Miners Association of the Philippines v. Factoran, Case Decree No.

463, as amended, as the governing law on the

Digest acceptance and approval of declarations of location and all
other kinds of applications for the exploration, development, and
G.R. No. 98332 January 16, 1995
utilization of mineral resources pursuant to Executive Order No.
211, is erroneous. Presidential Decree No. 463, as amended,
Facts :
pertains to the old system of exploration, development and
utilization of natural resources through "license, concession or
Former President Corazon Aquino issued Executive Order Nos
lease" which, however, has been disallowed by Article XII,
211 and 279 in the exercise of her legislative powers. EO No.
Section 2 of the 1987 Constitution. By virtue of the said
211 prescribes the interim procedures in the processing and
constitutional mandate and its implementing law, Executive
approval of applications for the exploration, development and
Order No. 279 which superseded Executive Order No. 211, the
utilization of minerals pursuant to Section 2, Article XII of the
provisions dealing on "license, concession or lease" of mineral
1987 Constitution. EO No. 279 authorizes the DENR Secretary
resources under Presidential Decree No. 463, as amended, and
to negotiate and conclude joint-venture, co-production, or
other existing mining laws are deemed repealed and, therefore,
production- sharing agreements for the exploration,
ceased to operate as the governing law. In other words, in all
development, and utilization of mineral resources.
other areas of administration and management of mineral lands,
the provisions of Presidential Decree No. 463, as amended, and
The issuance and the impeding implementation by the DENR of
other existing mining laws, still govern. Section 7 of Executive
Administrative Order Nos. 57 which declares that all existing
Order No. 279 provides, thus:
mining leases or agreements which were granted after the
Sec. 7. All provisions of Presidential Decree No. 463, as
effectivity of the 1987 Constitution…shall be converted into
amended, other existing mining laws, and their implementing
production-sharing agreements within one (1) year from the
rules and regulations, or parts thereof, which are not
effectivity of these guidelines.‖ and Administrative Order No. 82
inconsistent with the provisions of this Executive Order, shall
which provides that a failure to submit Letter of Intent and
continue in force and effect.
Mineral Production-Sharing Agreement within 2 years from the
effectivity of the Department Administrative Order No. 57 shall
Well -settled is the rule, however, that regardless of the
cause the abandonment of the mining, quarry, and sand and
reservation clause, mining leases or agreements granted by the
gravel claims, after their respective effectivity dates compelled
State, such as those granted pursuant to Executive Order No.
the Miners Association of the Philippines, Inc., an organization
211 referred to this petition, are subject to alterations through a
composed of mining prospectors and claim owners and claim
reasonable exercise of the police power of the State.
holders, to file the instant petition assailing their validity and
Accordingly, the State, in the exercise of its police power in this
constitutionality before this Court.
regard, may not be precluded by the constitutional restriction on
non-impairment of contract from altering, modifying and
Issue :
amending the mining leases or agreements granted under
Are the two Department Administrative Orders valid?
Presidential Decree No. 463, as amended, pursuant to
Executive Order No. 211. Police Power, being co-extensive with
Ruling :
the necessities of the case and the demands of public interest;
extends to all the vital public needs. The passage of Executive
Yes. Petitioner's insistence on the application of Presidential
Order No. 279 which superseded Executive Order No. 211
provided legal basis for the DENR Secretary to carry into effect
the mandate of Article XII, Section 2 of the 1987 Constitution.
WHEREFORE, the petition is DISMISSED for lack of merit.
Asaphil Construction and Development Corp. vs Vicente
Tuason, Jr., Induplex Inc.
and Mines Adjudication Board
G.R. No.
134030 April 25,
2006
Facts:
Tuazon entered into a Contract to Sell (1st contract) with
Induplex wheren Induplex agreed to buy all the Perlite Ore that
can be found and mined in Tuason's mining claim and in return,
Induplex will assist Tuason to secure his rights over the mining
claim. Then, Tuason executed an Agreement to Operate Mining
Claims (2nd Contract) in favor of Asaphil. Tuason thereafter
filed with the Bureau of Mines-DENR against Induplex and
Asaphil for the nullity of the two contracts alleging that the
stockholders of Induplex created Ibalon Mineral Resources Inc.
and then extracted in Ibalon's mining claim and thereafter
entered into a joint Venture with Grefco, Inc. which would violate
their agreement.
Issue:
Whether or not DENR has jurisdiction over the case.
Ruling:
No, Section 7 of P.D. 1281 provides:
"Section 7. In addition to its regulatory and adjudicative
functions over companies, partnerships or persons engaged in
mining exploration, development and exploitation, development
and exploitation, the Bureau of Mines shall have original and
exclusive jurisdiction to hear and decide cases involving:
(a) a mining property subject of different agreements entered
into by the claim holder thereof with several mining operators;
(b) complaints from claimowners that the mining property
subject of an operating agreement has not been placed into
actual operations within the period stipulated therein; and
(c) cancellation and/or enforcement of mining contracts due to
the refusal of the claimowner/operator to abide by the terms and
conditions thereof."
Tuason's case based on its facts is not a mining dispute. the
2nd contract although a mining contract does not make a mining
dispute, the resolution of its nullity is not based on Asaphil's
violation of the conditions but due to Induplex's alleged violation
in entering into a joint venture with Grefco Ltd. which is a judicial
question. The nullity shall be determined by regular courts. "A
judicial question is raised when the determination of the
question involves the exercise of judicial function, which
involves the determination of what the law is all about and what
are the legal rights of the parties"
DIDIPIO v GOZUN
GR No. 157882
March 30, 2006
FACTS:
This petition for prohibition and mandamus under Rule 65 of the
Rules of Court assails the constitutionality of Republic Act No.
7942 otherwise known as the Philippine Mining Act of 1995,
together with the Implementing Rules and Regulations issued
pursuant thereto, Department of Environment and Natural
Resources (DENR) Administrative Order No. 96-40, s. 1996
(DAO 96-40) and of the Financial and Technical Assistance
Agreement (FTAA) entered into on 20 June 1994 by the
Republic of the Philippines and Arimco Mining Corporation
(AMC), a corporation established under the laws of Australia
and owned by its nationals.
Subsequently, AMC consolidated with Climax Mining Limited to
form a single company that now goes under the new name of
Climax-Arimco Mining Corporation (CAMC), the controlling 99%
of stockholders of which are Australian nationals.
on 20 June 1994, President Ramos executed an FTAA with
AMC over a total land area of 37,000 hectares covering
the provinces of Nueva Vizcaya and Quirino. Included in this
area is Barangay Dipidio, Kasibu, Nueva Vizcaya.
