CHAPTER X & XI

Definition of terms

 Contractor - means a qualified person acting alone or in consortium who is a party to a mineral agreement or to a financial or
technical assistance agreement.
 Financial or technical assistance agreement - means a contract involving financial or technical assistance for large-scale exploration,
development, and utilization of mineral resources.
 Permittee - means the holder of an exploration permit.
 COMMONWEALTH ACT NO. 613 – An act to control and regulate the immigration of aliens into Philippines
 Exploration - means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys, remote
sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence,
extent, quantity and quality thereof and the feasibility of mining them for profit.
 Director- the Director of the Mines and Geosciences Bureau.

Duties of a Contractor:

 assist in the development of its mining community, promotion of the general welfare of its inhabitants and development of science
and mining technology. (Sec. 57)
 A contractor shall maintain an effective program of manpower training and development throughout the term of the mineral
agreement and shall encourage and train Filipinos to participate in all aspects of the mining operations, including the management
thereof.(Sec. 59)
 A contractor shall give preference to the use of local goods, services and scientific and technical resources in the mining operations,
where the same are of equivalent quality, and are available on equivalent terms as their imported counterparts. (Sec. 60)

Credited activities or expenditures for the development of mining communities and science and mining technology(Sec. 58):

a. Any activity or expenditure intended to enhance the development of the mining and neighboring communities of a mining
operation other than those required or provided for under existing laws, or collective bargaining agreements, and the like; and

b. Any activity or expenditure directed towards the development of geosciences and mining technology such as, but not limited to,
institutional and manpower development, and basic and applied researches. Appropriate supervision and control mechanisms shall
be prescribed in the implementing rules and regulations of this Act.

Social Development and Management Program and Community Development Program (Section 136-A of IRR)

All Contractors/Permit Holders/Lessees shall prepare an SDMP, in consultation and in partnership with the host and neighboring
communities. The SDMP shall be actively promoted and shall cover and include all P/P/As towards enhancing the development of the host and
neighboring communities in accordance with credited activities or expenditures as provided under RA. 7942 and its IRR. To meet the changing
needs and demands of the communities, the Contractor/Permit Holder/Lessee engaged in mining operations shall submit every five (5) years an
SDMP to the Regional Office for approval as provided for in Section 136-B hereof.

In the case of a holder of an Exploration Permit or a Mineral Agreement or FTAA in the Exploration Stage, the Permittee/Contractor
shall develop and implement a Community Development Program (CDP) which implementation shall be supported by a fund equivalent to a
minimum of ten percent (10.0%) of the budget of the approved two (2)-year Exploration Work Program

Use of Indigenous Goods, Services and Technologies (Section 138 of IRR)

To the maximum extent compatible with efficient mining operations, the Contractor/Permit Holder/Lessee shall give preference to
products, services and technologies produced and offered in the Philippines of comparable quality. In particular, the Contractor/Permit
Holder/Lessee shall give preference to Filipino construction enterprises, construct buildings utilizing materials and skills available in the
Philippines, employ Filipino subcontractors for road construction and transportation, and purchase Philippine household equipment, furniture
and food.

Penalties (Section 136-F of IRR)

Contractor/Permit Holder/Lessee found not implementing its approved SDMP 88 and Programs on Development of Mining
Technology and Geosciences and on IEC, or operating without such approved Programs shall, on the first offense, be liable to a fine not
exceeding Five Thousand Pesos (PhP5,000.00). A succeeding offense shall be sufficient ground to suspend its mining/milling operations in the
mining areas, in addition to a fine not exceeding Five Thousand Pesos (PhP5,000.00).
 Provided, That approved Programs shall be deemed revoked if the mining operation of the Contractor/Permit Holder/Lessee is
suspended or stopped for a period of at least two (2) consecutive years.

Can a contractor hire a foreigner? (Sec. 62)

General rule: Preference to Filipinos in all types of mining employment

Give preference to qualified Filipino citizens in the hiring of personnel for its mining operations, the majority of which
shall originate according to priority from the host and neighboring communities, the host municipality and province
where mine is located: Provided, That the Contractor/Permit Holder/Lessee shall organize, at its own expense, skills
enhancement programs in the absence of the needed skills: Provided, further, That it shall give its firm commitment to
skills re-formation and entrepreneurship development for people in the mining communities as an integral part of the
mine closure process.

Exception: contractor may employ Foreigners for highly-technical and specialized mining operations

Note: No person under sixteen (16) years of age shall be employed in any
phase of mining operations and no person under eighteen (18) years of age
shall be employed underground in a mine. (Sec. 64)

Conditions for Employment of foreigners: (Sec. 62)

 Employment is subject to provisions of Commonwealth Act No. 613, as amended,

 Technical and specialized work which requires highly-specialized training or long experience in exploration, development or
utilization of mineral resources
 approval of the Director
 employment shall not exceed five (5) years or the payback period as represented in original project study, whichever is longer
 That each foreigner employed in a position lower than the managerial level shall be hired on a consultancy basis.
 Provided each foreigner employed as mine manager, vice-president for operations or in an equivalent managerial position in charge
of mining, milling, quarrying or drilling operation shall comply with requirements for employment.
 Foreigners that may be employed in mining operations shall:

a. Present evidence of his qualification and work experience; or

b. Shall pass the appropriate government licensure examination; or

c. In special cases, may be permitted to work by the Director for a period not exceeding one (1) year: Provided, however,
That if reciprocal privileges are extended to Filipino nationals in the country of domicile, the Director may grant waivers
or exemptions.

d. Secure working permits/visa from other Government agency(ies) concerned; and

e. Submit other supporting papers deemed necessary by the Secretary/Director/Regional Director concerned.

Period for removal improvements (Sec 61)

 Prior to cessation of mining operations occasioned by abandonment or withdrawal of operations, on public lands by the contractor,
the contractor shall one (1) year within which to remove his improvements

Failure to do so means that all the social infrastructure and facilities shall be turned over or donated tax-free to the
proper government authorities, national or local, to ensure that said infrastructure and facilities are continuously
maintained and utilized by the host and neighboring communities.