EXERCISE OF SURFACE RIGHTS BY A MINING TENEMENT HOLDER: A FORM OF EMINENT DOMAIN
There is a peculiar nature of ownership or possessory right of a person or entity who was granted mining contract by the State by virtue of either a Financial and Technical Assistance Agreement (FTAA) or a Mineral Production Sharing Agreement (MPSA). Being a contractor obligated to explore, develop and utilize the minerals of a contract area, the said person or entity is given such plentitude of rights such as timber rights, quarry rights and surface rights. The first two rights are self-explanatory. What is surface rights of a mining tenement holder or contractor?
A tenement holder or contractor is entitled by the State to develop and utilize the minerals. As we all know, under the Regalian Doctrine Principle or Jura Regalia, the State is the owner of the minerals beneath the surface. Of course, we could not discount that the surface is not a public land anymore but an agricultural land acquired by private individuals. Surface rights simply means that the owner on the surface could not prevent the mining tenement holder or contractor to enter the property for its mineral development and utilization activities. It can enter the property subject to notice requirements and payment of just compensation.
If the owner is known, it simply requires notice to the said owner and voluntary agreement, either by virtue of sale, lease, usufruct. Cases of disagreement are usually settled by the Panel of Arbitrators before the Mines and Geosciences Bureau (“MGB”). What if the owner is unknown? Par. 2, Section 105 of CDAO 2021-10 (Mining Act of 1995 Implementing Rules and Regulations) provides:
“If the surface owner(s) of the land, occupant(s) or concessionaire(s) thereof cannot be found, the Permittee/Permit Holder/Contractor or concessionaire shall notify the Regional Director concerned, copy furnished the concerned local officials in case of private land or the Government agency concerned in case of concessionaires, attaching thereto a copy of the written notice and a sworn declaration by the holder(s) of mining right(s) that it/they had exerted all efforts to locate such surface owner(s)/occupant(s)/concessionaire(s). Such notice(s) to the Regional Director concerned shall be deemed notice(s) to the surface owner(s) and concessionaire(s).”
Aside from the notice requirements, which in case of unknown owners, is done through notice to the Regional Director of the MGB, the requirement of posting a bond under Section 108 of CDAO 2021-10 is necessary and which provides:
“In all cases mentioned in the preceding Section, the Permittee/Permit Holder/Contractor shall post a cash or surety bond from an accredited surety with the Regional Office concerned. The amount of the bond shall be agreed upon by the parties. In case of disagreement, it shall be determined by the Director for areas inside Mineral Reservations and the Regional Director for areas outside Mineral Reservations based on the type of the land and the value of the trees, plants and other existing improvements thereto.”
The mechanisms of the mining tenement holder or contractor entering the property of the surface owner may be considered as an exercise of eminent domain. A mining project is technically a project of the State or the National Government. It just so happens that usually, there is a private mining company is a mining contractor or operator. So this is a peculiar case of the right of the State of eminent domain being passed on to a private individual or entity, the mining tenement holder or contractor.