The CAMC FTAA grants in favor of CAMC the right of
possession of the Exploration Contract Area, the full right of
ingress and egress and the right to occupy the same. It also
bestows CAMC the right not to be prevented from entry into
private lands by surface owners or occupants thereof when
prospecting, exploring and exploiting minerals therein.
Didipio Earth-Savers' Multi-Purpose Association, Inc., an
organization of farmers and indigenous peoples organized
under Philippine laws, representing a community actually
affected by the mining activities of CAMC, as well as other
residents of areas affected by the mining activities of CAMC.
ISSUES & RULINGS:
I WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THE
CAMC FTAA ARE VOID BECAUSE THEY ALLOW THE
UNJUST AND UNLAWFUL TAKING OF PROPERTY
WITHOUT PAYMENT OF JUST COMPENSATION , IN
VIOLATION OF SECTION 9, ARTICLE III OF THE
CONSTITUTION.
NO.
The provision of the FTAA in question lays down the ways and
means by which the foreign-owned contractor, disqualified to
own land, identifies to the government the specific surface areas
within the FTAA contract area to be acquired for the mine
infrastructure. The government then acquires ownership of the
surface land areas on behalf of the contractor, through a
voluntary transaction in order to enable the latter to proceed to
fully implement the FTAA. Eminent domain is not yet called for
at this stage since there are still various avenues by which
surface rights can be acquired other than expropriation. The
FTAA provision under attack merely facilitates the
implementation of the FTAA given to CAMC and shields it from
violating the Anti-Dummy Law.
There is also no basis for the claim that the Mining Law and its
implementing rules and regulations do not provide for just
compensation in expropriating private properties. Section 76 of
Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for
the payment of just compensation.
II WHETHER OR NOT THE MINING ACT AND ITS
IMPLEMENTING RULES AND REGULATIONS ARE VOID
AND UNCONSTITUTIONAL FOR SANCTIONING AN
UNCONSTITUTIONAL ADMINISTRATIVE PROCESS OF
DETERMINING JUST COMPENSATION.

NO.
there is nothing in the provisions of the assailed law and its
implementing rules and regulations that exclude the courts from
their jurisdiction to determine just compensation in expropriation
proceedings involving mining operations.
Although Section 105 confers upon the Panel of Arbitrators the
authority to decide cases where surface owners, occupants,
concessionaires refuse permit holders entry, thus, necessitating
involuntary taking, this does not mean that the determination of
the just compensation by the Panel of Arbitrators or the Mines
Adjudication Board is final and conclusive. The determination is
only preliminary unless accepted by all parties concerned.
There is nothing wrong with the grant of primary jurisdiction by
the Panel of Arbitrators or the Mines Adjudication Board to
determine in a preliminary matter the reasonable compensation
due the affected landowners or occupants. The original and
exclusive jurisdiction of the courts to decide determination of
just compensation remains intact despite the preliminary
determination made by the administrative agency.
III WHETHER OR NOT THE STATE, THROUGH REPUBLIC
ACT NO. 7942 AND THE CAMC FTAA, ABDICATED ITS
PRIMARY RESPONSIBILITY TO THE FULL CONTROL AND
SUPERVISION OVER NATURAL RESOURCES.
RA 7942 provides for the state's control and supervision over
mining operations. The following provisions thereof establish
the mechanism of inspection and visitorial rights over mining
operations and institute reportorial requirements.
The setup under RA 7942 and DAO 96-40 hardly relegates the
State to the role of a ―passive regulator‖ dependent
on submitted plans and reports. On the contrary, the
government agencies concerned are empowered to approve or
disapprove -- hence, to influence, direct and change -- the
various work programs and the corresponding minimum
expenditure commitments for each of the exploration,
development and utilization phases of the mining enterprise.
IV WHETHER OR NOT THE RESPONDENTS'
INTERPRETATION OF THE ROLE OF WHOLLY FOREIGN
AND FOREIGN-OWNED CORPORATIONS IN THEIR
INVOLVEMENT IN MINING ENTERPRISES, VIOLATES
PARAGRAPH 4, SECTION 2, ARTICLE XII OF THE
CONSTITUTION.
the use of the word ―involving‖ signifies the possibility of the
inclusion of other forms of assistance or activities having to do
with, otherwise related to or compatible with financial or
technical assistance.
Thus, we come to the inevitable conclusion that there was a
conscious and deliberate decision to avoid the use of restrictive
wording that bespeaks an intent not to use the expression
―agreements x x x involving either technical or financial
assistance‖ in an exclusionary and limiting manner.
V WHETHER OR NOT THE 1987 CONSTITUTION
PROHIBITS SERVICE CONTRACTS
NO. The mere fact that the term service contracts found in the
1973 Constitution was not carried over to the present
constitution, sans any categorical statement banning service
contracts in mining activities, does not mean that service
contracts as understood in the 1973 Constitution was eradicated
in the 1987 Constitution.
The 1987 Constitution allows the continued use of service
contracts with foreign corporations as contractors who would
invest in and operate and manage extractive enterprises,
subject to the full control and supervision of the State; this time,
however, safety measures were put in place to prevent abuses
of the past regime.
the phrase agreements involving either technical or financial
assistance, referred to in paragraph 4, are in fact service
contracts. But unlike those of the 1973 variety, the new ones
are between foreign corporations acting as contractors on the
one hand; and on the other, the government as principal or
―owner‖ of the works. In the new service contracts, the foreign
contractors provide capital, technology and technical know-how,
and managerial expertise in the creation and operation of large-
scale mining/extractive enterprises; and the government,
through its agencies (DENR, MGB), actively exercises control
and supervision over the entire operation.
OBITER DICTA: ! justiciable controversy: definite and concrete
dispute touching on the legal relations of parties having adverse
legal interests which may be resolved by a court of law through
the application of a law. ! to exercise the power of judicial
review, the following must be extant (1) there must be an actual
case calling for the exercise of judicial power; - involves a
conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a
hypothetical or abstract difference or dispute.
In the instant case, there exists a live controversy involving a
clash of legal rights as Rep. Act No. 7942 has been enacted,
DAO 96-40 has been approved and an FTAAs have been
entered into. The FTAA holders have already been operating in
various provinces of the country.
(2) the question must be ripe for adjudication; and - A question
is considered ripe for adjudication when the act being
challenged has had a direct adverse effect on the individual
challenging it. (3) the person challenging must have the
―standing" - personal or substantial interest in the case such that
the party has sustained or will sustain direct injury as a result of
the governmental act that is being challenged, alleging more
than a generalized grievance.
