 MINING

AN ACT CREATING A PEOPLE'S SMALL-SCALE MINING PROGRAM AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1. Title. – This Act shall be known as the "People's Small-scale Mining Act of 1991."

Section 2. Declaration of Policy. – It is hereby declared of the State to promote, develop, protect and rationalize viable small-scale mining activities in order to
generate more employment opportunities and provide an equitable sharing of the nation's wealth and natural resources, giving due regard to existing rights as
herein provided.

Section 3. Definitions. – For purposes of this Act, the following terms shall be defined as follows:

(a) "Mineralized areas" refer to areas with naturally occurring mineral deposits of gold, silver, chromite, kaolin, silica, marble, gravel, clay and like mineral
resources;

(b) "Small-scale mining" refers to mining activities which rely heavily on manual labor using simple implement and methods and do not use explosives or heavy
mining equipment;

(c) "Small-scale miners" refer to Filipino citizens who, individually or in the company of other Filipino citizens, voluntarily form a cooperative duly licensed by the
Department of Environment and Natural Resources to engage, under the terms and conditions of a contract, in the extraction or removal of minerals or
ore-bearing materials from the ground;

(d) "Small-scale mining contract" refers to co-production, joint venture or mineral production sharing agreement between the State and a small-scale mining
contractor for the small-scale utilization of a plot of mineral land;

(e) "Small-scale mining contractor" refers to an individual or a cooperative of small-scale miners, registered with the Securities and Exchange Commission or
other appropriate government agency, which has entered into an agreement with the State for the small-scale utilization of a plot of mineral land within a
people's small-scale mining area;

(f) "Active mining area" refers to areas under actual exploration, development, exploitation or commercial production as determined by the Secretary after the
necessary field investigation or verification including contiguous and geologically related areas belonging to the same claimowner and/or under contract with an
operator, but in no case to exceed the maximum area allowed by law;

(g) "Existing mining right" refers to perfected and subsisting claim, lease, license or permit covering a mineralized area prior to its declaration as a people's
small-scale mining area;

(h) "Claimowner" refers to a holder of an existing mining right;

(i) "Processor" refers to a person issued a license to engage in the treatment of minerals or ore-bearing materials such as by gravity concentration, leaching
benefication, cyanidation, cutting, sizing, polishing and other similar activities;

(j) "License" refers to the privilege granted to a person to legitimately pursue his occupation as a small-scale miner or processor under this Act;

(k) "Mining plan" refers to a two-year program of activities and methodologies employed in the extraction and production of minerals or ore-bearing materials,
including the financial plan and other resources in support thereof;

(l) "Director" refers to the regional executive director of the Department of Environment and Natural Resources; and

(m) "Secretary" refers to the Secretary of the Department of Environment and Natural Resources.

Section 4. People's Small-scale Mining Program. – For the purpose of carrying out the declared policy provided in Section 2 hereof, there is hereby established a
People's Small-scale Mining Program to be implemented by the Secretary of the Department of Environment and Natural Resources, hereinafter called the
Department, in coordination with other concerned government agencies, designed to achieve an orderly, systematic and rational scheme for the small-scale
development and utilization of mineral resources in certain mineral areas in order to address the social, economic, technical, and environmental connected with
small-scale mining activities.

The People's Small-scale Mining Program shall include the following features:

(a) The identification, segregation and reservation of certain mineral lands as people's small-scale mining areas;

(b) The recognition of prior existing rights and productivity;

(c) The encouragement of the formation of cooperatives;

(d) The extension of technical and financial assistance, and other social services;
(e) The extension of assistance in processing and marketing;

(f) The generation of ancillary livelihood activities;

(g) The regulation of the small-scale mining industry with the view to encourage growth and productivity; and

(h) The efficient collection of government revenue.

Section 5. Declaration of People's Small-scale Mining Areas. – The Board is hereby authorized to declare and set aside people's small-scale mining areas in sites
onshore suitable for small-scale mining, subject to review by the Secretary, immediately giving priority to areas already occupied and actively mined by
small-scale miners before August 1, 1987: provided, that such areas are not considered as active mining areas: provided, further, that the minerals found therein
are technically and commercially suitable for small-scale mining activities: provided, finally, that the areas are not covered by existing forest rights or
reservations and have not been declared as tourist or marine reserved, parks and wildlife reservations, unless their status as such is withdrawn by competent
authority.

Section 6. Future People's Small-scale Mining Areas. – The following lands, when suitable for small-scale mining, may be declared by the Board as people's
small scale mining areas:

(a) Public lands not subject to any existing right;

(b) Public lands covered by existing mining rights which are not active mining areas; and

(c) Private lands, subject to certain rights and conditions, except those with substantial improvements or in bona fide and regular use as a yard, stockyard,
garden, plant nursery, plantation, cemetery or burial site, or land situated within one hundred meters (100 m.) from such cemetery or burial site, water reservoir
or a separate parcel of land with an area of ten thousand square meters (10,000 sq. m.) or less.

Section 7. Ancestral Lands. – No ancestral land may be declared as a people's small-scale mining area without the prior consent of the cultural communities
concerned: provided, that, if ancestral lands are declared as people's small-scale mining areas, the members of the cultural communities therein shall be given
priority in the awarding of small-scale mining contracts.

Section 8. Registration of Small-scale Miners. – All persons undertaking small-scale mining activities shall register as miners with the Board and may organize
themselves into cooperatives in order to qualify for the awarding of a people's small-scale mining contract.

Section 9. Award of People's Small-scale Mining Contracts. – A people's small-scale mining contract may be awarded by the Board to small-scale miners who
have voluntarily organized and have duly registered with the appropriate government agency as an individual miner or cooperative; Provided, that only one (1)
people's small-scale mining contract may be awarded at any one time to a small-scale mining operations within one (1) year from the date of award: provided,
further, that priority shall be given or city where the small-scale mining area is located.

Applications for a contract shall be subject to a reasonable fee to be paid to the Department of Environment and Natural Resources regional office having
jurisdiction over the area.

Section 10. Extent of Contract Area. – The Board shall determine the reasonable size and shape of the contract area following the meridional block system
established under Presidential Decree No. 463, as amended, otherwise known as the Mineral Resources Development Decree of 1974, but in no case shall the
area exceed twenty hectares (20 has.) per contractor and the depth or length of the tunnel or adit not exceeding that recommended by the director taking into
account the following circumstances:

(a) Size of membership and capitalization of the cooperative;

(b) Size of mineralized area;

(c) Quantity of mineral deposits;

(d) Safety of miners;

(e) Environmental impact and other considerations; and

(f) Other related circumstances.

Section 11. Easement Rights. – Upon the declaration of a people's small-scale mining area, the director, in consultation with the operator, claimowner,
landowner or lessor of an affected area, shall determine the right of the small scale miners to existing facilities such as mining and logging roads, private roads,
port and communication facilities, processing plants which are necessary for the effective implementation of the People's Small-scale Mining Program, subject to
payment of reasonable fees to the operator, claimowner, landowner or lessor.

Section 12. Rights Under a People's Small-scale Mining Contract. – A people's small-scale mining contract entitles the small-scale mining contractor to the right
to mine, extract and dispose of mineral ores for commercial purposes. In no case shall a small-scale mining contract be subcontracted, assigned or otherwise
transferred.
Section 13. Terms and Conditions of the Contract. – A contract shall have a term of two (2) years, renewable subject to verification by the Board for like periods
as long as the contractor complies with the provisions set forth in this Act, and confers upon the contractor the right to mine within the contract area: provided,
that the holder of a small-scale mining contract shall have the following duties and obligations:

(a) Undertake mining activities only in accordance with a mining plan duly approved by the Board;

(b) Abide by the Mines and Geosciences Bureau and the small-scale Mining Safety Rules and Regulations;

(c) Comply with his obligations to the holder of an existing mining right;

(d) Pay all taxes, royalties or government production share as are now or may hereafter be provided by law;

(e) Comply with pertinent rules and regulations on environmental protection and conservation, particularly those on tree-cutting mineral-processing and
pollution control;

(f) File under oath at the end of each month a detailed production and financial report to the Board; and

(g) Assume responsibility for the safety of persons working in the mines.

Section 14. Rights of Claimowners. – In case a site declared and set aside as a people's-scale mining area is covered by an existing mining right, the claimowner
and the small-scale miners therein are encouraged to enter into a voluntary and acceptable contractual agreement with respect to the small-scale utilization of
the mineral values from the area under claim. In case of disagreement, the claimowner shall be entitled to the following rights and privileges:

(a) Exemption from the performance of annual work obligations and payment of occupation fees, rental, and real property taxes;

(b) Subject to the approval of the Board, free access to the contract area to conduct metallurgical tests, explorations and other activities, provided such activities
do not unduly interfere with the operations of the small-scale miners; and

(c) Royalty equivalent to one and one half percent (1 1/2%) of the gross value of the metallic mineral output or one percent (1%) of the gross value of the
nonmetallic mineral output to be paid to the claimowner: provided, that such rights and privileges shall be available only if he is not delinquent and other
performance of his annual work obligations and other requirements for the last two (2) years prior to the effectivity of this Act.

Section 15. Rights of Private Landowners. – The private landowner or lawful possessor shall be notified of any plan or petition to declare his land as a people's
small-scale mining area. Said landowner may oppose such plan or petition in an appropriate proceeding and hearing conducted before the Board.

If a private land is declared as a people's small-scale mining area, the owner and the small-scale mining contractors are encouraged to enter into a voluntary and
acceptable contractual agreement for the small-scale utilization of the mineral values from the private land: provided, that the owner shall in all cases be
entitled to the payment of actual damages which he may suffer as a result of such declaration: provided, further, that royalties paid to the owner shall in no case
exceed one percent (1%) of the gross value of the minerals recovered as royalty.

Section 16. Ownership of Milllings. – The small-scale mining contractor shall be the owner of all milllings produced from the contract area. He may sell thelings
or have them processed in any custom mill in the area: provided, that, if the small-scale mining contractor decide to sell its milllings, the claimowner shall have a
preemptive right to purchase said milllings at the prevailing market price.

Section 17. Sale of Gold. – All gold produced by small-scale miners in any mineral area shall be sold to the Central Bank, or its duly authorized representatives,
which shall buy it at prices competitive with those prevailing in the world market regardless of volume or weight.

The Central Bank shall establish as many buying stations in gold-rush areas to fully service the requirements of the small-scale minerals thereat.

Section 18. Custom Mills. – The establishment and operation of safe and efficient customs mills to process minerals or ore-bearing materials shall be limited to
mineral processing zones duly designated by the local government unit concerned upon recommendation of the Board.

In mining areas where the private sector is unable to establish custom mills, the Government shall construct such custom mills upon the recommendation of the
Board based on the viability of the project.

The Board shall issue licenses for the operation of custom mills and other processing plants subject to pollution control and safety standards.

The Department shall establish assay laboratories to cross-check the integrity of custom mills and to render metallurgical and laboratory services to mines.

Custom mills shall be constituted as withholding agents for the royalties, production share or other taxes due the Government.

Section 19. Government Share and Allotment. – The revenue to be derived by the Government from the operation of the mining program herein established
shall be subject to the sharing provided in the Local Government Code.

Section 20. People's Small-scale Mining Protection Fund. – There is hereby created a People's Small-scale Mining Protection Fund which shall be fifteen percent
(15%) of the national government's share due the Government which shall be used primarily for information dissemination and training of small-scale miners on
safety, health and environmental protection, and the establishment of mine rescue and recovery teams including the procurement of rescue equipment
necessary in cases of emergencies such as landslides, tunnel collapse, or the like.
The fund shall also be made available to address the needs of the small-scale miners brought about by accidents and/or fortuitous events.

Section 21. Rescission of Contracts and Administrative Fines. – The noncompliance with the terms and conditions of the contract or violation of the rules and
regulations issued by the Secretary pursuant to this Act, as well as the abandonment of the mining site by the contractor, shall constitute a ground for the
cancellation of the contracts and the ejectment from the people's small-scale mining area of the contractor. In addition, the Secretary may impose fines against
the violator in an amount of not less than Twenty thousand pesos (P20,000.00) and not more than One hundred thousand pesos (P100,000.00). Nonpayment of
the fine imposed shall render the small-scale mining contractor ineligible for other small-scale mining contracts.

Section 22. Reversion of People's Small-scale Mining Areas. – The Secretary, upon recommendation of the director, shall withdraw the status of the people's
small-scale mining area when it can no longer feasibly operated on a small-scale mining basis or when the safety, health and environmental conditions warrant
that the same shall revert to the State for proper disposition.

Section 23. Actual Occupation by Small-scale Miners. – Small-scale miners who have been in actual operation of mineral lands on or before August 1, 1987 as
determined by the Board shall not be dispossessed, ejected or removed from said areas: provided, that they comply with the provisions of this Act.

Section 24. Provincial/City Mining Regulatory Board. – There is hereby created under the direct supervision and control of the Secretary a provincial/city
mining regulatory board, herein called the Board, which shall be the implementing agency of the Department, and shall exercise the following powers and
functions, subject to review by the Secretary:

(a) Declare and segregate existing gold-rush areas for small-scale mining;

(b) Reserve future gold and other mining areas for small-scale mining;

(c) Award contracts to small-scale miners;

(d) Formulate and implement rules and regulations related to small-scale mining;

(e) Settle disputes, conflicts or litigations over conflicting claims within a people's small-scale mining area, an area that is declared a small-mining; and

(f) Perform such other functions as may be necessary to achieve the goals and objectives of this Act.

Section 25. Composition of the Provincial/City Mining Regulatory Board. – The Board shall be composed of the Department of Environment and Natural
Resources representative as Chairman; and the representative of the governor or city mayor, as the representative of the governor or city mayor, as the case
may be, one (1) small scale mining representative, one (1) big-scale mining representative, and the representative from a nongovernment organization who shall
come from an environmental group, as members.

The representatives from the private sector shall be nominated by their respective organizations and appointed by the Department regional director. The
Department shall provide the staff support to the Board.

Section 26. Administrative Supervision over the People's Small-scale Mining Program. – The Secretary through his representative shall exercise direct
supervision and control over the program and activities of the small-scale miners within the people's small-scale mining area.

The Secretary shall within ninety (90) days from the effectivity of this Act promulgate rules and regulations to effectively implement the provisions of the same.
Priority shall be given to such rules and regulations that will ensure the least disruption in the operations of the small-scale miners.

Section 27. Penal Sanctions. – Violations of the provisions of this Act or of the rules and regulations issued pursuant hereto shall be penalized with
imprisonment of not less than six (6) months nor more than six (6) years and shall include the confiscation and seizure of equipment, tools and instruments.

CASE: League of Provinces of Philippines vs. DENR GR No. 175368

This is a petition for certiorari, prohibition and mandamus,1 praying that this Court order the following: ( 1) declare as unconstitutional Section 17(b)(3)(iii) of
Republic Act (R.A.) No. 7160, otherwise known as The Local Government Code of 1991 and Section 24 of Republic Act (R.A.) No. 7076, otherwise known as the
People's Small-Scale Mining Act of 1991; (2) prohibit and bar respondents from exercising control over provinces; and (3) declare as illegal the respondent
Secretary of the Department of Energy and Natural Resources' (DENR) nullification, voiding and cancellation of the Small-Scale Mining permits issued by the
Provincial Governor of Bulacan.

The Facts are as follows:

On March 28, 1996, Golden Falcon Mineral Exploration Corporation (Golden Falcon) filed with the DENR Mines and Geosciences Bureau Regional Office No. III
(MGB R-III) an Application for Financial and Technical Assistance Agreement (FTAA) covering an area of 61,136 hectares situated in the Municipalities of San
Miguel, San Ildefonso, Norzagaray and San Jose del Monte, Bulacan.2

On April 29, 1998, the MGB R-III issued an Order denying Golden Falcon's Application for Financial and Technical Assistance Agreement for failure to secure area
clearances from the Forest Management Sector and Lands Management Sector of the DENR Regional Office No. III.3

On November 11, 1998, Golden Falcon filed an appeal with the DENR Mines and Geosciences Bureau Central Office (MGB-Central Office), and sought
reconsideration of the Order dated April 29, 1998.4
On February 10, 2004, while Golden Falcon's appeal was pending, Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz and Liberato Sembrano filed with the
Provincial Environment and Natural Resources Office (PENRO) of Bulacan their respective Applications for Quarry Permit (AQP), which covered the same area
subject of Golden Falcon's Application for Financial and Technical Assistance Agreement.5

On July 16, 2004, the MGB-Central Office issued an Order denying Golden Falcon's appeal and affirming the MGB R-III's Order dated April 29, 1998.

On September 13, 2004, Atlantic Mines and Trading Corporation (AMTC) filed with the PENRO of Bulacan an Application for Exploration Permit (AEP) covering
5,281 hectares of the area covered by Golden Falcon's Application for Financial and Technical Assistance Agreement.6

On October 19, 2004, DENR-MGB Director Horacio C. Ramos, in response to MGB R-III Director Arnulfo V. Cabantog's memorandum query dated September 8,
2004, categorically stated that the MGB-Central Office's Order dated July 16, 2004 became final on August 11, 2004, fifteen (15) days after Golden Falcon
received the said Order, per the Certification dated October 8, 2004 issued by the Postmaster II of the Philippine Postal Corporation of Cainta, Rizal.7

Through letters dated May 5 and May 10, 2005, AMTC notified the PENRO of Bulacan and the MGB R-III Director, respectively, that the subject Applications for
Quarry Permit fell within its (AMTC's) existing valid and prior Application for Exploration Permit, and the the former area of Golden Falcon was open to mining
location only on August 11, 2004 per the Memorandum dated October 19, 2004 of the MGB Director, Central Office.8

On June 24, 2005, Ricardo Medina, Jr., PENRO of Bulacan, indorsed AMTC's letter to the Provincial Legal Officer, Atty. Eugenio F. Resurreccion, for his legal
opinion on which date of denial of Golden Falcon's application/appeal – April 29, 1998 or July 16, 2004 − is to be considered in the deliberation of the Provincial
Mining Regulatory Board (PMRB) for the purpose of determining when the land subject of the Applications for Quarry Permit could be considered open for
application.

On June 28, 2005, Provincial Legal Officer Eugenio Resurreccion issued a legal opinion stating that the Order dated July 16, 2004 of the MGB-Central Office was a
mere reaffirmation of the Order dated April 29, 1998 of the MGB R-III; hence, the Order dated April 29, 1998 should be the reckoning period of the denial of the
application of Golden Falcon.

On July 22, 2005, AMTC filed with the PMRB of Bulacan a formal protest against the aforesaid Applications for Quarry Permit on the ground that the subject area
was already covered by its Application for Exploration Permit.9

On August 8, 2005, MGB R-III Director Cabantog, who was the concurrent Chairman of the PMRB, endorsed to the Provincial Governor of Bulacan, Governor
Josefina M. dela Cruz, the aforesaid Applications for Quarry Permit that had apparently been converted to Applications for Small-Scale Mining Permit of Eduardo
D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz and Lucila S. Valdez (formerly Liberato Sembrano).10

On August 9, 2005, the PENRO of Bulacan issued four memoranda recommending to Governor Dela Cruz the approval of the aforesaid Applications for
Small-Scale Mining Permit.11

On August 10, 2005, Governor Dela Cruz issued the corresponding Small-Scale Mining Permits in favor of Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R.
Cruz and Lucila S. Valdez.12

Subsequently, AMTC appealed to respondent DENR Secretary the grant of the aforesaid Small-Scale Mining Permits, arguing that: (1) The PMRB of Bulacan erred
in giving due course to the Applications for Small-Scale Mining Permit without first resolving its formal protest; (2) The areas covered by the Small-Scale Mining
Permits fall within the area covered by AMTC's valid prior Application for Exploration Permit; (3) The Applications for Quarry Permit were illegally converted to
Applications for Small-Scale Mining Permit; (4) DENR-MGB Director Horacio C. Ramos' ruling that the subject areas became open for mining location only on
August 11, 2004 was controlling; (5) The Small-Scale Mining Permits were null and void because they covered areas that were never declared People's
Small-Scale Mining Program sites as mandated by Section 4 of the People's Small-Scale Mining Act of 1991; and (6) Iron ore is not considered as one of the
quarry resources, as defined by Section 43 of the Philippine Mining Act of 1995, which could be subjects of an Application for Quarry Permit.13

On August 8, 2006, respondent DENR Secretary rendered a Decision14 in favor of AMTC. The DENR Secretary agreed with MGB Director Horacio C. Ramos that
the area was open to mining location only on August 11, 2004, fifteen (15) days after the receipt by Golden Falcon on July 27, 2004 of a copy of the MGB-Central
Office's Order dated July 16, 2004, which Order denied Golden Falcon's appeal. According to the DENR Secretary, the filing by Golden Falcon of the letter-appeal
suspended the finality of the Order of denial issued on April 29, 1998 by the Regional Director until the resolution of the appeal on July 16, 2004 by the
MGB-Central Office. He stated that the Applications for Quarry Permit were filed on February 10, 2004 when the area was still closed to mining location; hence,
the Small-Scale Mining Permits granted by the PMRB and the Governor were null and void. On the other hand, the DENR Secretary declared that AMTC filed its
Application for Exploration Permit when the area was already open to other mining applicants; thus, AMTC’s Application for Exploration Permit was valid.
Moreover, the DENR Secretary held that the questioned Small-Scale Mining Permits were issued in violation of Section 4 of R.A. No. 7076 and beyond the
authority of the Provincial Governor pursuant to Section 43 of R.A. No. 7942, because the area was never proclaimed to be under the People's Small-Scale
Mining Program. Further, the DENR Secretary stated that iron ore mineral is not considered among the quarry resources.

The dispositive portion of the DENR Secretary’s Decision reads:

WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines and Trading Corp. is declared valid and may now be given due course. The
Small-Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of Eduardo D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of
Lucila S. Valdez are declared NULL AND VOID. Consequently, the said permits are hereby CANCELLED.15

Hence, petitioner League of Provinces filed this petition.

Petitioner is a duly organized league of local governments incorporated under R.A. No. 7160. Petitioner declares that it is composed of 81 provincial
governments, including the Province of Bulacan. It states that this is not an action of one province alone, but the collective action of all provinces through the
League, as a favorable ruling will not only benefit one province, but all provinces and all local governments.

Petitioner raises these issues:

 I

WHETHER OR NOT SECTION 17(B)(3)(III) OF THE, 1991 LOCAL GOVERNMENT CODE AND SECTION 24 OF THE PEOPLE'S SMALL-SCALE
MINING ACT OF 1991 ARE UNCONSTITUTIONAL FOR PROVIDING FOR EXECUTIVE CONTROL AND INFRINGING UPON THE LOCAL
AUTONOMY OF PROVINCES.

II

WHETHER OR NOT THE ACT OF RESPONDENT [DENR] IN NULLIFYING, VOIDING AND CANCELLING THE SMALL-SCALE MINING PERMITS
AMOUNTS TO EXECUTIVE CONTROL, NOT MERELY SUPERVISION AND USURPS THE DEVOLVED POWERS OF ALL PROVINCES.16

To start, the Court finds that petitioner has legal standing to file this petition because it is tasked under Section 504 of the Local Government Code of 1991 to
promote local autonomy at the provincial level;17 adopt measures for the promotion of the welfare of all provinces and its officials and employees;18 and
exercise such other powers and perform such other duties and functions as the league may prescribe for the welfare of the provinces.19

Before this Court determines the validity of an act of a co-equal and coordinate branch of the Government, it bears emphasis that ingrained in our jurisprudence
is the time-honored principle that a statute is presumed to be valid.20This presumption is rooted in the doctrine of separation of powers which enjoins upon the
three coordinate departments of the Government a becoming courtesy for each other's acts.21 This Court, however, may declare a law, or portions thereof,
unconstitutional where a petitioner has shown a clear and unequivocal breach of the Constitution,22 leaving no doubt or hesitation in the mind of the Court.23

In this case, petitioner admits that respondent DENR Secretary had the authority to nullify the Small-Scale Mining Permits issued by the Provincial Governor of
Bulacan, as the DENR Secretary has control over the PMRB, and the implementation of the Small-Scale Mining Program is subject to control by respondent
DENR.

Control of the DENR/DENR Secretary over small-scale mining in the provinces is granted by three statutes: (1) R.A. No. 7061 or The Local Government Code of
1991; (2) R.A. No. 7076 or the People's Small Scale Mining Act of 1991; and (3) R.A. No. 7942, otherwise known as the Philippine Mining Act of 1995.24 The
pertinent provisions of law sought to be declared as unconstitutional by petitioner are as follows:

R.A. No. 7061 (The Local Government Code of 1991)

SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to be self-reliant and shall continue exercising the powers and discharging the
duties and functions currently vested upon them. They shall also discharge the functions and responsibilities of national agencies and offices devolved to them
pursuant to this Code. Local government units shall likewise exercise such other powers and discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, the following:

xxxx

(3) For a Province:c

xxxx

(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement of forestry laws limited to community-based forestry
projects, pollution control law, small-scale mining law, and other laws on the protection of the environment; and mini-hydro electric projects for local purposes;
x x x25

R.A. No. 7076 (People's Small-Scale Mining Act of 1991)

Sec. 24. Provincial/City Mining Regulatory Board. - There is hereby created under the direct supervision and control of the Secretary a provincial/city mining
regulatory board, herein called the Board, which shall be the implementing agency of the Department, and shall exercise the following powers and functions,
subject to review by the Secretary:

(a) Declare and segregate existing gold-rush areas for small-scale mining;

(b) Reserve future gold and other mining areas for small-scale mining;

(c) Award contracts to small-scale miners;

(d) Formulate and implement rules and regulations related to small-scale mining;

(e) Settle disputes, conflicts or litigations over conflicting claims within a people’s small-scale mining area, an area that is declared a small-mining; and

(f) Perform such other functions as may be necessary to achieve the goals and objectives of this Act.26

Petitioner contends that the aforecited laws and DENR Administrative Order No. 9640 (the Implementing Rules and Regulations of the Philippine Mining Act of
1995) did not explicitly confer upon respondents DENR and the DENR Secretary the power to reverse, abrogate, nullify, void, or cancel the permits issued by the
Provincial Governor or small-scale mining contracts entered into by the PMRB. The statutes are also silent as to the power of respondent DENR Secretary to
substitute his own judgment over that of the Provincial Governor and the PMRB.

Moreover, petitioner contends that Section 17 (b)(3)(iii) of the Local Government Code of 1991 and Section 24 of R.A. No. 7076, which confer upon respondents
DENR and the DENR Secretary the power of control are unconstitutional, as the Constitution states that the President (and Executive Departments and her
alter-egos) has the power of supervision only, not control, over acts of the local government units, and grants the local government units autonomy, thus:

The 1987 Constitution:

Article X, Section 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with respect to
component cities and municipalities, and cities and municipalities with respect to component barangays, shall ensure that the acts of their
component units are within the scope of their prescribed powers and functions.27

Petitioner contends that the policy in the above-cited constitutional provision is mirrored in the Local Government Code, which states:

SEC. 25. National Supervision over Local Government Units. - (a) Consistent with the basic policy on local autonomy, the President shall
exercise general supervision over local government units to ensure that their acts are within the scope of their prescribed powers and
functions.

The President shall exercise supervisory authority directly over provinces, highly urbanized cities, and independent component cities;
through the province with respect to component cities and municipalities; and through the city and municipality with respect to
barangays.28

Petitioner contends that the foregoing provisions of the Constitution and the Local Government Code of 1991 show that the relationship between the President
and the Provinces or respondent DENR, as the alter ego of the President, and the Province of Bulacan is one of executive supervision, not one of executive
control. The term "control" has been defined as the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of
his/her duties and to substitute the judgment of the former for the latter, while the term "supervision" is the power of a superior officer to see to it that lower
officers perform their function in accordance with law.29

Petitioner argues that respondent DENR Secretary went beyond mere executive supervision and exercised control when he nullified the small-scale mining
permits granted by the Provincial Governor of Bulacan, as the former substituted the judgment of the latter.

Petitioner asserts that what is involved here is a devolved power.

Under the Local Government Code of 1991, the power to regulate small-scale mining has been devolved to all provinces. In the exercise of devolved powers,
departmental approval is not necessary.30

Petitioner contends that if the provisions in Section 24 of R.A. No. 7076 and Section 17 (b)(3)(iii) of the Local Government Code of 1991 granting the power of
control to the DENR/DENR Secretary are not nullified, nothing would stop the DENR Secretary from nullifying, voiding and canceling the small-scale mining
permits that have been issued by a Provincial Governor.

Petitioner submits that the statutory grant of power of control to respondents is unconstitutional, as the Constitution only allows supervision over local
governments and proscribes control by the executive departments.

In its Comment, respondents, represented by the Office of the Solicitor General, stated that contrary to the assertion of petitioner, the power to implement the
small-scale mining law is expressly limited in Section 17 (b)(3)(iii) of the Local Government Code, which provides that it must be carried out "pursuant to national
policies and subject to supervision, control and review of the DENR." Moreover, the fact that the power to implement the small-scale mining law has not been
fully devolved to provinces is further amplified by Section 4 of the People's Small-Scale Mining Act of 1991, which provides, among others, that the People's
Small-Scale Mining Program shall be implemented by the DENR Secretary.

The petition lacks merit.

Paragraph 1 of Section 2, Article XII (National Economy and Patrimony) of the Constitution31 provides that "the exploration, development and utilization of
natural resources shall be under the full control and supervision of the State."

Moreover, paragraph 3 of Section 2, Article XII of the Constitution provides that "the Congress may, by law, allow small-scale utilization of natural resources by
Filipino citizens x x x."

Pursuant to Section 2, Article XII of the Constitution, R.A. No. 7076 or the People's Small-Scale Mining Act of 1991, was enacted, establishing under Section 4
thereof a People's Small-Scale Mining Program to be implemented by the DENR Secretary in coordination with other concerned government agencies.

The People's Small-Scale Mining Act of 1991 defines "small-scale mining" as "refer[ring] to mining activities, which rely heavily on manual labor using simple
implement and methods and do not use explosives or heavy mining equipment."32

It should be pointed out that the Administrative Code of 198733 provides that the DENR is, subject to law and higher authority, in charge of carrying out the
State's constitutional mandate, under Section 2, Article XII of the Constitution, to control and supervise the exploration, development, utilization and
conservation of the country's natural resources. Hence, the enforcement of small-scale mining law in the provinces is made subject to the supervision, control
and review of the DENR under the Local Government Code of 1991, while the People’s Small-Scale Mining Act of 1991 provides that the People’s Small-Scale
Mining Program is to be implemented by the DENR Secretary in coordination with other concerned local government agencies.
Indeed, Section 4, Article X (Local Government) of the Constitution states that "[t]he President of the Philippines shall exercise general supervision over local
governments," and Section 25 of the Local Government Code reiterates the same. General supervision by the President means no more than seeing to it that
laws are faithfully executed or that subordinate officers act within the law.34

The Court has clarified that the constitutional guarantee of local autonomy in the Constitution Art. X, Sec. 2 refers to the administrative autonomy of local
government units or, cast in more technical language, the decentralization of government authority.35 It does not make local governments sovereign within the
State.36 Administrative autonomy may involve devolution of powers, but subject to limitations like following national policies or standards,37 and those provided
by the Local Government Code, as the structuring of local governments and the allocation of powers, responsibilities, and resources among the different local
government units and local officials have been placed by the Constitution in the hands of Congress38 under Section 3, Article X of the Constitution.

Section 3, Article X of the Constitution mandated Congress to "enact a local government code which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the
different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term,
salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units."

In connection with the enforcement of the small-scale mining law in the province, Section 17 of the Local Government Code provides:

SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to be self-reliant and shall continue exercising the powers
and discharging the duties and functions currently vested upon them. They shall also discharge the functions and responsibilities of
national agencies and offices devolved to them pursuant to this Code. Local government units shall likewise exercise such other powers
and discharge such other functions and responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of
the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, the following:

xxxx

(3) For a Province:c

xxxx

(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement of forestry laws limited to
community-based forestry projects, pollution control law, small-scale mining law, and other laws on the protection of the environment;
and mini-hydro electric projects for local purposes;39

Clearly, the Local Government Code did not fully devolve the enforcement of the small-scale mining law to the provincial government, as
its enforcement is subject to the supervision, control and review of the DENR, which is in charge, subject to law and higher authority, of
carrying out the State's constitutional mandate to control and supervise the exploration, development, utilization of the country's natural
resources.40

Section 17 (b)(3)(iii) of the Local Government Code of 1991 is in harmony with R.A. No. 7076 or the People's Small-Scale Mining Act of
1991,41 which established a People's Small-Scale Mining Program to be implemented by the Secretary of the DENR, thus:

Sec. 2. Declaration of Policy. – It is hereby declared of the State to promote, develop, protect and rationalize viable small-scale mining
activities in order to generate more employment opportunities and provide an equitable sharing of the nation's wealth and natural
resources, giving due regard to existing rights as herein provided.

xxxx

Sec. 4. People's Small-Scale Mining Program. - For the purpose of carrying out the declared policy provided in Section 2 hereof, there is
hereby established a People's Small-Scale Mining Program to be implemented by the Secretary of the Department of Environment and
Natural Resources, hereinafter called the Department, in coordination with other concerned government agencies, designed to achieve an
orderly, systematic and rational scheme for the small-scale development and utilization of mineral resources in certain mineral areas in
order to address the social, economic, technical, and environmental problems connected with small-scale mining activities.

xxxx

Sec. 24. Provincial/City Mining Regulatory Board. – There is hereby created under the direct supervision and control of the Secretary a
provincial/city mining regulatory board, herein called the Board, which shall be the implementing agency of the Department, and shall
exercise the following powers and functions, subject to review by the Secretary:

(a) Declare and segregate existing gold-rush areas for small-scale mining;

(b) Reserve future gold and other mining areas for small-scale mining;

(c) Award contracts to small-scale miners;

(d) Formulate and implement rules and regulations related to small-scale mining;
 (e) Settle disputes, conflicts or litigations over conflicting claims within a people’s small-scale mining area, an area that is declared a
small-mining; and

(f) Perform such other functions as may be necessary to achieve the goals and objectives of this Act.42

DENR Administrative Order No. 34, series of 1992, containing the Rules and Regulations to implement R.A. No. 7076, provides:

SEC. 21. Administrative Supervision over the People's Small-Scale Mining Program. − The following DENR officials shall exercise the
following supervisory functions in the implementation of the Program:

21.1 DENR Secretrary – direct supervision and control over the program and activities of the small-scale miners within the people's
small-scale mining area;

21.2 Director − the Director shall:

a. Recommend the depth or length of the tunnel or adit taking into account the: (1) size of membership and capitalization of the
cooperative; (2) size of mineralized areas; (3) quantity of mineral deposits; (4) safety of miners; and (5) environmental impact and other
considerations;

b. Determine the right of small-scale miners to existing facilities in consultation with the operator, claimowner, landowner or lessor of an
affected area upon declaration of a small-scale mining area;

c. Recommend to the Secretary the withdrawal of the status of the people's small-scale mining area when it can no longer be feasibly
operated on a small-scale basis; and

d. See to it that the small-scale mining contractors abide by small-scale mines safety rules and regulations.

xxxx

SEC. 22. Provincial/City Mining Regulatory Board. − The Provincial/City Mining Regulatory Board created under R.A. 7076 shall exercise the
following powers and functions, subject to review by the Secretary:

22.1 Declares and segregates existing gold rush area for small-scale mining;

22.2 Reserves for the future, mineralized areas/mineral lands for people's small-scale mining;

22.3 Awards contracts to small-scale miners’ cooperative;

22.4 Formulates and implements rules and regulations related to R.A. 7076;

22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90) days upon filing of protests or complaints; Provided,
That any aggrieved party may appeal within five (5) days from the Board's decision to the Secretary for final resolution otherwise the same
is considered final and executory; and

22.6 Performs such other functions as may be necessary to achieve the goals and objectives of R.A. 7076.

SEC. 6. Declaration of People's Small-Scale Mining Areas. – The Board created under R.A. 7076 shall have the authority to declare and set
aside People's Small-Scale Mining Areas in sites onshore suitable for small-scale mining operations subject to review by the DENR
Secretary thru the Director.43

DENR Administrative Order No. 23, otherwise known as the Implementing Rules and Regulations of R.A. No. 7942, otherwise known as the Philippine Mining Act
of 1995, adopted on August 15, 1995, provides under Section 12344thereof that small-scale mining applications should be filed with the PMRB45 and the
corresponding permits shall be issued by the Provincial Governor, except small-scale mining applications within the mineral reservations.

Thereafter, DENR Administrative Order No. 96-40, otherwise known as the Revised Implementing Rules and Regulations of R.A. No. 7942, otherwise known as
the Philippine Mining Act of 1995, adopted on December 19, 1996, provides that applications for Small-Scale Mining Permits shall be filed with the Provincial
Governor/City Mayor through the concerned Provincial/City Mining Regulatory Board for areas outside the Mineral Reservations and with the Director though
the Bureau for areas within the Mineral Reservations.46 Moreover, it provides that Local Government Units shall, in coordination with the Bureau/ Regional
Offices and subject to valid and existing mining rights, "approve applications for small-scale mining, sand and gravel, quarry x x x and gravel permits not
exceeding five (5) hectares."47

Petitioner contends that the Local Government Code of 1991, R.A. No. 7076, DENR Administrative Orders Nos. 95-23 and 96-40 granted the DENR Secretary the
broad statutory power of control, but did not confer upon the respondents DENR and DENR Secretary the power to reverse, abrogate, nullify, void, cancel the
permits issued by the Provincial Governor or small-scale mining contracts entered into by the Board.

The contention does not persuade.

The settlement of disputes over conflicting claims in small-scale mining is provided for in Section 24 of R.A. No. 7076, thus:
Sec. 24. Provincial/City Mining Regulatory Board. − There is hereby created under the direct supervision and control of the Secretary a provincial/city mining
regulatory board, herein called the Board, which shall be the implementing agency of the Department, and shall exercise the following powers and functions,
subject to review by the Secretary:

xxxx

(e) Settle disputes, conflicts or litigations over conflicting claims within a people's small-scale mining area, an area that is declared a small mining area; x x x

Section 24, paragraph (e) of R.A. No. 7076 cited above is reflected in Section 22, paragraph 22.5 of the Implementing Rules and Regulations of R.A. No. 7076, to
wit:

SEC. 22. Provincial/City Mining Regulatory Board. – The Provincial/City Mining Regulatory Board created under R.A. No. 7076 shall exercise the following powers
and functions, subject to review by the Secretary:

xxxx

22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90) days upon filing of protests or complaints; Provided, That any aggrieved
party may appeal within five (5) days from the Board's decision to the Secretary for final resolution otherwise the same is considered final and executory; x x x

In this case, in accordance with Section 22, paragraph 22.5 of the Implementing Rules and Regulations of R.A. No. 7076, the AMTC filed on July 22, 2005 with the
PMRB of Bulacan a formal protest against the Applications for Quarry Permits of Eduardo Mercado, Benedicto Cruz, Liberato Sembrano (replaced by Lucila
Valdez) and Gerardo Cruz on the ground that the subject area was already covered by its Application for Exploration Permit.48 However, on August 8, 2005, the
PMRB issued Resolution Nos. 05-8, 05-9, 05-10 and 05-11, resolving to submit to the Provincial Governor of Bulacan the Applications for Small-Scale Mining
Permits of Eduardo Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the granting/issuance of the said permits.49 On August 10, 2005, the Provincial
Governor of Bulacan issued the Small-Scale Mining Permits to Eduardo Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz based on the legal opinion of
the Provincial Legal Officer and the Resolutions of the PMRB of Bulacan.

Hence, AMTC filed an appeal with respondent DENR Secretary, appealing from Letter-Resolution No. 05-1317 and Resolution Nos. 05-08, 05-09, 05-10 and 05-11,
all dated August 8, 2005, of the PMRB of Bulacan, which resolutions gave due course and granted, on August 10, 2005, Small-Scale Mining Permits to Eduardo D.
Mercado, Benedicto S. Cruz, Lucila Valdez and Gerardo Cruz involving parcels of mineral land situated at Camachin, Doña Remedios Trinidad, Bulacan.

The PMRB of Bulacan filed its Answer, stating that it is an administrative body, created under R.A. No. 7076, which cannot be equated with the court wherein a
full-blown hearing could be conducted, but it is enough that the parties were given the opportunity to present evidence. It asserted that the questioned
resolutions it issued were in accordance with the mining laws and that the Small-Scale Mining Permits granted were registered ahead of AMTC's Application for
Exploration Permit. Further, the Board stated that the Governor of Bulacan had the power to approve the Small-Scale Mining Permits under R.A. No. 7160.

