CUARTEROS, PEE JAY T.

October 17, 2015

Section E
CASE DIGESTS
MINING CASES

APEX MINING CO., INC. vs. SOUTHEAST MINDANAO GOLD

MINING CORP., et al., G.R. Nos. 152613 & 152628, November 20,
2009.

BALITE COMMUNAL PORTAL MINING COOPERATIVE vs.

SOUTHEAST MINDANAO GOLD MINING CORP., et al., G.R. NO.
152619-20

THE MINES ADJUDICATION BOARD AND ITS MEMBERS, et al. vs.

SOUTHEAST MINDANAO GOLD MINING CORPORATION, G.R. NO.
152870-71

FACTS: In an assailed decision held by the Court, it was ruled that the
assignment of Exploration Permit (EP) 133 in favor of the Southeast
Mindanao Gold Mining Corporation (SEM) violated one of the
conditions stipulated in the permit, i.e., that the same shall be for the
exclusive use and benefit of Marcopper Mining Corporation (MMC) or
its duly authorized agents. Since SEM did not claim or submit evidence
that it was a designated agent of MMC, the latter cannot be considered
as an agent of the former that can use EP 133 and benefit from it. It
also ruled that the transfer of EP 133 violated Presidential Decree No.
463, which requires that the assignment of a mining right be made with
the prior approval of the Secretary of the Department of Environment
and Natural Resources (DENR). Moreover, the Assailed Decision
pointed out that EP 133 expired by non-renewal since it was not
renewed before or after its expiration.
On 25 November 2002, the President issued Proclamation No. 297
declaring the Diwalwal Gold Rush Area as a mineral reservation and as
an environmentally critical area. The Assailed Decision upheld the
validity of said proclamation. In view of this, and considering Section 5
of Republic Act No. 7942 or the Mining Act of 1995 which provided that
mining operations in mineral reservations may be undertaken directly
by the State or through a contractor, the Court deemed the issue of
ownership of priority right over the contested Diwalwal Gold Rush Area
as having been overtaken by the said proclamation. Thus, it was held
that it is now within the prerogative of the Executive Department to
undertake directly the mining operations of the disputed area or to
award the operations to private entities including petitioners Apex and
Balite, subject to applicable laws, rules and regulations, and provided
that these private entities are qualified.
Apex, for its part, filed a Motion for Clarification of the Assailed
Decision, praying that the Court elucidate on the Decision's
pronouncement that mining operations, are now, therefore within the
full control of the State through the executive branch. Moreover, Apex
asked the Court to order the Mines and Geosciences Board (MGB) to
accept its application for an exploration permit.
Balite, in its Manifestation and Motion, echoes the same concern
as that of Apex on the actual takeover by the State of the mining
industry in the disputed area to the exclusion of the private sector. In
addition, Balite prays that the Court directs MGB to accept its
application for an exploration permit.

ISSUE: Whether or not SEM acquired a vested right over the area;
Whether or not Proclamation No. 297 is constitutional; and whether or
not the Court can grant an order for the MGB to accept Apex’s and
Balite’s application.