By the mere enactment of the questioned law or the approval of
the challenged act, the dispute is said to have ripened into a
judicial controversy even without any other overt act. Indeed,
even a singular violation of the Constitution and/or the law is
enough to awaken judicial duty.
! ―taking‖ under the concept of eminent domain as entering upon
private property for more than a momentary period, and, under
the warrant or color of legal authority, devoting it to a public use,
or otherwise informally appropriating or injuriously affecting it in
such a way as to substantially oust the owner and deprive him
of all beneficial enjoyment thereof.
requisites of taking in eminent domain, to wit:
(1) the expropriator must enter a private property;
(2) the entry must be for more than a momentary
period.
(3) the entry must be under warrant or color of legal
authority;
(4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected;
(5) the utilization of the property for public use must be
in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property.
! Taking in Eminent Domain Distinguished from Regulation in
Police Power
The power of eminent domain is the inherent right of the state
(and of those entities to which the power has been lawfully
delegated) to condemn private property to public use upon
payment of just compensation.On the other hand, police power
is the power of the state to promote public welfare by restraining
and regulating the use of liberty and property.
Although both police power and the power of eminent domain
have the general welfare for their object, and recent trends
show a mingling of the two with the latter being used as an
implement of the former, there are still traditional distinctions
between the two.
Property condemned under police power is usually noxious or
intended for a noxious purpose; hence, no compensation shall
be paid. Likewise, in the exercise of police power, property
rights of private individuals are subjected to restraints and
burdens in order to secure the general comfort, health, and
prosperity of the state. Thus, an ordinance prohibiting theaters
from selling tickets in excess of their seating capacity (which
would result in the diminution of profits of the theater-owners)
was upheld valid as this would promote the comfort,
convenience and safety of the customers.
where a property interest is merely restricted because the
continued use thereof would be injurious to public welfare, or
where property is destroyed because its continued existence
would be injurious to public interest, there is no compensable
taking. However, when a property interest is appropriated and
applied to some public purpose, there is compensable taking.
! On different roles and responsibilities:
* DENR Secretary : accept, consider and evaluate proposals
from foreign-owned corporations or foreign investors for
contracts of agreements involving either technical or financial
assistance for large-scale exploration, development, and
utilization of minerals, which, upon appropriate recommendation
of the Secretary, the President may execute with the foreign
proponent. (Executive Order No. 279, 1987)
! in re: easements and taking
In Ayala de Roxas v. City of Manila, it was held that the
imposition of burden over a private property through easement
was considered taking; hence, payment of just compensation is
required. The Court declared:
And, considering that the easement intended to be established,
whatever may be the object thereof, is not merely a real right
that will encumber the property, but is one tending to prevent
the exclusive use of one portion of the same, by expropriating it
for public use which, be it what it may, can not be accomplished
unless the owner of the property condemned or seized be
previously and duly indemnified, it is proper to protect the
appellant by means of the remedy employed in such cases, as it
is only adequate remedy when no other legal action can be
resorted to, against an intent which is nothing short of an
arbitrary restriction imposed by the city by virtue of the coercive
power with which the same is invested.
! in order that one law may operate to repeal another law, the
two laws must be inconsistent.The former must be so repugnant
as to be irreconciliable with the latter act.
Facts:
This petition for prohibition and mandamus assails the
constitutionality of Republic Act No. 7942otherwise known as
the Philippine Mining Act of 1995, together with the
Implementing Rules and Regulations issued pursuant thereto,
Department of Environment and Natural Resources(DENR)
Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the
Financial andTechnical Assistance Agreement (FTAA) entered
into on 20 June 1994 by the Republic of the Philippines and
Arimco Mining Corporation (AMC), a corporation established
under the laws of Australia and owned by its nationals. Then
President Corazon C. Aquino promulgated Executive Order
No. 279 which authorized the DENR Secretary to accept,
consider and evaluate proposals from foreign-owned
corporations or foreign investors for contracts of agreements
involving either technical or financial assistance for large-scale
exploration, development, and utilization of minerals, which,
upon appropriate recommendation of the Secretary,
the President may execute with the foreign proponent.AMC
consolidated with Climax Mining Limited to form a single
company that now goes under the new name of Climax-Arimco
Mining Corporation (CAMC), the controlling 99% of stockholders
of which are Australian nationals.Petitioners filed a demand
letter addressed to then DENR Secretary for the cancellation of
the CAMC FTAA for the primary reason that Rep. Act No. 7942
and its Implementing Rules and Regulations DAO 96-40
are unconstitutional.
Issue:
Whether or not Republic Act No. 7942 ,CAMC FTAA and its IRR
are void because they allowthe unjust and unlawful taking of
property without payment of just compensation , in violation
of Section 9, Article III of the Constitution.
Ruling:
Before going to the substantive issues, the procedural question
raised by public respondents shall first be dealt with. Public
respondents are of the view that petitioners‘ eminent domain
claim is not ripe for adjudication as they fail to allege that
CAMC has actually taken their properties nor do they allege that
their property rights have been endangered or are in danger on
account of CAMC‘s FTAA. In effect, public respondents insist
that the issue of eminent domain is not a justiciable
controversy which this Court can take cognizance of. In the
instant case, there exists a live controversy involving a clash
of legal rights as Rep. Act No.7942 has been enacted, DAO 96-
40 has been approved and an FTAAs have been entered into.
The FTAA holders have already been operating in various
provinces of the country. Among them is CAMC which operates
in the provinces of Nueva Vizcaya and Quirino where numerous
individuals including the petitioners are imperiled of being
ousted from their landholdings in view of the CAMC FTAA. In
light of this, the court cannot await the adverse consequences of
the law in order to consider the controversy actual and ripe
for judicial intervention. Actual eviction of the land owners
and occupants need not happen for this Court to intervene. By
the mere enactment of the questioned law or the approval of the
challenged act, the dispute is said to have ripened into a judicial
controversy even without any other overt act. Indeed, even
a singular violation of the Constitution and/or the law is enough
to awaken judicial duty Petitioners embrace various segments of
the society. They assert that they are affected by the mining
activities of CAMC. Likewise, they are under imminent threat of
being displaced from their landholdings as a result of
the implementation of the questioned FTAA. They thus meet the
appropriate case requirement as they assert an interest adverse
to that of respondents who, on the other hand, claim the validity
of the assailed statute and the FTAA of CAMC.Besides, the
transcendental importance of the issues raised and the
magnitude of the public interest involved will have a bearing on
the country‘s economy which is to a greater extent dependent
upon the mining industry. Also affected by the resolution of this
case are the proprietary rights of numerous residents in the
mining contract areas as well as the social existence of
indigenous peoples which are threatened. Based on
these considerations, this Court deems it proper to
take cognizance of the instant petition.
