AN ACT TO AMEND CERTAIN SECTIONS OF RE¬PUBLIC ACT NUMBERED EIGHTEEN HUNDRED TWENTY-EIGHT AUTHORIZING THE DEVELOPMENT, EXPLOITATION AND UTILIZATION OF THE MINERAL DEPOSITS IN THE SURIGAO RESERVATION, AS AMENDED BY REPUBLIC ACT NUMBERED TWO THOUSAND SEVENTY-SEVEN.

• Number: Republic Act No. 4167
• Sections: 6

Section 1

SECTION 1. Section two of Republic Act Numbered Eighteen hundred twenty-eight, as amended by Republic Act Numbered Two thousand seventy-seven, is hereby amended to read, as follow:

"SEC. 2. There is hereby created the Surigao Mineral Reservation Board, hereinafter referred to as the Board composed of the Chairman of the National Economic Council, as chairman, the Secretary of Agriculture and Natural Resources, the Secretary of Finance, the Secretary of Justice, and the Governor of the Central Bank as members, who shall carry out and implement the provisions of this Act, which shall be known as the "Nickel Law." It shall have the power and authority to represent the Government in the operations and to insure compliance with the terms and conditions of the operating contract or contracts.

"The Board is hereby authorized to organize an office and appoint the necessary staff, whose salaries and emoluments shall be fixed by the Board, and to secure the assistance of the personnel of the National Economic Council and other government offices.

"In order to carry out the policy declared in Section one hereof, the President of the Philippines is hereby authorized to determine, upon previous advice and recommendation of the Board, whether the development exploitation and utilization of the said mineral deposit and the processing and disposition of the minerals that may be produced therefrom:

"(1) shall be undertaken by the Government itself, in which case he is authorized to contract loans and/or float bonds in such amounts as he may deem necessary and adequate to carry out effectively the undertakings contemplated in this Act, but not exceeding two hundred million pesos, after consultation with the Monetary Board of the Central Bank and upon recommendation of the National Economic Council; or

"(2) shall be undertaken by the Government jointly with private enterprise, in which case he is also authorized to contract loans and/or float bonds in the amount and in the manner stipulated in the preceding sub-paragraph (1) : Provided, however, That the Government shall, at any one time, own not less than fifty-one per centum of the capital stock of such enterprise; or

"(3) shall have the operation undertaken as herein-above provided through an independent contractor or contractors who are qualified pursuant to the provisions hereunder, for the entire operation or any part or phase thereof.

"Unless there are clear advantages in favor of the third mode, either of the first two modes shall be preferred: Provided, That in any case, the Board shall implement the policy herein declared.

"Should the President of the Philippines decide to have the operation undertaken through an independent contractor or contractors, as hereinabove provided, the Board may engage and utilize the services of person or corporations, as independent contractor or contractors, with the approval of the President by calling for bids to undertake or perform for the Government any phase or phases of all the operations authorized in this Act covering any particular area or areas within the Surigao Mineral Reservation, and the processing of the minerals produced therefrom, negotiating and entering for such purpose into a contract or contracts of service with any party or parties, domestic or foreign, fully qualified as to organization, finances, resources, experience and technical competence, and which may offer such terms and conditions as determined by the Board subject to the approval of the President of the Philippines, to be most advantageous to the Government: Provided, That should there be no bid submitted or the bid or bids submitted are unacceptable, the Board, with the approval of the President, is hereby authorized to negotiate with such party or parties, domestic or foreign, as may be fully qualified as to organization finances, resources, experience and technical competence, for the operation of the whole or part of the Surigao Mineral Reservation under the provisions of this Act: Provided further, That any provision of existing law to the contrary notwithstanding, the successful bidder, contractor, or operator, may be a corporation formed by one or more corporations organized for the purpose of engaging in mining at least sixty per cent of the capital stock of each of said corporations is owned by Filipino citizens except where the effect of such interlocking stock ownership is to divest Filipino citizens of the ultimate and actual control of the corporation, in which case the corporation shall be disqualified to be a bidder, contractor or operator under the provisions of this Act and shall be subject to the penalty prescribed in Section 190 1/7 of the Corporation Law.

"For the purpose of this Act, a contract of service shall mean an operating contract in which the operator is an independent contractor of service, entitled as such to compensation for services rendered: Provided, That any contractor or contractors of service shall not, by virtue of the contract, acquire any title or interest in the area or areas affected, nor except as hereinafter provided in Section five hereof, in any of the minerals from the Surigao Mineral Reservation produced or processed by it.

"The operator shall furnish at its own cost and expenses all materials, labor, equipment, plants and other installations and processes that may be required for carrying on the operations herein authorized, or necessarily or incident thereto, and all operations, processes, work or acts shall be carried out at operator's own cost and expense: Provided, That all materials, equipment, plants and other installations and/or processes erected, installed, used or placed on the premises subject of the operation, excepting roads, bridges, piers and other similar permanent improvements, shall remain the property of the operator, unless the same are not removed from the premises subject of the operation within one year after the termination of the contract: And provided, further, That this is without prejudice to the Government and operator agreeing on other terms regarding materials, equipment, plants, and other installations and processes."

