[No. 72. February 23, 1909.
] Spanish Crown, where, even if tried by the law of Spain, without
MATEO CARIÑO, plaintiff in error, vs. INSULAR GOVERNMENT OF THE
PHILIPPINE ISLANDS.1
1. 1.APPEAL; MODE OF REVIEW; PROCEEDING FOR THE
REGISTRATION OF LAND.—Writ of error error is the proper mode
of bringing up to the Federal Supreme Court for review a judgment
of the Supreme Court of the Philippine Islands, affirming a judgment
below, dismissing, upon grounds of law, an application for the
registration of land.
1. 2.RECORDING LAWS; REGISTRATION OF TITLE IN PHILIPPINE
ISLANDS.—The exception of the Province of, Benguet from the
operation of the Philippine Commission's act of 1903, No. 926,
relating to the registration of land titles, does not apply to one who
claims present ownership of land in that province; but he is entitled
to registration, if his claim of ownership can be maintained, under
the Commission's act of 1902, No. 496, establishing a court for
registration purposes, with jurisdiction "throughout the Philippine
archipelago," and authorizing, in general terms, applications to be
made by persons claiming to own the legal estate in fee simple.
1. 3.EVIDENCE; PRESUMPTION; OWNERSHIP AS AGAINST
GOVERNMENT.—Every presumption should be indulged against
the United States claiming title to land in the Province of Benguet in
the Philippine Islands, which, for more than fifty years prior to the
treaty of peace with Spain of April 11, 1899 (30 Stat. at L., 1754),
has been held by the present native Igorot holder and his ancestors
under claim of private ownership.
1. 4.ADVERSE POSSESSION; AGAINST GOVERNMENT; LAND IN
PHILIPPINE ISLANDS.—A. native title to land in the Province of
Benguet in the Philippine Islands, which, for more than fifty years
prior to the treaty of peace with Spain of April 11, 1899, a native
Igorot and his ancestors have held in accordance with Igorot
________________
1
212 U. S., 449; 53 L. ed., 594.
936
936 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
1. custom, as private property, should be recognized by the insular
government, although no document of title has issued from the
reference to the effect of the change of sovereignty and of the
declaration of purpose and safeguards embodied in the Organic Act
of July 1, 1902 (32 Stat. at L., 691, chap. 1369), it is not clear that
he is not the owner.
IN ERROR to the Supreme Court of the Philippine Islands to review a
judgment which affirmed a judgment of the Court of First Instance of the
Province of Benguet, dismissing an application for the registration of
certain land. Reversed. See same case below, 7 Philippine, 132.
The facts are stated in the opinion.
Messrs. Frederic R. Coudert and Howard Thayer Kingsbury argued the
cause, and, with Messrs. Charles C. Cohn, D. R. Williams, and Paul
Fuller, filed a brief for plaintiff in error.
Solicitor-General Hoyt argued the cause, and, with Mr.
Paul Charlton, filed a brief for defendant in error.
Mr. Justice HOLMES delivered the opinion of the court:
This was an application to the Philippine court of land registration for the
registration of certain land. The application was granted by the court on
March 4, 1904. An appeal was taken to the Court of First Instance of the
Province of Benguet, on behalf of the Government of the Philippines, and
also on behalf of the United States, those governments having taken
possession of the property for public and military purposes. The Court of First
Instance found the facts and dismissed the application upon grounds of law.
This judgment was affirmed by the Supreme Court (7 Philippine, 132), and
the case then was brought here by writ of error.
The material facts found are very few. The applicant and plaintiff in error
is an Igorot of the Province of Benguet, where the land lies. For more than
fifty years before the Treaty of Paris, April 11, 1899, (30 Stat. at L.,
937
FEBRUARY 23, 1909. 937
Cariño vs. Insular Government.
1754), as far back as the findings go, the plaintiff and his ancestors had held
the land as owners. His grandfather had lived upon it, and had maintained
fences sufficient for the holding of cattle, according to the custom of the
country, some of the fences, it seems, having been of much earlier date. His
father had cultivated parts and had used parts for pasturing cattle, and he
had used it for pasture in his turn. They all had been recognized as owners
by the Igorots, and he had inherited or received the land from his father, in
accordance with Igorot custom. No document of title, however, had issued
from the Spanish Crown, and although, in 1893-1894, and again in 1896-
1897, he made application for one under the royal decrees then in force,
nothing seems to have come of it, unless, perhaps, information that lands in
Benguet could not be conceded until those to be occupied for a sanatorium,
etc., had been designated,—a purpose that has been carried out by the
Philippine government and the United States. In 1901 the plaintiff filed a
petition, alleging ownership, under the mortgage law, and the lands were
registered to him, that process, however, establishing only a possessory title,
it is said.
Before we deal with the merits, we must dispose of a technical point. The
Government has spent some energy in maintaining that this case should
have been brought up by appeal, and not by writ of error. We are of opinion,
however, that the mode adopted was right. The proceeding for registration is
likened to bills in equity to quiet title, but it.is different in principle. It is a
proceeding in remunder a statute of the type of the Torrens act, such as was
discussed in Tyler vs. Registration Ct. Judges (175 Mass., 71; 51 L. R. A.,
433; 55 N. E., 812). It is nearer to law than to equity, and is an assertion of
legal title; but we think it unnecessary to put it into either pigeon hole. A writ
of error is the general method of bringing cases to this court, and appeal the
exception, confined to equity in the main. There is no reason for not applying
the general rule to this case. (Ormsby vs. Webb, 134 U. S., 47, 65; 33 L. ed.,
805, 812; 10 Sup. Ct. Rep., 478; Campbell vs. Porter, 162 U.
938
938 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
S., 478; 40 L. ed., 1044; 16 Sup. Ct. Rep., 871; Metropolitan R.
Co. vs. District of Columbia (Metropolitan R. Co. vs.Macfarland) 195 U. S.,
322; 49 L. ed., 219; 25 Sup. Ct. Rep., 28.)
Another preliminary matter may as well be disposed of here. It is
suggested that, even if the applicant have title, he can not have it registered,
because the Philippine Commission's Act No. 926, of 1903, excepts the
Province of Benguet among others from its operation. But that act deals with
the acquisition of new titles by homestead entries, purchase, etc., and the
perfecting of titles begun under the Spanish law. The applicant's claim is that
he now owns the land, and is entitled to registration under the Philippine
Commission's Act No. 496, of 1902, which established a court for that
purpose with jurisdiction "throughout the Philippine archipelago," section 2,
and authorized in general terms applications to be made by persons claiming
to own the legal estate in fee simple, as the applicant does. He is entitled to
registration if his claim of ownership can be maintained.
We come, then, to the question on which the case was decided below,—
namely, whether the plaintiff owns the land. The position of the government,
shortly stated, is that Spain assumed, asserted, and had title to all the land in
the Philippines except so far as it saw fit to permit private titles to be
acquired; that there was no prescription against the Crown, and that, if there
was, a decree of June 25, 1880, required registration within a limited time to
make the title good; that the plaintiff's land was not registered, and therefore
became, if it was not always, public land; that the United States succeeded to
the title of Spain, and so that the plaintiff has no rights that the Philippine
government is bound to respect.
If we suppose for the moment that the government's contention is so far
correct that the Crown of Spain in form asserted a title to this land at the date
of the Treaty of Paris, to which the United States succeeded, it is not to be
assumed without argument .that the plaintiff's case is at an
939
FEBRUARY 23, 1909. 939
Cariño vs. Insular Government.
end. It is true that Spain, in its earlier decrees, embodied the universal feudal
theory that all lands were held f rom the Crown, and perhaps the general
attitude of conquering naions toward people not recognized as entitled to the
treatment accorded to those in the same zone of civilization with themselves.
It is true, also, that, in legal theory, sovereignty is absolute, and that, as
against foreign nations, the United States may assert, as Spain asserted,
absolute power. But it does not follow that, as against the inhabitants of the
Philippines, the United States asserts that Spain had such power. When
theory is left on one side, sovereignty is a question of strength, and may vary
in degree. How far a new sovereign shall insist upon the theoretical relation
of the subjects to the head in the past, and how far it shall recognize actual
facts, are matters for it to decide.
The Province of Benguet was inhabited by a tribe that the Solicitor-
General, in his argument, characterized as a savage tribe that never was
brought under the civil or military government of the Spanish Crown. It seems
probable, if not certain, that the Spanish officials would not have granted to
anyone in that province the registration to which formerly the plaintiff was
entitled by the Spanish laws and which would have made his title beyond
question good. Whatever may have been the technical position of Spain it
does not follow that, in the view of the United States, he had lost all rights
and was a mere trespasser when the present government seized his land.
The argument to that effect seems to amount to a denial of native titles
throughout an important part of the Island of Luzon, at least, for the want of
ceremonieswhich the Spaniards would not have permitted and had not the
power to enforce.
The acquisition of the Philippines was not like the settlement of the white
race in the United States. Whatever consideration may have been shown to
the North American Indians, the dominant purpose of the whites in America
was to occupy the land. It is obvious that, however stated, the reason f or our
taking over the Philippines was
940
940 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
No one, we suppose, would deny that, so far as consistent with paramount
necessities, our first object in the internal administration of the islands is to do
justice to the natives, not to exploit their country for private gain. By the
Organic Act of July 1, 1902, chapter 1369, section 12 (32 Statutes at Large,
691), all the property and rights acquired there by the United States are to be
administered "for the benefit of the inhabitants thereof." It is reasonable to
suppose that the attitude thus assumed by the United States with regard to
what was unquestionably its own is also its attitude in deciding what it will
claim for its own. The same statute made a bill of rights, embodying the
safeguards of the Constitution, and, like the Constitution, extends those
safeguards to all. It provides that "no law shall be enacted in said islands
which shall deprive any person of life, liberty, or property without due process
of law, or deny to any person therein the equal protection of the laws." (Sec.
5.) In the light of the declaration that we have quoted f rom section 12, it is
hard to believe that the United States was ready to declare in the next breath
that "any person" did not embrace the inhabitants of Benguet, or that it meant
by "property" only that which had become such by ceremonies of which
presumably a large part of the inhabitants never had heard, and that it
proposed to treat as public land what they, by native custom and by long
association,—one of the profoundest factors in human thought,—regarded as
their own.
It is true that, by section 14, the Government of the Philippines is
empowered to enact rules and prescribe terms for perfecting titles to public
lands where some, but not all, Spanish conditions had been f ulfilled, and to
issue patents to natives f or not more than 16 hectares of public lands
actually occupied by the native or his ancestors before August 13, 1898. But
this section perhaps might be satisfied if confined to cases where. the
occupation was of land admitted to be public land, and had not continued for
such a length of time and under such circumstances as to give rise to the
under-
941
FEBRUARY 23, 1909. 941
Cariño vs. Insular Government.
standing that the occupants were owners at that date. We hesitate to
suppose that it was intended to declare every native who had not a paper title
a trespasser, and to set the claims of all the wilder tribes afloat. . It is true
again that there is excepted from the provision that we have quoted as to the
administration of the property and rights acquired by the United States, such
land and property as shall be designated by the President for military or other
reservations, as this land since has been. But there still remains the question
what property and rights the United States asserted itself to have acquired.
Whatever the law upon these points may be, and we mean to go no
further than the necessities of decision demand, every presumption is and
ought to be against the government in a case like the present. It might,
perhaps, be proper and sufficient to say that when, as far back as testimony
or memory goes, the land has been held by individuals under a claim of
private ownership, it will be presumed to have been held in the same way
from before the Spanish conquest, and never to have been public land.
Certainly in a case like this, if there is doubt or ambiguity in the Spanish law,
we ought to give the applicant the benefit of the doubt. Whether justice to the
natives and the import of the Organic Act ought not to carry us beyond a
subtle examination of ancient texts, or perhaps even beyond the attitudes of
Spanish law, humane though it was, it is unnecessary to decide. If, in a tacit
way, it was assumed that the wild tribes of the Philippines were to be dealt
with as the power and inclination of the conqueror might dictate, Congress
has not yet sanctioned the same course as the proper one "for the benefit of
the inhabitants thereof."
If the applicant's case is to be tried by the law of Spain, we do not
discover such clear proof that it was bad by that law as to satisfy us that he
does not own the land. To begin with, the older decrees and laws cited by the
counsel for the plaintiff in error seem to indicate pretty clearly that the natives
were recognized as owning some lands, irrespective
942
942 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
of any royal grant. In other words, Spain did not assume to convert all the
native inhabitants of the Philippines into trespassers or even into tenants at
will. For instance, Book 4, title 12, Law 14 of the Recopilación de Leyes de
las Indias, cited for a contrary conclusion in Valenton vs.Murciano, 3
Philippine, 537, while it commands viceroys and others, when it seems
proper, to call for the exhibition of grants, directs them to confirm those who
hold by good grants or justa, prescripción. It is true that it begins by the
characteristic assertion of feudal overlordship and the origin of all titles in the
King or his predecessors. That was theory and discourse. The fact was that
titles were admitted to exist that owed nothing to the powers of Spain beyond
this recognition in their books.
Prescription is mentioned again in the royal cedula of October 15, 1754,
cited in 3 Philippine, 546; "Where such possessors shall not be able to
produce title deeds, it shall be sufficient if they shall show that ancient
possession, as a valid title by prescription." It may be that this means
possession from before 1700; but, at all events, the principle is admitted. As
prescription, even against Crown lands, was recognized by the laws of Spain
we see no sufficient reason for hesitating to admit that it was recognized in
the Philippines in regard to lands over which Spain had only a paper
sovereignty.
The question comes, however, on the decree of June 25, 1880, for the
adjustment of royal lands wrongfully occupied by private individuals in the
Philippine Islands. This begins with the usual theoretic assertion that, for
private ownership, there must have been a grant by competent authority; but
instantly descends to fact by providing that for all legal effects, those who
have been in possession for certain times shall be deemed owners. For
cultivated land, twenty years, uninterrupted, is enough. For uncultivated,
thirty. (Art. 5.) So that, when this decree went into effect, the applicant's
father was owner of the land by the very terms of the decree. But, it is said,
the object of this law was to require
943
FEBRUARY 23, 1909. 943
Cariño vs. Insular Government.
the adjustment or registration proceedings that it described, and in that way of a privilege. As a matter of fact, the applicant never was disturbed. This
to require every one to get a document of title or lose his land. That purpose same decree is quoted by the court of land registration for another
may have been entertained, but it does not appear clearly to have been recognition of the commonlaw prescription of thirty years as still running
applicable to all. The regulations purport to have been made "for the against alienable Crown land.
adjustment of royal lands wrongfully occupied by private individuals." (We It will be perceived that the rights of the applicant under the Spanish law
follow the translation in the government's brief.) It does not appear that this present a problem not without difficulties for courts of a different legal
land ever was royal land or wrongfully occupied. In article 6 it is provided that tradition. We have deemed it proper on that account to notice the possible
' interested parties not included within the two preceding articles (the articles effect of the change of sovereignty and the act of Congress establishing the
recognizing prescription of twenty and thirty years) may legalize their fundamental principles now to be observed. Upon a consideration of the
possession, and thereby acquire the full ownership of the said lands, by whole case we are of opinion that law and justice require that the applicant
means of adjustment proceedings, to be conducted in the following manner." should be granted what he seeks, and should not be deprived of what by the
This seems, by its very terms, not to apply to those declared already to be practice and belief of those among whom he lived, was his property, through
owners by lapse of time. Article 8 provides for the case of parties not asking a refined interpretation of an almost forgotten law of Spain.
an adjustment of the lands of which they are unlawfully enjoying the Judgment reversed.
possession, within one year, and threatens that the treasury "will reassert the
ownership of the state over the lands/' and will sell at auction such part as it
does not reserve. The applicant's possession was not unlawful, and no
attempt at any such proceedings against him or his father ever was made.
Finally, it should be noted that the natural construction of the decree is
confirmed by the report of the council of state. That report puts forward as a
reason for the regulations that, in view of the condition of almost all property
in the Philippines, it is important to fix its status by general rules, on the
principle that the lapse of a fixed period legalizes completely all possession;
recommends in two articles twenty and thirty years, as adopted in the decree;
and then suggests that interested parties not included in those articles may
legalize their possession and acquire ownership by adjustment at a certain
price.
It is true that the language of articles 4 and 5 attributes title to those "who
may prove" possession for the necessary time and we do not overlook the
argument that this means
944
944 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
may prove in registration proceedings. It may be that an English conveyancer
would have recommended an application under the foregoing decree, but
certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every
word of it. The words "may prove" (acrediten), as well, or better, in view of the
other provisions, might be taken to mean when called upon to do so in any
litigation. There are indications that registration was expected from all, but
none sufficient to show that, for want of- it, ownership actually gained would
be lost. The effect of the proof, wherever made, was not to conf er title, but
simply to establish it, as already conferred by the decree, If not by earlier law.
The royal decree of February 13, 1894, declaring forfeited titles that were
capable of adjustment under decree of 1880, for which adjustment had not
been sought, should not be construed as confiscation, but as the withdrawal
 G.R. No. 135385. December 6, 2000.*
ISAGANI CRUZ and CESAR EUROPA, petitioners, vs.SECRETARY OF
ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET
AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE
NATIONAL COMMISSION ON INDIGENOUS PEOPLES,respondents.
x ----------------------------------------------------------------------- x
HON. JUAN M. FLAVIER, HON. PONCIANO BENNAGEN, BAYANI
ASCARRAGA, EDTAMI MANSAYANGAN, BASILIO WANDAG, EVELYN
DUNUAN, YAOM TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN,
MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE
SATURNO, BAE MALOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-
ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO
SABASALES, DATU EDUARDO BANDA, DATU JOEL UNAD, DATU
RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO,
TIMUAY EDWIN B. ENDING, DATU SAHAMPONG MALANAW VI, DATU
BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAI INAY DAYA-
MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY,
VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA
GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G.
PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-
VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT,
ANDRES MENDIGORIN, LEOPOLDO ABUGAN,
_______________
*
EN BANC.
129
VOL. 347, DECEMBER 6, 2000 129
Cruz vs. Secretary of Environment and Natural Resources
VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES,
ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO VALONES, PEPE
H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N.
TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN,
RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO
H. MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S.
MANSANGCAGAN, PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S.
SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB,
SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUKIM
MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO,
JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY
DIAMILING, SALOME P. SARZA, FELIFE P. BAGON, SAMMY
SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSA GONOS, ROMEO
SALIGA, SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING
MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI, MORANTE
S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented
by her father CORNELIO MALID, MARCELINO M. LADRA, represented by
her father MONICO D. LADRA, JENNYLYN MALID, represented by her
father TONY MALID, ARIEL M. EVANGELISTA, represented by her mother
LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND,
PULA BATO B’LAAN TRIBAL FARMER’S ASSOCIATION, INTER-PEOPLE’S
EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS, intervenor.
x ----------------------------------------------------------------------- x
COMMISSION ON HUMAN RIGHTS, intervenor.
x ----------------------------------------------------------------------- x
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE
CONSERVATION OF NATURAL RESOURCES, INC., intervenor.
Supreme Court; Judgments; Judicial Review; Where the votes in the
Court en banc are equally divided and the necessary majority is not
obtained, the case is redeliberated upon, but if after deliberation, the voting
130
130 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
remains the same, the petition is dismissed pursuant to Rule 56,
Section 7 of the Rules of Civil Procedure.—After due deliberation on the
petition, the members of the Court voted as follows: Seven (7) voted to
dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice
and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity
of the challenged provisions of R.A. 8371. Justice Puno also filed a separate
opinion sustaining all challenged provisions of the law with the exception of
Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998,
the Rules and Regulations Implementing the IPRA, and Section 57 of the
IPRA which he contends should be interpreted as dealing with the large-scale
exploitation of natural resources and should be read in conjunction with
Section 2, Article XII of the 1987 Constitution. On the other hand, Justice
Mendoza voted to dismiss the petition solely on the ground that it does not
raise a justiciable controversy and petitioners do not have standing to
question the constitutionality of R.A. 8371. Seven (7) other members of the
Court voted to grant the petition. Justice Panganiban filed a separate opinion
expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related
provisions of R.A. 8371 are unconstitutional. He reserves judgment on the
constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes
must await the filing of specific cases by those whose rights may have been
violated by the IPRA. Justice Vitug also filed a separate opinion expressing
the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the
separate opinions of Justices Panganiban and Vitug. As the votes were
equally divided (7 to 7) and the necessary majority was not obtained, the
case was redeliberated upon. However, after redeliberation, the voting
remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules
of Civil Procedure, the petition is DISMISSED.
PUNO, J.,Separate Opinion:
National Patrimony; Regalian Doctrine; Natural Resources; Public
Lands; The “Regalian Doctrine” or jura regalia is a Western legal concept
that was first introduced by the Spaniards into the country through the Laws
of the Indies and the Royal Cedulas.—The capacity of the State to own or
acquire property is the state’s power of dominium. This was the foundation
for the early Spanish decrees embracing the feudal theory of jura regalia.
The “Regalian Doctrine” or jura regalia is a Western legal concept that was
first introduced by the Spaniards into the country through the Laws of the
Indies and the Royal Cedulas.
131
VOL. 347, DECEMBER 6, 2000 131
Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; Words and Phrases; The Public Land Act
(Act No. 926) operated on the assumption that title to public lands in the
Philippine Islands remained in the government, and that the government’s
title to public land sprung from the Treaty of Paris and other subsequent
treaties between Spain and the United States; The term “public land” referred
to all lands of the public domain whose title still remained in the government
and are thrown open to private appropriation and settlement, and excluded
the patrimonial property of the government and the friar lands.—Act No. 926,
the first Public Land Act, was passed in pursuance of the provisions of the
Philippine Bill of 1902. The law governed the disposition of lands of the public
domain. It prescribed rules and regulations for the homesteading, selling, and
leasing of portions of the public domain of the Philippine Islands, and
prescribed the terms and conditions to enable persons to perfect their titles to
public lands in the Islands. It also provided for the “issuance of patents to
certain native settlers upon public lands,” for the establishment of town sites
and sale of lots therein, for the completion of imperfect titles, and for the
cancellation or confirmation of Spanish concessions and grants in the
Islands.” In short, the Public Land Act operated on the assumption that title to
public lands in the Philippine Islands remained in the government; and that
the government’s title to public land sprung from the Treaty of Paris and other
subsequent treaties between Spain and the United States. The term “public
land” referred to all lands of the public domain whose title still remained in the
government and are thrown open to private appropriation and settlement,
and excluded the patrimonial property of the government and the friar lands.
Same; Same; Same; Same; Land Titles; Enacted by the Philippine
Commission, Act 496 placed all public and private lands in the Philippines
under the Torrens system.—Grants of public land were brought under the
operation of the Torrens system under Act 496, or the Land Registration Law
of 1903. Enacted by the Philippine Commission, Act 496 placed all public and
private lands in the Philippines under the Torrens system. The law is said to
be almost a verbatim copy of the Massachusetts Land Registration Act of
1898, which, in turn, followed the principles and procedure of the Torrens
system of registration formulated by Sir Robert Torrens who patterned it after
the Merchant Shipping Acts in South Australia. The Torrens system requires
that the government issue an official certificate of title attesting to the fact that
the person named is the owner of the property described therein, subject to
such liens and encumbrances as thereon noted or the law warrants or
reserves. The certificate of title is indefeasible and imprescriptible and all
claims to the parcel of land are quieted upon issuance of said certificate. This
system highly facilitates land conveyance and negotiation.
132
132 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; The delegates to the 1935 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, so to remove
all doubts, the Convention approved the provision in the Constitution
affirming the Regalian doctrine.—The Regalian doctrine was enshrined in
the 1935 Constitution. One of the fixed and dominating objectives of the 1935
Constitutional Convention was the nationalization and conservation of the
natural resources of the country. 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 to 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.
Same; Indigenous Peoples Rights Act (RA. No. 8371); Ancestral
Domains: Ancestral Lands; Customary Laws; The Indigenous Peoples Rights
Act (IPRA) grants the indigenous cultural communities or indigenous peoples
(ICCs/IPs) the ownership and possession of their ancestral domains and
ancestral lands, and defines the extent of these lands and domains, and the
ownership given is the indigenous concept of ownership under customary
law which traces its origin to native title.—Republic Act No. 8371 is entitled
“An Act to Recognize, Protect and Promote the Rights of Indigenous Cultural
Communities/Indigenous Peoples, Creating a National Commission on
Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating
Funds Therefor, and for Other Purposes.” It is simply known as “The
Indigenous Peoples Rights Act of 1997” or the IPRA. The IPRA recognizes
the existence of the indigenous cultural communities or indigenous peoples
(ICCs/IPs) as a distinct sector in Philippine society. It grants these people the
ownership and possession of their ancestral domains and ancestral lands,
and defines the extent of these lands and domains. The ownership given is
the indigenous concept of ownership under customary law which traces its
origin to native title.
Same; Same; Same; Same; Words and Phrases; Indigenous Cultural
Communities or Indigenous Peoples refer to a group of people or
homogeneous societies who have continuously lived as an organized
community on communally bounded and defined territory.—Indigenous
Cultural Com-
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Cruz vs. Secretary of Environment and Natural Resources
munities or Indigenous Peoples refer to a group of people or
homogeneous societies who have continuously lived as an organized
community on communally bounded and defined territory. These groups of
people have actually occupied, possessed and utilized their territories under
claim of ownership since time immemorial. They share common bonds of
language, customs, traditions and other distinctive cultural traits, or, they, by
their resistance to political, social and cultural inroads of colonization, non-
indigenous religions and cultures, became historically differentiated from the
Filipino majority. ICCs/IPs also include descendants of ICCs/IPs who
inhabited the country at the time of conquest or colonization, who retain
some or all of their own social, economic, cultural and political institutions but
who may have been displaced from their traditional territories or who may
have resettled outside their ancestral domains.
Same; Same; Same; Same; The abrogation of the Filipinos’ ancestral
rights in land and the introduction of the concept of public domain were the
most immediate fundamental results of Spanish colonial theory and law.—All
lands lost by the old barangays in the process of pueblo organization as well
as all lands not assigned to them and the pueblos, were now declared to be
crown lands or realengas, belonging to the Spanish king. It was from
the realengas that land grants were made to non-Filipinos. The abrogation of
the Filipinos’ ancestral rights in land and the introduction of the concept of
public domain were the most immediate fundamental results of Spanish
colonial theory and law. The concept that the Spanish king was the owner of
everything of value in the Indies or colonies was imposed on the natives, and
the natives were stripped of their ancestral rights to land.
Same; Same; Same; Same; Colonialism tended to divide and rule an
otherwise culturally and historically related populace through a colonial
system that exploited both the virtues and vices of the Filipinos.—The Moros
and infieles resisted Spanish rule and Christianity. The Moros were driven
from Manila and the Visayas to Mindanao; while the infieles, to the
hinterlands. The Spaniards did not pursue them into the deep interior. The
upland societies were naturally outside the immediate concern of Spanish
interest, and the cliffs and forests of the hinterlands were difficult and
inaccessible, allowing the infieles, in effect, relative security. Thus, the
infieles, which were peripheral to colonial administration, were not only able
to preserve their own culture but also thwarted the Christianization process,
separating themselves from the newly evolved Christian community. Their
own political, economic and social systems were kept constantly alive and
vibrant. The pro-Christian or pro-Indio attitude of colonialism brought about a
generally mutual feeling of suspicion, fear, and hostility between the
Christians on the one hand and the non-
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13 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Christians on the other. Colonialism tended to divide and rule an
otherwise culturally and historically related populace through a colonial
system that exploited both the virtues and vices of the Filipinos.
Same; Same; Same; Same; Under the 1973 Constitution, for the first
time in Philippine history, the “non-Christian tribes” or the “cultural minorities”
were addressed by the highest law of the Republic, and they were referred to
as “cultural communities.”—It was in the 1973 Constitution that the State
adopted the following provision: “The State shall consider the customs,
traditions, beliefs, and interests of national cultural communities in the
formulation and implementation of State policies.” For the first time in
Philippine history, the “non-Christian tribes” or the “cultural minorities” were
addressed by the highest law of the Republic, and they were referred to as
“cultural communities.” More importantly this time, their “uncivilized” culture
was given some recognition and their “customs, traditions, beliefs and
interests” were to be considered by the State in the formulation and
implementation of State policies. President Marcos abolished the CNI and
transferred its functions to the Presidential Adviser on National Minorities
(PANAMIN). The PANAMIN was tasked to integrate the ethnic groups that
sought full integration into the larger community, and at the same time
“protect the rights of those who wish to preserve their original lifeways beside
the larger community.” In short, while still adopting the integration policy, the
decree recognized the right of tribal Filipinos to preserve their way of life.
Same; Same; Same; Same; The Aquino government signified a total
shift from the policy of integration to one of preservation.—The Aquino
government signified a total shift from the policy of integration to one of
preservation. Invoking her powers under the Freedom Constitution, President
Aquino created the Office of Muslim Affairs, Office for Northern Cultural
Communities and the Office for Southern Cultural Communities all under the
Office of the President.
Same; Same; Same; Same; The State, by recognizing the right of tribal
Filipinos to their ancestral lands and domains, has effectively upheld their
right to live in a culture distinctly their own.—The 1987 Constitution carries at
least six (6) provisions which insure the right of tribal Filipinos to preserve
their way of life. This Constitution goes further than the 1973 Constitution by
expressly guaranteeing the rights of tribal Filipinos to their ancestral domains
and ancestral lands. By recognizing their right to their ancestral lands and
domains, the State has effectively upheld their right to live in a culture
distinctly their own.
 135
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Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; Land Titles; Land titles do not exist in the
indigenous peoples’ economic and social system—the concept of individual
land ownership under the civil law is alien to them.—Land titles do not exist
in the indigenous peoples' economic and social system. The concept of
individual land ownership under the civil law is alien to them. Inherently
colonial in origin, our national land laws and governmental policies frown
upon indigenous claims to ancestral lands. Communal ownership is looked
upon as inferior, if not inexistent.
Same; Same; Same; Same; It was to address the centuries-old neglect
of the Philippine indigenous peoples that the Tenth Congress passed and
approved the Indigenous Peoples Rights Act (IPRA) of 1997.—It was to
address the centuries-old neglect of the Philippine indigenous peoples that
the Tenth Congress of the Philippines, by their joint efforts, passed and
approved R.A. No. 8371, the Indigenous Peoples Rights Act (IPRA) of 1997.
The law was a consolidation of two Bills—Senate Bill No. 1728 and House
Bill No. 9125.
Same; Same; Same; Same; Words and Phrases; “Ancestral Domains,”
Explained.—Ancestral domains are all areas belonging to ICCs/IPs held
under a claim of ownership, occupied or possessed by ICCs/IPs by
themselves or through their ancestors, communally or individually since time
immemorial, continuously until the present, except when interrupted by war,
force majeure or displacement by force, deceit, stealth or as a consequence
of government projects or any other voluntary dealings with government
and/or private individuals or corporations. Ancestral domains comprise lands,
inland waters, coastal areas, and natural resources therein and includes
ancestral lands, forests, pasture, residential, agricultural, and other lands
individually owned whether alienable or not, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources. They
also include lands which may no longer be exclusively occupied by ICCs/IPs
but from which they traditionally had access to for their subsistence and
traditional activities, particularly the home ranges of ICCs/IPs who are still
nomadic and/or shifting cultivators.
Same; Same; Same; Same; Same; “Ancestral Lands,” Explained.—
Ancestral lands are lands held by the ICCs/IPs under the same conditions as
ancestral domains except that these are limited to lands and that these lands
are not merely occupied and possessed but are also utilized by the ICCs/IPs
under claims of individual or traditional group ownership. These lands include
but are not limited to residential lots, rice terraces or paddies, private forests,
swidden farms and tree lots.
136
136 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; Land Titles; Customary Laws; The
National Commission on Indigenous Peoples (NCIP) issues a Certificate of
Ancestral Domain Title (CADT) in the name of the community concerned,
leaving the allocation of lands within the ancestral domain to any individual or
indigenous corporate (family or clan) claimants to the ICCs/IPs concerned to
decide in accordance with customs and traditions while with respect to
ancestral lands outside the ancestral domains, the NICP issues a Certificate
of Ancestral Land Title (CALT).—Upon due application and compliance with
the procedure provided under the law and upon finding by the NCIP that the
application is meritorious, the NCIP shall issue a Certificate of Ancestral
Domain Title (CADT) in the name of the community concerned. The
allocation of lands within the ancestral domain to any individual or indigenous
corporate (family or clan) claimants is left to the ICCs/IPs concerned to
decide in accordance with customs and traditions. With respect to
ancestral lands outside the ancestral domain, the NCIP issues a Certificate of
Ancestral Land Title (CALT). CADTs and CALTs issued under the IPRA shall
be registered by the NCIP before the Register of Deeds in the place where
the property is situated.
Same; Same; Same; Same; Same; The IPRA categorically declares
ancestral lands and domains held by native title as never to have been public
land—domains and lands held under native title are, therefore, indisputably
presumed to have never been public lands and are private.—Native title
refers to ICCs/IPs’ preconquest rights to lands and domains held under a
claim of private ownership as far back as memory reaches. These lands are
deemed never to have been public lands and are indisputably presumed to
have been held that way since before the Spanish Conquest. The rights of
ICCs/IPs to their ancestral domains(which also include ancestral lands) by
virtue of native title shall be recognized and respected. Formal recognition,
when solicited by ICCs/IPs concerned, shall be embodied in a Certificate of
Ancestral Domain Title (CADT), which shall recognize the title of the
concerned ICCs/IPs over the territories identified and delineated. Like a
Torrens title, a CADT is evidence of private ownership of land by native
title. Native title, however, is a right of private ownership peculiarly granted to
ICCs/IPs over their ancestral lands and domains. The IPRA categorically
declares ancestral lands and domains held by native title as never to have
been public land. Domains and lands held under native title are, therefore,
indisputably presumed to have never been public lands andare private.
Same; Same; Same; Same; Same; The concept of native title first
upheld in Cariño v. Insular Government, 41 Phil 935 (1909), 212 US. 449, 53
L.Ed. 594, and enshrined in the IPRA grants ownership, albeit in limited
137
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Cruz vs. Secretary of Environment and Natural Resources
form, of the land to the ICCs/IPs.—In the Philippines, the concept of
native title first upheld in Cariño and enshrined in the IPRA grants ownership,
albeit in limited form, of the land to the ICCs/IPs. Native title presumes that
the land is private and was never public. Cariño is the only case that
specifically and categorically recognizes native title. The long line of cases
citing Cariño did not touch on native title and the private character of
ancestral domains and lands. Cariño was cited by the succeeding cases to
support the concept of acquisitive prescription under the Public Land Act
which is a different matter altogether. Under the Public Land Act, land sought
to be registered must be public agricultural land. When the conditions
specified in Section 48 [b] of the Public Land Act are complied with, the
possessor of the land is deemed to have acquired, by operation of law, a
right to a grant of the land. The land ceases to be part of the public
domain, ipso jure, and is converted to private property by the mere lapse or
completion of the prescribed statutory period.
Same; Same; Same; Same; Same; Ancestral lands and ancestral
domains are not part of the lands of the public domain; they are private and
belong to the ICCs/IPs.—Thus, ancestral lands and ancestral domains are
not part of the lands of the public domain. They are private and belong to the
ICCs/IPs. Section 3 of Article XII on National Economy and Patrimony of the
1987 Constitution classifies lands of the public domain into four categories:
(a) agricultural, (b) forest or timber, (c) mineral lands, and (d) national parks.
Section 5 of the same Article XII mentions ancestral lands and ancestral
domains but it does not classify them under any of the said four categories.
To classify them as public lands under any one of the four classes will render
the entire IPRA law a nullity. The spirit of the IPRA lies in the distinct concept
of ancestral domains and ancestral lands. The IPRA addresses the major
problem of the ICCs/IPs which is loss of land. Land and space are of vital
concern in terms of sheer survival of the ICCs/IPs. The 1987 Constitution
mandates the State to “protect the rights of indigenous cultural communities
to their ancestral lands” and that “Congress provide for the applicability of
customary laws x x x in determining the ownership and extent of ancestral
domain.” It is the recognition of the ICCs/IPs distinct rights of ownership over
their ancestral domains and lands that breathes life into this constitutional
mandate.
Same; Same; Same; Same; The right of ownership and possession of
the ICCs/IPs to their ancestral domains is held under the indigenous concept
of ownership which maintains the view that ancestral domains are the
ICCs/IPs private but community property.—The right of ownership and
possession of the ICCs/IPs to their ancestral domains is held under the
indigenous concept of ownership. This concept maintains the view that
138
138 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
ancestral domains are the ICCs/IPs private but community property. It is
private simply because it is not part of the public domain. But its private
character ends there. The ancestral domain is owned in common by the
ICCs/IPs and not by one particular person. The IPRA itself provides that
areas within the ancestral domains, whether delineated or not, are presumed
to be communally held. These communal rights, however, are not exactly the
same as co-ownership rights under the Civil Code. Co-ownership gives any
co-owner the right to demand partition of the property held in common. The
Civil Code expressly provides that “[n]o co-owner shall be obliged to remain
in the co-ownership.” Each co-owner may demand at any time the partition of
the thing in common, insofar as his share is concerned. To allow such a right
over ancestral domains may be destructive not only of customary law of the
community but of the very community itself.
Same; Same; Same; Same; Customary Laws; The IPRA, by legislative
fiat, introduces a new concept of ownership, a concept that has long existed
under customary law.—Following the constitutional mandate that “customary
law govern property rights or relations in determining the ownership and
extent of ancestral domains,” the IPRA, by legislative flat, introduces a new
concept of ownership. This is a concept that has long existed under
customary law.
Same; Same; Same; Same; Same; Customary law is a primary, not
secondary, source of rights under the IPRA and uniquely applies to ICCs/IPs,
and its recognition does not depend on the absence of a specific provision in
the civil law.—Custom, from which customary law is derived, is also
recognized under the Civil Code as a source of law. Some articles of the Civil
Code expressly provide that custom should be applied in cases where no
codal provision is applicable. In other words, in the absence of any applicable
provision in the Civil Code, custom, when duly proven, can define rights and
liabilities. Customary law is a primary, not secondary, source of rights under
the IPRA and uniquely applies to ICCs/IPs. Its recognition does not depend
on the absence of a specific provision in the civil law. The indigenous concept
of ownership under customary law is specifically acknowledged and
recognized, and coexists with the civil law concept and the laws on land
titling and land registration.
Same; Same; Same; Same; Natural Resources; There is nothing in
IPRA that grants to the ICCs/IPs ownership over the natural resources within
their ancestral domains.—Examining the IPRA, there is nothing in the law
that grants to the ICCs/IPs ownership over the natural resources within their
ancestral domains. The right of ICCs/IPs in their ancestral
139
VOL. 347, DECEMBER 6, 2000 139
Cruz vs. Secretary of Environment and Natural Resources
domains includes ownership, but this “ownership” is expressly defined
and limited in Section 7 (a) as: “Sec. 7. a) Right of ownership—The right to
claim ownership over lands, bodies of water traditionally and actually
occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds,
and all improvements made by them at any time within the domains;” The
ICCs/IPs are given the right to claim ownership over “lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional
hunting and fishing grounds, and all improvements made by them at any time
within the domains.” It will be noted that this enumeration does not
mention bodies of water not occupied by the ICCs/IPs, minerals, coal,
wildlife, floraand fauna in the traditional hunting grounds, fish in the traditional
fishing grounds, forests or timber in the sacred places, etc. and all other
natural resources found within the ancestral domains. Indeed, the right of
ownership under Section 7 (a) does not cover “waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna and all other natural
resources”enumerated in Section 2, Article XII of the 1987 Constitution as
belonging to the State.
Same; Same; Same; Same; Same; The inclusion of “natural resources”
in Section 1, Part II, Rule III of the Implementing Rules goes beyond the
parameters of Section 7 (b) of the law and is contrary to Section 2, Article XII
of the 1987 Constitution.—The constitutionality of Section 1, Part II, Rule III
of the Implementing Rules was not specifically and categorically challenged
by petitioners. Petitioners actually assail the constitutionality of the
Implementing Rules in general. Nevertheless, to avoid any confusion in the
implementation of the law, it is necessary to declare that the inclusion of
“natural resources” in Section 1, Part II, Rule III of the Implementing Rules
goes beyond the parameters of Section 7 (b) of the law and is contrary to
Section 2, Article XII of the 1987 Constitution.
Same; Same; Same; Same; Same; The right to negotiate the terms and
conditions over the natural resources covers only their exploration which
must be for the purpose of ensuring ecological and environmental protection
of, and conservation measures in the ancestral domain—it does not extend
to the exploitation and development of natural resources.—Ownership over
the natural resources in the ancestral domains remains with the State and
the ICCs/IPs are merely granted the right to “manage and conserve” them for
future generations, “benefit and share” the profits from their allocation and
utilization, and “negotiate the terms and conditions for their exploration” for
the purpose of “ensuring ecological and environmental protection and
conservation measures.” It must be noted that the right to negotiate the terms
and conditions over the natural re-
140
140 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
sources covers only their exploration which must be for the purpose of
ensuring ecological and environmental protection of, and conservation
measures in the ancestral domain. It does not extend to the exploitation and
development of natural resources. Simply stated, the ICCs/IPs’ rights over
the natural resources take the form of management or stewardship. For the
ICCs/IPs may use these resources and share in the profits of their utilization
or negotiate the terms for their exploration. At the same time, however, the
ICCs/IPs must ensure that the natural resources within their ancestral
domains are conserved for future generations and that the “utilization” of
these resources must not harm the ecology and environment pursuant to
national and customary laws.
Same; Same; Same; Same; Same; The limited rights of “management
and use” in Section 7 (b) of the IPRA must be taken to contemplate small-
scale utilization of natural resources as distinguished from large-scale
utilization.—The limited rights of “management and use” in Section 7 (b)
must be taken to contemplate small-scale utilization of natural resources as
distinguished from large-scale. Small-scale utilization of natural resources is
expressly allowed in the third paragraph of Section 2, Article XII of the
Constitution “in recognition of the plight of forest dwellers, gold panners,
marginal fishermen and others similarly situated who exploit our natural
resources for their daily sustenance and survival.” Section 7 (b) also
expressly mandates the ICCs/IPs to manage and conserve these resources
and ensure environmental and ecological protection within the domains,
which duties, by their very nature, necessarily reject utilization in a large-
scale.
Same; Same; Same; Same; Same; The rights granted by the IPRA to
the ICCs/IPs over the natural resources in their ancestral domains merely
gives the ICCs/IPs, as owners and occupants of the land on which the
resources are found, the right to the small-scale utilization of these
resources, and at the same time, a priority in their large-scale development
and exploitation.—The rights granted by the IPRA to the ICCs/IPs over the
natural resources in their ancestral domains merely gives the ICCs/IPs, as
owners and occupants of the land on which the resources are found, the right
to the small-scale utilization of these resources, and at the same time, a
priority in their large-scale development and exploitation. Section 57 does not
mandate the State to automatically give priority to the ICCs/IPs. The State
has several options and it is within its discretion to choose which option to
pursue. Moreover, there is nothing in the law that gives the ICCs/IPs the right
to solely undertake the large-scale development of the natural resources
within their domains. The ICCs/IPs must undertake such endeavour always
under State supervision or control. This
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VOL. 347, DECEMBER 6, 2000 141
Cruz vs. Secretary of Environment and Natural Resources
indicates that the State does not lose control and ownership over the
resources even in their exploitation. Sections 7 (b) and 57 of the law simply
give due respect to the ICCs/IPs who, as actual occupants of the land where
the natural resources lie, have traditionally utilized these resources for their
subsistence and survival.
Same; Same; Same; Same; Ecology and Environment; Indigenous
rights came as a result of both human rights and environmental protection,
and have become a part of today’s priorities for the international agenda.—
Presently, there is a growing concern for indigenous rights in the international
scene. This came as a result of the increased publicity focused on the
continuing disrespect for indigenous human rights and the destruction of the
indigenous peoples’ environment, together with the national governments’
inability to deal with the situation. Indigenous rights came as a result of both
human rights and environmental protection, and have become a part of
today’s priorities for the international agenda.
Same; Same; Same; Same; Customary Laws; If the evolution of the
Filipino people into a democratic society is to truly proceed democratically,
i.e., if the Filipinos as a whole are to participate fully in the task of continuing
democratization, it is the Supreme Court’s duty to acknowledge the presence
of indigenous and customary laws in the country and affirm their co-
existence with the land laws in our national legal system.—The struggle of
the Filipinos throughout colonial history had been plagued by ethnic and
religious differences. These differences were carried over and magnified by
the Philippine government through the imposition of a national legal order
that is mostly foreign in origin or derivation. Largely unpopulist, the present
legal system has resulted in the alienation of a large sector of society,
specifically, the indigenous peoples. The histories and cultures of the
indigenes are relevant to the evolution of Philippine culture and are vital to
the understanding of contemporary problems. It is through the IPRA that an
attempt was made by our legislators to understand Filipino society not in
terms of myths and biases but through common experiences in the course of
history. The Philippines became a democracy a centennial ago and the
decolonization process still continues. If the evolution of the Filipino people
into a democratic society is to truly proceed democratically, i.e., if the
Filipinos as a whole are to participate fully in the task of continuing
democratization, it is this Court’s duty to acknowledge the presence of
indigenous and customary laws in the country and affirm their co-existence
with the land laws in our national legal system.
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142 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
VITUG, J., Separate Opinion:
Supreme Court; Judicial Review; Procedural Rules and
Technicalities; Until an exact balance is struck, the Court must accept an
eclectic notion that can free itself from the bondage of legal nicety and hold
trenchant technicalities subordinate to what may be considered to be of
overriding concern.—Nevertheless, where a most compelling reason exists,
such as when the matter is of transcendental importance and paramount
interest to the nation, the Court must take the liberal approach that
recognizes the legal standing of nontraditional plaintiffs, such as citizens and
taxpayers, to raise constitutional issues that affect them. This Court thus did
so in a case that involves the conservation of our forests for ecological
needs. Until an exact balance is struck, the Court must accept an eclectic
notion that can free Itself from the bondage of legal nicety and hold trenchant
technicalities subordinate to what may be considered to be of overriding
concern.