Republic v. Rosemoor Mining
FACTS:
Four respondents were granted permission to look for marble
deposits in the mountains of Biak-na-Bato. When they
discovered marble deposits in Mount Mabio, they applied for
license to exploit said marble deposits and they were issued
such license. However, in a letter, Ernest o Maceda (newly-
appointed Minister of the Department of Energy and Natural
Resources) cancelled their license. Prclamation No. 84 was
then issued, confirming the cancellation of the license.
RULING OF THE TRIAL COURT:
The privilege granted under respondents‘ license already
became a property right, which is protected unde the due
process clause. License cancellation, without notice and hearing
was unjust. Moreover, the proclamation, which confirmed the
cancellation of the license was an ex post facto law.
RULING OF THE COURT OF APPEALS:
CA affirmed the decision of the Trial Court.
It adds that the Constitution provides for the non-impairment of
obligations and contracts, which implies that the license of the
respondents must be respected.
ISSUES:
1. WON the license was valid.
Petitioners: License was issued in violation of PD 463 – a
quarry license should cover not more than 100 hectares in any
given province. The license was issued to Rosemoor Mining
and Development Corporation and covered a 330-hectare land.
Respondents: The license was embraced by 4 separate
applications, each for an aread of 81 hectares. Also, the issue
has been mooted because PD 463 has already been repealed
by RA 7942 or the Philippine Mining Act of 1995.
2. WON Proclamation No. 84 – which confirmed the
cancellation of the license, is valid.
Petitioners: The license was validly declared a nullity and
terminated. Maceda‘sletter did not cancel or revoke the license,
but merely declared its nullity. Also, the respondents waived
their right to notice and hearing in their license application.
Respondents: Their right to due process was violated because
there was no notice and hearing. Proclamation No. 84 is not
valid because it violates the clause on non-impairment of
contracts, it is an ex post facto law and/or a bill of attainder, and
it was issued by the President after the effectivity of the 1987
Constitution.
RULING OF THE SUPREME COURT:
Tbe Petition is GRANTED.
SC set aside the decision of the CA and TC.
 1. THE LICENSE IS NOT VALID.
The issue has not been mooted because while RA 7942 has
expressly repealed provisions of mining laws that are
inconsistent with its own, it respects previously issued valid and
existing licenses.
When the license was issued, the governing law was PD 463.
Thus, it was subject to the terms and conditions of PD 463,
including the part where it says that the quarry license shall
cover an area of not more than 100 hectares in any one
province and not more than 1000 hectares in the entire
Philippines. The license in question was issued in the name of
Rosemoor Mining Development Corporation and not the 4
individual stockholders. It clearly violates PD 463 because the
license covered an area of 330-hectares.
2. PROCLAMATION NO. 84, CONFIRMING THE
CANCELLATION OF THE LICENSE, IS VALID.
Respondents‘ license may be revoked or rescinded by
executive action when the national interest so requires because
it is not a contract, property or a property right protected by the
due process clause of the Constitution. The license itself
provides such condition. The license can also be validly revoked
by the State in the exercise of police power, in accordance with
the Regalian doctrine.
Also, since the license is not a contract, the non-impairment
clause may not be invoked. Even if it were, the non-impairment
clause must yield to the police power of the State.
The proclamation cannot also be said to be a bill-of-attainder,
which is a legislative act which inflicts punishment without
judicial trial. The proclamation only declares the nullity of the
license. It does not declare guilt or impose punishment.
The proclamation can also be said to be an ex post facto law
because it does not fall under any of the six recognized
instances when a law is considered as such. It is not even
criminal or penal in nature.
Lastly, when President Aquino issued Proclamation No. 84, she
was still validly exercising legislative powers under the
Provisional Constitution of 1986.
LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., ET AL. V.
RAMOS
G.R. No. 127882 27 January 2004 Ponente: Carpio-Morales
FACTS:
On July 25, 1987, then President Corazon C. Aquino issued
Executive Order (E.O.) No. 279authorizing the DENR Secretary
to accept, consider and evaluate proposals from foreign-owned
corporations or foreign investors for contracts or agreements
involving either technical or financial assistance for large-scale
exploration, development, and utilization of minerals, which,
upon appropriate recommendation of the Secretary, the
President may execute with the foreign proponent.
On March 3, 1995, then President Fidel V. Ramos approved
R.A. No. 7942 to "govern the exploration, development,
utilization and processing of all mineral resources." R.A. No.
7942 defines the modes of mineral agreements for mining
operations, outlines the procedure for their filing and approval,
assignment/transfer and withdrawal, and fixes their terms.
Similar provisions govern financial or technical assistance
agreements.On April 9, 1995, 30 days following its publication
on March 10, 1995 in Malaya and Manila Times, two
newspapers of general circulation, R.A. No. 7942 took effect.
Shortly before the effectivity of R.A. No. 7942, however, or on
March 30, 1995, the President entered into an FTAA with
WMCP covering99,387 hectares of land in South Cotabato,
Sultan Kudarat, Davao del Sur and North Cotabato.
On August 15, 1995, then DENR Secretary Victor O. Ramos
issued DENR Administrative Order (DAO) No. 95-23, s. 1995,
otherwise known as the Implementing Rules and Regulations of
R.A. No.7942. This was later repealed by DAO No. 96-40, s.
1996 which was adopted on December 20, 1996.On January
10, 1997, counsels for petitioners sent a letter to the DENR
Secretary demanding that the DENR stop the implementation of
R.A. No. 7942 and DAO No. 96-40, giving the DENR fifteen
days from receipt to act thereon. The DENR, however, has yet
to respond or act on petitioners' letter. Petitioners claim that the
DENR Secretary acted without or in excess of jurisdiction.They
pray that the Court issue an order:(a) Permanently enjoining
respondents from acting on any application for Financial or
Technical Assistance Agreements;(b) Declaring the Philippine
Mining Act of 1995 or Republic Act No. 7942 as unconstitutional
and null and void;(c) Declaring the Implementing Rules and
Regulations of the Philippine Mining Act contained in DENR
Administrative Order No. 96-40 and all other similar
administrative issuances as unconstitutional and null and void;
and(d) Cancelling the Financial and Technical Assistance
Agreement issued to Western MiningPhilippines, Inc. as
unconstitutional, illegal and null and void.In January 2001, MMC
a publicly listed Australian mining and exploration company –
sold its whole stake in WMCP to Sagittarius Mines, 60% of
which is owned by Filipinos while 40% of which is owned by
Indophil Resources, an Australian company. DENR approved
the transfer and registration of the FTAA in Sagittarius‘ name
but Lepanto Consolidated assailed the same. WMCP contends
that the annulment of the FTAA would violate a treaty between
the Philippines and Australia which provides for the protection
of Australian investments.
