13 July 2012

[LEGAL NOTES] Extracting good policy from bad legislation: A review of Executive Order No. 79, Series of 2012

Are all critical areas in “No-Go Mining Zones” actually mine-free? Does the moratorium on mining prohibit the operations of mining within the protected areas? Are LGUs deprived of their Rule-Making Power when it comes to mining?

On 6 July 2012, President Benigno Aquino issued Executive Order (EO) 79, series of 2012 entitled, “Institutionalizing And Implementing Reforms In The Philippine Mining Sector Providing Policies And Guidelines To Ensure Environmental Protection And Responsible Mining In The Utilization Of Mineral Resources.” Several pros and cons have been deliberated on a very important matter concerning mining issues in the Philippines.  This is my humble opinion on the matter which is based on the following premises:
  1. There is no substitute to having an enacted Alternative Minerals Management Bill coupled with a National Land Use Policy;
  2. Environmental protection and food security are of paramount priority over other concerns including economic benefits;
  3. Players in the mining industry has not yet shown a model site for “responsible mining” where local communities have developed because of the entry of mining;
  4. IP/ICCs ownership of minerals found inside their Ancestral Domain should be recognized.


First, EO 79 was entirely based on Republic Act 7942 (Philippine Mining Act of 1995) wherein the focus is to fully utilize the mineral resources of the country at whatever cost.  This is irresponsive to the concerns raised by segments critical to RA 7942 owing to its defective provisions resulting to unabated environmental destruction, human rights violations of the communities, exploitation of IP rights, food insecurity, militarization, among others, caused by mining operations.  These very same problems are not addressed by the present mining law rendering it fully defective.  Hence, any executive issuances based on Republic Act 7942 are necessarily defective as the very law itself has been defective since its enactment.

Second, the language is not about environment but revenues and sharing.  This frame limits the discussion between mining contractor and government for the revenue, and between national government and local government for sharing, thereby virtually depriving the communities and stakeholders from participating in the process. Third, the IPs area again sidelined in EO 79.

Fourth, the EO 79 takes on a “business-as-usual” attitude as if the bureaucracy runs following the “matuwid na daan”.  The national government failed to realize, or choose not to reach to such realization, that part of the problem, if not the main, is the government agency tasked to regulate mining itself – the DENR.  There will be no serious mining reforms without serious reforms in the DENR bureaucracy.  


A.   No-Go Mining Zones

EO 79 was brave enough to expressly declare areas which should not be included in mining operations.  This includes the 78 tourism sites, farmlands, marine sanctuaries and island ecosystems in response to the public clamour to protect the environment.  EO 79 expanded the list of “No-Go Mining Zones” to include the following:
SECTION 1. Areas Closed to Mining Applications. Applications for mineral contracts, concessions, and agreements shall not be allowed in the following:

a)    Areas expressly enumerated under Section 19 of RA No. 7942, to wit:

(1) In military and other government reservations, except upon prior written clearance by the government agency concerned;
(2) Near or under public or private buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or private entity concerned;
(3) In areas covered by valid and existing mining rights;
(4) In areas expressly prohibited by law;
(5) In areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners, in which case a royalty payment upon the utilization of minerals shall be agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development of the community concerned; and
(6) Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks, provincial/municipal forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law in areas expressly prohibited under the National Integrated Protected areas System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws.

b)   Protected areas categorized and established under the National Integrated Protected Areas System (NIPAS) under RA No. 7586;

c)    Prime agricultural lands, in addition to lands covered by RA No. 6657, or the Comprehensive Agrarian Reform Law of 1988, as amended, including plantations and areas devoted to valuable crops, and strategic agriculture and fisheries development zones and fish refuge and sanctuaries declared as such by the Secretary of the Department of Agriculture (DA);

d)    Tourism development areas, as identified in the National Tourism Development Plan (NTDP); and,

e) Other critical areas, island ecosystems, and impact areas of mining as determined by current and existing mapping technologies, that the DENR may hereafter identify pursuant to existing laws, rules, and regulations, such as, but not limited to, the NIPAS Act.

Although the list of the “No-Go Zones” seems to be a long enumeration, only three areas were added, to wit, (1) tourism sites, (2) prime agricultural lands, and (3) other critical areas, island ecosystems and impact areas were added to the list of areas where mining is banned.  The rest are already covered by RA 7942 (Philippine Mining Act), RA 7586 (NIPAS), and RA 6657 (CARL).

Not in the list are Key Bio-diversity Areas (KBAs) and Critical Watersheds which should have also been included to the list of  areas that are closed to mining operations regardless of whether or not the same has been legislated/proclaimed by the President.  The Implementing Rules and Regulations (IRR) of EO 79 should also clearly define what is meant by “Island Eco-systems”.