National Patrimony; Regalian Doctrine; Natural Resources; Indigenous
Peoples Rights Act (IPRA); The provisions Sections 7 and 57 of the IPRA, in
their totality, are, in my view, beyond the context of the fundamental law and
virtually amount to an undue delegation, if not an unacceptable abdication, of
State authority over a significant area of the country and its patrimony.—
IPRA effectively withdraws from the public domain the so-called ancestral
domains covering literally millions of hectares. The notion of community
property would comprehend not only matters of proprietary interest but also
some forms of self-governance over the carved-out territory. This concept is
elaborated in Section 7 of the law which states that the “rights of ownership
and possession of ICCs/IPs to their ancestral domains shall be recognized
and protected,” subsumed under which would encompass the right of
ownership (paragraph a); the right to develop, control and use lands and
natural resources, including “the right to negotiate the terms and conditions
for the exploration of natural resources in the areas for the purpose of
ensuring ecological, environmental protection and the conservation
measures, pursuant to national and customary laws;” (par. b); the right to
stay in the territories (par. c); the right to return to their abandoned lands. In
case of displacement (par. d); the right to regulate entry of migrants (par. e);
the right to claim parts of ancestral domains previously reserved (par. g); and
the right to resolve land conflicts. In accordance primarily with customary law
(par. h). Concurrently, Section 57 states that ICCs/IPs shall be given “priority
rights in the harvesting, extraction, development or exploitation of any natural
resources within the ancestral domains.” These provisions of IPRA, in their
totality, are, in my view, beyond the context of the fun-
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Cruz vs. Secretary of Environment and Natural Resources
damental law and virtually amount to an undue delegation, if not an
unacceptable abdication, of State authority over a significant area of the
country and its patrimony.
Same; Same; Same; The decision of the United States Supreme Court
in Cariño v. Insular Government, 41 Phil 935 (1910), holding that a parcel of
land held since time immemorial by individuals under a claim of private
ownership is presumed never to have been public land and cited to
downgrade the application of the regalian doctrine, cannot override the
collective will of the people expressed in the Constitution.—The decision of
the United States Supreme Court in Cariño vs. InsularGovernment, holding
that a parcel of land held since time immemorial by individuals under a claim
of private ownership is presumed never to have been public land and cited to
downgrade the application of the regalian doctrine, cannot override the
collective will of the people expressed in the Constitution. It is in them that
sovereignty resides and from them that all government authority emanates. It
is not then for a court ruling or any piece of legislation to be conformed to by
the fundamental law, but it is for the former to adapt to the latter, and it is the
sovereign act that must, between them, stand inviolate.
 Customary Laws; I do not see the statement in Section 5 of Article XII
of the Constitution allowing Congress to provide “for the applicability of
customary laws governing property rights or relations in determining the
ownership and extent of ancestral domains” as saying that Congress may
enact a law that would simply express that “customary laws shall govern”
and end it there.—The second paragraph of Section 5 of Article XII of the
Constitution allows Congress to provide “for the applicability of customary
laws governing property rights or relations in determining the ownership and
extent of ancestral domains.” I do not see this statement as saying that
Congress may enact a law that would simply express that “customary laws
shall govern” and end it there. Had it been so, the Constitution could have
itself easily provided without having to still commission Congress to do it.
Same; Customary laws, when specifically enacted to become part of
statutory law, must first undergo that publication to render them
correspondingly binding and effective as such.—The constitutional aim, it
seems to me, is to get Congress to look closely into the customary laws and,
with specificity and by proper recitals, to hew them to, and make them part of,
the stream of laws. The “due process clause,” as I so understand it in Tañada
vs. Tuvera would require an apt publication of a legislative enactment before
it is permitted to take force and effect. So, also
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customary laws, when specifically enacted to become part of statutory
law, must first undergo that publication to render them correspondingly
binding and effective as such.
KAPUNAN, J., Separate Opinion:
Indigenous Peoples Rights Act (IPRA); Words and
Phrases; International Law; In international law, the definition of what
constitutes “indigenous peoples” attains some degree of controversy.—The
term “indigenous” traces its origin to the Old Latin word indu, meaning
“within.” In the sense the term has come to be used, it is nearer in meaning to
the Latin word indigenus, which means “native.” “Indigenous” refers to that
which originated or has been produced naturally in a particular land, and has
not been introduced from the outside. In international law, the definition of
what constitutes “indigenous peoples” attains some degree of controversy.
No definition of the term “indigenous peoples” has been adopted by the
United Nations (UN), although UN practice has been guided by a working
definition in the 1986 Report of UN Special Rapporteur Martinez Cobo.
Same; Same; In Philippine constitutional law, the term “indigenous
peoples” pertains to those groups of Filipinos who have retained a high
degree of continuity from pre-Conquest culture.—In Philippine constitutional
law, the term “indigenous peoples” pertains to those groups of Fili-pinos who
have retained a high degree of continuity from pre-Conquest culture.
Philippine legal history, however, has not been kind to the indigenous
peoples, characterized them as “uncivilized,” “backward people,” with
“barbarous practices” and “a low order of intelligence.”
Same; Same; The extant Philippine national culture is the culture of the
majority, its indigenous roots were replaced by foreign cultural elements that
are decidedly pronounced, if not dominant.—Though Filipinos today are
essentially of the same stock as the indigenous peoples, our national culture
exhibits only the last vestiges of this native culture. Centuries of colonial rule
and neocolonial domination have created a discernible distinction between
the cultural majority and the group of cultural minorities. The extant Philippine
national culture is the culture of the majority; its indigenous roots were
replaced by foreign cultural elements that are decidedly pronounced, if not
dominant. While the culture of the majority reoriented itself to Western
influence, the culture of the minorities has retained its essentially native
character.
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Supreme Court; Judicial Review; When the State machinery is set into
motion to implement an alleged unconstitutional statute, the Supreme Court
possesses sufficient authority to resolve and prevent imminent injury and
violation of the constitutional process.—In the case at bar, there exists a live
controversy involving a clash of legal rights. A law has been enacted, and the
Implementing Rules and Regulations approved. Money has been
appropriated and the government agencies concerned have been directed to
implement the statute. It cannot be successfully maintained that we should
await the adverse consequences of the law in order to consider the
controversy actual and ripe for judicial resolution. It is precisely the
contention of the petitioners that the law, on its face, constitutes an
unconstitutional abdication of State ownership over lands of the public
domain and other natural resources. Moreover, when the State machinery is
set into motion to implement an alleged unconstitutional statute, this Court
possesses sufficient authority to resolve and prevent imminent injury and
violation of the constitutional process.
Same; Same; Parties; Locus Standi; Taxpayer’s Suits; Citizen’s
Suits; In a sense, all citizen’s and taxpayer’s suits are efforts to air
generalized grievances about the conduct of government and the allocation
of power.—In addition to the existence of an actual case or controversy, a
person who assails the validity of a statute must have a personal and
substantial interest in the case, such that, he has sustained, or will sustain, a
direct injury as a result of its enforcement. Evidently, the rights asserted by
petitioners as citizens and taxpayers are held in common by all the citizens,
the violation of which may result only in a “generalized grievance.” Yet, in a
sense, all citizen’s and taxpayer’s suits are efforts to air generalized
grievances about the conduct of government and the allocation of power.
 Same; Same; Same; Same; Same; Same; National Patrimony; The
preservation of the integrity and inviolability of the national patrimony is a
proper subject of a citizen’s suit.—Petitioners, as citizens, possess the
“public right” to ensure that the national patrimony is not alienated and
diminished in violation of the Constitution. Since the government, as the
guardian of the national patrimony, holds it for the benefit of all Filipinos
without distinction as to ethnicity, it follows that a citizen has sufficient interest
to maintain a suit to ensure that any grant of concessions covering the
national economy and patrimony strictly complies with constitutional
requirements. Thus, the preservation of the integrity and inviolability of the
national patrimony is a proper subject of a citizen’s suit.
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National Patrimony; Regalian Doctrine; The theory of jura regalia was
nothing more than a natural fruit of conquest; The Regalian theory does not
negate native title to lands held in private ownership since time immemorial.
—Generally, under the concept of jura regalia, private title to land must be
traced to some grant, express or implied, from the Spanish Crown or its
successors, the American Colonial government, and thereafter, the Philippine
Republic. The belief that the Spanish Crown is the origin of all land titles in
the Philippines has persisted because title to land must emanate from some
source for it cannot issue forth from nowhere. 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. The Regalian theory, however, does not
negate native title to lands held in private ownership since time immemorial.
Same; Same; Natural Resources; The mere fact that Section 3(a) of
IPRA defines ancestral domains to include the natural resources, found
therein does not ipso facto convert the character of such natural resources
as private property of the indigenous people.—Section 3(a) merely defines
the coverage of ancestral domains, and describes the extent, limit and
composition of ancestral domains by setting forth the standards and
guidelines in determining whether a particular area is to be considered as
part of and within the ancestral domains. In other words, Section 3(a) serves
only as a yardstick which points out what properties are within the ancestral
domains. It does not confer or recognize any right of ownership over the
natural resources to the indigenous peoples. Its purpose is definitional and
not declarative of a right or title. The specification of what areas belong to the
ancestral domains is, to our mind, important to ensure that no unnecessary
encroachment on private properties outside the ancestral domains will result
during the delineation process. The mere fact that Section 3(a) defines
ancestral domains to include the natural resources found therein does
not ipso facto convert the character of such natural resources as private
property of the indigenous peoples. Similarly, Section 5 in relation to Section
3(a) cannot be construed as a source of ownership rights of indigenous
people over the natural resources simply
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Cruz vs. Secretary of Environment and Natural Resources
because it recognizes ancestral domains as their “private but
community property.”
Same; Same; Same; Words and Phrases; The phrase “private but
community property” is merely descriptive of the indigenous peoples’ concept
of ownership as distinguished from that provided in the Civil Code.—The
phrase “private but community property” is merely descriptive of the
indigenous peoples’ concept of ownership as distinguished from that
provided in the Civil Code. In Civil Law, “ownership” is the “independent and
general power of a person over a thing for purposes recognized by law and
within the limits established thereby.” The civil law concept of ownership has
the following attributes: jus utendi or the right to receive from the thing that
which it produces, jus abutendi or the right to consume the thing by its
use, jus disponendi or the power to alienate, encumber, transform and even
destroy that which is owned, and jus vindicandi or the right to exclude other
persons from the possession the thing owned. In contrast, the indigenous
peoples’ concept of ownership emphasizes the importance of communal or
group ownership. By virtue of the communal character of ownership, the
property held in common “cannot be sold, disposed or destroyed” because it
was meant to benefit the whole indigenous community and not merelythe
individual member.
Same; Same; Same; The concept of native title to natural resources,
unlike native title to land, has not been recognized in the Philippines.—
Finally, the concept of native title to natural resources, unlike native title to
land, has not been recognized in the Philippines. NCIP and Flavier, et al.
invoke the case of Reavies v. Fianza in support of their thesis that native title
to natural resources has been upheld in this jurisdiction. They insist that “it is
possible for rights over natural resources to vest on a private (as opposed to
a public) holder if these were held prior to the 1935 Constitution.” However, a
judicious examination of Reavies reveals that, contrary to the position of
NCIP and Flavier, et al., the Court did not recognize native title to natural
resources. Rather, it merely upheld the right of the indigenous peoples to
claim ownership of minerals under the Philippine Bill of 1902.
Same; Same; Same; Upon the certification of certain areas as
ancestral domain following the procedure outlined in Sections 51 to 53 of the
IPRA, jurisdiction of the government agency or agencies concerned over
lands forming part thereof ceases but the jurisdiction of government agencies
over the natural resources within the ancestral domains does not terminate
by such certification because said agencies are mandated under existing
laws to administer the natural resources for the State, which is the
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owner thereof.—Undoubtedly, certain areas that are claimed as
ancestral domains may still be under the administration of other agencies of
the Government, such as the Department of Agrarian Reform, with respect to
agricultural lands, and the Department of Environment and Natural
Resources with respect to timber, forest and mineral lands. Upon the
certification of these areas as ancestral domain following the procedure
outlined in Sections 51 to 53 of the IPRA, jurisdiction of the government
agency or agencies concerned over lands forming part thereof ceases.
Nevertheless, the jurisdiction of government agencies over the natural
resources within the ancestral domains does not terminate by such
certification because said agencies are mandated under existing laws to
administer the natural resources for the State, which is the owner thereof. To
construe Section 52[i] as divesting the State, through the government
agencies concerned, of jurisdiction over the natural resources within the
ancestral domains would be inconsistent with the established doctrine that all
natural resources are owned by the State.
Same; Same; Same; Clearly, Section 2, Article XII, when interpreted in
view of the pro-Filipino, pro-poor philosophy of our fundamental law, and in
harmony with the other provisions of the Constitution rather as a sequestered
pronouncement, cannot be construed as a prohibition against any and all
forms of utilization of natural resources without the State’s direct
participation.—In addition to the means of exploration, development and
utilization of the country’s natural resources stated in paragraph 1, Section 2
of Article XII, the Constitution itself states in the third paragraph of the same
section that Congress may, by law, allow small-scale utilization of natural
resources by its citizens. Further, Section 6, Article XIII, directs the State, in
the disposition and utilization of natural resources, to apply the principles of
agrarian reform or stewardship. Similarly, Section 7, Article XIII mandates the
State to protect the rights of subsistence fishermen to the preferential use of
marine and fishing resources. Clearly, Section 2, Article XII, when interpreted
in view of the pro-Filipino, pro-poor philosophy of our fundamental law, and in
harmony with the other provisions of the Constitution rather as a sequestered
pronouncement, cannot be construed as a prohibition against any and all
forms of utilization of natural resources without the State’s direct
participation.
Same; Same; Same; Land Titles; By the enactment of IPRA, Congress
did not purport to annul any and all Torrens titles within areas claimed as
ancestral lands or ancestral domains.—Further, by the enactment of IPRA,
Congress did not purport to annul any and all Torrens titles within areas
claimed as ancestral lands or ancestral domains. The statute im-
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poses strict procedural requirements for the proper delineation of
ancestral lands and ancestral domains as safeguards against the fraudulent
deprivation of any landowner of his land, whether or not he is member of an
indigenous cultural community. In all proceedings for delineation of ancestral
lands and ancestral domains, the Director of Lands shall appear to represent
the interest of the Republic of the Philippines. With regard to ancestral
domains, the following procedure is mandatory: first,petition by an indigenous
cultural community, or motu proprio by the NCIP; second, investigation and
census by the Ancestral domains Office (“ADO”) of the
NCIP; third, preliminary report by the ADO; fourth, posting and publication;
and lastly, evaluation by the NCIP upon submission of the final report of the
ADO. With regard to ancestral lands, unless such lands are within an
ancestral domain, the statute imposes the following procedural
requirements: first, application; second, posting and
publication; third, investigation and inspection by the
ADO; fourth,delineation; lastly, evaluation by the NCIP upon submission of a
report by the ADO. Hence, we cannot sustain the arguments of the
petitioners that the law affords no protection to those who are not indigenous
peoples.
Indigenous Peoples; Due Process; The fact that the NCIP is composed
of members of the indigenous peoples does not mean that it (the NCIP) is
incapable, or will appear to be so incapable, of delivering justice to the non-
indigenous peoples.—The fact that the NCIP is composed of members of the
indigenous peoples does not mean that it (the NCIP) is incapable, or will
appear to be so incapable, of delivering justice to the non-indigenous
peoples. A person’s possession of the trait of impartiality desirable of a judge
has nothing to do with his or her ethnic roots. In this wise, the indigenous
peoples are as capable of rendering justice as the non-indigenous peoples
for, certainly, the latter have no monopoly of the concept of justice.
Same; Customary Laws; The use of customary laws under the IPRA is
not absolute, for the law speaks merely of primacy of use.—Anent the use of
customary laws in determining the ownership and extent of ancestral
domains, suffice it to say that such is allowed under paragraph 2, Section 5
of Article XII of the Constitution. Said provision states, “The Congress may
provide for the applicability of customary laws governing property rights and
relations in determining the ownership and extent of the ancestral domains.”
Notably, the use of customary laws under IPRA is not absolute, for the law
speaks merely of primacy of use.The IPRA prescribes the application of such
customary laws where these present a workable solution acceptable to the
parties, who are members of the same indige-
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Cruz vs. Secretary of Environment and Natural Resources
nous group. This interpretation is supported by Section 1, Rule IX of the
Implementing Rules.
Same; Same; When one of the parties to a dispute is a non-member of
an indigenous group, or when the indigenous peoples involved belong to
different groups, the application of customary law is not required.—The
application of customary law is limited to disputes concerning property rights
or relations in determining the ownership and extent of the ancestral
domains, where all the parties involved are members of indigenous peoples,
specifically, of the same indigenous group. It therefore follows that when one
of the parties to a dispute is a non-member of an indigenous group, or when
the indigenous peoples involved belong to different groups, the application of
customary law is not required.
Administrative Law; Presidency; Power of Control; Words and
Phrases; An “independent agency” is an administrative body independent of
the executive branch or one not subject to a superior head of department, as
distinguished from a “subordinate agency” or an administrative body whose
action is subject to administrative review or revision.—The NCIP has been
designated under IPRA as the primary government agency responsible for
the formulation and implementation of policies, plans and programs to
promote and protect the rights and well being of the indigenous peoples and
the recognition of their ancestral domain as well as their rights thereto. It has
been granted administrative, quasi-legislative and quasi-judicial powers to
carry out its mandate. The diverse nature of the NCIP’s functions renders it
impossible to place said agency entirely under the control of only one branch
of government and this, apparently, is the reason for its characterization by
Congress as an independent agency. An “independent agency” is defined as
an administrative body independent of the executive branch or one not
subject to a superior head of department, as distinguished from a
“subordinate agency” or an administrative body whose action is subject to
administrative review or revision.
Same; Same; Same; The NCIP, although independent to a certain
degree, was placed by Congress “under the office of the President” and, as
such, is still subject to the President’s power to control and supervision with
respect to its performance of administrative functions.—That Congress did
not intend to place the NCIP under the control of the President in all
instances is evident in the IPRA itself, which provides that the decisions of
the NCIP in the exercise of its quasi-judicial functions shall be appealable to
the Court of Appeals, like those of the National Labor Relations Commission
(NLRC) and the Securities and Exchange Commission (SEC). Nevertheless,
the NCIP, although independent to a certain degree, was
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Cruz vs. Secretary of Environment and Natural Resources
placed by Congress “under the office of the President” and, as such, is
still subject to the President’s power of control and supervision granted under
Section 17, Article VII of the Constitution with respect to its performance of
administrative functions, such as the following: (1) the NCIP must secure the
President’s approval in obtaining loans to finance its projects; (2) it must
obtain the President’s approval for any negotiation for funds and for the
acceptance of gifts and/or properties in whatever form and from whatever
source; (3) the NCIP shall submit annual reports of its operations and
achievements to the President, and advise the latter on all matters relating to
the indigenous peoples; and (4) it shall exercise such other powers as may
be directed by the President. The President is also given the power to
appoint the Commissioners of the NCIP as well as to remove them from
office for cause motu proprio or upon the recommendation of any indigenous
community.
MENDOZA, J., Separate Opinion:
Courts; Judicial Review; The judicial power vested in the Supreme
Court by Art. VIII, §1 extends only to cases and controversies for the
determination of such proceedings as are established by law for the
protection or enforcement of rights, or the prevention, redress or punishment
of wrongs.—The judicial power vested in this Court by Art. VIII, §1 extends
only to cases and controversies for the determination of such proceedings as
are established by law for the protection or enforcement of rights, or the
prevention, redress or punishment of wrongs. In this case, the purpose of the
suit is not to enforce a property right of petitioners against the government
and other respondents or to demand compensation for injuries suffered by
them as a result of the enforcement of the law, but only to settle what they
believe to be the doubtful character of the law in question. Any judgment that
we render in this case will thus not conclude or bind real parties in the future,
when actual litigation will bring to the Court the question of the
constitutionality of such legislation. Such judgment cannot be executed as it
amounts to no more than an expression of opinion upon the validity of the
provisions of the law in question.
Same; Same; The statement that the judicial power includes the duty to
determine whether there has been a grave abuse of discretion was inserted
in Art. VIII, §1 not really to give the judiciary a roving commission to right any
wrong it perceives but to preclude courts from invoking the political question
doctrine in order to evade the decision of certain cases even where violations
of civil liberties are alleged.—I do not conceive it to be the function of this
Court under Art. VIII, §1 of the Constitution to determine in the abstract
whether or not there has been a grave abuse of
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 discretion amounting to lack or excess of jurisdiction on the part of the
legislative and executive departments in enacting the IPRA. Our jurisdiction
is confined to cases or controversies. No one reading Art. VIII, §5 can fail to
note that, in enumerating the matters placed in the keeping of this Court, it
uniformly begins with the phrase “all cases . . .” The statement that the
judicial power includes the duty to determine whether there has been a grave
abuse of discretion was inserted in Art. VIII, §1 not really to give the judiciary
a roving commission to right any wrong it perceives but to preclude courts
from invoking the political question doctrine in order to evade the decision of
certain cases even where violations of civil liberties are alleged.
Same; Same; The judicial power cannot be extended to matters which
do not involve actual cases or controversies without upsetting the balance of
power among the three branches of the government and erecting, as it were,
the judiciary, particularly the Supreme Court, as a third branch of Congress,
with power not only to invalidate statutes but even to rewrite them.—Indeed,
the judicial power cannot be extended to matters which do not involve actual
cases or controversies without upsetting the balance of power among the
three branches of the government and erecting, as it were, the judiciary,
particularly the Supreme Court, as a third branch of Congress, with power not
only to invalidate statutes but even to rewrite them. Yet that is exactly what
we would be permitting in this case were we to assume jurisdiction and
decide wholesale the constitutional validity of the IPRA contrary to the
established rule that a party can question the validity of a statute only if, as
applied to him, it is unconstitutional. Here the IPRA is sought to be declared
void on its face.
Same; Same; Freedom of Expression; “Chilling Effect” Syndrome; The
only instance where a facial challenge to a statute is allowed is when it
operates in the area of freedom of expression—invalidation of the statute “on
its face” rather than “as applied” is permitted in the interest of preventing a
“chilling” effect on freedom of expression.—The only instance where a facial
challenge to a statute is allowed is when it operates in the area of freedom of
expression. In such instance, the overbreadth doctrine permits a party to
challenge the validity of a statute even though as applied to him it is not
unconstitutional but it might be if applied to others not before the Court
whose activities are constitutionally protected. Invalidation of the statute “on
its face” rather than “as applied” is permitted in the interest of preventing a
“chilling” effect on freedom of expression. But in other cases, even if it is
found that a provision of a statute is unconstitutional, courts will decree only
partial invalidity unless the invalid portion is so far in-
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Cruz vs. Secretary of Environment and Natural Resources
separable from the rest of the statute that a declaration of partial
invalidity is not possible.
Same; Same; To decline the exercise of jurisdiction where there is no
genuine controversy is not to show timidity but respect for the judgment of a
coequal department of government whose acts, unless shown to be clearly
repugnant to the fundamental law, are presumed to be valid.—To decline,
therefore, the exercise of jurisdiction where there is no genuine controversy
is not to show timidity but respect for the judgment of a coequal department
of government whose acts, unless shown to be clearly repugnant to the
fundamental law, are presumed to be valid. The polestar of constitutional
adjudication was set forth by Justice Laurel in the Angara case when he said
that “this power of judicial review is limited to actual cases and controversies
to be exercised after full opportunity of argument by the parties, and limited
further to the constitutional question raised or the very lis mota, presented.”
For the exercise of this power is legitimate only in the last resort; and as a
necessity in the determination of real, earnest, and vital controversy between
individuals. Until, therefore, an actual case is brought to test the
constitutionality of the IPRA, the presumption of constitutionality, which
inheres in every statute, must be accorded to it.
PANGANIBAN, J., Separate Opinion (Concurring and Dissenting):
National Patrimony; Ancestral Domains; Ancestral Lands; I respectfully
reject the contention that “ancestral lands and ancestral domains are not
public lands and have never been owned by the State.”—It recognizes or,
worse, grants rights of ownership over lands of the public domain, waters, x x
x and other natural resources” which, under Section 2, Article XII of the
Constitution, “are owned by the State” and “shall not be alien-ated.” I
respectfully reject the contention that “ancestral lands and ancestral domains
are not public lands and have never been owned by the State.” Such
sweeping statement places substantial portions of Philippine territory outside
the scope of the Philippine Constitution and beyond the collective reach of
the Filipino people. As will be discussed later, these real properties constitute
a third of the entire Philippine territory; and the resources, 80 percent of the
nation’s natural wealth.
Same; Same; Same; I cannot agree to legitimize perpetual inequality of
access to the nation’s wealth or to stamp the Court’s imprimatur on a law that
offends and degrades the repository of the very authority of the Supreme
Court—the Constitution of the Philippines.—Consistent with the social justice
principle of giving more in law to those who have less in life,
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Cruz vs. Secretary of Environment and Natural Resources
Congress in its wisdom may grant preferences and prerogatives to our
marginalized brothers and sisters, subject to the irreducible caveat that the
Constitution must be respected. I personally believe in according every
benefit to the poor, the oppressed and the disadvantaged, in order to
empower them to equally enjoy the blessings of nationhood. I cannot,
however, agree to legitimize perpetual inequality of access to the nation’s
wealth or to stamp the Court’s imprimatur on a law that offends and
degrades the repository of the very authority of this Court—the Constitution
of the Philippines.
Same; Same; Same; Though laudable and well-meaning, IPRA,
however, has provisions that run directly afoul of our fundamental law from
which it claims origin and authority.—RA 8371, which defines the rights of
indigenous cultural communities and indigenous peoples, admittedly
professes a laudable intent. It was primarily enacted pursuant to the state
policy enshrined in our Constitution to “recognize and promote the rights of
indigenous cultural communities within the framework of national unity and
development.” Though laudable and well-meaning, this statute, however, has
provisions that run directly afoul of our fundamental law from which it claims
origin and authority. More specifically, Sections 3(a) and (b), 5, 6, 7(a) and
(b), 8 and other related provisions contravene the Regalian Doctrine—the
basic foundation of the State’s property regime.
Vested Rights; Property; Ownership; Because of the State’s
implementation of policies considered to be for the common good, all those
concerned have to give up, under certain conditions, even vested rights of
ownership.—I submit, however, that all Filipinos, whether indigenous or not,
are subject to the Constitution. Indeed, no one is exempt from its
allencompassing provisions. Unlike the 1935 Charter, which was subject to
“any existing right, grant, lease or concession,” the 1973 and the 1987
Constitutions spoke in absolute terms. Because of the State’s implementation
of policies considered to be for the common good, all those concerned have
to give up, under certain conditions, even vested rights of ownership.
National Patrimony; Ancestral Domains; Ancestral Lands; Four hundred
years of Philippine political history cannot be set aside or ignored by IPRA,
however well-intentioned it may be.—Verily, as petitioners undauntedly point
out, four hundred years of Philippine political history cannot be set aside or
ignored by IPRA, however well-intentioned it may be. The perceived lack of
understanding of the cultural minorities cannot be remedied by conceding the
nation’s resources to their exclusive advantage. They cannot be more
privileged simply because they have chosen to ignore state laws. For having
chosen not to be enfolded by statutes on
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Cruz vs. Secretary of Environment and Natural Resources
perfecting land titles, ICCs/IPs cannot now maintain their ownership of
lands and domains by insisting on their concept of “native title” thereto. It
would be plain injustice to the majority of Filipinos who have abided by the
law and, consequently, deserve equal opportunity to enjoy the country’s
resources.
Same; Same; Same; Regalian Doctrine; The concerted effort to malign
the Regalian Doctrine as a vestige of the colonial past must fail—our
Constitution vests the ownership of natural resources, not in colonial
masters, but in all the Filipino people.—The concerted effort to malign the
Regalian Doctrine as a vestige of the colonial past must fail. Our Constitution
vests the ownership of natural resources, not in colonial masters, but in all
the Filipino people. As the protector of the Constitution, this Court has the
sworn duty to uphold the tenets of that Constitution—not to dilute, circumvent
or create exceptions to them.
Same; Same; Same; Same; Since RA 8371 defines ancestral domains
as including the natural resources found therein and further states that
ICCs/IPs own these ancestral domains, then it means that ICCs/IPs can own
natural resources.—Respondents insist, and the ponencia agrees, that
paragraphs (a) and (b) of Sections 3 are merely definitions and should not be
construed independently of the other provisions of the law. But, precisely, a
definition is “a statement of the meaning of a word or word group.” It
determines or settles the nature of the thing or person defined. Thus, after
defining a term as encompassing several items, one cannot thereafter say
that the same term should be interpreted as excluding one or more of the
enumerated items in its definition. For that would be misleading the people
who would be bound by the law. In other words, since RA 8371 defines
ancestral domains as including the natural resources found therein and
further states that ICCs/IPs own these ancestral domains, then it means that
ICCs/IPs can own natural resources.
Same; Same; Same; Congress, through IPRA, has in effect abdicated
in favor of a minority group the State’s power of ownership and full control
over a substantial part of the national patrimony, in contravention of our most
fundamental law.—But again, RA 8371 relinquishes this constitutional power
of full control in favor of ICCs/IPs, insofar as natural resources found within
their territories are concerned. Pursuant to their rights of ownership and
possession, they may develop and manage the natural resources, benefit
from and share in the profits from the allocation and the utilization thereof.
And they may exercise such right without any time limit, unlike non-ICCs/IPs
who may do so only for a period not exceeding 25 years, renewable for a like
period. Consistent with the Consti-
156
156 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
tution, the rights of ICCs/IPs to exploit, develop and utilize natural
resources must also be limited to such period. In addition, ICCs/IPs are given
the right to negotiate directly the terms and conditions for the exploration of
natural resources, a right vested by the Constitution only in the State.
Congress, through IPRA, has in effect abdicated in favor of a minority group
the State’s power of ownership and full control over a substantial part of the
national patrimony, in contravention of our most fundamental law.
Same; Same; Same; In giving ICCs/IPs rights in derogation of our
fundamental law, Congress is effectively mandating “reverse
discrimination.”—Indigenous peoples may have long been marginalized in
Philippine politics and society. This does not, however, give Congress any
license to accord them rights that the Constitution withholds from the rest of
the Filipino people. I would concede giving them priority in the use, the
enjoyment and the preservation of their ancestral lands and domains. But to
grant perpetual ownership and control of the nation’s substantial wealth to
them, to the exclusion of other Filipino citizens who have chosen to live and
abide by our previous and present Constitutions, would be not only unjust but
also subversive of the rule of law. In giving ICCs/IPs rights in derogation of
our fundamental law, Congress is effectively mandating “reverse
discrimination.” In seeking to improve their lot, it would be doing so at the
expense of the majority of the Filipino people. Such short-sighted and
misplaced generosity will spread the roots of discontent and, in the long term,
fan the fires of turmoil to a conflagration of national proportions.
Social Justice; The law must help the powerless by enabling them to
take advantage of opportunities and privileges that are open to all and by
preventing the powerful from exploiting and oppressing them.—Peace cannot
be attained by brazenly and permanently depriving the many in order to
coddle the few, however disadvantaged they may have been. Neither can a
just society be approximated by maiming the healthy to place them at par
with the injured. Nor can the nation survive by enclaving its wealth for the
exclusive benefit of favored minorities. Rather, the law must help the
powerless by enabling them to take advantage of opportunities and
privileges that are open to all and by preventing the powerful from exploiting
and oppressing them. This is the essence of social justice—empowering and
enabling the poor to he able to compete with the rich and, thus, equally enjoy
the blessings of prosperity, freedom and dignity.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition.
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VOL. 347, DECEMBER 6, 2000 157
Cruz vs.Secretaryof Environmentand Natural Resources
The facts are stated in the resolution of the Court.
Barbara Anne C. Migallos & Troy A. Luna, Raymond Parsifal A. Fortun
& Bienvenido O. Bulatao for petitioners.
The Solicitor General for respondents.
Luna, Bonpin,Perez & Associates for intervenors.
Rodolfo C. Rapista for intervenors-oppositors.
Leilene Carantes-San Juan for Sioco-Cariño Family.
R E S O L U TI O N
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition
and mandamus as citizens and taxpayers, assailing the constitutionality of
certain provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as
the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing
Rules and Regulations (Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents
to comment.1 In compliance, respondents Chairperson and Commissioners
of the National Commission on Indigenous Peoples (NCIP), the government
agency created under the IPRA to implement its provisions, filed on October
13, 1998 their Comment to the Petition, in which they defend the
constitutionality of the IPRA andpray that thepetitionbedismissed for lack of
merit.
On October 19, 1998, respondents Secretary of the Department of
Environment and Natural Resources (DENR) and Secretary of the
Department of Budget and Management (DBM) filed through the Solicitor
General a consolidated Comment. The Solicitor General is of the view that
the IPRA is partly unconstitutional on the ground that it grants ownership over
natural resources to indigenouspeoples and prays that thepetition begranted
in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan
Flavier, one of the authors of the IPRA, Mr. Ponciano Benna-
_______________
1
Rollo, p. 114.
158
158 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
gen, a member of the 1986 Constitutional Commission, and the leaders and
members of 112 groups of indigenous peoples (Flavier, et al.), filed their
Motion for Leave to Intervene. They join the NCIP in defending the
constitutionality of IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise
filed a Motion to Intervene and/or to Appear as Amicus Curiae. The CHR
asserts that IPRA is an expression of the principle of parens patriae and that
the State has the responsibility to protect and guarantee the rights of those
who are at a serious disadvantage like indigenous peoples. For this reason it
prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous
People and the Haribon Foundation for the Conservation of Natural
Resources, Inc. (Haribon, et al.), filed a Motion to Intervene with attached
Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that
IPRA is consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations
were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and
intervenors filed their respective memoranda in which they reiterate the
arguments adduced in their earlier pleadings and during the hearing.
Petitioners assail the constitutionality of the following provisions of the
IPRA and its Implementing Rules on the ground that they amount to an
unlawful deprivation of the State’s ownership over lands of the public domain
as well as minerals and other natural resources therein, in violation of the
regalian doctrine embodied in Section 2, Article XII of the Constitution:
1. “(1)Section 3(a) which defines the extent and coverage of ancestral
domains, and Section 3(b) which, in turn, defines ancestral lands;
2. “(2)Section 5, in relation to section 3(a), which provides that
ancestral domains including inalienable public lands, bodies of
water, mineral and other resources found within ancestral domains
are private but community property of the indigenous peoples;
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VOL. 347, DECEMBER 6, 2000 159
Cruz vs.Secretaryof Environmentand Natural Resources
1. “(3)Section 6 in relation to Section 3(a) and 3(b) which defines the
composition of ancestral domains and ancestral lands;
2. “(4)Section 7 which recognizes and enumerates the rights of the
indigenous peoples over theancestral domains;
3. “(5)Section 8 which recognizes and enumerates the rights of the
indigenous peoples over theancestrallands;
4. “(6)Section 57 which provides for priority rights of the indigenous
peoples in the harvesting, extraction, development or exploration of
minerals and other natural resources within the areas claimed to be
their ancestral domains, and the right to enter into agreements with
non-indigenous peoples for the development and utilization of
natural resources therein for a period not exceeding 25 years,
renewable for not more than 25 years;and
5. “(7)Section 58 which gives the indigenous peoples the responsibility
to maintain, develop, protect and conserve the ancestral domains
and portions thereof which are found to be necessary for critical
watersheds, mangroves, wildlife sanctuaries, wilderness, protected
areas, forest cover or reforestation.”2
Petitioners also contend that, by providing for an allencompassing definition
of “ancestral domains” and “ancestral lands” which might even include private
lands found within said areas, Sections 3(a) and 3(b) violate the rights of
private landowners.3
In addition, petitioners question the provisions of the IPRA defining the
powers and jurisdiction of the NCIP and making customary law applicable to
the settlement of disputes involving ancestral domains and ancestral lands
on the ground that these provisions violate the due process clause of the
Constitution.4 These provisions are:
1. “(1)Sections 51 to 53 and 59 which detail the process of delineation
and recognition of ancestral domains and which vest on the NCIP
the sole authority todelineate ancestraldomainsand ancestral lands;
_______________
2
Petition, Rollo, pp. 16-23.
3
Id.at 23-25.
4
Section 1, Article III of the Constitution states: “No person shall be
deprived of life, liberty or property without due process of law, nor shall any
person be deniedthe equal protection of the laws.”
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160 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. “(2)Section 52[i] which provides that upon certification by the NCIP
that a particular area is an ancestral domain and upon notification
to the following officials, namely, the Secretary of Environment and
Natural Resources, Secretary of Interior and Local Governments,
Secretary of Justice and Commissioner of the National
Development Corporation, the jurisdiction of said officials oversaid
area terminates;
2. “(3)Section 63 which provides the customary law, traditions and
practices of indigenous peoples shall be applied first with respect to
property rights, claims of ownership, hereditary succession and
settlement of land disputes, and that any doubt or ambiguity in the
interpretation thereof shall be resolvedin favorof the indigenous
peoples;
3. “(4)Section 65 which states that customary laws and practices shall
be used to resolve disputes involving indigenous peoples; and
4. “(5)Section 66 which vests on the NCIP the jurisdiction over all
claims and disputes involving rights of theindigenous peoples.” 5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP
Administrative Order No. 1, series of 1998, which provides that “the
administrative relationship of the NCIP to the Office of the President is
characterized as a lateral but autonomous relationship for purposes of policy
and program coordination.” They contend that said Rule infringes upon the
President’s power of control over executive departments under Section
17,Article VII of the Constitution.6
Petitionerspray for the following:
1. “(1)A declaration that Sections 3, 5, 6, 7, 8, 52[i], 57, 58, 59, 63, 65
and 66 and other related provisions of R.A. 8371 are
unconstitutional and invalid;
2. “(2)The issuance of a writ of prohibition directing the Chairperson
and Commissioners of the NCIP to cease and desist from
implementing theassailed provisions of R.A.8371 and its
Implementing Rules;
3. “(3)The issuance of a writ of prohibition directing the Secretary of the
Department of Environment and Natural Resources to cease and
desist from implementing Department of Environment and Natural
Resources CircularNo. 2, series of 1998;
_______________
5
Rollo, pp. 25-27.
6
Id.at 27-28.
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VOL. 347, DECEMBER 6, 2000 161
Cruz vs.Secretaryof Environmentand Natural Resources
1. “(4)The issuance of a writ of prohibition directing the Secretary of
Budget and Management to cease and desist from disbursing
public funds for the implementation of the assailed provisions of
R.A. 8371; and
2. “(5)The issuance of a writ of mandamus commanding the Secretary
of Environment and Natural Resources to comply with his duty of
carrying out the State’s constitutional mandate to control and
supervise the exploration, development, utilization and conservation
of Philippine natural resources.”7
After due deliberation on the petition, the members of the Court voted as
follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion,
which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago
join, sustaining the validity of the challenged provisions of R.A. 8371. Justice
Puno also filed a separate opinion sustaining all challenged provisions of the
law with the exception of Section 1, Part II, Rule III of NCIP Administrative
Order No. 1, series of 1998, the Rules and Regulations Implementing the
IPRA, and Section 57 of the IPRA which he contends should be interpreted
as dealing with the large-scale exploitation of natural resources and should
be read in conjunction with Section 2, Article XII of the 1987 Constitution. On
the other hand, Justice Mendoza voted to dismiss the petition solely on the
ground that it does not raise a justiciable controversy and petitioners do not
have standing toquestion the constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice
Panganiban filed a separate opinion expressing the view that Sections 3 (a)
(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional.
He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66
of the law, which he believes must await the filing of specific cases by those
whose rights may have been violated by the IPRA. Justice Vitug also filed a
separate opinion expressing the view that Sections 3(a), 7, and 57 of R.A.
8371 are unconstitutional. Justices Melo, Pardo, Buena,
_______________
7
Transcript of Stenographic Notes of the hearing held on April 13, 1999,
pp. 5-6.
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162 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Gonzaga-Reyes, and De Leon join in the separate opinions of Justices
Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was
not obtained, the case was redeliberated upon. However, after redeliberation,
the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of
the Rules of Civil Procedure, thepetition is DISMISSED.
Attached hereto and made integral parts thereof are the separate
opinions of Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban.
SO ORDERED.
Davide,
Jr. (C.J.), Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Qui
sumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago and De Leon,
Jr., JJ., concur.
SEPARATE OPINION
PUNO, J:
PRECIS
A classic essay on the utility of history was written in 1874 by Friedrich
Nietzsche entitled “On the Uses and Disadvantages of History for Life.”
Expounding on Nietzsche’s essay, Judge Richard Posner1 wrote:2
“Law is the most historically oriented, or if you like the most backward- 1. 1.Indigenous Peoples: Their History
looking, the most ‘past-dependent,’ of the professions. It venerates tradition,
precedent, pedigree, ritual, custom, ancient practices, ancient texts, archaic 2. 2.Their Concept of Land
terminology, maturity, wisdom, seniority, gerontocracy, and interpretation
conceived of as a method of recovering history. It is suspicious of innovation, 1. III.The IPRA is a Novel Piece of Legislation.
discontinuities, ‘paradigm shifts,’ and the energy and brashness of youth.
These ingrained attitudes are obstacles to anyone who
1. A.Legislative History
_______________
1. IV.The Provisions of the IPRA Do Not Contravene the Constitution.
1
Chief Judge, US Court of Appeals for the Seventh Circuit; Senior
Lecturer, University of ChicagoLaw School. 1. A.Ancestral domains and ancestral lands are the private property of
2
The University of Chicago Law Review, Vol. 67, Summer 2000, No. 3, p. indigenous peoples and do not constitute part of the land of the
573. public domain.
163
VOL. 347, DECEMBER 6, 2000 163 1. 1.The right to ancestral domains and ancestral lands: how
Cruz vs. Secretary of Environment and Natural Resources acquired
wants to re-orient law in a more pragmatic direction. But, by the same
token, pragmatic jurisprudence must come to terms with history.” 2. 2.The concept of native title
When Congress enacted the Indigenous Peoples Rights Act(IPRA), it
introduced radical concepts into the Philippine legal system which appear to
164
collide with settled constitutional and jural precepts on state ownership of
164 SUPREME COURT REPORTS ANNOTATED
land and other natural resources. The sense and subtleties of this law cannot
be appreciated without considering its distinct sociology and the labyrinths of Cruz vs. Secretary of Environment and Natural Resources
its history. This Opinion attempts to interpret IPRA by discovering its soul
shrouded by the mist of our history. After all, the IPRA was enacted by 1. (a)Cariño v. Insular Government
Congress not only to fulfill the constitutional mandate of protecting the
indigenous cultural communities’ right to their ancestral land but more 2. (b)Indian Title to land
importantly, to correct a grave historical injustice to our indigenous people.
This Opinion discusses the following: 3. (c)Why the Cariño doctrine is unique

1. I.The Development of the Regalian Doctrine in the Philippine Legal 1. 3.The option of securing a Torrens title to the ancestral land
System.
1. B.The right of ownership and possession by the ICCs/IPs to their
1. A.The Laws of the Indies ancestral domains is a limited form of ownership and does not
include the right to alienate the same.
2. B.Valenton v. Murciano
1. 1.The indigenous concept of ownership and customary law
3. C.The Public Land Acts and the Torrens System
1. C.Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the Regalian
4. D.The Philippine Constitutions Doctrine enshrined in Section 2, Article XII of the 1987 Constitution.

1. II.The Indigenous Peoples Rights Act (IPRA). 1. 1.The rights of ICCs/IPs over their ancestral domains and lands

1. A.Indigenous Peoples
 2. 2.The right of ICCs/IPs to develop lands and natural resources within
the ancestral domains does not deprive the State of ownership over
the natural resources, control and supervision in their development
and exploitation.
1. (a)Section 1, Part II, Rule III of the Implementing Rules goes beyond
the parameters of Section 7(a) of the law on ownership of ancestral
domains and is ultra vires.
2. (b)The small-scale utilization of natural resources in Section 7 (b) of
the IPRA is allowed under Paragraph 3, Section 2, Article XII of the
1987 Constitution.
3. (c)The large-scale utilization of natural resources in Section 57 of the
IPRA may be harmonized with Paragraphs 1 and 4, Section 2,
Article XII of the 1987 Constitution.
1. V.The IPRA is a Recognition of Our Active Participation in the
International Indigenous Movement.
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VOL. 347, DECEMBER 6, 2000 165
Cruz vs.Secretaryof Environmentand Natural Resources
DISCUSSION
I. THE DEVELOPMENTOF THE REGALIAN DOCTRINE IN
THEPHILIPPINE LEGAL SYSTEM.
The capacity of the State to own or acquire property is the state’s power
of dominium.3 This was the foundation for the early Spanish decrees
embracing the feudal theory of jura regalia. The “Regalian Doctrine” or jura
regalia is a Western legal concept that was first introduced by the Spaniards
into the country through the Laws of the Indies and the Royal Cedulas. The
Laws of the Indies, i.e., more specifically, Law 14, Title 12, Book 4 of the
Novisima Recopilacion de Leyes de las Indias, set the policy of the Spanish
Crown with respect to the Philippine Islands in the following manner:
“We, having acquired full sovereignty over the Indies, and all lands,
territories, and possessions not heretofore ceded away by our royal
predecessors, or by us, or in our name, still pertaining to the royal crown and
patrimony, it is our will that all lands which are held without proper and true
deeds of grant be restored to us as they belong to us, in order that after
reserving before all what to us or to our viceroys, audiencias, and governors
may seem necessary for public squares, ways, pastures, and commons in
those places which are peopled, taking into consideration not only their
present condition, but also their future and their probable increase, and after
distributing to the natives what may be necessary for tillage and pasturage,
confirming them in what they now have and giving them more if necessary,
all the rest of said lands may remain free and unencumbered for us to
disposeof as we may wish.
We therefore order and command that all viceroys and presidents of
pretorial courts designate at such time as shall to them seem most expedient,
a suitable period within which all possessors of tracts, farms, plantations, and
estates shall exhibit to them and to the court officers appointed by them for
this purpose, their title deeds thereto. And those who are in possession by
virtue of proper deeds and receipts, or by virtue of just
_______________
3
Dominium is distinguished from imperium which is the government
authority possessed by the state expressed in the concept of sovereignty—
Lee Hong Hok v. David, 48 SCRA 372, 377 [1972].