The DENR Secretary found the appeal meritorious, and resolved these pivotal issues: (1) when is the subject mining area open for mining location by other
applicants; and (2) who among the applicants have valid applications.1âwphi1 The pertinent portion of the decision of the DENR Secretary reads:

We agree with the ruling of the MGB Director that the area is open only to mining location on August 11, 2004, fifteen (15) days after the receipt by Golden
Falcon on July 27, 2004 of a copy of the subject Order of July 16, 2004.1âwphi1The filing by Golden Falcon of the letter-appeal suspended the finality of the
Order of Denial issued on April 29, 1998 by the Regional Director until the Resolution thereof on July 16, 2004.

Although the subject AQPs/SSMPs were processed in accordance with the procedures of the PMRB, however, the AQPs were filed on February 10, 2004 when
the area is still closed to mining location. Consequently, the SSMPs granted by the PMRB and the Governor are null and void making thereby AEP No. III-02-04 of
the AMTC valid, it having been filed when the area is already open to other mining applicants.

Records also show that the AQPs were converted into SSMPs. These are two (2) different applications. The questioned SSMPs were issued in violation of Section
4 of RA 7076 and beyond the authority of the Provincial Governor pursuant to Section 43 of RA 7942 because the area was never proclaimed as "People's
Small-Scale Mining Program." Moreover, iron ore mineral is not considered among the quarry resources.

xxxx

WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines and Trading Corp. is declared valid and may now be given due course. The
Small-Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of Eduardo D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of
Lucila S. Valdez are declared NULL AND VOID. Consequently, the said permits are hereby CANCELLED.50

The Court finds that the decision of the DENR Secretary was rendered in accordance with the power of review granted to the DENR Secretary in the resolution of
disputes, which is provided for in Section 24 of R.A. No. 707651 and Section 22 of its Implementing Rules and Regulations.52 It is noted that although AMTC filed
a protest with the PMRB regarding its superior and prior Application for Exploration Permit over the Applications for Quarry Permit, which were converted to
Small-Scale Mining Permits, the PMRB did not resolve the same, but issued Resolution Nos. 05-08 to 05-11 on August 8, 2005, resolving to submit to the
Provincial Governor of Bulacan the Applications for Small-Scale Mining Permits of Eduardo Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the
granting of the said permits. After the Provincial Governor of Bulacan issued the Small-Scale Mining Permits on August 10, 2005, AMTC appealed the Resolutions
of the PMRB giving due course to the granting of the Small-Scale Mining Permits by the Provincial Governor.

Hence, the decision of the DENR Secretary, declaring that the Application for Exploration Permit of AMTC was valid and may be given due course, and canceling
the Small-Scale Mining Permits issued by the Provincial Governor, emanated from the power of review granted to the DENR Secretary under R.A. No. 7076 and
its Implementing Rules and Regulations. The DENR Secretary's power to review and, therefore, decide, in this case, the issue on the validity of the issuance of
the Small-Scale Mining Permits by the Provincial Governor as recommended by the PMRB, is a quasi-judicial function, which involves the determination of what
the law is, and what the legal rights of the contending parties are, with respect to the matter in controversy and, on the basis thereof and the facts obtaining,
the adjudication of their respective rights.53 The DENR Secretary exercises quasi-judicial function under R.A. No. 7076 and its Implementing Rules and
Regulations to the extent necessary in settling disputes, conflicts or litigations over conflicting claims. This quasi-judicial function of the DENR Secretary can
neither be equated with "substitution of judgment" of the Provincial Governor in issuing Small-Scale Mining Permits nor "control" over the said act of the
Provincial Governor as it is a determination of the rights of AMTC over conflicting claims based on the law.

In determining whether Section 17 (b)(3)(iii) of the Local Government Code of 1991 and Section 24 of R.A. No. 7076 are unconstitutional, the Court has been
guided by Beltran v. The Secretary of Health, 54 which held:

The fundamental criterion is that all reasonable doubts should be resolved in favor of the constitutionality of a statute. Every law has in its favor the
presumption of constitutionality. For a law to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The ground for
nullity must be clear and beyond reasonable doubt. Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the
basis therefor. Otherwise, the petition must fail. 55

In this case, the Court finds that the grounds raised by petitioner to challenge the constitutionality of Section 17 (b )(3)(iii) of the Local Government Code of 1991
and Section 24 'of R.A. No.7076 failed to overcome the constitutionality of the said provisions of law.

WHEREFORE, the petition is DISMISSED for lack of merit. No costs. SO ORDERED.

REPUBLIC ACT NO. 7942

AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

This Act shall be known as the "Philippine Mining Act of 1995."

Section 2
Declaration of Policy

All mineral resources in public and private lands within the territory and exclusive economic zone of the Republic of the Philippines are owned by the State. It
shall be the responsibility of the State to promote their rational exploration, development, utilization and conservation through the combined efforts of
government and the private sector in order to enhance national growth in a way that effectively safeguards the environment and protect the rights of affected
communities.

Section 3
Definition of Terms

As used in and for purposes of this Act, the following terms, whether in singular or plural, shall mean:

a. Ancestral lands refers to all lands exclusively and actually possessed, occupied, or utilized by indigenous cultural communities by themselves or through their
ancestors in accordance with their customs and traditions since time immemorial, and as may be defined and delineated by law.

b. Block or meridional block means an area bounded by one-half (1/2) minute of latitude and one-half (1/2) minute of longitude, containing approximately
eighty-one hectares (81 has.).

c. Bureau means the Mines and Geosciences Bureau under the Department of Environment and Natural Resources.

d. Carrying capacity refers to the capacity of natural and human environments to accommodate and absorb change without experiencing conditions of instability
and attendant degradation.

e. Contiguous zone refers to water, sea bottom and substratum measured twenty-four nautical miles (24 n.m.) seaward from the base line of the Philippine
archipelago.

f. Contract area means land or body of water delineated for purposes of exploration, development, or utilization of the minerals found therein.

g. Contractor means a qualified person acting alone or in consortium who is a party to a mineral agreement or to a financial or technical assistance agreement.

h. Co-production agreement (CA) means an agreement entered into between the Government and one or more contractors in accordance with Section 26(b)
hereof.

i. Department means the Department of Environment and Natural Resources.

j. Development means the work undertaken to explore and prepare an ore body or a mineral deposit for mining, including the construction of necessary
infrastructure and related facilities.

k. Director means the Director of the Mines and Geosciences Bureau.

l. Ecological profile or eco-profile refers to geographic-based instruments for planners and decision-makers which presents an evaluation of the environmental
quality and carrying capacity of an area.
m. Environmental compliance certificate (ECC) refers to the document issued by the government agency concerned certifying that the project under
consideration will not bring about an unacceptable environmental impact and that the proponent has complied with the requirements of the environmental
impact statement system.

n. Environmental impact statement (EIS) is the document which aims to identify, predict, interpret, and communicate information regarding changes in
environmental quality associated with a proposed project and which examines the range of alternatives for the objectives of the proposal and their impact on
the environment.

o. Exclusive economic zone means the water, sea bottom and subsurface measured from the baseline of the Philippine archipelago up to two hundred nautical
miles (200 n.m.) offshore.

p. Existing mining/quarrying right means a valid and subsisting mining claim or permit or quarry permit or any mining lease contract or agreement covering a
mineralized area granted/issued under pertinent mining laws.

q. Exploration means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys, remote sensing, test pitting,
trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, extent, quantity and quality thereof and the
feasibility of mining them for profit.

r. Financial or technical assistance agreement means a contract involving financial or technical assistance for large-scale exploration, development, and
utilization of mineral resources.

s. Force majeure means acts or circumstances beyond the reasonable control of contractor including, but not limited to, war, rebellion, insurrection, riots, civil
disturbance, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemic, earthquake, storm, flood or
other adverse weather conditions, explosion, fire, adverse action by government or by any instrumentality or subdivision thereof, act of God or any public
enemy and any cause that herein describe over which the affected party has no reasonable control.

t. Foreign-owned corporation means any corporation, partnership, association, or cooperative duly registered in accordance with law in which less than fifty per
centum (50%) of the capital is owned by Filipino citizens.

u. Government means the government of the Republic of the Philippines.

v. Gross output means the actual market value of minerals or mineral products from its mining area as defined in the National Internal Revenue Code.

w. Indigenous cultural community means a group or tribe of indigenous Filipinos who have continuously lived as communities on communally-bounded and
defined land since time immemorial and have succeeded in preserving, maintaining, and sharing common bonds of languages, customs, traditions, and other
distinctive cultural traits, and as may be defined and delineated by law.

x. Joint venture agreement (JVA) means an agreement entered into between the Government and one or more contractors in accordance with Section 26(c)
hereof.

y. Mineral processing means the milling, beneficiation or upgrading of ores or minerals and rocks or by similar means to convert the same into marketable
products.

z. Mine wastes and tailings shall mean soil and rock materials from surface or underground mining and milling operations with no economic value to the
generator of the same.

aa. Minerals refers to all naturally occurring inorganic substance in solid, gas, liquid, or any intermediate state excluding energy materials such as coal,
petroleum, natural gas, radioactive materials, and geothermal energy.

ab. Mineral agreement means a contract between the government and a contractor, involving mineral production-sharing agreement, co-production agreement,
or joint-venture agreement.

ac. Mineral land means any area where mineral resources are found.

ad. Mineral resource means any concentration of minerals/rocks with potential economic value.

ae. Mining area means a portion of the contract area identified by the contractor for purposes of development, mining, utilization, and sites for support facilities
or in the immediate vicinity of the mining operations.

af. Mining operation means mining activities involving exploration, feasibility, development, utilization, and processing.

ag. Non-governmental organization (NGO) includes nonstock, nonprofit organizations involved in activities dealing with resource and environmental
conservation, management and protection.

ah. Net assets refers to the property, plant and equipment as reflected in the audited financial statement of the contractor net of depreciation, as computed for
tax purposes, excluding appraisal increase and construction in progress.

ai. Offshore means the water, sea bottom and subsurface from the shore or coastline reckoned from the mean low tide level up to the two hundred nautical
miles (200 n.m.) exclusive economic zone including the archipelagic sea and contiguous zone.
aj. Onshore means the landward side from the mean tide elevation, including submerged lands in lakes, rivers and creeks.

ak. Ore means a naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit.

al. Permittee means the holder of an exploration permit.

am. Pollution control and infrastructure devices refers to infrastructure, machinery, equipment and/or improvements used for impounding, treating or
neutralizing, precipitating, filtering, conveying and cleansing mine industrial waste and tailings as well as eliminating or reducing hazardous effects of solid
particles, chemicals, liquids or other harmful byproducts and gases emitted from any facility utilized in mining operations for their disposal.

an. President means the President of the Republic of the Philippines.

ao. Private land refers to any land belonging to any private person which includes alienable and disposable land being claimed by a holder, claimant, or occupant
who has already acquired a vested right thereto under the law, although the corresponding certificate or evidence of title or patent has not been actually issued.

ap. Public land refers to lands of the public domain which have been classified as agricultural lands and subject to management and disposition or concession
under existing laws.

aq. Qualified person means any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or
authorized for the purpose of engaging in miring, with technical and financial capability to undertake mineral resources development and duly registered in
accordance with law at least sixty per centum (60%) of the capital of which is owned by citizens of the Philippines: Provided, That a legally organized
foreign-owned corporation shall be deemed a qualified person for purposes of granting an exploration permit, financial or technical assistance agreement or
mineral processing permit.

ar. Quarrying means the process of extracting, removing and disposing quarry resources found on or underneath the surface of private or public land.

as. Quarry permit means a document granted to a qualified person for the extraction and utilization of quarry resources on public or private lands.

at. Quarry resources refers to any common rock or other mineral substances as the Director of Mines and Geosciences Bureau may declare to be quarry
resources such as, but not limited to, andesite, basalt, conglomerate, coral sand, diatomaceous earth, diorite, decorative stones, gabbro, granite, limestone,
marble, marl, red burning clays for potteries and bricks, rhyolite, rock phosphate, sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic glass:
Provided, That such quarry resources do not contain metals or metallic constituents and/or other valuable minerals in economically workable quantities:
Provided, further, That non-metallic minerals such as kaolin, feldspar, bull quartz, quartz or silica, sand and pebbles, bentonite, talc, asbestos, barite, gypsum,
bauxite, magnesite, dolomite, mica, precious and semi-precious stones, and other non-metallic minerals that may later be discovered and which the: Director
declares the same to be of economically workable quantities, shall not be classified under the category of quarry resources.

au. Regional director means the regional director of any mines regional office under the Department of Environment and Natural Resources.

av. Regional office means any of the mines regional offices of the Department of Environment and Natural Resources.

aw. Secretary means the Secretary of the Department of Environment and Natural Resources.

ax. Special allowance refers to payment to the claim-owners or surface right-owners particularly during the transition period from Presidential Decree No. 463
and Executive Order No. 279, series of 1987.

ay. State means the Republic of the Philippines.

az. Utilization means the extraction or disposition of minerals.

CHAPTER II
GOVERNMENT MANAGEMENT

Section 4
Ownership of Mineral Resources

Mineral resources are owned by the State and the exploration, development, utilization, and processing thereof shall be under its full control and supervision.
The State may directly undertake such activities or it may enter into mineral agreements with contractors.

The State shall recognize and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution.

Section 5
Mineral Reservations

When the national interest so requires, such as when there is a need to preserve strategic raw materials for industries critical to national development, or
certain minerals for scientific, cultural or ecological value, the President may establish mineral reservations upon the recommendation of the Director through
the Secretary. Mining operations in existing mineral reservations and such other reservations as may thereafter be established, shall be undertaken by the
Department or through a contractor: Provided, That a small scale-mining cooperative covered by Republic Act No. 7076 shall be given preferential right to apply
for a small-scale mining agreement for a maximum aggregate area of twenty-five percent (25%) of such mineral reservation, subject to valid existing
mining/quarrying rights as provided under Section 112 Chapter XX hereof. All submerged lands within the contiguous zone and in the exclusive economic zone of
the Philippines are hereby declared to be mineral reservations.

A ten per centum (10%) share of all royalties and revenues to be derived by the government from the development and utilization of the mineral resources
within mineral reservations as provided under this Act shall accrue to the Mines and Geosciences Bureau to be allotted for special projects and other
administrative expenses related to the exploration and development of other mineral reservations mentioned in Section 6 hereof.

Section 6
Other Reservations

Mining operations in reserved lands other than mineral reservations may be undertaken by the Department, subject to limitations as herein provided. In the
event that the Department cannot undertake such activities, they may be undertaken by a qualified person in accordance with the rules and regulations
promulgated by the Secretary. The right to develop and utilize the minerals found therein shall be awarded by the President under such terms and conditions as
recommended by the Director and approved by the Secretary: Provided, That the party who undertook the exploration of said reservation shall be given priority.
The mineral land so awarded shall be automatically excluded from the reservation during the term of the agreement: Provided, further, That the right of the
lessee of a valid mining contract existing within the reservation at the time of its establishment shall not be prejudiced or impaired.

Section 7
Periodic Review of Existing Mineral Reservations

The Secretary shall periodically review existing mineral reservations for the purpose of determining whether their continued existence is consistent with the
national interest, and upon his recommendation, the President may, by proclamation, alter or modify the boundaries thereof or revert the same to the public
domain without prejudice to prior existing rights.

Section 8
Authority of the Department

The Department shall be the primary government agency responsible for the conservation, management, development, and proper use of the State's mineral
resources including those in reservations, watershed areas, and lands of the public domain. The Secretary shall have the authority to enter into mineral
agreements on behalf of the Government upon the recommendation of the Director, promulgate such rules and regulations as may be necessary to implement
the intent and provisions of this Act.

Section 9
Authority of the Bureau

The Bureau shall have direct charge in the administration and disposition of mineral lands and mineral resources and shall undertake geological, mining,
metallurgical, chemical, and other researches as well as geological and mineral exploration surveys. The Director shall recommend to the Secretary the granting
of mineral agreements to duly qualified persons and shall monitor the compliance by the contractor of the terms and conditions of the mineral agreements. The
Bureau may confiscate surety, performance and guaranty bonds posted through an order to be promulgated by the Director. The Director may deputize, when
necessary, any member or unit of the Philippine National Police, barangay, duly registered non-governmental organization (NGO) or any qualified person to
police all mining activities.

Section 10
Regional Offices

There shall be as many regional offices in the country as may be established by the Secretary, upon the recommendation of the Director.

Section 11
Processing of Applications

The system of processing applications for mining rights shall be prescribed in the rules and regulations of this Act.

Section 12
Survey, Charting and Delineation of Mining Areas

A sketch plan or map of the contract or mining area prepared by a deputized geodetic engineer suitable for publication purposes shall be required during the
filing of a mineral agreement or financial or technical assistance agreement application. Thereafter, the contract or mining area shall be surveyed and
monumented by a deputized geodetic engineer or bureau geodetic engineer and the survey plan shall be approved by the Director before the approval of the
mining feasibility.

Section 13
Meridional Blocks

For purposes of the delineation of the contract or mining areas under this Act, the Philippine territory and its exclusive economic zone shall be divided into
meridional blocks of one-half (1/2) minute of latitude and one-half (1/2) minute of longitude.

Section 14
Recording System
There shall be established a national and regional filing and recording system. A mineral resource database system shall be set up in the Bureau which shall
include, among others, a mineral rights management system. The Bureau shall publish at least annually, a mineral gazette of nationwide circulation containing
among others, a current list of mineral rights, their location in the map, mining rules and regulations, other official acts affecting mining, and other information
relevant to mineral resources development. A system and publication fund shall be included in the regular budget of the Bureau.

CHAPTER III
SCOPE OF APPLICATION

Section 15
Scope of Application

This Act shall govern the exploration, development, utilization and processing of all mineral resources.

Section 16
Opening of Ancestral Lands for Mining Operations

No ancestral land shall be opened for mining-operations without prior consent of the indigenous cultural community concerned.

Section 17
Royalty Payments for Indigenous Cultural Communities

In the event of an agreement with an indigenous cultural community pursuant to the preceding section, the royalty payment, upon utilization of the minerals
shall be agreed upon by the parties. The said royalty shall form part of a trust fund for the socioeconomic well-being of the indigenous cultural community.

Section 18
Areas Open to Mining Operations

Subject to any existing rights or reservations and prior agreements of all parties, all mineral resources in public or private lands, including timber or forestlands
as defined in existing laws, shall be open to mineral agreements or financial or technical assistance agreement applications. Any conflict that may arise under
this provision shall be heard and resolved by the panel of arbitrators.

Section 19
Areas Closed to Mining Applications

Mineral agreement or financial or technical assistance agreement applications shall not be allowed:

a. In military and other government reservations, except upon prior written clearance by the government agency concerned;

b. Near or under public or private buildings, cemeteries, archeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other
infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or private entity
concerned;

c. In areas covered by valid and existing mining rights;

d. In areas expressedly prohibited by law;

e. In areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners, in which case a royalty payment upon the
utilization of minerals shall be agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development of the community concerned;
and

f. Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks provincial/municipal
forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law and in areas expressly prohibited under the National Integrated Protected Areas
System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws.

CHAPTER IV
EXPLORATION PERMIT

Section 20
Exploration Permit

An exploration permit grants the right to conduct exploration for all minerals in specified areas. The Bureau shall have the authority to grant an exploration
Permit to a qualified person.
 Section 21
Terms and Conditions of the Exploration Permit

An exploration permit shall be for a period of two (2) years, subject to annual review and relinquishment or renewal upon the recommendation of the Director.

Section 22
Maximum Areas for Exploration Permit

The maximum area that a qualified person may hold at any one time shall be:

a. Onshore, in any one province

1. for individuals, twenty (20) blocks: and

2. for partnerships, corporations, cooperatives, or associations, two hundred (200) blocks.

b. Onshore, in the entire Philippines

1. for individuals, forty (40) blocks; and

2. for partnerships, corporations, cooperatives, or associations, four hundred (400) blocks.

c. Offshore, beyond five hundred meters (500m) from the mean low tide level:

1. for individuals, one hundred (100) blocks; and

2. for partnerships, corporations, cooperatives, or associations, one thousand (1,000) blocks.

Section 23
Rights and Obligations of the Permittee

An exploration permit shall grant to the permittee, his heirs or successors-in-interest, the right to enter, occupy and explore the area: Provided, That if private or
other parties are affected, the permittee shall first discuss with the said parties the extent, necessity, and manner of his entry, occupation and exploration and in
case of disagreement, a panel of arbitrators shall resolve the conflict or disagreement.

The permittee shall undertake an exploration work on the area as specified by its permit based on an approved work program.

Any expenditure in excess of the yearly budget of the approved work program may be carried forward and credited to the succeeding years covering the
duration of the permit. The Secretary, through the Director, shall promulgate rules and regulations governing the terms and conditions of the permit.

The permittee may apply for a mineral production sharing agreement, joint venture agreement, co-production agreement or financial or technical assistance
agreement over the permit area, which application shall be granted if the permittee meets the necessary qualifications and the terms and conditions of any such
agreement: Provided, That the exploration period covered by the exploration permit shall be included as part of the exploration period of the mineral
agreement or financial or technical assistance agreement.

Section 24
Declaration of Mining Project Feasibility

A holder of an exploration permit who determines the commercial viability of a project covering a mining area may, within the term of the permit, file with the
Bureau a declaration of mining project feasibility accompanied by a work program for development. The approval of the mining project feasibility and
compliance with other requirements provided in this Act shall entitle the holder to an exclusive right to a mineral production sharing agreement or other mineral
agreements or financial or technical assistance agreement.

Section 25
Transfer or Assignment

An exploration permit may be transferred or assigned to a qualified person subject to the approval of the Secretary upon the recommendation of the Director.

CHAPTER V
MINERAL AGREEMENTS

Section 26
Modes of Mineral Agreement

For purposes of mining operations, a mineral agreement may take the following forms as herein defined:
a. Mineral production sharing agreement is an agreement where the Government grants to the contractor the exclusive right to conduct mining operations
within a contract area and shares in the gross output. The contractor shall provide the financing, technology, management and personnel necessary for the
implementation of this agreement.

b. Co-production agreement is an agreement between the Government and the contractor wherein the Government shall provide inputs to the mining
operations other than the mineral resource.

c. Joint venture agreement is an agreement where a joint-venture company is organized by the Government and the contractor with both parties having equity
shares. Aside from earnings in equity, the Government shall be entitled to a share in the gross output.

A mineral agreement shall grant to the contractor the exclusive right to conduct mining operations and to extract all mineral resources found in the contract
area. In addition, the contractor may be allowed to convert his agreement into any of the modes of mineral agreements or financial or technical assistance
agreement covering the remaining period of the original agreement subject to the approval of the Secretary.

Section 27
Eligibility

A qualified person may enter into any of the three (3) modes of mineral agreement with the government for the exploration, development and utilization of
mineral resources: Provided, That in case the applicant has been in the mining industry for any length of time, he should possess a satisfactory environmental
track record as determined by the Mines and Geosciences Bureau and in consultation with the Environmental Management Bureau of the Department.

Section 28
Maximum Areas for Mineral Agreement

The maximum area that a qualified person may hold at any time under a mineral agreement shall be:

a. Onshore, in any one province

1. for individuals, ten (10) blocks; and

2. for partnerships, cooperatives, associations, or corporations, one hundred (100) blocks.

b. Onshore, in the entire Philippines

1. for individuals, twenty (20) blocks; and

2. for partnerships, cooperatives, associations, or corporations, two hundred (200) blocks.

c. Offshore, in the entire Philippines

1. for individuals fifty (50) blocks;

2. for partnerships, cooperatives, associations, or corporations, five hundred (500) blocks; and

3. for the exclusive economic zone, a larger area to be determined by the Secretary.

The maximum areas mentioned above that a contractor may hold under a mineral agreement shall not include mining/quarry areas under operating agreements
between the contractor and a claimowner/lessee/permittee/licensee entered into under Presidential Decree No. 463.

Section 29
Filing and Approval of Mineral Agreements

All proposed mineral agreements shall be filed in the region where the areas of interest are located, except in mineral reservations which shall be filed with the
Bureau.

The filing of a proposal for a mineral agreement shall give the proponent the prior right to areas covered by the same. The proposed mineral agreement will be
approved by the Secretary and copies thereof shall be submitted to the President. Thereafter, the President shall provide a list to Congress of every approved
mineral agreement within thirty (30) days from its approval by the Secretary.

Section 30
Assignment/Transfer

Any assignment or transfer of rights and obligations under any mineral agreement except a financial or technical assistance agreement shall be subject to the
prior approval of the Secretary. Such assignment or transfer shall be deemed automatically approved if not acted upon by the Secretary within thirty (30)
working days from official receipt thereof, unless patently unconstitutional or illegal.

Section 31
Withdrawal from Mineral Agreements
The contractor may, by giving due notice at any time during the term of the agreement, apply for the cancellation of the mineral agreement due to causes which,
in the opinion of the contractor, make continued mining operations no longer feasible or viable. The Secretary shall consider the notice and issue its decision
within a period of thirty (30) days: Provided, That the contractor has met all its financial, fiscal and legal obligations.

Section 32
Terms

Mineral agreements shall have a term not exceeding twenty-five (25) years to start from the date of execution thereof, and renewable for another term not
exceeding twenty-five (25) years under the same terms and conditions thereof, without prejudice to changes mutually agreed upon by the parties. After the
renewal period, the operation of the mine may be undertaken by the Government or through a contractor. The contract for the operation of a mine shall be
awarded to the highest bidder in a public bidding after due publication of the notice thereof: Provided, That the contractor shall have the right to equal the
highest bid upon reimbursement of all reasonable expenses of the highest bidder.

CHAPTER VI
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT

Section 33
Eligibility

Any qualified person with technical and financial capability to undertake large-scale exploration, development, and utilization of mineral resources in the
Philippines may enter into a financial or technical assistance agreement directly with the Government through the Department.

Section 34
Maximum Contract Area

The maximum contract area that may be granted per qualified person, subject to relinquishment shall be:

a. 1,000 meridional blocks onshore;

b. 4,000 meridional blocks offshore; or

c. Combinations of a and b provided that it shall not exceed the maximum limits for onshore and offshore areas.

Section 35
Terms and Conditions

The following terms, conditions, and warranties shall be incorporated in the financial or technical assistance agreement, to wit:

a. A firm commitment in the form of a sworn statement, of an amount corresponding to the expenditure obligation that will be invested in the contract area:
Provided, That such amount shall be subject to changes as may be provided for in the rules and regulations of this Act;

b. A financial guarantee bond shall be posted in favor of the Government in an amount equivalent to the expenditure obligation of the applicant for any year;

c. Submission of proof of technical competence, such as, but not limited to, its track record in mineral resource exploration, development, and utilization; details
of technology to be employed in the proposed operation; and details of technical personnel to undertake the operation;

d. Representations and warranties that the applicant has all the qualifications and none of the disqualifications for entering into the agreement;

e. Representations and warranties that the contractor has or has access to all the financing, managerial and technical expertise and, if circumstances demand,
the technology required to promptly and effectively carry out the objectives of the agreement with the understanding to timely deploy these resources under its
supervision pursuant to the periodic work programs and related budgets, when proper, providing an exploration period up to two (2) years, extendible for
another two (2) years but subject to annual review by the Secretary in accordance with the implementing rules and regulations of this Act, and further, subject
to the relinquishment obligations;

f. Representations and warranties that, except for payments for dispositions for its equity, foreign investments in local enterprises which are qualified for
repatriation, and local supplier's credits and such other generally accepted and permissible financial schemes for raising funds for valid business purposes, the
contractor shall not raise any form of financing from domestic sources of funds, whether in Philippine or foreign currency, for conducting its mining operations
for and in the contract area;

g. The mining operations shall be conducted in accordance with the provisions of this Act and its implementing rules and regulations;

h. Work programs and minimum expenditures commitments;

i. Preferential use of local goods and services to the maximum extent practicable;
j. A stipulation that the contractors are obligated to give preference to Filipinos in all types of mining employment for which they are qualified and that
technology shall be transferred to the same;

k. Requiring the proponent to effectively use appropriate anti-pollution technology and facilities to protect the environment and to restore or rehabilitate mined
out areas and other areas affected by mine tailings and other forms of pollution or destruction;

l. The contractors shall furnish the Government records of geologic, accounting, and other relevant data for its mining operations, and that book of accounts and
records shall be open for inspection by the government;

m. Requiring the proponent to dispose of the minerals and byproducts produced under a financial or technical assistance agreement at the highest price and
more advantageous terms and conditions as provided for under the rules and regulations of this Act;

n. Provide for consultation and arbitration with respect to the interpretation and implementation of the terms and conditions of the agreements; and

o. Such other terms and conditions consistent with the Constitution and with this Act as the Secretary may deem to be for the best interest of the State and the
welfare of the Filipino people.

Section 36
Negotiations

A financial or technical assistance agreement shall be negotiated by the Department and executed and approved by the President. The President shall notify
Congress of all financial or technical assistance agreements within thirty (30) days from execution and approval thereof.

Section 37
Filing and Evaluation of Financial or Technical Assistance Agreement Proposals

All financial or technical assistance agreement proposals shall be filed with the Bureau after payment of the required processing fees. If the proposal is found to
be sufficient and meritorious in form and substance after evaluation, it shall be recorded with the appropriate government agency to give the proponent the
prior right to the area covered by such proposal: Provided, That existing mineral agreements, financial or technical assistance agreements and other mining
rights are not impaired or prejudiced thereby. The Secretary shall recommend its approval to the President.

Section 38
Term of Financial or Technical Assistance Agreement

A financial or technical assistance agreement shall have a term not exceeding twenty-five (25) years to start from the execution thereof, renewable for not more
than twenty-five (25) years under such terms and conditions as may be provided by law.

Section 39
Option to Convert into a Mineral Agreement

The contractor has the option to convert the financial or technical assistance agreement to a mineral agreement at any time during the term of the agreement, if
the economic viability of the contract area is found to be inadequate to justify large-scale mining operations, after proper notice to the Secretary as provided for
under the implementing rules and regulations: Provided, That the mineral agreement shall only be for the remaining period of the original agreement.

In the case of a foreign contractor, it shall reduce its equity to forty percent (40%) in the corporation, partnership, association, or cooperative. Upon compliance
with this requirement by the contractor, the Secretary shall approve the conversion and execute the mineral production-sharing agreement.

Section 40
Assignment/Transfer

A financial or technical assistance agreement may be assigned or transferred, in whole or in part, to a qualified person subject to the prior approval of the
President: Provided, That the President shall notify Congress of every financial or technical assistance agreement assigned or converted in accordance with this
provision within thirty (30) days from the date of the approval thereof.

Section 41
Withdrawal from Financial or Technical Assistance Agreement

The contractor shall manifest in writing to the Secretary his intention to withdraw from the agreement, if in his judgment the mining project is no longer
economically feasible, even after he has exerted reasonable diligence to remedy the cause or the situation. The Secretary may accept the withdrawal: Provided,
That the contractor has complied or satisfied all his financial, fiscal or legal obligations.

CHAPTER VII
SMALL-SCALE MINING

Section 42
Small-scale Mining
Small-scale mining shall continue to be governed by Republic Act No. 7076 and other pertinent laws.

CHAPTER VIII
QUARRY RESOURCES

Section 43
Quarry Permit

Any qualified person may apply to the provincial/city mining regulatory board for a quarry permit on privately-owned lands and/or public lands for building and
construction materials such as marble, basalt, andesite, conglomerate, tuff, adobe, granite, gabbro, serpentine, inset filling materials, clay for ceramic tiles and
building bricks, pumice, perlite and other similar materials that are extracted by quarrying from the ground. The provincial governor shall grant the permit after
the applicant has complied with all the requirements as prescribed by the rules and regulations.

The maximum area which a qualified person may hold at any one time shall be five hectares (5 has.): Provided, That in large-scale quarry operations involving
cement raw materials, marble, granite, sand and gravel and construction aggregates, a qualified person and the government may enter into a mineral
agreement as defined herein.

A quarry permit shall have a term of five (5) years, renewable for like periods but not to exceed a total term of twenty-five (25) years. No quarry permit shall be
issued or granted on any area covered by a mineral agreement or financial or technical assistance agreement.

Section 44
Quarry Fee and Taxes

A permittee shall, during the term of his permit, pay a quarry fee as provided for under the implementing rules and regulations. The permittee shall also pay the
excise tax as provided by pertinent laws.

Section 45
Cancellation of Quarry Permit

A quarry permit may be cancelled by the provincial governor for violations of the provisions of this Act or its implementing rules and regulations or the terms
and conditions of said permit: Provided, That before the cancellation of such permit, the holder thereof shall be given the opportunity to be heard in an
investigation conducted for the purpose.

Section 46
Commercial Sand and Gravel Permit

Any qualified person may be granted a permit by the provincial governor to extract and remove sand and gravel or other loose or unconsolidated materials
which are used in their natural state, without undergoing processing from an area of not more than five hectares (5 has.) and in such quantities as may be
specified in the permit.

Section 47
Industrial Sand and Gravel Permit

Any qualified person may be granted an industrial sand and gravel permit by the Bureau for the extraction of sand and gravel and other loose or unconsolidated
materials that necessitate the use of mechanical processing covering an area of more than five hectares (5 has.) at any one time. The permit shall have a term of
five (5) years, renewable for a like period but not to exceed a total term of twenty-five (25) years.

Section 48
Exclusive Sand and Gravel Permit

Any qualified person may be granted an exclusive sand and gravel permit by the provincial governor to quarry and utilize sand and gravel or other loose or
unconsolidated materials from public lands for his own use, provided that there will be no commercial disposition thereof.

A mineral agreement or a financial technical assistance agreement contractor shall, however, have the right to extract and remove sand and gravel and other
loose unconsolidated materials without need of a permit within the area covered by the mining agreement for the exclusive use in the mining operations:
Provided, That monthly reports of the quantity of materials extracted therefrom shall be submitted to the mines regional office concerned: Provided, further,
That said right shall be coterminous with the expiration of the agreement.

Holders of existing mining leases shall likewise have the same rights as that of a contractor: Provided, That said right shall be coterminous with the expiry dates
of the lease.

Section 49
Government Gratuitous Permit

Any government entity or instrumentality may be granted a gratuitous permit by the provincial governor to extract sand and gravel, quarry or loose
unconsolidated materials needed in the construction of building and/or infrastructure for public use or other purposes over an area of not more than two
hectares (2 has.) for a period coterminous with said construction.
 Section 50
Private Gratuitous Permit

Any owner of land may be granted a private gratuitous permit by the provincial governor.

Section 51
Guano Permit

Any qualified person may be granted a guano permit by the provincial governor to extract and utilize loose unconsolidated guano and other organic fertilizer
materials in any portion of a municipality where he has established domicile. The permit shall be for specific caves and/or for confined sites with locations
verified by the Department's field officer in accordance with existing rules and regulations.

Section 52
Gemstone Gathering Permit

Any qualified person may be granted a non-exclusive gemstone gathering permit by the provincial governor to gather loose stones useful as gemstones in rivers
and other locations.

CHAPTER IX
TRANSPORT, SALE AND PROCESSING OF MINERALS

Section 53
Ore Transport Permit

A permit specifying the origin and quantity of non-processed mineral ores or minerals shall be required for their transport. Transport permits shall be issued by
the mines regional director who has jurisdiction over the area where the ores were extracted. In the case of mineral ores or minerals being transported from the
small-scale mining areas to the custom mills or processing plants, the Provincial Mining Regulatory Board (PMRB) concerned shall formulate their own policies to
govern such transport of ores produced by small-scale miners. The absence of a permit shall be considered as prima facie evidence of illegal mining and shall be
sufficient cause for the Government to confiscate the ores or minerals being transported, the tools and equipment utilized, and the vehicle containing the same.
Ore samples not exceeding two metric tons (2 m.t.) to be used exclusively for assay or pilot test purposes shall be exempted from such requirement.

Section 54
Mineral Trading Registration

No person shall engage in the trading of mineral products, either locally or internationally, unless registered with the Department of Trade and Industry and
accredited by the Department, with a copy of said registration submitted to the Bureau.

Section 55
Minerals Processing Permit

No person shall engage in the processing of minerals without first securing a minerals processing permit from the Secretary. Minerals processing permit shall be
for a period of five (5) years renewable for like periods but not to exceed a total term of twenty-five (25) years. In the case of mineral ores or minerals produced
by the small-scale miners, the processing thereof as well as the licensing of their custom mills, or processing plants shall continue to be governed by the
provisions of Republic Act No. 7076.

Section 56
Eligibility of Foreign-owned/-controlled Corporation

A foreign-owned/-controlled corporation may be granted a mineral processing permit.

CHAPTER X
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY

Section 57
Expenditure for Community Development and Science and Mining Technology

A contractor shall assist in the development of its mining community, the promotion of the general welfare of its inhabitants, and the development of science
and mining technology.

Section 58
Credited Activities

Activities that may be credited as expenditures for development of mining communities, and science and mining technology are the following:
a. Any activity or expenditure intended to enhance the development of the mining and neighboring communities of a mining operation other than those
required or provided for under existing laws, or collective bargaining agreements, and the like; and

b. Any activity or expenditure directed towards the development of geosciences and mining technology such as, but not limited to, institutional and manpower
development, and basic and applied researches. Appropriate supervision and control mechanisms shall be prescribed in the implementing rules and regulations
of this Act.

Section 59
Training and Development

A contractor shall maintain an effective program of manpower training and development throughout the term of the mineral agreement and shall encourage
and train Filipinos to participate in all aspects of the mining operations, including the management thereof. For highly-technical and specialized mining
operations, the contractor may, subject to the necessary government clearances, employ qualified foreigners.

Section 60
Use of Indigenous Goods, Services and Technologies

A contractor shall give preference to the use of local goods, services and scientific and technical resources in the mining operations, where the same are of
equivalent quality, and are available on equivalent terms as their imported counterparts.

Section 61
Donations/Turn Over of Facilities

Prior to cessation of mining operations occasioned by abandonment or withdrawal of operations, on public lands by the contractor, the latter shall have a period
of one (1) year therefrom within which to remove his improvements; otherwise, all the social infrastructure and facilities shall be turned over or donated
tax-free to the proper government authorities, national or local, to ensure that said infrastructure and facilities are continuously maintained and utilized by the
host and neighboring communities.

Section 62
Employment of Filipinos

A contractor shall give preference to Filipino citizens in all types of mining employment within the country insofar as such citizens are qualified to perform the
corresponding work with reasonable efficiency and without hazard to the safety of the operations. The contractor, however, shall not be hindered from hiring
employees of his own selection, subject to the provisions of Commonwealth Act No. 613, as amended, for technical and specialized work which, in his judgment
and with the approval of the Director, requires highly-specialized training or long experience in exploration, development or utilization of mineral resources:
Provided, That in no case shall each employment exceed five (5) years or the payback period as represented in original project study, whichever is longer:
Provided, further, That each foreigner employed as mine manager, vice-president for operations or in an equivalent managerial position in charge of mining,
milling, quarrying or drilling operation shall:

a. Present evidence of his qualification and work experience; or

b. Shall pass the appropriate government licensure examination; or

c. In special cases, may be permitted to work by the Director for a period not exceeding one (1) year: Provided, however, That if reciprocal privileges are
extended to Filipino nationals in the country of domicile, the Director may grant waivers or exemptions.

CHAPTER XI
SAFETY AND ENVIRONMENTAL PROTECTION

Section 63
Mines Safety and Environmental Protection

All contractors and permittees shall strictly comply with all the mines safety rules and regulations as may be promulgated by the Secretary concerning the safe
and sanitary upkeep of the mining operations and achieve waste-free and efficient mine development. Personnel of the Department involved in the
implementation of mines safety, health and environmental rules and regulations shall be covered under Republic Act No. 7305.

Section 64
Mine Labor

No person under sixteen (16) years of age shall be employed in any phase of mining operations and no person under eighteen (18) years of age shall be
employed underground in a mine.

Section 65
Mine Supervision

All mining and quarrying operations that employ more than fifty (50) workers shall have at least one (1) licensed mining engineer with at least five (5) years of
experience in mining operations, and one (1) registered foreman.
 Section 66
Mine Inspection

The regional director shall have exclusive jurisdiction over the safety inspection of all installations, surface or underground, in mining operations at reasonable
hours of the day or night and as much as possible in a manner that will not impede or obstruct work in progress of a contractor or permittee.

