CDA Memorandum Circular No. 2012-14: Guidelines for the Registration of Small-Scale Mining Cooperatives

Administrative Overview and Statutory Framework

• Executive Authority:

  • Republic of the Philippines, Office of the President, Cooperative Development Authority (CDA).

  • Physical Address: $827$ Aurora Blvd. Service Road, Brgy. Immaculate Conception, $1111$ Cubao, Quezon City, Philippines.

  • Institutional Directory and Contact Telephones:

  • Office of the Chairman: $721\text{-}5325$, Telefax: $725\text{-}5324$

  • Administrative Office: $725\text{-}2107$

  • Office of the Executive Director: $725\text{-}6450$

  • Planning Division: $726\text{-}2814$

  • Management Information System (MIS): $725\text{-}0750$

  • Supplies / Cash / Records: $723\text{-}8306$

  • Finance Division: $721\text{-}5328$

  • Office of the Auditor: $721\text{-}5329$

  • Cooperative Research Information & Training Division: $725\text{-}6604$

  • Cooperative Project & Development Assistance Division: $727\text{-}6735$

  • Legal Division: $725\text{-}8536$

  • Registration Division: $725\text{-}5510$

  • Officer of the Day: $725\text{-}3764$

  • Official Website: www.cda.gov.ph

• Administrative Issuance Details:

  • Directive Identification: Memorandum Circular No. $2012\text{-}14$, Series of $2012$.

  • Date of Promulgation: July $18$, $2012$

  • Historical Commemoration: Issued during the $2012$ International Year of Cooperatives.

• Statutory Legal Basis:

  • Republic Act No. $6939$: Promulgated pursuant to Sections $1$ and $3(a)$, which establish the mandate to promote the viability and growth of cooperatives as instruments of equity, social justice, and economic development, alongside empowering the Authority to formulate, adopt, and implement integrated and comprehensive plans and programs on cooperative development.

  • Republic Act No. $9520$: Promulgated in consistency with Article $2$, Paragraph $1$, which mandates fostering the creation and growth of cooperatives as practical vehicles for promoting self-reliance and harnessing people power toward economic development and social justice.

  • Regulatory Integration: Promulgated in direct consonance with Memorandum Circular No. $2012\text{-}08$

Scope, Purpose, and Statutory Coverage

• Section $1$ (Title):

  • Promulgated as the "Guidelines For The Registration of Small-Scale Mining Cooperative".

• Section $2$ (Legal Basis):

  • Reaffirms compliance with RA $9520$, RA $6939$, and Memorandum Circular No. $2012\text{-}08$

• Section $3$ (Purpose):

  • Establishes regulatory provisions for the orderly registration of proposed primary Small-Scale Mining Cooperatives in full compliance with RA $9520$ and related legal mandates.

• Section $4$ (Scope):

  • Mandates coverage over all existing cooperatives engaged in mining activities.

  • Governs individual miners intending to organize into a cooperative structure under the framework of:

  • Republic Act No. $7076$ (otherwise known as the "People's Small-Scale Mining Program Act").

  • Republic Act No. $7942$ (otherwise known as "The Philippine Mining Act of $1995$") and its associated Implementing Rules and Regulations.

Comprehensive Legal and Technical Definitions

• Area of Business Operation:

  • Refers to the principal place of business operation of a proposed small-scale mining cooperative, formally declared as a "minahang bayan" by the Department of Environment and Natural Resources (DENR), as well as the mineral processing area explicitly defined in its articles of cooperation and by-laws.

• Area of Operation:

  • Refers to the geographic territory from which cooperative members originate, as formally stipulated in their articles of cooperation and by-laws.

• Authority:

  • Refers explicitly to the Cooperative Development Authority (CDA).

• Bond of Membership:

  • Refers to the foundational condition under which members associate themselves to achieve common goals and objectives, restricted strictly to residential or occupational categories.

• Business Transaction:

  • Refers to any business activity or livelihood pursuit undertaken by the cooperative.

• Cooperative:

  • Refers to an autonomous and duly registered association of persons sharing a common bond of interest, who voluntarily combine to achieve social, economic, and cultural needs and aspirations through equitable capital contributions, product and service patronage, and fair acceptance of risks and benefits aligned with universally accepted cooperative principles.

• Registration:

  • Refers to the official operative act of the Authority granting legal juridical personality to a proposed cooperative, formally evidenced by the issuance of a Certificate of Registration.