HELD: Marcopper Mining Corporation (MMC) and Southeast Mindanao

Gold Mining Corporation (SEM) did not have vested rights over the
diwalwal gold rush area. Pursuant to the Philippine Bill of 1902, all
valuable mineral deposits in public lands in the Philippine Islands, both
surveyed and unsurveyed are 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. With the
effectivity of the 1935 Constitution, where the regalian doctrine was
again adopted; excluded, however, from the property of public domain
were the mineral lands and minerals that were located and perfected by
virtue of the Philippine Bill of 1902, since they were already considered
private properties of the locators. The possessory rights of mining claim
holders under the Bill remained intact and effective, and such rights
were recognized as property rights that the holders could convey or pass
by descent. In the instant cases, SEM does not aver or prove that its
mining rights had been perfected and completed when the Philippine
Bill of 1902 was still the operative law. Surely, it is impossible for SEM
to successfully assert that it acquired mining rights over the disputed
area in accordance with the same bill, since it was only in 1984 that
MMC, SEM's predecessor-in-interest, filed its declaration of locations
and its prospecting permit application in compliance with Presidential
Decree No. 463. It was on 1 July 1985 and 10 March 1986 that a
Prospecting Permit and EP 133, respectively, were issued to MMC.
Considering these facts, there is no possibility that MMC or SEM could
have acquired a perfected mining claim under the auspices of the
Philippine Bill of 1902.
Under the 1935, 1973, and 1987 Constitutions, national wealth,
such as mineral resources, are owned by the State and not by their
discoverer. The discoverer or locator can only develop and utilize said
minerals for his own benefit if he has complied with all the
requirements set forth by applicable laws and if the State has conferred
on him such right through permits, concessions or agreements. Without
the imprimatur of the State, any mining aspirant does not have any
definitive right over the mineral land because mineral land is owned by
the State, and the same cannot be alienated to any private person as
explicitly stated in Section 2, Article XIV of the 1987 Constitution.
Proclamation No. 297 is in harmony with Article XII, Section 4, of
the Constitution. There is nothing in the constitutional provision that
prohibits the President from declaring a forest land as an
environmentally critical area and from regulating the mining
operations therein by declaring it as a mineral reservation in order to
prevent the further degradation of the forest environment and to
resolve the health and peace and order problems that beset the area.
Contrary to the contention of Apex and Balite, the fourth
paragraph of Section 2, Article XII of the Constitution and Section 5 of
Republic Act No. 7942 sanctions the State, through the executive
department, to undertake mining operations directly, as an operator
and not as a mere regulator of mineral undertakings. The fourth
paragraph of Section 2, Article XII of the 1987 Constitution provides
that 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. Section 5 of Republic
Act No. 7942 states that the mining operations in mineral reservations
shall be undertaken by the DENR or a contractor.
Moreover, Section 2, Article XII of the Constitution provides that
the exploration, development, and utilization of natural resources shall
be under the full control and supervision of the State. It is the sole
prerogative of the executive department to undertake directly or to
award the mining operations of the contested area. It is the duty of the
appropriate administrative body to determine the qualifications of the
applicants. It is only when this administrative body whimsically denies
the applications of qualified applicants that the Court may interfere.
But until then, the Court has no power to direct said administrative
body to accept the application of any qualified applicant.

BENGUET CORPORATION vs. DEPARTMENT OF ENVIRONMENT

AND NATURAL RESOURCES-MINES ADJUDICATION BOARD and
J.G. REALTY AND MINING CORPORATION, G.R. No. 163101,
February 13, 2008