Section 67
Power to Issue Orders

The mines regional director shall, in consultation with the Environmental Management Bureau, forthwith or within such time as specified in his order, require
the contractor to remedy any practice connected with mining or quarrying operations, which is not in accordance with safety and anti-pollution laws and
regulations. In case of imminent danger to life or property, the mines regional director may summarily suspend the mining or quarrying operations until the
danger is removed, or appropriate measures are taken by the contractor or permittee.

Section 68
Report of Accidents

In case of any incident or accident, causing or creating the danger of loss of life or serious physical injuries, the person in charge of operations shall immediately
report the same to the regional office where the operations are situated. Failure to report the same without justifiable reason shall be a cause for the imposition
of administrative sanctions prescribed in the rules and regulations implementing this Act.

Section 69
Environmental Protection

Every contractor shall undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit. Such
environmental program shall be incorporated in the work program which the contractor or permittee shall submit as an accompanying document to the
application for a mineral agreement or permit. The work program shall include not only plans relative to mining operations but also to rehabilitation,
regeneration, revegetation and reforestation of mineralized areas, slope stabilization of mined-out and tailings covered areas, aquaculture, watershed
development and water conservation; and socioeconomic development.

Section 70
Environmental Impact Assessment (EIA)

Except during the exploration period of a mineral agreement or financial or technical assistance agreement or an exploration permit, an environmental
clearance certificate shall be required based on an environmental impact assessment and procedures under the Philippine Environmental Impact Assessment
System including Sections 26 and 27 of the Local Government Code of 1991 which require national government agencies to maintain ecological balance, and
prior consultation with the local government units, non-governmental and people's organizations and other concerned sectors of the community: Provided, That
a completed ecological profile of the proposed mining area shall also constitute part of the environmental impact assessment. People's organizations and
non-governmental organizations shall be allowed and encouraged to participate in ensuring that contractors/permittees shall observe all the requirements of
environmental protection.

Section 71
Rehabilitation

Contractors and permittees shall technically and biologically rehabilitate the excavated, mined-out, tailings covered and disturbed areas to the condition of
environmental safety, as may be provided in the implementing rules and regulations of this Act. A mine rehabilitation fund shall be created, based on the
contractor's approved work program, and shall be deposited as a trust fund in a government depository bank and used for physical and social rehabilitation of
areas and communities affected by mining activities and for research on the social, technical and preventive aspects of rehabilitation. Failure to fulfill the above
obligation shall mean immediate suspension or closure of the mining activities of the contractor/permittee concerned.

CHAPTER XII
AUXILIARY MINING RIGHTS

Section 72
Timber Rights

Any provision of law to the contrary notwithstanding, a contractor may be granted a right to cut trees or timber within his mining area as may be necessary for
his mining operations subject to forestry laws, rules and regulations: Provided, That if the land covered by the mining area is already covered by existing timber
concessions, the volume of timber needed and the manner of cutting and removal thereof shall be determined by the mines regional director, upon consultation
with the contractor, the timber concessionaire/permittee and the Forest Management Bureau of the Department: Provided, further, That in case of
disagreement between the contractor and the timber concessionaire, the matter shall be submitted to the Secretary whose decision shall be final. The
contractor shall perform reforestation work within his mining area in accordance with forestry laws, rules and regulations.

Section 73
Water Rights

A contractor shall have water rights for mining operations upon approval of application with the appropriate government agency in accordance with existing
water laws, rules and regulations promulgated thereunder: Provided, That water rights already granted or vested through long use, recognized and
acknowledged by local customs, laws, and decisions of courts shall not thereby be impaired: Provided, further, That the Government reserves the right to
regulate water rights and the reasonable and equitable distribution of water supply so as to prevent the monopoly of the use thereof.

Section 74
Right to Possess Explosives

A contractor/exploration permittee shall have the right to possess and use explosives within his contract/permit area as may be necessary for his mining
operations upon approval of application with the appropriate government agency in accordance with existing laws, rules and regulations promulgated
thereunder: Provided, That the Government reserves the right to regulate and control the explosive accessories to ensure safe mining operations.

Section 75
Easement Rights

When mining areas are so situated that for purposes of more convenient mining operations it is necessary to build, construct or install on the mining areas or
lands owned, occupied or leased by other persons, such infrastructure as roads, railroads, mills, waste dump sites, tailings ponds, warehouses, staging or storage
areas and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines, dams and their normal flood and catchment areas,
sites for water wells, ditches, canals, new river beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the contractor, upon payment of just compensation, shall
be entitled to enter and occupy said mining areas or lands.

Section 76
Entry into Private Lands and Concession Areas

Subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and concession areas by surface owners, occupants, or
concessionaires when conducting mining operations therein: Provided, That any damage done to the property of the surface owner, occupant, or concessionaire
as a consequence of such operations shall be properly compensated as may be provided for in the implementing rules and regulations: Provided, further, That to
guarantee such compensation, the person authorized to conduct mining operation shall, prior thereto, post a bond with the regional director based on the type
of properties, the prevailing prices in and around the area where the mining operations are to be conducted, with surety or sureties satisfactory to the regional
director.

CHAPTER XIII
SETTLEMENT OF CONFLICTS

Section 77
Panel of Arbitrators

There shall be a panel of arbitrators in the regional office of the Department composed of three (3) members, two (2) of whom must be members of the
Philippine Bar in good standing and one a licensed mining engineer or a professional in a related field, and duly designated by the Secretary as recommended by
the Mines and Geosciences Bureau Director. Those designated as members of the panel shall serve as such in addition to their work in the Department without
receiving any additional compensation As much as practicable, said members shall come from the different bureaus of the Department in the region. The
presiding officer thereof shall be selected by the drawing of lots. His tenure as presiding officer shall be on a yearly basis. The members of the panel shall
perform their duties and obligations in hearing and deciding cases until their designation is withdrawn or revoked by the Secretary. Within thirty (30) working
days, after the submission of the case by the parties for decision, the panel shall have exclusive and original jurisdiction to hear and decide on the following:

a. Disputes involving rights to mining areas;

b. Disputes involving mineral agreements or permits;

c. Disputes involving surface owners, occupants and claimholders/concessionaires; and

d. Disputes pending before the Bureau and the Department at the date of the effectivity of this Act.

Section 78
Appellate Jurisdiction

The decision or order of the panel of arbitrators may be appealed by the party not satisfied thereto to the Mines Adjudication Board within fifteen (15) days
from receipt thereof which must decide the case within thirty (30) days from submission thereof for decision.

Section 79
Mines Adjudication Board

The Mines Adjudication Board shall be composed of three (3) members. The Secretary shall be the chairman with the Director of the Mines and Geosciences
Bureau and the Undersecretary for Operations of the Department as members thereof. The Board shall have the following powers and functions:

a. To promulgate rules and regulations governing the hearing and disposition of cases before it, as well as those pertaining to its internal functions, and such
rules and regulations as may be necessary to carry out its functions;
b. To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such
books, papers, contracts, records, statement of accounts, agreements, and other documents as may be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing conducted in pursuance of this Act;

c. To conduct hearings on all matters within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been
summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings at any time and place, refer
technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or
excluded from the proceedings, correct, amend, or waive any error, defect or irregularity, whether in substance or in form, give all such directions as it may
deem necessary or expedient in the determination of the dispute before it, and dismiss the mining dispute as part thereof, where it is trivial or where further
proceedings by the Board are not necessary or desirable:

1. To hold any person in contempt, directly or indirectly, and impose appropriate penalties therefor; and

2. To enjoin any or all acts involving or arising from any case pending before it which, if not restrained forthwith, may cause grave or irreparable damage to any
of the parties to the case or seriously affect social and economic stability.

In any proceeding before the Board, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Act
that shall govern. The Board shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due process. In any proceeding before the Board, the parties may be represented by legal counsel. The
findings of fact of the Board shall be conclusive and binding on the parties and its decision or order shall be final and executory.

A petition for review by certiorari and question of law may be filed by the aggrieved party with the Supreme Court within thirty (30) days from receipt of the
order or decision of the Board.

CHAPTER XIV
GOVERNMENT SHARE

Section 80
Government Share in Mineral Production Sharing Agreement

The total government share in a mineral production sharing agreement shall be the excise tax on mineral products as provided in Republic Act No. 7729,
amending Section 151(a) of the National Internal Revenue Code, as amended.

Section 81
Government Share in Other Mineral Agreements

The share of the Government in co-production and joint-venture agreements shall be negotiated by the Government and the contractor taking into
consideration the:

a. capital investment of the project;

b. risks involved;

c. contribution of the project to the economy; and

d. other factors that will provide for a fair and equitable sharing between the Government and the contractor.

The Government shall also be entitled to compensations for its other contributions which shall be agreed upon by the parties, and shall consist, among other
things, the contractor's income tax, excise tax, special allowance, withholding tax due from the contractor's foreign stockholders arising from dividend or
interest payments to the said foreign stockholders, in case of a foreign national, and all such other taxes, duties and fees as provided for under existing laws.

The Government share in financial or technical assistance agreement shall consist of, among other things, the contractor's corporate income tax, excise tax,
special allowance, withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholder in
case of a foreign national and all such other taxes, duties and fees as provided for under existing laws.

The collection of Government share in financial or technical assistance agreement shall commence after the financial or technical assistance agreement
contractor has fully recovered its pre-operating expenses, exploration, and development expenditures, inclusive.

Section 82
Allocation of Government Share

The Government share as referred to in the preceding sections shall be shared and allocated in accordance with Sections 290 and 292 of Republic Act No. 7160
otherwise known as the Local Government Code of 1991. In case the development and utilization of mineral resources is undertaken by a government-owned or
-controlled corporation, the sharing and allocation shall be in accordance with Sections 291 and 292 of the said Code.
 CHAPTER XV
TAXES AND FEES

Section 83
Income Taxes

After the lapse of the income tax holiday as provided for in the Omnibus Investments Code, the contractor shall be liable to pay income tax as provided in the
National Internal Revenue Code, as amended.

Section 84
Excise Tax on Mineral Products

The contractor shall be liable to pay the excise tax on mineral products as provided for under Section 151 of the National Internal Revenue Code: Provided,
however, That with respect to a mineral production sharing agreement, the excise tax on mineral products shall be the government share under said agreement.

Section 85
Mine Wastes and Tailings Fees

A semi-annual fee to be known as mine wastes and tailings fee is hereby imposed on all operating mining companies in accordance with the implementing rules
and regulations. The mine wastes and tailings fee shall accrue to a reserve fund to be used exclusively for payment for damages to:

a. Lives and personal safety;

b. Lands, agricultural crops and forest products, marine life and aquatic resources, cultural resources; and

c. Infrastructure and the revegetation and rehabilitation of silted farm lands and other areas devoted to agriculture and fishing caused by mining pollution.

This is in addition to the suspension or closure of the activities of the contractor at any time and the penal sanctions imposed upon the same.

The Secretary is authorized to increase mine wastes and tailings fees, when public interest so requires, upon the recommendation of the Director.

Section 86
Occupation Fees

There shall be collected from any holder of a mineral agreement, financial or technical assistance agreement or exploration permit on public or private lands, an
annual occupation fee in accordance with the following schedule:

a. For exploration permit - Five pesos (P5.00) per hectare or fraction thereof per annum;

b. For mineral agreements and financial or technical assistance agreements - Fifty pesos (P50.00) per hectare or fraction thereof per annum; and

c. For mineral reservation - One hundred pesos (P100.00) per hectare or fraction thereof per annum.

The Secretary is authorized to increase the occupation fees provided herein when the public interest so requires, upon recommendation of the Bureau Director.

Section 87
Manner of Payment of Fees

The fees shall be paid on the date the mining agreement is registered with the appropriate office and on the same date every year thereafter. It shall be paid to
the treasurer of the municipality or city where the onshore mining areas are located, or to the Director in case of offshore mining areas. For this purpose, the
appropriate officer shall submit to the treasurer of the municipality or city where the onshore mining area is located, a complete list of all onshore mining rights
registered with his office, indicating therein the names of the holders, area in hectares, location, and date registered. If the fee is not paid on the date specified,
it shall be increased by twenty-five per centum (25%).

Section 88
Allocation of Occupation Fees

Thirty per centum (30%) of all occupational fees collected from holders of mining rights in onshore mining areas shall accrue to the province and seventy per
centum (70%) to the municipality in which the onshore mining areas are located. In a chartered city, the full amount shall accrue to the city concerned.

Section 89
Filing Fees and Other Charges

The Secretary is authorized to charge reasonable filing fees and other charges as he may prescribe in accordance with the implementing rules and regulations.
 CHAPTER XVI
INCENTIVES

Section 90
Incentives

The contractors in mineral agreements, and financial or technical assistance agreements shall be entitled to the applicable fiscal and non-fiscal incentives as
provided for under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987. Provided, That holders of exploration permits may
register with the Board of Investments and be entitled to the fiscal incentives granted under the said Code for the duration of the permits or extensions thereof:
Provided, further, That mining activities shall always be included in the investment priorities plan.

Section 91
Incentives for Pollution Control Devices

Pollution control devices acquired, constructed or installed by contractors shall not be considered as improvements on the land or building where they are
placed, and shall not be subject to real property and other taxes or assessments: Provided, however, That payment of mine wastes and tailings fees is not
exempted.

Section 92
Income Tax-Carry Forward of Losses

A net operating loss without the benefit of incentives incurred in any of the first ten (10) years of operations may be carried over as a deduction from taxable
income for the next five (5) years immediately following the year of such loss. The entire amount of the loss shall be carried over to the first of the five (5)
taxable years following the loss, and any portion of such loss which exceeds the taxable income of such first year shall be deducted in like manner from the
taxable income of the next remaining four (4) years.

Section 93
Income Tax-Accelerated Depreciation

Fixed assets may be depreciated as follows:

a. To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at normal rate of depreciation if the expected life is ten (10)
years or less; or

b. Depreciated over any number of years between five (5) years and the expected life if the latter is more than ten (10) years, and the depreciation thereon
allowed as deduction from taxable income: Provided, That the contractor notifies the Bureau of Internal Revenue at the beginning of the depreciation period
which depreciation rate allowed by this section will be used.

In computing for taxable income, unless otherwise provided in this Act, the contractor may, at his option, deduct exploration and development expenditures
accumulated at cost as of the date of the prospecting or exploration and development expenditures paid or incurred during the taxable year: Provided, That the
total amount deductible for exploration and development expenditures shall not exceed twenty-five per centum (25%) of the net income from mining
operations. The actual exploration and development expenditures minus the twenty-five per centum (25%) net income from mining shall be carried forward to
the succeeding years until fully deducted.

Net income from mining operation is defined as gross income from operations less allowable deductions which are necessary or related to mining operations.
Allowable deductions shall include mining, milling and marketing expenses, depreciation of properties directly used in the mining operations. This paragraph
shall not apply to expenditures for the acquisition or improvement of property of a character which is subject to the allowances for depreciation.

Section 94
Investment Guarantees

The contractor shall be entitled to the basic rights and guarantees provided in the Constitution and such other rights recognized by the government as
enumerated hereunder:

a. Repatriation of investments. The right to repatriate the entire proceeds of the liquidation of the foreign investment in the currency in which the investment
was originally made and at the exchange rate prevailing at the time of repatriation.

b. Remittance of earnings. The right to remit earnings from the investment in the currency in which the foreign investment was originally made and at the
exchange rate prevailing at the time of remittance.

c. Foreign loans and contracts. The right to remit at the exchange rate prevailing at the time of remittance such sums as may be necessary to meet the payments
of interest and principal on foreign loans and foreign obligations arising from financial or technical assistance contracts.

d. Freedom from expropriation. The right to be free from expropriation by the Government of the property represented by investments or loans, or of the
property of the enterprise except for public use or in the interest of national welfare or defense and upon payment of just compensation. In such cases, foreign
investors or enterprises shall have the right to remit sums received as compensation for the expropriated property in the currency in which the investment was
originally made and at the exchange rate prevailing at the time of remittance.

e. Requisition of investment. The right to be free from requisition of the property represented by the investment or of the property of the enterprises except in
case of war or national emergency and only for the duration thereof. Just compensation shall be determined and paid either at the time or immediately after
cessation of the state of war or national emergency. Payments received as compensation for the requisitioned property may be remitted in the currency in
which the investments were originally made and at the exchange rate prevailing at the time of remittance.

f. Confidentiality. Any confidential information supplied by the contractor pursuant to this Act and its implementing rules and regulations shall be treated as
such by the Department and the Government, and during the term of the project to which it relates.

CHAPTER XVII
GROUND FOR CANCELLATION, REVOCATION, AND TERMINATION

Section 95
Late or Non-filing of Requirements

Failure of the permittee or contractor to comply with any of the requirements provided in this Act or in its implementing rules and regulations, without a valid
reason, shall be sufficient ground for the suspension of any permit or agreement provided under this Act.

Section 96
Violation of the Terms and Conditions of Permits or Agreements

Violation of the terms and conditions of the permits or agreements shall be a sufficient ground for cancellation of the same.

Section 97
Non-Payment of Taxes and Fees

Failure to pay the taxes and fees due the Government for two (2) consecutive years shall cause the cancellation of the exploration permit, mineral agreement,
financial or technical assistance agreement and other agreements and the re-opening of the area subject thereof to new applicants.

Section 98
Suspension or Cancellation of Tar Incentives and Credits

Failure to abide by the terms and conditions of tax incentive and credits shall cause the suspension or cancellation of said incentives and credits.

Section 99
Falsehood or Omission of Facts in the Statement

All statements made in the exploration permit, mining agreement and financial or technical assistance agreement shall be considered as conditions and essential
parts thereof and any falsehood in said statements or omission of facts therein which may alter, change or affect substantially the facts set forth in said
statements may cause the revocation and termination of the exploration permit, mining agreement and financial or technical assistance agreement.

CHAPTER XVIII
ORGANIZATIONAL AND INSTITUTIONAL ARRANGEMENTS

Section 100
From Staff Bureau to Line Bureau

The Mines and Geosciences Bureau is hereby transformed into a line bureau consistent with Section 9 of this Act: Provided, That under the Mines and
Geosciences Bureau shall be the necessary mines regional, district and other pertinent offices - the number and specific functions of which shall be provided in
the implementing rules and regulations of this Act.

CHAPTER XIX
PENAL PROVISIONS

Section 101
False Statements

Any person who knowingly presents any false application, declaration, or evidence to the Government or publishes or causes to be published any prospectus or
other information containing any false statement relating to mines, mining operations or mineral agreements, financial or technical assistance agreements and
permits shall, upon conviction, be penalized by a fine of not exceeding Ten thousand pesos (P10,000.00).

Section 102
Illegal Exploration
Any person undertaking exploration work without the necessary exploration permit shall, upon conviction, be penalized by a fine of not exceeding Fifty
thousand pesos (P50,000.00).

Section 103
Theft of Minerals

Any person extracting minerals and disposing the same without a mining agreement, lease, permit, license, or steals minerals or ores or the products thereof
from mines or mills or processing plants shall, upon conviction, be imprisoned from six (6) months to six (6) years or pay a fine from Ten thousand pesos
(P10,000.00) to Twenty thousand pesos (P20,000.00) or both, at the discretion of the appropriate court. In addition, he shall be liable to pay damages and
compensation for the minerals removed, extracted, and disposed of. In the case of associations, partnerships, or corporations, the president and each of the
directors thereof shall be responsible for the acts committed by such association, corporation, or partnership.

Section 104
Destruction of Mining Structures

Any person who willfully destroys or damages structures in or on the mining area or on the mill sites shall, upon conviction, be imprisoned for a period not to
exceed five (5) years and shall, in addition, pay compensation for the damages which may have been caused thereby.

Section 105
Mines Arson

Any person who willfully sets fire to any mineral stockpile, mine or workings, fittings or a mine, shall be guilty of arson and shall be punished, upon conviction, by
the appropriate court in accordance with the provisions of the Revised Penal Code and shall, in addition, pay compensation for the damages caused hereby.

Section 106
Willful Damage to a Mine

Any person who willfully damages a mine, unlawfully causes water to run into a mine, or obstructs any shaft or passage to a mine, or renders useless, damages
or destroys any machine, appliance, apparatus, rope, chain, tackle, or any other things used in a mine, shall be punished, upon conviction, by the appropriate
court, by imprisonment not exceeding a period of five (5) years and shall, in addition, pay compensation for the damages caused thereby.

Section 107
Illegal Obstruction to Permittees or Contractors

Any person who, without justifiable cause, prevents or obstructs the holder of any permit, agreement or lease from undertaking his mining operations shall be
punished, upon conviction by the appropriate court, by a fine not exceeding Five thousand pesos (P5,000.00) or imprisonment not exceeding one (1) year, or
both, at the discretion of the court.

Section 108
Violation of the Terms and Conditions of the Environmental Compliance Certificate

Any person who willfully violates or grossly neglects to abide by the terms and conditions of the environmental compliance certificate issued to said person and
which causes environmental damage through pollution shall suffer the penalty of imprisonment of six (6) months to six (6) years or a fine of Fifty thousand pesos
(P50,000.00) to Two hundred thousand pesos (P200,000.00), or both, at the discretion of the court.

Section 109
Illegal Obstruction to Government Officials

Any person who illegally prevents or obstructs the Secretary, the Director or any of their representatives in the performance of their duties under the provisions
of this Act and of the regulations promulgated hereunder shall be punished upon conviction, by the appropriate court, by a fine not exceeding Five thousand
pesos (P5,000.00) or by imprisonment not exceeding one (1) year, or both, at the discretion of the court.

Section 110
Other Violations

Any other violation of this Act and its implementing rules and regulations shall constitute an offense punishable with a fine not exceeding Five thousand pesos
(P5,000.00).

Section 111
Fines

The Secretary is authorized to charge fines for late or non-submission of reports in accordance with the implementing rules and regulations of this Act.

CHAPTER XX
TRANSITORY AND MISCELLANEOUS PROVISIONS
 Section 112
Non-Impairment of Existing Mining/Quarrying Rights

All valid and existing mining lease contracts, permits/licenses, leases pending renewal, mineral production-sharing agreements granted under Executive Order
No. 279, at the date of effectivity of this Act, shall remain valid, shall not be impaired, and shall be recognized by the Government: Provided, That the provisions
of Chapter XIV on government share in mineral production-sharing agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply to
a mining lessee or contractor unless the mining lessee or contractor indicates his intention to the secretary, in writing, not to avail of said provisions: Provided,
further, That no renewal of mining lease contracts shall be made after the expiration of its term: Provided, finally, That such leases, production-sharing
agreements, financial or technical assistance agreements shall comply with the applicable provisions of this Act and its implementing rules and regulations.

Section 113
Recognition of Valid and Existing Mining Claims and Lease/Quarry Applications

CASE 1: Sisipio v. DENR GR No. 157882

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.
.
On 25 July 1987, 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.
On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No. 7942 entitled, An Act Instituting A New System of Mineral Resources Exploration,
Development, Utilization and Conservation, otherwise known as the Philippine Mining Act of 1995.
On 15 August 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 23, Series of 1995, containing the implementing
guidelines of Rep. Act No. 7942. This was soon superseded by DAO No. 96-40, s. 1996, which took effect on 23 January 1997 after due publication.

Previously, however, or specifically 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.

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 7 September 2001, counsels for petitioners filed a demand letter addressed to then DENR Secretary Heherson Alvarez, 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. The Office of the
Executive Secretary was also furnished a copy of the said letter. There being no response to both letters, another letter of the same content dated 17 June
2002 was sent to President Gloria Macapagal Arroyo. This letter was indorsed to the DENR Secretary and eventually referred to the Panel of Arbitrators of the
Mines and Geosciences Bureau (MGB), Regional Office No. 02, Tuguegarao, Cagayan, for further action.

On 12 November 2002, counsels for petitioners received a letter from the Panel of Arbitrators of the MGB requiring the petitioners to comply with the Rules of
the Panel of Arbitrators before the letter may be acted upon.

Yet again, counsels for petitioners sent President Arroyo another demand letter dated 8 November 2002. Said letter was again forwarded to the DENR Secretary
who referred the same to the MGB, Quezon City.

In a letter dated 19 February 2003, the MGB rejected the demand of counsels for petitioners for the cancellation of the CAMC FTAA.

Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They pray that the Court issue an
order:

1. enjoining public respondents from acting on any application for FTAA;

2. declaring unconstitutional the Philippine Mining Act of 1995 and its Implementing Rules and Regulations;

3. canceling the FTAA issued to CAMC.

In their memorandum petitioners pose the following issues:

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.

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.

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.

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.

WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS.[1]

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 CAMCs FTAA. In effect, public respondents insist that the issue of eminent domain is
not a justiciable controversy which this Court can take cognizance of.

A justiciable controversy is defined as a 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.[2]Thus, courts have no judicial power to review cases involving political questions and as a rule, will
desist from taking cognizance of speculative or hypothetical cases, advisory opinions and cases that have become moot.[3]The Constitution is quite explicit on
this matter.[4] It provides that judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable
and enforceable. Pursuant to this constitutional mandate, courts, through the power of judicial review, are to entertain only real disputes between conflicting
parties through the application of law. For the courts 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; (2) the question must be ripe for adjudication; and (3) the person challenging must have the standing.[5]

An actual case or controversy 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.[6] There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing
law and jurisprudence.
Closely related to the second requisite is that the question must be ripe for adjudication. A question is considered ripe for adjudication when the act being
challenged has had a direct adverse effect on the individual challenging it.[7]
The third requisite is legal standing or locus standi. It is defined as a 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.[8] The gist of the question of standing is
whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult constitutional questions.[9] Unless a person is injuriously affected in any of his constitutional rights by
the operation of statute or ordinance, he has no standing.[10]
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.[11]Actual eviction of the land owners and occupants need not happen for this Court to intervene. As held in Pimentel, Jr. v. Hon. Aguirre[12]:

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.[13]

Petitioners embrace various segments of the society. These include 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. These petitioners have the standing to raise the constitutionality of the questioned FTAA as they allege a
personal and substantial injury.[14] 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 countrys
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.

Having resolved the procedural question, the constitutionality of the law under attack must be addressed squarely.

First Substantive Issue: Validity of Section 76 of Rep. Act No. 7942 and DAO 96-40

In seeking to nullify Rep. Act No. 7942 and its implementing rules DAO 96-40 as unconstitutional, petitioners set their sight on Section 76 of Rep. Act
No. 7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and unjust taking of private property for private purpose in contradiction with
Section 9, Article III of the 1987 Constitution mandating that private property shall not be taken except for public use and the corresponding payment of just
compensation. They assert that public respondent DENR, through the Mining Act and its Implementing Rules and Regulations, cannot, on its own, permit entry
into a private property and allow taking of land without payment of just compensation.
Interpreting Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40, juxtaposed with the concept of taking of property for purposes of eminent domain in
the case of Republic v. Vda. de Castellvi,[15] petitioners assert that there is indeed a taking upon entry into private lands and concession areas.

Republic v. Vda. de Castellvi defines 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.

From the criteria set forth in the cited case, petitioners claim that the entry into a private property by CAMC, pursuant to its FTAA, is for more than a
momentary period, i.e., for 25 years, and renewable for another 25 years; that the entry into the property is under the warrant or color of legal authority
pursuant to the FTAA executed between the government and CAMC; and that the entry substantially ousts the owner or possessor and deprives him of all
beneficial enjoyment of the property. These facts, according to the petitioners, amount to taking. As such, petitioners question the exercise of the power of
eminent domain as unwarranted because respondents failed to prove that the entry into private property is devoted for public use.
Petitioners also stress that even without the doctrine in the Castellvi case, the nature of the mining activity, the extent of the land area covered by the CAMC
FTAA and the various rights granted to the proponent or the FTAA holder, such as (a) the right of possession of the Exploration Contract Area, with full right of
ingress and egress and the right to occupy the same; (b) the right not to be prevented from entry into private lands by surface owners and/or occupants thereof
when prospecting, exploring and exploiting for minerals therein; (c) the right to enjoy easement rights, the use of timber, water and other natural resources in
the Exploration Contract Area; (d) the right of possession of the Mining Area, with full right of ingress and egress and the right to occupy the same; and (e) the
right to enjoy easement rights, water and other natural resources in the Mining Area, result in a taking of private property.

Petitioners quickly add that even assuming arguendo that there is no absolute, physical taking, at the very least, Section 76 establishes a legal easement upon
the surface owners, occupants and concessionaires of a mining contract area sufficient to deprive them of enjoyment and use of the property and that such
burden imposed by the legal easement falls within the purview of eminent domain.

To further bolster their claim that the legal easement established is equivalent to taking, petitioners cite the case of National Power Corporation v.
Gutierrez[16] holding that the easement of right-of-way imposed against the use of the land for an indefinite period is a taking under the power of eminent
domain.

Traversing petitioners assertion, public respondents argue that Section 76 is not a taking provision but a valid exercise of the police power and by virtue of which,
the state may prescribe regulations to promote the health, morals, peace, education, good order, safety and general welfare of the people. This government
regulation involves the adjustment of rights for the public good and that this adjustment curtails some potential for the use or economic exploitation of private
property. Public respondents concluded that to require compensation in all such circumstances would compel the government to regulate by purchase.

Public respondents are inclined to believe that by entering private lands and concession areas, FTAA holders do not oust the owners thereof nor
deprive them of all beneficial enjoyment of their properties as the said entry merely establishes a legal easement upon surface owners, occupants and
concessionaires of a mining contract area.

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.[17]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.[18] Although both police power and the power of eminent domain have the general welfare for their
object, and recent trends show a mingling[19] 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.[20] 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.[21] In U.S. v. Toribio,[22] the court
upheld the provisions of Act No. 1147, a statute regulating the slaughter of carabao for the purpose of conserving an adequate supply of draft animals, as a valid
exercise of police power, notwithstanding the property rights impairment that the ordinance imposed on cattle owners. A zoning ordinance prohibiting the
operation of a lumber yard within certain areas was assailed as unconstitutional in that it was an invasion of the property rights of the lumber yard owners
in People v. de Guzman.[23] The Court nonetheless ruled that the regulation was a valid exercise of police power. A similar ruling was arrived at in Seng Kee S Co.
v. Earnshaw and Piatt[24] where an ordinance divided the City of Manila into industrial and residential areas.

A thorough scrutiny of the extant jurisprudence leads to a cogent deduction that 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.[25] However, when a property interest is appropriated and applied to some public purpose, there is compensable taking.[26]

According to noted constitutionalist, Fr. Joaquin Bernas, SJ, in the exercise of its police power regulation, the state restricts the use of private
property, but none of the property interests in the bundle of rights which constitute ownership is appropriated for use by or for the benefit of the public.[27] Use
of the property by the owner was limited, but no aspect of the property is used by or for the public.[28] The deprivation of use can in fact be total and it will not
constitute compensable taking if nobody else acquires use of the property or any interest therein.[29]

If, however, in the regulation of the use of the property, somebody else acquires the use or interest thereof, such restriction constitutes compensable
taking. Thus, in City Government of Quezon City v. Ericta,[30] it was argued by the local government that an ordinance requiring private cemeteries to reserve 6%
of their total areas for the burial of paupers was a valid exercise of the police power under the general welfare clause. This court did not agree in the contention,
ruling that property taken under the police power is sought to be destroyed and not, as in this case, to be devoted to a public use. It further declared that the
ordinance in question was actually a taking of private property without just compensation of a certain area from a private cemetery to benefit paupers who are
charges of the local government. Being an exercise of eminent domain without provision for the payment of just compensation, the same was rendered invalid
as it violated the principles governing eminent domain.

In People v. Fajardo,[31] the municipal mayor refused Fajardo permission to build a house on his own land on the ground that the proposed structure
would destroy the view or beauty of the public plaza. The ordinance relied upon by the mayor prohibited the construction of any building that would destroy the
view of the plaza from the highway. The court ruled that the municipal ordinance under the guise of police power permanently divest owners of the beneficial
use of their property for the benefit of the public; hence, considered as a taking under the power of eminent domain that could not be countenanced without
payment of just compensation to the affected owners. In this case, what the municipality wanted was to impose an easement on the property in order to
preserve the view or beauty of the public plaza, which was a form of utilization of Fajardos property for public benefit.[32]

While the power of eminent domain often results in the appropriation of title to or possession of property, it need not always be the case. Taking
may include trespass without actual eviction of the owner, material impairment of the value of the property or prevention of the ordinary uses for which the
property was intended such as the establishment of an easement.[33] In Ayala de Roxas v. City of Manila,[34] 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.

And in the case of National Power Corporation v. Gutierrez,[35] despite the NPCs protestation that the owners were not totally deprived of the use of
the land and could still plant the same crops as long as they did not come into contact with the wires, the Court nevertheless held that the easement of
right-of-way was a taking under the power of eminent domain. The Court said:

In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the
nature and effect of the installation of 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land
for an indefinite period deprives private respondents of its ordinary use.

A case exemplifying an instance of compensable taking which does not entail transfer of title is Republic v. Philippine Long Distance Telephone
Co.[36] Here, the Bureau of Telecommunications, a government instrumentality, had contracted with the PLDT for the interconnection between the Government
Telephone System and that of the PLDT, so that the former could make use of the lines and facilities of the PLDT. In its desire to expand services to government
offices, the Bureau of Telecommunications demanded to expand its use of the PLDT lines. Disagreement ensued on the terms of the contract for the use of the
PLDT facilities. The Court ruminated:

Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the
expropriated property; but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of
the condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be
subjected to an easement right of way.[37]

In Republic v. Castellvi,[38] this Court had the occasion to spell out the 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.

As shown by the foregoing jurisprudence, a regulation which substantially deprives the owner of his proprietary rights and restricts the beneficial use
and enjoyment for public use amounts to compensable taking. In the case under consideration, the entry referred to in Section 76 and the easement rights
under Section 75 of Rep. Act No. 7942 as well as the various rights to CAMC under its FTAA are no different from the deprivation of proprietary rights in the
cases discussed which this Court considered as taking. Section 75 of the law in question reads:

Easement Rights. - When mining areas are so situated that for purposes of more convenient mining operations it is necessary to
build, construct or install on the mining areas or lands owned, occupied or leased by other persons, such infrastructure as roads, railroads,
mills, waste dump sites, tailing ponds, warehouses, staging or storage areas and port facilities, tramways, runways, airports, electric
transmission, telephone or telegraph lines, dams and their normal flood and catchment areas, sites for water wells, ditches, canals, new
river beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the contractor, upon payment of just compensation, shall be entitled to enter
and occupy said mining areas or lands.

Section 76 provides:

Entry into private lands and concession areas Subject to prior notification, holders of mining rights shall not be prevented from
entry into private lands and concession areas by surface owners, occupants, or concessionaires when conducting mining operations
therein.

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.

The entry referred to in Section 76 is not just a simple right-of-way which is ordinarily allowed under the provisions of the Civil Code. Here, the
holders of mining rights enter private lands for purposes of conducting mining activities such as exploration, extraction and processing of minerals. Mining right
holders build mine infrastructure, dig mine shafts and connecting tunnels, prepare tailing ponds, storage areas and vehicle depots, install their machinery,
equipment and sewer systems. On top of this, under Section 75, easement rights are accorded to them where they may build warehouses, port facilities, electric
transmission, railroads and other infrastructures necessary for mining operations. All these will definitely oust the owners or occupants of the affected areas the
beneficial ownership of their lands. Without a doubt, taking occurs once mining operations commence.

Section 76 of Rep. Act No. 7942 is a Taking Provision

Moreover, it would not be amiss to revisit the history of mining laws of this country which would help us understand Section 76 of Rep. Act No. 7942.

This provision is first found in Section 27 of Commonwealth Act No. 137 which took effect on 7 November 1936, viz:
 Before entering private lands the prospector shall first apply in writing for written permission of the private owner, claimant, or
holder thereof, and in case of refusal by such private owner, claimant, or holder to grant such permission, or in case of disagreement as to
the amount of compensation to be paid for such privilege of prospecting therein, the amount of such compensation shall be fixed by
agreement among the prospector, the Director of the Bureau of Mines and the surface owner, and in case of their failure to unanimously
agree as to the amount of compensation, all questions at issue shall be determined by the Court of First Instance.

Similarly, the pertinent provision of Presidential Decree No. 463, otherwise known as The Mineral Resources Development Decree of 1974, provides:

SECTION 12. Entry to Public and Private Lands. A person who desires to conduct prospecting or other mining operations within public
lands covered by concessions or rights other than mining shall first obtain the written permission of the government official concerned
before entering such lands. In the case of private lands, the written permission of the owner or possessor of the land must be obtained
before entering such lands. In either case, if said permission is denied, the Director, at the request of the interested person may intercede
with the owner or possessor of the land. If the intercession fails, the interested person may bring suit in the Court of First Instance of the
province where the land is situated. If the court finds the request justified, it shall issue an order granting the permission after fixing the
amount of compensation and/or rental due the owner or possessor: Provided, That pending final adjudication of such amount, the court
shall upon recommendation of the Director permit the interested person to enter, prospect and/or undertake other mining operations on
the disputed land upon posting by such interested person of a bond with the court which the latter shall consider adequate to answer for
any damage to the owner or possessor of the land resulting from such entry, prospecting or any other mining operations.

Hampered by the difficulties and delays in securing surface rights for the entry into private lands for purposes of mining operations, Presidential Decree No. 512
dated 19 July 1974 was passed into law in order to achieve full and accelerated mineral resources development. Thus, Presidential Decree No. 512 provides for a
new system of surface rights acquisition by mining prospectors and claimants. Whereas in Commonwealth Act No. 137 and Presidential Decree No. 463 eminent
domain may only be exercised in order that the mining claimants can build, construct or install roads, railroads, mills, warehouses and other facilities, this time,
the power of eminent domain may now be invoked by mining operators for the entry, acquisition and use of private lands, viz:

SECTION 1. Mineral prospecting, location, exploration, development and exploitation is hereby declared of public use and benefit, and for
which the power of eminent domain may be invoked and exercised for the entry, acquisition and use of private lands. x x x.
The evolution of mining laws gives positive indication that mining operators who are qualified to own lands were granted the authority to exercise eminent
domain for the entry, acquisition, and use of private lands in areas open for mining operations. This grant of authority extant in Section 1 of Presidential Decree
No. 512 is not expressly repealed by Section 76 of Rep. Act No. 7942; and neither are the former statutes impliedly repealed by the former. These two provisions
can stand together even if Section 76 of Rep. Act No. 7942 does not spell out the grant of the privilege to exercise eminent domain which was present in the old
law.

It is an established rule in statutory construction that in order that one law may operate to repeal another law, the two laws must be inconsistent.[39] The former
must be so repugnant as to be irreconciliable with the latter act.Simply because a latter enactment may relate to the same subject matter as that of an earlier
statute is not of itself sufficient to cause an implied repeal of the latter, since the new law may be cumulative or a continuation of the old one. As has been the
ruled, repeals by implication are not favored, and will not be decreed unless it is manifest that the legislature so intended.[40] As laws are presumed to be passed
with deliberation and with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing a statute it was not intended to
interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is not only irreconcilable, but also clear and
convincing, and flowing necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or unless the reason for the
earlier act is beyond peradventure removed.[41] Hence, every effort must be used to make all acts stand and if, by any reasonable construction, they can be
reconciled, the latter act will not operate as a repeal of the earlier.
Considering that Section 1 of Presidential Decree No. 512 granted the qualified mining operators the authority to exercise eminent domain and since this grant
of authority is deemed incorporated in Section 76 of Rep. Act No. 7942, the inescapable conclusion is that the latter provision is a taking provision.

While this Court declares that the assailed provision is a taking provision, this does not mean that it is unconstitutional on the ground that it allows taking of
private property without the determination of public use and the payment of just compensation.

The taking to be valid must be for public use.[42] Public use as a requirement for the valid exercise of the power of eminent domain is now synonymous with
public interest, public benefit, public welfare and public convenience.[43] It includes the broader notion of indirect public benefit or advantage. Public use as
traditionally understood as actual use by the public has already been abandoned.[44]

Mining industry plays a pivotal role in the economic development of the country and is a vital tool in the governments thrust of accelerated recovery.[45] The
importance of the mining industry for national development is expressed in Presidential Decree No. 463:

WHEREAS, mineral production is a major support of the national economy, and therefore the intensified discovery, exploration,
development and wise utilization of the countrys mineral resources are urgently needed for national development.