• Share:

  • Refers to a single unit of capital in a primary cooperative, the par value of which is fixed at an amount not exceeding $\text{PHP } 1,000.00$, divisible by $\text{PHP } 1.00$, and structured into common share capital and preferred share capital.

• Share Capital:

  • Refers to total funds paid or required to be paid by members to finance cooperative operations.

• Mineralized Areas:

  • Refers to geographic areas containing naturally occurring mineral deposits of gold, silver, chromite, kaolin, silica, marble, gravel, clay, and similar mineral resources.

• Mining:

  • Refers to any operational activity involving the exploration, extraction, development, utilization, and processing of mineral deposits such as gold, silver, chromite, kaolin, silica, marble, gravel, clay, and related mineral resources.

• Small-scale Mining:

  • Refers to mining activities relying heavily on manual labor using simple implements and methods, explicitly prohibiting the utilization of explosives or heavy mining equipment.

• Small-scale Miners:

  • Refers to Filipino citizens who, individually or collectively with other Filipino citizens, voluntarily form a cooperative duly licensed by the DENR to engage under contract in extracting or removing minerals or ore-bearing materials from the ground.

• Small-scale Mining Contract:

  • Refers to a co-production, joint venture, or mineral production sharing agreement entered into between the State and a small-scale mining contractor for the small-scale utilization of a designated mineral land plot.

• Small-scale Mining Contractor:

  • Refers to an individual or a cooperative of small-scale miners registered with the Securities and Exchange Commission (SEC) or another appropriate government agency, which has executed a formal agreement with the State for small-scale utilization of mineral land within a people's small-scale mining area.

• License:

  • Refers to the legal privilege granted to an individual to pursue an occupation as a small-scale miner or processor under Republic Act No. $7076$

• Small-Scale Mining Cooperative:

  • Refers to a specialized cooperative composed exclusively of Filipino citizens, duly registered with the CDA, organized to carry out small-scale mining operations.

• Mineral Processing:

  • Refers to activities including milling, beneficiation, or upgrading of ores, minerals, and rocks through physical or chemical means to produce marketable products.

• Quarrying:

  • Refers to the systematic extraction, removal, and disposal of quarry resources situated on or underneath public or private lands.

• People's Small-Scale Mining Areas:

  • Refers to areas declared by the DENR as technically and commercially suitable for small-scale mining, provided they are not active mining areas, are free of existing forest rights or reservations, and are not designated as tourist/marine reserves or wildlife parks (unless such restrictive status is officially revoked by competent authority).

Jurisdictional and Administrative Procedures

• Registration Jurisdiction (Section $6$):

  • Direct Filing: Pursuant to Section $6$ of MC No. $2012\text{-}08$, all applications for registration must be directly filed with the Central Office (CO) of the Authority.

  • Future Delegation: Direct filing at the Central Office does not prejudice future administrative delegation of registration functions to Extension/Regional Offices.

• Step-by-Step Registration Procedure (Section $7$):

  • Technical Assistance (Section $7.1$): Prospective cooperatives may request procedural checklists from Extension/Regional offices, where a Cooperative Development Specialist (CDS) will explain compliance rules and filing steps.

  • Standard Document Submission (Section $7.2$): Applicants must submit complete documentation in compliance with MC No. $2011\text{-}15$ ("Revised Guidelines in the Registration of Primary Cooperatives").

  • Field Validation and Verification (Section $7.3$):

  • Mandate: Pursuant to Section $9$ of MC No. $2012\text{-}08$, applications are subject to compulsory field verification and validation prior to registration approval.

  • Execution (Section $7.3.1$): The Registration Section of the concerned Extension Office conducts verification upon formal Order from the Central Office Registration Division within the timeline transmitted electronically or otherwise.

  • Report Submission (Section $7.3.2$): The Report of Verification and Validation must be prepared and transmitted to the Central Office Registration Division within $5\text{ days}$ following the investigation.

  • Physical Record Requirement (Section $7.3.3$): The original physical copy of the validation and verification report must be officially submitted to the Central Office.

Membership Criteria and Capitalization Thresholds

• Membership Requirements (Section $8$):

  • Minimum Membership Threshold: Requires a minimum of $15$ or more natural persons.

  • Citizenship Requirement: All cooperators must be natural-born or naturalized Filipino citizens.

  • Professional Licensing: Every cooperator must be an individually licensed miner.

  • Geographic and Relational Bond: Cooperators must share a common bond of interest and maintain actual residence or workplace within the designated area of operations.