FACTS: Benguet and J.G. Realty entered into a Royalty Agreement

with Option to Purchase (RAWOP), wherein J.G. Realty was
acknowledged as the owner of four mining claims situated in Camarines
Norte. The mining claims were covered by Mineral Production Sharing
Agreeement Application No. APSA-V-0009 jointly filed by J.G. Realty as
claimowner and Benguet as operator.
In the RAWOP, Benguet obligated itself to perfect the rights to
the mining claims and/or otherwise acquire the mining rights to the
mineral claims. Within 24 months from the execution of the RAWOP,
Benguet should also cause the examination of the mining claims for the
purpose of determining whether or not they are worth developing with
reasonable probability of profitable production. Benguet undertook also
to furnish J.G. Realty with a report on the examination, within a
reasonable time after the completion of the examination. Moreover, also
within the examination period, Benguet shall conduct all necessary
exploration in accordance with a prepared exploration program. If it
chooses to do so and before the expiration of the examination period,
Benguet may undertake to develop the mining claims upon written
notice to J.G. Realty. Benguet must then place the mining claims into
commercial productive stage within 24 months from the written notice.
It is also provided in the RAWOP that if the mining claims were placed
in commercial production by Benguet, J.G. Realty should be entitled to
a royalty of five percent (5%) of net realizable value, and to royalty for
any production done by Benguet whether during the examination or
development periods.
On August 9, 1989, the Executive Vice-President of Benguet
Corp., Antonio N. Tachuling, issued a letter informing J.G. Realty of its
intention to develop the mining claims. J.G. Realty, however, replied
informing Benguet Corp. that it is terminating the RAWOP on the
grounds that Benguet Corp. has failed to perform the obligations set
forth in the RAWOP, i.e., to undertake development works within 2
years from the execution of the Agreement; that the contract was
violated by allowing high graders to operate on our claim; that no
stipulation was provided with respect to the term limit of the RAWOP;
and that non-payment of the royalties thereon as provided in the
RAWOP.
In response, Benguet Corp. alleged that it complied with its
obligations by investing PhP 42.4 million to rehabilitate the mines, and
that the commercial operation was hampered by the non-issuance of a
Mines Temporary Permit by the Mines and Geosciences Bureau (MGB)
which must be considered as force majeure, entitling Benguet to an
extension of time to prosecute such permit. Benguet further claimed
that the high graders mentioned were already operating prior to
Benguet’s taking over of the premises, and that J.G. Realty had the
obligation of ejecting such small scale miners. Benguet also alleged that
the nature of the mining business made it difficult to specify a time
limit for the RAWOP. Benguet then argued that the royalties due to
J.G. Realty were in fact in its office and ready to be picked up at any
time. It appeared that, previously, the practice by J.G. Realty was to
pick-up checks from Benguet representing such royalties. However,
starting August 1994, J.G. Realty allegedly refused to collect such
checks from Benguet. Thus, Benguet posited that there was no valid
ground for the termination of the RAWOP. It also reminded J.G. Realty
that it should submit the disagreement to arbitration rather than
unilaterally terminating the RAWOP.
ISSUE: Whether or not Benguet Corp. the cancellation of the RAWOP
is valid and such cancellation prejudiced the substantial rights of
Benguet Corp.

HELD: The cancellation of the RAWOP by the POA was based on two
grounds: (1) Benguet’s failure to pay J.G. Realty’s royalties for the
mining claims; and (2) Benguet’s failure to seriously pursue MPSA
Application No. APSA-V-0009 over the mining claims.
Evidently, the RAWOP itself provides for the mode of royalty
payment by Benguet. The fact that there was the previous practice
whereby J.G. Realty picked-up the checks from Benguet is unavailing.
The mode of payment is embodied in a contract between the parties.
Benguet’s claim that J.G. Realty must prove nonpayment of its royalties
is both illogical and unsupported by law and jurisprudence. The
obligation of Benguet to pay royalties to J.G. Realty has been admitted
and supported by the provisions of the RAWOP. Thus, the burden to
prove such obligation rests on Benguet.
The MPSA Application No. APSA-V-0009 has been pending with
the MGB for a considerable length of time. Benguet, in the RAWOP,
obligated itself to perfect the rights to the mining claims and/or
otherwise acquire the mining rights to the mineral claims but failed to
present any evidence showing that it exerted efforts to speed up and
have the application approved. In fact, Benguet never even alleged that
it continuously followed-up the application with the MGB and that it
was in constant communication with the government agency for the
expeditious resolution of the application. Such allegations would show
that, indeed, Benguet was remiss in prosecuting the MPSA application
and clearly failed to comply with its obligation in the RAWOP.

ARMANDO C. CARPIO vs. SULU RESOURCES

DEVELOPMENT CORPORATION, G.R. No. 148267, August 08, 2002

FACTS: Sulu Resources Development Corporation filed a petition for

Mines Production Sharing Agreement (MPSA) No. MPSA-IV-131,
covering certain areas in Antipolo, Rizal. Carpio filed an
opposition/adverse claim thereto, alleging, inter alia, that his
landholdings in Cupang and Antipolo, Rizal will be covered by Sulu’s
claim, thus he enjoys a preferential right to explore and extract the
quarry resources on his properties.
After due proceedings were made, the Panels of Arbitrator of the
Mines and Geo-Sciences Bureau of the DENR rendered a Resolution
upholding Carpio’s opposition/adverse claim. Sulu appealed the
foregoing to the Mines Adjudication Board (MAB), and it was granted,
dismissing Carpio’s claim.
ISSUE: Whether or not the MAB’s decision is appealable to the Court of
Appeals first or directly to the Supreme Court.

