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7076

TodayisThursday,October06,2016

RepublicofthePhilippines
CongressofthePhilippines
MetroManila

EighthCongress

RepublicActNo.7076June27,1991

ANACTCREATINGAPEOPLE'SSMALLSCALEMININGPROGRAMANDFOROTHERPURPOSES

BeitenactedbytheSenateandHouseofRepresentativesofthePhilippinesinCongressassembled::

Section1.Title.ThisActshallbeknownasthe"People'sSmallscaleMiningActof1991."

Section2.DeclarationofPolicy.ItisherebydeclaredoftheStatetopromote,develop,protectandrationalize
viablesmallscaleminingactivitiesinordertogeneratemoreemploymentopportunitiesandprovideanequitable
sharingofthenation'swealthandnaturalresources,givingdueregardtoexistingrightsashereinprovided.

Section3.Definitions.ForpurposesofthisAct,thefollowingtermsshallbedefinedasfollows:

(a) "Mineralized areas" refer to areas with naturally occurring mineral deposits of gold, silver, chromite,
kaolin,silica,marble,gravel,clayandlikemineralresources

(b) "Smallscale mining" refers to mining activities which rely heavily on manual labor using simple
implementandmethodsanddonotuseexplosivesorheavyminingequipment

(c) "Smallscale miners" refer to Filipino citizens who, individually or in the company of other Filipino
citizens, voluntarily form a cooperative duly licensed by the Department of Environment and Natural
Resourcestoengage,underthetermsandconditionsofacontract,intheextractionorremovalofminerals
ororebearingmaterialsfromtheground

(d) "Smallscale mining contract" refers to coproduction, joint venture or mineral production sharing
agreementbetweentheStateandasmallscaleminingcontractorforthesmallscaleutilizationofaplotof
mineralland

(e)"Smallscaleminingcontractor"referstoanindividualoracooperativeofsmallscaleminers,registered
withtheSecuritiesandExchangeCommissionorotherappropriategovernmentagency,whichhasentered
into an agreement with the State for the smallscale utilization of a plot of mineral land within a people's
smallscaleminingarea

(f) "Active mining area" refers to areas under actual exploration, development, exploitation or commercial
production as determined by the Secretary after the necessary field investigation or verification including
contiguousandgeologicallyrelatedareasbelongingtothesameclaimownerand/orundercontractwithan
operator,butinnocasetoexceedthemaximumareaallowedbylaw

(g) "Existing mining right" refers to perfected and subsisting claim, lease, license or permit covering a
mineralizedareapriortoitsdeclarationasapeople'ssmallscaleminingarea

(h)"Claimowner"referstoaholderofanexistingminingright

(i) "Processor" refers to a person issued a license to engage in the treatment of minerals or orebearing
materialssuchasbygravityconcentration,leachingbenefication,cyanidation,cutting,sizing,polishingand
othersimilaractivities

(j) "License" refers to the privilege granted to a person to legitimately pursue his occupation as a small
scaleminerorprocessorunderthisAct

(k) "Mining plan" refers to a twoyear program of activities and methodologies employed in the extraction
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and production of minerals or orebearing materials, including the financial plan and other resources in
supportthereof

(l) "Director" refers to the regional executive director of the Department of Environment and Natural
Resourcesand

(m)"Secretary"referstotheSecretaryoftheDepartmentofEnvironmentandNaturalResources.

Section 4. People's Smallscale Mining Program. For the purpose of carrying out the declared policy
provided in Section 2 hereof, there is hereby established a People's Smallscale Mining Program to be
implemented by the Secretary of the Department of Environment and Natural Resources, hereinafter called the
Department, in coordination with other concerned government agencies, designed to achieve an orderly,
systematic and rational scheme for the smallscale development and utilization of mineral resources in certain
mineralareasinordertoaddressthesocial,economic,technical,andenvironmentalconnectedwithsmallscale
miningactivities.

ThePeople'sSmallscaleMiningProgramshallincludethefollowingfeatures:

(a)Theidentification,segregationandreservationofcertainminerallandsaspeople'ssmallscalemining
areas

(b)Therecognitionofpriorexistingrightsandproductivity

(c)Theencouragementoftheformationofcooperatives

(d)Theextensionoftechnicalandfinancialassistance,andothersocialservices

(e)Theextensionofassistanceinprocessingandmarketing

(f)Thegenerationofancillarylivelihoodactivities

(g)The regulation of the smallscale mining industry with the view to encourage growth and productivity
and

(h)Theefficientcollectionofgovernmentrevenue.