ISSUE: W/N the Philippine Mining Act is unconstitutional
for allowing fully foreign-owned corporations toexploit
Philippine mineral resources. –YES.
W/N the FTAA between WMCP and the Philippines is a
service contract. –YES.
RATIO:
First Issue:RA 7942 or the Philippine Mining Act of 1995 is
unconstitutional for permitting fully foreign owned corporations
to exploit Philippine natural resources. Article XII Section 2 of
the 1987 Constitution retained the Regalian doctrine which
states that ―All lands of the public domain, waters, minerals,
coal, petroleum, and other minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are
owned by the State.‖ The same section also states that,
―exploration and development and utilization of natural
resources shall be under the full control and supervision of the
State.‖
Conspicuously absent in Section 2 is the provision in the 1935
and 1973 Constitutions authorizing the State to grant licenses,
concessions, or leases for the exploration, exploitation,
development or utilization of natural resources. Y such
omission, the utilization of inalienable lands of public domain
through license, concession or lease is no longer allowed under
the 1987 Constitution. Under the concession system, the
concessionaire makes a direct equity investment for the
purpose of exploiting a particular natural resource within a given
area. The concession amounts to complete control by the
concessionaire over the country‘s natural resource, for it is
given exclusive and plenary rights to exploit a particular
resource at the point of extraction.
The 1987 Constitution, moreover, has deleted the phrase
―management or other forms of
assistance‖ in the 1973 Charter. The present Constitution now
allows only ―technical and financial assistance.‖ The
management or operation of mining activities by foreign
contractors, the primary feature of service contracts was
precisely the evil the drafters of the 1987 Constitution sought to
avoid.
The constitutional provision allowing the President to enter into
FTAAs is an exception to the rule that participation in the
nation‘s natural resources is reserved exclusively to Filipinos.
Accordingly such provision must be construed strictly against
their enjoyment by non-Filipinos. Therefore RA 7942 is invalid
insofar as said act authorizes service contracts. Although the
statute employs the phrase ―financial and technical agreements‖
in accordance with the 1987 Constitution, its pertinent
provisions actually treat these agreements as service contracts
that grant beneficial ownership to foreign contractors contrary
tothe fundamental law.
The underlying assumption in the provisions of the law is that
the foreign contractor manages the mineral resources just like
the foreign contractor in a service contract. By allowing foreign
contractors to manage or operate all the aspects of the mining
operation, RA 7942 has in effect conveyed beneficial ownership
over the nation‘s mineral resources to these contractors, leaving
the State with nothing but bare title thereto.The same
provisions, whether by design or inadvertence, permit a
circumvention of the constitutionally ordained 60-40%
capitalization requirement for corporations or associations
engaged in the exploitation, development and utilization of
Philippine natural resources. When parts of a statute are so
mutually dependent and connected as conditions,
considerations, inducements or compensations for each other
as to warrant a belief that the legislature intended them as a
whole, then if some parts are unconstitutional, all provisions that
are thus dependent, conditional or connected must fall with
them.
Under Article XII Section 2 of the 1987 Charter, foreign owned
corporations are limited only to merely technical or financial
assistance to the State for large scale exploration, development
and utilization of minerals, petroleum and other mineral oils.
2nd Issue:The FTAA between WMCP and the Philippine
government is likewise unconstitutional since theagreement
itself is a device contract.
Section 1.3 of the FTAA grants WMCP, a fully foreign owned
corporation, the ―exclusive right to
explore, exploit, utilize and dispose of all minerals and by-
products that may be produced from the contract area.‖
Section 1.2 of the same agreement provides that WMCP shall
provide ―all financing,technology, management, and personnel
necessary for the Mining Operations.‖
These contractual stipulations and related provisions in the
FTAA taken together, grant WMCP beneficial ownership over
natural resources that properly belong to the State and are
intended for the benefit of its citizens. These stipulations are
abhorrent to the 1987 Constitution. They are precisely the vices
that the fundamental law seeks to avoid, the evils that it aims to
suppress. Consequently, the contract from which they spring
must be struck down.
FACTS:
This petition for prohibition and mandamus challenges the
constitutionality of Republic Act No. 7942 (The Philippine Mining
Act of 1995), its implementing rules and regulations and the
Financial and Technical Assistance Agreement (FTAA) dated
March 30, 1995 by the government with Western Mining
Corporation(Philippines) Inc. (WMCP).
Accordingly, the FTAA violated the 1987 Constitution in that it is
a service contract and is antithetical to the principle of
sovereignty over our natural resources, because they allowed
foreign control over the exploitation of our natural resources, to
the prejudice of the Filipino nation.
ISSUE:
What is the proper interpretation of the phrase ―Agreements
involving Either Technical or Financial Assistance‖ contained in
paragraph 4, Section 2, Article XII of the Constitution.
HELD:
The Supreme Court upheld the constitutionality of the Philippine
Mining Law, its implementing rules and regulations – insofar as
they relate to financial and technical agreements as well as the
subject Financial and Technical Assistance Agreement.
Full control is not anathematic to day-to-day management by
the contractor, provided that the State retains the power to
direct overall strategy; and to set aside, reverse or modify plans
and actions of the contractor. The idea of full control is similar to
that which is exercised by the board of directors of a private
corporation, the performance of managerial, operational,
financial, marketing and other functions may be delegated to
subordinate officers or given to contractual entities, but the
board retains full residual control of the business.
La Bugal-B’Laan Tribal Association Inc. vs Ramos
GR No. 127882 December 1, 2004
Facts: The Petition for Prohibition and Mandamus before the
Court challenges the constitutionality of (1) Republic Act No.
