Case Digests in re Mining Act (RA 7942)

GR No. 127882 La Bugal B!Laan "ri#al Association$ %nc. &. 'ictor Ra(os )anuar* 27$ 2++4 Facts President Corazon Aquino issued Executive Order (EO) 279, as part of her interim e!is ative po"er "hich authorizes the #E$% &ecretar' to accept, consider and eva uate proposa s from forei!n(o"ned corporations or forei!n investors for contracts or a!reements invo vin! either technica or financia assistance for ar!e(sca e exp oration, deve opment, and uti ization of minera s, "hich, upon appropriate recommendation of the &ecretar', the she ma' execute "ith the forei!n proponent) President *ide %amos approved %A 79+2 ,no"n as the -inin! Act to .!overn the exp oration, deve opment, uti ization and processin! of a minera resources) &hort ', after its effectivit', the President entered into a *inancia and /echnica Assistance A!reement (*/AA) "ith 0estern -inin! Corporation Phi ippines (0-CP) "hich is o"ned 1' 0-C %esources 2nternationa Pt'), 3td) (/he atter is a "ho ' o"ned su1sidiar' of 0estern -inin! Corporation 4o din!s 3imited, a pu1 ic ' isted ma5or Austra ian minin! and exp oration compan')), coverin! 99, 677 hectares of and in &outh Cota1ato, &u tan 8uradat, #avao de &ur and $orth Cota1ato) /hen #E$% &ecretar' 9ictor O) %amos issued #E$% Administrative Order (#AO) $o) 9:(26, s) ;99:, ,no"n as the 2mp ementin! %u es and %e!u ations of the said %A 79+2 "hich "as ater repea ed 1' #AO $o) 9<(+=, s) ;99<) Counse s for petitioners sent a etter to the #E$% &ecretar' demandin! that the #E$% stop the imp ementation of the said a" and its imp ementin! ru es !ivin! the #E$% fifteen da's from receipt to act thereon) /he #E$%, ho"ever, has 'et to respond or act on petitioner>s etter) /he petitioners fi ed the present petition for prohi1ition and mandamus, "ith a pra'er for a temporar' restrainin! order a e!in! that at the time of the fi in! of the petition, ;== */AA

app ications has a read' 1een fi ed, coverin! an area of 7)+ mi ion hectares, <+ of the app ication are 1' fu ' forei!n(o"ned corporations, and at east one 1' a fu ' forei!n(o"ned minin! compan' over offshore areas) /he' are questionin! the effectivit' of EO 279 "hich sa's that the effectivit' of the said presidentia issuance is contrar' to "hat is provided in EO 2== "hich sa's a"s are effective after fifteen (;:) da's fo o"in! its pu1 ication) ?iven this, the po"er of that issuance has ceased to exist 1ecause prior to the apse of the ;:(da' period Con!ress has convened ma,in! the po"ers to e!is ate 1' the President ceased to exist) /he */AA issued 1' the President "ith 0-C, the ori!ina compan' 1efore it "as ca ed 0-CP) /he' a so c aim that the #E$% &ecretar' acted "ithout or in excess of 5urisdiction on the !round of the issuance of #AO $o) 9<(+= re!u ations of %A 79+2, "hich the atter is unconstitutiona for it@ a)) a o"s fu ' forei!n(o"ned corporations to exp ore, deve op, uti ize and exp oit minera resources in a manner contrar' to &ec) 2, par) +, Art) A22 of the ConstitutionB 1)) a o"s the ta,in! of private propert' "ithout the determination of pu1 ic use and for 5ust compensationB c)) vio ates &ec) ;, Art) 222 of the ConstitutionB d)) a o"s en5o'ment 1' forei!n citizens as "e as fu ' forei!n o"ned corporations of the nation>s marine "ea th contrar' to &ec) 2, par) 2 of Art) A22 of the ConstitutionB e)) a o"s priorit' to forei!n and fu ' forei!n o"ned corporations in the exp oration, deve opment and uti ization of minera resources contrar' to Art) A22 of the ConstitutionB f)) a o"s the inequita1 e sharin! of "ea th contrar' to &ec) ;, par) ;) and &ec) 2, par) + of Art) A22 of the Constitution) -oreover, in recommendin! approva of and imp ementin! the */AA 1et"een the President and 0-CP 1ecause the same is i e!a and unconstitutiona ) /he' pra' that the Court issue an order@ a)) permanent ' en5oinin! the respondents from actin! on an' app ication for */AAsB 1)) dec arin! %A 79+2 as unconstitutiona and nu and voidB c)) dec arin! the 2%% contained in #AO 9<(+= and a unconstitutiona , i e!a and nu and void) %espondents ar!ued that the EO 279 is constitutiona accordin! to the ru in! in -iners Association of the Phi ippines vs) *actoran) /he' further ar!ues that the first three requisites to "arrant 5udicia revie" in this case are not present such as a1sence of actua controvers' and e!a standin! of the petitioners and the question is not raised at the ear iest opportunit') On the issue of the constitutiona it' of the #AO 9<(+=, respondents insisted that Ca!reements invo vin! other simi ar administrative issuances as unconstitutiona and nu and voidB and d)) cance in! the */AA issued to 0-CP as

