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FACTS:

In 1952, Paper Industries Corporation of the Philippines’ (PICOP) predecessor, Bislig


Bay Lumber Co., Inc. (BBLCI) was granted a Timber License Agreement (TLA) covering
certain forest areas in Mindanao. Said TLA expired in 1977 and some months thereafter was
renewed for another 25 years to terminate in 2002.
Sometime however in 1969, then President Marcos allegedly issued a “presidential
warranty” to BBLCI that even after the expiration of the said TFA in 2002, it would be renewed
as an Industrial Forest Management Agreement (IFMA).
When the TFA expired, PICOP sought to convert the same to an IFMA and filed their
application with the DENR. It was denied by the DENR Secretary.
PICOP filed before the RTC a petition for mandamus, seeking to compel the DENR
Secretary to approve their application, PICOP allegedly having submitted all required
documents. The RTC granted the petition and was subsequently affirmed by the CA, with
modifications. Hence, the present petition.

ISSUE:
Whether or not the DENR Secretary validly refused the application for the IFMA.

HELD:
YES.
Sec. 2, Art. XII of the 1987 Constitution provides that the State shall have full control and
supervision regarding exploration development and utilization of its natural resources. It also
provides that the State may enter into joint exploration activities with qualified Filipino citizens
or corporations. However, such joint activities are limited to a 25-year contract, and renewable
for not more than another 25 years.
PICOP postulates that the presidential warranty is a vested right, given to them by
President Marcos before the 1987 Constitution was ratified; thus, the State is contract-bound to
accord them the necessary permits. They likewise argued that the new application was an IFMA,
not a TFA.
The Court struck down such arguments because first, any laws or government acts
contrary to, or inconsistent with the 1987 Constitution was declared by the latter expressly to be
inoperative. Second, the IFMA nevertheless secured the same purpose as that of the TFA, which
was for lumber concessions. The Constitution is clear that any contracts for joint activities should
only be for a maximum of 25 years and may only be renewed for another 25 years. By merely
changing the name of the contract and attempting to secure another license, PICOP tried to do
indirectly what it could not do directly by Constitutional fiat.
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