HELD: There are sufficient legal footings authorizing a review of the

MAB Decision under Rule 43 of the Rules of Court. Under the rule,
appeals from their judgments and final orders are now required to be
brought to the CA on a verified petition for review. A quasi-judicial
agency or body is an organ of government, other than a court or
legislature, which affects the rights of private parties through either
adjudication or rule-making. MAB falls under this definition; hence, it
is no different from the other quasi-judicial bodies enumerated under
Rule 43. According to Section 3 of Rule 43, an appeal under Rule 43
may be taken to the Court of Appeals within the period and in the
manner therein provided whether the appeal involves questions of fact,
of law, or mixed questions of fact and law. Hence, appeals from quasi-
judicial agencies even only on questions of law may be brought to the
CA.
On the other hand, Section 79 of RA No. 7942 provides that
decisions of the MAB may be reviewed by the Supreme Court on a
petition for review by certiorari. This provision is obviously an
expansion of the Court’s appellate jurisdiction, an expansion to which
this Court has not consented. This is inconsistent with Section 30,
Article VI of the 1987 Constitution.
The judicial policy of observing the hierarchy of courts dictates
that direct resort from administrative agencies to this Court will not be
entertained, unless the redress desired cannot be obtained from the
appropriate lower tribunals, or unless exceptional and compelling
circumstances justify availment of a remedy falling within and calling
for the exercise of our primary jurisdiction.
In brief, appeals from decisions of the MAB shall be taken to the
CA through petitions for review in accordance with the provisions of
Rule 43 of the 1997 Rules of Court.

CELESTIAL NICKEL MINING EXPLORATION CORPORATION

vs. MACROASIA CORPORATION (FORMERLY INFANTA MINERAL
AND INDUSTRIAL CORPORATION), and LEBACH MINING
CORPORATION, G.R. No. 169080, December 19, 2007

BLUE RIDGE MINERAL CORPORATION vs. HON. ANGELO

REYES IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT
OF ENVIRONMENT AND NATURAL RESOURCES, et al., G.R. No.
172936

CELESTIAL NICKEL MINING EXPLORATION CORPORATION

vs. BLUE RIDGE MINERAL CORPORATION and MACROASIA
CORPORATION (FORMERLY INFANTA MINERAL AND
INDUSTRIAL CORPORATION), G.R. No. 176226
 MACROASIA CORPORATION (FORMERLY INFANTA
MINERAL AND INDUSTRIAL CORPORATION) vs. BLUE RIDGE
MINERAL CORPORATION and CELESTIAL NICKEL MINING
EXPLORATION CORPORATION, G.R. No. 176319

FACTS: 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, Brooke's Point, Palawan. Infanta's
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 before the Panel of Arbitrators (POA) of the Mines
and Geo-Sciences Bureau (MGB) of the DENR. 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
Brooke's Point.
Celestial sought the cancellation of Macroasia's 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 Celestial's 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 ruling of the Panel of Arbitrators (POA) of the DENR, it
was held that Macroasia and Lebach not only automatically abandoned
their areas/mining claims but likewise had lost all their rights to the
mining claims. POA gave Celestial the preferential right to Macroasia's
mining areas. It also upheld Blue Ridge's petition but only as against
the Mining Lease Contract areas of Lebach. The said leased areas were
declared automatically abandoned. It gave Blue Ridge priority right to
the aforesaid Lebach's areas/mining claims.
Blue Ridge and Macroasia appealed before the MAB. The MAB
affirmed the POA findings that Macroasia abandoned its mining claims.
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.
Both Celestial and Macroasia moved for reconsideration. 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 Macroasia's lease contract expired on January
17, 1997 and after the POA's 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
Ridge's MPSA application filed on June 17, 1996 had no effect and
should not be considered superior since Macroasia's lease contracts
were still valid and subsisting and could not have been canceled by
Macroasia's 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.
However, before the resolution of the foregoing motions,
Macroasia filed its Supplemental Motion for Reconsideration
questioning the jurisdiction of the POA in canceling mining lease
contracts and mining claims. It averred that the power and authority to
grant, cancel, and revoke mineral agreements is exclusively lodged with
the DENR Secretary.
The MAB resolved that neither it nor the POA has the power to
revoke the mineral agreements for such power is exclusively lodged
with the DENR Secretary. Moreover, the MAB held that there was no
abandonment by Macroasia because the DENR Secretary had not
decided to release Macroasia from its obligations.