[RA] 7942 (The Philippine Mining Act of 1995); (2) its
Implementing Rules and Regulations (DENR Administrative
Order No. [DAO] 96-40); and (3) the FTAA dated March 30,
1995,6 executed by the government with Western Mining
Corporation (Philippines), Inc. (WMCP). On January 27, 2004,
the Court en banc promulgated its Decision granting the Petition
and declaring the unconstitutionality of certain provisions of RA
7942, DAO 96-40, as well as of the entire FTAA executed
between the government and WMCP, mainly on the finding that
FTAAs are service contracts prohibited by the 1987
Constitution. The Decision struck down the subject FTAA for
being similar to service contracts, which, though permitted
under the 1973 Constitution, were subsequently denounced for
being antithetical to the principle of sovereignty over our natural
resources, because they allowed foreign control over the
exploitation of our natural resources, to the prejudice of the
Filipino nation. The Decision quoted several legal scholars and
authors who had criticized service contracts for, inter alia,
vesting in the foreign contractor exclusive management and
control of the enterprise, including operation of the field in the
event petroleum was discovered; control of production,
expansion and development; nearly unfettered control over the
disposition and sale of the products discovered/extracted;
effective ownership of the natural resource at the point of
extraction; and beneficial ownership of our economic resources.
According to the Decision, the 1987 Constitution (Section 2 of
Article XII) effectively banned such service contracts.
Subsequently, respondents filed separate Motions for
Reconsideration. In a Resolution dated March 9, 2004, the
Court required petitioners to comment thereon. In the
Resolution of June 8, 2004, it set the case for Oral Argument on
June 29, 2004.
Issue: Whether or not the FTAA issued were valid.
Held: Yes. The notion that the deliberations reflect only the
views of those members who spoke out and not the views of the
majority who remained silent should be clarified. We must never
forget that those who spoke out were heard by those who
remained silent and did not react. If the latter were silent
because they happened not to be present at the time, they are
presumed to have read the minutes and kept abreast of the
deliberations. By remaining silent, they are deemed to have
signified their assent to and/or conformity with at least some of
the views propounded or their lack of objections thereto. It was
incumbent upon them, as representatives of the entire Filipino
people, to follow the deliberations closely and to speak their
minds on the matter if they did not see eye to eye with the
proponents of the draft provisions.
In any event, each and every one of the commissioners had the
opportunity to speak out and to vote on the matter. Moreover,
the individual explanations of votes are on record, and they
show where each delegate stood on the issues. In sum, we
cannot completely denigrate the value or usefulness of the
record of the ConCom, simply because certain members chose
not to speak out.
However, it is of common knowledge, and of judicial notice as
well, that the government is and has for many many years been
financially strapped, to the point that even the most essential
services have suffered serious curtailments — education and
health care, for instance, not to mention judicial services —
have had to make do with inadequate budgetary allocations.
Thus, government has had to resort to build-operate-transfer
and similar arrangements with the private sector, in order to get
vital infrastructure projects built without any governmental
outlay.
The drafters — whose ranks included many academicians,
economists, businessmen, lawyers, politicians and government
officials — were not unfamiliar with the practices of foreign
corporations and multinationals.
Neither were they so naïve as to believe that these entities
would provide ―assistance‖ without conditionalities or some quid
pro quo. Definitely, as business persons well know and as a
matter of judicial notice, this matter is not just a question of
signing a promissory note or executing a technology transfer
agreement. Foreign corporations usually require that they be
given a say in the management, for instance, of day-to-day
operations of the joint venture. They would demand the
appointment of their own men as, for example, operations
managers, technical experts, quality control heads, internal
auditors or comptrollers. Furthermore, they would probably
require seats on the Board of Directors — all these to ensure
the success of the enterprise and the repayment of the loans
and other financial assistance and to make certain that the
funding and the technology they supply would not go to waste.
Ultimately, they would also want to protect their business
reputation and bottom lines.
LEPANTO CONSOLIDATED MINING COMPANY v. WMC
RESOURCES INTERNATIONAL PTY. LTD. and WMC
(PHILIPPINES), INC.
412 SCRA 101 (2003), THIRD DIVISION
FACTS:
In a contract denominated as ―Tampakan Option Agreement‖,
respondent WMC Resources International Pty. Ltd. (WMC),
through its local subsidiary Western Mining Corporation
(Philippines), Inc. (WMCP), acquired the mining claims in
Tampakan, South Cotabato of the Tampakan Companies. The
―Tampakan Option Agreement‖ was amended by subsequent
agreements under which the Tampakan Companies were given
preferential option to acquire the shares of WMC in WMCP and
Hillcrest Inc. in the event WMC decided to sell them. WMC, by a
Sale and Purchase Agreement, sold to Lepanto Consolidated
Mining Company (Lepanto) its shares of stock. As the
Tampakan Companies later availed of their preferential right
under the ―Tampakan Option Agreement,‖ a Sale
and Purchase Agreement was concluded between WMC and
the Tampakan Companies over the same shares of stock priorly
purchased by Lepanto.
The Tampakan Companies notified the Director of the Mines
and Geosciences Bureau (MGB) of the DENR of the exercise of
their preemptive right to buy WMC‗s equity in WMCP and
Hillcrest, Inc. Lepanto wrote the DENR Secretary about the
invalidity of said agreement and reiterated its request for the
approval of its acquisition of the disputed shares.
Lepanto subsequently filed before the Regional Trial Court
(RTC) of Makati a complaint against WMC, WMCP, Tampakan
Companies. WMC et al. filed before the RTC a Joint Motion to
Dismiss on the ground of forum shopping. The RTC denied
WCM et al.‗s Motion to Dismiss. On appeal, the CA granted
the petition of respondents ruling that Lepanto is guilty of forum
shopping. Petitioners filed a motion for reconsideration with the
CA. The CA denied said motion.
ISSUE:
Whether or not Lepanto is guilty of forum shopping
HELD:
It is clear from the proceedings before the DENR, specifically
before the MGB, that the issue of which –– between petitioner
and respondent Tampakan Companies –– possesses the better
right to acquire the mining rights, claims and interests held by
WMC through its local subsidiary WMCP, especially with
respect to the 1995 FTAA, had been brought to the fore. The
MGB cannot just assess the qualifications of petitioner and of
the Tampakan Companies as potential transferee or assignee of
the rights and obligations of WMCP under the FTAA without
also resolving the issue of which has priority of right to become
one.
True, the questioned agreements of sale between Lepanto and
WMC on one hand and between WMC and the Tampakan
Companies on the other pertain to transfer of shares of stock
from one entity to another. But said shares of stock represent
ownership of mining rights or interest in mining agreements.
Hence, the power of the MGB to rule on the validity of the
questioned agreements of sale, which was raised by Lepanti
before the DENR, is inextricably linked to the very nature of
such agreements over which the MGB has jurisdiction under the
law. Unavoidably, there is identity of reliefs that Lepanto seeks
from both the MGB and the RTC.
