Regalian Doctrine

La Bugal-Blaan Tribal Assn. v DENR

G. R. No. 127882
January 27, 2004
FACTS:
The present petition for mandamus and prohibition assails the constitutionality of
Republic Act No. 7942, 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 9640, 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. 279 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. On March 3, 1995, then President Fidel V.
Ramos approved R.A. No. 7942
R.A. No. 7942 defines the modes of mineral agreements for mining operations,
outlines the procedure for their filing and approval, assignment/transfer and
withdrawal, and fixes their terms. The law prescribes the qualifications of
contractors and grants them certain rights, including timber, water and easement
rights, and the right to possess explosives.
On August 15, 1995, then DENR Secretary Victor O. Ramos, adhering to the Act,
issued DENR Administrative Order (DAO) No. 95-23, s. 1995 otherwise known as the
Implementing Rules and Regulations of R.A. No. 7942.
Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction
in signing and promulgating DENR Administrative Order No. 96-40 implementing
Republic Act No. 7942, it (1) 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, (2) being
unconstitutional in that it allows the taking of private property without the
determination of public use and for just compensation; (3) being unconstitutional in
that it violates Sec. 1, Art. III of the Constitution; (4) 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; (5) 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; and (6) being
unconstitutional in that it allows the inequitable sharing of wealth contrary to
Sections 1, paragraph 1, and Section 2, paragraph 4, Article XII of the Constitution.

ISSUE:
Whether or not RA 7942 being unconstitutional
RULING:
1. Yes. The 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.
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."
Technical assistance or financial assistance agreements may be entered into, and
only for large-scale activities by foreign-owned corporations. 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 twothirds vote of all the members of the Legislature.
It is true that the word technical encompasses a broad number of possible
services. However, the law follows the maxim casus omisus pro omisso habendus
est which means a person, object or thing omitted from an enumeration must be
held to have been omitted intentionally. 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.
Accordingly, petitioners' interpretation must be rejected. WHEREFORE, the petition
is GRANTED. The Court hereby declares unconstitutional and void:
The following provisions of Republic Act No. 7942, provisions of Department of
Environment and Natural Resources Administrative Order 96-40, s. 1996 which are
not in conformity with this Decision, and The Financial and Technical Assistance
Agreement between the Government of the Republic of the Philippines and WMC
Philippines, Inc.