technica or financia assistanceD is 5ust another term for service contracts as ref ected in the de i1erations of the Constitutiona Commission preparin! the draft of the ;977 Constitution) Issues Procedura 2ssue ;) 2s there a vio ation on the ru e of hierarch' of courts a!ainst the petitionersE &u1stantive 2ssue ;) 2s the petition a 5usticia1 e question !iven that the petition "as raised after t"o 'ears of the execution of the */AAE 2) 0hen did EO 279 1ecome effective, as provided in the presidentia issuance itse f or as provided in EO 2==E 6) 2s %A 79+2 constitutiona E +) 2s #AO 9<(+= va idE :) 2s the 0-CP */AA va idE Rulings According to the Cited Issues Procedura 2ssue ;) A thou!h the &upreme Court has concurrent 5urisdiction "ith the %e!iona /ria Courts and the Court of Appea s to issue "rits of certiorari, prohi1ition, mandamus, quo "arranto, ha1eas corpus and in5unction, such concurrence does not !ive a part' unrestricted freedom of choice of court forum) 2t is a o"ed to direct ' fi e the petition in the &upreme Court "here the redress desired cannot 1e o1tained in the appropriate courts or "here exceptiona and compe in! circumstances 5ustif' such invocation as he d in Peop e vs) Cuaresma) /he issues raised constitute exceptiona and compe in! circumstances to 5ustif' the direct petition) /he Court has the discretion to ta,e co!nizance of a suit "hich does not satisf' the requirements of an actua or e!a standin! "hen paramount importance to the pu1 ic interest is invo ved) /hus, the Court ma' 1rush aside technica ities of procedure)

&u1stantive 2ssues ;) /he issue is 5usticia1 e on the !round that this requisite shou d not 1e ta,en to mean that the question of constitutiona it' must 1e raised immediate ' after the execution of the state action comp ained of) /hat the question of constitutiona it' has not 1een raised 1efore is not a va id reason for refusin! to a o" it to 1e raised ater) A contrar' ru e "ou d mean that a cha en!e the same) 2) $othin! in EO 2== "hich prevents a a" from ta,in! effects on a date other than( even 1efore( the ;:(da' period after its pu1 ication) 0here a a" provides for its o"n date of effectivit', such date prevai s over that prescri1ed 1' said issuance) 2t is the ver' essence of the phrase Cun ess it is other"ise providedD &ec) ; of EO 2==, therefore, app ies on ' "hen a statute does not provide for its o"n date of effectivit') 0hat is mandator' under EO 2== and "hat due process requires is the pu1 ication of the a" for "ithout such notice and pu1 ication, there "ou d 1e no 1asis for the app ication of the maxim Ci!norantia e!is nFeminemG excusatD 2t is c ear that EO 279 "as pu1 ished in the Officia ?azette on Au!ust 6, ;977) /he said effectivit' too, p ace after the convenin! of the first Con!ress is irre evant) At the time President Aquino issued EO 279 on Hu ' 2:, ;977, she "as sti va id ' exercisin! e!is ative po"ers under the Provisiona Constitution) /he ru in! in -iners Association of the Phi ippines is not app ica1 e since the question raised in the said case "as the unconstitutiona it' of the #AO :7 and 72 "hich "ere pursuant to EO 279) 6) As to the third, fourth and ast issues, the ru in! are conso idated !iven the re ation of the said issuances) /he nationa patrimon' or our natura resources are exc usive ' reserved for the *i ipino peop e) $o a ien must 1e a o"ed to en5o', exp oit and deve op our natura resources) As a matter of fact, that princip e proceeds from the fact that our natura resources are !ifts from ?od to the *i ipino peop e and it "ou d 1e a 1reach of that specia 1 essin! from ?od if "e "i a o" a iens to exp oit our natura resources) a", other"ise unconstitutiona , "ou d apse into constitutiona it' 1' the mere fai ure of the proper part' to prompt ' fi e a case to