Forum shopping exists when both actions involve the same
transactions, same essential facts and circumstances and raise
identical causes of actions, subject matter, and issues. Such
elements are evidently present in both the proceedings before
the MGB and before the trial court. The case instituted with the
RTC was thus correctly ordered dismissed by
the appellate court on the ground of forum shopping. Besides,
not only did Lepanto commit forum shopping but it also failed to
exhaust administrative remedies by opting to go ahead in
seeking reliefs from the court even while those same reliefs
were appropriately awaiting resolution by the MGB.
BENGUET CORPORATION v DENR-MAB G.R. No. 163101
February 13, 2008
FACTS:
On June 1, 1987, Benguet and J.G. Realty entered into a
RAWOP, wherein J.G. Realty was acknowledged as the owner
of four mining claims respectively named as Bonito-I, Bonito-II,
Bonito-III, and Bonito-IV, with a total area of 288.8656 hectares,
situated in Barangay Luklukam, Sitio Bagong Bayan,
Municipality of Jose Panganiban, Camarines Norte.
Thus, on August 9, 1989, the Executive Vice-President of
Benguet, Antonio N. Tachuling, issued a letter informing J.G.
Realty of its intention to develop the mining claims. However, on
February 9, 1999, J.G. Realty, through its President, Johnny L.
Tan, then sent a letter to the President of Benguet informing the
latter that it was terminating the RAWOP on the following
grounds:
a. The fact that your company has failed to perform the
obligations set forth in the RAWOP, i.e., to
undertake development works within 2 years from the execution
of the Agreement; b. Violation of the Contract by allowing
high graders to operate on our claim. c. No stipulation was
provided with respect to the term limit of the
RAWOP. d. Non-payment of the royalties thereon as
provided in the RAWOP.
On June 7, 2000, J.G. Realty filed a Petition for Declaration of
Nullity/Cancellation of the RAWOP with the Legaspi City POA,
Region V, docketed as DENR Case No. 2000-01 and entitled
J.G. Realty v. Benguet.
DECISION OF LOWER COURTS: *POA: declared the RAWOP
cancelled. *MAB: affirmed POA.
ISSUES: (1) Should the controversy have first been submitted
to arbitration before the POA took cognizance of the case?; (2)
Was the cancellation of the RAWOP supported by evidence?;
and (3) Did the cancellation of the RAWOP amount to unjust
enrichment of J.G. Realty at the expense of Benguet?
HELD: On correctness of appeal: Petitioner having failed to
properly appeal to the CA under Rule 43, the decision of the
MAB has become final and executory. On this ground alone, the
instant petition must be denied.
(1) YES, the case should have first been brought to voluntary
arbitration before the POA.
Secs. 11.01 and 11.02 of the RAWOP pertinently provide:
11.01 Arbitration
Any disputes, differences or disagreements between BENGUET
and the OWNER with reference to anything whatsoever
pertaining to this Agreement that cannot be amicably settled by
them shall not be cause of any action of any kind whatsoever in
any court or administrative agency but shall, upon notice of one
party to the other, be referred to a Board of Arbitrators
consisting of three (3) members, one to be selected by
BENGUET, another to be selected by the OWNER and the third
to be selected by the aforementioned two arbitrators so
appointed.
xxxx
11.02 Court Action
No action shall be instituted in court as to any matter in dispute
as hereinabove stated, except to enforce the decision of the
majority of the Arbitrators
A contractual stipulation that requires prior resort to voluntary
arbitration before the parties can go directly to court is not illegal
and is in fact promoted by the State.
To reiterate, availment of voluntary arbitration before resort is
made to the courts or quasi-judicial agencies of the government
is a valid contractual stipulation that must be adhered to by the
parties.
In other words, in the event a case that should properly be the
subject of voluntary arbitration is erroneously filed with the
courts or quasi-judicial agencies, on motion of the defendant,
the court or quasi-judicial agency shall determine whether such
contractual provision for arbitration is sufficient and effective. If
in affirmative, the court or quasi-judicial agency shall then order
the enforcement of said provision.
In sum, on the issue of whether POA should have referred the
case to voluntary arbitration, we find that, indeed, POA has no
jurisdiction over the dispute which is governed by RA 876, the
arbitration law.
HOWEVER, ESTOPPEL APPLIES. the Court rules that the
jurisdiction of POA and that of MAB can no longer be
questioned by Benguet at this late hour. What Benguet should
have done was to immediately challenge the POA's jurisdiction
by a special civil action for certiorari when POA ruled that it has
jurisdiction over the dispute. To redo the proceedings fully
participated in by the parties after the lapse of seven years from
date of institution of the original action with the POA would be
anathema to the speedy and efficient administration of justice.
(2) The cancellation of the RAWOP was supported by
evidence.
(3) There is no unjust enrichment in the instant case. There is
no unjust enrichment when the person who will benefit has a
valid claim to such benefit.
The principle of unjust enrichment under Article 22 requires two
conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at another's
expense or damage.
Clearly, there is no unjust enrichment in the instant case as the
cancellation of the RAWOP, which left Benguet without any
legal right to participate in further developing the mining claims,
was brought about by its violation of the RAWOP. Hence,
Benguet has no one to blame but itself for its predicament.
OBITER DICTA:
(1) Difference between compulsory & voluntary arbitration --
In Reformist Union of R.B. Liner, Inc. vs. NLRC, compulsory
arbitration has been defined both as ―the process of settlement
of labor disputes by a government agency which has the
authority to investigate and to make an award which is binding
on all the parties, and as a mode of arbitration where the parties
are compelled to accept the resolution of their dispute through
arbitration by a third party.‖ While a voluntary arbitrator is not
part of the governmental unit or labor department's personnel,
said arbitrator renders arbitration services provided for under
labor laws.
There is a clear distinction between compulsory and voluntary
arbitration. The arbitration provided by the POA is compulsory,
while the nature of the arbitration provision in the RAWOP is
voluntary, not involving any government agency.
G.R. No. 183576 May 30, 2011
DIAMOND DRILLING CORPORATION OF THE PHILIPPINES,
Petitioner,vs.
NEWMONT PHILIPPINES INCORPORATED, Respondent.