1.   Non-Impairment of Existing Mining Contracts

What happens to areas identified as “No-Go Mining Zones” but with existing mining contracts?  Unfortunately, EO 79 includes a “catch-all” proviso which absolves mining operations already existing within the banned areas, to wit:

“Mining contracts, agreements and concessions approved before the effectivity of this Order shall continue to be valid, binding, and enforceable so long as they strictly comply with existing laws, rules, and regulations and the terms and conditions of the grant thereof.  For this purpose, review and monitoring of such compliance shall be undertaken periodically.”

Hence, existing mining contracts within the “No-Go Mining Zones” continue to be valid and effective as the provision only applies to future mining applications. The obvious conclusion is that mining may still be allowed within “No-Go Mining Zones”.  The mining ban—which is purportedly the center-piece of the EO—only means that no future mining applications shall be entertained because of the supposedly ecological uniqueness and the need to protect the remaining flora and fauna, marine sanctuaries, farmlands, among others, of certain critical areas but at the same time expressly declares that mining contractors existing therein prior to EO 79 are allowed to exploit the same until the contract expires.  Mining contracts have a 25-year term, renewable for another 25 years.  Sadly, most of those areas included in the “No-Go Mining Zones” already have several existing mining operations.  

A case in point is Palawan—the whole island being declared as a Mangrove Swamp Forest Reserve by Presidential Proclamation 2152 as early as 1981 and with at least 17 Key Bio-diversity Areas (KBAs) and 8 declared protected areas in the island making it a part of the NIPAS protected area—but has at least 13 existing mining companies (Rio Tuba, MacroAsia, etc.) operating on 38,202 hectares within the protected areas.  Despite the declaration that the whole island of Palawan is part of the 78 tourism zones, mining will continue rampage of destruction in what is considered as the last frontier of the Philippines.

While Section 3 of EO 79 mandates a review of the performance of existing mining contracts, this will, however, not result in their invalidation because EO 79 expressly states that it does not affect the validity of prior mining contracts.  In fact, the last paragraph of Section 4 of EO 79 states that the review of existing contracts for renegotiation shall in all cases be acceptable to the mining contractor, to wit: 

“The DENR shall likewise undertake a review of existing mining contracts and agreements for possible renegotiation of the terms and conditions of the same, which shall in all cases be mutually acceptable to the government and the mining contractor.”

Hence, even if the review of the existing mining contracts shows that there are violations on the grant thereof, the same remains to be valid if the mining contractor does not allow its renegotiation.

Previous violations should not be tolerated by EO 79.  Thus, it is recommended that all existing mining projects be reviewed and monitored within 90 days from the effectivity of EO 79.  Mining operations situated inside “No-Go Mining Zones”, or if there is an allegation of an overlap, should discontinue their activities pending the determination of the truthfulness of the allegation.  Lastly, the jurisdiction of mining administrative cases (MPSA cancellation, etc.) should be immediately transferred to the inter-agency Mining Regulatory Board rather than just in the single-agency of the DENR.

2.   Prime Agricultural Lands and Fishery Zones

EO 79 is laudable in that it includes Prime Agricultural Lands, in addition to areas covered by CARP, as part of the banned areas for mining.  The principle behind protecting such lands was to protect the gains of agrarian reform and to attain food security for the country.  However, a question remains as to the areas critical to or surrounding the Prime Agricultural Lands—are they also closed to mining applications?  This has particular importance because of the nature of agricultural lands wherein any extractive activities in nearby areas would severely affect, if not completely damage, plantations and crops in the area.  The same situation applies to fishery zones and marine sanctuaries where mining operations are usually conducted in upland areas but has adverse effects in the coastal areas.

A case in point is the mining activities in Cantilan, Surigao del Sur wherein a 4,799-hectare area within the watersheds are presently being mined by Marcventures Mining and Development Corporation.  The watersheds are vital main sources of water for the NIA-assisted irrigation systems and potable water sources in the three Municipalities of Cantilan, Carrascal, and Madrid, all in the Province of Surigao del Sur.  However, the mining operation in the watersheds has severely damaged the river systems and irrigation facilities and affecting more than 3,300 hectares of ricelands, as well as the marine sanctuaries, in the coastal areas of Surigao.

Hence, the exclusion of prime agricultural lands and marine sanctuaries do not fully protect them from the hazards and ill-effects of mining operations. The actual operation may not be on the said sites but may have adverse effects to the said areas. Mining operation may contaminate irrigation canals, rivers and coastal and aquatic resources.  Areas close to mining should therefore include head waters and river systems affecting farmlands and coastal areas.  Even if mining activities are banned in agricultural lands, if the surrounding areas critical to the improvement and development of the farmlands are not protected from extractive activities, then the goals of agrarian reform and food security are weakened.