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166 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
prescriptive right shall be protected, and all the rest shall be restored to us
tobedisposedof at our will.”4
The Philippines passed to Spain by virtue of “discovery” and conquest.
Consequently, all lands became the exclusive patrimony and dominion of the
Spanish Crown. The Spanish Government took charge of distributing the
lands by issuing royal grants and concessions to Spaniards, both military and
civilian.5 Private land titles could only be acquired from the government either
by purchase or by thevariousmodes of landgrant from the Crown. 6
The Laws of the Indies were followed by the Ley Hipotecaria, or
the Mortgage Law of 1893.7 The Spanish Mortgage Law provided for the
systematic registration of titles and deeds as well as possessory claims. The
law sought to register and tax lands pursuant to the Royal Decree of 1880.
The Royal Decree of 1894, or the “Maura Law,” was partly an amendment of
the Mortgage Law as well as the Laws of the Indies, as already amended by
previous orders and decrees.8 This was the last Spanish land law
promulgated in the Philippines. It required the “adjustment” or registration of
all agricultural lands,otherwise the lands shall revert to the state.
Four years later, by the Treaty of Paris of December 10, 1898, Spain
ceded to the government of the United States all rights, interests and claims
over the national territory of the Philippine Islands. In 1903, the United States
colonial government, through
_______________
4
Valenton v. Murciano, 3 Phil. 537, 543 [1904]; See also Florencio D.R.
Ponce, The PhilippineTorrens System, p. 13 [1964].
5
Antonio H. Noblejas, Land Titles and Deeds, p. 5 [1986]; These grants
were better known as repartimientos and encomiendas. Repartimientos were
handouts to the military as fitting reward for their services to the Spanish
crown. The encomiendas were given to Spaniards to administer and develop
with the right to receive and enjoy for themselves the tributes of the natives
assigned to them.—Ponce, supra, p. 12, citing Benitez, Historyof the
Philippines, pp. 125-126.
6
Narciso Pena, Registration ofLandTitlesandDeeds, p. 2 [1994].
7
The Mortgage Law is a misnomer because it is primarily a law on
registration of property and secondarily a mortgage law—Ponce, supra, at
16.
8
Ponce, supra,at 15.
167
VOL. 347, DECEMBER 6, 2000 167
Cruz vs.Secretaryof Environmentand Natural Resources
the Philippine Commission, passed Act No. 926, the first Public Land Act.
In 1904, under the American regime, this Court decided the case of Valenton
v. Murciano.9
Valenton resolved the question of which is the better basis for ownership
of land: long-time occupation or paper title. Plaintiffs had entered into
peaceful occupation of the subject land in 1860. Defendant’s predecessor-in-
interest, on the other hand, purchased the land from the provincial treasurer
of Tarlac in 1892. The lower court ruled against the plaintiffs on the ground
that they had lost all rights to the land by not objecting to the administrative
sale. Plaintiffs appealed the judgment, asserting that their 30-year adverse
possession, as an extraordinary period of prescription in the Partidas and the
Civil Code, had given them title to the land as against everyone, including the
State; and that the State, not owning the land, couldnot validly transmit it.
The Court, speaking through Justice Willard, decided the case on the
basis of “those special laws which from earliest time have regulated the
disposition of the public lands in the colonies.” 10 The question posed by the
Court was: “Did these special laws recognize any right of prescription as
against the State as to these lands; and if so, to what extentwas it
recognized?”
Prior to 1880, the Court said, there were no laws specifically providing for
the disposition of land in the Philippines. However, it was understood that in
the absence of any special law to govern a specific colony, the Laws of the
Indies would be followed. Indeed, in the Royal Order of July 5, 1862, it was
decreed that until regulations on the subject could be prepared, the
authorities of the Phil-ippine Islands should follow strictly the Laws of the
Indies, the Ordenanza of the Intendentes of 1786, and the Royal Cedula of
1754.11
_______________
9
3 Phil. 537 [1904].
10
Id.at 540.
11
Id.at 548.
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168 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Quoting the preamble of Law 14, Title 12, Book 4 of the Recopilacion de
Leyes de lasIndias,the court interpreted it as follows:
“In the preamble of this law there is, as is seen, a distinct statement that all
those lands belong to the Crown which have not been granted by Philip, or in
his name, or by the kings who preceded him. This statement excludes the
idea that there might be lands not so granted, that did not belong to the king.
It excludes the idea that the king was not still the owner of all ungranted
lands, because some private person had been in the adverse occupation of
them. By the mandatory part of the law all the occupants of the public lands
are required to produce before the authorities named, and within a time to be
fixed by them, their title papers. And those who had good title or showed
prescription were to be protected in their holdings. It is apparent that it was
not the intention of the law that mere possession for a length of time should
make the possessors the owners of the land possessed by them without any
action on the part of the authorities.”12
The preamble stated that all those lands which had not been granted by
Philip, or in his name, or by the kings who preceded him, belonged to the
Crown.13 For those lands granted by the king, the decree provided for a
system of assignment of such lands. It also ordered that all possessors of
agricultural land should exhibit their title deed, otherwise, the land would be
restored to the Crown.14
The Royal Cedula of October 15, 1754 reinforced the Recopilacion when
it ordered the Crown’s principal subdelegate to issue a generalorder directing
thepublicationof the Crown’s instructions:
“xxx to the end that any and all persons who, since the year 1700, and up to
the date of the promulgation and publication of said order, shall have
occupied royal lands, whether or not x xx cultivated or tenanted, may xxx
appear and exhibit to said subdelegates the titles and patents by
_______________
12
Id.at 543-544.
13
Id.at 543.
14
Id. at 542-543. These comments by the court are clear expressions of
the concept that Crown holdings embraced both imperium and dominium—
Ma. Lourdes Aranal-Sereno and Roan Libarios, The Interface Between
National Land Law and Kalinga Land Law, 58 P.L.J. 420, 423 [1983].
169
VOL. 347, DECEMBER 6, 2000 169
Cruz vs.Secretaryof Environmentand Natural Resources
virtue of which said lands are occupied, x xx. Said subdelegates will at the
same time warn the parties interested that in case of their failure to present
their title deeds within the term designated, without a just and valid reason
therefor, they will be deprived of and evicted from their lands, and they will
begranted to others.”15
On June 25, 1880, the Crown adopted regulations for the adjustment of
lands “wrongfully occupied” by private individuals in the Philippine
Islands. Valenton construed these regulations together with
contemporaneous legislative and executive interpretations of the law, and
concluded that plaintiffs’ case fared no better under the 1880 decree and
other laws which followed it, than it did under the earlier ones. Thus as a
general doctrine, the Court stated:
“While the State has always recognized the right of the occupant to a deed if
he proves a possession for a sufficient length of time, yet it has always
insisted that he must make that proof before the proper administrative
officers, and obtain from them his deed, and until he did that the
State remained the absolute owner.”16
In conclusion, the Court ruled: “We hold that from 1860 to 1892 there was no
law in force in these Islands by which the plaintiffs could obtain the ownership
of these lands by prescription, without any action by the State.” 17 Valenton
had no rights other than those which accrued to mere possession. Murciano,
on the other hand, was deemed to be the owner of the land by virtue of the
grant by the provincial secretary. In effect, Valenton upheld the Spanish
conceptof state ownershipof public land.
As a fitting observation, the Court added that “[t]he policy pursued by the
Spanish Government from earliest times, requiring settlers on the public
lands to obtain title deeds therefor from the State, has been continued by the
American Government in Act No. 926”18
_______________
15
Id.at 545-546.
16
Id.at 543.
17
Id.at 557.
18
Id. at 553-554; Valenton was applied in Cansino v. Valdez, 6 Phil.
320 [1906]; Tiglao v. Insular Government, 7 Phil. 80 [1906]; and Cariño v.
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170 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Act No. 926, the first Public Land Act, was passed in pursuance of the
provisions of the Philippine Bill of 1902. The law governed the disposition of
lands of the public domain. It prescribed rules and regulations for the
homesteading, selling, and leasing of portions of the public domain of the
Philippine Islands, and prescribed the terms and conditions to enable
persons to perfect their titles to public lands in the Islands. It also provided for
the “issuance of patents to certain native settlers upon public lands,” for the
establishment of town sites and sale of lots therein, for the completion of
imperfect titles, and for the cancellation or confirmation of Spanish
concessions and grants in the Islands.” In short, the Public Land Act operated
on the assumption that title to public lands in the Philippine Islands remained
in the government;19 and that the government’s title to public land sprung
from the Treaty of Paris and other subsequent treaties between Spain and
the United States.20 The term “public land” referred to all lands of the public
domain whose title still remained in the government and are thrown open to
private appropriation and settlement,21 and excluded the patrimonial property
of the government and the friar lands.22
Act No. 926 was superseded in 1919 by Act 2874, the second Public
Land Act. This new law was passed under the Jones Law. It was more
comprehensive in scope but limited the exploitation of agricultural lands to
Filipinos and Americans and citizens of other countries which gave Filipinos
the same privileges.23 After the passage of the 1935 Constitution, Act 2874
was amended in 1936 by Commonwealth Act No. 141. Commonwealth Act
No. 141 remains the present Public Land Law and it is essentially the same
Insular Government, 7 Phil. 132 [1906]; all decided by the Philippine
Supreme Court.
_______________
19
Please see Section 70, Act 926.
20
Ponce, supra,at 33.
21
Montano v. Insular Government, 12 Phil. 572 [1909]; also cited in
Ponce,supra,at 32.
22
Archbishop of Manila v. Director of Lands, 27 Phil. 245 [1914]; also
cited in Ponce, supra,at 32.
23
Antonio H. Noblejas, LandTitles and Deeds, p. 250 [1961].
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VOL. 347, DECEMBER 6, 2000 171
Cruz vs.Secretaryof Environmentand Natural Resources
as Act 2874. The main difference between the two relates to the transitory
provisions on the rights of American citizens and corporations during the
Commonwealth period at par with Filipino citizens and corporations. 24
Grants of public land were brought under the operation of the Torrens
system under Act 496, or the Land Registration Law of 1903. Enacted by the
Philippine Commission, Act 496 placed all public and private lands in the
Philippines under the Torrens system. The law is said to be almost a verbatim
copy of the Massachussetts Land Registration Act of 1898, 25 which, in turn,
followed the principles and procedure of the Torrens system of registration
formulated by Sir Robert Torrens who patterned it after the Merchant
Shipping Acts in South Australia. The Torrens system requires that the
government issue an official certificate of title attesting to the fact that the
person named is the owner of the property described therein, subject to such
liens and encumbrances as thereon noted or the law warrants or
reserves.26 The certificate of title is indefeasible and imprescriptible and all
claims to the parcel of land are quieted upon issuance of said certificate. This
system highly facilitates land conveyance and negotiation. 27
The Regalian doctrine was enshrined in the 1935 Constitution. One of the
fixed and dominating objectives of the 1935 Constitutional Convention was
the nationalization and conservation of the natural resources of the
country.28 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.29 State ownership of natural resources was seen as a
neces-
_______________
24
Ponce, supra,at 32.
25
Peña, Registration of Land Titles and Deeds, p. 26 [1982];
Noblejas, supra,at 32.
26
Noblejas, supra,at 32.
27
Ponce, supra,at 123-124; Noblejas, supra,at 33.
28
2 Aruego, The Framing of the Philippine Constitution, p. 592 [1937].
29
Id.at 600.
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172 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
sary starting point to secure recognition of the state’s power to control their
disposition, exploitation, development, or utilization. 30 The delegates to 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 Regaliandoctrine.31
Thus, the 1935 Constitution, in Section 1 of Article XIII on “Conservation
andUtilization of Natural Resources,” reads as follows:
“Sec. 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 thelimit of the
grant.”
The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article
XIV on the “National Economy and the Patrimony of the Nation,” to wit:
“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
_______________
30
Id.at 600-601.
31
Ibid.
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VOL. 347, DECEMBER 6, 2000 173
Cruz vs. Secretary of Environment and Natural Resources
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.”
The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article
XII on “National Economy and Patrimony,” to wit:
“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.
x x x.”
Simply stated, all lands of the public domain as well as all natural
resources enumerated therein, whether on public or private land, belong to
the State. It is this concept of State ownership that petitioners claim is being
violated by the IPRA.
II. THE INDIGENOUS PEOPLES RIGHTS ACT.
Republic Act No. 8371 is entitled “An Act to Recognize, Protect and Promote
the Rights of Indigenous Cultural Communities/Indigenous Peoples, Creating
a National Commission on Indigenous Peoples, Establishing Implementing

Mechanisms, Appropriating Funds Therefor, and for Other Purposes.” It is
simply known as “The Indigenous Peoples Rights Act of 1997” or the IPRA.
The IPRA recognizes the existence of the indigenous cultural
communities or indigenous peoples (ICCs/IPs) as a distinct sector in
174
174 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Philippine society. It grants these people the ownership and possession of
their ancestral domains and ancestral lands, and defines the extent of these
lands and domains. The ownership given is the indigenous concept of
ownership under customary law which traces its origin to native title.
Other rights are also granted theICCs/IPs, and these are:
- the right to developlandsand natural resources;
- the right to stayinthe territories;
- the right in case of displacement;
- the right to safe and clean airand water;
- the right to claim parts of reservations;
- the right to resolveconflict;32
- the right to ancestral lands which include
1. a.the right to transfer land/property to/among members of the same
ICCs/IPs, subject to customary laws and traditions of the
community concerned;
2. b.the right to redemption for a period not exceeding 15 years from
date of transfer, if the transfer is to a non-member of the ICC/IP and
is tainted by vitiated consent of the ICC/IP, or if the transferis for an
unconscionable consideration.33
Within their ancestral domains and ancestral lands, the ICCs/IPs are given
the right to self-governance and empowerment, 34 social justice and human
rights,35 the right to preserve and protect their culture, traditions, institutions
and community intellectual rights, and the right to develop their own sciences
and technologies.36
To carry out the policies of the Act, the law created the National
Commission on Indigenous Peoples (NCIP). The NCIP is an independent
agency under the Office of the President and is composed of seven (7)
Commissioners belonging to ICCs/IPs from each of the ethnographic areas—
Region I and the Cordilleras; Region II; the
_______________
32
Section 7.
33
Section 8.
34
Sections 13 to20.
35
Sections 21 to28.
36
Sections 29 to37.
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VOL. 347, DECEMBER 6, 2000 175
Cruz vs.Secretaryof Environmentand Natural Resources
rest of Luzon; Island groups including Mindoro, Palawan, Romblon, Panay
and the rest of the Visayas; Northern and Western Mindanao; Southern and
Eastern Mindanao; and Central Mindanao. 37 The NCIP took over the
functions of the Office for Northern Cultural Communities and the Office for
Southern Cultural Communities created by former President Corazon Aquino
which were merged under a revitalized structure.38
Disputes involving ICCs/IPs are to be resolved under customary laws and
practices. When still unresolved, the matter may be brought to the NCIP,
which is granted quasi-judicial powers. 39 The NCIP’s decisions may be
appealed to the Court of Appeals by a petition for review.
Any person who violates any of the provisions of the Act such as, but not
limited to, unauthorized and/or unlawful intrusion upon ancestral lands and
domains shall be punished in accordance with customary laws or imprisoned
from 9 months to 12 years and/or fined from P100,000.00 to P500,000.00
and obliged to pay damages.40
The IPRA is a law dealing with a specific group of people, i.e., the Indigenous
Cultural Communities (ICCs) or the Indigenous Peoples (IPs). The term
“ICCs” is used in the 1987 Constitution while that of “IPs” is the contemporary
international language in the International Labor Organization (ILO)
Convention 16941 and the United Nations (UN) Draft Declaration on the
Rights of Indigenous Peoples.42
_______________
37
Sections 38 and 40.
38
Sections 74 to77.
39
Section 69.
40
Section 73.
41
Convention Concerning Indigenous and Tribal Peoples in Independent
Countries, June 27, 1989.
42
Guide to R.A. 8371, published by the Coalition for IPs Rights and
Ancestral Domains in cooperation with the ILO and Bilance-Asia Department,
p. 4 [1999]—hereinafter referred to asGuide to RA. 8371.
176
176 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
ICCs/IPs are defined by the IPRA as:
“Sec. 3 [h]. Indigenous Cultural Communities/Indigenous Peoples.—Refer to
a group of people or homogeneous societies identified by self-ascription and
ascription by others, who have continuously lived as organized community on
communally bounded and defined territory, and who have, under claims of
ownership since time immemorial, occupied, possessed and utilized such
territories, sharing common bonds of language, customs, traditions and other
distinctive cultural traits, or who have, through resistance to political, social
and cultural inroads of colonization, non-indigenous religions and cultures,
became historically differentiated from the majority of Filipinos. ICCs/IPs shall
likewise include peoples who are regarded as indigenous on account of their
descent from the populations which inhabited the country, at the time of
conquest or colonization, or at the time of inroads of non-indigenous religions
and cultures, or the establishment of present state boundaries, who retain
some or all of their own social, economic, cultural and political institutions,
but who may have been displaced from their traditional domains or who may
have resettled outside their ancestral domains.”
Indigenous Cultural Communities or Indigenous Peoples refer to a group of
people or homogeneous societies who have continuously lived as an
organized community on communally bounded and defined territory. These
groups of people have actually occupied, possessed and utilized their
territories under claim of ownership since time immemorial. They share
common bonds of language, customs, traditions and other distinctive cultural
traits, or, they, by their resistance to political, social and cultural inroads of
colonization, non-indigenous religions and cultures, became historically
differentiated from the Filipino majority. ICCs/IPs also include descendants of
ICCs/IPs who inhabited the country at the time of conquest or colonization,
who retain some or all of their own social, economic, cultural and political
institutions but who may have been displaced from their traditional territories
or who may have resettled outside their ancestral domains.
1. 1.Indigenous Peoples: Their History
Presently, Philippine indigenous peoples inhabit the interiors and mountains
of Luzon, Mindanao, Mindoro, Negros, Samar,
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VOL. 347, DECEMBER 6, 2000 177
Cruz vs. Secretary of Environment and Natural Resources
Leyte, and the Palawan and Sulu group of islands. They are composed of
110 tribes and are as follows:
1. 1.In the Cordillera Autonomous Region—Kankaney, Ibaloi, Bontoc,
Tinggian or Itneg, Ifugao, Kalinga, Yapayao, Aeta or Agta or Pugot,
and Bago of Ilocos Norte and Pangasinan; Ibanag of Isabela,
Cagayan; Ilongot of Quirino and Nueva Vizcaya; Gaddang of
Quirino, Nueva Vizcaya, Itawis of Cagayan; Ivatan of Batanes, Aeta
of Cagayan, Quirino and Isabela.
2. 2.In Region III—Aetas.
3. 3.In Region IV—Dumagats of Aurora, Rizal; Remontado of Aurora,
Rizal, Quezon; Alangan or Mangyan, Batangan, Buid or Buhid,
Hanunuo and Iraya of Oriental and Occidental Mindoro; Tadyawan
of Occidental Mindoro; Cuyonon, Palawanon, Tagbanua and Tao’t
bato of Palawan.
4. 4.In Region V—Aeta of Camarines Norte and Camarines Sur; Aeta-
Abiyan, Isarog, and Kabihug of Camarines Norte; Agta, and Mayon
of Camarines Sur; Itom of Albay; Cimaron of Sorsogon; and the
Pullon of Masbate and Camarines Sur.
5. 5.In Region VI—Ati of Negros Occidental, Iloilo and Antique, Capiz;
the Magahat of Negros Occidental; the Corolano and Sulod.
6. 6.In Region VII—Magahat of Negros Oriental and Eskaya of Bohol.
7. 7.In Region IX—the Badjao numbering about 192,000 in Tawi-Tawi,
Zamboanga del Sur; the Kalibugan of Basilan, the Samal, Subanon
and Yakat.
8. 8.Region X—Numbering 1.6 million in Region X alone, the IPs are:
the Banwaon, Bukidnon, Matigsalog, Talaanding of Bukidnon; the
Camiguin of Camiguin Island; the Higa-unon of Agusan del Norte,
Agusan del Sur, Bukidnon and Misamis Occidental; the Tigwahanon
of Agusan del Sur, Misamis Oriental and and Misamis Occidental,
the Manobo of the Agusan provinces, and the Umayamnon of
Agusan and Bukidnon.
9. 9.In Region XI—There are about 1,774,065 IPs in Region XI. They
are tribes of the Dibabaon, Mansaka of Davao del Norte; Blaan,
Kalagan, Langilad, Tboli and Talaingod of Davao del Sur;
Mamamanua of Surigao del Sur; Mandaya of the Surigao provinces
and Davao Oriental; Manobo Blit of South Cotabato; the
Mangguangon of Davao and South Cotabato; Matigsalog of Davao
del Norte and Del Sur, Tagakaolo, Tasaday and Ubo of South
Cotabato; and Bagobo of Davao del Sur and South Cotabato.
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178 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. 10.In Region XII—Ilianen, Tiruray, Maguindanao, Maranao, Tausug,
Yakan/Samal, and Iranon.43
How these indigenous peoples came to live in the Philippines goes back toas
early as 25,000 to30,000 B.C.
Before the time of Western contact, the Philippine archipelago was peopled
largely by the Negritos, Indonesians and Malays. 44 The strains from these
groups eventually gave rise to common cultural features which became the
dominant influence in ethnic reformula-
_______________
43
Taken from the list of IPs submitted by Rep. Andolana to the House of
Representatives during the deliberations on H.B. No. 9125—Interpellations of
Aug. 20, 1997, pp. 00086-00095. “Lost tribes” such as the Lutangan
andTatanghave not been included.
44
How these people came to the Philippines may be explained by two
theories. One view, generally linked to Professor Otley H. Beyer, suggests
the “wave theory”—a series of arrivals in the archipelago bringing in different
types and levels of culture. The Negritos, dark-skinned pygmies, came
between 25,000 to 30,000 B.C. Their cultural remains are preserved by the
Negrito-type Filipinos found in Luzon, Visayas and Mindanao. Their relatively
inferior culture did not enable them to overcome the pressures from the
second wave of people, the Indonesians A and B who came in 5,000 and
3,500 B.C. They are represented today by the Kalinga, Gaddang, Isneg,
Mangyan, Tagbanua, Manobo, Mandaya, Subanon, and Sama. The first
group was pushed inland as the second occupied the coastal and downriver
settlements. The last wave involved Malay migrations between 500 B.C. and
1,500 A.D. They had a more advanced culture based on metal age
technology. They are represented by the Christianized and Islamized
Filipinos who pushed the Indonesian groups inland and occupied muchof the
coastal,lowland and downstream areas. A second view is postulated by
Robert Fox, F. Landa Jocano, Alfredo Evangelista, and Jesus Peralta.
Jocano maintains that the Negritos, Indonesians and Malays stand co-equal
as ethnic groups without any one being dominant, racially or culturally. The
geographic distribution of the ethno-linguistic groups, which shows
overlapping of otherwise similar racial strains in both upland and lowland
cultures or coastal and inland communities, suggests a random and
unstructured advent of different kinds of groups in the archipelago—Samuel
K. Tan, A History of the Philippines, published by the Manila Studies
Association, Inc. and the Philippine National Historical Society, Inc., pp. 33-
34 [1997]; Teodoro A. Agoncillo,Historyof the Filipino People,p. 21 [1990].
179
VOL. 347, DECEMBER 6, 2000 179
Cruz vs. Secretary of Environmentand Natural Resources
tion in the archipelago. Influences from the Chinese and Indian civilizations in
the third or fourth millennium B.C. augmented these ethnic strains. Chinese
economic and socio-cultural influences came by way of Chinese porcelain,
silk and traders. Indian influence found their way into the religious-cultural
aspect of precolonial society.45
The ancient Filipinos settled beside bodies of water. Hunting and food
gathering became supplementary activities as reliance on them was reduced
by fishing and the cultivation of the soil. 46 From the hinterland, coastal, and
riverine communities, our ancestors evolved an essentially homogeneous
culture, a basically common way of life where nature was a primary
factor. Community life throughout the archipelago was influenced by, and
responded to, common ecology. The generally benign tropical climate and
the largely uniform flora and fauna favored similarities, not differences. 47 Life
was essentiallysubsistence but not harsh.48
The early Filipinos had a culture that was basically Malayan in structure
and form. They had languages that traced their origin to the Austronesian
parent-stock and used them not only as media of daily communication but
also as vehicles for the expression of their literary moods. 49They fashioned
concepts and beliefs about the world that they could not see, but which they
sensed to be part of their lives.50 They had their own religion and religious
beliefs. They believed in the immortality of the soul and life after death. Their
rituals were based on beliefs in a ranking deity whom they called Bathalang
Maykapal, and a host of other deities, in the environmental spirits and in soul
spirits. The early Filipinos adored the sun, the moon, the animals and birds,
for they seemed to consider the objects of Nature as something to be
respected. They venerated
_______________
45
Tan,supra,at 35-36.
46
Onofre D. Corpuz, The Roots of the Filipino Nation, Philippine
Centennial (1898-1998) Edition, vol. 1, p. 13, Aklahi Foundation, Inc. [1989].
It was in 800-1,000 A.D. that the Ifugaos of Northern Luzon built the rice
terraces—Id.at 37.
47
Id. at 5-6.
48
Id.at 13.
49
Teodoro A. Agoncillo,History of the FilipinoPeople,p. 54 [1990].
50
Corpuz,supra,at 5.
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180 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
almost any object that was close to their daily life, indicating the importance
of the relationship between man and the object of nature. 51
The unit of government was the “barangay,” a term that derived its
meaning from the Malay word “balangay,” meaning, a boat, which
transported them to these shores.52The barangay was basically a family-
based community and consisted of thirty to one hundred families. Each
barangay was different and ruled by a chieftain called a “dato.” It was the
chieftain’s duty to rule and govern his subjects and promote their welfare and
interests. A chieftain had wide powers for he exercised all the functions of
government. He was the executive, legislator and judge and was the
supreme commander in time of war.53
Laws were either customary or written. Customary laws were handed
down orally from generation to generation and constituted the bulk of the
laws of the barangay. They were preserved in songs and chants and in the
memory of the elder persons in the community. 54 The written laws were those
that the chieftain and his elders promulgated from time to time as the
necessity arose.55 The oldest known written body of laws was the Maragtas
Code by Datu Sumakwel at about 1250 A.D. Other old codes are the Muslim
Code of Luwaran and the Principal Code of Sulu. 56Whether customary or
written, the laws dealt with various subjects, such as inheritance, divorce,
usury, loans, partnership, crime and punishment, property
_______________
51
Id.at 44-45.
52
Agoncillo,supra,at 40.
53
Id.at 40-41.
54
Rafael Iriarte, History of the Judicial System, the Philippine Indigenous
Era Prior to 1565, unpublished work submitted as entry to the Centennial
Essay-Writing Contest sponsored by the National Centennial Commission
and the Supreme Court in 1997, p. 103, citing Perfecto V.
Fernandez, Custom Laws in Pre-Conquest Philippines, UP Law Center, p. 10
[1976].
55
Agoncillo,supra,at 41.
56
Amelia Alonzo, The History of the Judicial System in the Philippines,
Indigenous Era Prior to 1565, unpublished work submitted as entry to the
Centennial Essay-Writing Contest sponsored by the National Centennial
Commission and the Supreme Court in 1997.
181
VOL. 347, DECEMBER 6, 2000 181
Cruz vs.Secretaryof Environmentand Natural Resources
rights, family relations and adoption. Whenever disputes arose, these were
decided peacefully through a court composed by the chieftain as “judge” and
the barangay elders as “jury.” Conflicts arising between subjects of different
barangays were resolved by arbitration in which a board composed of elders
from neutral barangays acted as arbiters.57
Baranganic society had a distinguishing feature: the absence of private
property in land. The chiefs merely administered the lands in the name of the
barangay. The social order was an extension of the family with chiefs
embodying the higher unity of the community. Each individual, therefore,
participated in the community ownership of the soil and the instruments of
production as a member of the barangay.58 This ancient communalism was
practiced in accordance with the concept of mutual sharing of resources so
that no individual, regardless of status, was without sustenance. Ownership
of land was non-existent or unimportant and the right of usufruct was what
regulated the development of lands.59 Marine resources and fishing grounds
were likewise free to all. Coastal communities depended for their economic
welfare on the kind of fishing sharing concept similar to those in land
communities.60 Recognized leaders, such as the chieftains and elders, by
virtue of their positions of importance, enjoyed some economic privileges and
benefits. But their rights, related to either land and sea, were subject to their
responsibility to protect the communities from danger and to provide them
with the leadership and means of survival.61
Sometime in the 13th century, Islam was introduced to the archipelago in
Maguindanao. The Sultanate of Sulu was established and claimed
jurisdiction over territorial areas represented today by Tawi-tawi, Sulu,
Palawan, Basilan and Zamboanga. Four ethnic
_______________
57
Agoncillo, supra,at 42.
58
Renato Constantino, A Past Revisited,p. 38 [1975].
59
Samuel K. Tan, A History of the Philippines, published by the Manila
Studies Ass’n., Inc. and the Phil. National Historical Society, Inc., p. 43
[1997].
60
Id.
61
Id.at 43-44.
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182 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
groups were within this jurisdiction: Sama, Tausug, Yakan and
Subanon.62 The Sultanate of Maguindanao spread out from Cotabato toward
Maranao territory, now Lanao del Norte and Lanao del Sur. 63
The Muslim societies evolved an Asiatic form of feudalism where land
was still held in common but was private in use. This is clearly indicated in
the Muslim Code of Luwaran. The Code contains a provision on the lease of
cultivated lands. It, however, has no provisionfor the acquisition, transfer,
cession or sale ofland.64
The societies encountered by Magellan and Legaspitherefore were
primitive economies where most production was geared to the use of the
producers and to the fulfillment of kinship obligations. They were not
economies geared to exchange and profit. 65 Moreover, the family basis of
barangay membership as well as of leadership and governance worked to
splinter the population of the islands into numerous small and separate
communities.66
When the Spaniards settled permanently in the Philippines in 1565, they
found the Filipinos living in barangay settlements scattered along water
routes and river banks. One of the first tasks imposed on the missionaries
and the encomenderos was to collect all scattered Filipinos together in
a reduccion.67 As early as 1551, the Spanish government assumed an
unvarying solicitous attitude towards the natives. 68 The Spaniards regarded it
a sacred “duty to conscience and humanity to civilize these less fortunate
people
_______________
62
Tan, supra,at 47-48.
63
Id.at 48-49.
64
Cacho v. Government of the P.I., 28 Phil. 616, 625-627 11914]; see
also Ponce, The Philippine Torrens System, pp. 11-12 [1964]. In Philippine
pre-colonial history, there was only one recorded transaction on the purchase
of land. The Maragtas Code tells us of the purchase of Panay Island by ten
Bornean datus led by Datu Puti from the Atis under Marikudo in the 13th
century. The purchase price for the Island was a gold salakot and a long gold
necklace—Agoncillo, supra,at 25.
65
Constantino, supra,at 38.
66
Corpuz, supra,at 39.
67
Resettlement—“bajo el son de la campana” (under the sound of the
bell) or “bajo el toque dela campana”(under the peal of the bell).
68
People v. Cayat, 68 Phil. 12, 17 [1939].
183
VOL. 347, DECEMBER 6, 2000 183
Cruz vs.Secretaryof Environmentand Natural Resources
living in the obscurity of ignorance” and to accord them the “moral and
material advantages” of community life and the “protection and vigilance
afforded them by the same laws.”69
The Spanish missionaries were ordered to establish pueblos where the
church and convent would be constructed. All the new Christian converts
were required to construct their houses around the church and the
unbaptized were invited to do the same. 70 With the reduccion, the Spaniards
attempted to “tame” the reluctant Filipinos through Christian indoctrination
using the convento/casa real/plaza complex as focal point. The reduccion, to
the Spaniards, was a “civilizing” device to make the Filipinos law-abiding
citizens of the Spanish Crown, and in the long run, to make them ultimately
adoptHispanic culture and civilization.71
All lands lost by the old barangays in the process of pueblo organization
as well as all lands not assigned to them and the pueblos, were now
declared to be crown lands or realengas, belonging to the Spanish king. It
was from the realengas that land grants were made tonon-Filipinos. 72
The abrogation of the Filipinos’ ancestral rights in land and the
introduction of the concept of public domain were the most immediate
fundamental results of Spanish colonial theory and law. 73 The concept that
the Spanish king was the owner of everything of value in the Indies or
colonies was imposed on the natives, and the natives were stripped of
theirancestral rights to land.74
_______________
69
Id. at 17, citing the Decree of the Governor-General of the Philippines,
Jan. 14, 1887.
70
Agoncillo, supra,at 80.
71
Id.at 80.
72
Corpuz, supra,at 277-278.
73
Id. at 277.
74
Id.; N.B. But see discussion in Cariño v. Insular Government,
infra,where the United States Supreme Court found that the Spanish decrees
in the Philippines appeared to recognize that the natives owned some
land. Whether in the implementation of these decrees the natives’ ancestral
rights to land were actually respected was not discussed by the U.S.
Supreme Court; see also Note 131,infra.
184
184 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Increasing their foothold in the Philippines, the Spanish colonialists, civil and
religious, classified the Filipinos according to their religious practices and
beliefs, and divided them into three types. First were the Indios, the
Christianized Filipinos, who generally came from the lowland populations.
Second, were the Moros or the Muslim communities, and third, were
the infieles or the indigenous communities.75
The Indio was a product of the advent of Spanish culture. This class was
favored by the Spaniards and was allowed certain status although below the
Spaniards. The Moros and infieles were regarded as the lowest classes.76
The Moros and infieles resisted Spanish rule and Christianity. The Moros
were driven from Manila and the Visayas to Mindanao; while the infieles, to
the hinterlands.The Spaniards did not pursue them into the deep interior. The
upland societies were naturally outside the immediate concern of Spanish
interest, and the cliffs and forests of the hinterlands were difficult and
inaccessible, allowing the infieles, in effect, relative security.77 Thus,
the infieles,which were peripheral to colonial administration, were not only
able to preserve their own culture but also thwarted the Christianization
process, separating themselves from the newly evolved Christian
community.78 Their own political, economic and social systems were kept
constantly alive and vibrant.
The pro-Christian or pro-Indio attitude of colonialism brought about a
generally mutual feeling of suspicion, fear, and hostility between the
Christians on the one hand and the non-Christians on the other. Colonialism
tended to divide and rule an otherwise culturally and historically related
populace through a colonial system that exploitedboth the virtues and vicesof
the Filipinos.79
President McKinley, in his instructions to the Philippine Commission of
April 7,1900, addressed the existenceof the infieles:

_______________
75
Tan, supra, at 49-50.
76
Id.at 67.
77
Id.at 52-53.
78
Id.at 53.
79
Id.at 55.
185
VOL. 347, DECEMBER 6, 2000 185
Cruz vs.Secretaryof Environmentand Natural Resources
“In dealing with the uncivilized tribes of the Islands, the Commission should
adopt the same course followed by Congress in permitting the tribes of our
North American Indians to maintain their tribal organization and government,
and under which many of those tribes are now living in peace and
contentment, surrounded by civilization to which they are unable or unwilling
to conform. Such tribal government should, however, be subjected to wise
and firm regulation; and, without undue or petty interference, constant and
active effort should be exercised to prevent barbarous practicesand introduce
civilized customs.”80
Placed in an alternative of either letting the natives alone or guiding them in
the path of civilization, the American government chose “‘to adopt the latter
measure as one more in accord with humanity andwith the national
conscience.”81
The Americans classified the Filipinos into two: the Christian Filipinos and
the non-Christian Filipinos. The term “non-Christian” referred not to religious
belief, but to a geographical area, and more directly, “to natives of the
Philippine Islands of a low grade of civilization, usually living in tribal
relationship apart from settled communities.”82
Like the Spaniards, the Americans pursued a policy of assimilation. In
1903, they passed Act No. 253 creating the Bureau of Non-Christian Tribes
(BNCT). Under the Department of the Interior, the BNCTs primary task was to
conduct ethnographic research among unhispanized Filipinos, including
those in Muslim Mindanao, with a “special view to determining the most
practicable means for bringing about their advancement in civilization and
prosperity.” The BNCT was modeled after the bureau dealing with American
Indians. The agency took a keen anthropological interest in Philippine cultural
minorities and produced a wealth of valuable materials about them. 83
_______________
80
People v. Cayat, 68 Phil. 12, 17 [1939].
81
Memorandum of the Secretary of the Interior, quoted in Rubi v.
Provincial Board of Mindoro, 39 Phil. 660, 714 [1919]; also cited in People v.
Cayat, supra, at 17-18.
82
Rubi v. Provincial Board of Mindoro, supra, at 693.
83
Charles MacDonald, Indigenous Peoples of the Philippines: Between
Segregation and Integration, Indigenous Peoples of Asia, p. 348, ed.
186
186 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The 1935 Constitution did not carry any policy on the non-Christian Filipinos.
The raging issue then was the conservation of the national patrimony for the
Filipinos.
In 1957, the Philippine Congress passed RA. No. 1888,an “Act to
effectuate in a more rapid and complete manner the economic, social, moral
and political advancement of the non-Christian Filipinos or national cultural
minorities and to render real, complete, and permanent the integration of all
said national cultural minorities into the body politic, creating the Commission
on National Integration charged with said functions.” The law called for a
policy of integration of indigenous peoples into the Philippine mainstream
and for this purpose created the Commission on National Integration
(CNI).84 The CNI was given, more or less, the same task as the BNCT during
the American regime. The post-independence policy of integration was like
the colonial policy of assimilation understood in the context ofaguardian-ward
relationship.85
The policy of assimilation and integration did not yield the desired
result. Like the Spaniards and Americans, government attempts at
integration met with fierce resistance. Since World War II, a tidal wave of
Christian settlers from the lowlands of Luzon and the Visayas swamped the
highlands and wide open spaces in Mindanao.86 Knowledge by the settlers of
the Public Land Acts and the Torrens system resulted in the titling of several
ancestral lands in the settlers’ names. With government initiative and
participation, this titling displaced several indigenous peoples from their
lands. Worse, these peoples were also displaced by projects undertaken by
the nationalgovernment in the name of nationaldevelopment. 87by R.H.
Barnes, A. Gray and B. Kingsbury, pub. by Association for Asian Studies
[1995]. The BNCT made a Bontok and Subanon ethnography, a history of
Sulu genealogy, and a compilation on unhispanized peoples in northern
Luzon.—Owen J. Lynch, Jr., The Philippine Colonial Dichotomy: Attraction
and Disenfranchisement, 63 P.L.J. 139-140 [1988].
_______________
84
R.A. No. 1888 of 1957.
85
See People v. Cayat, supra, at 21; See also Rubi v. Provincial Board of
Mindoro, 39 Phil. 660, 694 [1919].
86
MacDonald,Indigenous Peoples of the Philippines,supra, at 351.
87
The construction of the Ambuklao and Binga dams in the 1950’s
resulted in the eviction of hundreds of Ibaloi families—Cerilo Rico S.
187
VOL. 347, DECEMBER 6, 2000 187
 Cruz vs.Secretaryof Environmentand Natural Resources
It was in the 1973 Constitution that the State adopted the following provision:
“The State shall consider the customs, traditions, beliefs, and interests of
national cultural communities in the formulation and implementation of State
policies.”88
For the first time in Philippine history, the “non-Christian tribes” or the
“cultural minorities” were addressed by the highest law of the Republic, and
they were referred to as “cultural communities.” More importantly this time,
their “uncivilized” culture was given some recognition and their “customs,
traditions, beliefs and interests” were to be considered by the State in the
formulation and implementation of State policies. President Marcos abolished
the CNI and transferred its functions to the Presidential Adviser on National
Minorities (PANAMIN).The PANAMIN was tasked to integrate the ethnic
groups that sought full integration into the larger community, and at the same
time “protect the rights of those who wish to preserve their original lifeways
beside the larger community.”89 In short, while still adopting the integration
policy, the decree recognized the right of tribal Filipinos to preserve their way
of life.90
In 1974, President Marcos promulgated P.D. No. 410,otherwise known as
the Ancestral Lands Decree. The decree provided for the issuance of land
occupancy certificates to members of the national cultural communities who
were given up to 1984 to register their claims. 91 In 1979, the Commission on
the Settlement of Land Prob-Abelardo, Ancestral Domain Rights: Issues,
Responses, and Recommendations, Ateneo Law Journal, vol. 38, No. 1, p.
92 [1993].
_______________
88
Section 11, Art. XV, 1973 Constitution.
89
Presidential Decrees Nos. 1017 and 1414.
90
The PANAMIN, however, concentrated funds and resources on image-
building, publicity, and impact projects. In Mindanao, the agency resorted to a
policy of forced resettlement on reservations, militarization and intimidation—
MacDonald, Indigenous Peoples of the Philippines, supra,at 349-350.
91
No occupancy certificates were issued, however, because the
government failed to release the decree’s implementing rules and regulations
—Abelardo, supra, at 120-121.
188
188 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
lems was created under E.O. No. 561 which provided a mechanism for the
expeditious resolution of land problems involving small settlers, landowners,
and tribal Filipinos.92
Despite the promulgation of these laws, from 1974 to the early 1980’s,
some 100,000 Kalingas and Bontoks of the Cordillera region were displaced
by the Chico River dam project of the National Power Corporation (NPC).
The Manobos of Bukidnon saw their land bulldozed by the Bukidnon Sugar
Industries Company (BUSCO). In Agusan del Sur, the National Development
Company was authorized by law in 1979 to take approximately 40,550
hectares of land that later became the NDC-Guthrie plantation in Agusan del
Sur. Most of the land was possessed by the Agusan natives. 93 Timber
concessions, water projects, plantations, mining, and cattle ranching and
other projects of the national government led not only to the eviction of the
indigenous peoples from their land but also to the reduction and destruction
of their natural environment.94
The Aquino government signified a total shift from the policy of integration
to one of preservation. Invoking her powers under the Freedom Constitution,
President Aquino created the Office of Muslim Affairs, Office for Northern
Cultural Communities and the Office for Southern Cultural Communities all
under the Office of the President.95
The 1987 Constitution carries at least six (6) provisions which insure the
right of tribal Filipinos to preserve their way of life. 96
_______________
92
Id., Note 177.
93
Id.,at 93-94.
94
MacDonald, Indigenous Peoples of the Philippines, supra, at 351.
95
E.O. Nos. 122-A, 122-B and 122-C. The preamble of E.O. No. 122-B
states: “Believing that the new government is committed to formulate more
vigorous policies, plans, programs, and projects for tribal Filipinos, otherwise
known as Indigenous Cultural Communities, taking into consideration their
communal aspirations, customs, traditions, beliefs, and interests, in order to
promote and preserve their rich cultural heritage and insure their participation
in the country’s development for national unity; x x x”
96
Article II, sec. 22; Article VI, sec. 5, par. 2; Article XII, sec. 5; Article XIII,
sec. 6; Article XIV, sec. 17; and Article XVI, sec. 12.
189
VOL. 347, DECEMBER 6, 2000 189
Cruz vs.Secretaryof Environmentand Natural Resources
This Constitution goes further than the 1973 Constitution by expressly
guaranteeing the rights of tribal Filipinos to their ancestral domains and
ancestral lands. By recognizing their right to their ancestral lands and
domains, the State has effectively upheld their right to live ina
culturedistinctly their own.
1. 2.Their Concept of Land
Indigenous peoples share distinctive traits that set them apart from the
Filipino mainstream. They are non-Christians. They live in less accessible,
marginal, mostly upland areas. They have a system of self-government not
dependent upon the laws of the central administration of the Republic of the
Philippines. They follow ways of life and customs that are perceived as
different from those of the rest of the population. 97 The kind of response the
indigenous peoples chose to deal with colonial threat worked well to their
advantage by making it difficult for Western concepts and religion to erode
their customs and traditions. The “infieles societies” which had become
peripheral to colonial administration, represented, from a cultural perspective,
a much older base of archi-pelagic culture. The political systems were still
structured on the patriarchal and kinship oriented arrangement of power and
authority. The economic activities were governed by the concepts of an
ancient communalism and mutual help. The social structure which
emphasized division of labor and distinction of functions, not status, was
maintained. The cultural styles and forms of life portraying the varieties of
social courtesies and ecological adjustments were kept constantly vibrant. 98
Land is the central element of the indigenous peoples’ existence. There is
no traditional concept of permanent, individual, land ownership. Among the
Igorots, ownership of land more accurately applies to the tribal right to use
the land or to territorial control. The people are the secondary owners or
stewards of the land and that if a member of the tribe ceases to work, he
loses his claim of ownership, and the land reverts to the beings of the spirit
world who are its true and primary owners. Under the concept of
“trusteeship,”
_______________
97
MacDonald, Indigenous Peoples of the Philippines, supra, at 345.
98
Samuel K. Tan, A Historyofthe Philippines, p. 54 [1997].
190
190 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
the right to possess the land does not only belong to the present generation
but the future onesas well.99
Customary law on land rests on the traditional belief that no one owns the
land except the gods and spirits, and that those who work the land are its
mere stewards.100Customary law has a strong preference for communal
ownership, which could either be ownership by a group of individuals or
families who are related by blood or by marriage, 101 or ownership by
residents of the same locality who may not be related by blood or marriage.
The system of communal ownership under customary laws draws its
meaning from the subsistence and highly collectivized mode of economic
production. The Kalingas, for instance, who are engaged in team occupation
like hunting, foraging for forest products, and swidden farming found it natural
that forest areas, swidden farms, orchards, pasture and burial grounds
should be communally-owned.102 For the Kalingas, everybody has a common
right to a common economic base. Thus, as a rule, rights and obligations to
the land are shared in common.
Although highly bent on communal ownership, customary law on land
also sanctions individual ownership. The residential lots and terrace rice
farms are governed by a limited system of individual ownership. It is limited
because while the individual owner has the right to use and dispose of the
property, he does not possess all the rights of an exclusive and full owner as
defined under our Civil Code.103 Under Kalinga customary law, the alienation
of individu-
_______________
99
Cordillera Studies Program, Land Use and Ownership and Public Policy
in the Cordillera, 29-30 [n.d.]; also cited in Dante B. Gatmaytan, Ancestral
Domain Recognition in the Philippines: Trends in Jurisprudence and
Legislation,5 Phil. Nat. Res.L.J. No. 1, pp. 47-48 [1992].
