By Antonio V. Figueroa

DAVAO CITY – Seven years after peace and order in Mt. Diwata, known as the Diwalwal gold rush of Monkayo, Davao de Oro, was restored, trouble is again back in paradise.

On June 7, 2023, a party of thirty-six individuals led by town mayor Manuel E. Zamora entered the Victory Tunnel at Mount Diwata, the subject of a joint operating agreement (JOA) between the state-owned company, Philippine Mining Development Corporation (PMDC), and Paraiso Consolidated Mining Corporation (PACOMINCO), a Fil-Australian mining company.

Under the accord, the contract area that is subject of the incursion is inclusive to the operation of PACOMINCO, which has no obligation in assigning its interest to other parties without the consent of the PMDC, and is required to strictly comply with the law and other stipulations.

Proclamation No. 297

Under Presidential Proclamation No. 297, which covers 8,100 hectares an elevation ranging from 500 to 1,500 meters above sea level (masl) and comprising certain barangays in the provinces of Davao de Oro and Davao Oriental, Diwalwal Mineral Reservation Area (DMRA) was created.

Under DAO No. 2003-38 of the Department of Environment and Natural Resources (DENR), which defined the guidelines of execution, places the mining and mineral processing operations of Natural Resources Development Corp. (NRDC), a government-owned firm under it and gives it authority over the small-scale miners operating at the 600 masl.

The authority to manage, administer, and regulate all mineral processing operations in DMRA was later moved to PMDC, formerly Natural Resources Mining Development Corp., under a tripartite memorandum of agreement signed by DENR, NRDC, and PMDC. This MOA terminated an earlier accord between DENR and NRDC and effectively moved all the NRDC funds, assets, properties, records, and documents to PMDC.

SC’s decision

On June 23, 2006, the Supreme Court, after consolidating six Diwalwal-related cases filed before it, decided that the matter of exploring and developing Diwalwal, stating:

“It is now up to the Executive Department… to undertake directly the mining operations of the Diwalwal Gold Rush Area… [and] may not be precluded from considering a direct takeover of the mines, if it is the only plausible remedy in sight to the gnawing complexities generated by the gold rush. The State need be guided only by the demands of public interest in settling on this option, as well as its material and logistic feasibility. The State can also opt to award mining operations in the mineral reservation to private entities.

The high court’s ruling also stipulated that the prerogative to develop the gold-rush area, particularly DMRA, “lies with the Executive Department over which courts will not interfere.”

Exploration rights

PACOMINCO entered into a JOA with PMDC on July 31, 2009 after the former won a public bid to explore, develop, and conduct mining within the Upper Ulip/Paraiso parcels, covering 1,620 hectares, of the DMRA.

PACOMINCO signed on October 20, 2017, another JOA with the PMDC to explore, develop, and mine within the 729-hectare parcel below 600m elevation after a court-mandated settlement was made ordering the lifting of the injunction filed by the JB Management Mining Corporation (JBMMC) against PMDC.

Under the second JOA, agreed upon pursuant to Department Administrative Order No. 2003-38 of the DENR, PACOMINCO’s rights include the “peaceful possession of the Contract Area, with the full right of ingress and egress and right to occupy the same, subject to surface and easement rights, and free from any legal proceedings and injunctions from third parties.”

Anti-graft case

On July 7, 2023, PACOMINCO filed a joint criminal and administrative cases against Manuel ‘Way Kurat’ Zamora mayor of Monkayo, Davao de Oro, and three dozen of his men with the Deputy Ombudsman for Mindanao.

The criminal cases involve the violation of Section 3(e) of Republic Act (RA) 3019 or the Anti-Graft and Corrupt Practices Act; grave coercion under Article 286 of the Revised Penal Code, as amended; and theft of mineral ore under Section 103 of RA 7942, the Philippine Act.

On the other hand, the administrative cases include violations of Section 1, Rule III of Administrative Order No. 07; Section 60 of RA 7160 or the Local Government Code of 1991; and RA 6713, the Code of Conduct and Ethical Standards for Public Officers and Employees.

The anti-graft complaint points out that the mayor’s actions, among others, are contrary to law, oppressive or were made with grave abuse of authority, irregular and devoid of justification, and an act of grave misconduct.