B. Moratorium on Mining Applications

The provision on moratorium on mining applications is commendable but there are still important concerns which are not addressed by EO 79 which provides the following:
SECTION 4. Grant of Mineral Agreements Pending New Legislation.No new mineral agreements shall be entered into until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect. The DENR may continue to grant and issue Exploration Permits under existing laws, rules, and guidelines. The grantees of such permits shall have the rights under the said laws, rules, and guidelines over the approved exploration area and shall be given the right of first option to develop and utilize the minerals in their respective exploration area upon the approval of the declaration of mining project feasibility and the effectivity of the said legislation.

As stated above, existing mining operations continue despite the moratorium since what is deferred is only the grant of new mining applications regardless of whether the mining applications are located within “No-Go Mining Zones”.  To address environmental concerns, the Moratorium should also be imposed on existing mining contracts  pending compliance with Section 3 of EO 79 that requires a review of existing mining contracts.

Ironically, despite the declaration of a moratorium on the grant of mining applications, EO 79 provides for a “One-stop Shop” for all mining applications in Section 13 aimed at fast-tracking the processes for the grant thereof.  This is a clear manifestation that the moratorium is merely a “temporary suspension” and not exactly a moratorium.

EO 79 also provides that the moratorium does not include the grant of Exploration Permits for mining companies and small-scale mining applications.  In actual practice, however, the issuance of the Exploration Permits to mining companies signals the commencement of actual mining operations in the area.  This has been a prevalent problem, especially in areas where indigenous communities are present, and which the DENR has not fully addressed.  On the other hand, small-scale mining remains to be unregulated by the DENR for so many years. 

It is thus recommended that the moratorium should include the grant of Exploration Permits and small-scale mining applications.  Furthermore, the moratorium should be lifted not upon the enactment of a new legislation on revenue-sharing scheme but only after an Integrated Map System is finalized and available.  The map should cover all areas and shall include declaration of “No-Go Zones Areas”.  The call for the cessation of mining operations is due to environmental, health, and livelihood concerns of the people in the affected communities and not merely because of the revenue-sharing issues between the national government and the LGUs.  Enactment of a National Land Use Policy becomes an imperative.

C.   Primacy of National Policy over Local Legislation

Section 12 of EO 79 directs the local government units to exercise their powers consistent with the policies and decisions undertaken by the national government.  This may have put limitations on the powers of LGUs granted by the Constitution and Republic Act 7160 (Local Government Code).  There is a need to clarify the role of the national government over mining operations because a potential conflict is brewing between the national government and the local governments.  The national government is clearly imposing its general supervision powers over the autonomous Local Government Units thereby disturbing the principle of devolution of powers to local governments. 

As of now, several provinces, cities and municipalities have passed legislations disallowing mining operations within their jurisdictions including Albay, South Cotabato, Bukidnon, Romblon, Samar, Marinduque, La Union, Capiz, Romblon, Antique, Zamboanga Sibugay, Bohol, Zamboanga del Norte, and Negros Occidental, while in the process of banning mining are the areas of Eastern Samar, Nueva Vizcaya, Cagayan de Oro, Catanduanes, Sorsogon, Southern Leyte, and Davao City.

A case in point is the Province of Romblon where the three Municipalities of Magdiwang, San Fernando and Cajidiocan, all in the island of Sibuyan, Romblon issued Joint Resolution No. 01-10 banning mining in Sibuyan Island.  The whole island of Sibuyan has been previously declared as a Mangrove Swamp Forest Reserve by Presidential Proclamation 2152 in 1981 and therefore part of the NIPAS protected areas.This was supported by the Governor Eduardo Firmalo of Romblon who issued Executive Order 1, Series of 2011 declaring a moratorium in the whole Province of Romblon, as well as the Provincial Council of Romblon which issued Sanggunian Resolution No. 01-2011-23.  In view of the new EO 79 issued by the President, what happens to the LGUs which have existing legislations strongly opposing mining operations within their jurisdictions? 

It is to be noted that Congress recognized the role of the local government units in development as stated in the Constitution, and enacted the Local Government Code of 1991 which provides the policy that the LGUs shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals instituted through a system of decentralization whereby LGUs shall be given more powers, authority, responsibilities, and resources.  Towards that end, Section 16 (General Welfare Clause) of the LGC provides that:
SEC. 16. General Welfare. - Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

 In the case of Province of Rizal versus Executive Secretary,[1] the Supreme Court provides an exhaustive discussion that the LGC gives to local government units all the necessary powers to promote the general welfare of their inhabitants, particularly citing Section 2 (c) of RA 7160, to wit:

“It is likewise the policy of the State to require all national agencies and offices to conduct consultations with appropriate local government units, nongovernmental and people’s organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions.”

