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HON. HEHERSON T. ALVAREZ v. PICOP RESOURCES, INC.G.R. No. 162243, December 3, 2009 Chico-Nazario, J.

: Doctrine: A timber license is not a contract within the purview of the non-impairment clause. Facts: PICOP filed with the DENR an application to have its Timber License Agreement (TLA) No. 43converted into an IFMA.PICOP filed before the (RTC) City a Petition for Mandamus

against then DENR Sec Alvarez for unlawfully refusing and/or neglecting to sign and execute the IFMA contract of PICOP even as thelatter has complied with all the legal requirements for the automatic conversion of TLA No. 43, asamended, into an IFMA.The cause of action of PICOP Resources, Inc. (PICOP) in its Petition for Mandamus with the trialcourt is clear: the government is bound by contract, a 1969 Document signed by then PresidentFerdinand Marcos, to enter into an Integrated Forest Management Agreement (IFMA) with PICOP. Issue: Whether the 1969 Document is a contract recognized under the non-impairment clause by which thegovernment may be bound (for the issuance of the IFMA) Held: NO. Our definitive ruling in Oposa v. Factoran that a timber license is not a contract within the purviewof the non-impairment clause is edifying. We declared:

Needless to say, all licenses may thus berevoked or rescinded by executive action. It is not a contract, property or a property right protected bythe due process clause of the Constitution.

Since timber licenses are not contracts, the non-impairment clause, which reads: "SEC. 10. No lawimpairing the obligation of contracts shall be passed." cannot be invoked.The Presidential Warranty cannot, in any manner, be construed as a contractual undertaking assuringPICOP of exclusive possession and enjoyment of its concession areas. Such an interpretation wouldresult in the complete abdication by the State in favor of PICOP of the sovereign power to control andsupervise the exploration, development and utilization of the natural resources in the area.

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