Section 5. Declaration of People's Smallscale MiningAreas. The Board is hereby authorized to declare
andsetasidepeople'ssmallscaleminingareasinsitesonshoresuitableforsmallscalemining,subjecttoreview
bytheSecretary,immediatelygivingprioritytoareasalreadyoccupiedandactivelyminedbysmallscaleminers
beforeAugust 1, 1987: provided, that such areas are not considered as active mining areas: provided, further,
that the minerals found therein are technically and commercially suitable for smallscale mining activities:
provided, finally, that the areas are not covered by existing forest rights or reservations and have not been
declaredastouristormarinereserved,parksandwildlifereservations,unlesstheirstatusassuchiswithdrawnby
competentauthority.

Section 6. Future People's Smallscale Mining Areas. The following lands, when suitable for smallscale
mining,maybedeclaredbytheBoardaspeople'ssmallscaleminingareas:

(a)Publiclandsnotsubjecttoanyexistingright

(b)Publiclandscoveredbyexistingminingrightswhicharenotactiveminingareasand

(c)Privatelands,subjecttocertainrightsandconditions,exceptthosewithsubstantialimprovementsorin
bonafideandregularuseasayard,stockyard,garden,plantnursery,plantation,cemeteryorburialsite,or
land situated within one hundred meters (100 m.) from such cemetery or burial site, water reservoir or a
separateparceloflandwithanareaoftenthousandsquaremeters(10,000sq.m.)orless.

Section7.AncestralLands.Noancestrallandmaybedeclaredasapeople'ssmallscaleminingareawithout
the prior consent of the cultural communities concerned: provided, that, if ancestral lands are declared as
people'ssmallscaleminingareas,themembersoftheculturalcommunitiesthereinshallbegivenpriorityinthe
awardingofsmallscaleminingcontracts.

Section 8. Registration of Smallscale Miners. All persons undertaking smallscale mining activities shall
register as miners with the Board and may organize themselves into cooperatives in order to qualify for the
awardingofapeople'ssmallscaleminingcontract.

Section9.AwardofPeople'sSmallscaleMiningContracts.Apeople'ssmallscaleminingcontractmaybe
awarded by the Board to smallscale miners who have voluntarily organized and have duly registered with the

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appropriategovernmentagencyasanindividualminerorcooperativeProvided,thatonlyone(1)people'ssmall
scale mining contract may be awarded at any one time to a smallscale mining operations within one (1) year
fromthedateofaward:provided,further,thatpriorityshallbegivenorcitywherethesmallscaleminingareais
located.

ApplicationsforacontractshallbesubjecttoareasonablefeetobepaidtotheDepartmentofEnvironmentand
NaturalResourcesregionalofficehavingjurisdictionoverthearea.

Section 10. Extent of Contract Area. The Board shall determine the reasonable size and shape of the
contractareafollowingthemeridionalblocksystemestablishedunderPresidentialDecreeNo.463,asamended,
otherwiseknownastheMineralResourcesDevelopmentDecreeof1974,butinnocaseshalltheareaexceed
twenty hectares (20 has.) per contractor and the depth or length of the tunnel or adit not exceeding that
recommendedbythedirectortakingintoaccountthefollowingcircumstances:

(a)Sizeofmembershipandcapitalizationofthecooperative

(b)Sizeofmineralizedarea

(c)Quantityofmineraldeposits

(d)Safetyofminers

(e)Environmentalimpactandotherconsiderationsand

(f)Otherrelatedcircumstances.

Section 11. Easement Rights. Upon the declaration of a people's smallscale mining area, the director, in
consultationwiththeoperator,claimowner,landownerorlessorofanaffectedarea,shalldeterminetherightof
the small scale miners to existing facilities such as mining and logging roads, private roads, port and
communicationfacilities,processingplantswhicharenecessaryfortheeffectiveimplementationofthePeople's
Smallscale Mining Program, subject to payment of reasonable fees to the operator, claimowner, landowner or
lessor.

Section12.Rights Under a People's Smallscale Mining Contract. A people's smallscale mining contract
entitlesthesmallscaleminingcontractortotherighttomine,extractanddisposeofmineraloresforcommercial
purposes.Innocaseshallasmallscaleminingcontractbesubcontracted,assignedorotherwisetransferred.

Section13.TermsandConditionsoftheContract.Acontractshallhaveatermoftwo(2)years,renewable
subjecttoverificationbytheBoardforlikeperiodsaslongasthecontractorcomplieswiththeprovisionssetforth
inthisAct,andconfersuponthecontractortherighttominewithinthecontractarea:provided,thattheholderof
asmallscaleminingcontractshallhavethefollowingdutiesandobligations:

(a)UndertakeminingactivitiesonlyinaccordancewithaminingplandulyapprovedbytheBoard

(b)AbidebytheMinesandGeosciencesBureauandthesmallscaleMiningSafetyRulesandRegulations

(c)Complywithhisobligationstotheholderofanexistingminingright

(d) Pay all taxes, royalties or government production share as are now or may hereafter be provided by
law

(e)Complywithpertinentrulesandregulationsonenvironmentalprotectionandconservation,particularly
thoseontreecuttingmineralprocessingandpollutioncontrol

(f)FileunderoathattheendofeachmonthadetailedproductionandfinancialreporttotheBoardand

(g)Assumeresponsibilityforthesafetyofpersonsworkinginthemines.