100
Abelardo, Ancestral Domain Rights, supra, at 98-99, citing Ponciano L.
Bennagen, Indigenous Attitudes Toward Land and Natural Resources of
Tribal Filipinos, 31 National Council of Churches in the Philippines
Newsletter, Oct.-Dec. 1991, at 4-9.
101
Id. at 99, citing June Prill-Brett, Bontok Land Tenure (UP Law library,
mimeographed).
102
Ma. Lourdes Aranal-Sereno and Roan Libarios, The Interface of
National Land Law and Kalinga Law, 58 P.L.J. 420, 440-441 [1983].
103
Ibid.
191
VOL. 347, DECEMBER 6, 2000 191
Cruz vs.Secretaryof Environmentand Natural Resources
ally-owned land is strongly discouraged except in marriage and succession
and except to meet sudden financial needs due to sickness, death in the
family, or loss of crops.104Moreover, land to be alienated should first be
offered to a clan-member before any village-member can purchase it, and in
no case may land be sold to a non-member of the ili.105
Land titles do not exist in the indigenous peoples’ economic and social
system. The concept of individual land ownership under the civil law is alien
to them. Inherently colonial in origin, our national land laws and
governmental policies frown upon indigenous claims to ancestral lands.
Communal ownership is looked upon as inferior, if not inexistent.106
III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.
It was to address the centuries-old neglect of the Philippine indigenous
peoples that the Tenth Congress of the Philippines, by their joint efforts,
passed and approved R.A. No. 8371, the Indigenous Peoples Rights Act
(IPRA) of 1997. The law was a consolidation of two Bills—Senate Bill No.
1728 and House Bill No. 9125.
Principally sponsored by Senator Juan M. Flavier,107Senate Bill No.
1728 was a consolidation of four proposed measures referred to the
Committees on Cultural Communities, Environment and Natu-
_______________
104
Ibid.
105
Ibid.
106
Ma. Lourdes Aranal-Sereno and Roan Libarios, The Interface, supra,at
420.
107
Senate Bill No. 1728 was co-sponsored by Senator Macapagal-Arroyo
and co-authored by Senators Alvarez, Magsaysay, Revilla, Mercado, Enrile,
Honasan,Tatad, Maceda, Shahani,Osmena and Romulo. The Eighth
Congress, through Senators Rasul, Estrada and Romulo filed a bill to
operationalize the mandate of the 1987 Constitution on indigenous peoples.
The bill was reported out, sponsored and interpellated but never enacted into
law. In the Ninth Congress, the bill filed by Senators Rasul and Macapagal-
Arroyo was never sponsored and deliberated upon in the floor.
192
192 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
ral Resources, Ways and Means, as well as Finance. It adopted almost en
toto the comprehensive version of Senate Bill Nos. 1476 and 1486 which was
a result of six regional consultations and one national consultation with
indigenous peoples nationwide.108 At the Second Regular Session of the
Tenth Congress, Senator Flavier, in his sponsorship speech, gave a
background on the situation of indigenous peoples in the Philippines, to wit:
“The Indigenous Cultural Communities, including the Bangsa Moro, have
long suffered from the dominance and neglect of government controlled by
the majority. Massive migration of their Christian brothers to their homeland
shrunk their territory and many of the tribal Filipinos were pushed to the
hinterlands. Resisting the intrusion, dispossessed of their ancestral land and
with the massive exploitation of their natural resources by the elite among the
migrant population, they became marginalized. And the government has
been an indispensable party to this insidious conspiracy against the
Indigenous Cultural Communities (ICCs). It organized and supported the
resettlement of people to their ancestral land, which was massive during the
Commonwealth and early years of the Philippine Republic. Pursuant to the
Regalian Doctrine first introduced to our system by Spain through the Royal
Decree of 13 February 1894 or the Maura Law, the government passed laws
to legitimize the wholesale landgrabbing and provide for easy titling or grant
of lands to migrant homesteaders within thetraditionalareas of the ICCs.” 109
Senator Flavier further declared:
The IPs are the offsprings and heirs of the peoples who have first inhabited
and cared for the land long before any central government was established.
Their ancestors had territories over which they ruled themselves and related
with other tribes. These territories—the land—include people, their dwelling,
the mountains, the water, the air, plants, forest and the animals. This is their
environment in its totality. Their existence as indigenous peoples is
manifested in their own lives through political, economic, socio-cultural and
spiritual practices. The IPs culture is the living and irrefutableproof to this.
_______________
108
Sponsorship Speech of Senator Flavier, Legislative History of SBN
1728, Tenth Congress, Second Regular Session, Senate, Oct 16, 1996, pp.
15-16.
109
Id. at 12.
193
VOL. 347, DECEMBER 6, 2000 193
Cruz vs.Secretaryof Environmentand Natural Resources
Their survival depends on securing or acquiring land rights; asserting their
rights to it; and depending on it. Otherwise, IPs shall cease to exist asdistinct
peoples.”110
To recognize the rights of the indigenous peoples effectively, Senator Flavier
proposed a bill based on two postulates: (1) the concept of native title; and
(2) theprincipleofparens patriae.
According to Senator Flavier, “[w]hile our legal tradition subscribes to the
Regalian Doctrine reinstated in Section 2, Article XII of the 1987
Constitution,” our “decisional laws” and jurisprudence passed by the State
have “made exception to the doctrine.” This exception was first laid down in
the case of Cariño v. Insular Government where:
“xxx the court has recognized long occupancy of land by an indigenous
member of the cultural communities as one of private ownership, which, in
legal concept, is termed “native title.” This ruling has not been overturned. In
fact, it was affirmed insubsequent cases.”111
Following Cariño, the State passed Act No. 926, Act No. 2874, CA. No. 141,
P.D. 705, P.D. 410, P.D. 1529, R.A. 6734 (the Organic Act for the
Autonomous Region of Muslim Mindanao). These laws, explicitly or implicitly,
and liberally or restrictively, recognized “native title” or “private right” and the
existence of ancestral lands and domains. Despite the passage of these
laws, however, Senator Flavier continued:
“xxx the executive department of government since the American occupation
has not implemented the policy. In fact, it was more honored in its breach
than in its observance, its wanton disregard shown during the period unto the
Commonwealth and the early years of the Philippine Republic when
government organized and supported massive resettlement of the
peopletothe land of the ICCs.”
Senate Bill No. 1728 seeks to genuinely recognize the IPs right to own and
possess their ancestral land. The bill was prepared also under the principle
of parens patriaeinherent in the supreme
_______________
110
Id. at 17-18.
 111
Id.at 13.
194
194 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
power of the State and deeply embedded in Philippine legal tradition. This
principle mandates that persons suffering from serious disadvantage or
handicap, which places them in a position of actual inequality in their relation
or transaction with others, are entitled to the protection of the State.
Senate Bill No. 1728 was passed on Third Reading by twenty-one (21)
Senators voting in favor and none against, with no abstention. 112
House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of the
Committee on Cultural Communities. It was originally authored and
subsequently presented and defended on the floor by
Rep. GregorioAndolanaof North Cotabato.113
Rep.Andolana’s sponsorshipspeech reads as follows:
‘This Representation, as early as in the 8th Congress, filed a bill of similar
implications that would promote, recognize the rights of indigenous cultural
communities within the framework of national unity and development.
Apart from this, Mr. Speaker, is our obligation, the government’s
obligation to assure and ascertain that these rights shall be well-preserved
and the cultural traditions as well as the indigenous laws that remained long
before this Republic was established shall be preserved and promoted.
There is a need, Mr. Speaker, to look into these matters seriously and early
approval of the substitute bill shall bring into reality the aspirations, the hope
and the dreams of more than 12 million Filipinos that they be considered in
the mainstream of the Philippine society as we fashion for the year 2000.” 114
Rep. Andolana stressed that H.B. No. 9125 is based on the policy of
preservation as mandated in the Constitution. He also empha-
_______________
112
Journal of the Tenth Congress of the Philippines, Senate, Session No.
5, Aug. 5-6,1997, pp. 86-87.
113
Co-authors of the bill were Reps. Ermita, Teves, Plaza, Calalay, Recto,
Fua, Luciano, Abad, Cosalan, Aumentado, de la Cruz, Bautista, Singson,
Damasing, Romualdo, Montilla, Germino, Verceles—Proceedings of Sept. 4,
1997, pp. 00107-00108.
114
Sponsorship speech of Rep. Andolana of House Bill No 9125 March
20, 1997.
195
VOL. 347, DECEMBER 6, 2000 195
Cruz vs.Secretaryof Environmentand Natural Resources
sized that the rights of IPs to their land was enunciated in Cariño v. Insular
Government which recognized the fact that they had vested rights prior to the
establishment of the Spanish and American regimes.115
After exhaustive interpellation, House Bill No. 9125, and its
corresponding amendments, was approved on Second Reading with no
objections.
IV. THE PROVISIONS OF THE IPRA
DO NOT CONTRAVENE THE CONSTITUTION.
The IPRA grants to ICCs/IPs a distinct kind of ownership over ancestral
domains and ancestral lands. Ancestral lands are not the same as ancestral
domains. These are defined in Section 3 [a] and [b] ofthe IndigenousPeoples
Right Act,viz.:
“Sec. 3 a) Ancestral Domains.—Subject to Section 56 hereof, refer to all
areas generally belonging to ICCs/IPs comprising lands, inland waters,
coastal areas, and natural resources therein, held under a claim of
ownership, occupied or possessed by ICCs/IPs by themselves or through
their ancestors, communally or individually since time immemorial,
continuously to the present except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of government
projects or any other voluntary dealings entered into by government and
private individuals/corporations, and which are necessary to ensure their
economic, social and cultural welfare. It shall include ancestral lands, forests,
pasture, residential, agricultural, and other lands individually owned whether
alienable and disposable or otherwise, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources, and
lands which may no longer be exclusively occupied by ICCs/IPs but from
which they traditionally had access to for their subsistence and traditional
activities, particularly the home ranges of ICCs/IPs who are still nomadic
and/or shifting cultivators;
_______________
115
Interpellationof Aug. 20, 1997, 6:16 p.m., p. 00061.
196
196 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. b)Ancestral Lands.—Subject to Section 56 hereof, refers to land
occupied, possessed and utilized by individuals, families and clans
who are members of the ICCs/IPs since time immemorial, by
themselves or through their predecessors-in-interest, under claims
of individual or traditional group ownership, continuously, to the
present except when interrupted by war, force majeure or
displacement by force, deceit, stealth, or as a consequence of
government projects and other voluntary dealings entered into by
government and private individuals/corporations, including, but not
limited to, residential lots, rice terraces or paddies, private forests,
swiddenfarms and tree lots.”
Ancestral domains are all areas belonging to ICCs/IPs held under a claim of
ownership, occupied or possessed by ICCs/IPs by themselves or through
their ancestors, communally or individually since time immemorial,
continuously until the present, except when interrupted by war, force majeure
or displacement by force, deceit, stealth or as a consequence of government
projects or any other voluntary dealings with government and/or private
individuals or corporations. Ancestral domains comprise lands, inland waters,
coastal areas, and natural resources therein and includes ancestral lands,
forests, pasture, residential, agricultural, and other lands individually owned
whether alienable or not, hunting grounds, burial grounds, worship areas,
bodies of water, mineral and other natural resources. They also include lands
which may no longer be exclusively occupied by ICCs/IPs but from which
they traditionally had access to for their subsistence and traditional activities,
particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators.116
Ancestral lands are lands held by the ICCs/IPs under the same conditions
as ancestral domains except that these are limited to lands and that these
lands are not merely occupied and possessed but are also utilized by the
ICCs/IPs under claims of individual or traditional group ownership. These
lands include but are not limited to residential lots, rice terraces or paddies,
private forests, swidden farms and tree lots.117
_______________
116
Section 3 [a],IPRA.
117
Section 3 [b], IPRA.
197
197 VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
The procedures for claiming ancestral domains and lands are similar to the
procedures embodied in Department Administrative Order (DAO) No. 2,
series of 1993, signed by then Secretary of the Department of Environment
and Natural Resources (DENR) Angel Alcala. 118 DAO No. 2 allowed the
delineation of ancestral domains by special task forces and ensured the
issuance of Certificates of Ancestral Land Claims (CALC’s) and Certificates
of Ancestral Domain Claims (CADC’s) toIPs.
The identification and delineation of these ancestral domains and lands is
a power conferred by the IPRA on the National Commission on Indigenous
Peoples (NCIP).119 The guiding principle in identification and delineation is
self-delineation.120 This means that the ICCs/IPs have a decisive role in
determining the boundaries of theirdomainsand in all the activities pertinent
thereto.121
The procedure for the delineation and recognition of ancestral domains is
set forth in Sections 51 and 52 of the IPRA. The identification, delineation
and certification of ancestral lands is in Section53 of saidlaw.
Upon due application and compliance with the procedure provided under
the law and upon finding by the NCIP that the application is meritorious, the
NCIP shall issue a Certificate of Ancestral Domain Title (CADT) in the name
of the community concerned.122 The allocation of lands within the ancestral
domain to any individual or indigenous corporate (family or clan) claimants is
left to the ICCs/IPs concerned to decide in accordance with customs and
traditions.123 With respect to ancestral lands outside the ances-
_______________
118
Guide to R.A. 8371, p. 14.
119
Section 44 [e], IPRA.
120
Section 51, IPRA.
121
Guide to R.A. 8371, p. 15.
122
A CADT refers to a title formally recognizing the right of possession
and ownership of ICCs/IPs over their ancestral domains identified and
delineated in accordance with the IPRA—Rule II [c], Rules & Regulations
Implementing the IPRA, NCIP Admin. Order No. 1.
123
Section 53 [a], IPRA.
198
198 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
tral domain, the NCIP issues a Certificate of Ancestral Land Title (CALT).124
CADT’s and CALT’s issued under the IPRA shall be registered by the
NCIP before the Register of Deeds in the place where the property is
situated.125
1. (1)Right to Ancestral Domains and Ancestral Lands: How Acquired
The rights of the ICCs/IPs to their ancestral domains and ancestral lands
may be acquired in two modes: (1) by native title over both ancestral lands
and domains; or (2) by Torrens title under the Public Land Act and the Land
Registration Act with respect to ancestral lands only.
1. (2)The Concept of Native Title
Native title is defined as:
“Sec. 3 [1]. Native Title—refers to pre-conquest rights to lands and domains
which, as far back as memory reaches, have been held under a claim
of private ownership by ICCs/IPs, have never been public lands and are
thus indisputably presumed to have been held that way since before the
Spanish Conquest.”126
Native title refers to ICCs/IPs’ preconquest rights to lands and domains held
under a claim of private ownership as far back as memory reaches. These
lands are deemed never to have been public lands and are indisputably

presumed to have been held that way since before the Spanish Conquest.
The rights of ICCs/IPs to their ancestral domains (which also include
ancestral lands) by virtue of native title shall be recognized and
respected.127 Formal recognition, when solicited by ICCs/IPs concerned, shall
be embodied in a Certificate of Ancestral Domain Title (CADT), which
_______________
124
A CALT refers to a title formally recognizing the rights of the ICCs/IPs
over their ancestral lands—Rule II [d], Implementing Rules NCIPA.O. No. 1.
125
Section 52 [k], IPRA.
126
Section 3 [1], IPRA.
127
Section 11, IPRA.
199
VOL. 347, DECEMBER 6, 2000 199
Cruz vs.Secretaryof Environmentand Natural Resources
shall recognize the title of the concerned ICCs/IPs over the territories
identified and delineated.128
Like a Torrens title, a CADT is evidence of private ownership of land by
native title. Native title, however, is a right of private ownership peculiarly
granted to ICCs/IPs over their ancestral lands and domains. The IPRA
categorically declares ancestral lands and domains held by native title
as never to have been public land. Domains and lands held under native title
are, therefore, indisputably presumed to have never been public lands and
are private.
1. (a)Cariño v. Insular Government129
The concept of native title in the IPRA was taken from the 1909 case
of Cariño v. Insular Government.130 Cariño firmly established a concept of
private land title that existed irrespective of any royal grant from the State.
In 1903, Don Mateo Cariño, an Ibaloi, sought to register with the land
registration court 146 hectares of land in Baguio Municipality, Benguet
Province. He claimed that this land had been possessed and occupied by his
ancestors since time immemorial; that his grandfather built fences around the
property for the holding of cattle and that his father cultivated some parts of
the land. Cariño inherited the land in accordance with Igorot custom. He tried
to have the land adjusted under the Spanish land laws, but no document
issued from the Spanish Crown. 131 In 1901, Cariño obtained a possessory
title to the land under the Spanish Mortgage Law. 132 The North American
colonial government, however, ignored his possessory title and built a public
road on the land prompting him
_______________
128
Ibid.
129
41 Phil. 935 (1909), 212 U.S. 449, 53 L.Ed. 594.
130
Sponsorship Speech of Senator Juan Flavier, Leg. History of SBN
1728, Tenth Congress, Second Regular Session, Oct. 16, 1996, p. 13.
131
It was the practice of the Spanish colonial government not to issue
titles to Igorots—Owen J. Lynch, Jr., Invisible Peoples and a Hidden Agenda:
The Origins of Contemporary Philippine Land Laws (1900-1913), 63 P.L.J.
249, 288 [1988], citing the testimony of Benguet Provincial Governor William
F. Pack, Records at 47,Cariño.
132
Maura Law or the Royal Decree of Feb. 13, 1894.
200
200 SUPREME COURT REPORTSANNOTATED
Cruz vs. Secretaryof Environmentand Natural Resources
to seek a Torrens title to his property in the land registration court. While his
petition was pending, a U.S. military reservation 133 was proclaimed over his
land and, shortly thereafter, a military detachment was detailed on the
property with orders to keep cattle and trespassers, including Cariño, off the
land.134
In 1904, the land registration court granted Cariño’s application for
absolute ownership to the land. Both the Government of the Philippine
Islands and the U.S. Government appealed to the C.F.I. of Benguet which
reversed the land registration court and dismissed Cariño’s application. The
Philippine Supreme Court135 affirmed the C.F.I, by applying
the Valenton ruling. Cariño took the case to the U.S. Supreme Court. 136 On
one hand, the Philippine government invoked the Regalian doctrine and
contended that Cariño failed to comply with the provisions of the Royal
Decree of June 25, 1880, which required registration of land claims within a
limited period of time. Cariño, on the other, asserted that he was the absolute
owner of the land jure gentium, and that the land neverformed part of the
public domain.
In a unanimous decision written by Justice Oliver Wendell Holmes,
theU.S.Supreme Court held:
“It is true that Spain, in its earlier decrees, embodied the universal feudal
theory that all lands were held from the Crown, and perhaps the general
attitude of conquering nations toward people not recognized as entitled to the
treatment accorded to those in the same zone of civilization with themselves.
It is true, also, that in legal theory, sovereignty is absolute, and that, as
against foreign nations, the United States may assert, as Spain asserted,
absolute power. But it does not follow that, as against the inhabitants of the
Philippines, the United States asserts that Spain
_______________
133
Later namedCamp John Hay.
134
Lynch,Invisible Peoples, supra, at 288-289.
135
7 Phil. 132 [1906].
 136
In 1901, Cariño had entered into a promissory agreement with a U.S.
merchant in Manila.The note obliged Cariño to sell the land at issue “as soon
as he obtains from the Government of the United States, or its
representatives in the Philippines, real and definitivetitle.”See Lynch, Invisible
Peoples, supra,at290, citing Government’s Exhibit G, Records, at 137-
138,Cariño.
201
VOL. 347, DECEMBER 6, 2000 201
Cruz vs.Secretaryof Environmentand Natural Resources
had such power. When theory is left on one side, sovereignty is a question of
strength, and may vary in degree. How far a new sovereign shall insist upon
the theoretical relation of the subjects to the head in the past, and how far it
shall recognize actual facts, are mattersfor it to decide.” 137
The U.S. Supreme Court noted that it need not accept Spanish doctrines.
The choice was with the new colonizer. Ultimately, the matter had tobe
decidedunder U.S. law.
The Cariño decision largely rested on the North American
constitutionalist’s concept of “due process” as well as the pronounced policy
“‘to do justice to the natives.”138 It was based on the strong mandate
extended to the Islands via the Philippine Bill of 1902 that “No law shall be
enacted in said islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the equal
protection of the laws.” The court declared:
“The acquisition of the Philippines was not like the settlement of the white
race in the United States. Whatever consideration may have been shown to
the North American Indians, the dominant purpose of the whites in America
was to occupy land. It is obvious that, however stated, the reason for our
taking over the Philippines was different. No one, we suppose, would deny
that, so far as consistent with paramount necessities, our first object in the
internal administration of the islands is to do justice to the natives, not to
exploit their country for private gain. By the Organic Act of July 1, 1902,
chapter 1369, section 12 (32 Statutes at Large, 691), all the property and
rights acquired there by the United States are to be administered ‘for the
benefit of the inhabitants thereof.’ It is reasonable to suppose that the attitude
thus assumed by the United States with regard to what was unquestionably
its own is also its attitude in deciding what it will claim for its own. The same
statute made a bill of rights, embodying the safeguards of the Constitution,
and, like the Constitution, extends those safeguards to all. It provides that ‘no
law shall be enacted in said islands which shall deprive any person of life,
liberty, or property without due process of law, or deny to any person therein
the equal protection of the laws.’ In the light of the declaration that we have
quoted from section 12, it is hard to believe that the United States was ready
to declare in the next breath that “any person” did not embrace the
inhabitants of Benguet,
_______________
137
Cariño v. Insular Government, supra, at 939.
138
Ibid.
202
202 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
or that it meant by “property” only that which had become such by
ceremonies of which presumably a large part of the inhabitants never had
heard, and that it proposed to treat as public land what they, by native
custom and by long association,—of the profoundest factors in human
thought,—regarded as their own.”139
The Courtwent further:
“[E]very presumption is and ought to be against the government in a case like
the present. It might, perhaps, be proper and sufficient to say that when, as
far back as testimony or memory goes, the land has been held by individuals
under a claim of private ownership, it will be presumed to have been held in
the same way from before the Spanish conquest, and never to have been
public land. Certainly in a case like this, if there is doubt or ambiguity in the
Spanish law, we ought to give the applicant the benefit of the doubt.” 140
The court thus laid down the presumption of a certain title held (1) as far
back as testimony or memory went, and (2) under a claim of private
ownership. Land held by this title is presumed to “never have beenpublic
land.”
Against this presumption, the U.S. Supreme Court analyzed the Spanish
decrees upheld in the 1904 decision of Valenton v. Murciano. The U.S.
Supreme Court found noproof that the Spanish decrees did not honor native
title. On the contrary, the decrees discussed in Valentonappeared to
recognize that the natives owned some land, irrespective of any royal grant.
The Regalian doctrine declared in the preamble of the Recopilacion was all
“theory and discourse” and it was observed that titles were admitted to
existbeyond thepowers of the Crown,viz.:
“If the applicant’s case is to be tried by the law of Spain, we do not discover
such clear proof that it was bad by that law as to satisfy us that he does not
own the land. To begin with, the older decrees and laws cited by the counsel
for the plaintiff in error seem to indicate pretty clearly that the natives were
recognized as owning some lands, irrespective of any royal grant. In other
words, Spain did not assume to convert all the native in-
_______________
139
Id.at 940.
140
Id.at 941.
203
VOL. 347, DECEMBER 6, 2000 203
Cruz vs.Secretaryof Environmentand Natural Resources
habitants of the Philippines into trespassers or even into tenants at will. For
instance, Book 4, title 12, Law 14 of the Recopilacion de Leyes de las
Indias, cited for a contrary conclusion in Valenton v. Murciano, 3 Philippine
537, while it commands viceroys and others, when it seems proper, to call for
the exhibition of grants, directs them to confirm those who hold by good
grants or justa prescripcion. It is true that it begins by the characteristic
assertion of feudal overlordship and the origin of all titles in the King or his
predecessors. That was theory and discourse. The fact was that titles were
admitted to exist that owed nothing to the powers of Spain beyond this
recognition in their books” (Emphasis supplied).141
The court further stated that the Spanish “adjustment” proceedings never
held sway over unconquered territories. The wording of the Spanish laws
were not framed in a manner as to convey to the natives that failure to
register what to them has always been their own would mean loss of such
land. The registration requirement was “not to confer title, but simply to
establish it”; it was “not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every
word of it.”
By recognizing this kind of title, the court clearly repudiated the doctrine
of Valenton. It was frank enough, however, to admit the possibility that the
applicant might have been deprived of his land under Spanish law because
of the inherent ambiguity of the decrees and concomitantly, the various
interpretations which may be given them. But precisely because of the
ambiguity and of the strong “due process mandate” of the Constitution, the
court validated this kind of title.142 This title was sufficient, even without
government administrative action, and entitled the holder to a Torrens
certificate. Justice Holmes explained:
“It will be perceived that the rights of the applicant under the Spanish law
present a problem not without difficulties for courts of a legal tradition. We
have deemed it proper on that account to notice the possible
_______________
141
Id.at 941-942.
142
Aranal-Sereno and Libarios, The Interface Between Kalinga Land Law,
supra at 428—This article was one of those circulated among the
Constitutional Commissioners in the formulation of Sec. 5, Article XII of the
1987 Constitution (4 Record of the Constitutional Commission 33).
204
204 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
effect of the change of sovereignty and the act of Congress establishing the
fundamental principles now to be observed. Upon a consideration of the
whole case we are of the opinion that law and justice require that the
applicant should be granted what he seeks, and should not be deprived of
what, by the practice and belief of those among whom he lived, was his
property, through a refined interpretation of an almost forgotten law of
Spain.”143
Thus, the court ruled in favor of Cariño and ordered the registrationof
the148hectares inBaguio Municipality in hisname.144
Examining Cariño closer, the U.S. Supreme Court did not categorically
refer to the title it upheld as “native title.” It simply said:
“The Province of Benguet was inhabited by a tribe that the Solicitor-General,
in his argument, characterized as a savage tribe that never was brought
under the civil or military government of the Spanish Crown. It seems
probable, if not certain, that the Spanish officials would not have granted to
anyone in that province the registration to which formerly the plaintiff was
entitled by the Spanish Laws, and which would have made his title beyond
question good. Whatever may have been the technical position of Spain it
does not follow that, in the view of the United States, he had lost all rights
and was a mere trespasser when the present government seized his land.
The argument to that effect seems to amount to a denial of native titles
through an important part of the Island of Luzon, at least, for the want of
ceremonies which the Spaniards would not have permitted and had not the
power to enforce.”145
This is the only instance when Justice Holmes used the term “native title” in
the entire length of the Cariñodecision. It is observed that the widespread use
of the term “native title” may be traced to Professor Owen James Lynch, Jr.,
a Visiting Professor at
______________
143
Id.at 944.
144
Certificate of Title No. 2 covering the 148 hectares of Baguio
Municipality was issued not in the name of Cariño who died on June 6, 1908,
but to his lawyers John Hausserman and Charles Cohn and his attorney-in-
fact Metcalf Clarke. Hausserman, Cohn and Clarke sold the land to the U.S.
Government in a Deed of Quitclaim—Richel B. Langit, Igorot Descendants
Claim Rights to Camp John Hay, Manila Times, p. 1, Jan. 12, 1998.
145
Id.at 939.
205
VOL. 347, DECEMBER 6, 2000 205
Cruz vs.Secretaryof Environmentand Natural Resources
the University of the Philippines College of Law from the Yale University Law
School. In 1982, Prof. Lynch published an article in the Philippine Law
Journal entitled Native Title, Private Right and Tribal Land Law. 146 This article
was made after Professor Lynch visited over thirty tribal communities
throughout the country and studied the origin and development of Philippine
land laws.147 He discussed Cariño extensively and used the term “native title”
to refer to Cariño’s title as discussed and upheld by the U.S. Supreme Court
in said case.
1. (b)Indian Title
In a footnote in the same article, Professor Lynch stated that the concept of
“native title” as defined by Justice Holmes in Cariño “is conceptually similar to
“aboriginal title” of the American Indians.148 This is not surprising, according
to Prof. Lynch, considering that during the American regime, government
policy towards ICCs/IPs was consistently made in reference to native
Americans.149 This was clearly demonstrated in the case of Rubi v. Provincial
Board of Mindoro.150
In Rubi, the Provincial Board of Mindoro adopted a Resolution authorizing
the provincial governor to remove the Mangyans from
________________
146
57 P.L.J. 268, 293-296 [1982].
147
Prom 1987 to 1988, Prof. Lynch allowed the P.L.J. to publish parts of
his doctoral dissertation at the Yale Law School entitled “Invisible Peoples: A
History of Philippine Land Law.” Please see The Legal Bases of Philippine
Colonial Sovereignty: An Inquiry, 62 P.L.J. 279 [1987]; Land Rights, Land
Laws and Land Usurpation: The Spanish Era (15681898),63 P.L.J. 82
[1988]; The Colonial Dichotomy: Attraction and Disenfranchisement, 63 P.L.J.
112; Invisible Peoples and a Hidden Agenda: The Origins of Contemporary
Philippine Land Laws (1900-1913),63 P.L.J. 249.
148
“Native title” is a common law recognition of pre-existing aboriginal
land interests in Australia—Maureen Tehan, Customary Title, Heritage
Protection, and Property Rights in Australia: Emerging Patterns of Land Use
in the Post-Mabo Era, 7 Pacific Rim Law & Policy Journal, No. 3, p. 765
[June 1998].
149
Lynch,Native Titles, supra, Note 164, p. 293.
150
39 Phil. 660 [1919].
206
206 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
their domains and place them in a permanent reservation in Sitio Tigbao,
Lake Naujan. Any Mangyan who refused to comply was to be imprisoned.
Rubi and some Mangyans, including one who was imprisoned for trying to
escape from the reservation, filed for habeas corpus claiming deprivation of
liberty under the Board Resolution. This Court denied the petition on the
ground of police power. It upheld government policy promoting the idea that a
permanent settlement was the only successful method for educating the
Mangyans, introducing civilized customs, improving their health and morals,
and protecting the public forests in which they roamed. 151 Speaking
throughJustice Malcolm, the court said:
“Reference was made in the President’s instructions to the Commission to
the policy adopted by the United States for the Indian Tribes. The methods
followed by the Government of the Philippine Islands in its dealings with the
so-called non-Christian people is said, on argument, to be practically
identical with that followed by the United States Government in its dealings
with the Indian tribes. Valuable lessons, it is insisted, can be derived
byaninvestigation of the American-Indian policy. From the beginning of the
United States, and even before, the Indians have been treated as “in a state
of pupilage.” The recognized relation between the Government of the United
States and the Indians may be described as that of guardian and ward. It is
for the Congress to determine when and how the guardianship shall be
terminated. The Indians are alwayssubject to theplenary authority ofthe
United States.152
x x x.
As to the second point, the facts in the Standing Bear case and the Rubi
case are not exactly identical. But even admitting similarity of facts, yet it is
known to all that Indian reservations do exist in the United States, that
Indians have been taken from different parts of the country and placed on
these reservations, without any previous consultation as to their own wishes,
and that, when once so located, they have been made to remain on the
reservation for their own good and for the general good of the country. If any
lesson can be drawn from the Indian policy of the United States, it is that the
determination of this policy is for the legislative and executive branches of the
government and that when once so decided upon, the courts should not
interfere to upset a carefully planned
_______________
151
Id.at 712-713.
152
Id.at 694.
207
VOL. 347, DECEMBER 6, 2000 207
Cruz vs.Secretaryof Environmentand Natural Resources
governmental system. Perhaps, just as many forceful reasons exist for the
segregation of the Manguianes in Mindoro as existed for the segregation of
the different Indiantribes in the United States.”153
Rubi applied the concept of Indian land grants or reservations in the
Philippines. An Indian reservation is a part of the public domain set apart by
proper authority for the use and occupation of a tribe or tribes of Indians. 154 It
may be set apart by an act of Congress, by treaty, or by executive order, but
it cannot be established by custom and prescription. 155
Indian title to land, however, is not limited to land grants or reservations. It
also covers the “aboriginal right of possession or occupancy.”156 The
aboriginal right of possession depends on the actual occupancy of the lands
in question by the tribe or nation as their ancestral home, in the sense that
such lands constitute definable territory occupied exclusively by the particular
tribe or nation.157 It
________________
153
Id.at 700.
 154
42 C.J.S., Indians,Sec. 29 [1944 ed.].
155
There are 3 kinds of Indian reservations: (a) those created by treaties
prior to 1871; (b) those created by acts of Congress since 1871; and (c)
those made by Executive Orders where the President has set apart public
lands for the use of the Indians in order to keep them within a certain territory
—42 C.J.S., Indians, Sec. 29 citing Sioux Tribe of Indians v. U.S., 94 Ct. Cl.
150, 170, certiorari granted 62 S. Ct. 631, 315 U. S. 790, 86 L. Ed. 1194,
affirmed 62 S. Ct. 1095, 316 U.S. 317, 86 L.Ed. 1501. It is observed that the
first two kinds may include lands possessed by aboriginal title. The last kind
covers Indian reservations proper. Until 1871, Indian tribes were recognized
by the United States as possessing the attributes of nations to the extent that
treaties were made with them. In that year, however, Congress, by statute,
declared its intention thereafter to make the Indian tribes amenable directly to
the power and authority of the United States by the immediate exercise of its
legislative power over them, instead of by treaty. Since then, Indian affairs
have been regulated by acts of Congress and by contracts with the Indian
tribes practically amounting to treaties—41 Am Jur 2d, Indians, Sec. 55 [1995
ed.].
156
42 C.J.S. Indians,Sec. 28 [1944 ed.].
157
Ibid; see also U.S. v. Santa Fe Pac. R. Co., Ariz., 62 S. Ct. 248, 314
U.S. 339, 86 L. Ed. 260 [1941].
208
208 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
is a right which exists apart from any treaty, statute, or other governmental
action, although in numerous instances treaties have been negotiated with
Indian tribes, recognizing their aboriginal possession and delimiting their
occupancy rights or settling and adjusting theirboundaries. 158
American jurisprudence recognizes the Indians’ or native Americans’
rights to land they have held and occupied before the “discovery” of the
Americas by the Europeans. The earliest definitive statement by the U.S.
Supreme Court on the nature of aboriginal title was made in 1823 in Johnson
& Graham’s Lessee v. M'Intosh.159
In Johnson, the plaintiffs claimed the land in question under two (2) grants
made by the chiefs of two (2) Indian tribes. The U.S. Supreme Court refused
to recognize this conveyance, the plaintiffs being private persons. The only
conveyance that was recognized was that made by the Indians to the
government of the European discoverer. Speaking for the court, Chief Justice
Marshall pointed out that the potentates of the old world believed that they
had made ample compensation to the inhabitants of the new world by
bestowing civilization and Christianity upon them; but in addition, said the
court, they found it necessary, in order to avoid conflicting settlements and
consequent war, to establish the principle that discovery gives title to the
government by whose subjects, or by whose authority, the discovery was
made, against all other European governments, which title might be
consummated by possession.160 The exclusion of all other Europeans gave to
the nation making the discovery the sole right of acquiring the soil from the
natives and establishing settlements upon it. As regards the natives, the court
further stated that:
“Those relations which were to exist between the discoverer and the natives
were to be regulated by themselves. The rights thus acquired being
exclusive, no otherpowercould interpose between them.
In the establishment of these relations, the rights of the original
inhabitants were, in no instance, entirely disregarded; but were necessarily,
________________
158
Ibid.
159
8 Wheat 543, 5 L. Ed. 681 [1823].
160
Id.at 680.
209
VOL. 347, DECEMBER 6, 2000 209
Cruz vs.Secretaryof Environmentand Natural Resources
to a considerable extent, impaired. They were admitted to be the rightful
occupants of the soil, with a legal as well as just claim to retain possession of
it, and to use it according to their own discretion; but their rights to complete
sovereignty, as independent nations, were necessarily diminished, and their
power to dispose of the soil at their own will, to whomsoever they pleased,
was denied by the fundamental principle that discovery gave exclusive titleto
those who made it.
While the different nations of Europe respected the right of the natives as
occupants, they asserted the ultimate dominion to be in themselves; and
claimed and exercised, as a consequence of this ultimate dominion, a power
to grant the soil, while yet in possession of the natives. These grants have
been understood by all to convey a title to the grantees, subject only to the
Indian right of occupancy.”161
Thus, the discoverer of new territory was deemed to have obtained
the exclusive right to acquire Indian land and extinguish Indian titles. Only to
the discoverer—whether to England, France, Spain or Holland—did this right
belong and not to any other nation or private person. The mere acquisition of
the right nonetheless did not extinguish Indian claims to land. Rather, until
the discoverer, by purchase or conquest, exercised its right, the concerned
Indians were recognized as the “rightful occupants of the soil, with a legal as
well as just claim to retain possession of it.” Grants made by the discoverer to
her subjects of lands occupied by the Indians were held to convey a title to
the grantees, subject only to the Indian right of occupancy. Once the
discoverer purchased the land from the Indians or conquered them, it was
only then that the discoverer gained an absolute title unrestricted by Indian
rights.
The court concluded, in essence, that a grant of Indian lands by Indians
could not convey a title paramount to the title of the United States itself
tootherparties, saying:

It has never been contended that the Indian title amounted to nothing. Their
right of possession has never been questioned. The claim of government
extends to the complete ultimate title, charged with this right of possession,
and to the exclusive power of acquiring that right.”162
_______________
161
Id.at 689.
162
Id. at 696; see also 41 ALR Fed 425, Annotation: Proof and
Extinguishment of Aboriginal Title to Indian Lands, Sec. 2 [a] [1979].
210
210 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
It has been said that the history of America, from its discovery to the present
day, proves the universal recognition of this principle. 163
The Johnson doctrine was a compromise. It protected Indian rights and
their native lands without having to invalidate conveyances made by the
government to many U.S. citizens.164
Johnson was reiterated in the case of Worcester v. Georgia.165 In this
case, the State of Georgia enacted a law requiring all white persons residing
within the Cherokee nation to obtain a license or permit from the Governor of
Georgia; and any violation of the law was deemed a high misdemeanor. The
plaintiffs, who were white missionaries, did not obtain said license and were
thus charged with a violation ofthe Act.
The U.S. Supreme Court declared the Act as unconstitutional for
interfering with the treaties established between the United States and the
Cherokee nation as well as the Acts of Congress regulating intercourse with
them. It characterized the relationship between the United States government
and the Indians as:
“The Indian nations were, from their situation, necessarily dependent on
some foreign potentate for the supply of their essential wants, and for their
protection from lawless and injurious intrusions into their country. That power
was naturally termed their protector. They had been arranged under the
protection of Great Britain; but the extinguishment of the British power in their
neighborhood, and the establishment of that of the United States in its place,
led naturally to the declaration, on the part of the Cherokees, that they were
under the protection of the United States, and of no other power. They
assumed the relation with the United States which had before subsisted with
Great Britain.
This relation was that of a nation claiming and receiving the protection of
one more powerful, not that of individuals abandoning their national
character,and submitting as subjects tothelaws of a master.” 166
_______________
163
Buttz v. Northern Pac. R. Co., Dak., 7 S. Ct. 100, 119 U.S. 55, 30 L.Ed.
330, 335 [1886].
164
Lynch, Native Title, supra, at 293-294; Cohen, Original Indian Title,32
Minn. L.R. 48-49 [1947].
165
6 Pet 515, 8 L.Ed. 483 [1832].
166
Id.at 499.
211
VOL. 347, DECEMBER 6, 2000 211
Cruz vs.Secretaryof Environmentand Natural Resources
It was the policy of the U.S. government to treat the Indians as nations with
distinct territorial boundaries and recognize their right of occupancy over all
the landswithin theirdomains. Thus:
“From the commencement of our government Congress has passed acts to
regulate trade and intercourse with the Indians; which treat them as nations,
respect their rights, and manifest a firm purpose to afford that protection
which treaties stipulate. All these acts, and especially that of 1802, which is
still in force, manifestly consider the several Indian nations as distinct political
communities, having territorial boundaries, within which their authority is
exclusive, and having a right to all the lands within those boundaries, which
is not only acknowledged, but guaranteed by the United States.
x x x.
“The Indian nations had always been considered as distinct, independent
political communities, retaining their original natural rights, as the undisputed
possessors of the soil from time immemorial, with the single exception of that
imposed by irresistible power, which excluded them from intercourse with any
other European potentate than the first discoverer of the coast of the
particular region claimed: and this was a restriction which those European
potentates imposed on themselves, as well as on the Indians. The very term
“nation,” so generally applied to them, means “a people distinct from others.”
x xx.167
The Cherokee nation, then, is a distinct community, occupying its own
territory, with boundaries accurately described, in which the laws of Georgia
can have no force, and which the citizens of Georgia have no right to enter
but with the assent of the Cherokees themselves or in conformity with
treaties and with the acts of Congress. The whole intercourse between the
United States and this nation is, by our Constitution and laws, vestedin the
government of the United States.”168
The discovery of the American continent gave title to the government of the
discoverer as against all other European governments. Designated as the
naked fee,169 this title was to be consum-
_______________
167
Id.at 500.
168
Id. at 501.
 169
The title of the government to Indian lands, the naked fee, is a
sovereign title, government having no landlord from whom it holds the fee—
Shoshone Tribe of Indians of Wind River Reservation in Wyoming v.
212
212 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
mated by possession and was subject to the Indian title of occupancy. The
discoverer acknowledged the Indians’ legal and just claim to retain
possession of the land, the Indians being the original inhabitants of the land.
The discoverer nonetheless asserted the exclusive right to acquire the
Indians’ land—either by purchase, “defensive” conquest, or cession—and in
so doing, extinguish the Indian title. Only the discoverer could extinguish
Indian title because it alone asserted ultimate dominion in itself. Thus, while
the different nations of Europe respected the rights of the natives as
occupants, they all asserted the ultimate dominion and title to be in
themselves.170
As early as the 19th century, it became accepted doctrine that although
fee title to the lands occupied by the Indians when the colonists arrived
became vested in the sovereign—first the discovering European nation and
later the original 13 States and the United States—a right of occupancy in
the Indian tribes was nevertheless recognized. The Federal Government
continued the policy of respecting the Indian right of occupancy, sometimes
called Indian title, which it accorded the protection of complete
ownership.171 But this aboriginal Indian interest simply constitutes
“permission” from the whites to occupy the land, and means mere
possession not specifically recognized as ownership by Congress. 172 It is
clear that this right of occupancy based upon aboriginal possession is not a
property right.173 It is vulnerable to affirmative action by the federal
government who, as sovereign, possessed exclusive power to
_______________
U.S., 85 Ct. Cl. 331, certiorari granted U.S. v. Shoshone Tribe of Indians,
58 S. Ct. 609, 303 U.S. 629, 82 L. Ed. 1090, affirmed 58 S. Ct. 794, 304 U.S.
111, 82 L.Ed. 1213, 1218-1219 [1938].
170
Buttz v. Northern Pac. R. Co., Dak., at 30 L. Ed. 330, 335; Beecher v.
Wetherby, Wis., 95 U.S. 517, 24 L. Ed. 440, 441 [1877]; see also 42
C.J.S.,Indians,Sec. 28 [1944 ed.].
171
Annotation, Proof and Extinguishment of Aboriginal Title to Indian
Lands, 41 ALR Fed 425, Sec. 2 [b] [1979]—hereinafter cited as Aboriginal
Title to IndianLands.
172
Ibid.; see also Tee Hit Ton Indians v. U.S., 348 U.S. 272, 99 L. Ed. 314,
320, 75 S. Ct. 313 [1955], reh den 348 U.S. 965, 99 L. Ed. 753, 75 S. Ct.
521.
173
Ibid.;Tee Hit Ton Indians v.U.S.,at 99 L. Ed. 320.
213
VOL. 347, DECEMBER 6, 2000 213
Cruz vs.Secretaryof Environmentand Natural Resources
extinguish the right of occupancy at will. 174Thus, aboriginal title is not the
same as legal title. Aboriginal title rests on actual, exclusive and continuous
use and occupancy for a long time.175It entails that land owned by Indian title
must be used within the tribe, subject to its laws and customs, and cannot be
sold to another sovereign government nor to any citizen. 176 Such title as
Indians have to possess and occupy land is in the tribe, and not in the
individual Indian; the right of individual Indians to share in the tribal property
usually depends upon tribal membership, the property of the tribe generally
beingheld in communal ownership.177
As a rule, Indian lands are not included in the term “public lands,” which is
ordinarily used to designate such lands as are subject to sale or other
disposal under general laws.178 Indian land which has been abandoned is
deemed to fall into the public do-
_______________
174
Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 39 L. Ed. 2d
73, 94 S Ct. 772 [1974]; U.S. v. Alcea Bank of Tillamooks, 329 U.S. 40, 91 L.
Ed. 29. 67 S. Ct. 167 [1946].
175
For compensation under the Indian Claims Commission Act, the proof
of aboriginal title rests on actual, exclusive and continuous use and
occupancy for a long time prior to the loss of the property. (The Indian Claims
Commission Act awards compensation to Indians whose aboriginal titles
were extinguished by the government through military conquest, creation of a
reservation, forced confinement of Indians and removal of Indians from
certain portions of the land and the designation of Indian land into forest
preserve, grazing district, etc.)—Aboriginal Title to Indian Lands,
supra, atSecs. 2[a], 3[a],pp. 431, 433, 437.
176
Aboriginal Title to Indian Lands, supra, at Sec. 2[b], p. 435.
177
41 Am Jr 2d, Indians,Sec. 59[1995 ed.].
178
An allotment of Indian land contains restrictions on alienation of the
land. These restrictions extend to a devise of the land by will—Missouri, K. &
T R. Co. v. U.S., 235 U.S. 37, 59 L. Ed. 116, 35 S. Ct. 6 [1914]; A railroad
land grant that falls within Indian land is null and void—Northern P. R. Co. v.