/he phrase Cmana!ement or other forms of assistanceD in the ;976 Constitution "as de eted in the ;977 Constitution, "hich a o"s on ' Ctechnica or financia assistance)D Casus omisus pro omisso ha1endus est) A person, o15ect or thin! omitted from an enumeration must 1e he d to have 1een omitted intentiona ') /he mana!ement or operation of minin! activities 1' forei!n contractors, "hich is the primar' feature of service contracts, "as precise ' the evi that the drafters of the ;977 Constitution sou!ht to eradicate) /o upho d respondentsI theor' "ou d reduce the atter to a mere euphemism for the former and render the chan!e in phraseo o!' meanin! ess) 2t is apparent that service contracts are not a o"ed in the ;977 Constitution) /here can 1e itt e dou1t that the 0-CP */AA itse f is a service con( tract) &ection ;)6 of the 0-CP */AA !rants 0-CP .the exc usive ri!ht to exp ore, exp oit, uti ize F,G process and dispose of a -inera s products and 1'(products thereof that ma' 1e produced from the Contract Area). 0hi e 0-CP invo,es the A!reement on the Promotion and Protection of 2nvestments 1et"een the Phi ippine and Austra ian ?overnments, the annu ment of the */AA "ou d not 1e a vio ation of the princip e pacta sunt servanda since the decision forms part of the e!a s'stem of the Phi ippines) Disposition 04E%E*O%E, the petition is ?%A$/E#) /he Court here1' dec ares unconstitutiona and void@ (;) (a) (1) (c) (d) (e) (f) (2) /he fo o"in! provisions of %epu1 ic Act $o) 79+2@ /he proviso in &ection 6 (aq), &ection 26, &ection 66 to +;, &ection :<, /he second and third para!raphs of &ection 7;, and &ection 9=) A provisions of #epartment of Environment and $atura %esources

Administrative Order 9<(+=, s) ;99< "hich are not in conformit' "ith this #ecision, and

(6)

/he *inancia and /echnica Assistance A!reement 1et"een the ?overnment of

the %epu1 ic of the Phi ippines and 0-C Phi ippines, 2nc)