Section14.RightsofClaimowners.Incaseasitedeclaredandsetasideasapeople'sscaleminingareais
coveredbyanexistingminingright,theclaimownerandthesmallscaleminersthereinareencouragedtoenter
into a voluntary and acceptable contractual agreement with respect to the smallscale utilization of the mineral
valuesfromtheareaunderclaim.Incaseofdisagreement,theclaimownershallbeentitledtothefollowingrights
andprivileges:

(a) Exemption from the performance of annual work obligations and payment of occupation fees, rental,
andrealpropertytaxes

(b) Subject to the approval of the Board, free access to the contract area to conduct metallurgical tests,

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explorationsandotheractivities,providedsuchactivitiesdonotundulyinterferewiththeoperationsofthe
smallscaleminersand

(c)Royaltyequivalenttooneandonehalfpercent(11/2%)ofthegrossvalueofthemetallicmineraloutput
or one percent (1%) of the gross value of the nonmetallic mineral output to be paid to the claimowner:
provided, that such rights and privileges shall be available only if he is not delinquent and other
performance of his annual work obligations and other requirements for the last two (2) years prior to the
effectivityofthisAct.

Section15.RightsofPrivateLandowners.Theprivatelandownerorlawfulpossessorshallbenotifiedofany
planorpetitiontodeclarehislandasapeople'ssmallscaleminingarea.Saidlandownermayopposesuchplan
orpetitioninanappropriateproceedingandhearingconductedbeforetheBoard.

If a private land is declared as a people's smallscale mining area, the owner and the smallscale mining
contractors are encouraged to enter into a voluntary and acceptable contractual agreement for the smallscale
utilizationofthemineralvaluesfromtheprivateland:provided,thattheownershallinallcasesbeentitledtothe
paymentofactualdamageswhichhemaysufferasaresultofsuchdeclaration:provided,further,thatroyalties
paid to the owner shall in no case exceed one percent (1%) of the gross value of the minerals recovered as
royalty.

Section 16. Ownership of Milllings. The smallscale mining contractor shall be the owner of all milllings
produced from the contract area. He may sell thelings or have them processed in any custom mill in the area:
provided, that, if the smallscale mining contractor decide to sell its milllings, the claimowner shall have a
preemptiverighttopurchasesaidmilllingsattheprevailingmarketprice.

Section 17. Sale of Gold. All gold produced by smallscale miners in any mineral area shall be sold to the
CentralBank,oritsdulyauthorizedrepresentatives,whichshallbuyitatpricescompetitivewiththoseprevailing
intheworldmarketregardlessofvolumeorweight.

TheCentralBankshallestablishasmanybuyingstationsingoldrushareastofullyservicetherequirementsof
thesmallscalemineralsthereat.

Section 18. Custom Mills. The establishment and operation of safe and efficient customs mills to process
minerals or orebearing materials shall be limited to mineral processing zones duly designated by the local
governmentunitconcerneduponrecommendationoftheBoard.

Inminingareaswheretheprivatesectorisunabletoestablishcustommills,theGovernmentshallconstructsuch
custommillsupontherecommendationoftheBoardbasedontheviabilityoftheproject.

TheBoardshallissuelicensesfortheoperationofcustommillsandotherprocessingplantssubjecttopollution
controlandsafetystandards.

The Department shall establish assay laboratories to crosscheck the integrity of custom mills and to render
metallurgicalandlaboratoryservicestomines.

Custommillsshallbeconstitutedaswithholdingagentsfortheroyalties,productionshareorothertaxesduethe
Government.

Section 19. Government Share and Allotment. The revenue to be derived by the Government from the
operation of the mining program herein established shall be subject to the sharing provided in the Local
GovernmentCode.

Section20.People'sSmallscaleMiningProtectionFund.ThereisherebycreatedaPeople'sSmallscale
Mining Protection Fund which shall be fifteen percent (15%) of the national government's share due the
Government which shall be used primarily for information dissemination and training of smallscale miners on
safety,healthandenvironmentalprotection,andtheestablishmentofminerescueandrecoveryteamsincluding
theprocurementofrescueequipmentnecessaryincasesofemergenciessuchaslandslides,tunnelcollapse,or
thelike.