U.S., 227 U.S. 355, 57 L. Ed. 544, 33 S. Ct. 368 [1913]; Portions of Indian
land necessary for a railroad right of way were, by the terms of the treaty,
declared “public land,” implying that land beyond the right of way was private
—Kindred v. Union P.R. Co., 225 U.S. 582, 56 L. Ed. 1216, 32 S. Ct. 780
[1912]; see also 41 Am Jur 2d, Indians,Sec. 58 [1995 ed.].
214
214 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretaryof Environmentand Natural Resources
main.179 On the other hand, an Indian reservation is a part of the public
domain set apart for the use and occupation of a tribe of Indians. 180 Once set
apart by proper authority, the reservation ceases to be public land, and until
the Indian title is extinguished, no one but Congress can initiate any
preferential right on, or restrict the nation’s power to dispose of,them. 181
The American judiciary struggled for more than 200 years with the
ancestral land claims of indigenous Americans.182 And two things are
clear. First, aboriginal title is recognized. Second, indigenous property
systems are also recognized. From a legal point of view, certain benefits can
be drawn from a comparison of Philippine IPs to native Americans. 183 Despite
the similarities between native title and aboriginal title, however, there are at
present some misgivings on whether jurisprudence on American Indians may
be cited authoritatively in the Philippines. The U.S. recognizes the
possessory rights of the Indians over their land; title to the land, however, is
deemed to have passed to the U.S. as successor of the discoverer. The
aboriginal title of ownership is not specifically recognized as ownership by
action authorized by Congress.184 The protection of aboriginal title merely
guards against encroachment
_______________
179
Aboriginal Title to Indian Lands, supra, at Sec. 2[a], p. 433.
180
42 C.J.S. Indians,Sec. 29 [1944 ed.]
181
Ibid.
182
North American Indians have made much progress in establishing a
relationship with the national government and developing their own laws.
Some have their own government-recognized constitutions. Usually the
recognition of Indian tribes depends on whether the tribe has a reservation.
North American tribes have reached such an advanced stage that the main
issues today evolve around complex jurisdictional and litigation matters.
Tribes have acquired the status of sovereign nations within another nation,
possessing the right to change and grow—Jose Paulo Kastrup, The
Internationalization of Indigenous Rights from the Environmental and Human
Rights Perspective, Texas International Law Journal, vol. 32:97, 104[1997].
183
Lynch, Native Title, supra, at 293.
184
Dante Gatmaytan, Ancestral Domain Recognition in the Philippines:
Trends in Jurisprudence and Legislation, 5 Phil. Nat. Res. L.J. No. 1, pp. 43,
40 [Aug. 1992]; see also Tee Hit Ton Indians v. U.S., supra, at 320.
215
VOL. 347, DECEMBER 6, 2000 215
Cruz vs.Secretaryof Environmentand Natural Resources
by persons other than the Federal Government. 185 Although there are
criticisms against the refusal to recognize the native Americans’ ownership of
these lands,186 the power of the State to extinguish these titles has
remainedfirmly entrenched.187
Under the IPRA, the Philippine State is not barred form asserting
sovereignty over the ancestral domains and ancestral lands. 188 The IPRA,
however, is still in its infancy and any similarities between its application in
the Philippines vis-à-vis American Jurisprudence on aboriginal title will
depend on the peculiar facts of each case.
1. (c)Why theCariño doctrine is unique
In the Philippines, the concept of native title first upheld in Cariño and
enshrined in the IPRA grants ownership, albeit in limited form, of the land to
the ICCs/IPs. Native title presumes that the land is private and was never
public. Cariño is the only case that specifically and categorically recognizes
native title. The long line of cases citing Cariño did not touch on native title
and the private character of ancestral domains and lands. Cariño was cited
by the succeeding cases to support the concept of acquisitive prescription
under the Public Land Act which is a different matter
_______________
185
Ibid.
186
D. Gatmaytan, supra, citing Churchill, The Earth is Our Mother-
Struggles for American Indian Land and Liberation in the Contemporary
United States, The State of Native America: Genocide, Colonization and
Resistance 139 (M. Jaimes 1992); and Indian Law Resource Center, United
States Denial of Indian Property Rights: A Study in Lawless Power and
Racial Discrimination, Rethinking Indian Law 15 (National Lawyers Guild,
Committee on Native American Struggles 1982).
187
Id., Note 28, stating that some earlier decisions of the U.S. Supreme
Court have held that Congress is subject to the strictures of the Constitution
in dealing with Indians. When Indian property is taken for non-Indian use, the
U.S. government is liable for payment of compensation, and an
uncompensated taking may be enjoined. F. Cohen, Handbook of Federal
Indian Law 217 [1982], citing Shoshone Tribe v. U.S.299 U.S.
476 [1937]; Choate v. Trapp, 224 U.S. 665 [1912]; and Lane v. Pueblo of
Santa Rosa, 249 U.S. 110 [1919].
188
See Discussion,infra,Part IV (c) (2).
216
216 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
altogether. Under the Public Land Act, land sought to be registered must
be public agricultural land. When the conditions specified in Section 48 [b] of
the Public Land Act are complied with, the possessor of the land is deemed
to have acquired, by operation of law, a right to a grant of the land. 189 The
land ceases to be part of the public domain, 190ipso jure,191 and is converted to
private property by the mere lapseor completionof theprescribed
statutoryperiod.
It was only in the case of Oh Cho v. Director of Lands 192that the court
declared that the rule that all lands that were not acquired from the
government, either by purchase or grant, belong to the public domain has an
exception. This exception would be any land that should have been in the
possession of an occupant and of his predecessors-in-interest since time
immemorial. It is this kind of possession that would justify the presumption
that the land had never been part of the public domain or that it had been
private property even before the Spanish conquest. 193 Oh Cho,however, was
decided under the provisions of the Public Land Act and Cariño was cited to
support the applicant’s claim of acquisitive prescription under the said Act.
All these years, Cariño had been quoted out of context simply to justify
long, continuous, open and adverse possession in the concept of owner of
public agricultural land. It is this long, continuous, open and adverse
possession in the concept of owner of thirty years both for ordinary
citizens194 and members of the national cultural minorities195 that converts the
land from public into private and entitles the registrant to a Torrens certificate
of title.
_______________
189
Susi v. Razon, 48 Phil. 424 [1925]; Herico v. Dar, 95 SCRA 437[1980].
190
Ibid.
191
Director of Lands v. Intermediate Appellate Court, 146 SCRA
509[1986]; Director of Lands v. Buyco, 216 SCRA 78 [1992]; Republic v.
Court of Appeals and 235 SCRA 567 [1994].
192
75 Phil. 890 [1946].
193
Id.at 892.
194
Sec. 48 [b], CA 141.
195
Sec. 48 [c], CA. 141, as amended. This provision was added in 1964
by R.A. 3872.
217
VOL. 347, DECEMBER 6, 2000 217
Cruz vs.Secretaryof Environmentand Natural Resources
1. (3)The Option of Securing a Torrens Title to the Ancestral Land
Indicates that the Land is Private.
The private character of ancestral lands and domains as laid down in the
IPRA is further strengthened by the option given to individual ICCs/IPs over
their individually-owned ancestral lands. For purposes of registration under
the Public Land Act and the Land Registration Act, the IPRA expressly
converts ancestral land into public agricultural land which may be disposed
of by the State. The necessary implication is that ancestral land is private. It,
however, has to be first converted to public agricultural land simply for
registration purposes. To wit:
“Sec. 12. Option to Secure Certificate of Title Under Commonwealth Act 141,
as amended, or the Land Registration Act 496.—Individual members of
cultural communities, with respect to their individually-owned ancestral lands
who, by themselves or through their predecessors-in-interest, have been in
continuous possession and occupation of the same in the concept of owner
since time immemorial or for a period of not less than thirty (30) years
immediately preceding the approval of this Act and uncontested by the
members of the same ICCs/IPs shall have the option to secure title to their
ancestral lands under the provisions of CommonwealthAct 141, as
amended,or theLand Registration Act 496.
For this purpose, said individually-owned ancestral lands, which are
agricultural in character and actually used for agricultural, residential,
pasture, and tree farming purposes, including those with a slope of eighteen
percent (18%) or more, are hereby classified as alienable and disposable
agriculturallands.
The option granted under this section shall be exercised within twenty
(20)years from the approval of this Act.”196
ICCs/IPs are given the option to secure a Torrens certificate of title over their
individually-owned ancestral lands. This option is limited to
ancestral lands only, not domains, and such lands must be individually,not
communally, owned.
Ancestral lands that are owned by individual members of ICCs/IPs who,
by themselves or through their predecessors-in-interest, have been in
continuous possession and occupation of the
_______________
196
Section 12, IPRA.
218
218 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
same in the concept of owner since time immemorial 197 or for a period of not
less than 30 years, which claims are uncontested by the members of the
same ICCs/IPs, may be registered under CA. 141, otherwise known as the
Public Land Act, or Act 496, the Land Registration Act. For purposes of
registration, the individuallyowned ancestral lands are classified as alienable
and disposable agricultural lands of the public domain, provided, they are
agricultural in character and are actually used for agricultural, residential,
pasture and tree farming purposes. These lands shall be classified as public
agricultural lands regardless of whether they have a slopeof 18% or more.
The classification of ancestral land as public agricultural land is in
compliance with the requirements of the Public Land Act and the Land
Registration Act. CA. 141, the Public Land Act, deals specifically with lands of
the public domain.198 Its provisions apply to those lands “declared open to
disposition or concession” xxx “which have not been reserved for public or
quasi-public purposes, nor appropriated by the Government, nor in any
manner become private property, nor those on which a private right
authorized and recognized by this Act or any other valid law x xx or which
having been reserved or appropriated, have ceased to be so.” 199 Act 496, the
Land Registration Act, allows registration only of private lands and public
agricultural lands. Since ancestral domains and lands are private, if the
ICC/IP wants to avail of the benefits of CA. 141 and Act 496, the IPRA itself
converts his ancestral land, regardless of whether the land has a slope of
eighteen per cent (18%) or over, 200 fromprivate to publicagricultural land
forproperdisposition.
_______________
197
“Time immemorial” refers “to a period of time when as far back as
memory can go, certain ICCs/IPs are known to have occupied, possessed in
the concept of owner, and utilized a defined territory devolved to them, by
operation of customary law or inherited from their ancestors, in accordance
with their customs and traditions.” (Sec. 3 [p], IPRA).
198
Section 2, CA. 141.
199
Section 8, CA. 141.
200
The classification of ancestral lands 18% in slope or over as alienable
in the IPRA is an exception to Section 15, P.D. 705, the Revised Forestry
Code.
219
VOL. 347, DECEMBER 6, 2000 219
Cruz vs.Secretaryof Environmentand Natural Resources
The option to register land under the Public Land Act and the Land
Registration Act has nonetheless a limited period. This option must be
exercised within twenty (20) years from October 29, 1997, the dateof
approvalof theIPRA.
Thus, ancestral lands and ancestral domains are not part of the lands of
the public domain. They are private and belong to the ICCs/IPs. Section 3 of
Article XII on National Economy and Patrimony of the 1987 Constitution
classifies lands of the public domain into four categories: (a) agricultural, (b)
forest or timber, (c) mineral lands, and (d) national parks. Section 5 of the
same Article XII mentions ancestral lands and ancestral domains but it does
not classify them under any of the said four categories. To classify them as
public lands under any one of the four classes will render the entire IPRA law
a nullity. The spirit of the IPRA lies in the distinct concept of ancestral
domains and ancestral lands. The IPRA addresses the major problem of the
ICCs/IPs which is loss of land. Land and space are of vital concern in terms
of sheer survival of theICCs/IPs.201
The 1987 Constitution mandates the State to “protect the rights of
indigenous cultural communities to their ancestral lands” and that “Congress
provide for the applicability of customary laws x x x in determining the
ownership and extent of ancestral domain.”202 It is the recognition of the
ICCs/IPs distinct rights of ownership over their ancestral domains and lands
that breathes life into this constitutional mandate.
Registration under the Public Land Act and Land Registration Act recognizes
the concept of ownership under the civil law. This ownership is based on
adverse possession for a specified period, and harkens to Section 44 of the
Public Land Act on administrative
_______________
201
Charles MacDonald, Indigenous Peoples of the Philippines: Between
Segregation and Integration, Indigenous Peoples of Asia, supra, at pp. 345,
350.
202
Section 5, ArticleXII, 1987 Constitution.
220
220 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
legalization (free patent) of imperfect or incomplete titles and Section 48 (b)
and (c) of the same Act on the judicial confirmation of imperfector incomplete
titles. Thus:
“Sec. 44. Any natural-born citizen of the Philippines who is not the owner of
more than twenty-four hectares and who since July fourth, 1926 or prior
thereto, has continuously occupied and cultivated, either by himself or
through his predecessors-in-interest, a tract or tracts of agricultural public
lands subject to disposition, or who shall have paid the real estate tax
thereon while the same has not been occupied by any person shall be
entitled, under the provisions of this chapter, to have a free patent issued to
him for such tract or tracts of such land not to exceed twenty-four hectares.
A member of the national cultural minorities who has continuously
occupied and cultivated, either by himself or through his predecessors-in-
interest, a tract or tracts of land, whether disposable or not since July 4,
1955, shall be entitled to the right granted in the preceding paragraph of this
section: Provided, That at the time he files his free patent application he is
not the owner of any real property secured or disposable under the provision
of the Public Land Law.203
x x x.
“Sec. 48. The following described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply to
the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of titletherefor,
under theLand Registration Act,to wit:
1. (a)[perfectionofSpanish titles] x x x.
2. (b)Those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, for at
least thirty years immediately preceding the filing of the application
for confirmation of title except when prevented by war or force
 majeure. These shall be conclusively presumed to have performed apply only to alienable and disposable lands of the public domain—Please
all the conditions essential to a Government grant and shall be seeRepublic v. CA and Paran, 201 SCRA 1, 10-11 [1991].
205
entitled to a certificate of title under the provisions of this Chapter. Jus utendi, jus fruendi.
206
Jus abutendi.
207
_______________ Jus disponendi.
208
Jus vindicandi. Please see Tolentino, Civil Code, vol. II, pp. 45-46
203
Words in italics were amendments introduced by R.A. 3872 in 1964. [1992]; see also Tolentino, vol. I, pp. 12-14.
221 222
VOL. 347, DECEMBER 6, 2000 221 222 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources Cruz vs.Secretaryof Environmentand Natural Resources

1. (c)Members of the national cultural minorities who by themselves or 1. 1.The indigenous Conceptof Ownershipand Customary Law.
through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of Ownership of ancestral domains by native title does not entitle the ICC/IP to
lands of the public domain suitable to agriculture, whether a torrens title but to a Certificate of Ancestral Domain Title (CADT). The
disposable or not, under a bona fide claim of ownership for at least CADT formally recognizes the indigenous concept of ownership of the
30 years shall be entitled to the rights granted in sub-section (b) ICCs/IPs over their ancestral domain. Thus:
hereof.”204 “Sec. 5. Indigenous concept of ownership:—Indigenous concept of ownership
sustains the view that ancestral domains and all resources found therein
shall serve as the material bases of their cultural integrity. The indigenous
Registration under the foregoing provisions presumes that the land was
concept of ownership generally holds that ancestral domains are the
originally public agricultural land but because of adverse possession since
ICCs/IPs private but community property which belongs to all generations
July 4, 1955 (free patent) or at least thirty years (judicial confirmation), the
and therefore cannot be sold, disposed or destroyed. It likewise covers
land has become private. Open, adverse, public and continuous possession
sustainable traditional resource rights.”
is sufficient, provided, the possessor makes proper application therefor. The
The right of ownership and possession of the ICCs/IPs to their ancestral
possession has to be confirmed judicially or administratively after which a
domains is held under the indigenous concept of ownership. This concept
Torrens title is issued.
maintains the view that ancestral domains are the ICCs/IPs private but
A Torrens title recognizes the owner whose name appears in the
community property. It is private simply because it is not part of the public
certificate as entitled to all the rights of ownership under the civil law. The
domain. But its private character ends there. The ancestral domain is owned
Civil Code of the Philippines defines ownership in Articles 427, 428 and 429.
in common by the ICCs/IPs and not by one particular person. The IPRA itself
This concept is based on Roman Law which the Spaniards introduced to the
provides that areas within the ancestral domains, whether delineated or not,
Philippines through the Civil Code of 1889. Ownership, under Roman Law,
are presumed to be communally held. 209 These communal rights, however,
may be exercised over things or rights. It primarily includes the right of the
are not exactly the same as co-ownership rights under the Civil Code. 210 Co-
owner to enjoy and dispose of the thing owned. And the right to enjoy and
ownership gives any co-owner the right to demand partition of the property
dispose of the thing includes the right to receive from the thing what it
held in common. The Civil Code expressly provides that “[n]o co-owner shall
produces,205 the right to consume the thing by its use, 206 the right to alienate,
be obliged to remain in the co-ownership.” Each co-owner may demand at
encumber, transform or even destroy the thing owned, 207and the right to
any time the partition of the thing in common, insofar as his share is
exclude from the possession of the thing owned by any other person to
concerned.211 To allow such a right over ancestral domains may be
whom the owner has not transmitted such thing.208
_______________
_______________
209
204 Sec. 55, IPRA provides: “Sec. 55. Communal rights.—Subject to
Words in italics were amendments introduced by R.A. 3872 on June
Section 56 hereof, areas within the ancestral domains, whether delineated or
18, 1964. On January 25, 1977, however, Sec. 48 [b] and 48 [c] were further
not, shall be presumed to be communally held: Provided, That communal
amended by P.D. 1073 stating that these provisions on cultural minorities
rights under this Act shall not be construed as co-ownership as provided in
Republic Act No. 386, otherwise knownas the New Civil Code “
 210
Ibid.
211
Article 494,Civil Code.
223
VOL. 347, DECEMBER 6, 2000 223
Cruz vs.Secretaryof Environmentand Natural Resources
destructive not only of customary law of the community but of the very
community itself.212
Communal rights over land are not the same as corporate rights over real
property, much less corporate condominium rights. A corporation can exist
only for a maximum of fifty (50) years subject to an extension of another fifty
years in any single instance.213 Every stockholder has the right to
disassociate himself from the corporation.214 Moreover, the corporation itself
may be dissolved voluntarily or involuntarily.215
Communal rights to the land are held not only by the present possessors
of the land but extends to all generations of the ICCs/IPs, past, present and
future, to the domain. This is the reason why the ancestral domain must be
kept within the ICCs/IPs themselves. The domain cannot be transferred, sold
or conveyed to other persons.It belongs to the ICCs/IPs as a community.
Ancestral lands are also held under the indigenous concept of
ownership. The lands are communal. These lands, however, may be
transferred subject to the following limitations: (a) only to the members of the
same ICCs/IPs; (b) in accord with customary laws and traditions; and (c)
subject to the right of redemption of the ICCs/IPs for a period of 15 years if
the land was transferred to a non-member of the ICCs/IPs.
Following the constitutional mandate that “customary law govern property
rights or relations in determining the ownership and extent of ancestral
domains,”216 the IPRA, by legislative fiat, introduces a new concept of
ownership. This is a concept that has long existed under customary law. 217
_______________
212
Antonio M. La Vina, Arguments for Communal Title, Part II, 2
Phil. Nat. Res. L. J. 23 [Dec. 1989].
213
Section 11, Corporation Code.
214
Sections 60-72, Corporation Code.
215
Section 117, Corporation Code. Please see also La Vina, Arguments
for Communal Title, Part II, supra, at 23.
216
Section 5, par. 2, Article XII, 1987 Constitution.
217
Customary law is recognized by the Local Government Code of 1991
in solving disputes among members of the indigenous communities, viz.:
224
224 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Custom, from which customary law is derived, is also recognized under the
Civil Code as a source of law. 218 Some articles of the Civil Code expressly
provide that custom should be applied in cases where no codal provision is
applicable.219 In other words, in the absence of any applicable provision in the
Civil Code, custom, when dulyproven, candefine rights and liabilities. 220
Customary law is a primary, not secondary, source of rights under the
IPRA and uniquely applies to ICCs/IPs. Its recognition does not depend on
the absence of a specific provision in the civil law. The indigenous concept of
ownership under customary law is specifically acknowledged and
recognized, and coexists with the civil law concept and the laws on land
titling andland registration.221
_______________
“Sec. 412 (c). Conciliation among members of indigenous cultural
communities.—The customs and traditions of indigenous cultural
communities shall be applied in settling disputes between members of
theculturalcommunities.”
218
Law writes custom into contract—Hongkong & Shanghai Bank v.
Peters, 16 Phil. 284 [1910].
The Civil Code provides:
“Art. 11. Customs which are contrary to law, public order or public policy
shall not becountenanced.”
“Art. 12 A custom must be proved as a fact, according to the rules of
evidence.”
219
Article 78 on marriages between Mohammedans or pagans who live in
the non-Christian provinces—this is now Art. 33 of the Family Code; Art. 118,
now Art. 74 of the Family Code on property relations between spouses; Art.
577 on the usufructuary of woodland; Art. 657 on easement of right of way for
passage of livestock; Arts. 678, 1315, 1376, 1522, 1564 and 1577.Please
seeAquino, Civil Code, vol. 1, p. 25.
220
Castle Bros. v. Gutierrez Hermanos, 11 Phil. 629 [1908]; In Re: Firm
Name of Ozaeta Romulo, 92 SCRA 1 [1979]; Yao Kee v. Sy-Gonzales, 167
SCRA 736 [1988]; Please see Aquino, Civil Code, vol. 1, p. 26 for a list of
other cases.
221
This situation is analogous to the Muslim Code or the Code of Muslim
Personal Laws (P.D. 1083) which took effect on February 4, 1977 despite the
effectivity of the Civil Code and the Family Code. P.D. 1083 governs persons,
family relations and succession among Muslims, the adjudication and
settlement of disputes, the organization of the Shari’a courts, etc.
225
VOL. 347, DECEMBER 6, 2000 225
Cruz vs.Secretaryof Environmentand Natural Resources
To be sure, the indigenous concept of ownership exists even without a paper
title. The CADT is merely a “formal recognition” of native title. This is clear
from Section11of theIPRA, to wit:
“Sec. 11. Recognition of Ancestral Domain Rights.—The rights of ICCs/IPs to
their ancestral domains by virtue of Native Title shall be recognized and
respected. Formal recognition, when solicited by ICCs/IPs concerned shall
be embodied in a Certificate of Ancestral Domain Title, which shall recognize
the title of the concerned ICCs/IPs over the territories identified and
delineated.”
The moral import of ancestral domain, native land or being native is
“belongingness” to the land, being people of the land—by sheer force of
having sprung from the land since time beyond recall, and the faithful nurture
of the land by the sweat of one’s brow. This is fidelity of usufructuary relation
to the land—the possession of stewardship through perduring, intimate
tillage, and the mutuality of blessings between man and land; from man, care
for land; fromthe land, sustenance for man.222
1. 1.The Rights of ICCs/IPs Over Their Ancestral Domains and Lands
The IPRA grants the ICCs/IPs several rights over their ancestral domains and
ancestral lands. Section 7 provides for the rights over ancestraldomains:
“Sec. 7. Rights to Ancestral Domains.—The rights of ownership and
possession of ICCs/IPs to their ancestral domains shall be recognized and
protected. Such rights include:
_______________
222
Mariflor P. Pagusara, The Kalinga Ili: Cultural-Ecological Reflections
on Indigenous Theora and Praxis of Man-Nature Relationship,Dakami Ya
Nan Dagami, p. 36, Papers and Proceedings of the 1st Cordillera Multi-
Sectoral Land Congress, 11-14 March 1983, Cordillera Consultative
Committee [1984].
226
226 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
1. a)Right of Ownership.—The right to claim ownership over lands,
bodies of water traditionally and actually occupied by ICCs/IPs,
sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains;
2. b)Right to Develop Lands and Natural Resources.—Subject to
Section 56 hereof, the right to develop, control and use lands and
territories traditionally occupied, owned, or used; to manage and
conserve natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the
Section 8 provides for the rights over ancestral lands:
profits from allocation and utilization of the natural resources found
“Sec. 8. Rights to Ancestral Lands.—The right of ownership and possession
therein; the right to negotiate the terms and conditions for the
of the ICCs/IPs to their ancestral lands shall he recognized and protected.
exploration of natural resources in the areas for the purpose of
ensuring ecological, environmental protection and the conservation
measures, pursuant to national and customary laws; the right to an
informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect
or impact upon the ancestral domains and to receive just and fair
compensation for any damages which they may sustain as a result
of the project; and the right to effective measures by the
government to prevent any interference with, alienation and
encroachment upon these rights;
3. c)Right to Stay in the Territories.—The right to stay in the territory
and not to be removed therefrom. No ICCs/IPs will be relocated
without their free and prior informed consent, nor through any
means other than eminent domain, x x x;
4. d)Right in Case of Displacement.—In case displacement occurs as a
result of natural catastrophes, the State shall endeavor to resettle
the displaced ICCs/IPs in suitable areas where they can have
temporary life support systems: x x x;
5. e)Right to Regulate the Entry of Migrants.—Right to regulate the
entry of migrant settlers and organizations into their domains;
6. f)Right to Safe and Clean Air and Water.—For this purpose, the
ICCs/IPs shall have access to integrated systems for the
management of their inland waters and air space;
7. g)Right to Claim Parts of Reservations.—The right to claim parts of
the ancestral domains which have been reserved for various
purposes, except those reserved and intended for common and
public welfare and service;
8. h)Right to Resolve Conflict.—Right to resolve land conflicts in
accordance with customary laws of the area where the land is
located, and only in default thereof shall the complaints be
submitted to amicable settlement and to the Courts of Justice
whenever necessary.”
227
VOL. 347, DECEMBER 6, 2000 227
Cruz vs. Secretary of Environment and Natural Resources
1. a)Right to transfer land/property.—Such right shall include the right to
transfer land or property rights to/among members of the same
 ICCs/IPs, subject to customary laws and traditions of the
community concerned.
2. b)Right to Redemption.—In cases where it is shown that the transfer
of land/property rights by virtue of any agreement or devise, to a
non-member of the concerned ICCs/IPs is tainted by the vitiated
consent of the ICCs/IPs, or is transferred for an unconscionable
consideration or price, the transferor ICC/IP shall have the right to
redeem the same within a period not exceeding fifteen (15) years
from the date of transfer.”
Section 7 (a) defines the ICCs/IPs right of ownership over their
ancestral domains which covers (a) lands, (b) bodies of water traditionally
and actually occupied by the ICCs/IPs, (c) sacred places, (d) traditional
hunting and fishing grounds, and (e) all improvements made by them at any
time within the domains. The right of ownership includes the following rights:
(a) the right to develop lands and natural resources; (b) the right to stay in the
territories; (c) the right to resettlement in case of displacement; (d) the right to
regulate the entry of migrants; (e) the right to safe and clean air and water; (f)
the right to claim parts of the ancestral domains as reservations; and (g) the
right to resolve conflict in accordance with customary laws.
Section 8 governs their rights to ancestral lands. Unlike ownership over
the ancestral domains, Section 8 gives the ICCs/IPs also the right to transfer
the land or property rights to members of the same ICCs/IPs or non-
members thereof. This is in keeping with the option given to ICCs/IPs to
secure a Torrens title over the ancestral lands,but notto domains.
1. 2.The Right of ICCs/IPs to Develop Lands and Natural Resources
Within the Ancestral Domains Does Not Deprive the State of
Ownership Over the Natural Resources and Control and
Supervision in their Development and Exploitation.
228
228 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The Regalian doctrine on the ownership, management and utilization of
natural resources is declared in Section 2, Article XII of the 1987
Constitution, viz.:
“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
coproduction, 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 maybe themeasure 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
enjoymentexclusivelyto 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 fishworkers 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 useof 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.” 223
_______________
223
Section 2, Article XII.
229
VOL. 347, DECEMBER 6, 2000 229
Cruz vs.Secretaryof Environmentand Natural Resources
All lands of the public domain and all natural resources—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. The Constitution provides that in the
exploration, development and utilization of these natural resources, the State
exercises full control and supervision, and may undertake the same in four
(4) modes:
1. 1.The State maydirectlyundertake such activities; or
2. 2.The State may enter into co-production, joint venture or
production-sharing agreements with Filipinocitizensor qualified
corporations;
3. 3.Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens;
 4. 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.
As owner of the natural resources, the State is accorded primary power and
responsibility in the exploration, development and utilization of these natural
resources. The State may directly undertake the exploitation and
development by itself, or, it may allow participation by the private sector
through coproduction,224 joint venture,225 or production-sharing
226
agreements. These agreements may be for a period of 25 years,
renewable for another 25 years. The
_______________
224
A “co-production agreement” is defined as one wherein the
government provides input to the mining operation other than the mineral
resource—Section 26 (b), R.A. 7942, the Philippine Mining Act of 1995.
225
A “joint venture agreement” is one where a joint-venture company is
organized by the government and the contractor with both parties having
equity shares, and the government entitled to a share in the gross output—
Section26 (c), R.A. 7942.
226
A mineral “production-sharing agreement” is one 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 provides the financing, technology, management and personnel
necessary for the implementation of the agreementr-Section 26 (a), R.A.
7942.
230
230 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
State, through Congress, may allow the small-scale utilization of natural
resources by Filipino citizens. For the large-scale exploration of these
resources, specifically minerals, petroleum and other mineral oils, the State,
through the President, may enter into technical and financial assistance
agreements with foreign-owned corporations.
Under the Philippine Mining Act of 1995, (R.A. 7942) and the People’s
Small-Scale Mining Act of 1991 (R.A. 7076) the three types of
agreements, i.e., coproduction, joint venture or production-sharing, may
apply to both large-scale227 and small-scale mining.228 “Small-scale mining”
refers to “mining activities which rely heavily on manual labor using simple
implements and methods and do not use explosivesor heavy mining
equipment.”229
Examining the IPRA, there is nothing in the law that grants to the
ICCs/IPs ownership over the natural resources within their ancestral
domains. The right of ICCs/IPs in their ancestral domains includes
ownership, but this “ownership” is expressly defined and limited in Section 7
(a)as:
“Sec. 7. (a) Right of ownership—The right to claim ownership over lands,
bodies of water traditionally and actually occupied by ICCs/IPs, sacred
places, traditional hunting and fishing grounds, and all improvements made
bythem at anytimewithin the domains”;
The ICCs/IPs are given the right to claim ownership over “lands, bodies of
water traditionally and actually occupied by ICCs/IPs, sacred places,
traditional hunting and fishing grounds, and all improvements made by them
at any time within the domains.” It will be noted that this enumeration does
not mention bodies of water not occupied by the ICCs/IPs, minerals, coal,
wildlife, flora
_______________
227
Section 26, R.A. 7942.
228
Section 3 [d], People’s Small-Scale Mining Act of 1991 (R.A. 7076)
provides:
“Sec. 3 [d] ‘Small-scale mining contract’ refers to coproduction, 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.”
229
Section 3 [b], R.A. 7076.
231
VOL. 347, DECEMBER 6, 2000 231
Cruz vs.Secretaryof Environmentand Natural Resources
and fauna in the traditional hunting grounds, fish in the traditional fishing
grounds, forests or timber in the sacred places, etc. and all other natural
resources found within the ancestral domains. Indeed, the right of ownership
under Section 7 (a) does not cover “waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna and all other natural resources” enumerated in
Section 2,Article XII of the 1987 Constitution asbelonging to the State.
The non-inclusion of ownership by the ICCs/IPs over the natural
resources in Section7(a) complies with theRegaliandoctrine.
1. (a)Section 1, Part II, Rule III of the Implementing Rules Goes
Beyond the Parameters of Sec. 7 (a) of the IPRA And is
Unconstitutional.
The Rules Implementing the IPRA230 in Section 1, Part II, Rule III reads:
“Section 1. Rights of Ownership.—ICCs/IPs have rights of ownership over
lands, waters, and natural resources and all improvements made by them at
any time within the ancestral domains/lands. These rights shall include, but
not limited to, the right over the fruits, the right to possess, the right to use,
right to consume, right to exclude and right to recover ownership, and the
rights or interests over land and natural resources. The right to recover shall
be particularly applied to lands lost through fraud or any form or vitiated
consent or transferred for an unconscionable price.”
Section 1 of the Implementing Rules gives the ICCs/IPs rights of
ownership over “lands, waters and natural resources.” The term “natural
resources” is not one of those expressly mentioned in Section 7 (a) of the
law. Our Constitution and jurisprudence clearly declare that the right to claim
ownership over land does not necessarily include the right to claim
ownership over the natural resources found on or under the land. 231 The
IPRA itself makes a
_______________
230
NCIP Administrative Order No. 1, Series of 1998.
231
In Republic v. Court of Appeals, 160 SCRA 228, 239 [1988], Cruz,
J., ponente,it was declared that if a person is the owner of a piece of
agricultural land on which minerals are discovered, his ownership of such
land does not give him the right to extract or utilize the said minerals
232
232 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
distinction between land and natural resources. Section 7 (a) speaks of the
right of ownership only over the land within the ancestral domain. It is
Sections 7 (b) and 57 of the law that speak of natural resources, and these
provisions, as shall be discussed later, do not give the ICCs/IPs the rightof
ownership over these resources.
The constitutionality of Section 1, Part II, Rule III of the Implementing Rules
was not specifically and categorically challenged by petitioners. Petitioners
actually assail the constitutionality of the Implementing Rules in
general.232Nevertheless, to avoid any confusion in the implementation of the
law, it is necessary to declare that the inclusion of “natural resources” in
Section 1, Part II, Rule III of the Implementing Rules goes beyond the
parameters of Section 7 (b) of the law and is contrary to Section 2, Article XII
of the 1987 Constitution.
1. (a)The Small-Scale Utilization of Natural Resources In Sec. 7 (b) of
the IPRA Is Allowed Under Paragraph 3, Section 2 of Article XII of
the Constitution.
Ownership over natural resources remain with the State and the IPRA in
Section 7 (b) merely grants the ICCs/IPs the right to manage them, viz.:
“Sec. 7 (b) Right to Develop Lands and Natural Resources.—Subject to
Section 56 hereof, right to develop, control and use lands and
territories traditionally occupied, owned, or used; to manage and conserve
natural resources within the territories and uphold the responsibilities for
future generations; to benefit and share the profits from allocation and
utilization of the natural resources found therein; the right to negotiate the
terms and conditions for the exploration of natural resources in the areas for
the purpose of ensuring ecological, environmental protection and the
conservation measures, pursuant to national and customary laws; the right to
an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or
impact upon the ancestral domains and to receive just and fair compensa-
without the permission of the State to which such minerals belong—also cited
in H. de Leon, Phil. Constitutional Law, Principles and Cases, vol. 2, pp. 800-
801 [1999].
_______________
232
See Ground I, Grounds to Issue Writ of Prohibition, Petition, p. 14.
233
VOL. 347, DECEMBER 6, 2000 233
Cruz vs.Secretaryof Environmentand Natural Resources
tion for any damages which they may sustain as a result of the project;
and the right to effective measures by the government to prevent any
interference with, alienation and encroachment upon these rights”;
The right to develop lands and natural resources under Section 7 (b) ofthe
IPRA enumerates the following rights:
1. a)the right to develop, control and use lands and
territoriestraditionally occupied;
2. b)the right to manage and conserve natural resources within the
territoriesand uphold the responsibilities for future generations;
3. c)the right to benefit and share the profits from the allocation and
utilization of thenatural resources found therein;
4. d)the right to negotiate the terms and conditions for the exploration
of natural resources for the purpose of ensuring ecological,
environmental protection and the conservation measures, pursuant
to national and customarylaws;
5. e)the right to an informed and intelligent participation in the
formulation and implementation of any project, government or
private, that will affect or impact upon the ancestral domains and to
receive just and fair compensation for any damages which they
may sustain as a result of the project;
6. f)the right to effective measures by the government to prevent any
interference with, alienation andencroachment upon these rights. 233
Ownership over the natural resources in the ancestral domains remains with
the State and the ICCs/IPs are merely granted the right to “manage and
conserve” them for future generations, “benefit and share” the profits from
their allocation and utilization, and “negotiate the terms and conditions for
their exploration” for the purpose of “ensuring ecological and environmental
protection and
_______________
233
Section 7 (b) is subject to Section 56 of the same law which provides:
“Sec. 56. Existing Property Rights Regimes.—Property rights within the
ancestral domains already existing and/or vested upon effectivity of this Act,
shallbe recognized and respected.”
The law took effect 15 days upon publication in the O.G. or in any 2
newspapers of general circulation (Sec. 84, IPRA). The IPRA was published
in the Chronicle and Malaya on Nov. 7, 1997.
234
234 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
conservation measures.” It must be noted that the right to negotiate the terms
and conditions over the natural resources covers only their exploration which
must be for the purpose of ensuring ecological and environmental protection
of, and conservation measures in the ancestral domain. It does not extend to
the exploitation and development ofnatural resources.
Simply stated, the ICCs/IPs’ rights over the natural resources take the
form of management or stewardship. For the ICCs/IPs may use these
resources and share in the profits of their utilization or negotiate the terms for
their exploration. At the same time, however, the ICCs/IPs must ensure that
the natural resources within their ancestral domains are conserved for future
generations and that the “utilization” of these resources must not harm the
ecology and environment pursuant tonationaland customary laws. 234
The limited rights of “management and use” in Section 7 (b) must be
taken to contemplate small-scale utilization of natural resources as
distinguished from large-scale. Small-scale utilization of natural resources is
expressly allowed in the third paragraph of Section 2, Article XII of the
Constitution “in recognition of the plight of forest dwellers, gold panners,
marginal fishermen and others similarly
_______________
234
Section 9 of the IPRA also gives the ICCs/IPs the ff. responsibilities
overtheir ancestral domains:
1. “a) Maintain Ecological Balance.—To preserve, restore, and maintain
a balanced ecology in the ancestral domain by protecting the flora
and fauna, watershed areas, and other reserves;
2. b)Restore Denuded Areas.—To actively initiate, undertake and
participate in the reforestation of denuded areas and other
development programs and projects subject tojust and reasonable
remuneration;
3. c)Observe Laws.—To observe and comply with the provisions of this
Act and therules and regulations for its
effectiveimplementation.”Section 58 of the same law also mandates
that ancestral domains or portions thereof, which are found to be
necessary for critical watersheds, mangroves, wildlife sanctuaries,
wilderness, protected areas, forest cover, or reforestation as
determined by appropriate agencies with the full participation of the
ICCs/IPs concerned shall be maintained, managed and developed
for such purposes. The ICCs/IPs concerned shall be given the
responsibility to maintain, develop, protect and conserve such
areas with thefull and effective assistance of government agencies.
235
VOL. 347, DECEMBER 6, 2000 235
Cruz vs.Secretaryof Environmentand Natural Resources
situated who exploit our natural resources for their daily sustenance and
survival”235 Section 7 (b) also expressly mandates the ICCs/IPs to manage
and conserve these resources and ensure environmental and ecological
protection within the domains, which duties, by their very nature, necessarily
reject utilization in a large-scale.
1. (c)The Large-Scale Utilization of Natural Resources In Section 57 of
the IPRA Is Allowed Under Paragraphs 1 and 4, Section 2, Article
XII of the1987 Constitution.
Section 57 of the IPRA provides:
“Sec. 57. Natural Resources within Ancestral Domains.—The ICCs/IPs shall
have priority rights in the harvesting, extraction, development or exploitation
of any natural resources within the ancestral domains. A non-member of the
ICCs/IPs concerned may be allowed to take part in the development and
utilization of the natural resources for a period of not exceeding twenty-five
(25) years renewable for not more than twenty-five (25) years: Provided, That
a formal and written agreement is entered into with the ICCs/IPs concerned
or that the community, pursuant to its own decision-making process, has
agreed to allow such operation: Provided finally, That the NCIP may exercise
visitorial powers and take appropriate action to safeguard the rights of the
ICCs/IPs under the same contract.”
Section 57 speaks of the “harvesting, extraction, development or
exploitation of natural resources within ancestral domains” and “gives the
ICCs/IPs ‘priority rights’ therein.” The terms “harvesting, extraction,
development or exploitation” of any natural resources within the ancestral
domains obviously refer to large-scale utilization. It is utilization not merely for
subsistence but for commercial or other extensive use that require
technology other than manual labor. 236 The law recognizes the probability of
requir-
_______________
235
Hector S. de Leon, Textbook on the New Philippine Constitution pp.
473-474 [1987] citing the 1986 UP Law Constitution Project, The National
Economy and Patrimony, p. 11.
236
Under the Small-Scale Mining Act of 1991, “small-scale mining” refers
to “mining activities which rely heavily on manual labor using
236
236 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
ing a non-member of the ICCs/IPs to participate in the development and
utilization of the natural resources and thereby allows such participation for a
period of not more than 25 years, renewable for another 25 years. This may
be done on condition that a formal written agreement be entered into by the
non-member and members of the ICCs/IPs.
Section 57 of the IPRA does not give the ICCs/IPs the right to “manage
and conserve” the natural resources. Instead, the law only grants the
ICCs/IPs “priority rights” in the development or exploitation thereof. Priority
means giving preference. Having priority rights over the natural resources
does not necessarily mean ownership rights. The grant of priority rights
implies that there is a superior entity that owns these resources and this
entity has the power to grant preferential rights over the resources to
whosoever itself chooses.
Section 57 is not a repudiation of the Regalian doctrine. Rather, it is an
affirmation of the said doctrine that all natural resources found within the
ancestral domains belong to the State. It incorporates by implication the
Regalian doctrine, hence, requires that the provision be read in the light of
Section 2, Article XII of the 1987 Constitution. Interpreting Section 2, Article
XII of the 1987 Constitution 237 in relation to Section 57 of IPRA, the State, as
owner of these natural resources, may directly undertake the development
and exploitation of the natural resources by itself, or in the alternative, it may
recognize the priority rights of the ICCs/IPs as owners of the land on which
the natural resources are found by entering into a co-production, joint
venture, or production-sharing agreement with them. The State may likewise
enter into any of said agreements with a non-member of the ICCs/IPs,
whether natural or juridical, or enter into agreements with foreign-owned
corporations involving either technical or financial assistance for the large-
scale exploration, development and utilization of minerals, petroleum, and
other mineral oils, or allow such non-member to participate in its agreement
with the ICCs/IPs. If the State decides to enter into an agreement with a non-
ICC/IP member, the National Commis-
_______________
simple implements and methods and do not use explosives or heavy
mining equipment”—Section 3 [b],R.A. 7076.
237
See infra.,pp. 77-79.
237
VOL. 347, DECEMBER 6, 2000 237
Cruz vs. Secretary of Environment and Natural Resources
sion on Indigenous Peoples (NCIP) shall ensure that the rights of the
ICCs/IPs under the agreement shall be protected. The agreement shall be for
a period of 25 years, renewable for another 25 years.
To reiterate, in the large-scale utilization of natural resources within the
ancestral domains, the State, as owner of these resources, has four (4)
options: (1) it may, of and by itself, directly undertake the development and
exploitation of the natural resources; or (2) it may recognize the priority rights
of the ICCs/IPs by entering into an agreement with them for such
development and exploitation; or (3) it may enter into an agreement with a
non-member of the ICCs/IPs, whether natural or juridical, local or foreign; or
(4) it may allow such non-member to participate in the agreement with the
ICCs/IPs.
The rights granted by the IPRA to the ICCs/IPs over the natural
resources in their ancestral domains merely gives the ICCs/IPs, as owners
and occupants of the land on which the resources are found, the right to the
small-scale utilization of these resources, and at the same time, a priority in
their large-scale development and exploitation. Section 57 does not mandate
the State to automatically give priority to the ICCs/IPs. The State has several
options and it is within its discretion to choose which option to
pursue.Moreover, there is nothing in the law that gives the ICCs/IPs the right
to solely undertake the large-scale development of the natural resources
within their domains. The ICCs/IPs must undertake such endeavour
always under State supervision or control. This indicates that the State does
not lose control and ownership over the resources even in their exploitation.
Sections 7 (b) and 57 of the law simply give due respect to the ICCs/IPs who,
as actual occupants of the land where the natural resources lie, have
traditionally utilized these resources for their subsistence and survival.
Neither is the State stripped of ownership and control of the natural
resources by the following provision:
“Section 59. Certification Precondition.—All departments and other
governmental agencies shall henceforth be strictly enjoined from issuing,
renewing or granting any concession, license or lease, or entering into any
production-sharing agreement, without prior certification from the NCIP that
the area affected does not overlap with any ancestral domain. Such
certification shall only be issued after a field-based investiga-
 238
238 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
tion is conducted by the Ancestral Domains Office of the area
concerned: Provided, That no certification shall be issued by the NCIP
without the free and prior informed and written consent of the ICCs/IPs
concerned: Provided, further, That no department, government agency or
government-owned or -controlled corporation may issue new concession,
license, lease, or production sharing agreement while there is a pending
application for a CADT: Provided, finally, That the ICCs/IPs shall have the
right to stop or suspend, in accordance with this Act, any project that has not
satisfied the requirement of this consultation process.”
Concessions, licenses, lease or production-sharing agreements for the
exploitation of natural resources shall not be issued, renewed or granted by
all departments and government agencies without prior certification from the
NCIP that the area subject of the agreement does not overlap with any
ancestral domain. The NCIP certification shall be issued only after a field-
based investigation shall have been conducted and the free and prior
informed written consent of the ICCs/IPs obtained. Non-compliance with the
consultation requirement gives the ICCs/IPs the right to stop or suspend any
project granted by any department or government agency.
As its subtitle suggests, this provision requires as a precondition for the
issuance of any concession, license or agreement over natural resources,
that a certification be issued by the NCIP that the area subject of the
agreement does not lie within any ancestral domain. The provision does not
vest the NCIP with power over the other agencies of the State as to
determine whether to grant or deny any concession or license or agreement.
It merely gives the NCIP the authority to ensure that the ICCs/IPs have been
informed of the agreement and that their consent thereto has been obtained.
Note that the certification applies to agreements over natural resources that
do not necessarily lie within the ancestral domains. For those that are found
within the said domains, Sections 7(b) and 57 of the IPRA apply.
V. THE IPRA IS A RECOGNITION OF OUR ACTIVE PARTICIPATION IN
THE INDIGENOUS INTERNATIONAL MOVEMENT.