ISSUE: Whether or not the POA or the MAB has the power to grant,
cancel, or revoke mineral agreements.

HELD: No. 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, the Court ruled that the DENR Secretary, not
the POA, has the jurisdiction to cancel existing mineral lease contracts
or mineral agreements. The following are the 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;
2. RA 7942 confers to the DENR Secretary specific authority over
mineral resources;
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;
4. The DENR Secretary's 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; and
5. Celestial and Blue Ridge are not unaware of the stipulations in
the Mining Lease Contract Nos. V-1050 and MRD-52, 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, and the power of the lessor to cancel the
lease when the lessee fails to comply with any provision of PD 463
as amended, and Commonwealth Acts Nos. 137, 466 and 470, as
amended, and/or the rules and regulations promulgated
thereunder, or any of the covenants therein.
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.
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, the Court
cannot look into or review the wisdom of the exercise of such discretion.

DIDIPIO EARTH-SAVERS MULTI-PURPOSE ASSOCIATION,

INCORPORATED (DESAMA), et al. vs. ELISEA GOZUN, IN HER
CAPACITY AS SECRETARY OF THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES (DENR), et al., G.R.
No. 157882, March 30, 2006

FACTS: 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 or 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.
This is a petition for prohibition and mandamus assailing the
constitutionality of Republic Act No. 7942 or the Philippine Mining Act
of 19995, 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.

ISSUE: Whether or not R.A. 7942 and its implementing rules and
regulations is unconstitutional; whether or not DENR DAO 96-40 is
unconstitutional; and whether or not the FTAA is valid.

HELD: 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.
The provision of the FTAA in question lays down the ways and
means by which the foreign-owned contractor, disqualified to own land,
identifies to the government the specific surface areas within the FTAA
contract area to be acquired for the mine infrastructure. The
government then acquires ownership of the surface land areas on behalf
of the contractor, through a voluntary transaction in order to enable the
latter to proceed to fully implement the FTAA. Eminent domain is not
yet called for at this stage since there are still various avenues by which
surface rights can be acquired other than expropriation. The FTAA
provision under attack merely facilitates the implementation of the
FTAA given to CAMC and shields it from violating the Anti-Dummy
Law. There is also no basis for the claim that the Mining Law and its
implementing rules and regulations do not provide for just
compensation in expropriating private properties. Section 76 of Rep. Act
No. 7942 and Section 107 of DAO 96-40 provide for the payment of just
compensation
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 latter’s
decision may be reviewed by the Supreme Court by filing a petition for
review on certiorari.
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 latter’s 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 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.