Thefundshallalsobemadeavailabletoaddresstheneedsofthesmallscaleminersbroughtaboutbyaccidents
and/orfortuitousevents.

Section 21. Rescission of Contracts and Administrative Fines. The noncompliance with the terms and
conditionsofthecontractorviolationoftherulesandregulationsissuedbytheSecretarypursuanttothisAct,as
wellastheabandonmentoftheminingsitebythecontractor,shallconstituteagroundforthecancellationofthe
contractsandtheejectmentfromthepeople'ssmallscaleminingareaofthecontractor.Inaddition,theSecretary
mayimposefinesagainsttheviolatorinanamountofnotlessthanTwentythousandpesos(P20,000.00)andnot
morethanOnehundredthousandpesos(P100,000.00).Nonpaymentofthefineimposedshallrenderthesmall
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scaleminingcontractorineligibleforothersmallscaleminingcontracts.

Section22.ReversionofPeople'sSmallscaleMiningAreas.TheSecretary,uponrecommendationofthe
director,shallwithdrawthestatusofthepeople'ssmallscaleminingareawhenitcannolongerfeasiblyoperated
onasmallscaleminingbasisorwhenthesafety,healthandenvironmentalconditionswarrantthatthesameshall
reverttotheStateforproperdisposition.

Section 23. Actual Occupation by Smallscale Miners. Smallscale miners who have been in actual
operationofminerallandsonorbeforeAugust1,1987asdeterminedbytheBoardshallnotbedispossessed,
ejectedorremovedfromsaidareas:provided,thattheycomplywiththeprovisionsofthisAct.

Section24.Provincial/CityMiningRegulatoryBoard.Thereisherebycreatedunderthedirectsupervision
andcontroloftheSecretaryaprovincial/cityminingregulatoryboard,hereincalledtheBoard,whichshallbethe
implementingagencyoftheDepartment,andshallexercisethefollowingpowersandfunctions,subjecttoreview
bytheSecretary:

(a)Declareandsegregateexistinggoldrushareasforsmallscalemining

(b)Reservefuturegoldandotherminingareasforsmallscalemining

(c)Awardcontractstosmallscaleminers

(d)Formulateandimplementrulesandregulationsrelatedtosmallscalemining

(e)Settledisputes,conflictsorlitigationsoverconflictingclaimswithinapeople'ssmallscaleminingarea,
anareathatisdeclaredasmallminingand

(f)PerformsuchotherfunctionsasmaybenecessarytoachievethegoalsandobjectivesofthisAct.

Section25.CompositionoftheProvincial/CityMiningRegulatoryBoard.TheBoardshallbecomposedof
theDepartmentofEnvironmentandNaturalResourcesrepresentativeasChairmanandtherepresentativeofthe
governor or city mayor, as the representative of the governor or city mayor, as the case may be, one (1) small
scale mining representative, one (1) bigscale mining representative, and the representative from a
nongovernmentorganizationwhoshallcomefromanenvironmentalgroup,asmembers.

Therepresentativesfromtheprivatesectorshallbenominatedbytheirrespectiveorganizationsandappointed
bytheDepartmentregionaldirector.TheDepartmentshallprovidethestaffsupporttotheBoard.

Section 26. Administrative Supervision over the People's Smallscale Mining Program. The Secretary
through his representative shall exercise direct supervision and control over the program and activities of the
smallscaleminerswithinthepeople'ssmallscaleminingarea.

The Secretary shall within ninety (90) days from the effectivity of this Act promulgate rules and regulations to
effectively implement the provisions of the same. Priority shall be given to such rules and regulations that will
ensuretheleastdisruptionintheoperationsofthesmallscaleminers.

Section 27. Penal Sanctions. Violations of the provisions of thisAct or of the rules and regulations issued
pursuantheretoshallbepenalizedwithimprisonmentofnotlessthansix(6)monthsnormorethansix(6)years
andshallincludetheconfiscationandseizureofequipment,toolsandinstruments.

Section28.RepealingClause.Alllaws,decrees,lettersofinstruction,executiveorders,rulesandregulations,
and other issuances, or parts thereof, in conflict or inconsistent with this Act are hereby repealed or modified
accordingly.

Section29.SeparabilityClause.AnysectionorprovisionofthisActwhichmaybedeclaredunconstitutional
shallnotaffecttheothersectionsorprovisionshereof.

Section30.Effectivity.ThisActshalltakeeffectfifteen(15)daysafteritspublicationintheOfficialGazetteor
inanationalnewspaperofgeneralcirculation.

Approved:June27,1991.

TheLawphilProjectArellanoLawFoundation

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