It is clear from the mandate of the general welfare that the primary consideration is to ensure and support activities that enhance the right of the people to a balanced ecology, including promoting health and safety, maintain peace and order, and preserve the comfort and convenience of their inhabitants, among others. With this primary consideration in mind, the LGUs have the right to reject or accept any projects within its jurisdiction.  Definitely an executive issuance cannot limit the mandate provided by Congress to the LGUs in accordance to the Local Government Code.  Needless to say, in case of doubt of the grant such power, the LGC provides that “any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit.” 

D. IP Rights are once again sidelined in EO 79

The rights of the Indigenous Peoples and/or Indigenous Cultural Communities (IP/ICCs) are once again sidelinedin EO 79.  Though the EO made mention about the need of having Free, Prior and Informed Consent (FPIC) prior to the approval of mining agreement, it is silent on the mining privileges previously issued by the DENR.  It should be noted that based on actual experience by the IP, FPIC is facilitated not as a recognition of IP rights but as a mere requirement of mining application.  This means that IP consent should be obtained in whatever way to get an approval of the mining application. Maneuverings and deceit oftentimes go with it.  With the existing framework being followed by EO 79 of identifying and enumerating the areas closed to mining, the implication is that all the rest not enumerated is open to mining.  This scenario poses serious threats to IP/ICC’s Ancestral Domains, since not all of the IP territories are inside the areas identified as closed to mining.  MGB estimated around nine million hectares out of the country’s thirty million hectares as geologically prospective for metallic minerals as cited in the Philippine Development Plan (PDP) 2010-2016.  It is highly probable that most of the IP territories overlapped with the 9 million-hectare area.

In addition, the NCIP failed grossly in ensuring that IP/ICC’s rights are recognized and protected.  In the Joint DAR-DENR-LRA-NCIP Administrative Order No. 1 series of 2012, the NCIP virtually surrendered its mandate over Ancestral Domains.  While IPRA recognize areas with entitlements as prior vested rights, the said JAO expanded the vested rights to include Resource Use Instruments (RUIs).  These RUIs may include logging, mining and grazing privileges. 

NCIP is mandated to issue Certificate of Non-Overlap (CNO) before any development project shall commence, but projects like mining started and continue without certification.  The NCIP is also mandated to notify agencies holding jurisdiction over IP areas, such notification will automatically transfer jurisdiction to the IP (Section 52.i of IPRA).  The Commission, however, seemed powerless to perform its mandate.  The government should first compel NCIP to perform its mandate before any mining operation shall commence.

For non-IP areas, community consultation should likewise be mandatory.  In all cases, the approval of the LGU concerned shall be necessary in the whole process from application to actual mining operation.  The required mayor’s permit and sanggunian resolutions of the respective municipality and province should be included as mandatory requirements for approval of mining applications.

E. Other controversial provisions of the Executive Order 79

1. Full Enforcement of Environmental Standards in Mining (Section 2)

This is nothing new as regulations, rules and standards on the subject matter already exist.  The problem lies on the non-implementation or non-compliance of the same agency that issued these rules.  DENR and MGB do not have the reputation of strictly and effectively implementing environmental laws.  Enforcement mechanism should not be limited solely to these agencies but should expand and include independent groups and personalities.

 2. Opening of Areas for Mining though Competitive Public Bidding (Section 6)

Government should explore possibilities of initiating mining operations rather than foreign investors.  This is an additional assurance that the government will observe responsible mining and guarantee accountability in cases of environmental degradation due to mining activities.

3. Constituting the Climate Change Adaptation and Mitigation and Economic Development Cabinet Clusters as the Mining Industry Coordinating Council (MICC) (Section 9)

Membership in this body should be multi-sectoral.  The participation of the affected communities and the civil society organizations should be ensured in the policy-making and implementing body such as the MICC.  The one-stop shop application for mining operation should be part of the council’s functions.The council should also have monitoring function on the existing mining claims and operations.

4. Measures to Improve Small-Scale Mining Activities (Section 11)

This is already provided under RA 7076 but the same is not strictly implemented.  One issue is that the Provincial/City Mining Regulatory Board (P/CMRB) is either not yet constituted or non-functional.  P/CMRB is supposed to identify and establish “Minahang Bayan”, but small scale mining thrives even without an established “Minahang Bayan” or even without a constituted P/CMRB.  Small scale mining operations which are either outside the established “Minahang Bayan”, no permit from the P/CMRB, or operating in areas with no duly constituted P/CMRB should discontinue.