The indigenous movement can be seen as the heir to a history of anti-
imperialism stretching back to prehistoric times. The move-
239
VOL. 347, DECEMBER 6, 2000 239
Cruz vs. Secretary of Environment and Natural Resources
ment received a massive impetus during the 1960’s from two sources. First,
the decolonization of Asia and Africa brought into the limelight the possibility
of peoples controlling their own destinies. Second, the right of self-
determination was enshrined in the UN Declaration on Human Rights. 238 The
rise of the civil rights movement and anti-racism brought to the attention of
North American Indians, Aborigines in Australia, and Maori in New Zealand
the possibility of fighting for fundamental rights and freedoms.
In 1974 and 1975, international indigenous organizations were
founded,239 and during the 1980’s, indigenous affairs were on the
international agenda. The people of the Philippine Cordillera were the first
Asians to take part in the international indigenous movement. It was the
Cordillera People’s Alliance that carried out successful campaigns against
the building of the Chico River Dam in 1981-82 and they have since become
one of the best-organized indigenousbodies in the world. 240
Presently, there is a growing concern for indigenous rights in the
international scene. This came as a result of the increased publicity focused
on the continuing disrespect for indigenous human rights and the destruction
of the indigenous peoples’ environment, together with the national
governments’ inability to deal with the situation. 241Indigenous rights came as
a result of both human rights and environmental protection, and have
become a partof today’spriorities for the internationalagenda. 242
_______________
238
Andrew Gray, The Indigenous Movement in Asia, Indigenous Peoples
of Asia, ed. By Barnes, Gray and Kingsbury, pub. By Ass’n, for Asian
Studies,at 35, 42 [1995].
239
E.g. International Indian TreatyCouncil, World Council of IPs.
240
Gray, The Indigenous Movement in Asia, supra, at 44, citing the
International Work Group for Indigenous Affairs,1988.
241
Jose Paulo Kastrup, The Internationalization of Indigenous Rights from
the Environmental and Human Rights Perspective, 32 Texas International
Law Journal 97, 102 [1997].
242
Benedict Kingsbury, “Indigenous Peoples” in International Law: A
Constructivist Approach to the Asian Controversy, The American Journal of
InternationalLaw, vol. 92:414, 429 [1998].
240
240 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
International institutions and bodies have realized the necessity of applying
policies, programs and specific rules concerning IPs in some nations. The
World Bank, for example, first adopted a policy on IPs as a result of the
dismal experience of projects in Latin America. 243 The World Bank now seeks
to apply its current policy on IPs to some of its projects in Asia. This policy
has provided an influential model for the projects of theAsianDevelopment
Bank.244
The 1987 Philippine Constitution formally recognizes the existence of
ICCs/IPs and declares as a State policy the promotion of their rights within
the framework of national unity and development. 245 The IPRA amalgamates
the Philippine category of ICCs with the international category of IPs, 246 and
is heavily influenced by both the International Labor Organization (ILO)
Convention 169 and the United Nations (UN) Draft Declaration on the Rights
of IndigenousPeoples.247
 ILO Convention No. 169 is entitled the “Convention Concerning
Indigenous and Tribal Peoples in Independent Countries” 248 and was adopted
on June 27, 1989. It is based on the Universal Declaration of Human Rights,
the International Covenant on Economic, Social and Cultural Rights, the
International Covenant on Civil and Political Rights, and many other
international instruments on the prevention of discrimination. 249 ILO
Convention No. 169 revised
_______________
243
The World Bank supported the Chico Dam project. Due to the
Kalingas’ opposition, the WB pulled out of the project but the conflict between
the Philippine government and the natives endured long after—Marcus
Colchester, Indigenous Peoples’ Rights and Sustainable Resource Use in
South and Southeast Asia, Indigenous Peoples of Asia, supra, pp. 59, 71-72.
244
Kingsbury, supra,at 417.
245
Section 22, Article II, 1987 Constitution.
246
Interpellation of Senator Flavier on S.B. No. 1728, Deliberation on
Second Reading, November 20, 1996, p. 20.
247
Guide to R.A. 8371, Coalition for IPs Rights and Ancestral Domains,
the International Labor Organization, and the ILO-Bilance-Asia Dep’t, p. 3
[1999].
248
Also referred to as the “Indigenous and Tribal Peoples Convention,
1989.”
249
SeeIntroduction to ILO Convention No. 169, par. 4.
241
VOL. 347, DECEMBER 6, 2000 241
Cruz vs.Secretaryof Environmentand Natural Resources
the “Convention Concerning the Protection and Integration of Indigenous and
Other Tribal and Semi-Tribal Populations in Independent Countries” (ILO No.
107) passed on June 26, 1957. Developments in international law made it
appropriate to adopt new international standards on indigenous peoples “with
a view to removing the assimilationist orientation of the earlier standards,”
and recognizing the aspirations of these peoples to exercise control over
theirown institutions,waysof life and economic development.”250
CONCLUSION
The struggle of the Filipinos throughout colonial history had been plagued by
ethnic and religious differences. These differences were carried over and
magnified by the Philippine government through the imposition of a national
legal order that is mostly foreign in origin or derivation. 251Largely unpopulist,
the present legal system has resulted in the alienation of a large sector of
society, specifically, the indigenous peoples. The histories and cultures of the
indigenes are relevant to the evolution of Philippine culture and are vital to
the understanding of contemporary problems. 252 It is through the IPRA that an
attempt was made by our legislators to understand Filipino society not in
terms of myths and biases but through common experiences in the course of
history. The Philippines became a democracy a centennial ago and the
decolonization process still continues. If the evolution of the Filipino people
into a democratic society is to truly proceed democratically, i.e., if the
Filipinos as a whole are to participate fully in the task of continuing
democratization,253 it is this Court’s duty to acknowledge the presence of
indigenous and customary laws in the country and affirm their co-existence
with the land laws in our national legal system.
_______________
250
Id., pars. 5 and 6.
251
Perfecto V. Fernandez, Towards a Definition of National Policy on
Recognition of Ethnic Law within the Philippine Legal Order, 55 P.L.J. 383,
385 [1980].
252
Samuel K Tan, A History of the Philippines, Manila Studies Association,
Inc. andthe Phil. National Historical Society,Inc., p. 6 [1997].
253
Fernandez, supra, at 385, 391.
242
242 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
With the foregoing disquisitions, I vote to uphold the constitutionality of
theIndigenous Peoples Rights Act of 1997.
SEPARATE OPINION
VITUG, J.:
An issue of grave national interest indeed deserves a proper place in any
forum and, when it shows itself in a given judicial controversy, the rules of
procedure, like locus standi, the propriety of the specific remedy invoked, or
the principle of hierarchy of courts, that may ordinarily be raised by party-
litigants, should not be so perceived as good and inevitable justifications for
advocating timidity, let alone isolationism,by theCourt.
A cardinal requirement, to which I agree, is that one who invokes the
Court’s adjudication must have a personal and substantial interest in the
dispute;1 indeed, the developing trend would require a logical nexus between
the status asserted and the claim sought to be adjudicated in order to ensure
that one is the proper and appropriate party to invoke judicial power. 2 The
rule requires a party to aptly show a personal stake in the outcome of the
case or an injury to himself that can be redressed by a favorable decision so
as to warrant his invocation of the Court’s jurisdiction and to render legally
feasible the exercise of the Court’s remedial powers in his behalf. If it were
otherwise, the exercise of that power can easily become too unwieldy by its
sheer magnitude and scope to a point that may, in no small measure,
adversely affect its intended essentiality, stability and consequentially.
Nevertheless, where a most compelling reason exists, such as when the
matter is of transcendental importance and paramount interest to the
nation,3 the Court must take the liberal approach that recognizes the legal
standing of nontraditional plaintiffs, such
_______________
1
People vs. Vera, 65 Phil. 56, 89; Macasiano vs. National Housing
Authority, 224 SCRA 236, 244 (1993).
2
Am Jur § 189, p. 591, S. v. D., 410 US 841, 35 L Ed 2d 536, 93 S Ct
1146.
3
Legaspi vs. Civil Service Commission, 150 SCRA 530, 540
(1987); Tanada vs. Tuvera, 136 SCRA 27, 36, 37 (1985).
243
VOL. 347, DECEMBER 6, 2000 243
Cruz vs.Secretaryof Environmentand Natural Resources
as citizens and taxpayers, to raise constitutional issues that affect them. 4 This
Court thus did so in a case 5 that involves the conservation of our forests for
ecological needs. Until an exact balance is struck, the Court must accept an
eclectic notion that can free itself from the bondage of legal nicety and hold
trenchant technicalities subordinate towhatmaybe considered to be
ofoverriding concern.
The petition seeks a declaration by the Court of unconstitutionally of
certain provisions of Republic Act No. 8371, a law that obviously is yet
incapable of exact equation in its significance to the nation and its people
now and in the generations yet to come. Republic Act No. 8371, otherwise
also known as the Indigenous Peoples Rights Act of 1997 CIPRA”), enacted
into law in 1997 and made effective on 22 November 1997, is apparently
intended to be a legislative response to the 1987 Constitution which
recognizes the rights of indigenous cultural communities “within the
framework of national unity and development”6and commands the
State, “subject to the provisions of this Constitution and national
development policies and programs,” to protect the rights of indigenous
cultural communities to their ancestral lands in order to ensure their
economic, social, and cultural well-being.7
Among the assailed provisions in IPRA is its Section 3(a) which defines
“ancestral domains” to embrace “all areas generally belonging to ICCs/IPs
comprising lands, inland waters, coastal areas, and natural resources”
including “ancestral lands, forests, pasture, residential, agricultural, and other
lands individually owned whether alienable and disposable or otherwise,”
over which indigenous cultural communities/indigenous peoples (“ICCs/IPs”)
could exercise virtual ownership and control.
IPRA effectively withdraws from the public domain the so-called ancestral
domains covering literally millions of hectares. The notion of community
property would comprehend not only matters of
_______________
4
Defensor Santiago, Miriam, Constitutional Law, First Edition, 1994, p.
11; see also Rev. Fr. Joaquin Bernas, S.J., on the 1987 Constitution of the
Republic of the Philippines, 1996 Ed.,pp. 336-337.
5
Oposa vs. Factoran, Jr., 224 SCRA 792 (1993).
6
Art. 11, Sec. 22.
7
Art. XII, Sec. 5.
244
244 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
proprietary interest but also some forms of self governance over the curved-
out territory. This concept is elaborated in Section 7 of the law which states
that the “rights of ownership and possession of ICCs/IPs to their ancestral
domains shall be recognized and protected,” subsumed under which would
encompass the right of ownership(paragraph a); the right to develop, control
and use lands and natural resources, including “the right to negotiate the
terms and conditions for the exploration of natural resources in the areas for
the purpose of ensuring ecological, environmental protection and the
conservation measures, pursuant to national and customary laws”; (par. b);
the right to stay in the territories (par. c); the right to return to their
abandoned lands in case of displacement (par. d); the right to regulate entry
of migrants (par. e); the right to claim parts of ancestral domains previously
reserved (par. g); and the right to resolve land conflicts in accordance
primarily with customary law (par. h).Concurrently, Section 57 states that
ICCs/IPs shall be given “priority rights in the harvesting, extraction,
development or exploitation of any natural resources within the ancestral
domains.” These provisions of IPRA, in their totality, are, in my view, beyond
the context of the fundamental law and virtually amount to an undue
delegation, if not an unacceptable abdication, of State authority over a
significant area of the country and its patrimony.
Article XII of the 1987 Constitution expresses that 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,” and, with the exception of
agricultural lands, “shall not be alienated.” It ordains that the “exploration,
development, and utilization of natural resources shall be under the full
controland supervisionof the State.”8
These provisions had roots in the 1935 Constitution which, along with
some other specific mandates in the 1935 Constitution, forming Article XII
under the title “Conservation and Utilization of Natural Resources,” were
derived largely from the report of the Committee on Nationalization and
Preservation of Lands and other
_______________
8
Sec. 2.
245
 VOL. 347, DECEMBER 6, 2000 245
Cruz vs.Secretaryof Environmentand Natural Resources
Natural Resources.9 According to the Committee report, among the principles
upon which these provisions were based, was “that the land, minerals,
forests and other natural resources constitute the exclusive heritage of the
Filipino Nation,” and should thereby “be preserved for those under the
sovereign authority of the Nation and for their posterity.” 10 The delegates to
the 1934 Constitutional Convention were of the unanimous view that the
“policy on natural resources, being fundamental to the nation’s survival
should not be left to the changing mood of the lawmakingbody.” 11
The 1987 Constitution, like the precursor provisions in the 1935 and 1973
Constitutions, thus expresses this regalian doctrine of the old, and
the domainial doctrine of the new, that all lands and natural resources belong
to the state other than those which it recognizes to be of private
ownership. Except for agricultural lands of the public domain which alone
may be alienated, forest or timber, and mineral lands, as well as all other
natural resources, of the country must remain with the state, the exploration,
development and utilization of which shall be subject to its full control and
supervision albeit allowing it to enter into coproduction, joint venture or
production-sharing agreements, or into agreements with foreign-owned
corporations involving technical or financial assistance for large-scale
exploration,development andutilization.12
The decision of the United States Supreme Court in Cariño vs. Insular
Government,13 holding that a parcel of land held since time immemorial by
individuals under a claim of private ownership is presumed never to have
been public land and cited to downgrade the application of the regalian
doctrine, cannot override the collective will of the people expressed in the
Constitution. It is in them that sovereignty resides and from them that all
government authority emanates.14 It is not then for a court ruling or any piece
_______________
9
II Aruego, The Framing of the Philippine Constitution, p. 594.
10
Ibid., p. 595.
11
Ibid., p. 600.
12
CONST., Art. XII, Sec. 2; Miners Association of the Philippines, Inc. vs.
Factoran, J[r., 240 SCRA 100 (1995).
13
41 Phil. 935.
14
CONST., Art. II, Sec. I.
246
246 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
of legislation to be conformed to by the fundamental law, but it is for the
former to adapt to the latter, and it is the sovereign act that must, between
them, stand inviolate.
The second paragraph of Section 5 of Article XII of the Constitution allows
Congress to provide "for the applicability of customary laws governing
property rights or relations in determining the ownership and extent of
ancestral domains.” I do not see this statement as saying that Congress may
enact a law that would simply express that “customary laws shall govern” and
end it there. Had it been so, the Constitution could have itself easily provided
it without having to still commission Congress to do it. Mr. Chief Justice
Davide has explained this authority of Congress, during the deliberations of
the 1986 Constitutional Convention, thus:
“Mr. Davide. xxx Insofar as the application of the customary laws governing
property rights or relations in determining the ownership and extent of the
ancestral domain is concerned, it is respectfully submitted that the particular
matter must be submitted to Congress. I understand that the idea of Comm.
Bennagen is for the possibility of the codification of these customary laws. So
before these are codified, we cannot now mandate that the same must
immediately be applicable. We leave it to Congress to determine the extent
of the ancestral domain and the ownership thereof in relation to whatever
may have been codified earlier. So, in short, let us not put thecart ahead of
the horse.”15
The constitutional aim, it seems to me, is to get Congress to look closely into
the customary laws and, with specificity and by proper recitals, to hew them
to, and make them part of, the stream of laws. The “due process clause,” as I
so understand it in Tañada vs. Tuvera16 would require an apt publication of a
legislative enactment before it is permitted to take force and effect. So, also,
customary laws, when specifically enacted to become part of statutory law,
must first undergo that publication to render them correspondingly binding
and effective as such.
Undoubtedly, IPRA has several good points, and I would respectfully urge
Congress to re-examine the law. Indeed, the State is ex-
_______________
15
4 Record of the ConstitutionalCommission 32.
16
146 SCRA 446 (1986).
247
VOL. 347, DECEMBER 6, 2000 247
Cruz vs.Secretaryof Environmentand Natural Resources
horted to protect the rights of indigenous cultural communities to their
ancestral lands, a task that would entail a balancing of interest between their
specific needs and the imperatives of national interest.
WHEREFORE, I vote to grant thepetition.
SEPARATE OPINION
KAPUNAN, J.:
You ask if we own the land . .. How can you own that which will outlive you?
Only the race own the land because only the race lives forever. To claim a
piece of land is a birthright of every man. The lowly animals claim their place;
how much more man? Man is born to live. Apu Kabunian, lord of us all, gave
us life and placed us in the world to live human lives. And where shall we
obtain life? From the land. To work (the land) is an obligation, not merely a
right. In tilling the land, you possess it. And so land is a grace that must be
nurtured. To enrich it and make it fructify is the eternal exhortation of Apu
Kabunian to all his children. Land is sacred. Land is beloved.From its womb
springs . .. life.
—Macli-ing Dulag, Chieftain of the Kalinga
Tribe (quoted in Ponciano L. Bennagen,
“Tribal Filipinos” in Indigenous View of
Land and the Environment, ed. Shelton H.
Davis, the World Bank Discussion Papers,
No. 188, pp. 71-72.)
It is established doctrine that a statute should be construed whenever
possible in harmony with, rather than in violation of, the Constitution. 1 The
presumption is that the legislature intended to enact a valid, sensible and just
law and one which operates no further than may be necessary to effectuate
the specific purpose of the law.2
_______________
1
Teehankee vs. Rovira, 75 Phil. 634 (1945); San Miguel Corporation vs.
Avelino, 89 SCRA 69 (1979); Phil. Long Distance Telephone Co. w. Collector
of Internal Revenue, 90 Phil 674 (1952).
2
In re Guarina, 24 Phil, 37 (1913).
248
248 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The challenged provisions of the Indigenous Peoples Rights Act (IPRA) must
be construed in view of such presumption of constitutionality. Further, the
interpretation of these provisions should take into account the purpose of the
law, which is to give life to the constitutional mandate that the rights of the
indigenous peoples be recognized and protected.
The struggle of our indigenous peoples to reclaim their ancestral lands
and domains and therefore, their heritage, is not unique. It is one that they
share with the red-skinned “Indians” of the United States, with the aborigines
of Australia, the Maori of New Zealand and the Sazmi of Sweden, to name a
few. Happily, the nations in which these indigenous peoples live all have
enacted measures in an attempt to heal an oppressive past by the promise of
a progressive future. Thus has the international community realized the
injustices that have been perpetrated upon the indigenous peoples. This
sentiment among the family of nations is expressed in a number of
documents, the most recent and most comprehensive of which is the Draft
United Nations Declaration on the Rights of Indigenous Peoples which was
adopted by the UN Sub-Commission on Prevention of Discrimination and
Protection of Minorities by its resolution on August 26, 1994. Among the
rights recognized by the UN Draft is the restitution of lands, territories and
even the resources which the indigenous peoples have traditionally owned or
otherwise occupied or used, and which have been confiscated, occupied,
used or damaged without the free and informed consent of the
indigenouspeoples.
A Historical Backdrop on the Indigenous Peoples
The term “indigenous” traces its origin to the Old Latin word indu, meaning
“within.” In the sense the term has come to be used, it is nearer in meaning to
the Latin word indigenus, which means “native.”3 “Indigenous” refers to that
which originated or has been
_______________
3
In Philippine Colonial history, the term indio applied to indigenous
throughout the vast Spanish empire. India was a synonym for all of Asia east
of the Indus River. Even after it became apparent that the explorer
Christopher Columbus was not able to reach territories lying off the east
249
VOL. 347, DECEMBER 6, 2000 249
Cruz vs.Secretaryof Environmentand Natural Resources
produced naturally in a particular land, and has not been introduced from the
outside.4 In international law, the definition of what constitutes “indigenous
peoples” attains some degree of controversy. No definition of the term
“indigenous peoples” has been adopted by the United Nations (UN), although
UN practice has been guided by a working definition in the 1986 Report of
UN Special Rapporteur Martinez Cobo:5
Indigenous communities, peoples and nations are those which, having a
historical continuity with pre-invasion and pre-colonial societies that
developed on their territories, consider themselves distinct from other
sections of the societies now prevailing in those territories, or parts of them.
They form at present non-dominant sections of society and are determined to
preserve, develop and transmit to future generations their ancestral
territories, and their ethnic identity, as the basis of their continued existence
as peoples, in accordance with their own cultural patterns, social
institutionsand legal systems.
This historical continuity may consist of the continuation, for an extended
period reaching into the present, of one or more of the following factors:
1. (a)Occupation of ancestral lands, or atleast ofpart of them;
2. (b)Common ancestry with the original occupants of these lands;
 3. (c)Culture in general, or in specific manifestations (such as religion,
living under a tribal system, membership of an indigenous
community, dress, means of livelihood, life-style,etc.);
_______________
coast of Asia, the Spanish persisted in referring to all natives within their
empire as los Indios. (Owen J. Lynch. Jr., THE PHILIPPINE COLONIAL
DICHOTOMY: Attraction and Disenfranchisement, 63 PL J 112 [1988] citing
R. BERKHOFER, THE WHITE MAN’S INDIAN: IMAGES OF THE
AMERICAN INDIAN FROM COLUMBUS TO THE PRESIDENT 5 [1979].
4 8
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1976), p.
1151.
5
Benedict Kingsbury, “Indigenous Peoples” in International Law: A
Constructivist Approach to the Asian Controversy, 92 The American Journal
of International Law 414, 419 (1998) citing Jose Martinez Cobo, Study of the
Problem of Discrimination against indigenous population, UN Doc.
E/CN.4/Sub. 2/1986/7/ Add. 4, paras. 379-80.
250
250 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. (d)Language (whether used as the only language, as mother-tongue,
as the habitual means of communication at home or in the family, or
as the main, preferred, habitual, general or normal language);
2. (e)Residence in certain parts of the country; or in certain regions of
the world;
3. (f)Other relevant facts.6
In Philippine constitutional law, the term “indigenous peoples” pertains to
those groups of Filipinos who have retained a high degree of continuity from
pre-Conquest culture.7 Philippine legal history, however, has not been kind to
the indigenous peoples, characterized them as “uncivilized,” 8 “backward
people,”9 with “barbarous practices”10 and “a low orderofintelligence.”11
Drawing inspiration from both our fundamental law and international law,
IPRA now employs the politically-correct conjunctive term “indigenous
peoples/indigenous cultural communities” as follows:
Sec. 3. Definition of Terms.—For purposes of this Act, the following terms
shall mean:
xxx
1. (h)Indigenous peoples/Indigenous cultural communities.—refer to a
group of people or homogenous societies identified by self-
ascription and ascription by others, who have continuously lived as
organized community on communally bounded and defined
territory,
_______________
6
Ibid. This definition is criticized for taking the potentially limited, and
controversial view of indigenous peoples by requiring “historical continuity
with pre-invasion and pre-colonial societies that developed on their
territories.”
7
4 RECORD OF THE CONSTITUTIONAL COMMISSION 34.
Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 680 (1919).
9
Hearing before the Committee on the Philippines, United States Senate,
Sixty-Third Congress, Third Session on HR 18459, pp. 346, 351. Quoted
inRubiat 686.
10
United States President McKinleys’ Instruction to the Philippine
Commission, April 7, 1900, quoted In Rubiat 680.
11
US v. Tubban, 29 Phil. 434, 436 (1915).
251
VOL. 347, DECEMBER 6, 2000 251
Cruz vs.Secretaryof Environmentand Natural Resources
and who have, under claims of ownership since time immemorial, occupied,
possessed and utilized such territories, sharing common bonds of language,
customs, traditions, and other distinctive cultural traits, or who have, through
resistance to political, social and cultural inroads of colonization, non-
indigenous religions and cultures, became historically differentiated from the
majority of Filipinos. Indigenous peoples shall likewise include peoples who
are regarded as indigenous on account of their descent from the populations
which inhabited the country at the time of conquest or colonization, or at the
time of inroads of non-indigenous religions and cultures, or the establishment
of present State boundaries, who retain some or all of their own social,
economic, cultural and political institutions, but who may have been
displaced from their traditional domains or who may have resettled outside
theirancestral domains x x x.
Long before the Spaniards set foot in these islands, the indigenous peoples
were already plowing our soil and hunting in our forests. The Filipinos of Aeta
and Malay stock, who were the original inhabitants of our archipelago, were,
at that time, practicing a native culture. From the time the Spaniards arrived
up to the early part of the American regime, 12 these native inhabitants
resisted foreign invasion, relentlessly fighting for their lands. Today, from the
remote uplands of Northern Luzon, to Palawan, Mindoro and Mindanao, the
indigenous peoples continue to live on and cultivate their ancestrallands, the
lands of their forefathers.
Though Filipinos today are essentially of the same stock as the
indigenous peoples, our national culture exhibits only the last vestiges of this
native culture. Centuries of colonial rule and neocolonial domination have

created a discernible distinction between the cultural majority and the group
of cultural minorities.13 The extant Philippine national culture is the culture of
the majority; its in-
_______________
12
See Owen J. Lynch, Jr., INVISIBLE PEOPLES AND A HIDDEN
AGENDA: The Origins of Contemporary Philippine Land Laws (1900-1913),
63 PLJ 249 (1988).
13
For an introduction to the chasm that exists between Philippine Law
and Indigenous Custom Law, see Owen J. Lynch, Jr., Native Title, Private
Right and Tribal Land Law: An Introductory Survey 52 PLJ 268 (1982); and
the Philippine Indigenous Law Collection: An Introduction and
PreliminaryBibliography, 58 PLJ 457 (1983), by the same author.
252
252 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
digenous roots were replaced by foreign cultural elements that are decidedly
pronounced, if not dominant.14 While the culture of the majority reoriented
itself to Western influence, the culture of the minorities hasretained its
essentially nativecharacter. One of every six Filipinos is a member of an
indigenous cultural community. Around twelve million Filipinos are members
of the one hundred and ten or so indigenous cultural
communities,15 accounting for more than seventeen per centum of the
estimated seventy million Filipinos16 in our country. Sadly, the indigenous
peoples are one of the poorest sectors of Philippine society. The incidence of
poverty and malnutrition among themes significantly higher than the national
average. The indigenous peoples are also among the most powerless.
Perhaps because of their inability to speak the language of law and power,
they have been relegated to the fringes of society. They have little, if any,
voice in national politics and enjoy the least protection from economic
exploitation.
The Constitutional Policies on Indigenous Peoples
The framers of the 1987 Constitution, looking back to the long destitution of
our less fortunate brothers, fittingly saw the historic opportunity to actualize
the ideals of people empowerment and social justice, and to reach out
particularly to the marginalized sectors of society, including the indigenous
peoples. They incorporated in the fundamental law several provisions
recognizing and protecting the rights and interests of the indigenous peoples,
to wit:
_______________
14
See RENATO CONSTANTINO, THE PHILIPPINES: A PAST
REVISITED (1975), pp. 26-41; TEODORO AGONCILLO, A HISTORY OF
THE FILIPINO PEOPLE, 8th ed., pp. 5, 74-75.
15
Response of Rep. Gregorio A. Andolana to the interpellation of Rep.
John Henry R. Osmena on House Bill No. 9125, Journal of August 20 and 21,
1997 of the House of Representatives, p. 20.
16
Philippines Yearbook (1998 ed.), p. 366.
253
VOL. 347, DECEMBER 6, 2000 253
Cruz vs.Secretaryof Environmentand Natural Resources
Sec. 22. The State recognizes and promotes the rights of indigenous peoples
within the frameworkof national unityand development. 17
Sec. 5. The State, subject to the provisions of this Constitution and
national development policies and programs, shall protect the rights of
indigenous cultural communities to their ancestral lands to ensure their
economic, social, andcultural well-being.
The Congress may provide for the applicability of customary laws
governing property rights and relations in determining the ownership and
extent of ancestral domains.18
Sec. 1. The Congress shall give the highest priority to the enactment of
measures that protect and enhance the right of all the people to human
dignity, reduce social, economic and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition, ownership, use and
disposition of propertyand its increments.19Sec. 6. The State shall apply the
principles of agrarian reform or stewardship, whenever applicable in
accordance with law, in the disposition and utilization of other natural
resources, including lands of the public domain under lease or concession,
subject to prior rights, homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.20
Sec. 17. The State shall recognize, respect, and protect the rights of
indigenous cultural communities to preserve and develop their cultures,
traditions, and institutions. It shall consider these rights in the formulation of
national plans and policies.21
_______________
17
Article II of the Constitution, entitled State Principles and Policies.
18
Article XII of the Constitution, entitled National Economy and Patrimony.
19
Article XIII of the Constitution, entitled Social Justice and Human
Rights.
20
Ibid.
21
Article XIV of the Constitution, entitled Education, Science, Technology,
Arts, Culture,and Sports.
254
254 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Sec. 12. The Congress may create a consultative body to advise the
President on policies affecting indigenous cultural communities, the ma-
jorityof the members of which shallcome fromsuch communities. 22
IPRA was enacted precisely to implement the foregoing constitutional
provisions. It provides, among others, that the State shall recognize and
promote the rights of indigenous peoples within the framework of national
unity and development, protect their rights over the ancestral lands and
ancestral domains and recognize the applicability of customary laws
governing property rights or relations in determining the ownership and
extent of the ancestral domains. 23 Moreover, IPRA enumerates the civil and
political rights
_______________
22
Article XVI of the Constitution, entitled General Provisions.
23
SECTION 2. Declaration of State Policies.—The State shall recognize
and promote all the rights of Indigenous Cultural Communi-ties/Indigenous
Peoples (ICCs/IPs) hereunder enumerated within the framework of the
Constitution:
1. a)The State shall recognize and promote the rights of ICCs/IPs within
the framework of national unity and development;
2. b)The State shall protect the rights of ICCs/IPs to their ancestral
domains to ensure their economic, social and cultural well being
and shall recognize the applicability of customary laws governing
property rights or relations in determining the ownership and extent
of ancestral domain;
3. c)The State shall recognize, respect and protect the rights of
ICCs/IPs to preserve and develop their cultures, traditions and
institutions. It shall consider these rights in the formulation of
national laws and policies;
4. d)The State shall guarantee that members of the ICCs/IPs
regardless of sex, shall equally enjoy the full measure of human
rights and freedoms without distinction or discrimination;
5. e)The State shall take measures, with the participation of the
ICCs/IPs concerned, to protect their rights and guarantee respect
for their cultural integrity, and to ensure that members of the
ICCs/IPs benefit on an equal footing from the rights and
opportunities which national laws and regulations grant to other
members of the population; and
6. f)The State recognizes its obligations to respond to the strong
expression of the ICCs/IPs for cultural integrity by assuring
255
VOL. 347, DECEMBER 6, 2000 255
Cruz vs.Secretaryof Environmentand Natural Resources
of the indigenous peoples; 24 spells out their social and cultural
rights;25 acknowledges a general concept of indigenous property right and
recognizes title thereto;26 and creates the NCIP as an independent agency
under theOffice of the President.27
Preliminary Issues
A.The petition presentsan actual controversy.
The time-tested standards for the exercise of judicial review are: (1) the
existence of an appropriate case; (2) an interest personal and substantial by
the party raising the constitutional question; (3) the plea that the function be
exercised at the earliest opportunity; and (4) the necessity that the
constitutional question be passed upon in order todecide the case. 28
Courts can only decide actual controversies, not hypothetical questions or
cases.29 The threshold issue, therefore, is whether an “appropriate case”
exists for the exercise of judicial review in the present case.
An “actual case or controversy” means an existing case or controversy
which is both ripe for resolution and susceptible of judicial determination, and
that which is not conjectural or anticipatory, 30 maximum ICC/IP participation in
the direction of education, health, as well as other services of ICCs/Ips, in
order to render such services more responsive to the needs and desires of
thesecommunities. Towards these ends, the State shall institute and
establish the necessary mechanisms to enforce and guarantee the
realization of these rights, taking into consideration their customs, traditions,
values, beliefs, interests and institutions, and to adopt and implement
measures to protect their rights to their ancestral domains.
_______________
24
See Sections 13-20, R.A. 8371.
25
See Sections 21-37, R.A. 8371.
26
See Sections 4-12, R.A. 8371.
27
See Sections 38-50, R.A. 8371.
28
Dumlao v. COMELEC, 95 SCRA 392, 400 (1980), citing People vs.
Vera, 65 Phil. 56 (1937).
29
Subic Bay Metropolitan Authority v. COMELEC, 262 SCRA 492, 513
(1996).
30
Board of Optometry v. Colet, 260 SCRA 88, 104 (1996).
256
256 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
or that which seeks to resolve hypothetical or feigned constitutional
problems.31 A petition raising a constitutional question does not present an
“actual controversy,” unless it alleges a legal right or power. Moreover, it must
show that a conflict of rights exists, for inherent in the term “controversy” is
the presence of opposing views or contentions. 32 Otherwise, the Court will be
forced to resolve issues which remain unfocused because they lack such
concreteness provided when a question emerges precisely framed from a
clash of adversary arguments exploring every aspect of a multifaceted
situation embracing conflicting and demanding interests. 33The controversy
must also be justiciable; that is, it must be susceptible of judicial
determination.34
In the case at bar, there exists a live controversy involving a clash of legal
rights. A law has been enacted, and the Implementing Rules and Regulations
approved. Money has been appropriated and the government agencies
concerned have been directed to implement the statute. It cannot be
successfully maintained that we should await the adverse consequences of
the law in order to consider the controversy actual and ripe for judicial
resolution. It is precisely the contention of the petitioners that the law, on its
face, constitutes an unconstitutional abdication of State ownership over lands
of the public domain and other natural resources. Moreover, when the State
machinery is set into motion to implement an alleged unconstitutional statute,
this Court possesses sufficient authority to resolve and prevent imminent
injury and violation of the constitutional process.
B. Petitioners, as citizensand taxpayers, have the requisite standing to raise
the constitutional questions herein.
In addition to the existence of an actual case or controversy, a person who
assails the validity of a statute must have a personal
_______________
31
Muskrat v. United States, 219 US 346, 362 (1913).
32
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY, 1976, p.
497.
33
UnitedStates v. Freuhauf, 365 US 146 (1961).
34
Association of Small Landowners v. Secretary of Agrarian Reform,175
SCRA 343, 364 (1989); Joya v. PCGG, 225 SCRA 568 (1993).
257
VOL. 347, DECEMBER 6, 2000 257
Cruz vs.Secretaryof Environmentand Natural Resources
and substantial interest in the case, such that, he has sustained, or will
sustain, a direct injury as a result of its enforcement. 35 Evidently, the rights
asserted by petitioners as citizens and taxpayers are held in common by all
the citizens, the violation of which may result only in a “generalized
grievance.”36 Yet, in a sense, all citizen’s and taxpayer’s suits are efforts to air
generalized grievances about the conduct of government and the allocation
of power.37
In several cases, the Court has adopted a liberal attitude with regard to
standing.38 The proper party requirement is considered as merely
procedural,39 and the Court has ample discretion with regard thereto. 40 As
early as 1910, the Court in the case of Severino vs. GovernorGeneral41held:
xxx [W]hen the relief is sought merely for the protection of private rights, the
relator must show some personal or special interest in the subject matter,
since he is regarded as the real party in interest and his right must clearly
appear. Upon the other hand, when the question is one of public right and the
object of the mandamus is to procure the enforce-
_______________
35
People v.Vera, 65 Phil. 56, 89 (1937).
36
Lozada v. COMELEC, 120 SCRA 337, 342 (1983).
37
US v. Richardson, 418 US 166, 194 S Ct 2940, 41 L Ed 2d 678 (1974).
38
Kilosbayan v. Guingona, 232 SCRA 110, 135 (1994), citing, among
others, Philconsa v. Gimenez, 15 SCRA 479 (1965); CLU v. Executive
Secretary, 194 SCRA 317 (1991); Guingona v. Carague, 196 SCRA
221 (1991); Osmena. v. COMELEC,199 SCRA 750 (1991); Basco v.
PAGCOR, 197 SCRA 52 (1991); Carpio v. Executive Secretary, 206 SCRA
290 (1992).
In Kilosbayan v. Morato (250 SCRA 130 [1995]) the Court discoursed on
the rule on standing as follows: taxpayers may sue on the claim of illegal
disbursement of funds, or to assail the constitutionality of a tax
measure; voters may question the validity of election laws; citizens may raise
constitutional questions of transcendental importance which must be settled
early; and, legislators may question the validity of official acts which infringe
their prerogatives.
39
Araneta v. Dinglasan, 84 Phil. 368, 373 (1949).
40
Assn. of Small Landowners in the Philippines v. Secretary of Agrarian
Reform, 175 SCRA 343, 364-365 (1989).
41
16 Phil. 365 (1910), citing HIGH, EXTRAORDINARY LEGAL
REMEDIES.
258
258 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
ment of a public duty, the people are regarded as the real party in interest,
and the relator at whose instigation the proceedings are instituted need not
show that he has any legal or special interest in the result, it being sufficient
to show that he is a citizen and as such interested in the execution of the
laws.42
This Court has recognized that a “public right,” or that which belongs to the
people at large, may also be the subject of an actual case or controversy.
In Severino, we ruled that a private citizen may enforce a “public right” in
behalf of other citizens. We opined therein that:
... [T]he right which [petitioner] seeks to enforce is not greater or different
from that of any other qualified elector in the municipality of Silay. It is also
true that the injury which he would suffer in case he fails to obtain the relief
sought would not be greater or different from that of the other electors; but he
is seeking to enforce a public right as distinguished from a private right. The
real party in interest is the public, or the qualified electors of the town of
Silay. Each elector has the same right and would suffer the same injury. Each
elector stands on the same basis with reference to maintaining a
petition whether or not the relief sought by the relator should be granted. 43
In Tañada v. Tuvera,44 the Court enforced the “public right” to due process
and to be informedof matters ofpublic concern.
In Garcia vs. Board of Investments,45 the Court upheld the “public right” to
be heard or consulted on matters of national concern.
In Oposa v. Factoran,46 the Court recognized the “public right” of citizens
to “a balanced and healthful ecology which, for the first time in our nation’s
constitutional history, is solemnly incorporated in the fundamental law.” 47Mr.
Justice (now Chief Justice) Hilario G. Davide, Jr., delivering the opinion ofthe
Court, stated that:
_______________
42
Id.,at 371.
43
Id.,at 374-375
44
136 SCRA 27, 37 (1985).
45
177 SCRA 374, 383 (1989).
46
224 SCRA 792 (1993).
47
Id.,at 805.
259
VOL. 347, DECEMBER 6, 2000 259
Cruz vs.Secretaryof Environmentand Natural Resources
Such a right belongs to a different category of rights altogether for it concerns
nothing less than self-preservation and self-perpetuation—aptly and fittingly
stressed by petitioners—the advancement of which may even be said to
predate all governments and constitutions. As a matter of fact, these basic
rights need not even be written in the Constitution for they are assumed to
existfrom theinception of humankind.48
Petitioners, as citizens, possess the “public right” to ensure that the national
patrimony is not alienated and diminished in violation of the Constitution.
Since the government, as the guardian of the national patrimony, holds it for
the benefit of all Filipinos without distinction as to ethnicity, it follows that a
citizen has sufficient interest to maintain a suit to ensure that any grant of
concessions covering the national economy and patrimony strictly complies
with constitutional requirements. Thus, the preservation of the integrity and
inviolability of the national patrimony is a proper subjectof a citizen’s suit.
In addition, petitioners, as taxpayers, possess the right to restrain officials
from wasting public funds through the enforcement of an unconstitutional
statute. It is well-settled that a taxpayer has the right to enjoin public officials
from wasting public funds through the implementation of an unconstitutional
statute,49 and by necessity, he may assail the validity of a statute
appropriating public funds.50 The taxpayer has paid his taxes and contributed
to the public coffers and, thus, may inquire into the manner by which the
proceeds of his taxes are spent. The expenditure by an official of the State
for the purpose of administering an invalid law constitutes a misapplication of
suchfunds.51
The IPRA appropriates funds as indicated in its title: “An Act to
Recognize, Protect and Promote the Rights of Indigenous Cultural
Communities/Indigenous Peoples, Creating the National Commis-
_______________
48
Ibid.
49
Philconsa v. Mathay, 18 SCRA 300, 306 (1966).
50
Philconsa v. Gimenez, 15 SCRA 479, 487 (1965), citing 11 AM JUR
761.
51
Sanidad v. COMELEC, 73 SCRA 333, 358-359 (1976); Pascual v.
Secretary of Public Works, 110 Phil. 331 (1960); Tan v. Macapagal, 43 SCRA
677, 680 (1972).
260
260 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
sion on Indigenous Peoples, Establishing Implementing
Mechanisms, Appropriating Funds Therefor, and for Other Purposes.” In the
same manner, Section 79 authorizes for the expenditure of public funds by
providing that “the amount necessary to finance [its] initial implementation
shall be charged against the current year’s appropriation for the Office for
Northern Cultural Communities (the “ONCC”) and the Office for Southern
Cultural Communities (the “OSCC”),”52 which were merged as organic offices
of the NCIP.53 Thus,the IPRA is a valid subject of a taxpayer’s suit.
C. The petition for prohibition and mandamusis not an improper remedy.
Prohibition is an extraordinary writ directed against any tribunal, corporation,
board, officer or person, whether exercising judicial, quasi-judicial or
ministerial functions, ordering said entity or person to desist from further
proceedings when said proceedings are without or in excess of said entity’s
or person’s jurisdiction, or are accompanied with grave abuse of discretion,
and there is no appeal or any other plain, speedy and adequate remedy in
the ordinary course of law.54 Mandamus, on the other hand, is an
extraordinary writ commanding a tribunal, corporation, board, officer or
person, immediately or at some other specified time, to do the act required to
be done, when said entity or person unlawfully neglects the performance of
an act which the law specifically enjoins as a duty resulting from an office,
trust or station, or when said entity or person unlawfully excludes another
from the use and
_______________
52
Section 79. Appropriations.—The amount necessary to finance the
initial implementation of this Act shall be charged against the current year’s
appropriation of the ONCC and the OSCC. Thereafter, such sums as may be
necessary for its continued implementation shall be included in theannual
General Appropriations Act.
53
Section 74. Merger of ONCC/OSCC—The Office for Northern Cultural
Communities (ONCC) and the Office for Southern Cultural Communities
(OSCC), created under Executive Order Nos. 122-B and 122-C respectively,
are hereby merged as organic offices of the NCIP and shall continue to
function under a revitalized and strengthened structure to achieve the
objectives of the NCIP x x x.
54
Section 2, Rule 65, 1997 RULES OF CIVIL PROCEDURE.
261
VOL. 347, DECEMBER 6, 2000 261
Cruz vs.Secretaryof Environmentand Natural Resources
enjoyment of a right or office to which such other is entitled, and there is no
other plain, speedy and adequate remedy in the ordinary course oflaw. 55
In this case, the petitioners pray that respondents be restrained from
implementing the challenged provisions of the IPRA and its Implementing
Rules and the assailed DENR Circular No. 2, series of 1998, and that the
same officials be enjoined from disbursing public funds for the
implementation of the said law and rules. They further ask that the Secretary
of the DENR be compelled to perform his duty to control and supervise the
activities pertaining to natural resources.
Prohibition will lie to restrain the public officials concerned from
implementing the questioned provisions of the IPRA and from disbursing
funds in connection therewith if the law is found to be unconstitutional.
Likewise, mandamus will lie to compel the Secretary of the DENR to perform
his duty to control and supervise the exploration, development, utilization and
conservation of the country’s natural resources. Consequently, the petition for
prohibition and mandamusis not an improperremedy for the relief sought.
D. Notwithstanding the failure of petitioners to observe the hierarchy of
courts, the Court assumes jurisdiction over the petition in view of the
importanceof the issues raised therein.
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
_______________
55
Section 3, Rule 65, 1997 RULES OF CIVIL PROCEDURE.
262
262 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
corpus and injunction,56 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. 57 We held in People
v. Cuaresma 58 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 juris-
_______________
56
Article VIII of the Constitution states:
Sec. 5. The Supreme Court shall have the following powers:
1. (1)Exercise original jurisdiction over cases affecting ambassadors,
other public ministers and consuls, and over petitions
for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.
xxx
Batas Pambansa Blg. 129 (B.P. 129), as amended, provides:
Sec. 9. Jurisdiction.—The Court of Appeals shallexercise:
1. (1)Original jurisdiction to issue writs
of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether or not in aid of
its appellate jurisdiction;
x x x.
 Sec. 21. Original jurisdiction in other cases.—Regional Trial Courts shall
exercise originaljurisdiction:
1. (1)In the issuance of writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction which may be
enforcedinany part of their respective regions;and
2. (2)In actions affecting ambassadors and other public ministers and
consuls.
57
Tano vs. Socrates, 278 SCRA 154, 173-174 (1997).
58
172 SCRA 415 (1989).
263
VOL. 347, DECEMBER 6, 2000 263
Cruz vs.Secretaryof Environmentand Natural Resources
diction, and to prevent further over-crowding of the Court’s docket x
xx.59 (Emphasis supplied.)
IPRA aims to rectify the historical injustice inflicted upon indigenous peoples.
Its impact upon the lives not only of the indigenous peoples but also upon the
lives of all Filipinos cannot be denied. The resolution of this case by the Court
at the earliest opportunity is necessary if the aims of the law are to be
achieved. This reason is compelling enough to allow petitioners’ invocation of
this Court’sjurisdiction in the first instance.
Substantive Issues
Primary Issue
The issue of prime concern raised by petitioners and the Solicitor General
revolves around the constitutionality of certain provisions of IPRA, specifically
Sections 3(a), 3(b), 5, 6, 7, 8, 57, 58 and 59. These provisions allegedly
violate Section 2, Article XII of the Constitution, which states:
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 maybe themeasure 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
enjoymentexclusivelyto Filipino citizens.
_______________
59
Id.,424.
264
264 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
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 fishworkers 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 technicalresources.
The President shall notify the Congress of every contract entered into in
accordance with this provision, within thirty days from its execution.