Irrefragably, mining is an industry which is of public benefit.

That public use is negated by the fact that the state would be taking private properties for the benefit of private mining firms or mining contractors is
not at all true. In Heirs of Juancho Ardona v. Reyes,[46] petitioners therein contended that the promotion of tourism is not for public use because private
concessionaires would be allowed to maintain various facilities such as restaurants, hotels, stores, etc., inside the tourist area. The Court thus contemplated:

The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of deference to legislative policy even if such policy might mean taking from one
private person and conferring on another private person applies as well in the Philippines.

. . . Once the object is within the authority of Congress, the means by which it will be attained is also for Congress to
determine. Here one of the means chosen is the use of private enterprise for redevelopment of the area.Appellants
argue that this makes the project a taking from one businessman for the benefit of another businessman. But the
means of executing the project are for Congress and Congress alone to determine, once the public purpose has been
established. x x x[47]

Petitioners further maintain that the states discretion to decide when to take private property is reduced contractually by Section 13.5 of the CAMC FTAA, which
reads:
 If the CONTRACTOR so requests at its option, the GOVERNMENT shall use its offices and legal powers to assist in the acquisition at
reasonable cost of any surface areas or rights required by the CONTRACTOR at the CONTRACTORs cost to carry out the Mineral
Exploration and the Mining Operations herein.

All obligations, payments and expenses arising from, or incident to, such agreements or acquisition of right shall be for the account of the
CONTRACTOR and shall be recoverable as Operating Expense.

According to petitioners, the government is reduced to a sub-contractor upon the request of the private respondent, and on account of the foregoing provision,
the contractor can compel the government to exercise its power of eminent domain thereby derogating the latters power to expropriate property.

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.[48] 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. Hence, when
confronted with the same question in La Bugal-BLaan Tribal Association, Inc. v. Ramos,[49] the Court answered:

Clearly, petitioners have needlessly jumped to unwarranted conclusions, without being aware of the rationale for the said
provision. That provision does not call for the exercise of the power of eminent domain -- and determination of just compensation is not
an issue -- as much as it calls for a qualified party to acquire the surface rights on behalf of a foreign-owned contractor.

Rather than having the foreign contractor act through a dummy corporation, having the State do the purchasing is a better
alternative. This will at least cause the government to be aware of such transaction/s and foster transparency in the contractors dealings
with the local property owners. The government, then, will not act as a subcontractor of the contractor; rather, it will facilitate the
transaction and enable the parties to avoid a technical violation of 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:

Section 76. xxx Provided, that any damage to the property of the surface owner, occupant, or concessionaire as a consequence
of such operations shall be properly compensated as may be provided for in the implementing rules and regulations.

Section 107. Compensation of the Surface Owner and Occupant- Any damage done to the property of the surface owners, occupant, or
concessionaire thereof as a consequence of the mining operations or as a result of the construction or installation of the infrastructure
mentioned in 104 above shall be properly and justly compensated.

Such compensation shall be based on the agreement entered into between the holder of mining rights and the surface owner, occupant or
concessionaire thereof, where appropriate, in accordance with P.D. No. 512. (Emphasis supplied.)

Second Substantive Issue: Power of Courts to Determine Just Compensation

Closely-knit to the issue of taking is the determination of just compensation. It is contended that Rep. Act No. 7942 and Section 107 of DAO 96-40
encroach on the power of the trial courts to determine just compensation in eminent domain cases inasmuch as the same determination of proper
compensation are cognizable only by the Panel of Arbitrators.

The question on the judicial determination of just compensation has been settled in the case of Export Processing Zone Authority v. Dulay[50] wherein
the court declared that the determination of just compensation in eminent domain cases is a judicial function. Even as the executive department or the
legislature may make the initial determinations, the same cannot prevail over the courts findings.

Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO 96-40 states that holder(s) of mining right(s) shall not be prevented from entry
into its/their contract/mining areas for the purpose of exploration, development, and/or utilization. That in cases where surface owners of the lands, occupants
or concessionaires refuse to allow the permit holder or contractor entry, the latter shall bring the matter before the Panel of Arbitrators for proper
disposition. Section 106 states that voluntary agreements between the two parties permitting the mining right holders to enter and use the surface owners
lands shall be registered with the Regional Office of the MGB. In connection with Section 106, Section 107 provides that the compensation for the damage done
to the surface owner, occupant or concessionaire as a consequence of mining operations or as a result of the construction or installation of the infrastructure
shall be properly and justly compensated and that such compensation shall be based on the agreement between the holder of mining rights and surface owner,
occupant or concessionaire, or where appropriate, in accordance with Presidential Decree No. 512. In cases where there is disagreement to the compensation or
where there is no agreement, the matter shall be brought before the Panel of Arbitrators. Section 206 of the implementing rules and regulations provides an
aggrieved party the remedy to appeal the decision of the Panel of Arbitrators to the Mines Adjudication Board, and the latters decision may be reviewed by the
Supreme Court by filing a petition for review on certiorari.[51]

An examination of the foregoing provisions gives no indication that the courts are excluded from taking cognizance of expropriation cases under the
mining law. The disagreement referred to in Section 107 does not involve the exercise of eminent domain, rather it contemplates of a situation wherein the
permit holders are allowed by the surface owners entry into the latters lands and disagreement ensues as regarding the proper compensation for the allowed
entry and use of the private lands. Noticeably, the provision points to a voluntary sale or transaction, but not to an involuntary sale.

The legislature, in enacting the mining act, is presumed to have deliberated with full knowledge of all existing laws and jurisprudence on the
subject. Thus, it is but reasonable to conclude that in passing such statute it was in accord with the existing laws and jurisprudence on the jurisdiction of courts
in the determination of just compensation and that it was not intended to interfere with or abrogate any former law relating to the same matter. Indeed, 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.[52] 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. As held in Philippine Veterans Bank v. Court of Appeals[53]:

The jurisdiction of the Regional Trial Courts is not any less original and exclusive because the question is first passed upon by
the DAR, as the judicial proceedings are not a continuation of the administrative determination.

Third Substantive Issue: Sufficient Control by the State Over Mining Operations

Anent the third issue, petitioners charge that Rep. Act No. 7942, as well as its Implementing Rules and Regulations, makes it possible for FTAA
contracts to cede over to a fully foreign-owned corporation full control and management of mining enterprises, with the result that the State is allegedly
reduced to a passive regulator dependent on submitted plans and reports, with weak review and audit powers. The State is not acting as the supposed owner of
the natural resources for and on behalf of the Filipino people; it practically has little effective say in the decisions made by the enterprise. In effect, petitioners
asserted that the law, the implementing regulations, and the CAMC FTAA cede beneficial ownership of the mineral resources to the foreign contractor.

It must be noted that this argument was already raised in La Bugal-BLaan Tribal Association, Inc. v. Ramos,[54] where the Court answered in the
following manner:

RA 7942 provides for the states 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 in this manner:

1. Sec. 8 which provides for the DENRs power of over-all supervision and periodic review for the conservation,
management, development and proper use of the States mineral resources;

2. Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB) under the DENR to exercise direct charge in the
administration and disposition of mineral resources, and empowers the MGB to monitor the compliance by
the contractor of the terms and conditions of the mineral agreements, confiscate surety and performance
bonds, and deputize whenever necessary any member or unit of the Phil. National Police, barangay, duly
registered non-governmental organization (NGO) or any qualified person to police mining activities;

3. Sec. 66 which vests in the Regional Director exclusive jurisdiction over safety inspections of all installations,
whether surface or underground, utilized in mining operations.

4. Sec. 35, which incorporates into all FTAAs the following terms, conditions and warranties:

(g) Mining operations shall be conducted in accordance with the provisions of the Act and its IRR.

(h) Work programs and minimum expenditures commitments.

xxxx

(k) Requiring proponent to effectively use appropriate anti-pollution technology and facilities to
protect the environment and restore or rehabilitate mined-out areas.

(l) The contractors shall furnish the Government records of geologic, accounting and other relevant
data for its mining operation, and that books of accounts and records shall be open for
inspection by the government. xx x.

(m) Requiring the proponent to dispose of the minerals at the highest price and more advantageous
terms and conditions.

xxxx

(o) Such other terms and conditions consistent with the Constitution and with this Act as the
Secretary may deem to be for the best interest of the State and the welfare of the Filipino
people.

The foregoing provisions of Section 35 of RA 7942 are also reflected and implemented in Section 56 (g), (h), (l), (m) and (n) of
the Implementing Rules, DAO 96-40.

Moreover, RA 7942 and DAO 96-40 also provide various stipulations confirming the governments control over mining
enterprises:

The contractor is to relinquish to the government those portions of the contract area not needed for mining operations and not
covered by any declaration of mining feasibility (Section 35-e, RA 7942; Section 60, DAO 96-40).

The contractor must comply with the provisions pertaining to mine safety, health and environmental protection (Chapter XI, RA 7942;
Chapters XV and XVI, DAO 96-40).

For violation of any of its terms and conditions, government may cancel an FTAA. (Chapter XVII, RA 7942; Chapter XXIV, DAO 96-40).

An FTAA contractor is obliged to open its books of accounts and records for 0inspection by the government (Section 56-m, DAO
96-40).

An FTAA contractor has to dispose of the minerals and by-products at the highest market price and register with the MGB a copy of
the sales agreement (Section 56-n, DAO 96-40).
 MGB is mandated to monitor the contractors compliance with the terms and conditions of the FTAA; and to deputize, when
necessary, any member or unit of the Philippine National Police, the barangay or a DENR-accredited nongovernmental organization
to police mining activities (Section 7-d and -f, DAO 96-40).

An FTAA cannot be transferred or assigned without prior approval by the President (Section 40, RA 7942; Section 66, DAO 96-40).

A mining project under an FTAA cannot proceed to the construction/development/utilization stage, unless its Declaration of Mining
Project Feasibility has been approved by government (Section 24, RA 7942).

The Declaration of Mining Project Feasibility filed by the contractor cannot be approved without submission of the following
documents:

1. Approved mining project feasibility study (Section 53-d, DAO 96-40)

2. Approved three-year work program (Section 53-a-4, DAO 96-40)
3. Environmental compliance certificate (Section 70, RA 7942)
4. Approved environmental protection and enhancement program (Section 69, RA 7942)
5. Approval by the Sangguniang Panlalawigan/Bayan/Barangay (Section 70, RA 7942; Section 27, RA 7160)
6. Free and prior informed consent by the indigenous peoples concerned, including payment of royalties through a
Memorandum of Agreement (Section 16, RA 7942; Section 59, RA 8371)

The FTAA contractor is obliged to assist in the development of its mining community, promotion of the general welfare of its
inhabitants, and development of science and mining technology (Section 57, RA 7942).

The FTAA contractor is obliged to submit reports (on quarterly, semi-annual or annual basis as the case may be; per Section 270,
DAO 96-40), pertaining to the following:

1. Exploration
2. Drilling
3. Mineral resources and reserves
4. Energy consumption
5. Production
6. Sales and marketing
7. Employment
8. Payment of taxes, royalties, fees and other Government Shares
9. Mine safety, health and environment
10. Land use
11. Social development
12. Explosives consumption

An FTAA pertaining to areas within government reservations cannot be granted without a written clearance from the government
agencies concerned (Section 19, RA 7942; Section 54, DAO 96-40).

An FTAA contractor is required to post a financial guarantee bond in favor of the government in an amount equivalent to its
expenditures obligations for any particular year. This requirement is apart from the representations and warranties of the
contractor that it has access to all the financing, managerial and technical expertise and technology necessary to carry out the
objectives of the FTAA (Section 35-b, -e, and -f, RA 7942).

Other reports to be submitted by the contractor, as required under DAO 96-40, are as follows: an environmental report on the
rehabilitation of the mined-out area and/or mine waste/tailing covered area, and anti-pollution measures undertaken (Section
35-a-2); annual reports of the mining operations and records of geologic accounting (Section 56-m); annual progress reports and
final report of exploration activities (Section 56-2).

Other programs required to be submitted by the contractor, pursuant to DAO 96-40, are the following: a safety and health program
(Section 144); an environmental work program (Section 168); an annual environmental protection and enhancement program
(Section 171).

The foregoing gamut of requirements, regulations, restrictions and limitations imposed upon the FTAA contractor by the
statute and regulations easily overturns petitioners contention. 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.

Once these plans and reports are approved, the contractor is bound to comply with its commitments therein. Figures for
mineral production and sales are regularly monitored and subjected to government review, in order to ensure that the products and
by-products are disposed of at the best prices possible; even copies of sales agreements have to be submitted to and registered with
MGB. And the contractor is mandated to open its books of accounts and records for scrutiny, so as to enable the State to determine if the
government share has been fully paid.

The State may likewise compel the contractors compliance with mandatory requirements on mine safety, health and
environmental protection, and the use of anti-pollution technology and facilities. Moreover, the contractor is also obligated to assist in
the development of the mining community and to pay royalties to the indigenous peoples concerned.

Cancellation of the FTAA may be the penalty for violation of any of its terms and conditions and/or noncompliance with
statutes or regulations. This general, all-around, multipurpose sanction is no trifling matter, especially to a contractor who may have yet
to recover the tens or hundreds of millions of dollars sunk into a mining project.

Overall, considering the provisions of the statute and the regulations just discussed, we believe that the State definitely
possesses the means by which it can have the ultimate word in the operation of the enterprise, set directions and objectives, and detect
deviations and noncompliance by the contractor; likewise, it has the capability to enforce compliance and to impose sanctions, should the
occasion therefor arise.
 In other words, the FTAA contractor is not free to do whatever it pleases and get away with it; on the contrary, it will have to
follow the government line if it wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-40 vest in the government more
than a sufficient degree of control and supervision over the conduct of mining operations.

Fourth Substantive Issue: The Proper Interpretation of the Constitutional Phrase Agreements Involving Either Technical or Financial Assistance

In interpreting the first and fourth paragraphs of Section 2, Article XII of the Constitution, petitioners set forth the argument that foreign corporations
are barred from making decisions on the conduct of operations and the management of the mining project. The first paragraph of Section 2, Article XII reads:

x x x The exploration, development, and utilization of natural resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production sharing agreements
with Filipino citizens, or corporations or associations at least sixty percentum of whose capital is owned by such citizens. Such agreements
may be for a period not exceeding twenty five years, renewable for not more than twenty five years, and under such terms and conditions
as may be provided by law x x x.

The fourth paragraph of Section 2, Article XII provides:

The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for
large scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and
conditions provided by law, based on real contributions to the economic growth and general welfare of the country x x x.

Petitioners maintain that the first paragraph bars aliens and foreign-owned corporations from entering into any direct arrangement with the
government including those which involve co-production, joint venture or production sharing agreements. They likewise insist that the fourth paragraph allows
foreign-owned corporations to participate in the large-scale exploration, development and utilization of natural resources, but such participation, however, is
merely limited to an agreement for either financial or technical assistance only.

Again, this issue has already been succinctly passed upon by this Court in La Bugal-BLaan Tribal Association, Inc. v. Ramos.[55] In discrediting such
argument, the Court ratiocinated:

Petitioners claim that the phrase agreements x x x involving either technical or financial assistance simply means technical
assistance or financial assistance agreements, nothing more and nothing else. They insist that there is no ambiguity in the phrase, and
that a plain reading of paragraph 4 quoted above leads to the inescapable conclusion that what a foreign-owned corporation may enter
into with the government is merely an agreement for either financial or technical assistance only, for the large-scale exploration,
development and utilization of minerals, petroleum and other mineral oils; such a limitation, they argue, excludes foreign management
and operation of a mining enterprise.

This restrictive interpretation, petitioners believe, is in line with the general policy enunciated by the Constitution reserving to
Filipino citizens and corporations the use and enjoyment of the countrys natural resources. They maintain that this Courts Decision
of January 27, 2004 correctly declared the WMCP FTAA, along with pertinent provisions of RA 7942, void for allowing a foreign contractor
to have direct and exclusive management of a mining enterprise. Allowing such a privilege not only runs counter to the full control and
supervision that the State is constitutionally mandated to exercise over the exploration, development and utilization of the countrys
natural resources; doing so also vests in the foreign company beneficial ownership of our mineral resources. It will be recalled that the
Decision of January 27, 2004 zeroed in on management or other forms of assistance or other activities associated with the service
contracts of the martial law regime, since the management or operation of mining activities by foreign contractors, which is the primary
feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution sought to eradicate.

xxxx

We do not see how applying a strictly literal or verba legis interpretation of paragraph 4 could inexorably lead to the
conclusions arrived at in the ponencia. First, the drafters choice of words -- their use of the phrase agreements x x xinvolving either
technical or financial assistance -- does not indicate the intent to exclude other modes of assistance. The drafters opted to
use involving when they could have simply said agreements for financial or technical assistance, if that was their intention to begin
with. In this case, the limitation would be very clear and no further debate would ensue.

In contrast, 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. The word involving as used in this
context has three connotations that can be differentiated thus: one, the sense of concerning, having to do with, or affecting; two, entailing,
requiring, implying or necessitating; and three, including, containing or comprising.

Plainly, none of the three connotations convey a sense of exclusivity. Moreover, the word involving, when understood in the
sense of including, as in including technical or financial assistance, necessarily implies that there are activitiesother than those that are
being included. In other words, if an agreement includes technical or financial assistance, there is apart from such assistance -- something
else already in, and covered or may be covered by, the said agreement.

In short, it allows for the possibility that matters, other than those explicitly mentioned, could be made part of the
agreement. Thus, we are now led to the conclusion that the use of the word involving implies that these agreements with foreign
corporations are not limited to mere financial or technical assistance. The difference in sense becomes very apparent when we juxtapose
agreements for technical or financial assistance against agreements including technical or financial assistance. This much is unalterably
clear in a verba legis approach.

Second, if the real intention of the drafters was to confine foreign corporations to financial or technical assistance and nothing
more, their language would have certainly been so unmistakably restrictive and stringent as to leave no doubt in anyones mind about their
true intent. For example, they would have used the sentence foreign corporations are absolutely prohibited from involvement in the
management or operation of mining or similar ventures or words of similar import. A search for such stringent wording yields negative
results. 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.
Fifth Substantive Issue: Service Contracts Not Deconstitutionalized

Lastly, petitioners stress that the service contract regime under the 1973 Constitution is expressly prohibited under the 1987 Constitution as the term
service contracts found in the former was deleted in the latter to avoid the circumvention of constitutional prohibitions that were prevalent in the 1987
Constitution. According to them, the framers of the 1987 Constitution only intended for foreign-owned corporations to provide either technical assistance or
financial assistance. Upon perusal of the CAMC FTAA, petitioners are of the opinion that the same is a replica of the service contract agreements that the
present constitution allegedly prohibit.
Again, this contention is not well-taken. 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.[56] 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.[57] We ruled, thus:

To our mind, however, such intent cannot be definitively and conclusively established from the mere failure to carry the same
expression or term over to the new Constitution, absent a more specific, explicit and unequivocal statement to that effect. What
petitioners seek (a complete ban on foreign participation in the management of mining operations, as previously allowed by the earlier
Constitutions) is nothing short of bringing about a momentous sea change in the economic and developmental policies; and the
fundamentally capitalist, free-enterprise philosophy of our government. We cannot imagine such a radical shift being undertaken by our
government, to the great prejudice of the mining sector in particular and our economy in general, merely on the basis of the omission of
the terms service contract from or the failure to carry them over to the new Constitution. There has to be a much more definite and even
unarguable basis for such a drastic reversal of policies.

xxxx

The foregoing are mere fragments of the framers lengthy discussions of the provision dealing with agreements x x x involving
either technical or financial assistance, which ultimately became paragraph 4 of Section 2 of Article XII of the Constitution. Beyond any
doubt, the members of the ConCom were actually debating about the martial-law-era service contracts for which they were
crafting appropriate safeguards.

In the voting that led to the approval of Article XII by the ConCom, the explanations given by Commissioners Gascon, Garcia
and Tadeo indicated that they had voted to reject this provision on account of their objections to the constitutionalization of the service
contract concept.

Mr. Gascon said, I felt that if we would constitutionalize any provision on service contracts, this should always be with the
concurrence of Congress and not guided only by a general law to be promulgated by Congress. Mr. Garcia explained, Service contracts are
given constitutional legitimization in Sec. 3, even when they have been proven to be inimical to the interests of the nation, providing, as
they do, the legal loophole for the exploitation of our natural resources for the benefit of foreign interests. Likewise,
Mr. Tadeo cited inter alia the fact that service contracts continued to subsist, enabling foreign interests to benefit from our natural
resources. It was hardly likely that these gentlemen would have objected so strenuously, had the provision called for mere technical or
financial assistance and nothing more.

The deliberations of the ConCom and some commissioners explanation of their votes leave no room for doubt that the service
contract concept precisely underpinned the commissioners understanding of the agreements involving either technical or financial
assistance.

xxxx

From the foregoing, we are impelled to conclude that 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.

xxxx
It is therefore reasonable and unavoidable to make the following conclusion, based on the above arguments. As written by
the framers and ratified and adopted by the people, the 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 -- sans the abuses of the past regime. The purpose is clear: to develop and utilize our mineral, petroleum and
other resources on a large scale for the immediate and tangible benefit of the Filipino people.[58]

WHEREFORE, the instant petition for prohibition and mandamus is hereby DISMISSED. Section 76 of Republic Act No. 7942 and Section 107 of DAO
96-40; Republic Act No. 7942 and its Implementing Rules and Regulations contained in DAO 96-40 insofar as they relate to financial and technical assistance
agreements referred to in paragraph 4 of Section 2 of Article XII of the Constitution are NOT UNCONSTITUTIONAL. SO ORDERED.

CASE 2: La Bugal B’Laan Tribal Association Inc. v. Ramos GR No. 127882

The present petition for mandamus and prohibition assails the constitutionality of Republic Act No. 7942,5 otherwise known as the PHILIPPINE MINING ACT OF
1995, along with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative
Order 96-40, and of the Financial and Technical Assistance Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines and WMC
(Philippines), Inc. (WMCP), a corporation organized under Philippine laws.

On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 2796 authorizing 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. In entering into such proposals, the President shall consider the real contributions to the economic growth and general welfare of the country that
will be realized, as well as the development and use of local scientific and technical resources that will be promoted by the proposed contract or agreement.
Until Congress shall determine otherwise, large-scale mining, for purpose of this Section, shall mean those proposals for contracts or agreements for mineral
resources exploration, development, and utilization involving a committed capital investment in a single mining unit project of at least Fifty Million Dollars in
United States Currency (US $50,000,000.00).7

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."8 R.A. No. 7942 defines the modes of mineral agreements for mining operations,9 outlines the procedure for their filing and
approval,10 assignment/transfer11 and withdrawal,12and fixes their terms.13 Similar provisions govern financial or technical assistance agreements.14

The law prescribes the qualifications of contractors15 and grants them certain rights, including timber,16 water17 and easement18 rights, and the right to possess
explosives.19 Surface owners, occupants, or concessionaires are forbidden from preventing holders of mining rights from entering private lands and concession
areas.20 A procedure for the settlement of conflicts is likewise provided for.21

The Act restricts the conditions for exploration,22 quarry23 and other24 permits. It regulates the transport, sale and processing of minerals,25 and promotes the
development of mining communities, science and mining technology,26and safety and environmental protection.27

The government's share in the agreements is spelled out and allocated,28 taxes and fees are imposed,29 incentives granted.30 Aside from penalizing certain
acts,31 the law likewise specifies grounds for the cancellation, revocation and termination of agreements and permits.32

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.33 Shortly before the effectivity of R.A. No. 7942, however, or on March 30, 1995, the President entered into an FTAA with WMCP covering 99,387
hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato.34

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. 96-40,35 giving the DENR fifteen days from receipt36 to act thereon. The DENR, however, has yet to respond or act on petitioners' letter.37

Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They allege that at the time of the
filing of the petition, 100 FTAA applications had already been filed, covering an area of 8.4 million hectares,38 64 of which applications are by fully foreign-owned
corporations covering a total of 5.8 million hectares, and at least one by a fully foreign-owned mining company over offshore areas.39

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows fully foreign owned corporations to explore, develop, utilize and exploit mineral resources in a manner
contrary to Section 2, paragraph 4, Article XII of the Constitution;

II

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows the taking of private property without the determination of public use and for just compensation;

III

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it violates Sec. 1, Art. III of the Constitution;

IV

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows enjoyment by foreign citizens as well as fully foreign owned corporations of the nation's marine wealth
contrary to Section 2, paragraph 2 of Article XII of the Constitution;

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows priority to foreign and fully foreign owned corporations in the exploration, development and utilization of
mineral resources contrary to Article XII of the Constitution;

VI

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows the inequitable sharing of wealth contrary to Sections [sic] 1, paragraph 1, and Section 2, paragraph 4[,]
[Article XII] of the Constitution;
 VII

x x x in recommending approval of and implementing the Financial and Technical Assistance Agreement between the President of the
Republic of the Philippines and Western Mining Corporation Philippines Inc. because the same is illegal and unconstitutional.40

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 Mining Philippines, Inc. as unconstitutional, illegal and null and void.41

Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O. Ramos, the then DENR Secretary, and Horacio Ramos, Director of the
Mines and Geosciences Bureau of the DENR. Also impleaded is private respondent WMCP, which entered into the assailed FTAA with the Philippine Government.
WMCP is owned by WMC Resources International Pty., Ltd. (WMC), "a wholly owned subsidiary of Western Mining Corporation Holdings Limited, a publicly
listed major Australian mining and exploration company."42 By WMCP's information, "it is a 100% owned subsidiary of WMC LIMITED."43

Respondents, aside from meeting petitioners' contentions, argue that the requisites for judicial inquiry have not been met and that the petition does not comply
with the criteria for prohibition and mandamus. Additionally, respondent WMCP argues that there has been a violation of the rule on hierarchy of courts.

After petitioners filed their reply, this Court granted due course to the petition. The parties have since filed their respective memoranda.

WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January 23, 2001, WMC sold all its shares in WMCP to Sagittarius Mines,
Inc. (Sagittarius), a corporation organized under Philippine laws.44WMCP was subsequently renamed "Tampakan Mineral Resources Corporation."45 WMCP
claims that at least 60% of the equity of Sagittarius is owned by Filipinos and/or Filipino-owned corporations while about 40% is owned by Indophil Resources NL,
an Australian company.46 It further claims that by such sale and transfer of shares, "WMCP has ceased to be connected in any way with WMC."47

By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, 2001,48 approved the transfer and registration of the subject FTAA from
WMCP to Sagittarius. Said Order, however, was appealed by Lepanto Consolidated Mining Co. (Lepanto) to the Office of the President which upheld it by
Decision of July 23, 2002.49 Its motion for reconsideration having been denied by the Office of the President by Resolution of November 12, 2002,50 Lepanto filed
a petition for review51 before the Court of Appeals. Incidentally, two other petitions for review related to the approval of the transfer and registration of the
FTAA to Sagittarius were recently resolved by this Court.52

It bears stressing that this case has not been rendered moot either by the transfer and registration of the FTAA to a Filipino-owned corporation or by the
non-issuance of a temporary restraining order or a preliminary injunction to stay the above-said July 23, 2002 decision of the Office of the President.53 The
validity of the transfer remains in dispute and awaits final judicial determination. This assumes, of course, that such transfer cures the FTAA's alleged
unconstitutionality, on which question judgment is reserved.

WMCP also points out that the original claimowners of the major mineralized areas included in the WMCP FTAA, namely, Sagittarius, Tampakan Mining
Corporation, and Southcot Mining Corporation, are all Filipino-owned corporations,54 each of which was a holder of an approved Mineral Production Sharing
Agreement awarded in 1994, albeit their respective mineral claims were subsumed in the WMCP FTAA;55 and that these three companies are the same
companies that consolidated their interests in Sagittarius to whom WMC sold its 100% equity in WMCP.56 WMCP concludes that in the event that the FTAA is
invalidated, the MPSAs of the three corporations would be revived and the mineral claims would revert to their original claimants.57

These circumstances, while informative, are hardly significant in the resolution of this case, it involving the validity of the FTAA, not the possible consequences of
its invalidation.

Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the first and the last need be delved into; in the latter, the discussion
shall dwell only insofar as it questions the effectivity of E. O. No. 279 by virtue of which order the questioned FTAA was forged.

Before going into the substantive issues, the procedural questions posed by respondents shall first be tackled.

REQUISITES FOR JUDICIAL REVIEW

When an issue of constitutionality is raised, this Court can exercise its power of judicial review only if the following requisites are present:

(1) The existence of an actual and appropriate case;

(2) A personal and substantial interest of the party raising the constitutional question;

(3) The exercise of judicial review is pleaded at the earliest opportunity; and
(4) The constitutional question is the lis mota of the case. 58

Respondents claim that the first three requisites are not present.

Section 1, Article VIII of the Constitution states that "(j)udicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable." The power of judicial review, therefore, is limited to the determination of actual cases and controversies.59

An actual case or controversy means an existing case or controversy that is appropriate or ripe for determination, not conjectural or anticipatory,60 lest the
decision of the court would amount to an advisory opinion.61 The power does not extend to hypothetical questions62 since any attempt at abstraction could only
lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities.63

"Legal standing" or locus standi has been defined as a personal and 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,64alleging more than a generalized grievance.65 The gist of the question of standing is whether a party
alleges "such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the
court depends for illumination of difficult constitutional questions."66 Unless a person is injuriously affected in any of his constitutional rights by the operation of
statute or ordinance, he has no standing.67

Petitioners traverse a wide range of sectors. Among them are La Bugal B'laan Tribal Association, Inc., a farmers and indigenous people's cooperative organized
under Philippine laws representing a community actually affected by the mining activities of WMCP, members of said cooperative,68 as well as other residents of
areas also affected by the mining activities of WMCP.69 These petitioners have standing to raise the constitutionality of the questioned FTAA as they allege a
personal and substantial injury. They claim that they would suffer "irremediable displacement"70 as a result of the implementation of the FTAA allowing WMCP
to conduct mining activities in their area of residence. They thus meet the appropriate case requirement as they assert an interest adverse to that of
respondents who, on the other hand, insist on the FTAA's validity.

In view of the alleged impending injury, petitioners also have standing to assail the validity of E.O. No. 279, by authority of which the FTAA was executed.

Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue either or both contracting parties to annul it.71 In other words, they
contend that petitioners are not real parties in interest in an action for the annulment of contract.

Public respondents' contention fails. The present action is not merely one for annulment of contract but for prohibition and mandamus. Petitioners allege that
public respondents acted without or in excess of jurisdiction in implementing the FTAA, which they submit is unconstitutional. As the case involves constitutional
questions, this Court is not concerned with whether petitioners are real parties in interest, but with whether they have legal standing. As held in Kilosbayan v.
Morato:72

x x x. "It is important to note . . . that standing because of its constitutional and public policy underpinnings, is very different from questions relating to whether
a particular plaintiff is the real party in interest or has capacity to sue. Although all three requirements are directed towards ensuring that only certain parties
can maintain an action, standing restrictions require a partial consideration of the merits, as well as broader policy concerns relating to the proper role of the
judiciary in certain areas.["] (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328 [1985])

Standing is a special concern in constitutional law because in some cases suits are brought not by parties who have been personally injured by the operation of a
law or by official action taken, but by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence, the question in standing is whether
such parties have "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court so largely depends for illumination of difficult constitutional questions." (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)

As earlier stated, petitioners meet this requirement.

The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills the requisites of justiciability. Although these laws were not in
force when the subject FTAA was entered into, the question as to their validity is ripe for adjudication.

The WMCP FTAA provides:

14.3 Future Legislation

Any term and condition more favourable to Financial &Technical Assistance Agreement contractors resulting from repeal or amendment of any existing law or
regulation or from the enactment of a law, regulation or administrative order shall be considered a part of this Agreement.

It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more favorable to WMCP, hence, these laws, to the extent that they are
favorable to WMCP, govern the FTAA.

In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing agreements.

SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. – x x x That the provisions of Chapter XIV on government share in mineral production-sharing
agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply to a mining lessee or contractor unless the mining lessee or
contractor indicates his intention to the secretary, in writing, not to avail of said provisions x x x Provided, finally, That such leases, production-sharing
agreements, financial or technical assistance agreements shall comply with the applicable provisions of this Act and its implementing rules and regulations.

As there is no suggestion that WMCP has indicated its intention not to avail of the provisions of Chapter XVI of R.A. No. 7942, it can safely be presumed that they
apply to the WMCP FTAA.
Misconstruing the application of the third requisite for judicial review – that the exercise of the review is pleaded at the earliest opportunity – WMCP points out
that the petition was filed only almost two years after the execution of the FTAA, hence, not raised at the earliest opportunity.

The third requisite should not be taken to mean that the question of constitutionality must be raised immediately after the execution of the state action
complained of. That the question of constitutionality has not been raised before is not a valid reason for refusing to allow it to be raised later.73 A contrary rule
would mean that a law, otherwise unconstitutional, would lapse into constitutionality by the mere failure of the proper party to promptly file a case to challenge
the same.

PROPRIETY OF PROHIBITION AND MANDAMUS

Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule 65 read:

SEC. 2. Petition for prohibition. – When the proceedings of any tribunal, corporation, board, or person, whether exercising functions judicial or ministerial, are
without or in excess of its or his jurisdiction, or with grave abuse of discretion, and there is no appeal or any other plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be
rendered commanding the defendant to desist from further proceeding in the action or matter specified therein.

Prohibition is a preventive remedy.74 It seeks a judgment ordering the defendant to desist from continuing with the commission of an act perceived to be
illegal.75

The petition for prohibition at bar is thus an appropriate remedy. While the execution of the contract itself may be fait accompli, its implementation is not.
Public respondents, in behalf of the Government, have obligations to fulfill under said contract. Petitioners seek to prevent them from fulfilling such obligations
on the theory that the contract is unconstitutional and, therefore, void.

The propriety of a petition for prohibition being upheld, discussion of the propriety of the mandamus aspect of the petition is rendered unnecessary.

HIERARCHY OF COURTS

The contention that the filing of this petition violated the rule on hierarchy of courts does not likewise lie. The rule has been explained thus:

Between two courts of concurrent original jurisdiction, it is the lower court that should initially pass upon the issues of a case. That way, as a particular case goes
through the hierarchy of courts, it is shorn of all but the important legal issues or those of first impression, which are the proper subject of attention of the
appellate court. This is a procedural rule borne of experience and adopted to improve the administration of justice.

This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this Court has concurrent jurisdiction with the Regional Trial Courts and
the Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give a party
unrestricted freedom of choice of court forum. The resort to this Court's primary jurisdiction to issue said writs shall be allowed only where the redress desired
cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify such invocation. We held in People v. Cuaresma that:

A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should
be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to
issue these writs should be allowed only where there are special and important reasons therefor, clearly and specifically set out in the petition. This is
established policy. It is a policy necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within
its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket x x x.76 [Emphasis supplied.]

The repercussions of the issues in this case on the Philippine mining industry, if not the national economy, as well as the novelty thereof, constitute exceptional
and compelling circumstances to justify resort to this Court in the first instance.

In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the requirements of an actual case or legal standing when
paramount public interest is involved.77 When the issues raised are of paramount importance to the public, this Court may brush aside technicalities of
procedure.78

II

Petitioners contend that E.O. No. 279 did not take effect because its supposed date of effectivity came after President Aquino had already lost her legislative
powers under the Provisional Constitution.

And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O. No. 279, violates Section 2, Article XII of the Constitution because, among
other reasons:

(1) It allows foreign-owned companies to extend more than mere financial or technical assistance to the State in the exploitation, development, and utilization
of minerals, petroleum, and other mineral oils, and even permits foreign owned companies to "operate and manage mining activities."

(2) It allows foreign-owned companies to extend both technical and financial assistance, instead of "either technical or financial assistance."

To appreciate the import of these issues, a visit to the history of the pertinent constitutional provision, the concepts contained therein, and the laws enacted
pursuant thereto, is in order.

Section 2, Article XII reads in full:

Sec. 2. All lands of the public domain, waters, 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. With the exception of agricultural lands, all other natural resources shall not be alienated.
The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake
such activities or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least
sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, beneficial use may be the measure and limit of the grant.

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence
fishermen and fish-workers in rivers, lakes, bays, and lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local
scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.

THE SPANISH REGIME AND THE REGALIAN DOCTRINE

The first sentence of Section 2 embodies the Regalian doctrine or jura regalia. Introduced by Spain into these Islands, this feudal concept is based on the State's
power of dominium, which is the capacity of the State to own or acquire property.79

In its broad sense, the term "jura regalia" refers to royal rights, or those rights which the King has by virtue of his prerogatives. In Spanish law, it refers to a right
which the sovereign has over anything in which a subject has a right of property or propriedad. These were rights enjoyed during feudal times by the king as the
sovereign.

The theory of the feudal system was that title to all lands was originally held by the King, and while the use of lands was granted out to others who were
permitted to hold them under certain conditions, the King theoretically retained the title. By fiction of law, the King was regarded as the original proprietor of all
lands, and the true and only source of title, and from him all lands were held. The theory of jura regalia was therefore nothing more than a natural fruit of
conquest.80

The Philippines having passed to Spain by virtue of discovery and conquest,81 earlier Spanish decrees declared that "all lands were held from the Crown."82

The Regalian doctrine extends not only to land but also to "all natural wealth that may be found in the bowels of the earth."83 Spain, in particular, recognized the
unique value of natural resources, viewing them, especially minerals, as an abundant source of revenue to finance its wars against other nations.84 Mining laws
during the Spanish regime reflected this perspective.85

THE AMERICAN OCCUPATION AND THE CONCESSION REGIME

By the Treaty of Paris of December 10, 1898, Spain ceded "the archipelago known as the Philippine Islands" to the United States. The Philippines was hence
governed by means of organic acts that were in the nature of charters serving as a Constitution of the occupied territory from 1900 to 1935.86 Among the
principal organic acts of the Philippines was the Act of Congress of July 1, 1902, more commonly known as the Philippine Bill of 1902, through which the United
States Congress assumed the administration of the Philippine Islands.87 Section 20 of said Bill reserved the disposition of mineral lands of the public domain from
sale. Section 21 thereof allowed the free and open exploration, occupation and purchase of mineral deposits not only to citizens of the Philippine Islands but to
those of the United States as well:

Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed, are hereby declared to be free and open to
exploration, occupation and purchase, and the land in which they are found, to occupation and purchase, by citizens of the United States or of said Islands:
Provided, That when on any lands in said Islands entered and occupied as agricultural lands under the provisions of this Act, but not patented, mineral deposits
have been found, the working of such mineral deposits is forbidden until the person, association, or corporation who or which has entered and is occupying such
lands shall have paid to the Government of said Islands such additional sum or sums as will make the total amount paid for the mineral claim or claims in which
said deposits are located equal to the amount charged by the Government for the same as mineral claims.

Unlike Spain, the United States considered natural resources as a source of wealth for its nationals and saw fit to allow both Filipino and American citizens to
explore and exploit minerals in public lands, and to grant patents to private mineral lands.88 A person who acquired ownership over a parcel of private mineral
land pursuant to the laws then prevailing could exclude other persons, even the State, from exploiting minerals within his property.89 Thus, earlier
jurisprudence90 held that:

A valid and subsisting location of mineral land, made and kept up in accordance with the provisions of the statutes of the United States, has the effect of a grant
by the United States of the present and exclusive possession of the lands located, and this exclusive right of possession and enjoyment continues during the
entire life of the location. x x x.

x x x.