The incursion

The intrusion was initially discussed in earlier consultations with the mayor with the stakeholders, namely the PMDC and PACOMINCO.

On April 15, 2023, Zamora wrote Esmeraldo Q. Salvaña, PACOMINCO president, proposing a plan that would supposedly “benefit the LGU and the small-scale miners, as well as the Australian mining company, adding that under the proposed sharing agreement, PACOMINCO, which has already invested over a billion pesos in developing the Victory Tunnel, will get a 6% royalty per bag, while the local government unit is allotted 4%.

The PMDC, which supervises the DMRA, will get a smaller share. Two other stakeholders, the indigenous peoples and the barangay, will get 1% share each.

The proposal includes a sharing scheme, the establishment of a composite monitoring team to man the checkpoint that collects royalty fee, and advised the stakeholders that the plan to take over the tunnel common portal would be executed on May 3, 2022.

In response, PACOMINCO, in a letter dated April 26, 2023, declined the offer, citing three impediments, namely: (i) the company has no authority to enter into an agreement that will allow the passage of third parties through the tunnel; Iii) it also cannot participate in mining activities that violate the Philippine Mining Act; and (iii) and allowing the access can pose safety risks.

The same answer was later conveyed by PACOMINCO to the PMDC, asking support for the rejection of the LGU proposal given that the JOA involving the tunnel prohibits it.

Legal options

On June 8, 2023, the Australian company denounced the unlawful entry of Zamora, the armed small-scale miners, and the town’s police force in a letter addressed to President Ferdinand R. Marcos, Jr. sent through Sec. Leo Tereso A. Magno, presidential assistant for eastern Mindanao.

A corresponding communication was also sent to P/Brig. Gen. Alden S. Delvo, PNP-XI regional director, who responded on June 13, 2023, informing PACOMINCO that his office has already conducted a pre-charge probe to determine the administrative liabilities of police personnel assigned to secure the PACOMINCO contract area.

The investigation is an offshoot of the eyewitness accounts that the 12-man police team led by Monkayo chief of police Lt. Col. Jerry Cabag and a number of armed small-scale miners headed by Ramel ‘Lolong’ Arboleda jointly launched the forcible invasion of Victory Tunnel, which is part of the contract area.

Nearly a month later, PACOMINCO, through its board of directors, filed a joint criminal and administrative complaint with the Office of the Deputy Ombudsman in Mindanao against the mayor and his “monitoring team.”

Implications

The incursion of the PACOMINCO occupation, the setting up of a checkpoint, and the extraction of ore minerals by offices and individuals that are parties to the PACOMINCO-PMDC accord undermine the peace and order situation of the gold-rush area and affect the systematic exploration and development of the DMRA.

Mining industry observers cite five reasons why the LGU-led incursion of Diwalwal, unless sooner decided by the national leadership, need immediate resolution namely:

First, the takeover is illegal given that the contested contract area is under supervision of a national agency and the contract area is already covered by a joint agreement between a government-controlled corporation and a Filipino-Australian venture.

Second, the unlawful entry is an affront to the DENR secretary whose direct representative in the DMRA contract is the PMDC head, who is imbued with the task of peacefully managing the exploration and development of the 8,100-hectare area in its jurisdiction.

Third, the intruders are not small-scale miners but representative of well-financed outfits and individuals and former small-time tunnel workhands that have, through the decades, enriched themselves from the resources of the gold-rush area.

Fourth, the management and supervision of the DMRA is exclusive to PMDC, making any form of LGU-led incursion or any privately led takeover illicit without going through the conditions stipulated in the PACOMINCO-PMDC accord and without PMDC’s permission.

Fifth, the forcible invasion will seriously impact the strong trust and confidence that the mining industry, particularly the foreign capitalists, has shown towards the liberal policies the national government has adopted under the previous and present administrations.

Sixth, the illegal occupation violates Presidential Proclamation No. 297 and the Supreme Court decision imbuing only the Executive—not the LGUs—the prerogative to award mining operations in the mineral reservation to private entities.

And, seventh, the invasion of Tunnel Victory, a legally protected and contracted area, becomes a deafening challenge to the Philippine mining industry to pursue a peaceful sustainable, and responsible mining driven by laws, edicts, and regulations amid partisan harassments.