The contractor shall prepare a mining and milling plan so as to minimize environmental damage. As much as possible, it shall control pollution and transform mined-out areas or materials into economically and socially productive forms during mining operations. The contractor must comply with the required environmental impact statement (EIS) following the prescribed format, as component of the feasibility studies of the mine. These activities must be stated in the work program. – Sec. 13.3.n.4
The contractor may use the water resources in the contract area, subject to applicable laws, rules and regulations, as well as right of third parties to use the same. – Sec. 13.2.g
The contractor shall keep accurate technical records about its mining operations as well as financial and marketing accounts, and shall make them available to government representatives authorized by the Secretary for the purpose of checking whether the contractor is following the terms of this contract.
Other authorized government representatives may also have access to such accounts as allowed by other laws, rules and regulations. – Sec. 10.1.f
The contractor shall also allow access to exploration and production sites and operations by authorized government inspectors. - Sec. 10.1.j
The contractor shall keep accurate technical records about its mining operations as well as financial and marketing accounts, and shall make them available to government representatives authorized by the Secretary for the purpose of checking whether the contractor is following the terms of this contract.
Other authorized government representatives may also have access to such accounts as allowed by other laws, rules and regulations. The contractor shall also allow access to exploration and production sites and operations by authorized government inspectors. - Sec. 13.3.g
The contractor shall also allow access to exploration and production sites and operations by authorized government inspectors. - Sec. 13.3.k
The contractor shall pay regulatory fees at Php10/hectare for the 1st year; with yearly increments of Php5/hectare for the 2nd and subsequent years. - Sec. 6.2
The contractor shall pay taxes and fees required by law, rules and regulations. - Sec. 10.1.h
The contractor shall pay taxes and fees required by law, rules and regulations. - Sec. 13.3.i
Production Share - "Profit Oil features (triggers for variations in split - IRR, factor, production, etc .)
The contractor shall pay the government 60% of the net revenues. This is inclusive of the corporate tax, excise tax, and all other taxes, duties, fees, levies, royalties, as well as tax on dividend payments to stockholders, and tax on interest payments on foreign loans extended by the stockholders to the contractor; provided, that if this inclusion needs a law, then such inclusion shall take effect after such law has been passed. - Sec. 11.4
This 60% share is payable after the contractor and its affiliates have recovered their pre-operating expenses. - Sec. 11.5
The contractor shall coordinate with the proper authorities in preparing development plans for the host and neighboring communities, and shall help create self-sustaining, income-generating activities, such as reforestation and production of goods and services needed by the mine. - Sec. 13.3.n.2 (i-ii)
The contractor shall give preference to Filipino citizens who are residing near the mine site for its mining operations. - Sec. 13.3.n.2.iii
As much as possible, the contractor shall aim to “Filipinize” its personnel, such that its unskilled and clerical staff shall be 100% Filipino from Year 1 - 15; skilled personnel shall be 100% Filipino by Year 7 - 15; professional and management employees shall be 60% Filipino by Year 10 - 15. – Sec. 15.1
To the maximum extent compatible with efficient operations, contractors shall give preference to products and services produced and offered in the Philippines of comparative quality and price. – Sec. 10.1.e.
In particular, contractors shall give preference to Filipino construction enterprises and use buildings which can be constructed by using materials and skills available in the Philippines. They shall employ Filipino subcontractors for road construction and transportation, and purchase Philippine household equipment, furniture and food. - Sec. 13.3.e
Contractors shall, to the extent feasible and acceptable in view of the rates and conditions available, maximize the use of Filipino vessels and other means of transport available in the Philippines. To facilitate this, contractors may set joint arrangements with Filipino concerns for the transportation of concentrates. – Sec. 13.3.f
The contractor shall recognize and respect the rights, customs, and traditions of indigenous tribal communities over their ancestral lands. - Sec. 10.1.k
The contractor shall recognize and respect the rights, customs, and traditions of indigenous tribal communities over their ancestral lands. - Sec. 13.3.m
If the Filipino residents of the area lack skills and expertise, the contractor shall undertake a training and recruitment program at its own expense. - Sec. 13.3.n.2.iii
Costs and expense of training of Filipino personnel and employees shall be included in the operating expenses. – Sec. 5.2
The contractor may make expansions, modifications and improvements of the mining facilities, and may add new facilities necessary for mining operations, as long as these are stated in its Work Program as approved by the Secretary. Repairs and replacements are not covered in this section. - Sec. 10.4
The contractor may make expansions, modifications, improvements, and replacements of the mining facilities, and may add new facilities necessary for mining operations, as long as these are stated in its Work Program as approved by the Secretary. - Sec. 6.4
The contractor shall acquire only such assets that it needs for the operation of the mine. All movable units shall remain the property of the contractor, who may have them removed and re-exported. All that remain after 12 months from termination of this contract shall belong to the government. - Sec. 14.1 -14.4
The contractor shall prepare and submit a Work Program for the contract area stating its proposed mining operations and expenditures for the particular period. - Sec. 12.1
The contractor shall invest a minimum of US$50 million in the mining area. - Sec. 1.1
The contractor shall start its exploration operations within 3 months from effective date. – Sec. 5.1
The contractor shall strictly follow its approved exploration work program. It commits to spend the following:
US$200,000.00 for the 1st year; US$400,000.00 for the 2nd year; US$600,000.00 for the 3rd year; US$800,000.00 for the 4th year; and US$1 million for the 5th year. – Sec. 5.2
During the exploration period, the contractor shall conduct feasibility studies and submit its Declaration of Mining Feasibility indicating the mining area, with a Work Program for the next 3 years. Other areas not mentioned shall be deemed relinquished. – Sec. 7.1
The contractor has 36 months from the submission of the declaration of mining feasibility within which to complete the development and construction works. An extension may be granted based on justifiable grounds.- Sec. 9.1
Within 30 days from the completion of the construction works, the contractor shall submit a work program covering 3 years, and shall start commercial production following said work program. – Sec. 10.1
Subsequent work programs shall be submitted not later than 30 days before the expiration of the previous work program. The contractor shall conduct mining operation in accordance with said work programs. – Sec. 10.2
The parties have 1 year to settle any dispute amicably and in good faith, before resorting to arbitration. Disputes that were not resolved in a year shall be settled by a tribunal of 3 arbitrators: the first to be appointed by the contractor, the second to be appointed by the Secretary, and the third to be appointed by the first 2 so appointed and who shall be the Chairman of the tribunal. R.A. 876 (Arbitration Act) shall apply.