Under IPRA, indigenous peoples may obtain the recognition of their right of
ownership60 over ancestral lands and ancestral domains by virtue of native
title.61 The term “ancestral lands” under the statute refers to landsoccupied by
individuals, families and clans who are members of indigenous cultural
communities, in-
_______________
60
Section 7. Rights to Ancestral Domains.—The rights of ownership and
possession of ICCs/IPs to their ancestral domains shall be recognized and
protected. Such rightsshallinclude:
1. (a)Right of Ownership.—The right to claim ownership over lands,
bodies of water traditionally and actually occupied by ICCs/IPs,
sacred places, traditional
2. (b)hunting and fishing grounds, and all improvements made bythem
at any timewithin thedomains;
xxx
61
Section 3(1) Native Title—refers to pre-conquest rights to lands and
domains which, as far back as memory reaches, have been held under a
claim of private ownership by ICCs/IPs, have never been public lands and
are thus indisputably presumed to have been held that way since beforethe
Spanish Conquest; x x x
Section 3(p) Time Immemorial—refers to a period of time when as far
back as memory can go, certain ICCs/IPs are known to have occupied,
possessed in the concept of owners, and utilized a defined territory devolved
to them, by operation of customary law or inherited from their ancestors, in
accordance with their customs and traditions.
265
VOL. 347, DECEMBER 6, 2000 265
Cruz vs. Secretary of Environment and Natural Resources
eluding residential lots, rice terraces or paddies, private forests, swidden
farms and tree lots. These lands are required to have been “occupied,
possessed and utilized” by them or through their ancestors “since time
immemorial, continuously to the present.”62 On the other hand, “ancestral
domains” is defined as areas generally belonging to indigenous cultural
communities, including ancestral lands, forests, pasture, residential and
agricultural lands, hunting grounds, worship areas, and lands no longer
occupied exclusively by indigenous cultural communities but to which they
had traditional access, particularly the home ranges of indigenous cultural
communities who are still nomadic or shifting cultivators. Ancestral domains
also include inland waters, coastal areas and natural resources
therein.63 Again, the same are required to have been
_______________
62
Section 3(b) Ancestral Lands-—Subject to Section 56 hereof, refers
to land occupied, possessed and utilized by individuals, families and clans
who are members of the ICCs/IPs since time immemorial, by themselves or
through their predecessors-in-interest, under claims of individual or traditional
group ownership, continuously to the present except when interrupted by
war, force majeure or displacement by force, deceit, stealth, or as a
consequence of government projects or any other voluntary dealings entered
into by the government and private individuals/corporations, including, but not
limited to, residential lots, rice terraces or paddies, private forests, swidden
farms and tree lots;
63
Section 3(a) Ancestral Domains—Subject to Section 56 hereof, refer to
all areas generally belonging to ICCs/IPs comprising lands, inland waters,
coastal areas and natural resources therein, held under a claim of ownership,
occupied or possessed by Indigenous peoples, by themselves or through
their ancestors, communally or individually since time immemorial,
continuously to the present except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of government
projects or any other voluntary dealings entered into by the government and
private individuals/corporations, and which are necessary to ensure their
economic, social and cultural welfare. It shall include ancestral lands, forests,
pasture, residential, agricultural, and other lands individually owned whether
alienable and disposable or otherwise, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other resources, and lands
which may no longer be exclusively be occupied by Indigenous peoples but
from which they traditionally had access to for their subsistence and
traditional activities, particularly the home ranges of ICCs/IPs who are still
nomadic and/or shiftingcultivators.
266
266 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
“held under a claim of ownership, occupied or possessed by ICCs/IPs, by
themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present.”64 Under Section 56, property rights
within the ancestral domains already existing and/or vested upon effectivity of
said law “shall be recognized and respected.”
Ownership is the crux of the issue of whether the provisions of IPRA
pertaining to ancestral lands, ancestral domains, and natural resources are
unconstitutional. The fundamental question is, who, between the State and
the indigenous peoples, are the rightful ownersof these properties?
It bears stressing that a statute should be construed in harmony with, and
not in violation, of the fundamental law.65 The reason is that the legislature, in
enacting a statute, is assumed to have acted within its authority and adhered
to the constitutional limitations. Accordingly, courts should presume that it
was the intention of the legislature to enact a valid, sensible, and just law and
one which operates no further than may be necessary to effectuate the
specific purpose of thelaw.66
A. The provisions of IPRA recognizing the ownership of indigenous peoples
over the ancestral lands and ancestral domains are not unconstitutional.
In support of their theory that ancestral lands and ancestral domains are part
of the public domain and, thus, owned by the State, pursuant to Section 2,
Article XII of the Constitution, petitioners and theSolicitorGeneral advance
thefollowing arguments:
First, according to petitioners, the King of Spain under international law
acquired exclusive dominion over the Philippines by virtue of discovery and
conquest. They contend that the Spanish King under the theory of jura
regalia, which was introduced into Philippine law upon Spanish conquestin
1521, acquired title toall thelandsin the archipelago.
_______________
64
Ibid.
65
Hebron v. Reyes, 104 Phil. 175 (1958); San Miguel Corporation v.
Avelino, 89 SCRA 69 (1979).
66
In re Guarina, 24 Phil. 37 (1913).
267
VOL. 347, DECEMBER 6, 2000 267
Cruz vs.Secretaryof Environmentand Natural Resources
Second, petitioners and the Solicitor General submit that ancestral lands and
ancestral domains are owned by the State. They invoke the theory of jura
regalia which imputes to the State the ownership of all lands and makes the
State the original source of all private titles. They argue that the Philippine
State, as successor to Spain and the United States, is the source of
anyasserted right of ownership in land.
Third, petitioners and the Solicitor General concede that
the Cariño doctrine exists. However, petitioners maintain that the doctrine
merely states that title to lands of the public domain may be acquired by
prescription. The Solicitor General, for his part, argues that the doctrine
applies only to alienable lands of the public domain and, thus, cannot be
extended to other lands of the public domain such as forest or timber, mineral
lands,and national parks.
Fourth, the Solicitor General asserts that even assuming that native title
over ancestral lands and ancestral domains existed by virtue of
the Cariño doctrine, such native title was extinguished upon the ratification of
the 1935 Constitution.
Fifth, petitioners admit that Congress is mandated under Section 5, Article
XII of the Constitution to protect that rights of indigenous peoples to their
ancestral lands and ancestral domains. However, they contend that the
mandate is subject to Section 2, Article XII and the theory of jura
regalia embodied therein. According to petitioners, the recognition and
protection under R.A. 8371 of the right of ownership over ancestral lands and
ancestral domains is far in excess of the legislative power and constitutional
mandate of Congress.
Finally, on the premise that ancestral lands and ancestral domains are
owned by the State, petitioners posit that R.A. 8371 violates Section 2, Article
XII of the Constitution which prohibits the alienation of non-agricultural lands
of the public domain and othernatural resources.
I am notpersuaded by these contentions.
Undue reliance by petitioners and the Solicitor General on the theory
of jura regalia is understandable. Not only is the theory well recognized in our
legal system; it has been regarded, almost with reverence, as the immutable
postulate of Philippine land law. It has been incorporated into our
fundamental law and has been recognized by the Court. 67
_______________
67
SeeLee Hong Hok vs. David, 48 SCRA 372 (1972).
268
268 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Generally, under the concept of jura regalia, private title to land must be
traced to some grant, express or implied, from the Spanish Crown or its
successors, the American Colonial government, and thereafter, the Philippine
Republic. The belief that the Spanish Crown is the origin of all land titles in
the Philippines has persisted because title to land must emanate from some
source for it cannot issue forth fromnowhere.68
In its broad sense, the term “jura regalia” refers to royal rights,69 or those
rights which the King has by virtue of his prerogatives. 70 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.71 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.72 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.73
The theory of jura regalia was therefore nothing more than a natural
fruitof conquest.74
The Regalian theory, however, does not negate native title to lands held
in private ownership since time immemorial. In the landmark case of Cariño
vs. Insular Government75 the United
_______________
68
PEÑA, REGISTRATION OF LAND TITLES AND DEEDS, 1994 rev.ed.,
p. 15.
69
1 BOUVIER’S LAW DICTIONARY, 3rd revision, p. 1759.
70
BLACKS LAW DICTIONARY, 6th ed., p. 1282.
71
76 CORPUS JURIS SECUNDUM, citing Hart v. Burnett, 15 Cal. 530,
566.
72
WASHBURN, p. 44; see also WILLIAMS, PRINCIPLES OF THE LAW
ON REAL PROPERTY, 6th ed. (1886),R. 2; BIGELOW, p. 2.
73
WARVELLE, ABSTRACTS AND EXAMINATION OF TITLE TO REAL
PROPERTY (1907), p. 18.
74
1 DICTIONARY OF ENGLISH LAW (Jowitt, ed.), p. 797.
75
41 Phil. 935, 212 U.S. 449, 53L Ed. 594 (1909).
269
VOL. 347, DECEMBER 6, 2000 269
Cruz vs.Secretaryof Environmentand Natural Resources
States Supreme Court, reversing the decision76 of the pre-war Philippine
Supreme Court, made the following pronouncement:
xxx Every presumption is and ought to be taken against the Government in a
case like the present. It might, perhaps, be proper and sufficient to say
that when, as far back as testimony or memory goes, the land has been held
by individuals under a claim of private ownership, it will be presumed to have
been held in the same way from before the Spanish conquest, and never to
have been public land, x x x77 (Emphasis supplied.)
The above ruling institutionalized the recognition of the existence of native
title to land, or ownership of land by Filipinos by virtue of possession under a
claim of ownership since time immemorial and independent of any grant from
the Spanish Crown, as an exception to the theory of jura regalia.
In Cariño, an Igorot by the name of Mateo Cariño applied for registration
in his name of an ancestral land located in Benguet. The applicant
established that he and his ancestors had lived on the land, had cultivated it,
and had used it as far they could remember. He also proved that they had all
been recognized as owners, the land having been passed on by inheritance
according to native custom. However, neither he nor his ancestors had any
document of title from the Spanish Crown. The government opposed the
application for registration, invoking the theory of jura regalia. On appeal, the
United States Supreme Court held that the applicant was entitled to the
registration of his native title to their ancestral land.
Cariño was decided by the U.S. Supreme Court in 1909, at a time when
decisions of the U.S. Court were binding as precedent in our
jurisdiction.78 We applied the Cariñodoctrine in the 1946 case of Oh Cho vs.
Director of Lands,79where we stated that “[a]ll lands
_______________
76
Cariño vs. Insular Government, 7 Phil. 132 (1906). The Philippine
Supreme Court in this case held that in the Philippines, there is no conclusive
presumption of a grant of title to land from the Government founded
merelyupon long possession of the same bythe applicant.
77
Cariño vs. Insular Government, supra note 75,at 941.
78
Section 10, Philippine Bill of 1902.
79
75 Phil. 890 (1946).
270
270 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
that were not acquired from the Government either by purchase or by grant,
belong to the public domain, but [a]n exception to the rule would be any land
that should have been in the possession of an occupant and of his
predecessors in interest since time immemorial, for such possession would
justify the presumption that the land had never been part of the public domain
or that it had been private property even before the Spanish conquest.” 80
Petitioners however aver that the U.S. Supreme Court’s ruling
in Cariño was premised on the fact that the applicant had complied with the
requisites of acquisitive prescription, having established that he and his
predecessors-in-interest had been in possession of the property since time
immemorial. In effect, petitioners suggest that title to the ancestral land
applied for by Cariño was transferred from the State, as original owner, to
Cariño by virtue of prescription. They conclude that the doctrine cannot be
the basis for decreeing “by mere legislative fiat . .. that ownership of vast
tracts of land belongs to [indigenous peoples] without judicial confirmation.” 81
The Solicitor General, for his part, claims that the Cariño doctrine applies
only to alienable lands of the public domain and, as such, cannot be
extended to other lands of the public domain such as forestor timber, mineral
lands, andnational parks.
There is no merit in these contentions.
A proper reading of Cariño would show that the doctrine enunciated
therein applies only to lands which have always been considered as
private, and not to lands of the public domain, whether alienable or
otherwise. A distinction must be made between ownership of land under
native title and ownership by acquisitive prescription against the State.
Ownership by virtue of native title presupposes that the land has been held
by its possessor and his predecessors-in-interest in the concept of an owner
since time immemorial. The land is not acquired from the State, that is, Spain
or its successors-in-interest, the United States and the Philippine
Government. There has been no transfer of title from the State as
_______________
80
Id.,at 892.
81
Memorandum of Petitioners, Rollo,p. 861.
271
VOL. 347, DECEMBER 6, 2000 271
Cruz vs.Secretaryof Environmentand Natural Resources
the land has been regarded as private in character as far back as memory
goes. In contrast, ownership of land by acquisitive prescription against the
State involves a conversion of the character of the property from alienable
public land to private land, which presupposes a transfer of title from the
State to a private person. Since native title assumes that the property
covered by it is private land and is deemed never to have been part of the
public domain, the Solicitor General’s thesis that native title
under Cariñoapplies only to lands of the public domain is erroneous.
Consequently, the classification of lands of the public domain into
agricultural, forest or timber, mineral lands, and national parks under the
Constitution82is irrelevant to the application of the Cariño doctrine because
the Regalian doctrine which vests in the State ownership of lands of the
public domain does not cover ancestral lands and ancestral domains.
Legal history supports the Cariño doctrine.
When Spain acquired sovereignty over the Philippines by virtue of its
discovery and occupation thereof in the 16th century and the Treaty of
Tordesillas of 1494 which it entered into with Portugal, 83 the continents of
Asia, the Americas and Africa were considered as terra nulliusalthough
already populated by other peoples.84 The discovery and occupation by the
European States, who were then considered as the only members of the
international community of civilized nations, of lands in the said continents
were deemed sufficient to create title under international law. 85
Although Spain was deemed to have acquired sovereignty over the
Philippines, this did not mean that it acquired title to all lands in the
archipelago. By virtue of the colonial laws of Spain, the
_______________
82
Section 3, Article XII, CONSTITUTION.
83
Under the Treaty of Tordesillas, the world was divided between Spain
and Portugal, with the former having exclusive power to claim all lands and
territories west of the Atlantic Ocean demarcation line (Lynch, The Legal
Bases of Philippine Colonial Sovereignty, 62 Phil L J 279, 283 [1987]).
84
See AKEHURST, A MODERN INTRODUCTION TO INTERNATIONAL
LAW, 5th ed., 142-143.
85
See CRUZ, INTERNATIONAL LAW, 1996 ed., pp. 106-107.
272
272 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Spanish Crown was considered to have acquired dominiononly over
theunoccupied and unclaimed portions ofour islands.86
In sending the first expedition to the Philippines, Spain did not intend to
deprive the natives of their property. Miguel Lopez de Legazpi was under
instruction of the Spanish King to do no harm to the natives and to their
property. In this regard, an authority on the early Spanish colonial period in
the Philippineswrote:
The government of [the King of Spain] Philip II regarded the Philippines as a
challenging opportunity to avoid a repetition of the sanguinary conquests of
Mexico and Peru. In his written instructions for the Adelantado Legazpi, who
commanded the expedition, Philip II envisaged a bloodless pacification of the
archipelago. This extraordinary document could have been lifted almost
verbatim from the lectures of the Dominican theologian, Francisco de Vitoria,
delivered in the University of Salamanca. The King instructed Legazpi to
inform the natives that the Spaniards had come to do no harm to their
persons or to their property. The Spaniards intended to live among them in
peace and in friendship and ‘‘to explain to them the law of Jesus Christ by
which they will be saved.” Although the Spanish expedition could defend
themselves if attacked, the royal instruc-
_______________
86
Cariño v. Insular Government, supra note 75, at 939.
This point finds significance in light of the distinction between sovereignty
and dominion. Sovereignty is the right to exercise the functions of a State to
the exclusion of any other State (Case Concerning the Island of Las
Palmas [1928], UNRIAA II 829, 838). It is often referred to as the power
of imperium, which is defined as the government authority possessed by the
State (BERNAS, THE CONSTITUTION OF THE REPUBLIC OF THE
PHILIPPINES: A COMMENTARY VOL. 2, p. 419). On the other hand,
dominion, or dominium, is the capacity of the State to own or acquire
property such as lands and natural resources.
Dominium was the basis for the early Spanish decrees embracing the
theory of jura regalia. The declaration in Section 2, Article XII of the 1987
Constitution that all lands of the public domain are owned by the State is
likewise founded on dominium (Ibid.). If dominium, not impeHum, is the basis
of the theory of jura regalia, then the lands which Spain acquired in the 16th
century were limited to non-private lands, because it could only acquire lands
which were not yet privately-owned or occupied by the Filipinos. Hence,
Spain acquired title only over lands which were unoccupied and
unclaimed, i.e.,public lands.
273
VOL. 347, DECEMBER 6, 2000 273
Cruz vs.Secretaryof Environmentand Natural Resources
tions admonished the commander to commit no aggressive act which might
arouse native hostility.87
Spanish colonial laws recognized and respected Filipino landholdings
including native land occupancy.88 Thus, the Recopilación de Leyes de las
Indias expressly conferred ownership of lands already held by the
natives.89 The royal decrees of 1880 and 1894 did not extinguish native title
to land in the Philippines. The earlier royal decree, dated June 25, 1880,
provided that all those in
_______________
87
PHELAN, THE HISPANIZATION OF THE PHILIPPINES: SPANISH
AIMS AND FILIPINOS RESPONSES, 1565-1700 (1959), pp. 8-9.
88
Cariño vs. Insular Government, supra note 75,at 943.
89
Book 4, Title 12, Law 9, decreed by Philip II, 1 June 1594. We order
that grants of farms and lands to Spaniards be without injury to the Indians
and that those which have been granted to their loss and injury, be returned
to the lawful owners.
Book 4, Title 12, Law 14. We having acquired full sovereignty over the
Indies, and all lands, territories, and possessions not heretofore ceded away
by our royal predecessors, or by us, or in our name, still pertaining the royal
crown and patrimony, it is our will that all lands which are held without proper
and true deeds of grant be restored to us according as they belong to us, in
order that xxx after distributing to the natives what may be necessary for
tillage and pasteurage, confirming them in what they now have and giving
them more if necessary, all the rest of said lands may remain free and
unencumbered for us to dispose of as we wish. [Quoted in Valenton v.
Murciano, 3 Phil. 537, 542-543 (1904).] (Emphasis supplied.)
Book 6, Title 1, Law 15, decreed by King Philip II, at Madrid, 7 November
1574. We command that in the Philippine Islands the Indians not be removed
from one to another settlement by forceandagainst their will.
Book 6, Title 1, Law 23, otherwise known as Ordinance 10 of 1609
decreed by Philip III. It is right that time should be allowed the Indians to work
their own individual lands and thoseof the community.
 Book 6, Title 1, Law 32, decreed by Philip II, 16 April 1580. We command
the Viceroys, Presidents, and Audiencias that they see to it that the Indians
havecomplete libertyin their dispositions.
Royal Cedula of October 15, 1754. Where such possessors shall not be
able to produce title deeds it shall be sufficient if they shall show that ancient
possession, as a valid title by prescription: x x x. [Quoted in Valenton v.
Murciano, supra, at 546.] (Emphasis supplied.)
274
274 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
“unlawful possession of royal lands” must legalize their possession by means
of adjustment proceedings,90 and within the period specified. The later royal
decree, dated February 13, 1894, otherwise known as the Maura Law,
declared that titles that were capable of adjustment under the royal decree of
1880, but for which adjustment was not sought, were forfeited. Despite the
harsh wording of the Maura Law, it was held in the case of Cariño that the
royal decree of 1894 should not be construed as confiscation of title, but
merely as thewithdrawal of theprivilege of registering such title. 91
Neither was native title disturbed by the Spanish cession of the
Philippines to the United States, contrary to petitioners’ assertion that the US
merely succeeded to the rights of Spain, including the latter’s rights over
lands of the public domain.92 Under the Treaty of Paris of December 10,
1898, the cession of the Philippines did not impair any right to property
existing at the time.93 During the
_______________
90
Article 6 of the royal decree of June 25, 1880, quoted in Valenton v.
Murciano, supra note 89 at 549.
91
Cariño v. Insular Government, supra note 75, at 944.
92
Memorandum of Petitioners, par. 3.4,Rollo,pp. 845-846.
93
TheTreaty of Paris reads in part:
Article III. Spain cedes to the United States the archipelago known as the
Philippine Islands,x x x.
The United States will pay to Spain the sum of twenty million dollars,
within three months after the exchange of the ratifications of the
presenttreaty.
xxx
Article VIII. In conformity with the provisions of Articles One, Two, and
Three of this treaty, Spain relinquishes in Cuba, and cedes in Porto Rico and
other islands of the West Indies, in the Island of Guam, and in the Philippine
Archipelago, all the buildings, wharves, barracks, forts, structures, public
highways, and other immovable property which, in conformity with law,
belong to the public domain and as such belong to the Crown of Spain.
And it is hereby declared that the relinquishment or cession, as the case
may be, to which the preceding paragraph refers, can not in any respect
impair the property or rights which by law belong to the peaceful possession
of property of all kinds, of provinces, municipalities, public or private
establishments, ecclesiastical or civic bod-
275
VOL. 347, DECEMBER 6, 2000 275
Cruz vs.Secretaryof Environmentand Natural Resources
American colonial regime, native title to land was respected, even protected.
The Philippine Bill of 1902 provided that property and rights acquired by the
US through cession from Spain were to be administered for the benefit of the
Filipinos.94 In obvious adherence to libertarian principles, McKinley’s
Instructions, as well as the Philippine Bill of 1902, contained a bill of rights
embodying the safeguards of the US Constitution. One of these rights, which
served as an inviolable rule upon every division and branch of the American
colonial government in the Philippines,95 was that “no person shall be
deprived of life, liberty, or property without due process of law.” 96These
vested rights safeguarded by the Philippine Bill of 1902 were in turn
expressly protected by the due process clause of the 1935 Constitution.
Resultantly, property rights of the indigenous peoples over their ancestral
lands and ancestral domains were firmly established in law.
Nonetheless, the Solicitor General takes the view that the vested rights of
indigenous peoples to their ancestral lands and domains were “abated by the
direct act by the sovereign Filipino people of ratifying the 1935
Constitution.”97 He advances the following arguments:
_______________
ies, or any other associations having legal capacity to acquire and possess
property in the aforesaid territories renounced or ceded, or of private
individuals, of whatsoever nationality such individuals may be.
94
The statute reads in part:
Section 12. That all the property and rights which may have been
acquired in the Philippine Islands under the treaty of peace with Spain,signed
December tenth, eighteen hundred and ninety-eight, except such land or
other property as shall be designated by the President of the United States
for military and other reservations of the Government of the United
States, are hereby placed under the control of the Government of said
Islands, to be administered for the benefit of theinhabitants thereof,exceptas
provided bythis Act.
95
McKinley’s Instructions to the Second Philippine Commission, in
MENDOZA, FROM MCKINLEY’S INSTRUCTIONS TO THE NEW
CONSTITUTION: DOCUMENTS ON THE PHILIPPINE CONSTITUTIONAL
SYSTEM (1978) p. 71.
96
Id.,at 65-75; Section 5, Philippine Bill of 1902.
97
Solicitor General’s Memorandum, Rollo,pp. 668-669.
276
276 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The Sovereign, which is the source of all rights including ownership, has the
power to restructure the consolidation of rights inherent in ownership in the
State. Through the mandate of the Constitutions that have been adopted, the
State has wrested control of those portions of the natural resources it deems
absolutely necessary for social welfare and existence. It has been held that
the State may impair vested rights through a legitimate exercise of police
power.
Vested rights do not prohibit the Sovereign from performing acts not only
essential to but determinative of social welfare and existence. To allow
otherwiseis to invite havoc in the established social system, x x x
Time-immemorial possession does not create private ownership in cases
of natural resources that have been found from generation to generation to
be critical to the survival of the Sovereign and its agent, the State. 98
Stated simply, the Solicitor General’s argument is that the State, as the
source of all titles to land, had the power to re-vest in itself, through the 1935
Constitution, title to all lands, including ancestral lands and ancestral
domains. While the Solicitor General admits that such a theory would
necessarily impair vested rights, he reasons out that even vested rights of
ownership over ancestral lands and ancestral domains are not absolute and
may be impaired by the legitimate exercise of police power.
I cannot agree. The text of the provision of the 1935 Constitution invoked
by the Solicitor General, while embodying the theory of jura regalia, is too
clear for any misunderstanding. It simply declares that “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.” 99 Nowhere does it state that
cer-
_______________
98
Id.at 668.
99
Section 1, Article XII, 1935 Constitution reads:
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
277
VOL. 347, DECEMBER 6, 2000 277
Cruz vs.Secretaryof Environmentand Natural Resources
tain lands which are “absolutely necessary for social welfare and existence,”
including those which are not part of the public domain, shall thereafter be
owned by the State. If there is any room for constitutional construction, the
provision should be interpreted in favor of the preservation, rather than
impairment or extinguishment, of vested rights. Stated otherwise, Section 1,
Article XII of the 1935 Constitution cannot be construed to mean that vested
right which had existed then were extinguished and that the landowners were
divested of their lands, all in the guise of “wrest[ing] control of those portions
of the natural resources [which the State] deems absolutely necessary for
social welfare and existence.” On the contrary, said Section restated the
fundamental rule against the diminution of existing rights by expressly
providing that the ownership of lands of the public domain and other natural
resources by the State is “subject to any existing right, grant, lease, or
concessions.” The “existing rights” that were intended to be protected must,
perforce, include the right of ownership by indigenous peoples over their
ancestral lands and domains. The words of the law should be given their
ordinary or usual meaning,100 and the term “existing rights” cannot be
assigned an unduly restrictive definition.
Petitioners concede that Congress is mandated under Section 5, Article
XII of the 1987 Constitution101 to protect the rights of in-
_______________
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,
renewable for another 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 limit of the grant.
100
Central Azucarera Don Pedro v. Central Bank, 104 Phil. 598 (1954).
101
Sec. 5, Article XII. The State, subject to the provisions of this
Constitution and national development policies and programs, shall protect
278
278 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
digenous peoples to their ancestral lands and ancestral domains.
Nonetheless, they contend that the recognition and protection under IPRA of
the right of ownership of indigenous peoples over ancestral lands and
ancestral domains are far in excess of the legislative power and constitutional
mandate of the Congress,102 since such recognition and protection amount to
the alienation of lands of the public domain, which is proscribed under
Section 2, Article XIIn of the Constitution.
Section 5, Article XII of the Constitution expresses the sovereign intent to
“protect the rights of indigenous peoples to their ancestral lands.” In its
general and ordinary sense, the term “right” refers to any legally enforceable
claim.103 It is a power, privilege, faculty or demand inherent in one person and
incident upon another.104 When used in relation to property, “right” includes
any interest in or title to an object, or any just and legal claim to hold, use and
enjoy it.105 Said provision in the Constitution cannot, by any reasonable
construction, be interpreted to exclude the protection of the right of
ownership over such ancestral lands. For this reason, Congress cannot be
said to have exceeded its constitutional mandate and power in enacting the
provisions of IPRA, specifically Sections 7(a) and 8, which recognize the right
of ownership of the indigenous peoplesover ancestral lands.
The second paragraph of Section 5, Article XII also grants Congress the
power to “provide for the applicability of customary laws governing property
rights or relations in determining the ownership and extent of ancestral
domains.” In light of this provision, does Congress have the power to decide
whether ancestral domains shall be private property or part of the public
domain? Also, does Congress have the power to determine whether the
“extent” of
_______________
the rights of indigenous cultural communities to their ancestral lands to
ensure their economic, social,and cultural well-being.
The Congress may provide for the applicability of customary laws
governing property rights and relations in determining the ownership and
extent of ancestral domains.
102
See Memorandum of Petitioners, Rollo, pp. 863-864.
103
SIBAL, PHILIPPINE LEGAL ENCYCLOPEDIA, p. 893
104
BLACK’S LAW DICTIONARY, 5th ed., p. 1189.
105
Ibid.
279
VOL. 347, DECEMBER 6, 2000 279
Cruz vs. Secretary of Environment and Natural Resources
ancestral domains shall include the natural resources found therein?
It is readily apparent from the constitutional records that the framers of
the Constitution did not intend Congress to decide whether ancestral
domains shall be public or private property. Rather, they acknowledged that
ancestral domains shall be treated as private property, and that customary
laws shall merely determine whether such private ownership is by the entire
indigenous cultural community, or by individuals, families, or clans within the
community. The discussion below between Messrs. Regalado and Bennagen
and Mr. Chief Justice Davide, then members of the 1986 Constitutional
Commission, is instructive:
MR. REGALADO. Thank you, Madame President. May I seek some
clarifications from either Commissioner Bennagen or Commissioner Davide
regarding this phrase “CONGRESS SHALL PROVIDE FOR THE
APPLICABILITY OF CUSTOMARY LAWS GOVERNING PROPERTY
RIGHTS OR RELATIONS in determining the ownership and extent of the
ancestral domain,” because ordinarily it is the law on ownership and the
extent thereof which determine the property rights or relations arising
therefrom. On the other hand, in this proposed amendment the phraseology
is that it is the property rights or relations which shall be used as the basis in
determining the ownership and extent of the ancestral domain. I assume
there must be a certain difference in the customary laws and our regular civil
laws on property.
MR. DAVIDE. That is exactly the reason, Madam President, why we will
leave it to Congress to make the necessary exception to the general law on
property relations.
MR. REGALADO. I was thinking if Commissioner Bennagen could give
us an example of such a customary law wherein it is the property rights and
relations that determine the ownership and the extent of that ownership,
unlike the basic fundamental rule that it is the ownership and the extent of
ownership which determine the property rights and relations arising therefrom
and consequent thereto. Perhaps, these customary laws may have a
different provision or thrust so that we could make the corresponding
suggestions also by way of an amendment.
MR. DAVIDE. That is exactly my own perception.
MR. BENNAGEN. Let me put it this way.
There is a range of customary laws governing certain types of
ownership. There would be ownership based on individuals, on clan or
lineage,
280
280 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
or on community. And the thinking expressed in the consultation is that this
should be codified and should be recognized in relation to existing national
laws. That is essentiallytheconcept.106(Emphasis supplied.)
The intention to treat ancestral domains as private property is also apparent
from the following exchange between Messrs. Suarez and Bennagen:
MR. SUAREZ. When we speak of customary laws governing property rights
or relations in determining the ownership and extent of the ancestral
domain, are we thinking in terms of the tribal ownership or community
ownership or of private ownership within the ancestral lands or ancestral
domain?
MR. BENNAGEN. The concept of customary laws is that it is considered as
ownership by privateindividuals,clans and even communities.
MR. SUAREZ. So, there will be two aspects to this situation. This means that
the State will set aside the ancestral domain and there is a separate law
for that. Within the ancestral domain it could accept more specific
ownership in terms of individualswithin the ancestrallands.
MR. BENNAGEN. Individuals and groups within the ancestral
domain.107 (Emphasis supplied.)
It cannot be correctly argued that, because the framers of the Constitution
never expressly mentioned Cariño in their deliberations, they did not intend
to adopt the concept of native title to land, or that they were unaware of
native title as an exception to the theory of jura regalia.108 The framers of the
Constitution, as well as the people adopting it, were presumed to be aware of
the prevailing judicial doctrines concerning the subject of constitutional
provisions, and courts should take these doctrines into consideration in
construing theConstitution.109
Having thus recognized that ancestral domains under the Constitution are
considered as private property of indigenous peoples,
_______________
106
4 RECORD OF THE CONSTITUTIONAL COMMISSION 32.
107
Id., at 37.
108
Solicitor General’s Memorandum, Rollo, p. 665.
109
Torres v. Tan Chim, 69 Phil 518 (1940); CIR v. Guerrero, 21 SCRA
180 (1967).
281
VOL. 347, DECEMBER 6, 2000 281
Cruz vs. Secretary of Environment and Natural Resources
the IPRA, by affirming or acknowledging such ownership through its various
provisions, merely abides by the constitutional mandate and does not suffer
any vice of unconstitutionality.
Petitioners interpret the phrase “subject to the provisions of this
Constitution and national development policies and programs” in Section 5,
Article XII of the Constitution to mean “as subject to the provision of Section
2, Article XII of the Constitution,” which vests in the State ownership of all
lands of the public domain, mineral lands and other natural resources.
Following this interpretation, petitioners maintain that ancestral lands and
ancestral domains are the property of the State.
This proposition is untenable. Indeed, Section 2, Article XII reiterates the
declarations made in the 1935 and 1973 Constitutions on the state policy of
conservation and nationalization of lands of the public domain and natural
resources, and is of paramount importance to our national economy and
patrimony. A close perusal of the records of the 1986 Constitutional
Commission reveals that the framers of the Constitution inserted the phrase
“subject to the provisions of this Constitution” mainly to prevent the
impairment of Torrens titles and other prior rights in the determination of what
constitutes ancestral lands and ancestral domains, to wit:
MR. NATIVIDAD. Just one question. I want to clear this section protecting
ancestral lands. How does this affect the Torrens title and other prior
rights?
MR. BENNAGEN. I think that was also discussed in the committee hearings
and we did say that in cases where due process is clearly established in
terms of prior rights, these two have to be respected.
MR. NATIVIDAD. The other point is: How vast is this ancestral land? Is it true
that parts of Baguio City are considered as ancestral lands?
MR. BENNAGEN. They could be regarded as such. If the Commissioner still
recalls, in one of the publications that I provided the Commissioners, the
parts could be considered as ancestral domain in relation to the whole
population of Cordillera but not in relation to certain individuals or certain
groups.
MR. NATIVIDAD. The Commissioner means that the whole Baguio City is
considered as ancestral land?
282
282 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
MR. BENNAGEN. Yes, in the sense that it belongs to Cordillera or in the
same manner that Filipinos can speak of the Philippine archipelago as
ancestral land, but not in terms of the right of a particular person or
particular group to exploit, utilize, or sell it.
MR. NATIVIDAD. But is clear that the prior rights will be respected.
MR. BENNAGEN. Definitely.110
Thus, the phrase “subject to the provisions of this Constitution” was intended
by the framers of the Constitution as a reiteration of the constitutional
guarantee that no person shall be deprived of property without dueprocessof
law.
There is another reason why Section 5 of Article XII mandating the
protection of rights of the indigenous peoples to their ancestral lands cannot
be construed as subject to Section 2 of the same Article ascribing ownership
of all public lands to the State. The Constitution must be construed as a
whole. It is a rule that when construction is proper, the whole Constitution is
examined in order to determine the meaning of any provision. That
construction should beusedwhichwould give effect to the entire instrument. 111
Thus, the provisions of the Constitution on State ownership of public
lands, mineral lands and other natural resources should be read together
with the other provisions thereof which firmly recognize the rights of the
indigenous peoples. These, as set forth herein before, 112 include: Section 22,
Article II, providing that the State recognizes and promotes the rights of
indigenous peoples within the framework of national unify and
development; Section 5, Article XII, calling for the protection of the rights of
indigenous cultural communities to their ancestral lands to ensure their
economic, social, and cultural well-being, and for the applicability of
customary laws governing property rights and relations in determining the
ownership and extent of ancestral domains; Section 1, Article XIII,directing
the removal or reduction of social, economic,
_______________
110
4 RECORD OF THE CONSTITUTIONAL COMMISSION 36.
111
See I COOLEY, CONST., LIMITATIONS, 8TH ED., pp. 127-129.
112
See pp. 8-9 of this Opinion for the full text of the constitutional
provisions mentioned.
 283
VOL. 347, DECEMBER 6, 2000 283
Cruz vs.Secretaryof Environmentand Natural Resources
political and cultural inequities and inequalities by equitably diffusing wealth
and political power for the common good; Section 6, Article XIII, directing the
application of the principles of agrarian reform or stewardship in the
disposition and utilization of other natural resources, subject to prior rights,
homestead rights of small settlers, and the rights of indigenous communities
to their ancestral lands; Section 17, Article XIV, decreeing that the State shall
recognize, respect, and protect the rights of indigenous cultural communities
to preserve and develop their cultures, traditions, and institutions;
and Section 12, Article XVI, authorizing the Congress to create a consultative
body to advise the President on policies affecting indigenous
culturalcommunities.
Again, as articulated in the Constitution, the first goal of the national
economy is the more equitable distribution of opportunities, income, and
wealth.113 Equity is given prominence as the first objective of national
economic development.114 The framers of the Constitution did not, by the
phrase “subject to the provisions of this Constitution and national
development policies and programs,”
_______________
113
Section 1, Article XII provides:
The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth’, a sustained increase in the amount of
goods and services produced by the nation for the benefit of the people; and
an expanding productivity as the key to raisingthe qualityof life for all,
especially theunderprivileged.
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries that
make full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. However, the State shall
protect Filipino enterprises against unfair foreigncompetition and
tradepractices.
In the pursuit of these goals, all sectors of the economy and all regions of
the country shall be given optimum opportunity to develop. Private
enterprises, including corporations, cooperatives and similar collective
organizations, shall be encouraged to broaden the base of their ownership.
(Emphasis supplied.)
114
BERNAS, THE INTENT OF THE 1986 CONSTITUTION WRITERS, p.
800, citing the sponsorship speech of Dr. Bernardo Villegas, Chairman of the
Committee on NationalEconomy and Patrimony.
284
284 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
intend to establish a hierarchy of constitutional norms. As explained by then
Commissioner (now Chief Justice) Hilario G. Davide, Jr., it was not their
objective to make certain interests primary or paramount, or to create
absolute limitations or outright prohibitions;rather, the idea is towards the
balancing of interests:
BISHOP BACANI. In Commissioner Davide’s formulation of the first
sentence, he says: “The State, SUBJECT TO THE provisions of this
Constitution AND NATIONAL DEVELOPMENT POLICIES AND PROGRAMS
shall guarantee the rights of cultural or tribal communities to their ancestral
lands to insure their economic, social and cultural wellbeing. “ There are at
least two concepts here which receive different weights very often. They are
the concepts of national development policies and programs, and the rights
of cultural or tribal communities to their ancestral lands, et cetera. I would like
to ask: When the Commissioner proposed this amendment, which was the
controlling concept? I ask this because sometimes the rights of cultural
minorities are precisely transgressed in the interest of national development
policies and programs. Hence, I would like to know which is the controlling
concept here. Is it the rights of indigenous peoples to their ancestral lands or
is it national development policies and programs.
MR. DAVIDE. It is not really a question, of which is primary or which is
more paramount. The concept introduced here is really the balancing of
interests. That is what we seek to attain. We have to balance the interests
taking into account the specific needs and the specific interests also of these
cultural communities in like manner that we did so in the autonomous
regions.115(Emphasis supplied.)
B. The provisions of RA. 8371 do not infringe upon the State’s ownership
over thenatural resources withinthe ancestral domains.
Petitioners posit that IPRA deprives the State of its ownership over mineral
lands of the public domain and other natural resources, 116 as well as the
State’s full control and supervision over the exploration, development and
utilization of natural resources.117 Specifically, petitioners and the Solicitor
General assail Sections 3
_______________
115
4 RECORD OF THE CONSTITUTIONAL COMMISSION 34.
116
Petition, Rollo, pp. 18-19.
117
Id.,at 20
285
VOL. 347, DECEMBER 6, 2000 285
Cruz vs.Secretaryof Environmentand Natural Resources
(a),118 5,119 and 7120 of IPRA as violative of Section 2, Article XII of the
Constitution which states, in part, that “[a] 11 lands of the public
_______________
 118
Section 3. Definition of Terms.—For Purposes of this Act, the
followingterms shall mean:
1. a)Ancestral Domains.—Subject to Section 56 hereof, refer to all
areas generally belonging to ICCs/IPs comprising lands, inland
waters, coastal areas, and natural resources therein, held under a
claim of ownership, occupied or possessed by ICCs/IPs, by
themselves or through their ancestors, communally or individually
since time immemorial, continuously to the present except when
interrupted by war, force majeure or displacement by force, deceit,
stealth or as a consequence of government projects or any other
voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure their
economic, social and cultural welfare. It shall include ancestral
lands, forests, pasture, residential, agricultural, and other lands,
individually owned whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas, bodies of water,
mineral and other natural resources, and lands which may no
longer be exclusively occupied by ICCs/IPs but from which they
traditionally had access to for their subsistence and traditional
activities, particularly the home ranges of ICCs/IPs who are still
nomadicand/or shifting cultivators.
119
Section 5. Indigenous Concept of Ownership.—Indigenous concept of
ownership sustains the view that ancestral domains and all resources found
therein shall serve as the material bases of their cultural integrity. The
indigenous concept of ownership generally holds that ancestral domains are
the ICCs/IPs private but community property which belongs to all generations
and therefore cannot be sold, disposed or destroyed. Itlikewise covers
sustainable traditional resourcerights.
120
Section 7. Rights to Ancestral Domains.—The rights of ownershipand
possession of ICCs/IPs to their ancestral domains shall be recognized and
protected. Such rightsshallinclude:
1. (a)Right of Ownership.—The right to claim ownership over lands,
bodies of water traditionally and actually occupied by ICCs/IPs,
sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains;
2. (b)Right to Develop Lands and Natural Resources.—Subject to
Section 56 hereof, right to develop, control and use lands and
territories traditionally occupied, owned, or used; to manage and
con-
286
286 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
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.” 121 They would have the
Court declare as unconstitutional Section 3(a) of IPRA because the inclusion
of natural resources in the definition of ancestral domains purportedly results
in the abdication ofState ownership over theseresources.
I am not convinced.
Section 3(a) merely defines the coverage of ancestral domains, and
describes the extent, limit and composition of ancestral domains by setting
forth the standards and guidelines in determining whether a particular area is
to be considered as part of and within the ancestral domains. In other words,
Section 3(a) serves only as a yardstick which points out what properties are
within the ancestral domains. It does not confer or recognize any right of
ownership over the natural resources to the indigenous peoples. Its purpose
is definitional and not declarative ofa right or title.
The specification of what areas belong to the ancestral domains is, to our
mind, important to ensure that no unnecessary encroachment on private
properties outside the ancestral domains will result during the delineation
process. The mere fact that Section 3(a) defines ancestral domains to
include the natural resources
_______________
serve natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the profits from
allocation and utilization of the natural resources found therein; the right to
negotiate the terms and conditions for the exploration of natural resources in
the areas for the purpose of ensuring ecological, environmental protection
and the conservation measures, pursuant to national and customary laws;
the right to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or
impact upon the ancestral domains and to receive just and fair compensation
for any damages which they may sustain as a result of the project; and the
right to effective measures by the government to prevent any interference
with, alienation and encroachment upon these rights; x x x (Emphasis
supplied.)
121
Section 2, Article XII, CONSTITUTION.
287
VOL. 347, DECEMBER 6, 2000 287
Cruz vs.Secretaryof Environmentand Natural Resources
found therein does not ipso facto convert the character of such natural
resources as private property of the indigenous peoples. Similarly, Section 5
in relation to Section 3(a) cannot be construed as a source of ownership
rights of indigenous people over the natural resources simply because it
recognizes ancestral domains as their “private but community property.”
The phrase “private but community property” is merely descriptive of the
indigenous peoples’ concept of ownership as distinguished from that
provided in the Civil Code. In Civil Law, “ownership” is the “independent and
general power of a person over a thing for purposes recognized by law and
within the limits established thereby.”122 The civil law concept of ownership
has the following attributes: jus utendi or the right to receive from the thing
that which it produces, jus abutendi or the right to consume the thing by its
use, jus disponendi or the power to alienate, encumber, transform and even
destroy that which is owned and jus vindicandi or the right to exclude other
persons from the possession the thing owned. 123 In contrast, the indigenous
peoples’ concept of ownership emphasizes the importance of communal or
group ownership. By virtue of the communal character of ownership, the
property held in common “cannot be sold, disposed or destroyed” 124 because
it was meant to benefit the whole indigenous community and not merely the
individualmember.125
That IPRA is not intended to bestow ownership over natural resources to
the indigenous peoples is also clear from the deliberations of the bicameral
conference committee on Section 7 which recites the rights of indigenous
peoples over their ancestral domains, to wit:
_______________
122
TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE
CIVIL CODE OF THE PHILIPPINES, Vol. II, p. 42 (1983); see alsoArticles
427 and 428, Civil Code.
123
Id.,at 43.
124
Section 5, R.A. 8371.
125
Ibid.
288
288 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
CHAIRMAN FLAVIER. Accepted. Section 8126 rights to ancestral domain, this
iswhere we transferredthe other provision but here itself—
HON. DOMINGUEZ. Mr. Chairman, if I may be allowed to make a very
short Statement. Earlier, Mr. Chairman, we have decided to remove the
provisions on natural resources because we all agree that that belongs to the
State. Now, the plight or the rights of those indigenous communities living in
forest and areas where it could be exploited by mining, by dams, so can we
not also provide a provision to give little protection or either rights for them to
be consulted before any mining areas should be done in their areas, any
logging done in their areas or any dam construction because this has been
disturbing our people especially in the Cordilleras. So, if there could be, if our
lawyers or the secretariat could just propose a provision for incorporation
here so that maybe the right to consultation and the right to be compensated
when there are damages within their ancestral lands.
CHAIRMAN FLAVIER. Yes, very well taken but to the best of my
recollection both are already considered in subsequent sections which we
are now lookingfor.
HON. DOMINGUEZ. Thank you.
CHAIRMAN FLAVIER. First of all there is a line that gives priority use for
the indigenous people where they are. Number two, in terms of the mines
there is a need for prior consultation of source which is here already. So,
anyway it is on the record that you want to make sure that the secretariat
takes note of those two issues and my assurance is that it is alreadythereand
I will make sure that theycross check.
HON. ADAMAT. I second that, Mr. Chairman.
CHAIRMAN FLAVIER. Okay, thank you. So we now move to Section 8,
there is a Senate version you do not have and if you agree we will adopt
that.127(Emphasis supplied.)
Further, Section 7 makes no mention of any right of ownership of the
indigenous peoples over the natural resources. In fact, Sec-
_______________
126
Should be Section 7. The Transcript of Session Proceedings of the
deliberations of the Bicameral Conference Committee on National Cultural
Communities regarding House Bill No. 9125 refers to Section 8 but the
Committee was actually discussing Section 7 on Rights to Ancestral
Domains.
127
Transcript of Session Proceedings, Bicameral Conference Committee
on National Cultural Communities, October 9, 1997, XTV-2.
289
VOL. 347, DECEMBER 6, 2000 289
Cruz vs.Secretaryof Environmentand Natural Resources
tion 7(a) merely recognizes the “right to claim ownership over lands, bodies
of water traditionally and actually occupied by indigenous peoples, sacred
places, traditional hunting and fishing grounds, and all improvements made
by them at any time within the domains.” Neither does Section 7(b), which
enumerates certain rights of the indigenous peoples over the natural
resources found within their ancestral domains, contain any recognition of
ownership vis-a-vis the natural resources.