The discovery of minerals in the ground by one who has a valid mineral location perfects his claim and his location not only against third persons, but also
against the Government. x x x. [Italics in the original.]
The Regalian doctrine and the American system, therefore, differ in one essential respect. Under the Regalian theory, mineral rights are not included in a grant
of land by the state; under the American doctrine, mineral rights are included in a grant of land by the government.91

Section 21 also made possible the concession (frequently styled "permit", license" or "lease")92 system.93 This was the traditional regime imposed by the colonial
administrators for the exploitation of natural resources in the extractive sector (petroleum, hard minerals, timber, etc.).94

Under the concession system, the concessionaire makes a direct equity investment for the purpose of exploiting a particular natural resource within a given
area.95 Thus, 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.96 In consideration for the right to exploit a natural resource, the concessionaire either pays rent or royalty,
which is a fixed percentage of the gross proceeds.97

Later statutory enactments by the legislative bodies set up in the Philippines adopted the contractual framework of the concession.98 For instance, Act No.
2932,99 approved on August 31, 1920, which provided for the exploration, location, and lease of lands containing petroleum and other mineral oils and gas in the
Philippines, and Act No. 2719,100 approved on May 14, 1917, which provided for the leasing and development of coal lands in the Philippines, both utilized the
concession system.101

THE 1935 CONSTITUTION AND THE NATIONALIZATION OF NATURAL RESOURCES

By the Act of United States Congress of March 24, 1934, popularly known as the Tydings-McDuffie Law, the People of the Philippine Islands were authorized to
adopt a constitution.102 On July 30, 1934, the Constitutional Convention met for the purpose of drafting a constitution, and the Constitution subsequently
drafted was approved by the Convention on February 8, 1935.103 The Constitution was submitted to the President of the United States on March 18, 1935.104 On
March 23, 1935, the President of the United States certified that the Constitution conformed substantially with the provisions of the Act of Congress approved
on March 24, 1934.105 On May 14, 1935, the Constitution was ratified by the Filipino people.106

The 1935 Constitution adopted the Regalian doctrine, declaring all natural resources of the Philippines, including mineral lands and minerals, to be property
belonging to the State.107 As adopted in a republican system, the medieval concept of jura regalia is stripped of royal overtones and ownership of the land is
vested in the State.108

Section 1, Article XIII, on Conservation and Utilization of Natural Resources, of the 1935 Constitution provided:

SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to
citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing
right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than
the development of water power, in which cases beneficial use may be the measure and the limit of the grant.

The nationalization and conservation of the natural resources of the country was one of the fixed and dominating objectives of the 1935 Constitutional
Convention.109 One delegate relates:

There was an overwhelming sentiment in the Convention in favor of the principle of state ownership of natural resources and the adoption of the Regalian
doctrine. State ownership of natural resources was seen as a necessary starting point to secure recognition of the state's power to control their disposition,
exploitation, development, or utilization. The delegates of the Constitutional Convention very well knew that the concept of State ownership of land and natural
resources was introduced by the Spaniards, however, they were not certain whether it was continued and applied by the Americans. To remove all doubts, the
Convention approved the provision in the Constitution affirming the Regalian doctrine.

The adoption of the principle of state ownership of the natural resources and of the Regalian doctrine was considered to be a necessary starting point for the
plan of nationalizing and conserving the natural resources of the country. For with the establishment of the principle of state ownership of the natural resources,
it would not be hard to secure the recognition of the power of the State to control their disposition, exploitation, development or utilization.110

The nationalization of the natural resources was intended (1) to insure their conservation for Filipino posterity; (2) to serve as an instrument of national defense,
helping prevent the extension to the country of foreign control through peaceful economic penetration; and (3) to avoid making the Philippines a source of
international conflicts with the consequent danger to its internal security and independence.111

The same Section 1, Article XIII also adopted the concession system, expressly permitting the State to grant licenses, concessions, or leases for the exploitation,
development, or utilization of any of the natural resources. Grants, however, were limited to Filipinos or entities at least 60% of the capital of which is owned by
Filipinos.lawph!l.ne+

The swell of nationalism that suffused the 1935 Constitution was radically diluted when on November 1946, the Parity Amendment, which came in the form of
an "Ordinance Appended to the Constitution," was ratified in a plebiscite.112 The Amendment extended, from July 4, 1946 to July 3, 1974, the right to utilize and
exploit our natural resources to citizens of the United States and business enterprises owned or controlled, directly or indirectly, by citizens of the United
States:113

Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen, of the foregoing Constitution, during the effectivity of the
Executive Agreement entered into by the President of the Philippines with the President of the United States on the fourth of July, nineteen hundred and
forty-six, pursuant to the provisions of Commonwealth Act Numbered Seven hundred and thirty-three, but in no case to extend beyond the third of July,
nineteen hundred and seventy-four, the disposition, exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain,
waters, minerals, coals, petroleum, and other mineral oils, all forces and sources of potential energy, and other natural resources of the Philippines, and the
operation of public utilities, shall, if open to any person, be open to citizens of the United States and to all forms of business enterprise owned or controlled,
directly or indirectly, by citizens of the United States in the same manner as to, and under the same conditions imposed upon, citizens of the Philippines or
corporations or associations owned or controlled by citizens of the Philippines.
The Parity Amendment was subsequently modified by the 1954 Revised Trade Agreement, also known as the Laurel-Langley Agreement, embodied in Republic
Act No. 1355.114

THE PETROLEUM ACT OF 1949 AND THE CONCESSION SYSTEM

In the meantime, Republic Act No. 387,115 also known as the Petroleum Act of 1949, was approved on June 18, 1949.

The Petroleum Act of 1949 employed the concession system for the exploitation of the nation's petroleum resources. Among the kinds of concessions it
sanctioned were exploration and exploitation concessions, which respectively granted to the concessionaire the exclusive right to explore for116 or
develop117 petroleum within specified areas.

Concessions may be granted only to duly qualified persons118 who have sufficient finances, organization, resources, technical competence, and skills necessary to
conduct the operations to be undertaken.119

Nevertheless, the Government reserved the right to undertake such work itself.120 This proceeded from the theory that all natural deposits or occurrences of
petroleum or natural gas in public and/or private lands in the Philippines belong to the State.121 Exploration and exploitation concessions did not confer upon the
concessionaire ownership over the petroleum lands and petroleum deposits.122 However, they did grant concessionaires the right to explore, develop, exploit,
and utilize them for the period and under the conditions determined by the law.123

Concessions were granted at the complete risk of the concessionaire; the Government did not guarantee the existence of petroleum or undertake, in any case,
title warranty.124

Concessionaires were required to submit information as maybe required by the Secretary of Agriculture and Natural Resources, including reports of geological
and geophysical examinations, as well as production reports.125Exploration126 and exploitation127 concessionaires were also required to submit work
programs.lavvphi1.net

Exploitation concessionaires, in particular, were obliged to pay an annual exploitation tax,128 the object of which is to induce the concessionaire to actually
produce petroleum, and not simply to sit on the concession without developing or exploiting it.129 These concessionaires were also bound to pay the
Government royalty, which was not less than 12½% of the petroleum produced and saved, less that consumed in the operations of the concessionaire.130 Under
Article 66, R.A. No. 387, the exploitation tax may be credited against the royalties so that if the concessionaire shall be actually producing enough oil, it would
not actually be paying the exploitation tax.131

Failure to pay the annual exploitation tax for two consecutive years,132 or the royalty due to the Government within one year from the date it becomes
due,133 constituted grounds for the cancellation of the concession. In case of delay in the payment of the taxes or royalty imposed by the law or by the
concession, a surcharge of 1% per month is exacted until the same are paid.134

As a rule, title rights to all equipment and structures that the concessionaire placed on the land belong to the exploration or exploitation concessionaire.135 Upon
termination of such concession, the concessionaire had a right to remove the same.136

The Secretary of Agriculture and Natural Resources was tasked with carrying out the provisions of the law, through the Director of Mines, who acted under the
Secretary's immediate supervision and control.137 The Act granted the Secretary the authority to inspect any operation of the concessionaire and to examine all
the books and accounts pertaining to operations or conditions related to payment of taxes and royalties.138

The same law authorized the Secretary to create an Administration Unit and a Technical Board.139 The Administration Unit was charged, inter alia, with the
enforcement of the provisions of the law.140 The Technical Board had, among other functions, the duty to check on the performance of concessionaires and to
determine whether the obligations imposed by the Act and its implementing regulations were being complied with.141

Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy Development, analyzed the benefits and drawbacks of the concession system insofar as it
applied to the petroleum industry:

Advantages of Concession. Whether it emphasizes income tax or royalty, the most positive aspect of the concession system is that the State's financial
involvement is virtually risk free and administration is simple and comparatively low in cost. Furthermore, if there is a competitive allocation of the resource
leading to substantial bonuses and/or greater royalty coupled with a relatively high level of taxation, revenue accruing to the State under the concession system
may compare favorably with other financial arrangements.

Disadvantages of Concession. There are, however, major negative aspects to this system. Because the Government's role in the traditional concession is passive,
it is at a distinct disadvantage in managing and developing policy for the nation's petroleum resource. This is true for several reasons. First, even though most
concession agreements contain covenants requiring diligence in operations and production, this establishes only an indirect and passive control of the host
country in resource development. Second, and more importantly, the fact that the host country does not directly participate in resource management decisions
inhibits its ability to train and employ its nationals in petroleum development. This factor could delay or prevent the country from effectively engaging in the
development of its resources. Lastly, a direct role in management is usually necessary in order to obtain a knowledge of the international petroleum industry
which is important to an appreciation of the host country's resources in relation to those of other countries.142

Other liabilities of the system have also been noted:

x x x there are functional implications which give the concessionaire great economic power arising from its exclusive equity holding. This includes, first,
appropriation of the returns of the undertaking, subject to a modest royalty; second, exclusive management of the project; third, control of production of the
natural resource, such as volume of production, expansion, research and development; and fourth, exclusive responsibility for downstream operations, like
processing, marketing, and distribution. In short, even if nominally, the state is the sovereign and owner of the natural resource being exploited, it has been
shorn of all elements of control over such natural resource because of the exclusive nature of the contractual regime of the concession. The concession system,
investing as it does ownership of natural resources, constitutes a consistent inconsistency with the principle embodied in our Constitution that natural resources
belong to the state and shall not be alienated, not to mention the fact that the concession was the bedrock of the colonial system in the exploitation of natural
resources.143

Eventually, the concession system failed for reasons explained by Dimagiba:

Notwithstanding the good intentions of the Petroleum Act of 1949, the concession system could not have properly spurred sustained oil exploration activities in
the country, since it assumed that such a capital-intensive, high risk venture could be successfully undertaken by a single individual or a small company. In effect,
concessionaires' funds were easily exhausted. Moreover, since the concession system practically closed its doors to interested foreign investors, local capital was
stretched to the limits. The old system also failed to consider the highly sophisticated technology and expertise required, which would be available only to
multinational companies.144

A shift to a new regime for the development of natural resources thus seemed imminent.

PRESIDENTIAL DECREE NO. 87, THE 1973 CONSTITUTION AND THE SERVICE CONTRACT SYSTEM

The promulgation on December 31, 1972 of Presidential Decree No. 87,145 otherwise known as The Oil Exploration and Development Act of 1972 signaled such a
transformation. P.D. No. 87 permitted the government to explore for and produce indigenous petroleum through "service contracts."146

"Service contracts" is a term that assumes varying meanings to different people, and it has carried many names in different countries, like "work contracts" in
Indonesia, "concession agreements" in Africa, "production-sharing agreements" in the Middle East, and "participation agreements" in Latin America.147 A
functional definition of "service contracts" in the Philippines is provided as follows:

A service contract is a contractual arrangement for engaging in the exploitation and development of petroleum, mineral, energy, land and other natural
resources by which a government or its agency, or a private person granted a right or privilege by the government authorizes the other party (service contractor)
to engage or participate in the exercise of such right or the enjoyment of the privilege, in that the latter provides financial or technical resources, undertakes the
exploitation or production of a given resource, or directly manages the productive enterprise, operations of the exploration and exploitation of the resources or
the disposition of marketing or resources.148

In a service contract under P.D. No. 87, service and technology are furnished by the service contractor for which it shall be entitled to the stipulated service
fee.149 The contractor must be technically competent and financially capable to undertake the operations required in the contract.150

Financing is supposed to be provided by the Government to which all petroleum produced belongs.151 In case the Government is unable to finance petroleum
exploration operations, the contractor may furnish services, technology and financing, and the proceeds of sale of the petroleum produced under the contract
shall be the source of funds for payment of the service fee and the operating expenses due the contractor.152 The contractor shall undertake, manage and
execute petroleum operations, subject to the government overseeing the management of the operations.153 The contractor provides all necessary services and
technology and the requisite financing, performs the exploration work obligations, and assumes all exploration risks such that if no petroleum is produced, it will
not be entitled to reimbursement.154 Once petroleum in commercial quantity is discovered, the contractor shall operate the field on behalf of the
government.155

P.D. No. 87 prescribed minimum terms and conditions for every service contract.156 It also granted the contractor certain privileges, including exemption from
taxes and payment of tariff duties,157 and permitted the repatriation of capital and retention of profits abroad.158

Ostensibly, the service contract system had certain advantages over the concession regime.159 It has been opined, though, that, in the Philippines, our concept of
a service contract, at least in the petroleum industry, was basically a concession regime with a production-sharing element.160

On January 17, 1973, then President Ferdinand E. Marcos proclaimed the ratification of a new Constitution.161Article XIV on the National Economy and
Patrimony contained provisions similar to the 1935 Constitution with regard to Filipino participation in the nation's natural resources. Section 8, Article XIV
thereof provides:

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural
resources of the Philippines belong to the State. With the exception of agricultural, industrial or commercial, residential and resettlement lands of the public
domain, natural resources shall not be alienated, and no license, concession, or lease for the exploration, development, exploitation, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five years, renewable for not more than twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and the limit
of the grant.

While Section 9 of the same Article maintained the Filipino-only policy in the enjoyment of natural resources, it also allowed Filipinos, upon authority of the
Batasang Pambansa, to enter into service contracts with any person or entity for the exploration or utilization of natural resources.

Sec. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural resources of the Philippines shall be limited to citizens, or to
corporations or associations at least sixty per centum of which is owned by such citizens. The Batasang Pambansa, in the national interest, may allow such
citizens, corporations or associations to enter into service contracts for financial, technical, management, or other forms of assistance with any person or entity
for the exploration, or utilization of any of the natural resources. Existing valid and binding service contracts for financial, technical, management, or other forms
of assistance are hereby recognized as such. [Emphasis supplied.]

The concept of service contracts, according to one delegate, was borrowed from the methods followed by India, Pakistan and especially Indonesia in the
exploration of petroleum and mineral oils.162 The provision allowing such contracts, according to another, was intended to "enhance the proper development of
our natural resources since Filipino citizens lack the needed capital and technical know-how which are essential in the proper exploration, development and
exploitation of the natural resources of the country."163
The original idea was to authorize the government, not private entities, to enter into service contracts with foreign entities.164 As finally approved, however, a
citizen or private entity could be allowed by the National Assembly to enter into such service contract.165 The prior approval of the National Assembly was
deemed sufficient to protect the national interest.166 Notably, none of the laws allowing service contracts were passed by the Batasang Pambansa. Indeed, all of
them were enacted by presidential decree.

On March 13, 1973, shortly after the ratification of the new Constitution, the President promulgated Presidential Decree No. 151.167 The law allowed Filipino
citizens or entities which have acquired lands of the public domain or which own, hold or control such lands to enter into service contracts for financial, technical,
management or other forms of assistance with any foreign persons or entity for the exploration, development, exploitation or utilization of said lands.168

Presidential Decree No. 463,169 also known as The Mineral Resources Development Decree of 1974, was enacted on May 17, 1974. Section 44 of the decree, as
amended, provided that a lessee of a mining claim may enter into a service contract with a qualified domestic or foreign contractor for the exploration,
development and exploitation of his claims and the processing and marketing of the product thereof.

Presidential Decree No. 704170 (The Fisheries Decree of 1975), approved on May 16, 1975, allowed Filipinos engaged in commercial fishing to enter into
contracts for financial, technical or other forms of assistance with any foreign person, corporation or entity for the production, storage, marketing and
processing of fish and fishery/aquatic products.171

Presidential Decree No. 705172 (The Revised Forestry Code of the Philippines), approved on May 19, 1975, allowed "forest products licensees, lessees, or
permitees to enter into service contracts for financial, technical, management, or other forms of assistance . . . with any foreign person or entity for the
exploration, development, exploitation or utilization of the forest resources."173

Yet another law allowing service contracts, this time for geothermal resources, was Presidential Decree No. 1442,174 which was signed into law on June 11, 1978.
Section 1 thereof authorized the Government to enter into service contracts for the exploration, exploitation and development of geothermal resources with a
foreign contractor who must be technically and financially capable of undertaking the operations required in the service contract.

Thus, virtually the entire range of the country's natural resources –from petroleum and minerals to geothermal energy, from public lands and forest resources to
fishery products – was well covered by apparent legal authority to engage in the direct participation or involvement of foreign persons or corporations
(otherwise disqualified) in the exploration and utilization of natural resources through service contracts.175

THE 1987 CONSTITUTION AND TECHNICAL OR FINANCIAL ASSISTANCE AGREEMENTS

After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins of power under a revolutionary government. On March 25, 1986, President Aquino
issued Proclamation No. 3,176 promulgating the Provisional Constitution, more popularly referred to as the Freedom Constitution. By authority of the same
Proclamation, the President created a Constitutional Commission (CONCOM) to draft a new constitution, which took effect on the date of its ratification on
February 2, 1987.177

The 1987 Constitution retained the Regalian doctrine. The first sentence of Section 2, Article XII states: "All lands of the public domain, waters, 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."

Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the second sentence of the same provision, prohibits the alienation of natural resources,
except agricultural lands.

The third sentence of the same paragraph is new: "The exploration, development and utilization of natural resources shall be under the full control and
supervision of the State." The constitutional policy of the State's "full control and supervision" over natural resources proceeds from the concept of jura regalia,
as well as the recognition of the importance of the country's natural resources, not only for national economic development, but also for its security and
national defense.178 Under this provision, the State assumes "a more dynamic role" in the exploration, development and utilization of natural resources.179

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. By such omission, the utilization of inalienable lands of public domain through
"license, concession or lease" is no longer allowed under the 1987 Constitution.180

Having omitted the provision on the concession system, Section 2 proceeded to introduce "unfamiliar language":181

The State may directly undertake such activities or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or
corporations or associations at least sixty per centum of whose capital is owned by such citizens.

Consonant with the State's "full supervision and control" over natural resources, Section 2 offers the State two "options."182 One, the State may directly
undertake these activities itself; or two, it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or entities at
least 60% of whose capital is owned by such citizens.

A third option is found in the third paragraph of the same section:

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence
fishermen and fish-workers in rivers, lakes, bays, and lagoons.

While the second and third options are limited only to Filipino citizens or, in the case of the former, to corporations or associations at least 60% of the capital of
which is owned by Filipinos, a fourth allows the participation of foreign-owned corporations. The fourth and fifth paragraphs of Section 2 provide:
The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local
scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.

Although Section 2 sanctions the participation of foreign-owned corporations in the exploration, development, and utilization of natural resources, it imposes
certain limitations or conditions to agreements with such corporations.

First, the parties to FTAAs. Only the President, in behalf of the State, may enter into these agreements, and only with corporations. By contrast, under the 1973
Constitution, a Filipino citizen, corporation or association may enter into a service contract with a "foreign person or entity."

Second, the size of the activities: only large-scale exploration, development, and utilization is allowed. The term "large-scale usually refers to very
capital-intensive activities."183

Third, the natural resources subject of the activities is restricted to minerals, petroleum and other mineral oils, the intent being to limit service contracts to
those areas where Filipino capital may not be sufficient.184

Fourth, consistency with the provisions of statute. The agreements must be in accordance with the terms and conditions provided by law.

Fifth, Section 2 prescribes certain standards for entering into such agreements. The agreements must be based on real contributions to economic growth and
general welfare of the country.

Sixth, the agreements must contain rudimentary stipulations for the promotion of the development and use of local scientific and technical resources.

Seventh, the notification requirement. The President shall notify Congress of every financial or technical assistance agreement entered into within thirty days
from its execution.

Finally, the scope of the agreements. While the 1973 Constitution referred to "service contracts for financial, technical, management, or other forms of
assistance" the 1987 Constitution provides for "agreements. . . involving either financial or technical assistance." It bears noting that the phrases "service
contracts" and "management or other forms of assistance" in the earlier constitution have been omitted.

By virtue of her legislative powers under the Provisional Constitution,185 President Aquino, on July 10, 1987, signed into law E.O. No. 211 prescribing the interim
procedures in the processing and approval of applications for the exploration, development and utilization of minerals. The omission in the 1987 Constitution of
the term "service contracts" notwithstanding, the said E.O. still referred to them in Section 2 thereof:

Sec. 2. Applications for the exploration, development and utilization of mineral resources, including renewal applications and applications for approval of
operating agreements and mining service contracts, shall be accepted and processed and may be approved x x x. [Emphasis supplied.]

The same law provided in its Section 3 that the "processing, evaluation and approval of all mining applications . . . operating agreements and service contracts . . .
shall be governed by Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations. . . ."

As earlier stated, on the 25th also of July 1987, the President issued E.O. No. 279 by authority of which the subject WMCP FTAA was executed on March 30,
1995.

On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section 15 thereof declares that the Act "shall govern the exploration, development,
utilization, and processing of all mineral resources." Such declaration notwithstanding, R.A. No. 7942 does not actually cover all the modes through which the
State may undertake the exploration, development, and utilization of natural resources.

The State, being the owner of the natural resources, is accorded the primary power and responsibility in the exploration, development and utilization thereof. As
such, it may undertake these activities through four modes:

The State may directly undertake such activities.

(2) The State may enter into co-production, joint venture or production-sharing agreements with Filipino citizens or qualified corporations.

(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens.

(4) For the large-scale exploration, development and utilization of minerals, petroleum and other mineral oils, the President may enter into agreements with
foreign-owned corporations involving technical or financial assistance.186

Except to charge the Mines and Geosciences Bureau of the DENR with performing researches and surveys,187 and a passing mention of government-owned or
controlled corporations,188 R.A. No. 7942 does not specify how the State should go about the first mode. The third mode, on the other hand, is governed by
Republic Act No. 7076189(the People's Small-Scale Mining Act of 1991) and other pertinent laws.190 R.A. No. 7942 primarily concerns itself with the second and
fourth modes.

Mineral production sharing, co-production and joint venture agreements are collectively classified by R.A. No. 7942 as "mineral agreements."191 The
Government participates the least in a mineral production sharing agreement (MPSA). In an MPSA, the Government grants the contractor192 the exclusive right
to conduct mining operations within a contract area193 and shares in the gross output.194 The MPSA contractor provides the financing, technology, management
and personnel necessary for the agreement's implementation.195 The total government share in an MPSA is the excise tax on mineral products under Republic
Act No. 7729,196 amending Section 151(a) of the National Internal Revenue Code, as amended.197

In a co-production agreement (CA),198 the Government provides inputs to the mining operations other than the mineral resource,199 while in a joint venture
agreement (JVA), where the Government enjoys the greatest participation, the Government and the JVA contractor organize a company with both parties having
equity shares.200 Aside from earnings in equity, the Government in a JVA is also entitled to a share in the gross output.201The Government may enter into a
CA202 or JVA203 with one or more contractors. The Government's share in a CA or JVA is set out in Section 81 of the law:

The share of the Government in co-production and joint venture agreements shall be negotiated by the Government and the contractor taking into
consideration the: (a) capital investment of the project, (b) the risks involved, (c) contribution of the project to the economy, and (d) other factors that will
provide for a fair and equitable sharing between the Government and the contractor. The Government shall also be entitled to compensations for its other
contributions which shall be agreed upon by the parties, and shall consist, among other things, the contractor's income tax, excise tax, special allowance,
withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of a foreign
national and all such other taxes, duties and fees as provided for under existing laws.

All mineral agreements grant the respective contractors the exclusive right to conduct mining operations and to extract all mineral resources found in the
contract area.204 A "qualified person" may enter into any of the mineral agreements with the Government.205 A "qualified person" is

any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or authorized for the purpose of
engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law at least sixty
per centum (60%) of the capital of which is owned by citizens of the Philippines x x x.206

The fourth mode involves "financial or technical assistance agreements." An FTAA is defined as "a contract involving financial or technical assistance for
large-scale exploration, development, and utilization of natural resources."207 Any qualified person with technical and financial capability to undertake
large-scale exploration, development, and utilization of natural resources in the Philippines may enter into such agreement directly with the Government
through the DENR.208 For the purpose of granting an FTAA, a legally organized foreign-owned corporation (any corporation, partnership, association, or
cooperative duly registered in accordance with law in which less than 50% of the capital is owned by Filipino citizens)209 is deemed a "qualified person."210

Other than the difference in contractors' qualifications, the principal distinction between mineral agreements and FTAAs is the maximum contract area to which
a qualified person may hold or be granted.211 "Large-scale" under R.A. No. 7942 is determined by the size of the contract area, as opposed to the amount
invested (US $50,000,000.00), which was the standard under E.O. 279.

Like a CA or a JVA, an FTAA is subject to negotiation.212 The Government's contributions, in the form of taxes, in an FTAA is identical to its contributions in the
two mineral agreements, save that in an FTAA:

The collection of Government share in financial or technical assistance agreement shall commence after the financial or technical assistance agreement
contractor has fully recovered its pre-operating expenses, exploration, and development expenditures, inclusive.213

III

Having examined the history of the constitutional provision and statutes enacted pursuant thereto, a consideration of the substantive issues presented by the
petition is now in order.

THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279

Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA was executed, did not come into effect.

E.O. No. 279 was signed into law by then President Aquino on July 25, 1987, two days before the opening of Congress on July 27, 1987.214 Section 8 of the E.O.
states that the same "shall take effect immediately." This provision, according to petitioners, runs counter to Section 1 of E.O. No. 200,215 which provides:

SECTION 1. Laws shall take effect after fifteen days following the completion of their publication either in the Official Gazette or in a newspaper of general
circulation in the Philippines, unless it is otherwise provided.216 [Emphasis supplied.]

On that premise, petitioners contend that E.O. No. 279 could have only taken effect fifteen days after its publication at which time Congress had already
convened and the President's power to legislate had ceased.

Respondents, on the other hand, counter that the validity of E.O. No. 279 was settled in Miners Association of the Philippines v. Factoran, supra. This is of course
incorrect for the issue in Miners Association was not the validity of E.O. No. 279 but that of DAO Nos. 57 and 82 which were issued pursuant thereto.

Nevertheless, petitioners' contentions have no merit.

It bears noting that there is nothing in E.O. No. 200 that prevents a law from taking effect on a date other than – even before – the 15-day period after its
publication. Where a law provides for its own date of effectivity, such date prevails over that prescribed by E.O. No. 200. Indeed, this is the very essence of the
phrase "unless it is otherwise provided" in Section 1 thereof. Section 1, E.O. No. 200, therefore, applies only when a statute does not provide for its own date of
effectivity.

What is mandatory under E.O. No. 200, and what due process requires, as this Court held in Tañada v. Tuvera,217is the publication of the law for without such
notice and publication, there would be no basis for the application of the maxim "ignorantia legis n[eminem] excusat." It would be the height of injustice to
punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one.
While the effectivity clause of E.O. No. 279 does not require its publication, it is not a ground for its invalidation since the Constitution, being "the fundamental,
paramount and supreme law of the nation," is deemed written in the law.218 Hence, the due process clause,219 which, so Tañada held, mandates the publication
of statutes, is read into Section 8 of E.O. No. 279. Additionally, Section 1 of E.O. No. 200 which provides for publication "either in the Official Gazette or in a
newspaper of general circulation in the Philippines," finds suppletory application. It is significant to note that E.O. No. 279 was actually published in the Official
Gazette220 on August 3, 1987.

From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Tañada v. Tuvera, this Court holds that E.O. No. 279 became effective
immediately upon its publication in the Official Gazette on August 3, 1987.

That such effectivity took place after the convening of the first Congress is irrelevant. At the time President Aquino issued E.O. No. 279 on July 25, 1987, she was
still validly exercising legislative powers under the Provisional Constitution.221 Article XVIII (Transitory Provisions) of the 1987 Constitution explicitly states:

Sec. 6. The incumbent President shall continue to exercise legislative powers until the first Congress is convened.

The convening of the first Congress merely precluded the exercise of legislative powers by President Aquino; it did not prevent the effectivity of laws she had
previously enacted.

There can be no question, therefore, that E.O. No. 279 is an effective, and a validly enacted, statute.

THE CONSTITUTIONALITY OF THE WMCP FTAA

Petitioners submit that, in accordance with the text of Section 2, Article XII of the Constitution, FTAAs should be limited to "technical or financial assistance" only.
They observe, however, that, contrary to the language of the Constitution, the WMCP FTAA allows WMCP, a fully foreign-owned mining corporation, to extend
more than mere financial or technical assistance to the State, for it permits WMCP to manage and operate every aspect of the mining activity. 222

Petitioners' submission is well-taken. It is a cardinal rule in the interpretation of constitutions that the instrument must be so construed as to give effect to the
intention of the people who adopted it.223 This intention is to be sought in the constitution itself, and the apparent meaning of the words is to be taken as
expressing it, except in cases where that assumption would lead to absurdity, ambiguity, or contradiction.224 What the Constitution says according to the text of
the provision, therefore, compels acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the people mean what
they say.225 Accordingly, following the literal text of the Constitution, assistance accorded by foreign-owned corporations in the large-scale exploration,
development, and utilization of petroleum, minerals and mineral oils should be limited to "technical" or "financial" assistance only.

WMCP nevertheless submits that the word "technical" in the fourth paragraph of Section 2 of E.O. No. 279 encompasses a "broad number of possible services,"
perhaps, "scientific and/or technological in basis."226 It thus posits that it may also well include "the area of management or operations . . . so long as such
assistance requires specialized knowledge or skills, and are related to the exploration, development and utilization of mineral resources."227

This Court is not persuaded. As priorly pointed out, the phrase "management or other forms of assistance" in the 1973 Constitution was deleted in the 1987
Constitution, which allows only "technical or financial assistance." Casus omisus pro omisso habendus est. A person, object or thing omitted from an
enumeration must be held to have been omitted intentionally.228 As will be shown later, the management or operation of mining activities by foreign
contractors, which is the primary feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution sought to eradicate.

Respondents insist that "agreements involving technical or financial assistance" is just another term for service contracts. They contend that the proceedings of
the CONCOM indicate "that although the terminology 'service contract' was avoided [by the Constitution], the concept it represented was not." They add that
"[t]he concept is embodied in the phrase 'agreements involving financial or technical assistance.'"229 And point out how members of the CONCOM referred to
these agreements as "service contracts." For instance:

SR. TAN. Am I correct in thinking that the only difference between these future service contracts and the past service contracts under Mr. Marcos is the general
law to be enacted by the legislature and the notification of Congress by the President? That is the only difference, is it not?

MR. VILLEGAS. That is right.

SR. TAN. So those are the safeguards[?]

MR. VILLEGAS. Yes. There was no law at all governing service contracts before.

SR. TAN. Thank you, Madam President.230 [Emphasis supplied.]

WMCP also cites the following statements of Commissioners Gascon, Garcia, Nolledo and Tadeo who alluded to service contracts as they explained their
respective votes in the approval of the draft Article:

MR. GASCON. Mr. Presiding Officer, I vote no primarily because of two reasons: One, the provision on service contracts. I felt that if we would constitutionalize
any provision on service contracts, this should always be with the concurrence of Congress and not guided only by a general law to be promulgated by Congress.
x x x.231 [Emphasis supplied.]

x x x.

MR. GARCIA. Thank you.

I vote no. x x x.
Service contracts are given constitutional legitimization in Section 3, even when they have been proven to be inimical to the interests of the nation, providing as
they do the legal loophole for the exploitation of our natural resources for the benefit of foreign interests. They constitute a serious negation of Filipino control
on the use and disposition of the nation's natural resources, especially with regard to those which are nonrenewable.232[Emphasis supplied.]

xxx

MR. NOLLEDO. While there are objectionable provisions in the Article on National Economy and Patrimony, going over said provisions meticulously, setting aside
prejudice and personalities will reveal that the article contains a balanced set of provisions. I hope the forthcoming Congress will implement such provisions
taking into account that Filipinos should have real control over our economy and patrimony, and if foreign equity is permitted, the same must be subordinated
to the imperative demands of the national interest.

x x x.

It is also my understanding that service contracts involving foreign corporations or entities are resorted to only when no Filipino enterprise or Filipino-controlled
enterprise could possibly undertake the exploration or exploitation of our natural resources and that compensation under such contracts cannot and should not
equal what should pertain to ownership of capital. In other words, the service contract should not be an instrument to circumvent the basic provision, that the
exploration and exploitation of natural resources should be truly for the benefit of Filipinos.

Thank you, and I vote yes.233 [Emphasis supplied.]

x x x.

MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.

Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin, pangunahin ang salitang "imperyalismo." Ang ibig sabihin nito ay ang sistema ng lipunang
pinaghaharian ng iilang monopolyong kapitalista at ang salitang "imperyalismo" ay buhay na buhay sa National Economy and Patrimony na nating ginawa. Sa
pamamagitan ng salitang "based on," naroroon na ang free trade sapagkat tayo ay mananatiling tagapagluwas ng hilaw na sangkap at tagaangkat ng yaring
produkto. Pangalawa, naroroon pa rin ang parity rights, ang service contract, ang 60-40 equity sa natural resources. Habang naghihirap ang sambayanang
Pilipino, ginagalugad naman ng mga dayuhan ang ating likas na yaman. Kailan man ang Article on National Economy and Patrimony ay hindi nagpaalis sa
pagkaalipin ng ating ekonomiya sa kamay ng mga dayuhan. Ang solusyon sa suliranin ng bansa ay dalawa lamang: ang pagpapatupad ng tunay na reporma sa
lupa at ang national industrialization. Ito ang tinatawag naming pagsikat ng araw sa Silangan. Ngunit ang mga landlords and big businessmen at ang mga
komprador ay nagsasabi na ang free trade na ito, ang kahulugan para sa amin, ay ipinipilit sa ating sambayanan na ang araw ay sisikat sa Kanluran. Kailan man
hindi puwedeng sumikat ang araw sa Kanluran. I vote no.234 [Emphasis supplied.]

This Court is likewise not persuaded.

As earlier noted, the phrase "service contracts" has been deleted in the 1987 Constitution's Article on National Economy and Patrimony. If the CONCOM
intended to retain the concept of service contracts under the 1973 Constitution, it could have simply adopted the old terminology ("service contracts") instead
of employing new and unfamiliar terms ("agreements . . . involving either technical or financial assistance"). Such a difference between the language of a
provision in a revised constitution and that of a similar provision in the preceding constitution is viewed as indicative of a difference in purpose.235 If, as
respondents suggest, the concept of "technical or financial assistance" agreements is identical to that of "service contracts," the CONCOM would not have
bothered to fit the same dog with a new collar. To uphold respondents' theory would reduce the first to a mere euphemism for the second and render the
change in phraseology meaningless.

An examination of the reason behind the change confirms that technical or financial assistance agreements are not synonymous to service contracts.

[T]he Court in construing a Constitution should bear in mind the object sought to be accomplished by its adoption, and the evils, if any, sought to be prevented
or remedied. A doubtful provision will be examined in light of the history of the times, and the condition and circumstances under which the Constitution was
framed. The object is to ascertain the reason which induced the framers of the Constitution to enact the particular provision and the purpose sought to be
accomplished thereby, in order to construe the whole as to make the words consonant to that reason and calculated to effect that purpose.236

As the following question of Commissioner Quesada and Commissioner Villegas' answer shows the drafters intended to do away with service contracts which
were used to circumvent the capitalization (60%-40%) requirement:

MS. QUESADA. The 1973 Constitution used the words "service contracts." In this particular Section 3, is there a safeguard against the possible control of foreign
interests if the Filipinos go into coproduction with them?

MR. VILLEGAS. Yes. In fact, the deletion of the phrase "service contracts" was our first attempt to avoid some of the abuses in the past regime in the use of
service contracts to go around the 60-40 arrangement. The safeguard that has been introduced – and this, of course can be refined – is found in Section 3, lines
25 to 30, where Congress will have to concur with the President on any agreement entered into between a foreign-owned corporation and the government
involving technical or financial assistance for large-scale exploration, development and utilization of natural resources.237 [Emphasis supplied.]

In a subsequent discussion, Commissioner Villegas allayed the fears of Commissioner Quesada regarding the participation of foreign interests in Philippine
natural resources, which was supposed to be restricted to Filipinos.

MS. QUESADA. Another point of clarification is the phrase "and utilization of natural resources shall be under the full control and supervision of the State." In the
1973 Constitution, this was limited to citizens of the Philippines; but it was removed and substituted by "shall be under the full control and supervision of the
State." Was the concept changed so that these particular resources would be limited to citizens of the Philippines? Or would these resources only be under the
full control and supervision of the State; meaning, noncitizens would have access to these natural resources? Is that the understanding?

MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads the next sentence, it states:
Such activities may be directly undertaken by the State, or it may enter into co-production, joint venture, production-sharing agreements with Filipino citizens.

So we are still limiting it only to Filipino citizens.

x x x.

MS. QUESADA. Going back to Section 3, the section suggests that:

The exploration, development, and utilization of natural resources… may be directly undertaken by the State, or it may enter into co-production, joint venture or
production-sharing agreement with . . . corporations or associations at least sixty per cent of whose voting stock or controlling interest is owned by such citizens.

Lines 25 to 30, on the other hand, suggest that in the large-scale exploration, development and utilization of natural resources, the President with the
concurrence of Congress may enter into agreements with foreign-owned corporations even for technical or financial assistance.

I wonder if this part of Section 3 contradicts the second part. I am raising this point for fear that foreign investors will use their enormous capital resources to
facilitate the actual exploitation or exploration, development and effective disposition of our natural resources to the detriment of Filipino investors. I am not
saying that we should not consider borrowing money from foreign sources. What I refer to is that foreign interest should be allowed to participate only to the
extent that they lend us money and give us technical assistance with the appropriate government permit. In this way, we can insure the enjoyment of our
natural resources by our own people.

MR. VILLEGAS. Actually, the second provision about the President does not permit foreign investors to participate. It is only technical or financial assistance –
they do not own anything – but on conditions that have to be determined by law with the concurrence of Congress. So, it is very restrictive.

If the Commissioner will remember, this removes the possibility for service contracts which we said yesterday were avenues used in the previous regime to go
around the 60-40 requirement.238 [Emphasis supplied.]

The present Chief Justice, then a member of the CONCOM, also referred to this limitation in scope in proposing an amendment to the 60-40 requirement:

MR. DAVIDE. May I be allowed to explain the proposal?

MR. MAAMBONG. Subject to the three-minute rule, Madam President.

MR. DAVIDE. It will not take three minutes.

The Commission had just approved the Preamble. In the Preamble we clearly stated that the Filipino people are sovereign and that one of the objectives for the
creation or establishment of a government is to conserve and develop the national patrimony. The implication is that the national patrimony or our natural
resources are exclusively reserved for the Filipino people. No alien must be allowed to enjoy, exploit and develop our natural resources. As a matter of fact, that
principle proceeds from the fact that our natural resources are gifts from God to the Filipino people and it would be a breach of that special blessing from God if
we will allow aliens to exploit our natural resources.

I voted in favor of the Jamir proposal because it is not really exploitation that we granted to the alien corporations but only for them to render financial or
technical assistance. It is not for them to enjoy our natural resources. Madam President, our natural resources are depleting; our population is increasing by
leaps and bounds. Fifty years from now, if we will allow these aliens to exploit our natural resources, there will be no more natural resources for the next
generations of Filipinos. It may last long if we will begin now. Since 1935 the aliens have been allowed to enjoy to a certain extent the exploitation of our natural
resources, and we became victims of foreign dominance and control. The aliens are interested in coming to the Philippines because they would like to enjoy the
bounty of nature exclusively intended for Filipinos by God.

And so I appeal to all, for the sake of the future generations, that if we have to pray in the Preamble "to preserve and develop the national patrimony for the
sovereign Filipino people and for the generations to come," we must at this time decide once and for all that our natural resources must be reserved only to
Filipino citizens.

Thank you.239 [Emphasis supplied.]

The opinion of another member of the CONCOM is persuasive240 and leaves no doubt as to the intention of the framers to eliminate service contracts altogether.
He writes:

Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly technological undertakings for which the President may enter into contracts with
foreign-owned corporations, and enunciates strict conditions that should govern such contracts. x x x.

This provision balances the need for foreign capital and technology with the need to maintain the national sovereignty. It recognizes the fact that as long as
Filipinos can formulate their own terms in their own territory, there is no danger of relinquishing sovereignty to foreign interests.

Are service contracts allowed under the new Constitution? No. Under the new Constitution, foreign investors (fully alien-owned) can NOT participate in Filipino
enterprises except to provide: (1) Technical Assistance for highly technical enterprises; and (2) Financial Assistance for large-scale enterprises.

