The Mines and Geosciences Bureau (“MGB”) will adopt a two-step Alternative Dispute Resolution (“ADR”) process, which will include mediation and arbitration, pursuant to Executive Order No. 97 (Series of 2012) and Department of Environment and Natural Resources (“DENR”) Administrative Order (“DAO”) No. 2005-18 in re: Adoption of Alternative Dispute Resolution (“ADR”) Principles and Procedures in the Resolution of Appropriate Environment and Natural Resources Conflicts.

Section 7 of DAO No. 2005-18 specifically mandates the Panel of Arbitrators (“POA”) and the Mines Adjudication Board (“MAB”) to “create or modify their respective rules of procedures, where appropriate, to incorporate ADR principles or steps in addressing conflicts or hearing cases under their jurisdictions.”

The adoption of ADR principles and procedures appears to cover the matters before the POA and the MAB. In fact, the MGB stated on its website that “separate Stand-alone Rules for the ADR processes shall also be designed, taking into consideration Section 15 of the current Rules on Pleading, Practice and Procedure before the POA and MAB. The MGB is yet to decide on how this would be structured administratively.” At present, Section 15 already provides for Mandatory Conference/Conciliation before the POA. Under Section 7 of Republic Act (“R.A.”) No. 9285, otherwise known as the “Alternative Dispute Resolution Act” or “ADR Act”, the term “mediation” includes conciliation. Thus, the MGB will also be taking into account said Section 15 in drafting its Stand-Alone Rules for the ADR processes.

Possible Coverage of the ADR

The Legal Division of the MGB has stated that the ADR will possibly cover: (1) disputes under the jurisdiction of POA; (2) compromise settlements during the appellate stage at the MAB; and (3) administrative matters handled by MGB.

  1. Disputes under the jurisdiction of POA

    Under Section 77 of R.A. No. 7942, POA has jurisdiction over the following: (a) disputes involving rights to mining areas; (b) disputes involving mineral agreements or permits; (c) disputes involving surface owners, occupants and claimholders/ concessionaires; and (d) disputes pending before the MGB and the DENR at the date of the effectivity of R.A. 7942.In Gonzales vs. Climax Mining Ltd., 452 SCRA 607 (2005), the Supreme Court ruled that the jurisdiction of POA is limited only to those mining disputes which raise questions of fact or matters requiring the application of technological knowledge and experience. 

    1. Disputes involving rights to mining areas

       In Celestial Nickel Mining Exploration Corporation v. Macroasia Corp., 565 PHIL 466 (2007), the Supreme Court stated that “disputes involving rights to mining areas refers to any adverse claim, protest, or opposition to an application for mineral agreement.”InNarra Nickel vs. Redmont, 722 SCRA 382 (2014), the Supreme Court said that “one such dispute is an MPSA (Mineral Production Sharing Agreement) application to which an adverse claim, protest or opposition is filed by another interested applicant.”
    2. Disputes involving mineral agreements or permits

      Section 3(ab) of R.A. 7942 defines a mineral agreement as “a contract between the government and a contractor, involving mineral production-sharing agreement, co-production agreement, or joint-venture agreement.”In Olympic Mines and Development Corp. vs. Platinum Group Metals Corporation, 587 SCRA 624 (2009), the Supreme Court defined “permit” referred to in Section 77(b) of the Mining Act as pertaining to exploration permit, quarry permit, and other mining permits recognized in Chapters IV, VIII, and IX of said Act.In this case, the Supreme Court said that Citinickel Mines and Development Corporation’s complaint seeking to invalidate the Operating Agreement based on Platinum Group Metals Corporation’s alleged violation of its terms is a “dispute involving mineral agreements or permits” under Section 77(b) of R.A. 7942.
    3. Disputes involving surface owners, occupants and claimholders/ concessionaires

      In Olympic Mines and Development Corp. vs. Platinum Group Metals Corporation, supra, the Supreme Court stated that, “Surface-owners, occupants, and concessionaires refer to owners or occupants of the real property affected by the mining activities conducted by the claim-holders/concessionaires (entities which are holding mining rights granted by the government).”
    4. Disputes pending before the MGB and the DENR at the date of the effectivity of R.A. 7942
  2. Compromise settlements during the appellate stage at the MAB

    The MAB exercises appellate jurisdiction over the decisions and orders of the POA in accordance with Section 78 of R.A. 7942 and appealed cases before the DENR in accordance with Section 2(d) of Rule III of the Rules on Pleading, Practice and Procedure before the POA and MAB. Even at the appellate level, there are instances when compromises are made between the parties involved. These compromise settlements may be subject to ADR.
  3. Administrative matters handled by MGB

    Administrative matters handled by the MGB usually involve regulation, compensation and human rights issues. If these matters are not settled at the administrative level with MGB, they may also be subject to ADR.

Effect of ADR on Existing Mining Agreements

The adoption of ADR principles and procedures is limited to the foregoing matters, and shall not affect agreements, unless the agreements: 1) relate to the above enumeration; and 2) do not have an arbitration clause.

In Benguet Corporation vs. Department of Environment and Natural Resources-Mines Adjudication Board, 545 SCRA 196 (2008), the Supreme Court ruled that the Petition for Declaration of Nullity/Cancellation of the Royalty Agreement with Option to Purchase (“RAWOP”) should have first been brought to voluntary arbitration before the POA could take cognizance of the case because the RAWOP contained an arbitration agreement.

Finalization of ADR Rules

The Bureau targets the finalization of the ADR Rules within the year.

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