GR No. 127882 La Bugal B!Laan "ri#al Association$ %nc. &. 'ictor Ra(os Dece(#er +1$ 2++4 Facts /his case is in continuation of the petition a read' decided 1' the Court ast Hanuar' 27, 2==+) /he esta1 ished facts are a read' mentioned in the first case) Jut since the Court found ne" issues, there is a need to reiterate the said facts) /he Court decided that %A 79+2, #AO 9<(+=, and the 0-CP */AA as unconstitutiona on the !round that service contracts are prohi1ited in the ;977 Constitution (&ection 2, Artic e A22) in favor of the ri!hts of the *i ipinos to en5o' the nationa patrimon') &u1sequent ', the respondents fi ed a motion for reconsideration) After "hich petitioners "ere required to comment on the matter and then the ora ar!ument "as set) 4ence, ne" issues "ere found out 1' the Court after hearin! the ar!uments of the parties invo ved) Issues ;) /he constitutiona it' of %A 79+2, #AO 9<(+=, and the 0-CP */AA 2) 4as the case 1een rendered moot 1' the sa e of 0-C shares in 0-CP to &a!ittarius (<= percent of &a!ittarius> equit' is o"ned 1' *i ipinos andKor *i ipino(o"ned corporations "hi e += percent is o"ned 1' 2ndophi %esources $3, an Austra ian compan') and 1' the su1sequent transfer and re!istration of the */AA from 0-CP to &a!ittariusE 6) Assumin! that the case has 1een rendered moot, "ou d it sti 1e proper to reso ve the constitutiona it' of the assai ed provisions of the -inin! 3a", #AO 9<(+= and the 0-CP */AAE

+) 0hat is the proper interpretation of the phrase A!reements 2nvo vin! Either /echnica or *inancia Assistance contained in para!raph + of &ection 2 of the Artic e A22 of the ;977 ConstitutionE Ruling ;) 2n sum, there is a comp ete reversa of the previous decision of the Court) /o upho d the unconstitutiona it' of %A 79+2, #AO 9<(+=, and the 0-CP */AA "ou d ead to a sta!nant and under(deve op minera , petro eum, and other resources of the &tate) 2f there ar!e sca e exp oration, deve opment, and uti ization run 1' forei!n corporations, there "ou d 1e immediate and tan!i1 e 1enefit for the *i ipino peop e) *orei!n corporations or enterprises "ou d contri1ute to the economic deve opment and !enera "e fare of the countr', conserve the environment, and up ift the "e (1ein! of the affected oca communities) /hou!h the &tate permits the forei!n contractor sufficient and reasona1 e mana!ement authorit' over the enterprise it invested, in order to ensure that it is operatin! efficient ' and profita1 ', to protect its investments and to ena1 e it to succeed, sti the former has contro over the atter for the Constitution aid do"n the safe!uards as stated in &ection 2, Artic e A22) $o"here does it require the !overnment to ho d a exp oration permits and simi ar authorizations) 2n fact, there is no prohi1ition at a a!ainst forei!n or oca corporations or contractors ho din! exp oration permits) Pursuant to &ection 2= of %A 79+2, an exp oration permit mere ' !rants to a qua ified person the ri!ht to conduct exp oration for a minera s in specified areas) &uch a permit does not amount to an authorization to extract and carr' off the minera resources that ma' 1e discovered) /his phase invo ves nothin! 1ut expenditures for exp orin! the contract area and ocatin! the minera 1odies) As no extraction is invo ved, there are no revenues or incomes to spea, of) 2n short, the exp oration permit is an authorization for the !rantee to spend its o"n funds on exp oration pro!rams that are pre( approved 1' the !overnment, "ithout an' ri!ht to recover an'thin! shou d no minera s in commercia quantities 1e discovered) /he &tate ris,s nothin! and oses nothin! 1' !rantin! these permits to oca or forei!n firmsB in fact, it stands to !ain in the form of data !enerated 1' the exp oration activities) /he exp oration permit serves a practica and