The intent of this provision, as well as other provisions on foreign investments, is to prevent the practice (prevalent in the Marcos government) of skirting the
60/40 equation using the cover of service contracts.241 [Emphasis supplied.]
Furthermore, it appears that Proposed Resolution No. 496,242 which was the draft Article on National Economy and Patrimony, adopted the concept of
"agreements . . . involving either technical or financial assistance" contained in the "Draft of the 1986 U.P. Law Constitution Project" (U.P. Law draft) which was
taken into consideration during the deliberation of the CONCOM.243 The former, as well as Article XII, as adopted, employed the same terminology, as the
comparative table below shows:

DRAFT OF THE UP LAW CONSTITUTION PROPOSED RESOLUTION NO. 496 OF THE

ARTICLE XII OF THE 1987 CONSTITUTION
PROJECT CONSTITUTIONAL COMMISSION

Sec. 2. All lands of the public domain, waters, minerals,

Sec. 1. All lands of the public domain,
waters, minerals, coal, petroleum and
other mineral oils, all forces of potential
energy, fisheries, flora and fauna and
other natural resources of the Philippines
are owned by the State. With the
exception of agricultural lands, all other
natural resources shall not be alienated.
The exploration, development and
utilization of natural resources shall be
under the full control and supervision of
the State. Such activities may be directly
undertaken by the state, or it may enter
into co-production, joint venture,
production sharing agreements with
Filipino citizens or corporations or
associations sixty per cent of whose
voting stock or controlling interest is
owned by such citizens for a period of
not more than twenty-five years,
renewable for not more than twenty-five
years and under such terms and
conditions as may be provided by law. In
case as to water rights for irrigation,
water supply, fisheries, or industrial uses
other than the development of water
power, beneficial use may be the
measure and limit of the grant.
The National Assembly may by law allow
small scale utilization of natural
resources by Filipino citizens.
The National Assembly, may, by
two-thirds vote of all its members by
special law provide the terms and
conditions under which a foreign-owned
corporation may enter into agreements
with the government involving either
technical or financial assistance for
large-scale exploration, development, or
utilization of natural resources.
[Emphasis supplied.]
Sec. 3. All lands of the public domain,
waters, minerals, coal, petroleum and
other mineral oils, all forces of potential
energy, fisheries, forests, flora and fauna,
and other natural resources are owned
by the State. With the exception of
agricultural lands, all other natural
resources shall not be alienated. The
exploration, development, and utilization
of natural resources shall be under the
full control and supervision of the State.
Such activities may be directly
undertaken by the State, or it may enter
into co-production, joint venture,
production-sharing agreements with
Filipino citizens or corporations or
associations at least sixty per cent of
whose voting stock or controlling interest
is owned by such citizens. Such
agreements shall be for a period of
twenty-five years, renewable for not
more than twenty-five years, and under
such term and conditions as may be
provided by law. In cases of water rights
for irrigation, water supply, fisheries or
industrial uses other than the
development for water power, beneficial
use may be the measure and limit of the
grant.
The Congress may by law allow
small-scale utilization of natural
resources by Filipino citizens, as well as
cooperative fish farming in rivers, lakes,
bays, and lagoons.
The President with the concurrence of
Congress, by special law, shall provide
the terms and conditions under which a
foreign-owned corporation may enter
into agreements with the government
involving either technical or financial
assistance for large-scale exploration,
development, and utilization of natural
resources. [Emphasis supplied.]
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. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. The
State may directly undertake such activities or it may
enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or
corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements
may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under
such terms and conditions as may be provided by law. In
case of water rights for irrigation, water supply, fisheries,
or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the
grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence
fishermen and fish-workers in rivers, lakes, bays, and
lagoons.
The President may enter into agreements with
foreign-owned corporations involving either technical or
financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and
other mineral oils according to the general terms and
conditions provided by law, based on real contributions to
the economic growth and general welfare of the country.
In such agreements, the State shall promote the
development and use of local scientific and technical
resources. [Emphasis supplied.]
The President shall notify the Congress of every contract
entered into in accordance with this provision, within
thirty days from its execution.

The insights of the proponents of the U.P. Law draft are, therefore, instructive in interpreting the phrase "technical or financial assistance."

In his position paper entitled Service Contracts: Old Wine in New Bottles?, Professor Pacifico A. Agabin, who was a member of the working group that prepared
the U.P. Law draft, criticized service contracts for they "lodge exclusive management and control of the enterprise to the service contractor, which is reminiscent
of the old concession regime. Thus, notwithstanding the provision of the Constitution that natural resources belong to the State, and that these shall not be
alienated, the service contract system renders nugatory the constitutional provisions cited."244 He elaborates:

Looking at the Philippine model, we can discern the following vestiges of the concession regime, thus:

1. Bidding of a selected area, or leasing the choice of the area to the interested party and then negotiating the terms and conditions of the contract; (Sec. 5, P.D.
87)

2. Management of the enterprise vested on the contractor, including operation of the field if petroleum is discovered; (Sec. 8, P.D. 87)
3. Control of production and other matters such as expansion and development; (Sec. 8)

4. Responsibility for downstream operations – marketing, distribution, and processing may be with the contractor (Sec. 8);

5. Ownership of equipment, machinery, fixed assets, and other properties remain with contractor (Sec. 12, P.D. 87);

6. Repatriation of capital and retention of profits abroad guaranteed to the contractor (Sec. 13, P.D. 87); and

7. While title to the petroleum discovered may nominally be in the name of the government, the contractor has almost unfettered control over its disposition
and sale, and even the domestic requirements of the country is relegated to a pro rata basis (Sec. 8).

In short, our version of the service contract is just a rehash of the old concession regime x x x. Some people have pulled an old rabbit out of a magician's hat, and
foisted it upon us as a new and different animal.

The service contract as we know it here is antithetical to the principle of sovereignty over our natural resources restated in the same article of the [1973]
Constitution containing the provision for service contracts. If the service contractor happens to be a foreign corporation, the contract would also run counter to
the constitutional provision on nationalization or Filipinization, of the exploitation of our natural resources.245 [Emphasis supplied. Underscoring in the original.]

Professor Merlin M. Magallona, also a member of the working group, was harsher in his reproach of the system:

x x x the nationalistic phraseology of the 1935 [Constitution] was retained by the [1973] Charter, but the essence of nationalism was reduced to hollow rhetoric.
The 1973 Charter still provided that the exploitation or development of the country's natural resources be limited to Filipino citizens or corporations owned or
controlled by them. However, the martial-law Constitution allowed them, once these resources are in their name, to enter into service contracts with foreign
investors for financial, technical, management, or other forms of assistance. Since foreign investors have the capital resources, the actual exploitation and
development, as well as the effective disposition, of the country's natural resources, would be under their direction, and control, relegating the Filipino investors
to the role of second-rate partners in joint ventures.

Through the instrumentality of the service contract, the 1973 Constitution had legitimized at the highest level of state policy that which was prohibited under
the 1973 Constitution, namely: the exploitation of the country's natural resources by foreign nationals. The drastic impact of [this] constitutional change
becomes more pronounced when it is considered that the active party to any service contract may be a corporation wholly owned by foreign interests. In such a
case, the citizenship requirement is completely set aside, permitting foreign corporations to obtain actual possession, control, and [enjoyment] of the country's
natural resources.246 [Emphasis supplied.]

Accordingly, Professor Agabin recommends that:

Recognizing the service contract for what it is, we have to expunge it from the Constitution and reaffirm ownership over our natural resources. That is the only
way we can exercise effective control over our natural resources.

This should not mean complete isolation of the country's natural resources from foreign investment. Other contract forms which are less derogatory to our
sovereignty and control over natural resources – like technical assistance agreements, financial assistance [agreements], co-production agreements, joint
ventures, production-sharing – could still be utilized and adopted without violating constitutional provisions. In other words, we can adopt contract forms which
recognize and assert our sovereignty and ownership over natural resources, and where the foreign entity is just a pure contractor instead of the beneficial
owner of our economic resources.247 [Emphasis supplied.]

Still another member of the working group, Professor Eduardo Labitag, proposed that:

2. Service contracts as practiced under the 1973 Constitution should be discouraged, instead the government may be allowed, subject to authorization by special
law passed by an extraordinary majority to enter into either technical or financial assistance. This is justified by the fact that as presently worded in the 1973
Constitution, a service contract gives full control over the contract area to the service contractor, for him to work, manage and dispose of the proceeds or
production. It was a subterfuge to get around the nationality requirement of the constitution.248[Emphasis supplied.]

In the annotations on the proposed Article on National Economy and Patrimony, the U.P. Law draft summarized the rationale therefor, thus:

5. The last paragraph is a modification of the service contract provision found in Section 9, Article XIV of the 1973 Constitution as amended. This 1973 provision
shattered the framework of nationalism in our fundamental law (see Magallona, "Nationalism and its Subversion in the Constitution"). Through the service
contract, the 1973 Constitution had legitimized that which was prohibited under the 1935 constitution—the exploitation of the country's natural resources by
foreign nationals. Through the service contract, acts prohibited by the Anti-Dummy Law were recognized as legitimate arrangements. Service contracts lodge
exclusive management and control of the enterprise to the service contractor, not unlike the old concession regime where the concessionaire had complete
control over the country's natural resources, having been given exclusive and plenary rights to exploit a particular resource and, in effect, having been assured of
ownership of that resource at the point of extraction (see Agabin, "Service Contracts: Old Wine in New Bottles"). Service contracts, hence, are antithetical to the
principle of sovereignty over our natural resources, as well as the constitutional provision on nationalization or Filipinization of the exploitation of our natural
resources.

Under the proposed provision, only technical assistance or financial assistance agreements may be entered into, and only for large-scale activities. These are
contract forms which recognize and assert our sovereignty and ownership over natural resources since the foreign entity is just a pure contractor and not a
beneficial owner of our economic resources. The proposal recognizes the need for capital and technology to develop our natural resources without sacrificing
our sovereignty and control over such resources by the safeguard of a special law which requires two-thirds vote of all the members of the Legislature. This will
ensure that such agreements will be debated upon exhaustively and thoroughly in the National Assembly to avert prejudice to the nation.249 [Emphasis
supplied.]
The U.P. Law draft proponents viewed service contracts under the 1973 Constitution as grants of beneficial ownership of the country's natural resources to
foreign owned corporations. While, in theory, the State owns these natural resources – and Filipino citizens, their beneficiaries – service contracts actually
vested foreigners with the right to dispose, explore for, develop, exploit, and utilize the same. Foreigners, not Filipinos, became the beneficiaries of Philippine
natural resources. This arrangement is clearly incompatible with the constitutional ideal of nationalization of natural resources, with the Regalian doctrine, and
on a broader perspective, with Philippine sovereignty.

The proponents nevertheless acknowledged the need for capital and technical know-how in the large-scale exploitation, development and utilization of natural
resources – the second paragraph of the proposed draft itself being an admission of such scarcity. Hence, they recommended a compromise to reconcile the
nationalistic provisions dating back to the 1935 Constitution, which reserved all natural resources exclusively to Filipinos, and the more liberal 1973 Constitution,
which allowed foreigners to participate in these resources through service contracts. Such a compromise called for the adoption of a new system in the
exploration, development, and utilization of natural resources in the form of technical agreements or financial agreements which, necessarily, are distinct
concepts from service contracts.

The replacement of "service contracts" with "agreements… involving either technical or financial assistance," as well as the deletion of the phrase "management
or other forms of assistance," assumes greater significance when note is taken that the U.P. Law draft proposed other equally crucial changes that were
obviously heeded by the CONCOM. These include the abrogation of the concession system and the adoption of new "options" for the State in the exploration,
development, and utilization of natural resources. The proponents deemed these changes to be more consistent with the State's ownership of, and its "full
control and supervision" (a phrase also employed by the framers) over, such resources. The Project explained:

3. In line with the State ownership of natural resources, the State should take a more active role in the exploration, development, and utilization of natural
resources, than the present practice of granting licenses, concessions, or leases – hence the provision that said activities shall be under the full control and
supervision of the State. There are three major schemes by which the State could undertake these activities: first, directly by itself; second, by virtue of
co-production, joint venture, production sharing agreements with Filipino citizens or corporations or associations sixty per cent (60%) of the voting stock or
controlling interests of which are owned by such citizens; or third, with a foreign-owned corporation, in cases of large-scale exploration, development, or
utilization of natural resources through agreements involving either technical or financial assistance only. x x x.

At present, under the licensing concession or lease schemes, the government benefits from such benefits only through fees, charges, ad valorem taxes and
income taxes of the exploiters of our natural resources. Such benefits are very minimal compared with the enormous profits reaped by theses licensees,
grantees, concessionaires. Moreover, some of them disregard the conservation of natural resources and do not protect the environment from degradation. The
proposed role of the State will enable it to a greater share in the profits – it can also actively husband its natural resources and engage in developmental
programs that will be beneficial to them.

4. Aside from the three major schemes for the exploration, development, and utilization of our natural resources, the State may, by law, allow Filipino citizens to
explore, develop, utilize natural resources in small-scale. This is in recognition of the plight of marginal fishermen, forest dwellers, gold panners, and others
similarly situated who exploit our natural resources for their daily sustenance and survival.250

Professor Agabin, in particular, after taking pains to illustrate the similarities between the two systems, concluded that the service contract regime was but a
"rehash" of the concession system. "Old wine in new bottles," as he put it. The rejection of the service contract regime, therefore, is in consonance with the
abolition of the concession system.

In light of the deliberations of the CONCOM, the text of the Constitution, and the adoption of other proposed changes, there is no doubt that the framers
considered and shared the intent of the U.P. Law proponents in employing the phrase "agreements . . . involving either technical or financial assistance."

While certain commissioners may have mentioned the term "service contracts" during the CONCOM deliberations, they may not have been necessarily referring
to the concept of service contracts under the 1973 Constitution. As noted earlier, "service contracts" is a term that assumes different meanings to different
people.251 The commissioners may have been using the term loosely, and not in its technical and legal sense, to refer, in general, to agreements concerning
natural resources entered into by the Government with foreign corporations. These loose statements do not necessarily translate to the adoption of the 1973
Constitution provision allowing service contracts.

It is true that, as shown in the earlier quoted portions of the proceedings in CONCOM, in response to Sr. Tan's question, Commissioner Villegas commented that,
other than congressional notification, the only difference between "future" and "past" "service contracts" is the requirement of a general law as there were no
laws previously authorizing the same.252 However, such remark is far outweighed by his more categorical statement in his exchange with Commissioner Quesada
that the draft article "does not permit foreign investors to participate" in the nation's natural resources – which was exactly what service contracts did – except
to provide "technical or financial assistance."253

In the case of the other commissioners, Commissioner Nolledo himself clarified in his work that the present charter prohibits service contracts.254 Commissioner
Gascon was not totally averse to foreign participation, but favored stricter restrictions in the form of majority congressional concurrence.255 On the other hand,
Commissioners Garcia and Tadeo may have veered to the extreme side of the spectrum and their objections may be interpreted as votes against any foreign
participation in our natural resources whatsoever.

WMCP cites Opinion No. 75, s. 1987,256 and Opinion No. 175, s. 1990257 of the Secretary of Justice, expressing the view that a financial or technical assistance
agreement "is no different in concept" from the service contract allowed under the 1973 Constitution. This Court is not, however, bound by this interpretation.
When an administrative or executive agency renders an opinion or issues a statement of policy, it merely interprets a pre-existing law; and the administrative
interpretation of the law is at best advisory, for it is the courts that finally determine what the law means.258

In any case, the constitutional provision allowing the President to enter into FTAAs with foreign-owned corporations 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. As Commissioner Villegas emphasized, the provision is "very restrictive."259 Commissioner Nolledo also remarked that "entering into service
contracts is an exception to the rule on protection of natural resources for the interest of the nation and, therefore, being an exception, it should be subject,
whenever possible, to stringent rules."260 Indeed, exceptions should be strictly but reasonably construed; they extend only so far as their language fairly
warrants and all doubts should be resolved in favor of the general provision rather than the exception.261
With the foregoing discussion in mind, this Court finds that R.A. No. 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, it actually treats these agreements as service contracts that grant
beneficial ownership to foreign contractors contrary to the fundamental law.

Section 33, which is found under Chapter VI (Financial or Technical Assistance Agreement) of R.A. No. 7942 states:

SEC. 33. Eligibility.—Any qualified person with technical and financial capability to undertake large-scale exploration, development, and utilization of mineral
resources in the Philippines may enter into a financial or technical assistance agreement directly with the Government through the Department. [Emphasis
supplied.]

"Exploration," as defined by R.A. No. 7942,

means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys, remote sensing, test pitting, trending, drilling, shaft
sinking, tunneling or any other means for the purpose of determining the existence, extent, quantity and quality thereof and the feasibility of mining them for
profit.262

A legally organized foreign-owned corporation may be granted an exploration permit,263 which vests it with the right to conduct exploration for all minerals in
specified areas,264 i.e., to enter, occupy and explore the same.265Eventually, the foreign-owned corporation, as such permittee, may apply for a financial and
technical assistance agreement.266

"Development" is the work undertaken to explore and prepare an ore body or a mineral deposit for mining, including the construction of necessary
infrastructure and related facilities.267

"Utilization" "means the extraction or disposition of minerals."268 A stipulation that the proponent shall dispose of the minerals and byproducts produced at the
highest price and more advantageous terms and conditions as provided for under the implementing rules and regulations is required to be incorporated in every
FTAA.269

A foreign-owned/-controlled corporation may likewise be granted a mineral processing permit.270 "Mineral processing" is the milling, beneficiation or upgrading
of ores or minerals and rocks or by similar means to convert the same into marketable products.271

An FTAA contractor makes a warranty that the mining operations shall be conducted in accordance with the provisions of R.A. No. 7942 and its implementing
rules272 and for work programs and minimum expenditures and commitments.273 And it obliges itself to furnish the Government records of geologic, accounting,
and other relevant data for its mining operation.274

"Mining operation," as the law defines it, means mining activities involving exploration, feasibility, development, utilization, and processing.275

The underlying assumption in all these provisions is that the foreign contractor manages the mineral resources, just like the foreign contractor in a service
contract.

Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the same auxiliary mining rights that it grants contractors in mineral agreements (MPSA,
CA and JV).276 Parenthetically, Sections 72 to 75 use the term "contractor," without distinguishing between FTAA and mineral agreement contractors. And so
does "holders of mining rights" in Section 76. A foreign contractor may even convert its FTAA into a mineral agreement if the economic viability of the contract
area is found to be inadequate to justify large-scale mining operations,277 provided that it reduces its equity in the corporation, partnership, association or
cooperative to forty percent (40%).278

Finally, under the Act, an FTAA contractor warrants that it "has or has access to all the financing, managerial, and technical expertise. . . ."279 This suggests that
an FTAA contractor is bound to provide some management assistance – a form of assistance that has been eliminated and, therefore, proscribed by the present
Charter.

By allowing foreign contractors to manage or operate all the aspects of the mining operation, the above-cited provisions of R.A. No. 7942 have in effect
conveyed beneficial ownership over the nation's mineral resources to these contractors, leaving the State with nothing but bare title thereto.

Moreover, 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.

In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of Section 2, Article XII of the Constitution:

(1) The proviso in Section 3 (aq), which defines "qualified person," to wit:

Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person for purposes of granting an exploration permit, financial or
technical assistance agreement or mineral processing permit.

(2) Section 23,280 which specifies the rights and obligations of an exploration permittee, insofar as said section applies to a financial or technical assistance
agreement,

(3) Section 33, which prescribes the eligibility of a contractor in a financial or technical assistance agreement;

(4) Section 35,281 which enumerates the terms and conditions for every financial or technical assistance agreement;
(5) Section 39,282 which allows the contractor in a financial and technical assistance agreement to convert the same into a mineral production-sharing
agreement;

(6) Section 56,283 which authorizes the issuance of a mineral processing permit to a contractor in a financial and technical assistance agreement;

The following provisions of the same Act are likewise void as they are dependent on the foregoing provisions and cannot stand on their own:

(1) Section 3 (g),284 which defines the term "contractor," insofar as it applies to a financial or technical assistance agreement.

Section 34,285 which prescribes the maximum contract area in a financial or technical assistance agreements;

Section 36,286 which allows negotiations for financial or technical assistance agreements;

Section 37,287 which prescribes the procedure for filing and evaluation of financial or technical assistance agreement proposals;

Section 38,288 which limits the term of financial or technical assistance agreements;

Section 40,289 which allows the assignment or transfer of financial or technical assistance agreements;

Section 41,290 which allows the withdrawal of the contractor in an FTAA;

The second and third paragraphs of Section 81,291 which provide for the Government's share in a financial and technical assistance agreement; and

Section 90,292 which provides for incentives to contractors in FTAAs insofar as it applies to said contractors;

When the parts of the 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, and that if all could not be carried into effect, the legislature would not pass the residue
independently, then, if some parts are unconstitutional, all the provisions which are thus dependent, conditional, or connected, must fall with them.293

There can be little doubt that the WMCP FTAA itself is a service contract.

Section 1.3 of the WMCP FTAA grants WMCP "the exclusive right to explore, exploit, utilise[,] process and dispose of all Minerals products and by-products
thereof that may be produced from the Contract Area."294 The FTAA also imbues WMCP with the following rights:

(b) to extract and carry away any Mineral samples from the Contract area for the purpose of conducting tests and studies in respect thereof;

(c) to determine the mining and treatment processes to be utilised during the Development/Operating Period and the project facilities to be constructed during
the Development and Construction Period;

(d) have the right of possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to the provisions of
Presidential Decree No. 512 (if applicable) and not be prevented from entry into private ands by surface owners and/or occupants thereof when prospecting,
exploring and exploiting for minerals therein;

xxx

(f) to construct roadways, mining, drainage, power generation and transmission facilities and all other types of works on the Contract Area;

(g) to erect, install or place any type of improvements, supplies, machinery and other equipment relating to the Mining Operations and to use, sell or otherwise
dispose of, modify, remove or diminish any and all parts thereof;

(h) enjoy, subject to pertinent laws, rules and regulations and the rights of third Parties, easement rights and the use of timber, sand, clay, stone, water and
other natural resources in the Contract Area without cost for the purposes of the Mining Operations;

xxx

(i) have the right to mortgage, charge or encumber all or part of its interest and obligations under this Agreement, the plant, equipment and infrastructure and
the Minerals produced from the Mining Operations;

x x x. 295

All materials, equipment, plant and other installations erected or placed on the Contract Area remain the property of WMCP, which has the right to deal with
and remove such items within twelve months from the termination of the FTAA.296

Pursuant to Section 1.2 of the FTAA, WMCP shall provide "[all] financing, technology, management and personnel necessary for the Mining Operations." The
mining company binds itself to "perform all Mining Operations . . . providing all necessary services, technology and financing in connection therewith,"297 and to
"furnish all materials, labour, equipment and other installations that may be required for carrying on all Mining Operations."298> WMCP may make expansions,
improvements and replacements of the mining facilities and may add such new facilities as it considers necessary for the mining operations.299
These contractual stipulations, 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.

In arguing against the annulment of the FTAA, WMCP invokes the Agreement on the Promotion and Protection of Investments between the Philippine and
Australian Governments, which was signed in Manila on January 25, 1995 and which entered into force on December 8, 1995.

x x x. Article 2 (1) of said treaty states that it applies to investments whenever made and thus the fact that [WMCP's] FTAA was entered into prior to the entry
into force of the treaty does not preclude the Philippine Government from protecting [WMCP's] investment in [that] FTAA. Likewise, Article 3 (1) of the treaty
provides that "Each Party shall encourage and promote investments in its area by investors of the other Party and shall [admit] such investments in accordance
with its Constitution, Laws, regulations and investment policies" and in Article 3 (2), it states that "Each Party shall ensure that investments are accorded fair and
equitable treatment." The latter stipulation indicates that it was intended to impose an obligation upon a Party to afford fair and equitable treatment to the
investments of the other Party and that a failure to provide such treatment by or under the laws of the Party may constitute a breach of the treaty. Simply
stated, the Philippines could not, under said treaty, rely upon the inadequacies of its own laws to deprive an Australian investor (like [WMCP]) of fair and
equitable treatment by invalidating [WMCP's] FTAA without likewise nullifying the service contracts entered into before the enactment of RA 7942 such as those
mentioned in PD 87 or EO 279.

This becomes more significant in the light of the fact that [WMCP's] FTAA was executed not by a mere Filipino citizen, but by the Philippine Government itself,
through its President no less, which, in entering into said treaty is assumed to be aware of the existing Philippine laws on service contracts over the exploration,
development and utilization of natural resources. The execution of the FTAA by the Philippine Government assures the Australian Government that the FTAA is
in accordance with existing Philippine laws.300 [Emphasis and italics by private respondents.]

The invalidation of the subject FTAA, it is argued, would constitute a breach of said treaty which, in turn, would amount to a violation of Section 3, Article II of
the Constitution adopting the generally accepted principles of international law as part of the law of the land. One of these generally accepted principles is pacta
sunt servanda, which requires the performance in good faith of treaty obligations.

Even assuming arguendo that WMCP is correct in its interpretation of the treaty and its assertion that "the Philippines could not . . . deprive an Australian
investor (like [WMCP]) of fair and equitable treatment by invalidating [WMCP's] FTAA without likewise nullifying the service contracts entered into before the
enactment of RA 7942 . . .," the annulment of the FTAA would not constitute a breach of the treaty invoked. For this decision herein invalidating the subject
FTAA forms part of the legal system of the Philippines.301 The equal protection clause302 guarantees that such decision shall apply to all contracts belonging to
the same class, hence, upholding rather than violating, the "fair and equitable treatment" stipulation in said treaty.

One other matter requires clarification. Petitioners contend that, consistent with the provisions of Section 2, Article XII of the Constitution, the President may
enter into agreements involving "either technical or financial assistance" only. The agreement in question, however, is a technical and financial assistance
agreement.

Petitioners' contention does not lie. To adhere to the literal language of the Constitution would lead to absurd consequences.303 As WMCP correctly put it:

x x x such a theory of petitioners would compel the government (through the President) to enter into contract with two (2) foreign-owned corporations, one for
financial assistance agreement and with the other, for technical assistance over one and the same mining area or land; or to execute two (2) contracts with
only one foreign-owned corporation which has the capability to provide both financial and technical assistance, one for financial assistance and another for
technical assistance, over the same mining area. Such an absurd result is definitely not sanctioned under the canons of constitutional
construction.304 [Underscoring in the original.]

Surely, the framers of the 1987 Charter did not contemplate such an absurd result from their use of "either/or." A constitution is not to be interpreted as
demanding the impossible or the impracticable; and unreasonable or absurd consequences, if possible, should be avoided.305 Courts are not to give words a
meaning that would lead to absurd or unreasonable consequences and a literal interpretation is to be rejected if it would be unjust or lead to absurd
results.306 That is a strong argument against its adoption.307 Accordingly, petitioners' interpretation must be rejected.

The foregoing discussion has rendered unnecessary the resolution of the other issues raised by the petition.

WHEREFORE, the petition is GRANTED. The Court hereby declares unconstitutional and void:

(1) The following provisions of Republic Act No. 7942:

(a) The proviso in Section 3 (aq),

(b) Section 23,

(c) Section 33 to 41,

(d) Section 56,

(e) The second and third paragraphs of Section 81, and

(f) Section 90.

(2) All provisions of Department of Environment and Natural Resources Administrative Order 96-40, s. 1996 which are not in conformity with this Decision, and

(3) The Financial and Technical Assistance Agreement between the Government of the Republic of the Philippines and WMC Philippines, Inc.
SO ORDERED.

CASE 3: John Eric Loney vs. People GR No. 152644

The Case

This is a petition for review[1] of the Decision[2] dated 5 November 2001 and the Resolution dated 14 March 2002 of the Court of Appeals. The 5 November
2001 Decision affirmed the ruling of the Regional Trial Court, Boac, Marinduque, Branch 94, in a suit to quash Informations filed against petitioners John Eric
Loney, Steven Paul Reid, and Pedro B. Hernandez (petitioners). The 14 March 2002 Resolution denied petitioners motion for reconsideration.

The Facts

Petitioners John Eric Loney, Steven Paul Reid, and Pedro B. Hernandez are the President and Chief Executive Officer, Senior Manager, and Resident Manager for
Mining Operations, respectively, of Marcopper Mining Corporation (Marcopper), a corporation engaged in mining in the province of Marinduque.

Marcopper had been storing tailings[3] from its operations in a pit in Mt. Tapian, Marinduque. At the base of the pit ran a drainage tunnel leading to the Boac and
Makalupnit rivers. It appears that Marcopper had placed a concrete plug at the tunnels end. On 24 March 1994, tailings gushed out of or near the tunnels end. In
a few days, the Mt. Tapian pit had discharged millions of tons of tailings into the Boac and Makalupnit rivers.

In August 1996, the Department of Justice separately charged petitioners in the Municipal Trial Court of Boac, Marinduque (MTC) with violation of Article
91(B),[4] sub-paragraphs 5 and 6 of Presidential Decree No. 1067 or the Water Code of the Philippines (PD 1067),[5] Section 8[6] of Presidential Decree No. 984 or
the National Pollution Control Decree of 1976 (PD 984),[7] Section 108[8] of Republic Act No. 7942 or the Philippine Mining Act of 1995 (RA 7942),[9] and Article
365[10] of the Revised Penal Code (RPC) for Reckless Imprudence Resulting in Damage to Property.[11]
Petitioners moved to quash the Informations on the following grounds: (1) the Informations were duplicitous as the Department of Justice charged more than
one offense for a single act; (2) petitioners John Eric Loney and Steven Paul Reid were not yet officers of Marcopper when the incident subject of the
Informations took place; and (3) the Informations contain allegations which constitute legal excuse or justification.

The Ruling of the MTC

In its Joint Order of 16 January 1997 (Joint Order), the MTC[12] initially deferred ruling on petitioners motion for lack of indubitable ground for the quashing of
the [I]nformations x x x. The MTC scheduled petitioners arraignment in February 1997. However, on petitioners motion, the MTC issued a Consolidated Order
on 28 April 1997 (Consolidated Order), granting partial reconsideration to its Joint Order and quashing the Informations for violation of PD 1067 and PD 984. The
MTC maintained the Informations for violation of RA 7942 and Article 365 of the RPC. The MTC held:
[T]he 12 Informations have common allegations of pollutants pointing to mine tailings which were precipitately discharged into the
Makulapnit and Boac Rivers due to breach caused on the Tapian drainage/tunnel due to negligence or failure to institute adequate
measures to prevent pollution and siltation of the Makulapnit and Boac River systems, the very term and condition required to be
undertaken under the Environmental Compliance Certificate issued on April 1, 1990.

The allegations in the informations point to same set [sic] of evidence required to prove the single fact of pollution constituting violation of
the Water Code and the Pollution Law which are the same set of evidence necessary to prove the same single fact of pollution, in proving
the elements constituting violation of the conditions of ECC, issued pursuant to the Philippine Mining Act. In both instances, the terms and
conditions of the Environmental Compliance Certificate were allegedly violated. In other words, the same set of evidence is required in
proving violations of the three (3) special laws.

After carefully analyzing and weighing the contending arguments of the parties and after taking into consideration the applicable laws and
jurisprudence, the Court is convinced that as far as the three (3) aforesaid laws are concerned, only the Information for [v]iolation of
Philippine Mining Act should be maintained. In other words, the Informations for [v]iolation of Anti-Pollution Law (PD 984) and the Water
Code (PD 1067) should be dismissed/quashed because the elements constituting the aforesaid violations are absorbed by the same
elements which constitute violation of the Philippine Mining Act (RA 7942).

Therefore, x x x Criminal Case[] Nos. 96-44, 96-45 and 96-46 for [v]iolation of the Water Code; and Criminal Case[] Nos. 96-47, 96-48 and
96-49 for [v]iolation of the Anti-Pollution Law x x x are hereby DISMISSED or QUASHED and Criminal Case[] Nos. 96-50, 96-51 and 96-52 for
[v]iolation of the Philippine Mining Act are hereby retained to be tried on the merits.

The Information for [v]iolation of Article 365 of the Revised Penal Code should also be maintained and heard in a full blown trial because
the common accusation therein is reckless imprudence resulting to [sic] damage to property. It is the damage to property which the law
punishes not the negligent act of polluting the water system. The prosecution for the [v]iolation of Philippine Mining Act is not a bar to
the prosecution for reckless imprudence resulting to [sic] damage to property.[13]

The MTC re-scheduled petitioners arraignment on the remaining charges on 28 and 29 May 1997. In the hearing of 28 May 1997, petitioners manifested that
they were willing to be arraigned on the charge for violation of Article 365 of the RPC but not on the charge for violation of RA 7942 as they intended to appeal
the Consolidated Order in so far as it maintained the Informations for that offense. After making of record petitioners manifestation, the MTC proceeded with
the arraignment and ordered the entry of not guilty pleas on the charges for violation of RA 7942 and Article 365 of the RPC.

Petitioners subsequently filed a petition for certiorari with the Regional Trial Court, Boac, Marinduque, assailing that portion of the Consolidated Order
maintaining the Informations for violation of RA 7942. Petitioners petition was raffled to Branch 94. For its part, public respondent filed an ordinary appeal with
the same court assailing that portion of the Consolidated Order quashing the Informations for violation of PD 1067 and PD 984. Public respondents appeal was
raffled to Branch 38. On public respondents motion, Branch 38 ordered public respondents appeal consolidated with petitioners petition in Branch 94.

The Ruling of Branch 94

In its Resolution[14] of 20 March 1998, Branch 94 granted public respondents appeal but denied petitioners petition. Branch 94 set aside the Consolidated Order
in so far as it quashed the Informations for violation of PD 1067 and PD 984 and ordered those charges reinstated. Branch 94 affirmed the Consolidated Order in
all other respects. Branch 94 held:

After a careful perusal of the laws concerned, this court is of the opinion that there can be no absorption by one offense of the three other
offenses, as [the] acts penalized by these laws are separate and distinct from each other. The elements of proving each violation are not
the same with each other. Concededly, the single act of dumping mine tailings which resulted in the pollution of the Makulapnit and Boac
rivers was the basis for the information[s] filed against the accused each charging a distinct offense. But it is also a well-established rule in
this jurisdiction that

A single act may offend against two or more entirely distinct and unrelated provisions of law, and if one provision
requires proof of an additional fact or element which the other does not, an acquittal or conviction or a dismissal of
the information under one does not bar prosecution under the other. x x x.

xxxx

[T]he different laws involve cannot absorb one another as the elements of each crime are different from one another. Each of these laws
require [sic] proof of an additional fact or element which the other does not although they stemmed from a single act.[15]

Petitioners filed a petition for certiorari with the Court of Appeals alleging that Branch 94 acted with grave abuse of discretion because (1) the Informations for
violation of PD 1067, PD 984, RA 7942 and the Article 365 of the RPC proceed from and are based on a single act or incident of polluting the Boac and
Makalupnit rivers thru dumping of mine tailings and (2) the duplicitous nature of the Informations contravenes the ruling in People v. Relova.[16] Petitioners
further contended that since the acts complained of in the charges for violation of PD 1067, PD 984, and RA 7942 are the very same acts complained of in the
charge for violation of Article 365 of the RPC, the latter absorbs the former. Hence, petitioners should only be prosecuted for violation of Article 365 of the
RPC.[17]

The Ruling of the Court of Appeals

In its Decision of 5 November 2001, the Court of Appeals affirmed Branch 94s ruling. The appellate court held:

The records of the case disclose that petitioners filed a motion to quash the aforementioned Informations for being duplicitous in
nature. Section 3 of Rule 117 of the Revised Rules of Court specifically provides the grounds upon which an information may be quashed. x
xx

xxxx

[D]uplicity of Informations is not among those included in x x x [Section 3, Rule 117].

xxxx
We now go to petitioners claim that the resolution of the public respondent contravened the doctrine laid down in People vs.
Relova for being violative of their right against multiple prosecutions.

In the said case, the Supreme Court found the Peoples argument with respect to the variances in the mens rea of the two offenses being
charged to be correct. The Court, however, decided the case in the context of the second sentence of Article IV (22) of the 1973
Constitution (now under Section 21 of Article III of the 1987 Constitution), rather than the first sentence of the same section. x x x

xxxx

[T]he doctrine laid down in the Relova case does not squarely apply to the case at Bench since the Informations filed against the
petitioners are for violation of four separate and distinct laws which are national in character.

xxxx

This Court firmly agrees in the public respondents understanding that the laws by which the petitioners have been [charged]
could not possibly absorb one another as the elements of each crime are different. Each of these laws require [sic] proof of an additional
fact or element which the other does not, although they stemmed from a single act. x x x

xxxx

[T]his Court finds that there is not even the slightest indicia of evidence that would give rise to any suspicion that public respondent acted
with grave abuse of discretion amounting to excess or lack of jurisdiction in reversing the Municipal Trial Courts quashal of the
Informations against the petitioners for violation of P.D. 1067 and P.D. 984. This Court equally finds no error in the trial courts denial of
the petitioners motion to quash R.A. 7942 and Article 365 of the Revised Penal Code.[18]

Petitioners sought reconsideration but the Court of Appeals denied their motion in its Resolution of 14 March 2002.

Petitioners raise the following alleged errors of the Court of Appeals:

I. THE COURT OF APPEALS COMMITTED A R[E]VERSIBLE ERROR IN MAINTAINING THE CHARGES FOR VIOLATION OF THE PHILIPPINE MINING
ACT (R.A. 7942) AND REINSTATING THE CHARGES FOR VIOLATION OF THE WATER CODE (P.D. 1067) AND POLLUTION CONTROL LAW (P.D.
984), CONSIDERING THAT:

A. THE INFORMATIONS FOR VIOLATION OF THE WATER CODE (P.D. 1067), THE POLLUTION CONTROL LAW (P.D.
984), THE PHILIPPINE MINING ACT (R.A. 7942) AND ARTICLE 365 OF THE REVISED PENAL CODE PROCEED FROM AND
 ARE BASED ON A SINGLE ACT OR INCIDENT OF POLLUTING THE BOAC AND MAKULAPNIT RIVERS THRU DUMPING OF
MINE TAILINGS.
B. THE PROSECUTION OF PETITIONERS FOR DUPLICITOUS AND MULTIPLE CHARGES CONTRAVENES THE DOCTRINE
LAID DOWN IN PEOPLE VS. RELOVA, 148 SCRA 292 [1986] THAT AN ACCUSED SHOULD NOT BE HARASSED BY
MULTIPLE PROSECUTIONS FOR OFFENSES WHICH THOUGH DIFFERENT FROM ONE ANOTHER ARE NONETHELESS
EACH CONSTITUTED BY A COMMON SET OR OVERLAPPING SETS OF TECHNICAL ELEMENTS.
II. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT THE ELEMENT OF LACK OF NECESSARY OR ADEQUATE
PRECAUTION, NEGLIGENCE, RECKLESSNESS AND IMPRUDENCE UNDER ARTICLE 356 [sic] OF THE REVISED PENAL CODE DOES NOT FALL
WITHIN THE AMBIT OF ANY OF THE ELEMENTS OF THE PERTINENT PROVISIONS OF THE WATER CODE, POLLUTION CONTROL LAW AND
PHILIPPINE MINING ACT CHARGED AGAINST PETITIONERS[.][19]

The Issues

The petition raises these issues:

(1) Whether all the charges filed against petitioners except one should be quashed for duplicity of charges and only the charge for Reckless
Imprudence Resulting in Damage to Property should stand; and
(2) Whether Branch 94s ruling, as affirmed by the Court of Appeals, contravenes People v. Relova.

The Ruling of the Court

The petition has no merit.

No Duplicity of Charges in the Present Case

Duplicity of charges simply means a single complaint or information charges more than one offense, as Section 13 of Rule 110[20] of the 1985 Rules of Criminal
Procedure clearly states:
Duplicity of offense. A complaint or information must charge but one offense, except only in those cases in which existing laws
prescribe a single punishment for various offenses.

In short, there is duplicity (or multiplicity) of charges when a single Information charges more than one offense.[21]

Under Section 3(e), Rule 117[22] of the 1985 Rules of Criminal Procedure, duplicity of offenses in a single information is a ground to quash the
Information. The Rules prohibit the filing of such Information to avoid confusing the accused in preparing his defense.[23] Here, however, the prosecution
charged each petitioner with four offenses, with each Information charging only one offense. Thus, petitioners erroneously invoke duplicity of charges as a
ground to quash the Informations. On this score alone, the petition deserves outright denial.