• Capitalization Rules and Financial Thresholds (Section $9$):

  • Authorized Share Capital: Total authorized share capital must be defined in the Articles of Cooperation.

  • Mandatory Subscription Ratio: At least $25\%$ of total authorized share capital must be subscribed by founding members upon registration.

  • Mandatory Paid-Up Ratio: At least $25\%$ of total subscribed share capital must be fully paid up prior to registration submission.

  • Minimum Capitalization Amounts:

  • Primary Cooperatives: Paid-up capitalization shall not be less than $\text{PHP } 15,000.00$

  • Multipurpose Cooperatives: Paid-up capitalization shall be at least $\text{PHP } 100,000.00$, or the amount established by the mandatory economic feasibility study, or the capital mandated by a statutory regulatory agency overseeing specific cooperative pursuits, whichever sum is highest.

Cooperative Naming Conventions and Explicit Prohibitions

• Mandatory Naming Components (Section $10(a)$):

  • Every applicant must incorporate the term "small-scale mining" along with "Cooperative", "Kooperatiba", or "Cooperativa" into its official registered name.

  • The official name must clearly specify the designated statutory type of cooperative.

• Prohibited Naming Elements (Section $10(b)$):

  • Identical or Confusing Names: No name will be approved if it is identical, deceptively similar, or confusingly close to an existing registered cooperative.

  • Morality and Legal Consistency: Names contrary to public policy, moral standards, or existing statutes are barred.

  • Discouraged Terms: Inclusion of the words "development" and "integrated" is actively discouraged.

  • Corporate Terminology Prohibition: Use of words or abbreviations such as "Incorporated", "corporation", "company", "incorporation", or "partnership" is prohibited.

  • Secondary Association Terms: The words "federation" and "union" are strictly forbidden in primary cooperative names, unless explicitly reflecting the registered title of an existing parent association or institution from which the cooperators originate.

Complete Filing Checklist and Document Preparation

• Filing Documentation (Section $11$):

  • Submission Quantity: Applicants must submit four ($4$) full copies of every requirement, with the exception of Item $1$:

  1. Original Copy of Cooperative Name Reservation Notice (CNRN).

  2. Detailed Economic Survey.

  3. Four ($4$) original copies of Articles of Cooperation and approved By-Laws (Articles signed by all cooperators on every page; By-Laws signed by all members on the adoption page).

  4. Sworn Treasurer's Affidavit.

  5. Valid Surety Bonds covering accountable officers.

  6. Certificate of Pre-Membership Education Seminar (PMES) signed by the Interim Chairman and validated by the Authority.

  7. Written Undertaking to change cooperative name upon administrative order.

  8. Written Undertaking to adhere to accounting and auditing standards prescribed by the Authority.

  9. Written Undertaking to comply with statutory rules of other relevant regulatory agencies where applicable.

  10. Official Certification from the Mines and Geosciences Bureau (MGB) Regional Office attesting that members are licensed miners (mandatory if business operations fall within a designated People's Small-Scale Mining Area).

  11. Official Tax Identification Numbers (TIN) for every individual cooperator.

  12. Prescribed Registration Fee payment.

• Technical Formatting Standards (Section $12$):

  • Paper Dimensions: Printed on standard paper measuring $8.5'' \times 13''$ or $8.5'' \times 14''$

  • Language Options: Written in English, Filipino, or local regional dialects provided an accurate English translation is attached.

  • Typography Standard: Text should strictly utilize Bookman Old Style font at size $12\text{ pt}$ as far as practicable.

  • Prevailing Language Clause: In any event of linguistic conflict or interpretive ambiguity, the English translation text shall control.

Share Structure, Governance, and Risk Management

• Capital Share Allocation Rules (Section $13$):

  • Common and Preferred Shares: Share capital may comprise common and preferred shares if authorized in the articles and by-laws. Allocation figures must be stated in the Articles of Cooperation, though limiting capital exclusively to common shares is officially recommended.

  • Preferred Share Rights: Specific privileges, voting restrictions, and financial rights of preferred shares must be codified in the By-Laws.

  • Preferred Share Cap: Preferred share capital cannot exceed $25\%$ (or $\frac{1}{4}$) of total authorized share capital.

  • Subscription Compliance: Common share contributions must satisfy the statutory $25\%$ subscription and paid-up thresholds based on authorized share capital.

  • Individual Shareholding Limitation: No individual member may own or control more than $10\%$ of total subscribed share capital.

