EXECUTIVE ORDER NO. 279
EXECUTIVE ORDER NO. 279 -
AUTHORIZING THE SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES TO
NEGOTIATE AND CONCLUDE JOINT VENTURE, CO-PRODUCTION, OR
PRODUCTION-SHARING AGREEMENTS FOR THE EXPLORATION, DEVELOPMENT AND
UTILIZATION OF MINERAL RESOURCES, AND PRESCRIBING THE GUIDELINES FOR
SUCH AGREEMENTS AND THOSE AGREEMENTS INVOLVING TECHNICAL OR FINANCIAL
ASSISTANCE BY FOREIGN-OWNED CORPORATIONS FOR LARGE-SCALE EXPLORATION,
DEVELOPMENT, AND UTILIZATION OF MINERALS
WHEREAS,
Sec. 2 of Article XII of the 1987 Constitution provides that the
exploration, development and utilization of natural resources shall be
under the full control and supervision of the State, and that the State
may directly undertake such activities, or may enter into
co-production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations, or associations at least sixty per
centum (60%) of whose capital is owned by such citizens, which
agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and
conditions as may be provided by law;
WHEREAS, Sec. 2, Article XII of the 1987 Constitution further
provides that the President may enter into agreements with
foreign-owned corporations involving either technical or financial
assistance for large-scale exploration, development and utilization of
minerals, petroleum and other mineral oils according to the general
terms and conditions provided by law;
WHEREAS, there are existing and expected proposals from interested
parties, including foreign-owned corporations, for agreements involving
the exploration, development and utilization of minerals that require
immediate consideration to encourage investment in the mining industry
which plays a pivotal role in the economic development of the country;
and
WHEREAS, in order to enable the Government to consider and conclude
such agreements, it is necessary in the national interest to provide
the legal basis and authority as well as the general guidelines and
framework for entering into such contracts or agreements envisioned by
Sec. 2, Article XII of the 1987 Constitution until Congress shall
enact a more comprehensive legislation on the subject.
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do hereby
order:
Section 1. The Secretary of the Department of
Environment and Natural Resources (hereinafter referred to as “the
Secretary”) is hereby authorized to negotiate and enter into, for and
in behalf of the Government, joint venture, co-production, or
production-sharing agreements for the exploration, development, and
utilization of mineral resources with any Filipino citizen, or
corporation or association at least sixty per centum (60%) of whose
capital is owned by Filipino citizens. Such joint venture,
co-production, or production-sharing agreements may be for a period not
exceeding twenty-five years, renewable for not more than twenty-five
years, and shall include the minimum terms and conditions prescribed in
Sec. 2 hereof. In the execution of a joint venture, co-production,
or production-sharing agreement, the contracting parties, including the
Government, may consolidate two or more contiguous and geologically
related mining claims or leases and consider them as one contract area
for purposes of determining the subject of the joint venture,
co-production or production-sharing agreement.
Sec. 2. The following minimum terms and
conditions shall be incorporated in the co-production, joint venture or
production-sharing agreement: (a) all the necessary management,
technology and financial services to be furnished by the contractor;
(b) the use of local goods and services to the maximum extent
practicable, must be given preference; (c) a condition that the
contractor shall not require title to the contract area; (d) the
stipulated share in revenues and manner of payment thereof; (e) a
period of exploration not exceeding two (2) years from date of the
agreement, extendible for another two (2) years; (f) a period of
utilization including development which shall not exceed twenty-five
(25) years, subject to renewal for another period not exceeding
twenty-five (25) years under same the terms and conditions; (g)
obligatory relinquishment of portions of the contract area after the
exploration period which are not needed for utilization and
development; (h) work program and minimum expenditure commitment for
the exploration period; (i) provision on consultation and arbitration
with respect to interpretation and implementation of the agreement; (j)
employment and training of Filipino personnel; (k) industrial safety
and anti-pollution measures; (l) restoration and/or protection of the
environment; (m) transfer of technology to the Government or local
mining company; (n) a stipulation that all data and information
gathered by the contractor shall be furnished to the Bureau of Mines
and Geo-Sciences and that all books of accounts and records shall be
open to inspection; (o) commitment to community development; (p) such
other terms and conditions not inconsistent with the Constitution and
existing laws, as the Secretary may deem to be in the best interest of
the Government.
Sec. 3. Any contract or agreement which may be
entered into by the Secretary pursuant to Section s 1 and 2 hereof shall
be subject to the approval of the President.
Sec. 4. The Secretary is further hereby
authorized to accept, consider and evaluate proposals from
foreign-owned corporations or foreign investors for contracts or
agreements involving either technical or financial assistance for
large-scale exploration, development and utilization of minerals,
which, upon appropriate recommendation of the Secretary, the President
may execute with the foreign proponent. In entering into such
proposals, the President shall principally consider the real
contributions to the economic growth and general welfare of the country
that will be realized, as well as the development and use of local
scientific and technical resources that will be promoted by the
proposed contract or agreement. Until Congress shall determine
otherwise, large-scale mining, for purpose of this Section , shall mean
those proposals for contracts or agreements for mineral resources
exploration, development, and utilization involving a committed capital
investment in a single mining unit project of at least Fifty Million
Dollars in United States Currency (US $50,000,000.00).
Sec. 5. Any contract or agreement entered into by
the President pursuant to Sec. 4 hereof shall be reported to
Congress by the Executive Secretary on behalf of the President within
thirty (30) days from its execution.
Sec. 6. The Secretary shall promulgate such
supplementary rules and regulations as may be necessary to effectively
implement the provisions of this Executive Order.
Sec. 7. All provisions of Presidential Decree No.
463, as amended, other existing mining laws, and their implementing
rules and regulations, or parts thereof, which are not inconsistent
with the provisions of this Executive Order, shall continue in force
and effect.
Sec. 8. This Executive Order shall take effect
immediately.
DONE in the City of Manila,
this 25th day of July, in the name of Our Lord, nineteen hundred and
eighty-seven.
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Since 19.07.98.