The Filing of Several Charges is Proper

Petitioners contend that they should be charged with one offense only Reckless Imprudence Resulting in Damage to Property because (1) all the charges filed
against them proceed from and are based on a single act or incident of polluting the Boac and Makalupnit rivers thru dumping of mine tailings and (2) the charge
for violation of Article 365 of the RPC absorbs the other charges since the element of lack of necessary or adequate protection, negligence, recklessness and
imprudence is common among them.

The contention has no merit.

As early as the start of the last century, this Court had ruled that a single act or incident might offend against two or more entirely distinct and
unrelated provisions of law thus justifying the prosecution of the accused for more than one offense.[24] The only limit to this rule is the Constitutional
prohibition that no person shall be twice put in jeopardy of punishment for the same offense.[25] In People v. Doriquez,[26] we held that two (or more) offenses
arising from the same act are not the same

x x x if one provision [of law] requires proof of an additional fact or element which the other does not, x x x. Phrased elsewise, where two
different laws (or articles of the same code) define two crimes, prior jeopardy as to one of them is no obstacle to a prosecution of the
other, although both offenses arise from the same facts, if each crime involves some important act which is not an essential element of
the other.[27] (Emphasis supplied)

Here, double jeopardy is not at issue because not all of its elements are present.[28] However, for the limited purpose of controverting petitioners claim that they
should be charged with one offense only, we quote with approval Branch 94s comparative analysis of PD 1067, PD 984, RA 7942, and Article 365 of the RPC
showing that in each of these laws on which petitioners were charged, there is one essential element not required of the others, thus:
In P.D. 1067 (Philippines Water Code), the additional element to be established is the dumping of mine tailings into the Makulapnit River
and the entire Boac River System without prior permit from the authorities concerned. The gravamen of the offense here is the absence of
the proper permit to dump said mine tailings. This element is not indispensable in the prosecution for violation of PD 984 (Anti-Pollution
Law), [RA] 7942 (Philippine Mining Act) and Art. 365 of the Revised Penal Code. One can be validly prosecuted for violating the Water Code
even in the absence of actual pollution, or even [if] it has complied with the terms of its Environmental Compliance Certificate, or further,
even [if] it did take the necessary precautions to prevent damage to property.

In P.D. 984 (Anti-Pollution Law), the additional fact that must be proved is the existence of actual pollution. The gravamen is the pollution
itself. In the absence of any pollution, the accused must be exonerated under this law although there was unauthorized dumping of mine
tailings or lack of precaution on its part to prevent damage to property.

In R.A. 7942 (Philippine Mining Act), the additional fact that must be established is the willful violation and gross neglect on the part of the
accused to abide by the terms and conditions of the Environmental Compliance Certificate, particularly that the Marcopper should ensure
the containment of run-off and silt materials from reaching the Mogpog and Boac Rivers. If there was no violation or neglect, and that the
accused satisfactorily proved [sic] that Marcopper had done everything to ensure containment of the run-off and silt materials, they will not
be liable. It does not follow, however, that they cannot be prosecuted under the Water Code, Anti-Pollution Law and the Revised Penal
Code because violation of the Environmental Compliance Certificate is not an essential element of these laws.
 On the other hand, the additional element that must be established in Art. 365 of the Revised Penal Code is the lack of necessary or
adequate precaution, negligence, recklessness and imprudence on the part of the accused to prevent damage to property. This element is
not required under the previous laws. Unquestionably, it is different from dumping of mine tailings without permit, or causing pollution to
the Boac river system, much more from violation or neglect to abide by the terms of the Environmental Compliance Certificate. Moreover,
the offenses punished by special law are mal[a] prohibita in contrast with those punished by the Revised Penal Code which are mala in
se.[29]

Consequently, the filing of the multiple charges against petitioners, although based on the same incident, is consistent with settled doctrine.

On petitioners claim that the charge for violation of Article 365 of the RPC absorbs the charges for violation of PD 1067, PD 984, and RA 7942, suffice it to say
that a mala in se felony (such as Reckless Imprudence Resulting in Damage to Property) cannot absorb mala prohibita crimes (such as those violating PD 1067,
PD 984, and RA 7942). What makes the former a felony is criminal intent (dolo) or negligence (culpa); what makes the latter crimes are the special laws enacting
them.

People v. Relova not in Point

Petitioners reiterate their contention in the Court of Appeals that their prosecution contravenes this Courts ruling in People v. Relova. In particular, petitioners
cite the Courts statement in Relova that the law seeks to prevent harassment of the accused by multiple prosecutions for offenses which though different from
one another are nonetheless each constituted by a common set or overlapping sets of technical elements.

This contention is also without merit.

The issue in Relova is whether the act of the Batangas Acting City Fiscal in charging one Manuel Opulencia (Opulencia) with theft of electric power
under the RPC, after the latter had been acquitted of violating a City Ordinance penalizing the unauthorized installation of electrical wiring, violated Opulencias
right against double jeopardy. We held that it did, not because the offenses punished by those two laws were the same but because the act giving rise to the
charges was punished by an ordinance and a national statute, thus falling within the proscription against multiple prosecutions for the same act under the
second sentence in Section 22, Article IV of the 1973 Constitution, now Section 21, Article III of the 1987 Constitution. We held:

The petitioner concludes that:

The unauthorized installation punished by the ordinance [of Batangas City] is not the same as theft of electricity [under the
Revised Penal Code]; that the second offense is not an attempt to commit the first or a frustration thereofand that the second offense is
not necessarily included in the offense charged in the first information.

The above argument[ ] made by the petitioner [is] of course correct. This is clear both from the express terms of the
constitutional provision involved which reads as follows:

No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance,
conviction or acquittal under either shall constitute a bar to another prosecution for the same act. x x x

and from our case law on this point. The basic difficulty with the petitioners position is that it must be examined, not under the terms of
the first sentence of Article IV (22) of the 1973 Constitution, but rather under the second sentence of the same section. The first sentence
of Article IV (22) sets forth the general rule: the constitutional protection against double jeopardy is not available where the second
prosecution is for an offense that is different from the offense charged in the first or prior prosecution, although both the first and second
offenses may be based upon the same act or set of acts. The second sentence of Article IV (22) embodies an exception to the general
proposition: the constitutional protection, against double jeopardy is available although the prior offense charged under an ordinance
be different from the offense charged subsequently under a national statute such as the Revised Penal Code, provided that both
offenses spring from the same act or set of acts. x x x[30] (Italicization in the original; boldfacing supplied)

Thus, Relova is no authority for petitioners claim against multiple prosecutions based on a single act not only because the question of double jeopardy is not at
issue here, but also because, as the Court of Appeals held, petitioners are being prosecuted for an act or incident punished by four national statutes and not by
an ordinance and a national statute. In short, petitioners, if ever, fall under the first sentence of Section 21, Article III which prohibits multiple prosecution for
the same offense, and not, as in Relova, for offenses arising from the same incident.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 5 November 2001 and the Resolution dated 14 March 2002 of the Court of Appeals. SO
ORDERED.

CASE 4: Celestial Nickel Mining Exploration Corp. vs. Macroasia Corp GR No. 169080

The Case

Before us are four (4) petitions. The first is a Petition for Review on Certiorari[1] under Rule 45 docketed as G.R. No. 169080, wherein petitioner
Celestial Nickel Mining Exploration Corporation (Celestial) seeks to set aside the April 15, 2005 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 87931.
The CA affirmed the November 26, 2004 Resolution of the Mines Adjudication Board (MAB) in MAB Case Nos. 056-97 and 057-97 (DENR Case Nos. 97-01 and
97-02), upholding the authority of the Department of Environment and Natural Resources (DENR) Secretary to grant and cancel mineral agreements. Also
assailed is the August 3, 2005 Resolution[3] of the CA denying the Motion for Reconsideration of the assailed Decision.

The second is a Petition for Certiorari[4] under Rule 65 docketed as G.R. No. 172936, wherein petitioner Blue Ridge Mineral Corporation (Blue Ridge)
seeks to annul and set aside the action of then Secretary Michael T. Defensor, in his capacity as DENR Secretary, approving and signing two Mineral Production
Sharing Agreements (MPSAs) in favor of Macroasia Corporation (Macroasia) denominated as MPSA Nos. 220-2005-IVB and 221-2005-IVB.

And the third and fourth are petitions for review on certiorari[5] under Rule 45 docketed as G.R. No. 176226 and G.R. No. 176319, wherein petitioners
Celestial and Macroasia, respectively, seek to set aside the May 18, 2006 Decision[6] of the CA in CA-G.R. SP No. 90828. The CA reversed and set aside the
November 26, 2004 and July 12, 2005 Resolutions of the MAB, and reinstated the October 24, 2000 Decision in MAB Case Nos. 056-97 and 057-97, granting Blue
Ridge the prior and preferential right to file its application over the mining claims of Macroasia. These petitions likewise seek to set aside the January 19,
2007 Resolution[7] of the CA denying petitioners motions for reconsideration of the assailed Decision.

Through our July 5, 2006 Resolution,[8] we consolidated the first two cases. While in our subsequent April 23, 2007[9] and July 11, 2007[10] Resolutions,
we consolidated the four cases as they arose from the same facts.

The undisputed facts as found by the CA in CA-G.R. SP No. 87931 are as follows:

On September 24, 1973, the then Secretary of Agriculture and Natural Resources and Infanta Mineral and Industrial Corporation (Infanta) entered into a Mining
Lease Contract (V-1050) for a term of 25 years up to September 23, 1998 for mining lode claims covering an area of 216 hectares at Sitio Linao, Ipilan, Brookes
Point, Palawan. The mining claims of Infanta covered by lode/lease contracts were as follows:

Contract No. Area Date of Issuance

LLC-V-941 18 hectares January 17, 1972
LC-V-1050 216 hectares September 24, 1973
LLC-V-1060 16 hectares October 30, 1973
LLC-V-1061 144 hectares October 30, 1973
LLC-V-1073 144 hectares April 18, 1973
MLC-MRD-52 306 hectares April 26, 1978
MLC-MRC-53 72 hectares April 26, 1978

Infantas corporate name was changed to Cobertson Holdings Corporation on January 26, 1994 and subsequently to its present name, Macroasia Corporation,
on November 6, 1995.

Sometime in 1997, Celestial filed a Petition to Cancel the subject mining lease contracts and other mining claims of Macroasia including those covered by Mining
Lease Contract No. V-1050, before the Panel of Arbitrators (POA) of the Mines and Geo-Sciences Bureau (MGB) of the DENR. The petition was docketed as DENR
Case No. 97-01.

Blue Ridge, in an earlier letter-petition, also wrote the Director of Mines to seek cancellation of mining lease contracts and other mining rights of Macroasia and
another entity, Lebach Mining Corporation (Lebach), in mining areas in Brookes Point. The petition was eventually docketed as DENR Case No. 97-02.

Celestial is the assignee of 144 mining claims covering such areas contiguous to Infantas (now Macroasia) mining lode claims. Said area was involved in
protracted administrative disputes with Infanta (now Macroasia), Lecar & Sons, Inc., and Palawan Nickel Mining Corporation. Celestial also holds an MPSA with
the government which covers 2,835 hectares located at Ipilan/Maasin, Brookes Point, Palawan and two pending applications covering another 4,040 hectares in
Barangay Mainit also in Brookes Point.

Celestial sought the cancellation of Macroasias lease contracts on the following grounds: (1) the nonpayment of Macroasia of required occupational
fees and municipal taxes; (2) the non-filing of Macroasia of Affidavits of Annual Work Obligations; (3) the failure of Macroasia to provide improvements on
subject mining claims; (4) the concentration of Macroasia on logging; (5) the encroachment, mining, and extraction by Macroasia of nickel ore from Celestials
property; (6) the ability of Celestial to subject the mining areas to commercial production; and (7) the willingness of Celestial to pay fees and back taxes of
Macroasia.

In the later part of the proceedings, Macroasia intervened in the case and submitted its position paper refuting the grounds for cancellation invoked by
Celestial.[11]

The Ruling of the Panel of Arbitrators in

DENR Case Nos. 97-01 and 97-02

Based on the records of the Bureau of Mines and findings of the field investigations, the POA found that Macroasia and Lebach not only automatically
abandoned their areas/mining claims but likewise had lost all their rights to the mining claims. The POA granted the petition of Celestial to cancel the following
Mining Lease Contracts of Macroasia: LLC-V-941, LLC-V-1050, LLC-V-1060, LLC-V-1061, LLC-V-1073, MLC-MRD-52, and MLC-MRC-53; and found the claims of the
others indubitably meritorious. It gave Celestial the preferential right to Macroasias mining areas.[12] It upheld Blue Ridges petition regarding DENR Case No.
97-02, but only as against the Mining Lease Contract areas of Lebach (LLC-V-1153, LLC-V-1154, and LLC-V-1155), and the said leased areas were declared
automatically abandoned. It gave Blue Ridge priority right to the aforesaid Lebachs areas/mining claims.[13]

Blue Ridge and Macroasia appealed before the MAB, and the cases were docketed as MAB Case Nos. 056-97 and 057-97, respectively.

Lebach did not file any notice of appeal with the required memorandum of appeal; thus, with respect to Lebach, the above resolution became final
and executory.

The Rulings of the Mines Adjudication Board in

MAB Case Nos. 056-97 and 057-97 (DENR Case Nos. 97-01 and 97-02)

The MAB resolved the issues of timeliness and perfection of Macroasias appeal; Macroasias abandonment of its mining claims; and the preferential
right over the abandoned mining claims of Macroasia.

Conformably with Section 51 of Consolidated Mines Administrative Order (CMAO)[14] implementing Presidential Decree No. (PD) 463[15] and our ruling
in Medrana v. Office of the President (OP),[16] the MAB affirmed the POA findings that Macroasia abandoned its mining claims. The MAB found that Macroasia
did not comply with its work obligations from 1986 to 1991. It based its conclusion on the field verifications conducted by the MGB, Region IV and validated by
the Special Team tasked by the MAB.[17] However, contrary to the findings of the POA, the MAB found that it was Blue Ridge that had prior and preferential
rights over the mining claims of Macroasia, and not Celestial.

Thus, on October 24, 2000, the MAB promulgated its Decision upholding the Decision of the POA to cancel the Mining Lode/Lease Contracts of
Macroasia; declaring abandoned the subject mining claims; and opening the mining area with prior and preferential rights to Blue Ridge for mining applications,
subject to strict compliance with the procedure and requirements provided by law. In case Blue Ridge defaults, Celestial could exercise the secondary priority
and preferential rights, and subsequently, in case Celestial also defaults, other qualified applicants could file.[18]
Both Celestial and Macroasia moved for reconsideration.[19] Celestial asserted that it had better rights than Blue Ridge over the mining claims of
Macroasia as it had correctly filed its petition, and filed its MPSA application after Macroasias lease contract expired on January 17, 1997 and after the POAs
resolution was issued on September 1, 1997. Moreover, it argued that priority was not an issue when the contested area had not yet been declared
abandoned. Thus, Blue Ridges MPSA application filed on June 17, 1996 had no effect and should not be considered superior since Macroasias lease contracts
were still valid and subsisting and could not have been canceled by Macroasias mere failure to perform annual work obligations and pay corresponding
royalties/taxes to the government.

Macroasia, in its Motion for Reconsideration, reiterated that it did not abandon its mining claims, and even if mining was not listed among its
purposes in its amended Articles of Incorporation, its mining activities were acts that were only ultra vires but were ratified as a secondary purpose by its
stockholders in subsequent amendments of its Articles of Incorporation.

Before the MAB could resolve the motions for reconsideration, on March 16, 2001, Macroasia filed its Supplemental Motion for
Reconsideration[20] questioning the jurisdiction of the POA in canceling mining lease contracts and mining claims. Macroasia averred that the power and
authority to grant, cancel, and revoke mineral agreements is exclusively lodged with the DENR Secretary. Macroasia further pointed out that in arrogating upon
itself such power, the POA whimsically and capriciously discarded the procedure on conferment of mining rights laid down in Republic Act No. (RA) 7942, The
Philippine Mining Act of 1995, and DENR Administrative Order No. (AO) 96-40,[21] and perfunctorily and improperly awarded its mining rights to Blue Ridge and
Celestial.

Subsequently, on November 26, 2004, the MAB issued a Resolution[22] vacating its October 24, 2000 Decision, holding that neither the POA nor the
MAB had the power to revoke a mineral agreement duly entered into by the DENR Secretary, ratiocinating that there was no provision giving the POA and MAB
the concurrent power to manage or develop mineral resources. The MAB further held that the power to cancel or revoke a mineral agreement was exclusively
lodged with the DENR Secretary; that a petition for cancellation is not a mining dispute under the exclusive jurisdiction of the POA pursuant to Sec. 77 of RA
7942; and that the POA could only adjudicate claims or contests during the MPSA application and not when the claims and leases were already granted and
subsisting.

Moreover, the MAB held that there was no abandonment by Macroasia because the DENR Secretary had not decided to release Macroasia from its
obligations. The Secretary may choose not to release a contractor from its obligations on grounds of public interest. Thus, through its said resolution, the MAB
rendered its disposition, as follows:

WHEREFORE, premises considered, the assailed Decision of October 24, 2000 is hereby VACATED. The seven (7) mining lease contracts of
Macroasia Corporation (formerly Infanta Mineral & Industrial Corporation) are DECLARED SUBSISTING prior to their expirations without
prejudice to any Decision or Order that the Secretary may render on the same. NO PREFERENTIAL RIGHT over the same mining claims is
accorded to Blue Ridge Mineral Corporation or Celestial Nickel Mining Exploration Corporation also without prejudice to the
determination by the Secretary over the matter at the proper time.[23]

After the issuance of the MAB Resolution, Celestial and Blue Ridge went through divergent paths in their quest to protect their individual interests.

On January 10, 2005, Celestial assailed the November 26, 2004 MAB Resolution before the CA in a petition for review[24] under Rule 43 of the Rules of
Court. The petition entitled Celestial Nickel Mining Exploration Corporation v. Macroasia Corporation, et al. was docketed as CA-G.R. SP No. 87931.

On the other hand, Blue Ridge first filed a Motion for Reconsideration[25] which was denied.[26] On August 26, 2005, Blue Ridge questioned the MABs
November 26, 2004 and July 12, 2005 Resolutions before the CA in a petition for review[27] entitled Blue Ridge Mineral Corporation v. Mines Adjudication Board,
et al. docketed as CA-G.R. SP No. 90828.

CA-G.R. SP No. 87931 filed by Celestial was heard by the 12th Division of the CA; while Blue Ridges CA-G.R. SP No. 90828 was heard by the Special
10th Division. Ironically, the two divisions rendered two (2) diametrically opposing decisions.

The Ruling of the Court of Appeals Twelfth Division

On April 15, 2005, in CA-G.R. SP No. 87931, the CA 12th Division affirmed the November 26, 2004 MAB Resolution which declared Macroasias seven
mining lease contracts as subsisting; rejected Blue Ridges claim for preferential right over said mining claims; and upheld the exclusive authority of the DENR
Secretary to approve, cancel, and revoke mineral agreements. The CA also denied Celestials Motion for Reconsideration[28] of the assailed August 3,
2005 Resolution.[29]

Hence, Celestial filed its Petition for Review on Certiorari[30] docketed as G.R. No. 169080, before this Court.

The Ruling of the Court of Appeals Special Tenth Division

On May 18, 2006, the CA Special 10th Division in CA-G.R. SP No. 90828 granted Blue Ridges petition; reversed and set aside the November 26, 2004
and July 12, 2005 Resolutions of the MAB; and reinstated the October 24, 2000 Decision in MAB Case Nos. 056-97 and 057-97. The Special Tenth Division
canceled Macroasias lease contracts; granted Blue Ridge prior and preferential rights; and treated the cancellation of a mining lease agreement as a mining
dispute within the exclusive jurisdiction of the POA under Sec. 77 of RA 7942, explaining that the power to resolve mining disputes, which is the greater power,
necessarily includes the lesser power to cancel mining agreements.

On February 20, 2006, Celestial filed a Most Urgent Motion for Issuance of a Temporary Restraining Order/Preliminary Prohibitory
Injunction/Mandatory Injunction[31] to defer and preclude the issuance of MPSA to Macroasia by the MGB and the DENR Secretary. We denied this motion in
our February 22, 2006 Resolution.[32]

Upon inquiry with the DENR, Blue Ridge discovered that sometime in December 2005 two MPSAs, duly approved and signed by the DENR Secretary,
had been issued in favor of Macroasia. Thus, we have the instant Petition for Certiorari[33] filed by Blue Ridge docketed as G.R. No. 172936 under Rule
65, seeking to invalidate the two MPSAs issued to Macroasia.
 In the meantime, on June 7, 2006, Celestial filed its Motion for Partial Reconsideration[34] of the May 18, 2006 CA Decision in CA-G.R. SP No. 90828,
while Macroasia filed its motion for reconsideration of the same CA decision on July 7, 2006. The motions were denied in the assailed January 19, 2007 CA
Resolution. Hence, on March 8, 2007, Celestial filed the third petition[35] docketed as G.R. No. 176226, assailing the CAs May 18, 2006 Decision and January 19,
2007 Resolution, insofar as these granted Blue Ridges prior and preferential rights. While on March 9, 2007, Macroasia filed the fourth petition[36] docketed
as G.R. No. 176319, also assailing the CAs May 18, 2006 Decision and January 19, 2007 Resolution.

The Issues

In G.R. No. 169080, petitioner Celestial raises the following issues for our consideration:

(1) Whether or not Macroasia, for reasons of public policy is estopped from assailing the alleged lack of jurisdiction of the Panel of
Arbitrators and the Mines Adjudication Board only after receiving an adverse judgment therefrom? [sic]

(2) Whether or not it is only the Secretary of the DENR who has the jurisdiction to cancel mining contracts and privileges? [sic]

(3) Whether or not a petition for the cancellation of a mining lease contract or privilege is a mining dispute within the meaning of the law?
[sic]
(4) Whether or not Infantas (Macroasia) mining lease contract areas were deemed abandoned warranting the cancellation of the lease
contracts and the opening of the areas to other qualified applicants? [sic]
(5) Whether or not Macroasia/Infanta had lost its right to participate in this case after it failed to seasonably file its appeal and after its
lease contracts had been declared abandoned and expired without having been renewed by the government? [sic]

(6) Whether or not Celestial has the preferential right to apply for the 23 DE LARA claims which were included in Infantas (Macroasia)
expired lease contract (LLC-V-941) and the other areas declared as lapsed or abandoned by MGB-Region 4 and the Panel of
Arbitrators?[37] [sic]

In G.R. No. 172936, petitioner Blue Ridge raises the following grounds for the allowance of the petition:

At the outset, the instant petition must be given due course and taken cognizance of by the Honorable Court considering that exceptional
and compelling circumstances justify the availment of the instant petition and the call for the exercise of the Honorable Courts primary
jurisdiction.

A. The exploration, development and utilization of minerals, petroleum and other mineral oils are imbued with public interest. The action
of then Secretary Defensor, maintained and continued by public respondent Secretary Reyes, was tainted with grave abuse of discretion,
has far-reaching consequences because of the magnitude of the effect created thereby.

B. The issues in the instant petition have already been put to fore by Celestial with the First Division of the Honorable Court, and hence,
this circumstance justifies the cognizance by the Honorable Court of the instant petition.

II

It was grave abuse of discretion amounting to lack and/or excess of jurisdiction for then Secretary Defensor to have issued the subject
MPSAs in favor of private respondent Macroasia, considering that:

A. Non-compliance of the mandatory requirements by private respondent Macroasia prior to approval of the subject MPSAs should have
precluded then Secretary Defensor from approving subject MPSAs.

B. Petitioner Blue Ridge has the prior and preferential right to file its mining application over the mining claims covered by the subject
MPSAs, pursuant to the Decision dated 24 October 2000 of the Board and as affirmed by the Decision dated 18 May 2006 of the
Court of Appeals in CA-G.R. SP No. 90828.[38]
In G.R. No. 176226, petitioner Celestial ascribes the following errors to the CA for our consideration:

(1) That in reinstating and adopting as its own the Decision of the Mine Adjudication Board affirming the abandonment and cancellation of
the mining areas/claims of Macroasia (Infanta) but awarding the prior or preferential rights to Blue Ridge, the Hon. Court of Appeals had
decided a question of substance in a way not in accord with the Law (RA 7942) or with the applicable decisions of the Supreme Court; in
other words, errors of law had been committed by the Hon. Court of Appeals in granting preferential rights to Blue Ridge;

(2) That the Hon. Court of Appeals has so far departed from the accepted and usual course of judicial proceedings or so far sanctioned
such departure by the Mines Adjudication Board in its Decision of May 18, 2006 and Resolution of January 19, 2007 because:

(A) The findings of fact of the Hon. Court of Appeals are contradictory or inconsistent with the findings of the Panel
of Arbitrators;

(B) There is grave abuse of discretion on the part of the Hon. Court of Appeals in its appreciation of the facts, the
evidence and the law thereby leading it to make the erroneous conclusion that Blue Ridge, not Celestial, is entitled to the
Award of prior/preferential rights over the mining areas declared as abandoned by Macroasia;

(C) There is likewise, a grave abuse of discretion on the part of the Hon. Court of Appeals in that the said Court did
not even consider some of the issues raised by Celestial;

(D) That the findings of the Hon. Court of Appeals are mere conclusions not supported by substantial evidence and
without citation of the specific evidence upon which they are based; they were arrived at arbitrarily or in disregard of
contradiction of the evidence on record and findings of the Panel of Arbitrators in the Resolution of September 1, 1997;
 (E) That the findings of the Hon. Court of Appeals are premised on the absence of evidence but such findings are
contradicted by the evidence on record and are violative of the provisions of RA 7942 and its Implementing Rules and
Regulations.[39]

In G.R. No. 176319, petitioner Macroasia raises the following grounds for the allowance of the petition:
I.

The Court of Appeals (Special Tenth Division) should have dismissed the Petition of Blue Ridge outright since the issues, facts and matters
involved in the said Petition are identical to those which had already been painstakingly passed upon, reviewed and resolved by the Court
of Appeals Twelfth Division in CA-G.R. SP No. 87931

II.

The Court of Appeals (Special Tenth Division) gravely erred in denying Macroasias Motion to Inhibit Associate Justice Rosmari Carandang
from hearing and deciding the Petition

III.

There were no factual nor legal bases for the Court of Appeals to rule that Macroasia had waived its right to question the jurisdiction of
the Mines Adjudication Board

IV.

Republic Act No. 7942 contains provisions which unequivocally indicate that only the Secretary of the Department of Environment and
Natural Resources has the power and authority to cancel mining lease agreements

V.

The Court of Appeals (Special Tenth Division) gravely erred in perfunctorily transferring Macroasias mining lease agreements to Blue
Ridge without observing the required procedure nor providing any basis therefor[40]

The Courts Ruling

The petitions under G.R. Nos. 169080, 172936, and 176226 are bereft of merit, while the petition under G.R. No. 176319 is meritorious.

The pith of the controversy, upon which the other issues are hinged is, who has authority and jurisdiction to cancel existing mineral agreements
under RA 7942 in relation to PD 463 and pertinent rules and regulations.

G.R. Nos. 169080, 176226 and 176319

We will jointly tackle G.R. Nos. 169080, 176266, and 176319 as the issues and arguments of these three are inextricably intertwined.

Core Issue: Jurisdiction over Cancellation of Mineral Agreements

Petitioner Celestial maintains that while the jurisdiction to approve mining lease contracts or mineral agreements is conferred on the DENR Secretary,
Sec. 77(a) of RA 7942 by implication granted to the POA and MAB the authority to cancel existing mining lease contracts or mineral agreements.

On the other hand, respondent Macroasia strongly asserts that it is the DENR Secretary who has the exclusive and primary jurisdiction to grant and
cancel existing mining lease contracts; thus, the POA and MAB have no jurisdiction to cancel much less to grant any preferential rights to other mining firms.

Before we resolve this core issue of jurisdiction over cancellation of mining lease contracts, we first need to look back at previous mining laws
pertinent to this issue.

Under PD 463, The Mineral Resources Development Decree of 1974, which took effect on May 17, 1974, applications for lease of mining claims were
required to be filed with the Director of the Bureau of Mines, within two (2) days from the date of their recording.[41] Sec. 40 of PD 463 provided that if no
adverse claim was filed within (15) days after the first date of publication, it was conclusively presumed that no adverse claim existed and thereafter no
objection from third parties to the grant of the lease could be heard, except protests pending at the time of publication. The Secretary would then approve and
issue the corresponding mining lease contract. In case of any protest or adverse claim relating to any mining claim and lease application, Secs. 48 and 50 of PD
463 prescribed the procedure. Under Sec. 48, the protest should be filed with the Bureau of Mines. Under Sec. 50, any party not satisfied with the decision or
order of the Director could, within five (5) days from receipt of the decision or order, appeal to the Secretary. The decisions of the Secretary were likewise
appealable within five (5) days from receipts by the affected party to the President of the Philippines whose decision shall be final and executory. PD 463 was,
however, silent as to who was authorized to cancel the mineral agreements.

On July 10, 1987, President Corazon C. Aquino issued Executive Order No. (EO) 211. Under Sec. 2 of EO 211, the processing, evaluation, and approval
of all mining applications, declarations of locations, operating agreements, and service contracts were governed by PD 463, as amended. EO 211 likewise did not
contain any provision on the authority to cancel operating agreements and service contracts.

On July 25, 1987, EO 279 was issued by President Aquino. It authorized the DENR Secretary to negotiate and enter into, for and in behalf of the
Government, joint venture, co-production, or production-sharing agreements for the exploration, development, and utilization of mineral resources with any
Filipino citizen, corporation, or association, at least 60% of whose capital was owned by Filipino citizens.[42] The contract or agreement was subject to the
approval of the President.[43] With respect to contracts of foreign-owned corporations or foreign investors involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals, the DENR Secretary could recommend approval of said contracts to the President.[44] EO 279
provided that PD 463 and its implementing rules and regulations, which were not inconsistent with EO 279, continued in force and effect.[45] Again, EO 279 was
silent on the authority to cancel mineral agreements.
 RA 7942, The Philippine Mining Act of 1995 enacted on March 3, 1995, repealed the provisions of PD 463 inconsistent with RA 7942. Unlike PD 463,
where the application was filed with the Bureau of Mines Director, the applications for mineral agreements are now required to be filed with the Regional
Director as provided by Sec. 29 of RA 7942. The proper filing gave the proponent the prior right to be approved by the Secretary and thereafter to be submitted
to the President. The President shall provide a list to Congress of every approved mineral agreement within 30 days from its approval by the Secretary. Again, RA
7942 is silent on who has authority to cancel the agreement.

Compared to PD 463 where disputes were decided by the Bureau of Mines Director whose decisions were appealable to the DENR Secretary and then
to the President, RA 7942 now provides for the creation of quasi-judicial bodies (POA and MAB) that would have jurisdiction over conflicts arising from the
applications and mineral agreements. Secs. 77, 78, and 79 lay down the procedure, thus:

SEC. 77. Panel of Arbitrators.There shall be a panel of arbitrators in the regional office of the Department composed of three (3) members,
two (2) of whom must be members of the Philippine Bar in good standing and one [1] licensed mining engineer or a professional in a
related field, and duly designated by the Secretary as recommended by the Mines and Geosciences Bureau Director. Those designated as
members of the panel shall serve as such in addition to their work in the Department without receiving any additional compensation. As
much as practicable, said members shall come from the different bureaus of the Department in the region. The presiding officer thereof
shall be selected by the drawing of lots. His tenure as presiding officer shall be on a yearly basis. The members of the panel shall perform
their duties and obligations in hearing and deciding cases until their designation is withdrawn or revoked by the Secretary. Within thirty
(30) working days, after the submission of the case by the parties for decision, the panel shall have exclusive and original jurisdiction to
hear and decide on the following:

(a) Disputes involving rights to mining areas;

(b) Disputes involving mineral agreements or permits;

(c) Disputes involving surface owners, occupants and claimholders/concessionaires; and

(d) Disputes pending before the Bureau and the Department at the date of the effectivity of this Act.

SEC. 78. Appellate Jurisdiction.The decision or order of the panel of arbitrators may be appealed by the party not satisfied thereto to the
Mines Adjudication Board within fifteen (15) days from receipt thereof which must decide the case within thirty (30) days from submission
thereof for decision.

SEC. 79. Mines Adjudication Board.The Mines Adjudication Board shall be composed of three (3) members. The Secretary shall be the
chairman with the Director of the Mines and Geosciences Bureau and the Undersecretary for Operations of the Department as members
thereof.

xxxx

A petition for review by certiorari and question of law may be filed by the aggrieved party with the Supreme Court within thirty (30) days
from receipt of the order or decision of the Board.

RA 7942 is also silent as to who is empowered to cancel existing lease contracts and mineral agreements.

Meanwhile, in Southeast Mindanao Gold Mining Corp. v. MAB, we explained that the decision of the MAB can first be appealed, via a petition for
review, to the CA before elevating the case to this Court.[46]

After a scrutiny of the provisions of PD 463, EO 211, EO 279, RA 7942 and its implementing rules and regulations, executive issuances, and case law,
we rule that the DENR Secretary, not the POA, has the jurisdiction to cancel existing mineral lease contracts or mineral agreements based on the following
reasons:

1. The power of the DENR Secretary to cancel mineral agreements emanates from his administrative authority, supervision, management, and control
over mineral resources under Chapter I, Title XIV of Book IV of the Revised Administrative Code of 1987, viz:

Chapter 1General Provisions

Section 1. Declaration of Policy.(1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as
well as the judicious disposition, utilization, management, renewal and conservation of the countrysforest, mineral, land, waters,
fisheries, wildlife, off-shore areas and other natural resources x x x

Sec. 2. Mandate.(1) The Department of Environment and Natural Resources shall be primarily responsible for the implementation of the
foregoing policy. (2) It shall, subject to law and higher authority, be in charge of carrying out the States constitutional mandate to
control and supervise the exploration, development, utilization, and conservation of the countrys natural resources.

xxxx

Sec. 4. Powers and Functions.The Department shall:

xxxx

(2) Formulate, implement and supervise the implementation of the governments policies, plans, and programs pertaining to the
management, conservation, development, use and replenishment of the countrys natural resources;

xxxx

(4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral resources x x x

xxxx
 (12) Regulate the development, disposition, extraction, exploration and use of the countrys forest, land, water and mineral resources;

(13) Assume responsibility for the assessment, development, protection, licensing and regulation as provided for by law,
where applicable, of all energy and natural resources; the regulation and monitoring of service contractors, licensees, lessees, and
permit for the extraction, exploration, development and use of natural resources products; x x x

xxxx

(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain x x x

Chapter 2The Department Proper

xxxx

Sec. 8. The Secretary.The Secretary shall:

xxxx

(3) Promulgate rules, regulations and other issuances necessary in carrying out the Departments mandate, objectives,
policies, plans, programs and projects.

(4) Exercise supervision and control over all functions and activities of the Department;

(5) Delegate authority for the performance of any administrative or substantive function to subordinate officials of the
Department x x x (Emphasis supplied.)

It is the DENR, through the Secretary, that manages, supervises, and regulates the use and development of all mineral resources of the country. It has
exclusive jurisdiction over the management of all lands of public domain, which covers mineral resources and deposits from said lands. It has the power to
oversee, supervise, and police our natural resources which include mineral resources. Derived from the broad and explicit powers of the DENR and its Secretary
under the Administrative Code of 1987 is the power to approve mineral agreements and necessarily to cancel or cause to cancel said agreements.

2. RA 7942 confers to the DENR Secretary specific authority over mineral resources.

Secs. 8 and 29 of RA 7942 pertinently provide:

SEC. 8. Authority of the Department.The Department shall be the primary government agency responsible for the conservation,
management, development, and proper use of the States mineral resources including those in reservations, watershed areas, and lands of
the public domain. The Secretary shall have the authority to enter into mineral agreements on behalf of the Government upon the
recommendation of the Director, promulgate such rules and regulations as may be necessary to implement the intent and provisions of
this Act.

SEC. 29. Filing and approval of Mineral Agreements.x x x.

The filing of a proposal for a mineral agreement shall give the proponent the prior right to areas covered by the same. The proposed
mineral agreement will be approved by the Secretary and copies thereof shall be submitted to the President. Thereafter, the President
shall provide a list to Congress of every approved mineral agreement within thirty (30) days from its approval by the Secretary. (Emphasis
supplied.)

Sec. 29 is a carry over of Sec. 40 of PD 463 which granted jurisdiction to the DENR Secretary to approve mining lease contracts on behalf of the
government, thus:

SEC. 40. Issuance of Mining Lease Contract.If no adverse claim is filed within fifteen (15) days after the first date of publication,
it shall be conclusively presumed that no such adverse claim exists and thereafter no objection from third parties to the grant of the lease
shall be heard, except protest pending at the time of publication, and the Secretary shall approve and issue the corresponding mining
lease x x x.

To enforce PD 463, the CMAO containing the rules and regulations implementing PD 463 was issued. Sec. 44 of the CMAO provides:

SEC. 44. Procedure for Cancellation.Before any mining lease contract is cancelled for any cause enumerated in Section 43 above, the
mining lessee shall first be notified in writing of such cause or causes, and shall be given an opportunity to be heard, and to show cause
why the lease shall not be cancelled.

If, upon investigation, the Secretary shall find the lessee to be in default, the former may warn the lessee, suspend his operations
or cancel the lease contract (emphasis supplied).
Sec. 4 of EO 279 provided that the provisions of PD 463 and its implementing rules and regulations, not inconsistent with the executive order,
continue in force and effect.

When RA 7942 took effect on March 3, 1995, there was no provision on who could cancel mineral agreements. However, since the aforequoted Sec.
44 of the CMAO implementing PD 463 was not repealed by RA 7942 and DENR AO 96-40, not being contrary to any of the provisions in them, then it follows that
Sec. 44 serves as basis for the DENR Secretarys authority to cancel mineral agreements.
 Since the DENR Secretary had the power to approve and cancel mineral agreements under PD 463, and the power to cancel them under the CMAO
implementing PD 463, EO 211, and EO 279, then there was no recall of the power of the DENR Secretary under RA 7942. Historically, the DENR Secretary has the
express power to approve mineral agreements or contracts and the implied power to cancel said agreements.

It is a well-established principle that in the interpretation of an ambiguous provision of law, the history of the enactment of the law may be used as
an extrinsic aid to determine the import of the legal provision or the law.[47] History of the enactment of the statute constitutes prior laws on the same subject
matter. Legislative history necessitates review of the origin, antecedents and derivation of the law in question to discover the legislative purpose or intent.[48] It
can be assumed that the new legislation has been enacted as continuation of the existing legislative policy or as a new effort to perpetuate it or further advance
it.[49]

We rule, therefore, that based on the grant of implied power to terminate mining or mineral contracts under previous laws or executive issuances
like PD 463, EO 211, and EO 279, RA 7942 should be construed as a continuation of the legislative intent to authorize the DENR Secretary to cancel mineral
agreements on account of violations of the terms and conditions thereof.

3. Under RA 7942, the power of control and supervision of the DENR Secretary over the MGB to cancel or recommend cancellation of mineral rights
clearly demonstrates the authority of the DENR Secretary to cancel or approve the cancellation of mineral agreements.

Under Sec. 9 of RA 7942, the MGB was given the power of direct supervision of mineral lands and resources, thus:

Sec. 9. Authority of the Bureau.The Bureau shall have direct charge in the administration and disposition of mineral lands and mineral
resources and shall undertake geological, mining, metallurgical, chemical, and other researches as well as geological and mineral
exploration surveys. The Director shall recommend to the Secretary the granting of mineral agreements to duly qualified persons and
shall monitor the compliance by the contractor of the terms and conditions of the mineral agreements. The Bureau may confiscate
surety, performance and guaranty bonds posted through an order to be promulgated by the Director. The Director may deputize, when
necessary, any member or unit of the Philippine National Police, barangay, duly registered nongovernmental organization (NGO) or any
qualified person to police all mining activities. (Emphasis supplied.)

Corollary to the power of the MGB Director to recommend approval of mineral agreements is his power to cancel or recommend cancellation of
mining rights covered by said agreements under Sec. 7 of DENR AO 96-40, containing the revised Implementing Rules and Regulations of RA 7942. Sec. 7 reads:

Sec. 7. Organization and Authority of the Bureau.

xxxx

The Bureau shall have the following authority, among others:

a. To have direct charge in the administration and disposition of mineral land and mineral resources;

xxxx

d. To recommend to the Secretary the granting of mineral agreements or to endorse to the Secretary for action by the President the grant
of FTAAs [Financial and Technical Assistance Agreements], in favor of qualified persons and to monitor compliance by the Contractor with
the terms and conditions of the mineral agreements and FTAAs.

e. To cancel or to recommend cancellation after due process, mining rights, mining applications and mining claims for non-compliance
with pertinent laws, rules and regulations.