5. Improving Transparency in the Industry by Joining the Extractive Industries Transparency Initiative (Section 14)

This is a commendable and wise provision but it should include the whole value chain of mining such as (1) transparency in disclosure of mining contracts and all related mining documents prior to the grant of mining applications by the contractor; (2) transparency in decision-making whether a specific mining project is a “No-Go Mining Zone” or a “Go-Zone”; and (3) clear definition and blue print of the roles of minerals in resource management of the country.

6. Implementing Rules and Regulations (IRR) (Section 29)

There should be a representation from the civil society organizations and sectoral groups affected by mining such as IPs, farmers, fisherfolks and women, in the drafting and finalization of the IRR for EO 79.

7. Repealing Clause (Section 21)

EO 79 should expressly state that it repeals EO 270-A and the National Minerals Action Plan of 2006.


Section 4 of EO 79 awaits for a new legislation from Congress.  It is but fitting that a new law that will outline a comprehensive national policy to increase the government share from mining revenues and to promote an environment-friendly and human rights-centered mining industry in the country must be immediately legislated.

Akbayan Party’s House Bill No. 3763, also known as the Minerals Management Bill, seeks to repeal Republic 7942 or the Philippine Mining Act of 1995.  This democratic, environment-sensitive and human rights-centered mining policy puts premium in the ecological value of our country’s mineral resources, shifting the land use priority towards environmental protection, food security and sustainable development. This is a 360-degree paradigm shift from the current Philippine Mining Act of 1995 (Republic Act 7942), which paved the way for the full liberalization of the mining industry to foreign investments without placing safeguards against the wanton exploitation of our natural resources and our people.

The Minerals Management Bill upholds the provision in the 1987 Constitution that only Filipino corporations or those with at least 60% Filipino ownership shall be allowed for the exploration, development and utilization of mineral resources in the Philippines. This provision is a complete turnaround of the 1995 Mining Act clause that virtually allows 100% foreign-owned companies to conduct mining operations in the country.

A Multi-Sectoral Mining Council shall become the only agency empowered to deliberate and approve mining applications. It is designed to democratize the process of screening and issuing permits to mining companies to ensure that all stakeholders will be able to air their voice on the said applications. This will be comprised of the Mined and Geosciences Bureau (MGB), the Department of Environment and Natural Resources (DENR), affected local government units (from the provincial to the city or municipal levels), non-government organizations, and indigenous peoples if their ancestral lands will be covered by the mining application. The MGB shall remain as the primary government agency tasked to regulate existing mining operations.

The proposed measure specifically enumerates areas where mining activities shall not be permitted. Among those declared as “no-go zones” by the Bill are the following: head waters of watershed areas; areas with potential for acid mine drainage; critical watersheds; critical habitats; climate disaster-prone areas; geohazard areas; cultural sites, which may include, but not limited to, sacred sites and burial grounds; traditional swidden farms, and hunting grounds; prime agricultural lands; community sites; key biodiversity areas; densely populated areas; high conflict areas; and virgin forests, watershed forest reserves, wilderness area, mangrove forests, mossy forests, national parks, protection forests, provincial/municipal forests, parks, greenbelts, game refuge and bird sanctuaries, and their respective buffer zones as defined by law and in areas expressly prohibited under the National Integrated Protected Area System (NIPAS) under Republic Act 7586, Department Administrative Order 25 series of 1992, and other laws.

Finally, with regard to the revenue-sharing aspect of the proposed measure, the Bill requires additional taxes that mining companies have to pay on top of the 2% excise tax currently imposed under the 1995 Mining Act. The Bill also aims to increase the share of the government in mining to 10% of the gross revenues of the company, as well as to impose an Indigenous Cultural Communities (ICCs) equivalent to at least 10% of the company‘s gross revenues if it operates within ancestral domains. Community development programs shall not be considered as royal payment. The Bill stipulates that funds must be set aside for scientific and research development, and legal support services for those affected by the mining operations.

House Bill 3763 is currently being consolidated by a technical working group (TWG) in the Committee on Environment and Natural Resources composed of staff members of the authors of the different bills on responsible mining. To ensure the eventual passage of the Bill in the 15th Congress, Akbayan continues to work with its civil society partners under the Save Our Sovereignty – Yamang Minerales Nagsisilbi sa Bayan (SOS-Yamang Bayan) Network.

[1] G.R. No. 129546, December 13, 2005

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