e!itimate purpose in that it protects the interests and preserves the ri!hts of the exp oration permit !rantee (the "ou d(1e contractor) (( forei!n or oca (( durin! the period of time that it is spendin! heavi ' on exp oration "or,s, "ithout 'et 1ein! a1 e to earn revenues to recoup an' of its investments and expenditures) -inus this permit and the protection it affords, the exp oration "or,s and expenditures ma' end up 1enefitin! on ' c aim(5umpers) &uch a possi1i it' tends to discoura!e investors and contractors) /hus, &ection 6(aq) of %A 79+2 ma' not 1e deemed unconstitutiona ) A carefu perusa of the statute itse f and its imp ementin! ru es revea s that neither %A 79+2 nor #AO 99( :< can 1e said to conve' 1eneficia o"nership of an' minera resource or product to an' forei!n */AA contractor) 0-CP */AA uncovers no indication that it confers upon 0-CP o"nership, 1eneficia or other"ise, of the minin! propert' it is to deve op, the minera s to 1e produced, or the proceeds of their sa e, "hich can 1e e!a ' asserted and enforced as a!ainst the &tate) 2) $o) /he 1asis for dec arin! the */AA void sti has to 1e revisited, reexamined, and reconsidered) 2t not per se defective or unconstitutiona ) 2t "as questioned on ' 1ecause it had 1een issued to an a e!ed ' non(qua ified, forei!n(o"ned corporation) /he decision has 'et to 1ecome fina , to a intents and purposes, the */AA must 1e deemed va id and constitutiona ) 6) /he Court must reco!nize the exceptiona character of the situation and the paramount pu1 ic interest invo ved, as "e as the necessit' for a ru in! to put an end to the uncertainties p a!uin! the minin! industr' and the affected communities as a resu t of future */AAs, and the need to avert a mu tip icit' of suits) &tron! reasons of pu1 ic po ic' demand that the constitutiona it' issue 1e reso ved no") +) /he provision in question "as intended to refer to a!reements other than those for mere financia or technica assistance) 2t shou d 1e interpreted as a o"in! forei!n corporations to do ar!e(sca e exp oration "ithin the &tate, for the former is in rea it' not capa1 e of doin! it !iven the ump sum of mone' needed and the ris, of the underta,in!) 2t is !iven that even the 1asic services natura ' shou dered 1' the &tate are not adequate ' provided to the peop e) /he inc usion of Ctechnica or financia assistanceD

reco!nizes the fact that forei!n 1usiness entities and mu tinationa corporations are the ones "ith the resources and ,no"(ho" to provide technica andKor financia assistance of the ma!nitude and t'pe required for ar!e(sca e exp oration, deve opment and uti ization (E#L) of these resources) /he drafters a!reed that these a!reements inc ude mana!ement authorit' "ith respect to the da'(to(da' operations of the enterprise and measures for the protection of the interests of the forei!n corporation, provided that Phi ippine soverei!nt' over natura resources and fu contro over the enterprise underta,in! the exp oration, deve opment and uti ization activities remain firm ' in the &tate) 2n re ation to this, the Court a!reed that the framers "ere !oin! to permit service contracts "ith forei!n corporations as contractors, 1ut "ith safet' measures to prevent a1uses, as an exception to the !enera norm esta1 ished in para!raph ;, &ection 2, Artic e A22) /his provision reserves or imits to *i ipino citizensMand corporations at east sixt' (<=) percent of "hich is o"ned 1' such citizensMthe E#L of natura resources) /his prompted 1' the insufficienc' of *i ipino capita and the fe t need for forei!n investments in the E#L of natura resources) /his ne" service contracts, the forei!n contractors provide capita , techno o!' and technica ,no"(ho", and mana!eria expertise in the creation and operation of ar!e(sca e minin!Kextractive enterprisesB and the !overnment, throu!h its a!encies (#E$%, -?J), active ' exercises contro and supervision over the entire operation) A so, ma' 1e entered into on ' "ith respect to minera s, petro eum, and other minera oi s) Disposition 04E%E*O%E, the Court RESOLVES to GRANT the respondentsI and the intervenorsI -otions for %econsiderationB to REVERSE and SET ASIDE this CourtIs Hanuar' 27, 2==+ #ecisionB to DISMISS the PetitionB and to issue this ne" 5ud!ment dec arin! CONSTIT TIONAL (;) %epu1 ic Act $o) 79+2 (the Phi ippine -inin! 3a"), (2) its 2mp ementin! %u es and %e!u ations contained in #E$% Administrative Order (#AO) $o) 9<+= (( insofar as the' re ate to financia and technica assistance a!reements referred to in para!raph + of &ection 2 of Artic e A22 of the ConstitutionB and (6) the *inancia and /echnica Assistance A!reement (*/AA) dated -arch 6=, ;99: executed 1' the !overnment and 0estern -inin! Corporation Phi ippines 2nc) (0-CP), except &ections 7)7 and 7)9 of the su15ect */AA "hich

are here1' 2$9A32#A/E# for 1ein! contrar' to pu1 ic po ic' and for 1ein! !ross ' disadvanta!eous to the !overnment)