LEPANTO CONSOLIDATED MINING CO. vs. WMC RESOURCES

INT'L. PTY. LTD., WMC PHILIPPINES, INC. and SAGITTARIUS
MINES, INC., G.R. NO. 162331, November 20, 2006

FACTS: On 22 March 1995, the Philippine Government and WMC

Philippines, the local wholly-owned subsidiary of WMC Resources
International Pty. Ltd. (WMC Resources) executed a Financial and
Technical Assistance Agreement, denominated as the Columbio FTAA
No. 02-95-XI (Columbio FTAA) for the purpose of large scale
exploration, development, and commercial exploration of possible
mineral resources in an area of 99,387 hectares located in the provinces
of South Cotabato, Sultan Kudarat, Davao del Sur, and North Cotabato
in accordance with Executive Order No. 279 and Department
Administrative Order No. 63, Series of 1991. The Columbio FTAA is
covered in part by 156 mining claims held under various Mineral
Production Sharing Agreements (MPSA) by Southcot Mining
Corporation, Tampakan Mining Corporation, and Sagittarius Mines,
Inc. (collectively called the Tampakan Companies), in accordance with
the Tampakan Option Agreement entered into by WMC Philippines and
the Tampakan Companies for purposes of exploration of the mining
claims in Tampakan, South Cotabato. The Option Agreement, among
other things, provides for the grant of the right of first refusal to the
Tampakan Companies in case WMC Philippines desires to dispose of its
rights and interests in the mining claims covering the area subject of
the agreement.
WMC Resources subsequently divested itself of its rights and
interests in the Columbio FTAA, and on 12 July 2000 executed a Sale
and Purchase Agreement with petitioner Lepanto over its entire
shareholdings in WMC Philippines, subject to the exercise of the
Tampakan Companies' exercise of their right of first refusal to purchase
the subject shares. On 28 August 2000, petitioner sought the approval
of the 12 July 2000 Agreement from the DENR Secretary. In an
Agreement dated 6 October 2000, however, the Tampakan Companies
sought to exercise its right of first refusal. Thus, in a letter dated 13
October 2000, petitioner assailed the Tampakan Companies' exercise of
its right of first refusal, alleging that the Tampakan Companies failed
to match the terms and conditions set forth in the 12 July 2000
Agreement.

ISSUE: Whether or not the application to the Columbio FTAA failed to

comprehend the express language of Section 40 of the Philippine Mining
Act of 1995 requiring the approval of the President on the transfer or
assignment of a financial or technical assistance agreement.

HELD: The Columbio FTAA was entered into by the Philippine

Government and WMC Philippines on 22 March 1995, undoubtedly
before the Philippine Mining Act of 1995 took effect on 14 April 1995.
Furthermore, it is undisputed that said FTAA was granted in
accordance with Executive Order No. 279 and Department
Administrative Order No. 63, Series of 1991, which does not contain any
similar condition on the transfer or assignment of financial or technical
assistance agreements. Thus, it would seem that what petitioner would
want this Court to espouse is the retroactive application of the
Philippine Mining Act of 1995 to the Columbio FTAA, a valid
agreement concluded prior to the naissance of said piece of legislation.
By imposing a new condition apart from those already contained
in the agreement, before the parties to the Columbio FTAA may assign
or transfer its rights and interest in the said agreement, Section 40 of
the Philippine Mining Act of 1995, if made to apply to the Columbio
FTAA, will effectively modify the terms of the original contract and thus
impair the obligations of the parties thereto and restrict the exercise of
their vested rights under the original agreement. Such modification to
the Columbio FTAA, particularly in the conditions imposed for its valid
transfer is equivalent to an impairment of said contract violative of the
Constitution.

JOHN ERIC LONEY, STEVEN PAUL REID and PEDRO B.

HERNANDEZ vs. PEOPLE OF THE PHILIPPINES, G.R. NO. 152644,
February 10, 2006

FACTS: 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 (MMC), a corporation engaged in mining in the
province of Marinduque. MMC has been storing its tailings from its
operations on a pit whose base ran a drainage tunnel leading to the
Boac and Makalupnit rivers. Eventually, the tailings gushed out of or
near the tunnel's end, and in a few days the pit discharged millions of
tons of tailings into the rivers.

ISSUE: Whether or not the petitioners are in violation of Republic Act

No. 7942 or the Philippine Mining Act, Presidential Decree No. 1067 or
the Water Code of the Philippines, Presidential Decree No. 984 or the
Anti-Pollution Law, and Article 356 of the Revised Penal Code on
Reckless Imprudence Resulting in Damage to Property.

HELD: Yes. There is no multiplicity or duplicity of offense charged in a

single information in this case. A mala in se felony cannot absorb mala
prohibita crimes. The Court had long 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. 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. In this case, double jeopardy is not at issue
because not all of its elements are present. In P.D. 1067, the gravamen
of the offense is the absence of the proper permit to dump said mine
tailings. In P.D. 984, the gravamen is the pollution itself. In R.A. 7942,
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 rivers. In Art. 365 of the Revised Penal
Code, the additional element that must be established is the lack of
necessary or adequate precaution, negligence, recklessness and
imprudence on the part of the accused to prevent damage to property.