• Bond of Membership Classifications (Section $14$):

  • Residential Bond: Mandatory for cooperatives whose primary operations consist of quarrying.

  • Occupational Bond: Mandatory for cooperatives operating small-scale mining activities within designated People's Small-Scale Mining Areas.

• Operational Territory Restrictions (Section $15$):

  • Small-Scale Mining Cooperatives are prohibited from organizing or registering with a nationwide area of operation.

• Dual Membership Restrictions (Section $16$):

  • By-laws may include explicit provisions prohibiting individuals belonging to existing cooperatives of the same type within the same operational area from joining, unless they formally resign from their original cooperative.

• Accountable Officer Bonding Requirements (Section $17$):

  • Statutory Purpose: Compulsory bonding under Articles $14(5)$ and $56$ of the Cooperative Code to safeguard operations against financial loss.

  • Mandatory Bonded Positions:

  1. Chairperson

  2. Treasurer and Cashier

  3. Manager

  4. Warehouseman

  5. Loan/Deposit Collectors

  6. Authorized Signatories of checks and financial instruments

  7. Any employee or officer acting as custodian of cooperative funds, merchandise, inventories, securities, or physical assets.

  • Adequacy Assessment: The Board of Directors evaluates bond coverage based on initial net worth, encompassing paid-up capital, membership fees, and assets at registration.

Statutory Timelines, Appeals, and Supervision

• Approval Timelines and Default Approval (Section $18$):

  • Evaluation Window (Section $18(a)$): The Authority must issue a final disposition on registration within $60\text{ days}$ of receiving a complete application. If unacted upon within $60\text{ days}$, the application is automatically deemed approved, provided delay is not caused by applicant default.

  • Appeals Process (Section $18(b)$): Direct denial by the Authority may be formally appealed to the Office of the President within $90\text{ days}$ of receiving written notice of denial.

  • Executive Default Approval (Section $18(c)$): Failure by the Office of the President to render a decision on an appeal within $90\text{ days}$ from filing constitutes automatic legal approval of the registration.

• Monitoring and Field Inspection (Section $19$):

  • The Extension Office (EO) holds operational responsibility to inspect and monitor cooperatives to ensure ongoing compliance with these guidelines, legal statutes, and regulatory circulars.

• Transitory Period for Pre-Existing Entities (Section $20$):

  • Active mining cooperatives registered prior to issuance are granted a period of $1\text{ year}$ from effectivity to bring operations into full compliance with these guidelines.

Legal Clauses, Approval Details, and Meeting Minutes

• Enforceability Clauses:

  • Section $21$ (Separability Clause): Judicial invalidation or unconstitutionality of any single provision does not invalidate remaining provisions, which remain in full legal force.

  • Section $22$ (Repealing Clause): All prior circulars, rules, or administrative instructions inconsistent with these guidelines are repealed or modified.

  • Section $23$ (Effectivity): Takes effect immediately upon Board approval and $15\text{ days}$ following submission to the Office of National Administrative Register (ONAR) at the U.P. Law Center.

• Administrative Registration Timestamps:

  • Official Recording: Approved pursuant to Board of Administrators (BOA) Resolution No. $191$, S-$2012$, dated July $13$, $2012$

  • Authority Signature: Signed by Chairman Emmanuel M. Santiaguel, Ph.D.

  • Records Section Certification: Certified true copy signed on July $19$, $2012$

  • U.P. Law Center ONAR Filing: Received and stamped on July $23$, $2012$

• Excerpts from Board Minutes (July $13$, $2012$ Meeting):

  • Meeting Location: $6$th Floor CDA Board Room, $827$ Aurora Boulevard, Brgy. Immaculate Conception, Cubao, Quezon City.

  • Attendees Present:

  • Hon. Emmanuel M. Santiaguel, Ph.D. (Chairman / Presiding Officer)

  • Hon. Felicitas S. Acosido, Ph.D. (Administrator - Motion Proponent)

  • Hon. Nelon B. Alindogan (Administrator - Motion Seconder)

  • Hon. Paisalin P.D. Tago (Administrator)

  • Dir. Orlando R. Ravanera (Acting Executive Director)

  • Resolution No. $191$, s-$2012$ Text: Unanimously resolved to approve the "Guidelines in the Registration of Small-Scale Mining Cooperatives".

  • Official Certification: Certified true and correct by Mary Grace I. Cinco (Acting Board Secretary V) and authenticated by Chairman Emmanuel M. Santiaguel, Ph.D.