Section 2

SEC. 2. Section three of the same Act, as amended, is hereby further amended as follows:

"SEC. 3. The President may grant to the government entity which may operate the Reservation under paragraph one or two of Section two or to the operator under paragraph three of the same section, as the case may be, the following rights and privileges:

"(1) Necessary rights over an area or areas for investigation within the Surigao Mineral Reservation;

"(2) Exemption from laws and regulations relating to: (a) importation of machinery, equipment accessories, spare parts, and/or supplies and materials necessary for or in connection with said operation or processing of minerals; (b) construction, installation and operation of power plants, including importation of machinery and equipment, accessories, spare parts and/or operating supplies and materials, should the National Power Corporation fail to supply within a reasonable period and at reasonable cost the power needed in the operation; (c) exportation of such machinery and equipment which were imported solely for construction and installation purposes in connection with the aforesaid operation and processing, and which are no longer needed in the operation;

"(3) Exportation of mineral products produced by the operations: Provided, That all domestic requirements for same shall have first been satisfied;

"(4) Importation upon the sole approval of the Surigao Mineral Reservation Board of highly technical and specialized personnel and executive staff, who may exercise without examination or certification their profession solely for this undertaking subject to such regulations as may be prescribed by the office or agency to be created and designated; And Provided, That if the alien technicians lose their employment, or connection directly or indirectly with the operator, the applicable laws and regulations on immigrants shall apply to such alien technicians and their immediate families; and

"(5) Gratuitous use of timber and water for mining and processing purposes from any parcel or parcels of the Surigao Mineral Reservation subject of the operation."

Section 3

SEC. 3. Paragraph (1) Section five of the same Act as amended, is hereby further amended to read as follows

"(1) Any minority stockholder and/or contractor shall be entitled to repatriate duly authorized and recognized foreign capital investments, plus interest, and to remit to non-resident investors abroad profits or dividends."

Section 4

SEC. 4. Section six of the same Act, as amended is hereby further amended to read as follows:

"SEC. 6. Should the President of the Philippines decide to have the operations or any part thereof authorized in this Act done through the services of an independent contractor or contractors, the same shall be, among others, under the following terms and conditions:

"(1) The operator shall be paid for services rendered and expenditures incurred beginning with the end of the first year after the effective date of the contract the sum of one peso (P1.00) per year, and the operator shall receive by way of additional compensation, an amount equivalent to a portion of the gross annual receipts from all minerals, mineral and metal products, and by-products resulting from the operation, processing, and disposition thereof computed such that the Government shall retain not less than three and one-half per centum of the gross annual receipts, f.o.b. point of exports: Provided, That the operator shall, from the effective date of the contract of operation up to and including the fifth year after commencement of actual production, be exempt from all taxes, duties, fees and charges, both national and local, directly payable by it for any work or activity, equipment, machinery, materials, instruments, supplies, accessories, structures, buildings, lands, improvements, and/or other properties directly connected with or needed and to be used or being used exclusively in the operation, other than those provided in this Act and except those fees and charges that are imposed for work or services actually rendered to the operator: Provided, however, That the operator shall put the area or areas covered by the contract into actual production within five years from the effective date of the contract. Thereafter, penalties may be applied against the operator for failure to effect such production, and/or reach certain levels of production within specific time period, as may be agreed upon: And provided, further, That exemptions from taxes shall not extend to taxes due from contractor's personnel in their personal capacities;

"(2) The operator shall file a bond to guarantee full and faithful compliance with all its obligations;

"(3) The operator shall be entitled to repatriate its duly authorized and recognized foreign capital investment, plus interest, and to remit to non-resident investors or stockholders abroad profits or dividends;

"(4) Within one year from the first date of commercial production, the operator shall select a final area or areas in compact block or blocks, irrespective of water separation of portions to be retained by him sufficient to meet his reasonable needs as to ore reserves, plant sites, timber and water resources to ensure commercial operation, but in no case to exceed a total land area of twenty-five thousand hectares;

"(5) The operator shall give preference to Philippine citizens in all types of employment within the country insofar as such citizens are qualified to perform the corresponding work with reasonable efficiency and without hazard to the safety of the operations; and shall maintain effective programs of training and advancement commensurate with the demonstrated abilities of such citizens to perform satisfactorily the various types of work involved in the operation. The operator, however, shall not be hindered from using officials of its own selection for executive or technical work and for all other work which, in its judgment, and with the sole approval of the Board, requires highly specialized training and/or long experience;

"(6) The operator and/or its personnel shall be subject to the jurisdiction of the Philippine courts;

"(7) If and when the Government shall decide to have the renounced area operated by an independent contractor, the preferential right of the operator of the parcel already being operated to operate the same shall be recognized under such terms and conditions as may be fixed by the Government at the time: Provided, That said operator shall be qualified and shall have been diligent in the prosecution of its operation and in the compliance with its obligations.

"In case said operator shall fail to qualify or to exercise its preferential right, then said renounced area shall be open to operation in the manner provided by existing law at the time.

"(8) If and when the Government shall decide to have the other parcel or parcels of the Surigao Mineral Reservation operated by independent contractor or contractors in accordance with Section two numbered (3) hereof, the preferential rights of the operator of the parcel already being operated to operate the same shall be recognized under such terms and conditions as may be fixed by the Government at the time: Provided, That said operator shall be qualified and shall have been diligent in the prosecution of its operation and in the compliance with, its obligations.

"In case said operator shall fail to qualify or to exercise its preferential right, then said parcel or parcels shall be open to operation in the manner provided by existing law at the time."

Section 5

SEC. 5. Section eight of the same Act, as amended, is hereby further amended to read, as follows:

"SEC. 8. For the purpose of carrying out the provisions of this Act, the amount of three hundred thousand pesos is hereby appropriated from funds in the National Treasury not otherwise appropriated and the same shall hereafter be included in the General Appropriations Act, to cover the expenses; including salaries, wages, and per diems of the members of the Board and its staff and personnel.

"Any provision of law to the contrary notwithstanding, the Chairman of the Board shall receive a per diem of thirty pesos and the members including the executive secretary thereof shall each receive a per diem of twenty-five pesos for every meeting actually attended."

Section 6

SEC. 6. This Act shall take effect upon its approval.

Approved, August 5, 1964.