MALACAÑANG
M a n i l aPRESIDENTIAL DECREE No. 1174
AMENDING PRESIDENTIAL DECREE NUMBERED NINE HUNDRED SEVENTY TWO, OTHERWISE KNOWN AS THE "COAL DEVELOPMENT ACT OF 1976"
WHEREAS, the coal development program envisioned in Presidential Decree No. 972, otherwise known as the "Coal Development Act of 1976" encourage the participation of the private sector with adequate and sufficient financial, technical and managerial resources to undertake a work program to effectively explore, develop and exploit indigenous coal resources calculated yield maximum benefit to the Filipino people and revenues to the Philippine Government and assure just and fair returns to the participating private enterprises;
WHEREAS, in line with the policy of the Government to encourage and accelerate exploration and development of indigenous resources and in the light of current conditions in the coal industry, it is imperative that Presidential Decree No. 972 be amended granting additional incentives to coal operators participating in the coal development program;
WHEREAS, in order that coal operations should not be unnecessarily hampered and snagged by the difficulties and delays...
Details
Amends
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Amended by
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Presidential Decrees
Amending Presidential Decree Numbered Nine Hundred Seventy Two, Otherwise Known As The "Coal Development Act Of 1976"
Presidential Decree No. 1174
Summary of Presidential Decree No. 1174 Amending the Coal Development Act of 1976
Extension of Deadline for Coal Operating Contracts
- Extends the deadline for existing coal permit/lease holders to enter into coal operating contracts from July 27, 1977 to January 27, 1978. (Section 1)
- Applies only to those who have complied with unitization requirements.
- Those who have unitized may be granted special operating permits during the extension period.
- No further extension after January 27, 1978. Permits/leases not converted will be automatically canceled.
Operator's Reimbursement and Allowance
- Government to reimburse the operator up to 90% of gross proceeds from production for operating expenses in any year. Unrecovered expenses can be carried over to succeeding years. (Section 2)
- Operators with valid permits/leases who have unitized will be granted a special allowance up to 40% of the balance after deducting operating expenses. (Section 3)
- For Philippine citizens/corporations, special allowance up to 30% of the balance after deducting operating expenses.
- For contracts with minimum 40% Philippine interest, special allowance up to 20% of the balance after deducting operating expenses.
- Philippine corporation defined as at least 60% capital owned by Philippine citizens.
Minimum Work Obligations
- Operator must spend at least P1,000,000 per coal block annually on exploration work. (Section 4)
- For areas suitable for open pit mining, minimum expenditure may be reduced to P200,000 per block annually.
- After determining commercial coal reserves, operator must undertake development and production within agreed period, with negotiated minimum expenditure.
- Operator may concentrate work obligations on contiguous/geologically related blocks with Board's approval.
- Excess expenditure can be credited to succeeding years.
- Failure to comply with work obligations requires payment of unspent amount to the government.
- Minimum 30 drill holes per block and specified minimum footage before end of exploration period, unless open pit mining or other accepted methods.
Entry and Use of Private Lands
- Coal exploration, development and exploitation declared for public use and benefit, allowing exercise of eminent domain for entry, acquisition and use of private lands. (Section 5)
- Operator must notify surface owner/occupant before entry. If refused entry, operator must notify Board and post bond.
- Compensation for titled lands: At least P1 per ton of coal extracted, plus value of damaged improvements. (Section 5)
- Compensation for untitled/incomplete title lands: At least P0.50 per ton of coal extracted, plus value of damaged improvements.
- Government reserved lands open to coal operating contracts, with compensation shared between supervising agency and Board.
Timber and Water Rights
- Operator may cut trees/timber within contract area as necessary, subject to Bureau of Forest Development rules. Reforestation works required. (Section 5)
- Operator enjoys water rights necessary for operations upon application to Bureau of Public Works, subject to existing water rights and regulations. (Section 5)
Penal Provisions
- Penal provisions of the Mineral Resources Development Decree of 1974 (Presidential Decree No. 463) apply to coal operations, with references to the Energy Development Board. (Section 5)
Extension of Deadline for Coal Operating Contracts
- Extends the deadline for existing coal permit/lease holders to enter into coal operating contracts from July 27, 1977 to January 27, 1978. (Section 1)
- Applies only to those who have complied with unitization requirements.
- Those who have unitized may be granted special operating permits during the extension period.
- No further extension after January 27, 1978. Permits/leases not converted will be automatically canceled.
Operator's Reimbursement and Allowance
- Government to reimburse the operator up to 90% of gross proceeds from production for operating expenses in any year. Unrecovered expenses can be carried over to succeeding years. (Section 2)
- Operators with valid permits/leases who have unitized will be granted a special allowance up to 40% of the balance after deducting operating expenses. (Section 3)
- For Philippine citizens/corporations, special allowance up to 30% of the balance after deducting operating expenses.
- For contracts with minimum 40% Philippine interest, special allowance up to 20% of the balance after deducting operating expenses.
- Philippine corporation defined as at least 60% capital owned by Philippine citizens.
Minimum Work Obligations
- Operator must spend at least P1,000,000 per coal block annually on exploration work. (Section 4)
- For areas suitable for open pit mining, minimum expenditure may be reduced to P200,000 per block annually.
- After determining commercial coal reserves, operator must undertake development and production within agreed period, with negotiated minimum expenditure.
- Operator may concentrate work obligations on contiguous/geologically related blocks with Board's approval.
- Excess expenditure can be credited to succeeding years.
- Failure to comply with work obligations requires payment of unspent amount to the government.
- Minimum 30 drill holes per block and specified minimum footage before end of exploration period, unless open pit mining or other accepted methods.
Entry and Use of Private Lands
- Coal exploration, development and exploitation declared for public use and benefit, allowing exercise of eminent domain for entry, acquisition and use of private lands. (Section 5)
- Operator must notify surface owner/occupant before entry. If refused entry, operator must notify Board and post bond.
- Compensation for titled lands: At least P1 per ton of coal extracted, plus value of damaged improvements. (Section 5)
- Compensation for untitled/incomplete title lands: At least P0.50 per ton of coal extracted, plus value of damaged improvements.
- Government reserved lands open to coal operating contracts, with compensation shared between supervising agency and Board.
Timber and Water Rights
- Operator may cut trees/timber within contract area as necessary, subject to Bureau of Forest Development rules. Reforestation works required. (Section 5)
- Operator enjoys water rights necessary for operations upon application to Bureau of Public Works, subject to existing water rights and regulations. (Section 5)
Penal Provisions
- Penal provisions of the Mineral Resources Development Decree of 1974 (Presidential Decree No. 463) apply to coal operations, with references to the Energy Development Board. (Section 5)