It is explicit from the foregoing provision that the DENR Secretary has the authority to cancel mineral agreements based on the recommendation of
the MGB Director. As a matter of fact, the power to cancel mining rights can even be delegated by the DENR Secretary to the MGB Director. Clearly, it is the
Secretary, not the POA, that has authority and jurisdiction over cancellation of existing mining contracts or mineral agreements.

4. The DENR Secretarys power to cancel mining rights or agreements through the MGB can be inferred from Sec. 230, Chapter XXIV of DENR AO 96-40
on cancellation, revocation, and termination of a permit/mineral agreement/FTAA. Sec. 230 provides:

Section 230. Grounds

The following grounds for cancellation revocation and termination of a Mining Permit Mineral Agreement/FTAA.

a. Violation of any of the terms and conditions of the Permits or Agreements;

b. Nonpayment of taxes and fees due the government for two (2) consecutive years; and

c. Falsehood or omission of facts in the application for exploration [or Mining] Permit Mineral Agreement/FTAA or other permits which
may later, change or affect substantially the facts set forth in said statements.

Though Sec. 230 is silent as to who can order the cancellation, revocation, and termination of a permit/mineral agreement/FTAA, it has to be correlated with the
power of the MGB under Sec. 7 of AO 96-40 to cancel or to recommend cancellation, after due process, mining rights, mining applications and mining claims for
noncompliance with pertinent laws, rules and regulations. As the MGB is under the supervision of the DENR Secretary, then the logical conclusion is that it is the
DENR Secretary who can cancel the mineral agreements and not the POA nor the MAB.

5. Celestial and Blue Ridge are not unaware of the stipulations in the Mining Lease Contract Nos. V-1050 and MRD-52,[50] the cancellation of which they sought
from the POA. It is clear from said lease contracts that the parties are the Republic of the Philippines represented by the Secretary of Agriculture and Natural
Resources (now DENR Secretary) as lessor, and Infanta (Macroasia) as lessee. Paragraph 18 of said lease contracts provides:

Whenever the LESSEE fails to comply with any provision of [PD 463, and] Commonwealth Acts Nos. 137, 466 and 470, [both as amended,]
and/or the rules and regulations promulgated thereunder, or any of the covenants therein, the LESSOR may declare this lease
 cancelled and, after having given thirty (30) days notice in writing to the LESSEE, may enter and take possession of the said premises, and
said lessee shall be liable for all unpaid rentals, royalties and taxes due the Government on the lease up to the time of the forfeiture or
cancellation, in which event, the LESSEE hereby covenants and agrees to give up the possession of the property leased. (Emphasis
supplied.)

Thus, the government represented by the then Secretary of Agriculture and Natural Resources (now the DENR Secretary) has the power to cancel the lease
contracts for violations of existing laws, rules and regulations and the terms and conditions of the contracts. Celestial and Blue Ridge are now estopped from
challenging the power and authority of the DENR Secretary to cancel mineral agreements.

However, Celestial and Blue Ridge insist that the power to cancel mineral agreements is also lodged with the POA under the explicit provisions of Sec. 77 of RA
7942.

This postulation is incorrect.

Sec. 77 of RA 7942 lays down the jurisdiction of POA, to wit:

Within thirty (30) days, after the submission of the case by the parties for the decision, the panel shall have exclusive and original
jurisdiction to hear and decide the following:

(a) Disputes involving rights to mining areas

(b) Disputes involving mineral agreements or permits

The phrase disputes involving rights to mining areas refers to any adverse claim, protest, or opposition to an application for mineral agreement. The
POA therefore has the jurisdiction to resolve any adverse claim, protest, or opposition to a pending application for a mineral agreement filed with the concerned
Regional Office of the MGB. This is clear from Secs. 38 and 41 of DENR AO 96-40, which provide:

Sec. 38.

xxxx

Within thirty (30) calendar days from the last date of publication/posting/radio announcements, the authorized officer(s) of the
concerned office(s) shall issue a certification(s) that the publication/posting/radio announcement have been complied with. Any adverse
claim, protest or opposition shall be filed directly, within thirty (30) calendar days from the last date of publication/posting/radio
announcement, with the concerned Regional Office or through any concerned PENRO or CENRO for filing in the concerned Regional
Office for purposes of its resolution by the Panel of Arbitrators pursuant to the provisions of this Act and these implementing rules and
regulations. Upon final resolution of any adverse claim, protest or opposition, the Panel of Arbitrators shall likewise issue a certification
to that effect within five (5) working days from the date of finality of resolution thereof. Where there is no adverse claim, protest or
opposition, the Panel of Arbitrators shall likewise issue a Certification to that effect within five working days therefrom.

xxxx

No Mineral Agreement shall be approved unless the requirements under this Section are fully complied with and any
adverse claim/protest/opposition is finally resolved by the Panel of Arbitrators.

Sec. 41.
xxxx

Within fifteen (15) working days from the receipt of the Certification issued by the Panel of Arbitrators as provided in
Section 38 hereof, the concerned Regional Director shall initially evaluate the Mineral Agreement applications in areas outside Mineral
reservations. He/She shall thereafter endorse his/her findings to the Bureau for further evaluation by the Director within fifteen (15)
working days from receipt of forwarded documents.Thereafter, the Director shall endorse the same to the secretary for
consideration/approval within fifteen working days from receipt of such endorsement.

In case of Mineral Agreement applications in areas with Mineral Reservations, within fifteen (15) working days from receipt of
the Certification issued by the Panel of Arbitrators as provided for in Section 38 hereof, the same shall be evaluated and endorsed by
the Director to the Secretary for consideration/approval within fifteen days from receipt of such endorsement. (Emphasis supplied.)

It has been made clear from the aforecited provisions that the disputes involving rights to mining areas under Sec. 77(a) specifically refer only to
those disputes relative to the applications for a mineral agreement or conferment of mining rights.
The jurisdiction of the POA over adverse claims, protest, or oppositions to a mining right application is further elucidated by Secs. 219 and 43 of DENR
AO 95-936, which read:

Sec. 219. Filing of Adverse Claims/Conflicts/Oppositions.Notwithstanding the provisions of Sections 28, 43 and 57 above, any
adverse claim, protest or opposition specified in said sections may also be filed directly with the Panel of Arbitrators within the
concerned periods for filing such claim, protest or opposition as specified in said Sections.

Sec. 43. Publication/Posting of Mineral Agreement Application.

xxxx
 The Regional Director or concerned Regional Director shall also cause the posting of the application on the bulletin boards of the Bureau,
concerned Regional office(s) and in the concerned province(s) and municipality(ies), copy furnished the barangays where the proposed
contract area is located once a week for two (2) consecutive weeks in a language generally understood in the locality. After forty-five (45)
days from the last date of publication/posting has been made and no adverse claim, protest or opposition was filed within the said
forty-five (45) days, the concerned offices shall issue a certification that publication/posting has been made and that no adverse claim,
protest or opposition of whatever nature has been filed.On the other hand, if there be any adverse claim, protest or opposition, the
same shall be filed within forty-five (45) days from the last date of publication/posting, with the Regional Offices concerned, or through
the Departments Community Environment and Natural Resources Officers (CENRO) or Provincial Environment and Natural Resources
Officers (PENRO), to be filed at the Regional Office for resolution of the Panel of Arbitrators. However previously published valid and
subsisting mining claims are exempted from posted/posting required under this Section.

No mineral agreement shall be approved unless the requirements under this section are fully complied with and any
opposition/adverse claim is dealt with in writing by the Director and resolved by the Panel of Arbitrators.(Emphasis supplied.)

These provisions lead us to conclude that the power of the POA to resolve any adverse claim, opposition, or protest relative to mining rights under
Sec. 77(a) of RA 7942 is confined only to adverse claims, conflicts and oppositions relating to applications for the grant of mineral rights. POAs jurisdiction is
confined only to resolutions of such adverse claims, conflicts and oppositions and it has no authority to approve or reject said applications. Such power is vested
in the DENR Secretary upon recommendation of the MGB Director. Clearly, POAs jurisdiction over disputes involving rights to mining areas has nothing to do
with the cancellation of existing mineral agreements.

On the other hand, Celestial and Blue Ridge contend that POA has jurisdiction over their petitions for the cancellation of Macroasias lease
agreements banking on POAs jurisdiction over disputes involving mineral agreements or permits under Sec. 77 (b) of RA 7942.

Such position is bereft of merit.

As earlier discussed, the DENR Secretary, by virtue of his powers as administrative head of his department in charge of the management and
supervision of the natural resources of the country under the 1987 Administrative Code, RA 7942, and other laws, rules, and regulations, can cancel a mineral
agreement for violation of its terms, even without a petition or request filed for its cancellation, provided there is compliance with due process. Since the
cancellation of the mineral agreement is approved by the DENR Secretary, then the recourse of the contractor is to elevate the matter to the OP pursuant to AO
18, Series of 1987 but not with the POA.

Matched with the legal provisions empowering the DENR Secretary to cancel a mineral agreement is Sec. 77 (b) of RA 7942 which grants POA
jurisdiction over disputes involving mineral agreements.

A dispute is defined as a conflict or controversy; a conflict of claims or rights; an assertion of a right, claim or demand on one side; met by contrary claims or
allegations on the other.[51] It is synonymous to a cause of action which is an act or omission by which a party violates a right of another.[52]

A petition or complaint originating from a dispute can be filed or initiated only by a real party-in-interest. The rules of court define a real party-in-interest as the
party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit.[53] Every action, therefore, can only be
prosecuted in the name of the real party-in-interest.[54] It has been explained that a real party-in-interest plaintiff is one who has a legal right, while a real
party-in-interest-defendant is one who has a correlative legal obligation whose act or omission violates the legal right of the former.[55]

On the other hand, interest means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question
involved, or a mere incidental interest. It is settled in this jurisdiction that one having no right or interest to protect cannot invoke the jurisdiction of the court as
a party-plaintiff in an action.[56] Real interest is defined as a present substantial interest, as distinguished from a mere expectancy, or a future, contingent,
subordinate or consequential interest.[57]

From the foregoing, a petition for the cancellation of an existing mineral agreement covering an area applied for by an applicant based on the alleged violation
of any of the terms thereof, is not a dispute involving a mineral agreement under Sec. 77 (b) of RA 7942. It does not pertain to a violation by a party of the right
of another. The applicant is not a real party-in-interest as he does not have a material or substantial interest in the mineral agreement but only a prospective or
expectant right or interest in the mining area. He has no legal right to such mining claim and hence no dispute can arise between the applicant and the parties to
the mineral agreement.The court rules therefore that a petition for cancellation of a mineral agreement anchored on the breach thereof even if filed by an
applicant to a mining claim, like Celestial and Blue Ridge, falls within the jurisdiction of the DENR Secretary and not POA. Such petition is excluded from the
coverage of the POAs jurisdiction over disputes involving mineral agreements under Sec. 77 (b) of RA 7942.

Macroasia not estopped from raising the issue of jurisdiction on appeal

On the related issue of estoppel, petitioner Celestial argues that Macroasia is estopped from raising and questioning the issue of the jurisdiction of
the POA and MAB over the petition for cancellation of its mining lease contracts, when Macroasia raised it only in its Supplemental Motion for Reconsideration.

We rule that the principle of estoppel does not apply.

Indeed, Macroasia was not the one that initiated the instant case before the POA, and thus was not the one that invoked the jurisdiction of the
POA. Hence, on appeal, Macroasia is not precluded from raising the issue of jurisdiction as it may be invoked even on appeal.[58] As a matter of fact, a party can
raise the issue of jurisdiction at any stage of the proceedings.

Petitioner Celestials reliance on Villela v. Gozun[59] to support the contention that the POA has jurisdiction to hear and decide a petition to cancel
existing mining lease contracts, is misplaced. In said case, we dismissed the petition on the ground of non-exhaustion of administrative remedies and
disregarded judicial hierarchy as no compelling reason was shown to warrant otherwise. While we pointed out the authority of the POA, there was no
categorical pronouncement on the jurisdictional issue.

No valid pronouncement of abandonment due to lack of jurisdiction over petition to cancel

 As we are not a trier of facts, we need not make any finding on the various investigations done by the MGB and MAB on the issue of Macroasias
non-compliance with its work obligations and nonpayment of taxes and fees. Verily, the law does not impose automatic cancellation of an existing mining lease
contract, as it is a question of fact which must be determined by the MGB which can recommend the cancellation of the mineral or lease agreements to the
DENR Secretary. Be that as it may, since the POA and MAB have no jurisdiction over the petition for cancellation of existing mining lease contracts of Macroasia,
they could not have made any binding pronouncement that Macroasia had indeed abandoned the subject mining claims. Besides, it is the DENR Secretary who
has the authority to cancel Macroasias existing mining lease contracts whether on grounds of abandonment or any valid grounds for cancellation.

Decision in CA-G.R. SP No. 90828 not in accord with the law

With our resolution of the issue on the lack of jurisdiction of the POA and the MAB over petitions to cancel existing mining lease contracts or mineral
agreements, it is thus clear that the May 18, 2006 Decision in CA-G.R. SP No. 90828 must be nullified for being not in accord with the law and the April 15, 2005
Decision in CA-G.R. SP No. 87931 must be upheld.

Notwithstanding the nullification of the May 18, 2006 Decision of the Special Tenth Division in CA-G.R. SP No. 90828, the rendition of two conflicting
decisions of the two CA Divisions over the same challenged resolutions of the MAB should be avoided in the future as this is anathema to stability of judicial
decisions and orderly administration of justice.

The chronology of events reveals the following:

1. January 10, 2005 petitioner Celestial filed its petition docketed as CA-G.R. SP No. 87931 with the CA.

2. April 15, 2005 the CA through its Twelfth Division rendered its Decision in CA-G.R. SP No. 87931 affirming the November 26, 2004 MAB Resolution.

3. July 12, 2005 respondent Blue Ridge filed its petition docketed as CA-G.R. SP No. 90828 with the CA. It is clear that the Blue Ridge petition was filed
with the CA three months after the decision in CA-G.R. SP No. 87931 was promulgated.

4. May 18, 2006 the CA through its Special Tenth Division rendered its Decision setting aside the November 26, 2004 and July 12, 2005 Resolutions of
the MAB and reinstating the October 24, 2000 MAB Decision.

From these facts, the CA Special Tenth Division should have ordered the consolidation of the petition in CA-G.R. SP No. 90828 by CA-G.R. SP No.
87931 pursuant to the Internal Rules of the CA, the latter having the earlier docket number. Had it done so, then the occurrence of the conflicting decisions
could have been prevented. The CA Special Tenth Division should have abided by our ruling in Nacuray v. NLRC, where we held, Consequently, a division cannot
and should not review a case already passed upon by another Division of this Court. It is only proper, to allow the case to take its rest after having attained
finality.[60]

The CA should take the appropriate steps, including the adoption or amendment of the rules, to see to it that cases or petitions arising from the same
questioned decision, order, or resolution are consolidated to steer clear of contrary or opposing decisions of the different CA Divisions and ensure that incidents
of similar nature will not be replicated.

G.R. No. 172936

No showing that the DENR Secretary gravely abused his discretion

Now, going to the substance of the petition in G.R. No. 172936. A scrutiny of the records shows that the DENR Secretary did not gravely abuse his
discretion in approving and signing MPSA Nos. 220-2005-IVB and 221-2005-IVB in favor of Macroasia.

Petitioner Blue Ridge anchors its rights on the May 18, 2006 Decision in CA-G.R. SP No. 90828, which we have unfortunately struck down. Blue Ridges
argument in assailing the approval and issuance of the subject MPSAs that it has been accorded preferential right by the CA has no leg to stand on.

The October 24, 2000 MAB Decision, nullified by the subsequent November 26, 2004 Resolution, is unequivocal that Blue Ridge was granted only
prior and preferential rights to FILE its mining application over the same mining claims.[61] What was accorded Blue Ridge was only the right to file the mining
application but with no assurance that the application will be recommended for approval by the MGB and finally approved by the DENR Secretary.

Moreover, a preferential right would at most be an inchoate right to be given priority in the grant of a mining agreement. It has not yet been
transformed into a legal and vested right unless approved by the MGB or DENR Secretary. Even if Blue Ridge has a preferential right over the subject mining
claims, it is still within the competence and discretion of the DENR Secretary to grant mineral agreements to whomever he deems best to pursue the mining
claims over and above the preferential status given to Blue Ridge. Besides, being simply a preferential right, it is ineffective to dissolve the pre-existing or
subsisting mining lease contracts of Macroasia.

The DENR Secretary has full discretion in the grant of mineral agreements

Blue Ridge also argues that the Secretary gravely abused his discretion in approving the subject MPSAs without Macroasia complying with the
mandatory requirements for mineral agreement applications under Sec. 35 of DENR AO 96-40. Petitioner specifically cited Sec. 36 of DENR AO 96-40 to the
effect that no Mineral Agreement shall be approved unless the requirements under this section are fully complied with and any adverse
claim/protest/opposition thereto is finally resolved by the Panel of Arbitrators. Moreover, Blue Ridge contends that the MPSAs were approved even prior to the
issuance of the Compliance Certificate[62] by the National Commission on Indigenous Peoples under the OP, which is a requisite pre-condition for the issuance of
an MPSA.

We are not persuaded.

Blue Ridge cites Sec. 38 (not Sec. 36) of DENR AO 96-40 as basis for claiming that then DENR Secretary Defensor committed grave abuse of discretion
in granting MPSA Nos. 220-2005-IVB and 221-2005-IVB to Macroasia. Petitioners postulation cannot be entertained for the reason that the issuance of the
mining agreements was not raised before the MGB Director and DENR Secretary, nor was it amply presented before the CA. There is even a counter-charge
that Blue Ridge has not complied with the legal requirements for a mining application. The rule is established that questions raised for the first time on appeal
before this Court are not proper and have to be rejected. Furthermore, the resolution of these factual issues would relegate the Court to a trier of
facts. The Blue Ridge plea is hindered by the factual issue bar rule where factual questions are proscribed under Rule 65. Lastly, there was no exhaustion of
administrative remedies before the MGB and DENR. Thus, Blue Ridges petition must fail.

Primary jurisdiction of the DENR Secretary in determining whether to grant or not a mineral agreement

Verily, RA 7942, similar to PD 463, confers exclusive and primary jurisdiction on the DENR Secretary to approve mineral agreements, which is purely
an administrative function within the scope of his powers and authority. In exercising such exclusive primary jurisdiction, the DENR Secretary, through the MGB,
has the best competence to determine to whom mineral agreements are granted. Settled is the rule that the courts will defer to the decisions of the
administrative offices and agencies by reason of their expertise and experience in the matters assigned to them pursuant to the doctrine of primary
jurisdiction. Administrative decisions on matter within the jurisdiction of administrative bodies are to be respected and can only be set aside on proof of grave
abuse of discretion, fraud, or error of law.[63] Unless it is shown that the then DENR Secretary has acted in a wanton, whimsical, or oppressive manner, giving
undue advantage to a party or for an illegal consideration and similar reasons, this Court cannot look into or review the wisdom of the exercise of such
discretion. Blue Ridgefailed in this regard.

Delineation of powers and functions is accorded the three branches of government for the smooth functioning of the different governmental
services. We will not disturb nor interfere in the exercise of purely administrative functions of the executive branch absent a clear showing of grave abuse of
discretion.

Without a restraining order or injunction, litigation will not deter the DENR from exercising its functions

While it is true that the subject mining claims are under litigation, this does not preclude the DENR and its Secretary from carrying out their functions
and duties without a restraining order or an injunctive writ.Otherwise, public interest and public service would unduly suffer by mere litigation of particular
issues where government interests would be unduly affected. In the instant case, it must be borne in mind that the government has a stake in the subject mining
claims. Also, Macroasia had various valid existing mining lease contracts over the subject mining lode claims issued by the DENR. Thus, Macroasia has an
advantage over Blue Ridge and Celestial insofar as the administrative aspect of pursuing the mineral agreements is concerned.

WHEREFORE, the petitions under G.R. Nos. 169080, 172936, and 176229 are DISMISSED for lack of merit, while the petition under G.R. No. 176319 is
hereby GRANTED. The assailed April 15, 2005 Decision and August 3, 2005 Resolution of the CA in CA-G.R. SP No. 87931 are hereby AFFIRMED IN TOTO. And the
May 18, 2006 Decision and January 19, 2007 Resolution of the CA in CA-G.R. SP No. 90828 are hereby REVERSED and SET ASIDE. In view of the foregoing
considerations, we find no grave abuse of discretion on the part of the then DENR Secretary in the approval and issuance of MPSA Nos. 220-2005-IVB and
221-2005-IVB. Costs against Celestial Nickel Mining Exploration Corporation and Blue Ridge Mineral Corporation. SO ORDERED.

CASE 5: Republic vs. Rosemoor Mining and Development Corp GR No. 149927

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to nullify the May 29, 2001 Decision[2] and the September 6, 2001
Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. 46878. The CA disposed as follows:

WHEREFORE, premises considered, the appealed Decision is hereby AFFIRMED in toto.[4]

The questioned Resolution denied petitioners Motion for Reconsideration.

On the other hand, trial courts Decision, which was affirmed by the CA, had disposed as follows:

WHEREFORE, judgment is hereby rendered as follows:

1. Declaring that the cancellation of License No. 33 was done without jurisdiction and in gross violation of the Constitutional right of the petitioners
against deprivation of their property rights without due process of law and is hereby set aside.

2. Declaring that the petitioners right to continue the exploitation of the marble deposits in the area covered by License No. 33 is maintained for the
duration of the period of its life of twenty-five (25) years, less three (3) years of continuous operation before License No. 33 was cancelled, unless
sooner terminated for violation of any of the conditions specified therein, with due process.

3. Making the Writ of preliminary injunction and the Writ of Preliminary Mandatory Injunction issued as permanent.

4. Ordering the cancellation of the bond filed by the Petitioners in the sum of 1 Million.

5. Allowing the petitioners to present evidence in support of the damages they claim to have suffered from, as a consequence of the summary
cancellation of License No. 33 pursuant to the agreement of the parties on such dates as maybe set by the Court; and

6. Denying for lack of merit the motions for contempt, it appearing that actuations of the respondents were not contumacious and intended to delay
the proceedings or undermine the integrity of the Court.

No pronouncement yet as to costs.[5]

 The Facts

The CA narrated the facts as follows:

The four (4) petitioners, namely, Dr. Lourdes S. Pascual, Dr. Pedro De la Concha, Alejandro De La Concha, and Rufo De Guzman, after having been granted
permission to prospect for marble deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded in discovering marble deposits of high quality and
in commercial quantities in Mount Mabio which forms part of the Biak-na-Bato mountain range.

Having succeeded in discovering said marble deposits, and as a result of their tedious efforts and substantial expenses, the petitioners applied with the Bureau
of Mines, now Mines and Geosciences Bureau, for the issuance of the corresponding license to exploit said marble deposits.

xxxxxxxxx

After compliance with numerous required conditions, License No. 33 was issued by the Bureau of Mines in favor of the herein petitioners.

xxxxxxxxx

Shortly after Respondent Ernesto R. Maceda was appointed Minister of the Department of Energy and Natural Resources (DENR), petitioners License No. 33 was
cancelled by him through his letter to ROSEMOOR MINING AND DEVELOPMENT CORPORATION dated September 6, 1986 for the reasons stated therein. Because
of the aforesaid cancellation, the original petition was filed and later substituted by the petitioners AMENDED PETITION dated August 21, 1991 to assail the
same.

Also after due hearing, the prayer for injunctive relief was granted in the Order of this Court dated February 28, 1992. Accordingly, the corresponding
preliminary writs were issued after the petitioners filed their injunction bond in the amount of ONE MILLION PESOS (P1,000,000.00).

xxxxxxxxx

On September 27, 1996, the trial court rendered the herein questioned decision.[6]

The trial court ruled that the privilege granted under respondents license had already ripened into a property right, which was protected under the due
process clause of the Constitution. Such right was supposedly violated when the license was cancelled without notice and hearing. The cancellation was said to
be unjustified, because the area that could be covered by the four separate applications of respondents was 400 hectares. Finally, according to the RTC,
Proclamation No. 84, which confirmed the cancellation of the license, was an ex post facto law; as such, it violated Section 3 of Article XVIII of the 1987
Constitution.

On appeal to the Court of Appeals, herein petitioners asked whether PD 463 or the Mineral Resources Development Decree of 1974 had been violated by
the award of the 330.3062 hectares to respondents in accordance with Proclamation No. 2204. They also questioned the validity of the cancellation of
respondents Quarry License/Permit (QLP) No. 33.

Ruling of the Court of Appeals

Sustaining the trial court in toto, the CA held that the grant of the quarry license covering 330.3062 hectares to respondents was authorized by law,
because the license was embraced by four (4) separate applications -- each for an area of 81 hectares. Moreover, it held that the limitation under Presidential
Decree No. 463 -- that a quarry license should cover not more than 100 hectares in any given province -- was supplanted by Republic Act No. 7942,[7] which
increased the mining areas allowed under PD 463.

It also ruled that the cancellation of respondents license without notice and hearing was tantamount to a deprivation of property without due process of
law. It added that under the clause in the Constitution dealing with the non-impairment of obligations and contracts, respondents license must be respected by
the State. Hence, this Petition.[8]

Issues:

Petitioners submit the following issues for the Courts consideration: (1) [W]hether or not QLP No. 33 was issued in blatant contravention of Section 69, P.D. No.
463; and (2) whether or not Proclamation No. 84 issued by then President Corazon Aquino is valid. The corollary issue is whether or not the Constitutional
prohibition against ex post facto law applies to Proclamation No. 84[9]

The Courts Ruling The Petition has merit.

First Issue:
Validity of License
 Respondents contend that the Petition has no legal basis, because PD 463 has already been repealed.[10] In effect, they ask for the dismissal of the Petition
on the ground of mootness.

PD 463, as amended, pertained to the old system of exploration, development and utilization of natural resources through licenses, concessions or
leases.[11] While these arrangements were provided under the 1935[12] and the 1973[13] Constitutions, they have been omitted by Section 2 of Article XII of the
1987 Constitution.[14]

With the shift of constitutional policy toward full control and supervision of the State over natural resources, the Court in Miners Association of the
Philippines v. Factoran Jr. [15] declared the provisions of PD 463 as contrary to or violative of the express mandate of the 1987 Constitution. The said provisions
dealt with the lease of mining claims; quarry permits or licenses covering privately owned or public lands; and other related provisions on lease, licenses and
permits.

RA 7942 or the Philippine Mining Act of 1995 embodies the new constitutional mandate. It has repealed or amended all laws, executive orders,
presidential decrees, rules and regulations -- or parts thereof -- that are inconsistent with any of its provisions.[16]

It is relevant to state, however, that Section 2 of Article XII of the 1987 Constitution does not apply retroactively to a license, concession or lease granted
by the government under the 1973 Constitution or before the effectivity of the 1987 Constitution on February 2, 1987.[17] As noted in Miners Association of the
Philippines v. Factoran Jr., the deliberations of the Constitutional Commission[18] emphasized the intent to apply the said constitutional provision prospectively.

While RA 7942 has expressly repealed provisions of mining laws that are inconsistent with its own, it nonetheless respects previously issued valid and
existing licenses, as follows:

SECTION 5. Mineral Reservations. When the national interest so requires, such as when there is a need to preserve strategic raw materials for industries critical
to national development, or certain minerals for scientific, cultural or ecological value, the President may establish mineral reservations upon the
recommendation of the Director through the Secretary. Mining operations in existing mineral reservations and such other reservations as may thereafter be
established, shall be undertaken by the Department or through a contractor: Provided, That a small scale-mining cooperative covered by Republic Act No. 7076
shall be given preferential right to apply for a small-scale mining agreement for a maximum aggregate area of twenty-five percent (25%) of such mineral
reservation, subject to valid existing mining/quarrying rights as provided under Section 112 Chapter XX hereof. All submerged lands within the contiguous zone
and in the exclusive economic zone of the Philippines are hereby declared to be mineral reservations.

xxxxxxxxx

SECTION 7. Periodic Review of Existing Mineral Reservations. The Secretary shall periodically review existing mineral reservations for the purpose of determining
whether their continued existence is consistent with the national interest, and upon his recommendation, the President may, by proclamation, alter or modify
the boundaries thereof or revert the same to the public domain without prejudice to prior existing rights.

SECTION 18. Areas Open to Mining Operations. Subject to any existing rights or reservations and prior agreements of all parties, all mineral resources in public or
private lands, including timber or forestlands as defined in existing laws, shall be open to mineral agreements or financial or technical assistance agreement
applications. Any conflict that may arise under this provision shall be heard and resolved by the panel of arbitrators.

SECTION 19. Areas Closed to Mining Applications. -- Mineral agreement or financial or technical assistance agreement applications shall not be allowed:

(a) In military and other government reservations, except upon prior written clearance by the government agency concerned;

(b) Near or under public or private buildings, cemeteries, archeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other
infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or private entity
concerned;

(c) In areas covered by valid and existing mining rights;

(d) In areas expressly prohibited by law;

(e) In areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners, in which case a royalty payment upon the
utilization of minerals shall be agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development of the community concerned;
and

(f) Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks, provincial/municipal
forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law and in areas expressly prohibited under the National Integrated Protected Areas
System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws.

SECTION 112. Non-impairment of Existing Mining/ Quarrying Rights. All valid and existing mining lease contracts, permits/licenses, leases pending renewal,
mineral production-sharing agreements granted under Executive Order No. 279, at the date of effectivity of this Act, shall remain valid, shall not be impaired,
and shall be recognized by the Government: Provided, That the provisions of Chapter XIV on government share in mineral production-sharing agreement and of
Chapter XVI on incentives of this Act shall immediately govern and apply to a mining lessee or contractor unless the mining lessee or contractor indicates his
intention to the secretary, in writing, not to avail of said provisions: Provided, further, That no renewal of mining lease contracts shall be made after the
expiration of its term: Provided, finally, That such leases, production-sharing agreements, financial or technical assistance agreements shall comply with the
applicable provisions of this Act and its implementing rules and regulations.

SECTION 113. Recognition of Valid and Existing Mining Claims and Lease/Quarry Application. Holders of valid and existing mining claims, lease/quarry
applications shall be given preferential rights to enter into any mode of mineral agreement with the government within two (2) years from the promulgation of
the rules and regulations implementing this Act. (Underscoring supplied)

Section 3(p) of RA 7942 defines an existing mining/quarrying right as a valid and subsisting mining claim or permit or quarry permit or any mining lease
contract or agreement covering a mineralized area granted/issued under pertinent mining laws. Consequently, determining whether the license of respondents
falls under this definition would be relevant to fixing their entitlement to the rights and/or preferences under RA 7942. Hence, the present Petition has not been
mooted.

Petitioners submit that the license clearly contravenes Section 69 of PD 463, because it exceeds the maximum area that may be granted. This incipient
violation, according to them, renders the license void ab initio.

Respondents, on the other hand, argue that the license was validly granted, because it was covered by four separate applications for areas of 81 hectares
each.

The license in question, QLP No. 33,[19] is dated August 3, 1982, and it was issued in the name of Rosemoor Mining Development Corporation. The terms
of the license allowed the corporation to extract and dispose of marbleized limestone from a 330.3062-hectare land in San Miguel, Bulacan. The license is,
however, subject to the terms and conditions of PD 463, the governing law at the time it was granted; as well as to the rules and regulations promulgated
thereunder.[20] By the same token, Proclamation No. 2204 -- which awarded to Rosemoor the right of development, exploitation, and utilization of the mineral
site -- expressly cautioned that the grant was subject to existing policies, laws, rules and regulations.[21]

The license was thus subject to Section 69 of PD 463, which reads:

Section 69. Maximum Area of Quarry License Notwithstanding the provisions of Section 14 hereof, a quarry license shall cover an area of not more than one
hundred (100) hectares in any one province and not more than one thousand (1,000) hectares in the entire Philippines. (Italics supplied)

The language of PD 463 is clear. It states in categorical and mandatory terms that a quarry license, like that of respondents, should cover a maximum of
100 hectares in any given province. This law neither provides any exception nor makes any reference to the number of applications for a license. Section 69 of
PD 463 must be taken to mean exactly what it says. Where the law is clear, plain, and free from ambiguity, it must be given its literal meaning and applied
without attempted interpretation.[22]

Moreover, the lower courts ruling is evidently inconsistent with the fact that QLP No. 33 was issued solely in the name of Rosemoor Mining and
Development Corporation, rather than in the names of the four individual stockholders who are respondents herein. It likewise brushes aside a basic postulate
that a corporation has a separate personality from that of its stockholders.[23]

The interpretation adopted by the lower courts is contrary to the purpose of Section 69 of PD 463. Such intent to limit, without qualification, the area of
a quarry license strictly to 100 hectares in any one province is shown by the opening proviso that reads: Notwithstanding the provisions of Section 14 hereof x x
x. The mandatory nature of the provision is also underscored by the use of the word shall. Hence, in the application of the 100-hectare-per-province limit, no
regard is given to the size or the number of mining claims under Section 14, which we quote:

SECTION 14. Size of Mining Claim. -- For purposes of registration of a mining claim under this Decree, the Philippine territory and its shelf are hereby divided into
meridional blocks or quadrangles of one-half minute (1/2) of latitude and longitude, each block or quadrangle containing area of eighty-one (81) hectares, more
or less.

A mining claim shall cover one such block although a lesser area may be allowed if warranted by attendant circumstances, such as geographical and other
justifiable considerations as may be determined by the Director: Provided, That in no case shall the locator be allowed to register twice the area allowed for
lease under Section 43 hereof. (Italics supplied)

Clearly, the intent of the law would be brazenly circumvented by ruling that a license may cover an area exceeding the maximum by the mere expediency
of filing several applications. Such ruling would indirectly permit an act that is directly prohibited by the law.

Second Issue:
Validity of Proclamation No. 84

Petitioners also argue that the license was validly declared a nullity and consequently withdrawn or terminated. In a letter dated September 15, 1986,
respondents were informed by then Minister Ernesto M. Maceda that their license had illegally been issued, because it violated Section 69 of PD 463; and that
there was no more public interest served by the continued existence or renewal of the license. The latter reason, they added, was confirmed by the language of
Proclamation No. 84. According to this law, public interest would be served by reverting the parcel of land that was excluded by Proclamation No. 2204 to the
former status of that land as part of the Biak-na-Bato national park.

They also contend that Section 74 of PD 463 would not apply, because Minister Macedas letter did not cancel or revoke QLP No. 33, but merely declared
the latters nullity. They further argue that respondents waived notice and hearing in their application for the license.

On the other hand, respondents submit that, as provided for in Section 74 of PD 463, their right to due process was violated when their license was
cancelled without notice and hearing. They likewise contend that Proclamation No. 84 is not valid for the following reasons: 1) it violates the clause on the
non-impairment of contracts; 2) it is an ex post facto law and/or a bill of attainder; and 3) it was issued by the President after the effectivity of the 1987
Constitution.

This Court ruled on the nature of a natural resource exploration permit, which was akin to the present respondents license, in Southeast Mindanao Gold
Mining Corporation v. Balite Portal Mining Cooperative,[24] which held:

x x x. As correctly held by the Court of Appeals in its challenged decision, EP No. 133 merely evidences a privilege granted by the State, which may be amended,
modified or rescinded when the national interest so requires. This is necessarily so since the exploration, development and utilization of the countrys natural
mineral resources are matters impressed with great public interest. Like timber permits, mining exploration permits do not vest in the grantee any permanent or
irrevocable right within the purview of the non-impairment of contract and due process clauses of the Constitution, since the State, under its all-encompassing
police power, may alter, modify or amend the same, in accordance with the demands of the general welfare.[25]

This same ruling had been made earlier in Tan v. Director of Forestry[26] with regard to a timber license, a pronouncement that was reiterated in Ysmael v.
Deputy Executive Secretary,[27] the pertinent portion of which reads:
x x x. Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified
entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly
amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of
the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27,
1983, 125 SCRA 302].[28] (Italics supplied)

In line with the foregoing jurisprudence, 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.[29] Respondents themselves acknowledge this
condition of the grant under paragraph 7 of QLP No. 33, which we quote:

7. This permit/license may be revoked or cancelled at any time by the Director of Mines and Geo-Sciences when, in his opinion public interests so require or,
upon failure of the permittee/licensee to comply with the provisions of Presidential Decree No. 463, as amended, and the rules and regulations promulgated
thereunder, as well as with the terms and conditions specified herein; Provided, That if a permit/license is cancelled, or otherwise terminated, the
permittee/licensee shall be liable for all unpaid rentals and royalties due up to the time of the termination or cancellation of the permit/license[.][30] (Italics
supplied)

The determination of what is in the public interest is necessarily vested in the State as owner of all mineral resources. That determination was based on
policy considerations formally enunciated in the letter dated September 15, 1986, issued by then Minister Maceda and, subsequently, by the President through
Proclamation No. 84. As to the exercise of prerogative by Maceda, suffice it to say that while the cancellation or revocation of the license is vested in the director
of mines and geo-sciences, the latter is subject to the formers control as the department head. We also stress the clear prerogative of the Executive Department
in the evaluation and the consequent cancellation of licenses in the process of its formulation of policies with regard to their utilization. Courts will not interfere
with the exercise of that discretion without any clear showing of grave abuse of discretion.[31]

Moreover, granting that respondents license is valid, it can still be validly revoked by the State in the exercise of police power.[32] The exercise of such
power through Proclamation No. 84 is clearly in accord with jura regalia, which reserves to the State ownership of all natural resources.[33] This Regalian doctrine
is an exercise of its sovereign power as owner of lands of the public domain and of the patrimony of the nation, the mineral deposits of which are a valuable
asset.[34]

Proclamation No. 84 cannot be stigmatized as a violation of the non-impairment clause. As pointed out earlier, respondents license is not a contract to
which the protection accorded by the non-impairment clause may extend.[35] Even if the license were, it is settled that provisions of existing laws and a
reservation of police power are deemed read into it, because it concerns a subject impressed with public welfare.[36] As it is, the non-impairment clause must
yield to the police power of the state.[37]

We cannot sustain the argument that Proclamation No. 84 is a bill of attainder; that is, a legislative act which inflicts punishment without judicial
trial.[38] Its declaration that QLP No. 33 is a patent nullity[39] is certainly not a declaration of guilt. Neither is the cancellation of the license a punishment within
the purview of the constitutional proscription against bills of attainder.

Too, there is no merit in the argument that the proclamation is an ex post facto law. There are six recognized instances when a law is considered as such:
1) it criminalizes and punishes an action that was done before the passing of the law and that was innocent when it was done; 2) it aggravates a crime or makes
it greater than it was when it was committed; 3) it changes the punishment and inflicts one that is greater than that imposed by the law annexed to the crime
when it was committed; 4) it alters the legal rules of evidence and authorizes conviction upon a less or different testimony than that required by the law at the
time of the commission of the offense; 5) it assumes the regulation of civil rights and remedies only, but in effect imposes a penalty or a deprivation of a
right as a consequence of something that was considered lawful when it was done; and 6) it deprives a person accused of a crime of some lawful protection
to which he or she become entitled, such as the protection of a former conviction or an acquittal or the proclamation of an amnesty.[40] Proclamation No. 84
does not fall under any of the enumerated categories; hence, it is not an ex post facto law.

It is settled that an ex post facto law is limited in its scope only to matters criminal in nature.[41] Proclamation 84, which merely restored the area excluded
from the Biak-na-Bato national park by canceling respondents license, is clearly not penal in character.

Finally, it is stressed that at the time President Aquino issued Proclamation No. 84 on March 9, 1987, she was still validly exercising legislative powers
under the Provisional Constitution of 1986.[42] Section 1 of Article II of Proclamation No. 3, which promulgated the Provisional Constitution, granted her
legislative power until a legislature is elected and convened under a new Constitution. The grant of such power is also explicitly recognized and provided for in
Section 6 of Article XVII of the 1987 Constitution.[43]

WHEREFORE, this Petition is hereby GRANTED and the appealed Decision of the Court of Appeals SET ASIDE. No costs.

SO ORDERED.