FACTS:
Newmont wanted to explore and develop large gold deposits in
the Central Cordillera so on December 20,1994, respondent
Newmont Philippines Incorporated (Newmont) (now known as
the Cordillera Exploration Company Incorporated) filed eight
applications or Financial or Technical Assistance (FTAA) with
the Central Office Technical Secretariat of the Mines and
Geosciences Bureau (MGB) in Quezon City pursuant to
Executive Order No. 279 (EO 279) and Department of
Environment and Natural Resources (DENR) Administrative
Order No. 63 (DAO 63), series of 1991.Petitioner Diamond
Drilling Corporation of the Philippines (Diamond Drilling)
likewise filed on December 20,1994 an application for Mineral
Production Sharing Agreement (MPSA) with the MGB-CAR
pursuant to EO279 but it was only on December 22, 1994 that
Diamond Drilling was able to complete all the requirements
for application of MPSA. Upon verification, however, the MGB-
CAR found that Diamond Drilling‘s MPSA application was in
conflict with a portion of one of Newmont‘s FTAA applications.
Prior to Republic Act No. 7942 (RA 7942) or the Philippine
Mining Act of 1995 effectivity, Newmont wrote the MGB
requesting for an opinion on the applicability of Section 8 of
DAO 63, particularly the provision which requires an FTAA
applicant to furnish the MGB Regional Office with a copy of the
FTAA application within 72hours from filing and MGB replied
that it is mandatory.Then, Diamond Drilling filed a protest with
the MGB-CAR seeking to annul the eight FTAA applications
of Newmont and asked that it be granted preferential right over
the areas covered by its MPSA application. MGB-CAR then
decided the case in favor of Diamond Drilling. Newmont
appealed the decision of the MGB-CAR to the Mines
Adjudication Board (MAB). In a Decision, the MAB reversed the
decision of the MGB- CAR and ruled in Newmont‘s favor.
Diamond Drilling filed to CA but CA affirmed the decision of the
MAB hence this petition for review on certiorari.
ISSUE:
Whether or not Newmont Philippines Inc. satisfied the
requirement of DAO 63 specifically Sec. 8 in applying for FTAA.
RULING:
The Supreme Court denied the petition and AFFIRMED the
decision of Court of Appeals.
Since Newmont‘s FTAA applications preceded that of Diamond
Drilling‘s MPSA application, priority should be given to
Newmont. Section 8 of DAO 63 is clear. It states that in the
event there are two or more applicants over the same area,
priority shall be given to the applicant that first filed its
application.
On the requirement that the applicant should furnish the proper
MGB Regional Office a copy of the FTAA application within 72
hours from filing, Supreme Court affirmed CA‘s decision that the
requirement of DAO No. 63 that the MGB Regional Office
concerned be furnished a copy of the FTAA application is
merely directory in character. The word "shall ," which seems
to give the provision a mandatory character, precedes the filing
of an FTAA application and not the furnishing of a copy of the
same to the Regional office. Also, section 8 of DAO 63 did not
specify the mode of service and the kind of copy that must
be furnished to the MGB Regional Office so, A fax machine
copy of an application showing therein the essential information,
specially the dates of filing and registration, and technical
description is a valid document. Thus, Newmont Philippines
Incorporated was shown to have complied with the required
copy of furnishing MGDS/DENR-CAR within 72
hours.Therefore Newmont Philippines Incorporated must be
given preferential right to utilize the area included in its FTAA
applications.
SR Metals, Inc. v. Reyes
Facts:
Each of the petitioners was awarded a 2-year Small- Scale
Mining Permit (SSMP) by the Provincial Mining Regulatory
Board of Agusan del Norte; they were allowed to extract Nickel
and Cobalt (Ni-Co) in a 20-hectare mining site in Sitio Bugnang,
Brgy. La Fraternidad, Tubay, Agusan del Norte. The EMB sent
the mining corporations a Notice of Violation informing them that
they had exceeded the allowed annual volume of 150,000 MTs
combined production as their stockpile inventory of Nickeliferous
ore had already total 177,297 dry metric tons (DMT). Then,
DENR Secretary Angelo T. Reyes issued a Cease and Desist
Order (CDO) against the mining corporations suspending their
operations for their operations for the following reasons:
1. The excess in 1) annual production of SR Metals, Inc., 2)
maximum capitalization, and, 3) labor cost to equipment
utilization of 1:1 is, by itself, a violation of existing laws.
2. The ECCs issued in favor of San R Construction Corporation
and Galeo Equipment Corporation have no legal basis and [are]
therefore considered null and void from the beginning. Similarly,
the small scale mining permits that were issued by reason of
such ECCs are likewise null and void.
DOJ categorically concluded that the term 'ore' should be
confined only to Ni-Co, that is, excluding soil and other materials
that are of no economic value to the mining corporations. This is
considering that their ECCs explicitly specified '50,000 MTs of
Ni-Co ore.' The mining corporations then filed before the CA a
Petition for Certiorari with prayer for Temporary Restraining
Order and/or Preliminary Injunction, imputing grave abuse of
discretion on the part of DENR in issuing the CDO but was
denied the mining corporations' petition, not only because the
ECCs have been mooted by their expiration, but also due to its
recognition of the power of the DENR to issue the CDO as the
agency reposed with the duty of managing and conserving the
country's resources under Executive Order 192.
Issue: Whether or not there is a correct interpretation of the
50,000 MT limit.
Held:
No. There are two different laws governing small-scale mining:
PD 1899 and RA 7076. According to Section 1 of PD 1899:
Small-scale mining refers to any single unit mining operation
having an annual production of not more than 50,000 metric
tons of ore and satisfying the following requisites:
1. The working is artisanal, whether open cast or shallow
underground mining, without the use of sophisticated mining
equipment;
2. Minimal investment on infrastructures and processing plant;
3. Heavy reliance on manual labor; and
4. Owned, managed or controlled by an individual or entity
qualified under existing mining laws, rules and regulations.
While under Section 3(b) of RA 7076, small-scale mining refers
to 'mining activities which rely heavily on manual labor using
simple implements and methods and do not use explosives or
heavy mining equipment.' Significantly, this definition does not
provide for annual extraction limit unlike in PD 1899.
DOJ Opinion No. 74, Series of 2006 concluded that as nothing
from RA 7076 speaks of an annual production limit, Section 1 of
PD 1899 should be considered impliedly repealed by RA 7076,
the later law. However, while these two laws tackle the definition
of what small-scale mining is, both have different objects upon
which the laws shall be applied to. PD 1899 applies to
individuals, partnerships and corporations while RA 7076
applies to cooperatives.
The DENR, being the agency mandated to protect the
environment and the country's natural resources, is authoritative
on interpreting the 50,000- MT limit. MAO No. MRD-41 specifies
measuring the 'run-of-mine ore,' meaning the ore as it emerges
from the mine, i.e., before treatment. This definition is congruent
with RA 7942 or The Philippine Mining Act of 1995.