in cash or in allotment
of production which may be exported subject to domestic requirements of the
country, or in equity which shall not exceed the constitutional limits:
Provided, That such stipulation shall not defeat the citizenship
requirement of the Constitution in the exploration, development, exploitation
and utulization of the natural resources;
"d) A stipulation that the foreign entity shall not acquire any title or
interest in the leased area;
"e) A commitment by the service contractor to pay the Government the amount
which should have been spent, but was not, in direct prosecution of the approved
work program;
"f) A stipulation that the service contract shall be cancelled for repeated
failure to comply with the terms and conditions thereof;
"g) A preference for Filipinos in employment in all phases of operations for
which they are qualified;
"h) A stipulation that alien employees shall be limited to technologists and
executives requiring highly specialized training and long experience, and whose
employment shall be subject to the required approval under existing decrees,
laws and regulations on the matter; and
"i) In every case where foreign technologists and executives are employed, an
effective program of training of understudies.
"Service contracts shall be approved by the Secretary upon recommendation of
the Director."
SEC. 21. Section 47 of the same Decree is hereby amended to
read as follows:
"SEC. 47. Removal of Improvements. The lessee shall
within one (1) year from the abandonment, termination or cancellation of the
lease, remove all improvements on the mining premises found on public lands,
except roads and bridges; otherwise, said improvements shall become the property
of the Government."
SEC. 22. Section 50 of the same Decree is hereby amended to
read as follows:
"SEC. 50. Appeals. Any party not satisfied with the
decision or order of the Director, may, within five (5) days from receipt
thereof, appeal to the Secretary. Decisions of the Secretary are likewise
appealable within five (5) days from receipt thereof by the affected party to
the President whose decision shall be final and executory.
"In all cases, the decision or order of the Director and the Secretary shall
be immediately executory notwithstanding the appeal, unless the President of the
Philippines directs otherwise, and the prevailing party has the right to
immediately take possession, exploration and exploitation of the mining claims:
Provided, However, That the provisions of Section 3 of Presidential
Decree No. 1000, pertaining to the deposit in escrow of the prescribed
percentage of the proceeds of the gross sales of the mines produced, shall be
complied with for the protection of the interest of the party to whom the mining
claims are ultimately and finally awarded."
SEC. 23. Section 78 of the same Decree is hereby amended to
read as follows:
"SEC. 78. Theft of Minerals. Any person who,
without a mining lease or a temporary permit or any other permit granted by the
Secretary or the Director under existing mining decrees, laws and regulations to
mine, shall extract, remove and/or dispose of minerals belonging to the
Government or from a mining claim or claims leased, held or owned by other
persons, shall be deemed to have stolen the ores or the products thereof from
the mines or mills. He shall, upon conviction, be imprisoned from six (6) months
to six (6) years or pay a fine from one hundred pesos (P100.00) to ten thousand
pesos (P10,000.00) or both, in the discretion of the court, besides paying
compensation for the minerals removed, extracted and disposed of, the royalty
and the damage caused thereby."
SEC. 24. Section 94 of the same Decree is hereby amended to
read as follows:
"SEC. 94. Mine Evaluation. The appraisal or
reappraisal, evaluation or re-evaluation of any mine, mining claim or claims
with improvements thereon whether patented, leased or otherwise, for the purpose
of raising capital for the formation or organization of a partnership or
corporation or for determining the present net value of the mines shall be made
by the Director or his duly authorized representative. No mine, mining claim or
claims without improvements thereon, whether patented, leased or otherwise,
shall be accepted as asset or basis of any asset in any formation or
organization of a partnership or corporation without the value thereof having
been first appraised or determined by the Director as herein
provided."
SEC. 25. Repealing Clause. The provision of laws,
decrees, orders, rules and regulations or parts thereof which are inconsistnet
with the provisions of this Decree are hereby repealed or modified
accordingly.
SEC. 26. Effectivity Clause. This Decree shall take
effect immediately.
Done in the City of Manila, this 25th day of May in the year of Our Lord,
nineteen hundred and seventy-eight.
(Sgd.) FERDINAND E. MARCOS
President of the
Philippines
By the President:
(Sgd.) JACOBO C. CLAVE
Presidential Executive
Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