Where substantial foreign interests are involved, the contractors has 60 days from effective date to opt to follow the Rules of Conciliation and Arbitration of the International Chamber of Commerce (ICC), or if not applicable, the United Nations Commission for International Trade Law (UNCITRAL). In either case, the arbitation shall be conducted applying substantive laws of the Philippines.
The parties shall share 50%-50% of the fees and expenses of the arbitrators and the costs of the arbitration. They shall shoulder their own costs and attorney’s fee. - Sec. 17.1, 17.2
The contractor may assign its rights, interests and obligations in this contract to another entity, subject to the approval of the Secretary, whose approval will not be unreasonably withheld. Assignment to an affiliate as qualified as the contractor shall not require an approval. - Sec. 13.2.e.i
This contract shall be terminated and the parties shall be relieved of their obligations, as follows:
1. Upon expiration of the term or its extension;
2. Upon termination by the government or the contractor due to substantial breach of contract of the other, subject to 90 days' notice giving 180 days to remedy the same; or
3. Upon withdrawal by contractors, by giving six (6) months’ notice if in its business judgment the continuation of operations becomes technically or economically unfeasible. This notice of withdrawal shall become effective 6 months after receipt by the government.
No delay or omission by the government shall affect its rights under the contract, unless it issues a written waiver saying so. If the government opts to terminate the contract, it does not mean that it abandons other courses of action available. If it waives one default by the contractors, it does not mean that it waives all other defaults, unless specifically stated in writing.
In case of termination, the contractors shall pay all fees and other liabilities due up to the end of the year when the termination becomes effective, except for liabilities from which the contractor has been relieved.
4. Upon falsehood or substantial omission of one party resulting in the vitiated consent of the other; and
5. by mutual consent of the parties. - Sec. 19
– Sec. 19
The governing law is Philippine law. Art. XII, Sec. 2 of the 1987 Constitution allows the exploration, development, and utilization of mining areas under the full control and supervision of the government.
This contract was executed under Executive Order 279, s. 1987, entitled, "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.“
Presidential Decree No. 463 is entitled the “Mineral Resources Development Decree of 1974."
Failures and delays caused by force majeure may be excused.
The term of the contract shall be extended for the same amount of time that the mining operations were delayed due to force majeure.
The party affected shall immediately give a written notice to the other party of such failure or delay, the expected duration thereof, its anticipated effect, and shall remedy the delay as much as possible. If the force majeure happens to be a labor dispute, both parties are not obligated to settle it.
– Sec. 20.4 (a-c)
The contractor shall produce geological, geophysical, geochemical and other types of maps and reports that are appropriate in scale, format, and nomenclature, following internationally accepted standards and practices.
The contractor shall systematically keep technical, economic, financial, and related data generated from the mining area and shall make these available to students, researchers, and other persons responsible for the development of mining, geoscience and processing technology after declassification. – Sec. 13.3.n.3.(i-ii)
During the exploration period, the contractor shall submit an annual report within 60 days form the end of each contract year. It shall state financial expenditures, raw and processed analytical data, assay results, duplicate samples, field data, copies of originals from drilling reports, and other related information on exploration activities.
Within 6 months from the end of the exploration phase, the contractor shall submit a final report, professional in form and substance, incorporating all the findings in the contract area, such as location of samples, assays, chemical analysis, and assessment of mineral potentials, and complete and detailed expenditures during the exploration phase.
These information shall be kept confidential, subject to other provisions in this contract – Sec. 6.3
During the development and construction period, the contractor shall submit an annual report stating the major activities, achievements and expenditures during the year covered, including maps, assays, rock and mineral analyses, and progress geological and similar reports, to be submitted within 60 days after December 31.
Within 6 months from completing the development and construction period, the contractor shall submit a final report integrating all information in maps of appropriate scale and quality as well as monographs or reports following international standards. – Sec. 9.3
For the production period, the contractor shall submit quarterly reports within 30 days after the end of each calendar quarter, stating the tonnage of production in terms of ores, concentrates, and their corresponding grades and other types of products, values, destination of sales or exports and to whom sold, terms of sales and expenditures. – Sec. 10.3.a
The contractor shall also submit, within 60 days from the end of each calendar year, an annual report indicating in sufficient detail the total tonnage of ores and ore reserves; details and type of ore; what stage in production or transit; location; whether sold or committed for export; shipping details and terms of sale; and whether refined, processed or manufactured in the Philippines, with full specifications of the intermediate products, by-products or final products, and their terms of disposal.
The annual report shall also contain the work accomplished and work in progress of installations and facilities, including investments actually made or committed.
It shall also contain the profile of the workforce, management, and staff, stating their nationalities; and for Filipinos, their place of origin (barangay, town, province, region). It shall also state the nationality of the owners of the contractors. - Sec. 10.3.b