GR. No. 98,,2 Miners Association o- t.e /.ili00ines &s. 1actoran )anuar* 12$ 1993 Facts *ormer President Corazon Aquino issued Executive Order $os) 2;; and 279 as par to her interim e!is ative po"ers) Executive Order $o) 2;; prescri1es the interim procedures in the processin! and approva of app ications for the exp oration, deve opment and uti ization of minera s pursuant to &ection 2, Artic e A22 of the ;977 Constitution) Executive Order $o) 279 authorizes the #epartment of $atura %esources (#E$%) &ecretar' to ne!otiate and conc ude 5oint venture, co(production or production(sharin! a!reements for the exp oration, deve opment, and uti ization of minera resources) Petitioner is an or!anization composed of minin! prospectors and c aimo"ners or c aimho ders questions the constitutiona it' of the t"o administrative orders (#AO) issued 1' then &ecretar' of #E$% *u !encio *actoran Hr) pursuant to the a1ovementioned executive issuances) #epartment Administrative Order $o) :7 dec ares Ca existin! minin! ease or a!reements "hich are !ranted after the effectivit' of the ;977 ConstitutionNsha 1e converted into production(sharin! a!reements "ithin one (;) 'ear from the effectivit' of these !uide ines)D 2n re ation to this, #AO $o) 72 provides that a fai ure to su1mit 3etter of 2ntent (3O2) and -inera Production(&harin! A!reement (-P&A) "ithin from the effectivit' of #epartment Administrative Order $o) :7 sha !rave c aims) *urthermore, it c aims that the #AOs are issued in excess of 5urisdiction and are inconsistent "ith the executive orders) A so, #AO $o) :7 vio ates the non(impairment c ause of the ;977 Constitution for the undu ' pre(termination of the existin! minin! eases and other minin! a!reements and automatic conversion of said a!reements into production(sharin! a!reements "ithin one (;) 'ear from its effectivit') cause the a1andonment of minin!, quarr', and sand and

/he Court, actin! on petitionerIs ur!ent ex(parte petition for issuance of a restrainin! orderKpre iminar' in5unction, issued a /emporar' %estrainin! Order, upon postin! of a P:==, ===)== 1ond, en5oinin! the enforcement and imp ementation of #E$% Administrative Order $os) :7 and 72, as amended, &eries of ;979 and ;99=, respective ') Issues ;) #id the #E$% &ecretar' act "ith !rave a1use of discretion in the issuance of the t"o #AOsE 2) Are the t"o #AOs va idE Ruling ;) 2t cannot 1e esta1 ished that the &ecretar' "ent 1e'ond "hat is prescri1ed 1' the EO 279) &ection < of the said issuance specifica ' authorizes him to promu !ate such supp ementar' ru es and re!u ations as ma' 1e necessar' to effective ' imp ement the provisions thereof) A so, the #AOs and the EOs are re ated in order to carr' out the mandate of Artic e A22, &ection 2 of the ;977 Constitution) 2) /he t"o are reasona1 ' directed to the accomp ishment of the purposes of the a" under "hich the' "ere issued and "ere intended to secure the paramount interest of the pu1 ic, their economic !ro"th and "e fare) /heir constitutiona it' must 1e sustained and their force and effect uphe d for the' "ere part of the e!itimate exercise of the po ice po"er of the &tate) /he non(impairment c ause !uaranteed 1' the ;977 Constitution shou d not prevai over the e!itimate exercise of po ice po"er since it has 1een ru ed 1' the Court that such po"er is not a1so ute) /hus, it is a va id exercise)

Disposition 04E%E*O%E, the petition is #2&-2&&E# for ac, of merit) /he /emporar' %estrainin! Order issued on Hu ' 2, ;99; is here1' 32*/E#)