What is evident is that the IPRA protects the indigenous peoples’ rights
and welfare in relation to the natural resources found within their ancestral
domains,128 including the preservation of the ecological balance therein and
the need to ensure that the indigenous peoples will not be unduly displaced
when State-approved activities involving the natural resources located
therein are undertaken.
Finally, the concept of native title to natural resources,unlike native title
to land, has not been recognized in the Philippines. NCIP and Flavier, et
al. invoke the case of Reavies v. Fianza129 in support of their thesis that
native title to natural resources has been upheld in this jurisdiction. 130 They
insist that “it is possible for
_______________
128
Sections 7 (b) and Section 57,R.A. 8371.
129
40 Phil. 1017 (1909), 215 US 16, 54 L Ed 72.
130
Ibid. The facts of the case were discussed in Fianza vs. Reavies, (7
Phil. 610 [1909]) thus: Jose Fianza, et al., members of the Igorot tribe,
claimed that he and his predecessors had, for more than fifty years prior to
1901, possessed a certain parcel of mineral land on which were found two
gold mines. The same parcel of land was also claimed by an American, J.F.
Reavies, who entered the land in 1901 and proceeded to locate mining
claims according to the mining laws of the United States. The Philippine
Supreme Court held that Fianza, et al. were the rightful owners of the mineral
lands pursuant to Section 45 of the Philippine Bill of 1902 which in sum
states that where a person has held or worked on his mining claims for a
period equivalent to ten years, evidence of such possession and working of
the claims for such period shall be sufficient to establish a right to a patent
thereto. On appeal, the United States Supreme Court affirmed the decision of
the Philippine Supreme Court and held that the indigenous peoples were the
rightful owners of the contested parcel of land, stating that the possession
and working by Fianza, et al. of the
290
290 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
rights over natural resources to vest on a private (as opposed to a public)
holder if these were held prior to the 1935 Constitution.” 131 However, a
judicious examination of Reavies reveals that, contrary to the position of
NCIP and Flavier, et al., the Court did not recognize native title to natural
resources. Rather, it merely upheld the right of the indigenous peoples to
claim ownership of minerals under the Philippine Bill of1902.
While as previously discussed, native title to land or private ownership by
Filipinos of land by virtue of time immemorial possession in the concept of an
owner was acknowledged and recognized as far back during the Spanish
colonization of the Philippines, there was no similar favorable treatment as
regards natural resources. The unique value of natural resources has been
acknowledged by the State and is the underlying reason for its consistent
assertion of ownership and control over said natural resources from the
Spanish regime up to the present.132 Natural re-
_______________
mining claim in the Philippine Islands for the time required under the
Section 45 of the Philippine Bill of 1902 to establish the right to a patent,
need not have been under a claim of title.
131
Memorandum of Intervenors Flavier, et al., Rollo,p. 918.
132
Article I of the Decree of Superior Civil Government of January 29,
1864 provided that The supreme ownership of mines throughout the kingdom
belong to the crown and the king. They shall not be exploited except by
persons who obtained special grant from this superior government and by
those who may secure it thereafter, subject to this regulation.”
(FRANCISCO, PHILIPPINE LAWS ON NATURAL RESOURCES, 2nd ed.
[1956], p. 14, citing the unpublished case of Lawrence v. Garduno G.R. No.
19042.)
Article 2 of the Royal Decree of May 14, 1867 (the Spanish Mining Law), the
law in force at the time of the cession of the Philippines to the United States
contained a similar declaration, thus:
The ownership of the substances enumerated in the preceding article
(among them those of inflammable nature) belongs to the state, and they
cannot be disposed of without an authorization issued by the Superior Civil
Governor.
The Spanish Civil Code contained the following analogous provisions
affirming the State’s ownership overminerals:
Art. 339. Property of public dominium is—
xxx
291
VOL. 347, DECEMBER 6, 2000 291
Cruz vs.Secretaryof Environmentand Natural Resources
sources, especially minerals, were considered by Spain as an abundant
source of revenue to finance its battles in wars against other
_______________
2. That belonging exclusively to the State which, without being of general
public use, is employed in some public service, or in the development of the
national wealth, such as walls, fortresses, and other works for the defense of
the territory, and mines,until granted to private individuals.
Art. 350. The proprietor of land is the owner of the surface and of
everything under it and may build, plant or excavate thereon, as he may see
fit, subject to any existing easements and to the provisions of the Laws on
Mines and Watersand to police regulations.
After the Philippines was ceded to Spain, the Americans continued to
adhere to the concept of State-ownership of natural resources. However, the
open and free exploration, occupation and purchase of mineral deposits and
the land where they may be found were allowed under the Philippine Bill of
1902. Section 21 thereof stated:
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 hereby 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.
Other natural resources such as water and forests were similarly
regarded as belonging to the State during both the Spanish and American
rule in the Philippines,viz:
Article 33 of the Law of Waters of August 3, 1866 defined waters of public
ownership as (1) the waters springing continuously or intermittently from
lands of the public domain; (2) the waters of rivers; and (3) the continuous or
intermittent waters of springs and creeks running through their natural
channels.
Article 1 of the same law states:
The following arealso part of the national domain open to public use:
1. 1.The coasts or maritime frontiers of the Philippine territory with their
coves, inlets, creeks, roadsteads, bays and ports
2. 2.The coast of the sea, that is, the maritime zone encircling the
coasts, to the full width recognized by international law. The state
provides for and regulates the police supervision and the uses of
this zone as well as
292
292 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
nations. Hence, Spain, by asserting its ownership over minerals wherever
these may be found, whether in public or private lands, recognized the
separability of title over lands and that over minerals which may befound
therein.133
_______________
the right of refuge and immunity therein, in accordance with law and
international treaties.
With respect to forests, there are references made regarding State-
ownership of forest lands in Supreme Court decisions (See Director of
Forestry vs. Munoz, 23 SCRA 1183, 1198-1199 [1968]; Director of Lands vs.
Abanzado, 65 SCRA 5, 11 [1975]; Mapa vs. Insular Government, 10 Phil.
175, 184 [1908]; Montano vs. Insular Government, 12 Phil. 572, 584 [1909]).
The State’s ownership over natural resources was embodied in the 1935,
1973 and 1987 Constitutions. Section 1, Article XII of the 1935 Constitution
declared:
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, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five years,
renewable for another 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.
Section 8, ArticleXIV of the 1973 Constitution provided:
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
usemay be the measure and limit of the grant.
133
NOBLEJAS, PHILIPPINE LAW ON NATURAL RESOURCES 1961
Revised Ed., p. 6.
293
VOL. 347, DECEMBER 6, 2000 293
Cruz vs.Secretaryof Environmentand Natural Resources
On the other hand, the United States viewed natural resources as a source of
wealth for its nationals. As the owner of natural resources over the
Philippines after the latter’s cession from Spain, the United States saw it fit to
allow both Filipino and American citizens to explore and exploit minerals in
public lands, and to grant patents to private mineral lands. 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.134Although the United States made a distinction
between minerals found in public lands and those found in private lands, title
in these minerals was in all cases sourced from the State. The framers of the
1935 Constitution found it necessary to maintain the State’s ownership over
natural resources to insure their conservation for future generations of
Filipinos, to prevent foreign control of the country through economic
domination; and to avoid situations whereby “the Philippines would become a
source of international conflicts, thereby posingdangerto its internal security
and independence.135
The declaration of State ownership and control over minerals and other
natural resources in the 1935 Constitution was reiterated in both the
1973136 and 1987 Constitutions.137
_______________
134
See LAUREL (ED.), PROCEEDINGS OF THE PHILIPPINE
CONSTITUTIONAL CONVENTION, VOL. VI, pp. 494-495.
135
Explanatory Note of the Committee on Nationalization of Lands and
Natural Resources, September 14, 1934, reproduced in LAUREL
(ED.), PROCEEDINGS OF THE PHILIPPINE CONSTITUTIONAL
CONVENTION, VOL. VII, pp. 464-468; see also DE LEON AND DE LEON,
JR., PHILIPPINE CONSTITUTIONAL LAW: PRINCIPLES AND CASES,
VOL. 2, pp. 801-802.
136
Section 8, Article XIV, see note 139 for the full text of the provision.
137
Paragraph 1, Section 2, Article XII of the 1987 Constitution provides:
All lands of the public domain, waters, minerals, coal, petroleum, and other
minerals 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 explo-
294
294 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Having ruled that the natural resources which may be found within the
ancestral domains belong to the State, the Court deems it necessary to
clarify that the jurisdiction of the NCIP with respect to ancestral domains
under Section 52 [i] of IPRA extends only to thelands and not to thenatural
resourcestherein.
Section 52[i] provides:
Turnover of Areas Within Ancestral Domains Managed by Other Government
Agencies.—The Chairperson of the NCIP shall certify that the area covered
is an ancestral domain. The secretaries of the Department of Agrarian
Reform, Department of Environment and Natural Resources, Department of
Interior and Local Government, and Department of Justice, the
Commissioner of the National Development Corporation, and any other
government agency claiming jurisdiction over the area shall be notified
thereof. Such notification shall terminate any legal basis for the jurisdiction
previously claimed.
Undoubtedly, certain areas that are claimed as ancestral domains may still
be under the administration of other agencies of the Government, such as
the Department of Agrarian Reform, with respect to agricultural lands, and
the Department of Environment and Natural Resources with respect to
timber, forest and mineral lands. Upon the certification of these areas as
ancestral domain following the procedure outlined in Sections 51 to 53 of the
IPRA, jurisdiction of the government agency or agencies concerned
over lands forming part thereof ceases. Nevertheless, the jurisdiction of
government agencies over the natural resources within the ancestral
domains does not terminate by such certification because said agencies are
mandated under existing laws to administer the natu-
_______________
ration, 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 and 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 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.
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VOL. 347, DECEMBER 6, 2000 295
Cruz vs.Secretaryof Environmentand Natural Resources
ral resources for the State, which is the owner thereof. To construe Section
52[i] as divesting the State, through the government agencies concerned, of
jurisdiction over the natural resources within the ancestral domains would be
inconsistent with the established doctrine that all natural
resourcesareownedby the State.
C. The provisions of IPRA pertaining to the utilization of natural resourcesare
notunconstitutional.
The IPRA provides that indigenous peoples shall have the right to manage
and conserve the natural resources found on the ancestral domains, to
benefit from and share in the profits from the allocation and utilization of
these resources, and to negotiate the terms and conditions for the
exploration of such natural resources.138 The statute also grants them priority
rights in the harvesting, extraction, development or exploitation of any natural
resources within the ancestral domains.139 Before the NCIP can
_______________
138
Section 7. Rights to Ancestral Domains.—The rights of ownership and
possession of ICCs/IPs to their ancestral domains shall be recognized and
protected. Such rightsshallinclude:
 xxx
b) Right to Develop Lands and Natural Resources.—Subject to Section 56
hereof, right to develop, control and use lands and territories traditionally
occupied, owned, or used; to manage and conserve natural resources within
the territories and uphold the responsibilities for future generations; to benefit
and share the profits from allocation and utilization of the natural resources
found therein; the right to negotiate the terms and conditions for the
exploration of natural resources in the areas for the purpose of ensuring
ecological, environmental protection and the conservation measures,
pursuant to national and customary laws; the right to an informed and
intelligent participation in the formulation and implementation of any project,
government or private, that will affect or impact upon the ancestral domains
and to receive just and fair compensation for any damages which they may
sustain as a result of the project; and the right to effective measures by the
government to prevent any interference with, alienation and encroachment
upon these rights;
139
Section 57. Natural Resources within Ancestral Domains.—
TheICCs/IPs shall have priority rights in the harvesting, extraction, develop-
296
296 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
issue a certification for the renewal, or grant of any concession, license or
lease, or for the perfection of any production-sharing agreement the prior
informed written consent of the indigenous peoples concerned must be
obtained.140 In return, the indigenous peoples are given the responsibility to
maintain, develop, protect and conserve the ancestral domains or portions
thereof which are found to be necessary for critical watersheds, mangroves,
wildlife sanctuaries, wilderness, protected areas, forest cover, or
reforestation.141
_______________
ment or exploitation of any natural resources within the ancestral
domains. A non-member of the ICCs/IPs concerned may be allowed to take
part in the development and utilization of the natural resources for a period of
not exceeding twenty-five (25) years renewable for not more than twenty-five
(25) years: Provided, That a formal and written agreement is entered into
with the ICCs/IPs concerned or that the community, pursuant to its own
decision making process, has agreed to allow such operation: Provided,
finally, That the NCIP may exercise visitorial powers and take appropriate
action to safeguard the rights of the ICCs/IPs under the same contract.
140
Section 59. Certification Precondition.—All departments and other
governmental agencies shall henceforth be strictly enjoined from issuing,
renewing, or granting any concession, license or lease, or entering into any
production-sharing agreement, without prior certification from the NCIP that
the area affected does not overlap with any ancestral domain. Such
certification shall only be issued after a field-based investigation is conducted
by the Ancestral Domains Office of the area concerned: Provided, That no
certification shall be issued by the NCIP without the free and prior informed
and written consent of Indigenous peoples concerned: Provided, further, That
no department, government agency or govern-ment-owned or controlled
corporation may issue new concession, license, lease, or production sharing
agreement while there, is a pending application for a CADT: Provided,
finally, That the ICCs/IPs shall have the right to stop or suspend, in
accordance with this Act, any project that has not satisfied the requirement of
thisconsultation process.
141
Section 58. Environmental Considerations.—Ancestral domains or
portions thereof, which are found to be necessary for critical watersheds,
mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover, or
reforestation as determined by appropriate agencies with the full participation
of the Indigenous peoples concerned shall be maintained, managed and
developed for such purposes: The indigenous peoples con-
297
VOL. 347, DECEMBER 6, 2000 297
Cruz vs.Secretaryof Environmentand Natural Resources
The Solicitor General argues that these provisions deny the State an active
and dominant role in the utilization of our country’s natural resources.
Petitioners, on the other hand, allege that under the Constitution the
exploration, development and utilization of natural resources may only be
undertaken by the State, either directly or indirectly through co-production,
joint venture, or production-sharing agreements. 142 To petitioners, no other
method is allowed by the Constitution. They likewise submit that by vesting
ownership of ancestral lands and ancestral domains in the indigenous
peoples, IPRA necessarily gives them control over the use and enjoyment of
such natural resources, to the prejudice of the State. 143
Section 2, Article XII of the Constitution provides in paragraph 1 thereof
that the exploration, development and utilization of natural resources must be
under the full control and supervision of the State, which may directly
undertake such activities or enter into co-production, joint venture, or
production-sharing agreements. This provision, however, should not be read
in isolation to avoid a mistaken interpretation that any and all forms of
utilization of natural resources other than the foregoing are prohibited. The
Constitution must be regarded as consistent with itself throughout. 144 No
constitutional provision is to be separated from all the others, or to be
considered alone, all provisions bearing upon a
_______________
cerned shall be given the responsibility to maintain, develop, protect and
conserve such areas with the full and effective assistance of government
agencies. Should the Indigenous peoples decide to transfer the responsibility
over the areas, said decision must be made in writing. The consent of the
Indigenous peoples should be arrived at in accordance with its customary
laws without prejudice to the basic requirements of existing laws on free and
prior Informed consent: Provided, That the transfer shall be temporary and
will ultimately revert to the Indigenous peoples in accordance with the
program for technology transfer; Provided, further, That no Indigenous
peoples shall be displaced or relocated for the purpose enumerated under
this section without the written consent of the specific persons authorized to
give consent.
142
Citing Section 2, Article XII of the Constitution.
143
Memorandum of Petitioners, Id.,at 840-841.
144
State v. Lathrop, 93 Ohio St 79, 112 NE 209, cited in 16 AM JUR 2d,
ConstitutionalLaw, § 100.
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298 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
particular subject are to be brought into view and to be so interpreted as to
effectuate the great purposes of the fundamental law. 145
In addition to the means of exploration, development and utilization of the
country’s natural resources stated in paragraph 1, Section 2 of Article XII, the
Constitution itself states in the third paragraph of the same section that
Congress may, by law, allow small-scale utilization of natural resources by its
citizens.146 Further, Section 6, Article XIII, directs the State, in the disposition
and utilization of natural resources, to apply the principles of agrarian reform
or stewardship.147 Similarly, Section 7, Article XIII mandates the State to
protect the rights of subsistence fishermen to the preferential use of marine
and fishing resources.148 Clearly,
_______________
145
Old Wayne Mutual Life Assn. v. McDonough, 204 US 6, 51 L Ed 345,
cited in 16 AM JUR 2d Constitutional Law,§ 100.
146
Third paragraph, Section 2, Article XII, Constitution—
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 fishworkers in rivers,lakes, bays, and lagoons.
147
Section 6, Article XIII, Constitution—
The State shall apply the principles of agrarian reform or stewardship,
whenever applicable in accordance with law, in the disposition and utilization
of other natural resources, including lands of the public domain under lease
or concession suitable to agriculture, subject to prior rights, homestead rights
of small settlers, and the rights of the indigenous communities to their
ancestral lands.
The State may resettle landless farmers and farmworkers in its own
agricultural estates which shall be distributed to them in the manner provided
by law.
148
Section 7, Article XIII, Constitution—
The State shall protect the rights of subsistence fishermen, especially of local
communities, to the preferential use of the communal marine and fishing
resources, both inland and offshore. It shall provide support to such
fishermen through appropriate technology and research, adequate financial,
production, and marketing assistance, and other services. The State shall
also protect, develop, and conserve such resources. The protection shall
extend to offshore
299
VOL. 347, DECEMBER 6, 2000 299
Cruz vs.Secretaryof Environmentand Natural Resources
Section 2, Article XII, when interpreted in view of the pro-Filipino, pro-poor
philosophy of our fundamental law, and in harmony with the other provisions
of the Constitution rather as a sequestered pronouncement, 149 cannot be
construed as a prohibition against any and all forms of utilization of natural
resources without the State’s direct participation.
Through the imposition of certain requirements and conditions for the
exploration, development and utilization of the natural resources under
existing laws,150 the State retains full control over such activities,
whetherdoneon small-scale basis151 or otherwise.
The rights given to the indigenous peoples regarding the exploitation of
natural resources under Sections 7(b) and 57 of IPRA amplify what has been
granted to them under existing laws, such as the Small-Scale Mining Act of
1991 (R.A. 7076) and the Philippine Mining Act of 1995 (R.A. 7942). R.A.
7076 expressly provides that should an ancestral land be declared as a
people’s small-scale mining area, the members of the indigenous peoples
living within said area shall be given priority in the awarding of small-scale
mining contracts.152 R.A. 7942 declares that no ancestral land shall be
opened for mining operations without the prior consent of the
_______________
fishing grounds of subsistence fishermen against foreign intrusion.
Fishworkers shall receive a just share from their labor in the utilization of
marine and fishing resources.
149
Bower v. Big Horn Canal Assn. (Wyo) 307 P2d 593, cited in 16 AM
JUR 2d Constitutional Law, § 100.
150
Republic Act No. 7076 (the Small-Scale Mining Act of 1991), Republic
Act No. 7942 (the Philippine Mining Act of 1995).
151
Section 3(b) of R.A. 7076 defines “small-scale mining” as referring to
mining activities which rely heavily on manual labor using simple implements
and methods and do not use explosives or heavy mining equipment.
152
Section 7, R.A. 7076 provides:
Ancestral lands.—No ancestral land may be declared as a people’s
smallscale 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 for the awarding of a people’s small-scale mining contract.
300
300 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
indigenous cultural community concerned153 and in the event that the
members of such indigenous cultural community give their consent to mining
operations within their ancestral land, royalties shall be paid to them by
theparties to themining contract.154
In any case, a careful reading of Section 7(b) would reveal that the rights
given to the indigenous peoples are duly circumscribed. These rights are
limited only to the following: to manage and conserve natural resources
within territories and uphold it for future generations; to benefit and share the
profits from allocation and utilization of the natural resources found
therein; to negotiate the terms and conditions for the exploration of natural
resources in the areas for the purpose of ensuring ecological, environmental
protection and the conservation measures, pursuant to national and
customary laws; to an informed and intelligent participation in the formulation
and implementation of any project, government or private, that will affect or
impact upon the ancestral domains and to receive just and fair
compensation for any damages which they may sustain as a result of the
project, and the right to effective measures by the government to prevent any
interference with, alienation andencroachment of theserights.
It must be noted that the right to negotiate terms and conditions granted
under Section 7(b) pertains only to the exploration of natural resources. The
term “exploration” refers only to the search or prospecting of mineral
resources, or any other means for the purpose of determining the existence
and the feasibility of mining them for profit. 155 The exploration, which is
merely a preliminary activity, cannot be equated with the entire process of
“exploration, development and utilization” of natural resources which under
the Constitutionbelong to theState.
Section 57, on the other hand, grants the indigenous peoples “priority
rights” in the utilization of natural resources and not absolute ownership
thereof. Priority rights does not mean exclusive rights. What is granted is
merely the right of preference or first
_______________
153
Section 16, R.A. 7942.
154
Section 17, R.A. 794?.
155
Sec. 3(q), Chapter 1, Republic Act No. 7942 (the Philippine Mining Act
of 1995).
301
VOL. 347, DECEMBER 6, 2000 301
Cruz vs. Secretary of Environment and Natural Resources
consideration in the award of privileges provided by existing laws and
regulations, with due regard to the needs and welfare of indigenous peoples
living in the area.
There is nothing in the assailed law which implies an automatic or
mechanical character in the grant of concessions. Nor does the law negate
the exercise of sound discretion by government entities. Several factors still
have to be considered. For example, the extent and nature of utilization and
the consequent impact on the environment and on the indigenous peoples’
way of life are important considerations. Moreover, the indigenous peoples
must show that they live in the area and that they are in the best position to
undertake the required utilization.
It must be emphasized that the grant of said priority rights to indigenous
peoples is not a blanket authority to disregard pertinent laws and regulations.
The utilization of said natural resources is always subject to compliance by
the indigenous peoples with existing laws, such as R.A. 7076 and R.A. 7942
since it is not they but the State, which owns these resources.
It also bears stressing that the grant of priority rights does not preclude
the State from undertaking activities, or entering into coproduction, joint
venture or production-sharing agreements with private entities, to utilize the
natural resources which may be located within the ancestral domains. There
is no intention, as between the State and the indigenous peoples, to create a
hierarchy of values; rather, the object is to balance the interests of the State
for national development and those of the indigenous peoples.
Neither does the grant of priority rights to the indigenous peoples exclude
non-indigenous peoples from undertaking the same activities within the
ancestral domains upon authority granted by the proper governmental
agency. To do so would unduly limit the ownership rights of the State over the
natural resources.
To be sure, the act of the State of giving preferential right to a particular
sector in the utilization of natural resources is nothing new. As previously
mentioned, Section 7, Article XIII of the Constitution mandates the protection
by the State of “the rights of subsistence fishermen, especially of local
communities, to the preferential
302
302 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
use of communal marine and fishing resources, both inland and offshore.”
Section 57 further recognizes the possibility that the exploration and
exploitation of natural resources within the ancestral domains may disrupt the
natural environment as well as the traditional activities of the indigenous
peoples therein. Hence, the need for the prior informed consent of the
indigenous peoples before any search for or utilization of the natural
resources within their ancestral domains is undertaken.
In a situation where the State intends to directly or indirectly undertake
such activities, IPRA requires that the prior informed consent of the
indigenous peoples be obtained. The State must, as a matter of policy and
law, consult the indigenous peoples in accordance with the intent of the
framers of the Constitution that national development policies and programs
should involve a systematic consultation to balance local needs as well as
national plans. As may be gathered from the discussion of the framers of the
Constitution on this point, the national plan presumably takes into account
the requirements of the region after thorough consultation. 156 To this end,
IPRA grants to the indigenous peoples the right to an informed and intelligent
participation in the formulation and implementation of any project,
government or private, and the right not to be removed therefrom without
their free and prior informed consent.157 As to non-members, the prior
informed consent takes the form of a formal and written agreement between
the indigenous peoples and non-members under the proviso in Section 57 in
case the State enters into a co-production, joint venture, or production-
sharing agreement with Filipino citizens, or corporations. This requirement is
not peculiar to IPRA. Existing laws and regulations, such as the Philippine
Environmental Policy,158 the Environmental Impact System,159 the Local
Government Code160
_______________
156
4 RECORD OF THE CONSTITUTIONAL COMMISSION 37.
157
Sections 7(a)and (b), R.A. 8371.
158
Presidential Decree No. 1151 (1971).
159
Presidential Decree No. 1586 (1978) and DENR Administrative Order
No. 37 (1996).
160
Republic Act No. 7160 (1991).
303
VOL. 347, DECEMBER 6, 2000 303
Cruz vs.Secretaryof Environmentand Natural Resources
and the Philippine Mining Act of 1995 161 already require increased
consultation and participation of stakeholders, such as indigenous peoples,
in the planning of activities with significant environment impact.
The requirement in Section 59 that prior written informed consent of the
indigenous peoples must be procured before the NCIP can issue a
certification for the “issuance, renewal, or grant of any concession, license or
lease, or to the perfection of any production-sharing agreement,” must be
interpreted, not as a grant of the power to control the exploration,
development and utilization of natural resources, but merely the imposition of
an additional requirement for such concession or agreement. The clear intent
of the law is to protect the rights and interests of the indigenous peoples
which may be adversely affected by the operation of such entities or
licensees.
Corollary Issues
A. IPRA does not violate the Due Process clause.
The first corollary issue raised by petitioners is whether IPRA violates Section
1, Article III of the Constitution, which provides that “no person shall be
deprived of life, liberty, or property without due process of law, nor shall any
person be deprived the equal protection of the laws.”
Petitioners maintain that the broad definition of ancestral lands and
ancestral domains under Section 3(a) and 3(b) of IPRA includes private
lands. They argue that the inclusion of private lands in the ancestral lands
and ancestral domains violates the due process clause. 162Petitioners’
contention is erroneous.
Sections 3(a) and 3(b) expressly provide that the definition of ancestral
lands and ancestral domains are “subject to Section 56,” which reads:
_______________
161
Republic Act No. 7942.
162
Petition, Rollo, pp. 23-25.
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304 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Sec. 56. Existing Property Rights Regimes.—Property rights within the
ancestral domains already existing and/or vested upon effectivity of this Act,
shall be recognizedandprotected.
Petitioners, however, contend that Section 56 aims to protect only the vested
rights of indigenous peoples, but not those who are not members of such
communities. Following their interpretation, IPRA, under Section 56,
recognizes the rights of indigenous peoples to their ancestral lands and
ancestral domains, subject to the vested rights of the same communities to
such ancestral lands and ancestral domains.Such interpretation is obviously
incorrect.
The “property rights” referred to in Section 56 belong to those acquired by
individuals, whether indigenous or non-indigenous peoples. Said provision
makes no distinction as to the ethnic origins of the ownership of these
“property rights.” The IPRA thus recognizes and respects “vested rights”
regardless of whether they pertain to indigenous or non-indigenous peoples.
Where the law does not distinguish, the courts should not distinguish. 163 What
IPRA only requires is that these “property rights” already exist and/or
vestedupon its effectivity.
Further, by the enactment of IPRA, Congress did not purport to annul any
and all Torrens titles within areas claimed as ancestral lands or ancestral
domains. The statute imposes strict procedural requirements for the proper
delineation of ancestral lands and ancestral domains as safeguards against
the fraudulent deprivation of any landowner of his land, whether or not he is
member of an indigenous cultural community. In all proceedings for
delineation of ancestral lands and ancestral domains, the Director of Lands
shall appear to represent the interest of the Republic of the
Philippines.164 With regard to ancestral domains, the following procedure is
mandatory: first,petition by an indigenous cultural community, or motu
proprio by the NCIP; second, investigation and census by the Ancestral

domains Office (“ADO”) of the NCIP; third,preliminary report by the
ADO; fourth, posting and publication; and lastly, evaluation by the NCIP upon
submission of the final
_______________
163
Ramirez v. CA 248 SCRA 590, 596 (1995).
164
Section 53 (f), R.A. 8371.
305
VOL. 347, DECEMBER 6, 2000 305
Cruz vs.Secretaryof Environmentand Natural Resources
report of the ADO.165 With regard to ancestral lands, unless such lands are
within an ancestral domain, the statute imposes the following procedural
requirements: first,application; second, posting and
publication; third,investigation and inspection by the
ADO; fourth,delineation; lastly, evaluation by the NCIP upon submission of a
report by the ADO.166 Hence, we cannot sustain the arguments of the
petitioners that the law affords no protection to those who arenot indigenous
peoples.
Neither do the questioned sections of IPRA on the composition and
powers and jurisdiction of the NCIP167 and the application of customary
law,168 violate thedue process clauseof the Constitution.
Petitioners point out that IPRA provides that the NCIP shall be composed
exclusively of members of indigenous peoples, 169 and that the NCIP shall
have jurisdiction over all claims and disputes involving indigenous
peoples,170including even disputes between a
_______________
165
Section 52, R.A. 8371.
166
Section 53, R.A. 8371.
167
Sections 40, 51, 52, 53, 54, 62and 66, R.A. No. 8371.
168
Sections 63 and 65, R.A. No. 8371.
169
Section 40. Composition.—The NCIP shall be an independent agency
under the Office of the President and shall be composed of seven (7)
Commissioners belonging to the ICCs/IPs, one (1) of whom shall be the
Chairperson. The Commissioners shall be appointed by the President of the
Philippines from a list of recommendees submitted by authentic
ICCs/IPs: Provided, That the seven (7) Commissioners shall be appointed
specifically from each of the following ethnographic areas, Region I and the
Cordilleras; Region II, the rest of Luzon; Island Groups including Mindoro,
Palawan, Romblon, Panay and the rest of the Visayas; Northern and
Western Mindanao; Southern and Eastern Mindanao; and Central
Mindanao: Provided, That at least two (2) of the seven (7) Commissioners
shall be women.
170
Section 66. Jurisdiction of the NCIP.—The NCIP, through its regional
offices, shall have jurisdiction over all claims and disputes involving rights of
ICCs/IPs. Provided, however, That no such dispute shall be brought to the
NCIP unless the parties have exhausted all remedies provided under their
customary laws. For this purpose, a certification shall be issued by the
Council of Elders/Leaders who participated in the attempt to settle the
dispute that the same has not been resolved, which
306
306 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
member of such communities and one who is not a member, as well as over
disputes in the delineation of ancestral domains. 171 Petitioners clarify that
they do not claim that the members of the NCIP are incapable of being fair
and impartial judges. They merely contend that the NCIP will not appear to
be impartial, because a party who is not a member of an indigenous cultural
community “who must defend his case against [one who is] before judges
who are all members of [indigenous peoples] cannot but harbor a suspicion
that they do not have thecoldneutrality of an impartial judge.” 172 In addition,
petitioners claim that IPRA prescribes that customary laws shall be applied
first in disputes involving property, succession and land, 173 and that such laws
shall likewise be used in
_______________
certification shall be a condition precedent to the filing of a petition with
the NCIP.
171
Section 62. Resolution of Conflicts.—In cases of conflicting interest,
where there are adverse claims within the ancestral domains as delineated in
the survey plan, and which can not be resolved, the NCIP shall hear and
decide, after notice to the proper parties, the disputes arising from the
delineation of such ancestral domains: Provided, That if the dispute is
between and/or among ICCs/IPs regarding the traditional boundaries of their
respective ancestral domains, customary process shall be followed. The
NCIP shall promulgate the necessary rules and regulations to carry out its
adjudicatory functions: Provided, further, That any decision, order, award or
ruling of the NCIP on any ancestral domain dispute or on any matter
pertaining to the application, implementation, enforcement and interpretation
of this Act may be brought by Petition for Review to the Court of Appeals
within fifteen (15) days from receipt of a copy thereof.
172
Memorandum of Petitioners, Rollo,pp. 873-874.
173
Section 3 (f). Customary Laws.—refer to a body of written and/or
unwritten rules, usages, customs and practices traditionally and
continuallyrecognized,accepted and observed by respective ICCs/IPs;
xxx
Sec. 63. Applicable Laws.—Customary laws, traditions and practices of
the ICCs/IPs of the land where the conflict arises shall be applied first with
respect to property rights, claims and ownerships, hereditary succession and
settlement of land disputes. Any doubt or ambiguity in the application and
interpretation of laws shall be resolved in favor of the ICCs/IPs.
307
VOL. 347, DECEMBER 6, 2000 307
Cruz vs.Secretaryof Environmentand Natural Resources
disputes involving indigenous peoples. 174 They assert that “[w]hen the dispute
involves a member of an [indigenous cultural community and another who is
not], a resolution of such a dispute based on customary laws. . . would clearly
be a denial of due process . . . [because those who are not indigenous
peoples] do not know what these customary laws are.”175
Petitioners’ concerns are unfounded. The fact that the NCIP is composed
of members of the indigenous peoples does not mean that it (the NCIP) is
incapable, or will appear to be so incapable, of delivering justice to the non-
indigenous peoples. A person’s possession of the trait of impartiality
desirable of a judge has nothing to do with his or her ethnic roots. In this
wise, the indigenous peoples are as capable of rendering justice as the non-
indigenous peoples for, certainly, the latter have no monopoly of the
conceptofjustice.
In any case, there are sufficient checks in the law against any abuse by
the NCIP of its quasi-judicial powers. Section 67 states that the decision of
the NCIP shall be appealable to the Court of Appeals by petition for review.
The regular remedies under our rules of procedure are likewise available to
any party aggrieved by the decision of the NCIP.
Anent the use of customary laws in determining the ownership and extent
of ancestral domains, suffice it to say that such is allowed under paragraph 2,
Section 5 of Article XII of the Constitution. Said provision states, “The
Congress may provide for the applicability of customary laws governing
property rights and relations in determining the ownership and extent of the
ancestral domains.” Notably, the use of customary laws under IPRA is not
absolute, for the law speaks merely of primacy of use.176 The IPRA
prescribes the application of such customary laws where these
_______________
174
Sec. 65. Primacy of Customary Laws and Practices.—When disputes
involve ICCs/IPs, customary laws and practices shall bemused to resolve
thedispute.
175
Memorandum of Petitioners, Rollo, pp. 875-876.
176
R.A. 8371 states:
Sec. 65. Primacy of Customary Laws and Practices.—When disputes involve
ICCs/IPs, customary laws and practices shall be used to resolve the dispute.
308
308 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
present a workable solution acceptable to the parties, who are members of
the same indigenous group. This interpretation is supported by Section 1,
Rule IX of the Implementing Rules which states:
RULE IX. JURISDICTION AND PROCEDURES FOR
ENFORCEMENT OF RIGHTS
Section 1. Primacy of Customary Law.—All conflicts related to ancestral
domains and lands, involving ICCs/IPs, such as but not limited to conflicting
claims and boundary disputes, shall be resolved by the concerned parties
through the application of customary laws in the area where the disputed
ancestral domain or land is located.
All conflicts related to the ancestral domains or lands where one of the
parties is a non-ICC/IP or where the dispute could not be resolved through
customary law shall be heard and adjudicated in accordance with the Rules
on Pleadings, Practice and Procedures before the NCIP to be adopted
hereafter. (Emphasis supplied.)
The application of customary law is limited to disputes concerning property
rights or relations in determining the ownership and extent of the ancestral
domains,177 where all the parties involved are members of indigenous
peoples,178specifically, of the same indigenous group. It therefore follows that
when one of the parties to a dispute is a non-member of an indigenous
group, or when the indigenous peoples involved belong to different groups,
the applicationof customary law isnot required.
Like any other law, the objective of IPRA in prescribing the primacy of
customary law in disputes concerning ancestral lands and domains where all
parties involved are indigenous peoples is justice. The utilization of
customary laws is in line with the constitutional policy of recognizing the
application thereof through legislation passed by Congress.
Furthermore, the recognition and use of customary law is not a novel idea
in this jurisdiction. Under the Civil Code, use of customary law is sanctioned,
as long as it is proved as a fact according to
_______________
177
See Secs. 62and 63, R.A. 8371.
178
Sec. 65, R.A.8371.
309
VOL. 347, DECEMBER 6, 2000 309
Cruz vs.Secretaryof Environmentand Natural Resources
the rules of evidence,179 and it is not contrary to law, public order or public
policy.180 Moreover, the Local Government Code of 1991 calls for the
recognition and application of customary laws to the resolution of issues
involving members of indigenous peoples. This law admits the operation of
customary laws in the settling of disputes if such are ordinarily used in
barangays where majority of the inhabitants are membersof
indigenouspeoples.181
B. Section 1, Part II, Rule VII of the Implementing Rules of IPRA does not
infringe upon the President’s power of control over the Executive Department
The second corollary issue is whether the Implementing Rules of IPRA
violate Section 17, Article VII of the Constitution, which provides that:
The President shall have control of all the executive departments, bureaus,
and offices. He shallensure that the laws be faithfully executed.
The assailedprovision of the ImplementingRules provides:
Rule VII. The National Commission on Indigenous Peoples (NCIP)
xxx
Part II: NCIP as an Independent Agency Under the Office of the President
_______________
179
The Civil Code provides:
Article 12. A custom must be proved as a fact, according to the rules of
evidence.
180
The Civil Code provides:
Article 11. Customs which are contrary to law, public order or public
policyshall not be countenanced.
181
R.A. No. 7160 reads:
Sec. 399. Lupong Tagapamayapa.—
xxx
(f) In barangays where majority of the inhabitants are members of
indigenous peoples, local systems of settling disputes of indigenous peoples,
local systems of settling disputes through their councils of datus or elders
shall be recognized without prejudice to theapplicable provisions of this
Code.
310
310 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Section 1. The NCIP is the primary agency of government for the formulation
and implementation of policies, plans and programs to recognize, promote
and protect the rights and well-being of indigenous peoples. It shall be an
independent agency under the Office of the President. As such, the
administrative relationship of the NCIP to the Office of the President is
characterized as a lateral but autonomous relationship for purposes of policy
and program coordination. This relationship shall be carried out through a
system of periodic reporting. Matters of day-to-day administration or all those
pertaining to internal operations shall be left to the discretion of the
Chairperson of the Commission, as the Chief Executive Officer.
Petitioners asseverate that the aforecited rule infringes upon the power of
control of the President over the NCIP by characterizing the relationship of
the NCIP to the Office of the President as “lateral but autonomous . . . for
purposes of policy and program coordination.”
Although both Section 40 of the IPRA and Section 1, Part II, Rule VII of
the Implementing Rules characterize the NCIP as an independent agency
under the Office of the President, such characterization does not remove said
body from the President’s control and supervision.
The NCIP has been designated under IPRA as the primary government
agency responsible for the formulation and implementation of policies, plans
and programs to promote and protect the rights and well being of the
indigenous peoples and the recognition of their ancestral domain as well as
their rights thereto.182 It has been granted administrative,183 quasi-
legislative184 and quasi-judicial powers185 to carry out its mandate. The
diverse nature of the NCIP’s functions renders it impossible to place said
agency entirely under the control of only one branch of government and this,
apparently, is the reason for its characterization by Congress as an
independent agency. An “independent agency” is defined as
_______________
182
Sec. 38, R.A.8371.
183
Sec. 44 (a), (b), (c), (d), (f), (g), (h), (i), (j), (k), (1), (m), (n), (p), (q),
R.A. 8371.
184
Sec. 44 (o), R.A. 8371.
185
Secs. 44 (e),51-54, 62, R.A.8371.
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VOL. 347, DECEMBER 6, 2000 311
Cruz vs.Secretaryof Environmentand Natural Resources
an administrative body independent of the executive branch or one not
subject to a superior head of department, as distinguished from a
“subordinate agency” or an administrative body whose action is subjectto
administrative review or revision.186
That Congress did not intend to place the NCIP under the control of the
President in all instances is evident in the IPRA itself, which provides that the
decisions of the NCIP in the exercise of its quasi-judicial functions shall be
appealable to the Court of Appeals, 187 like those of the National Labor
Relations Commission (NLRC) and the Securities and Exchange
Commission (SEC). Nevertheless, the NCIP, although independent to a
certain degree, was placed by Congress “under the office of the President”
and, as such, is still subject to the President’s power of control and
supervision granted under Section 17, Article VII of the Constitution 188 with
respect to its performance of administrative functions, such as the following:
(1) the NCIP must secure the President’s approval in obtaining loans to
finance its projects;189 (2) it must obtain the President’s approval for any
negotiation for funds and for the acceptance of gifts and/or properties in
whatever form and from whatever source; 190 (3) the NCIP shall submit annual
reports of its operations and achievements to the President, and advise the
latter on all matters relating to the indigenous peoples; 191 and (4) it shall
exercise such other powers as may be directed by the President. 192 The
President is also given the power to appoint the Commissioners of the utilization of natural resources within their ancestral domains merely
NCIP193 as well as to remove them from office for cause motu proprio or upon amplify what has been earlier granted to them under the aforesaid
the recommendation of any indigenous community.194 laws;

_______________ 3. (3)While the IPRA recognizes the rights of indigenous peoples with
186
regard to their ancestral lands and domains, it also protects the
1 AM JUR 2D, Administrative Law, § 55. vested rights of persons, whether indigenous or non-indigenous
187
Sec. 62, R.A.8371. peoples, who may have acquired rights of ownership lands or rights
188
Sec. 17. The President shall have control of all the executive to explore and exploit natural resources within the ancestral lands
departments, bureaus, and offices. He shall ensure that the laws be faithfully and domains;198
executed.
189
Sec. 44 (f), R.A. 8371.
190 _______________
Sec. 44 (g), R.A. 8371.
191
Sec. 44 (j), RA. 8371. 195
192 Supranote 75.
Sec. 44 (p), R.A. 8371. 196
193 R.A. 7076.
Sec. 40, R.A.8371. 197
194 R.A. 7942.
Sec. 42, R.A.8371. 198
Section 56, R.A. 8371.
312
313
312 SUPREME COURT REPORTS ANNOTATED
VOL. 347, DECEMBER 6, 2000 313
Cruz vs.Secretaryof Environmentand Natural Resources
Cruz vs. Secretary of Environmentand Natural Resources
To recapitulate:

1. (4)The Due Process Clause of the Constitution is not violated by the

1. (1)The provisions of the IPRA (specifically Sections 3, paragraphs [a] provisions (Sections 40, 51-54, 62, 63, 65 and 66) of the IPRA
and [b], 5, 6, 7, and 8) affirming the ownership by the indigenous which, among others, establish the composition of the NCIP, and
peoples of their ancestral lands and domains by virtue of native title prescribe the application of customary law in certain disputes
do not diminish the State’s ownership of lands of the public domain, involving indigenous peoples. The fact the NCIP is composed
because said ancestral lands and domains are considered as wholly of indigenous peoples does not mean that it is incapable of
private land, and never to have been part of the public domain, being impartial. Moreover, the use of customary laws is sanctioned
following the doctrine laid down in Cariño vs. Insular by paragraph 2, Section 5 ofArticle XII ofthe Constitution;and
Government;195
2. (5)The provision of the Implementing Rules characterizing the NCIP
2. (2)The constitutional provision vesting ownership over minerals, as an independent agency under the Office of the President does
mineral lands and other natural resources in the State is not not infringe upon the President’s power of control under Section 17,
violated by Sections 3, 5, 7, 56, 57, 58 and 59 of the IPRA which Article VII of the Constitution, since said provision as well as
grant certain rights to the indigenous peoples over the natural Section 40 of the IPRA expressly places the NCIP under the Office
resources found within the ancestral domains, e.g., to benefit from of the President, and therefore under the President’s control and
and share in the profits from the allocation and utilization of the supervision with respect to its administrative functions. However,
same, as well as priority rights in the harvesting, extraction, insofar as the decisions of the NCIP in the exercise of its quasi-
development or exploitation thereof. The State retains full control judicial powers are concerned, the same are reviewable by the
over the exploration, development and utilization of natural CourtofAppeals, like those of the NLRC and the SEC.
resources even with the grant of said rights to the indigenous
peoples, through the imposition of requirements and conditions for
In viewof theforegoing, I vote to DISMISS thepetition.
the utilization of natural resources under existing laws, such as the
SEPARATE OPINION
Small-Scale Mining Act of 1991196 and the Philippine Mining Act of
1995.197 Moreover, the rights granted to indigenous peoples for the
MENDOZA, J.:
This suit was instituted to determine the constitutionality of certain provisions
of R.A. No. 8371, otherwise known as the Indigenous Peoples Rights Act.
Petitioners do not complain of any injury as a result of the application of the
statute to them. They assert a right to seek an adjudication of constitutional
questions as citizens and taxpayers, upon the plea that the questions raised
are of “transcendental importance.”
The judicial power vested in this Court by Art. VIII, §1 extends only to
cases and controversies for the determination of such proceedings as are
established by law for the protection or enforcement of rights, or the
prevention, redress or punishment of wrongs. 1 In this case, the purpose of
the suit is not to enforce a
_______________
1
Lopez v. Roxas, 17 SCRA 756, 761 (1966).
314
314 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
property right of petitioners against the government and other respondents or
to demand compensation for injuries suffered by them as a result of the
enforcement of the law, but only to settle what they believe to be the doubtful
character of the law in question. Any judgment that we render in this case will
thus not conclude or bind real parties in the future, when actual litigation will
bring to the Court the question of the constitutionality of such legislation.
Such judgment cannot be executed as it amounts to no more than an
expression of opinion upon the validity of the provisions of the law in
question.2
I do not conceive it to be the function of this Court under Art. VIII, §1 of
the Constitution to determine in the abstract whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of the legislative and executive departments in enacting the IPRA. Our
jurisdiction is confined to cases or controversies. No one reading Art. VIII, §5
can fail to note that, in enumerating the matters placed in the keeping of this
Court, it uniformly beginswith the phrase “all cases . . .”
The statement that the judicial power includes the duty to determine
whether there has been a grave abuse of discretion was inserted in Art. VIII,
§1 not really to give the judiciary a roving commission to right any wrong it
perceives but to preclude courts from invoking the political question doctrine
in order to evade the decision of certain cases even where violations of civil
liberties are alleged.
The statement is based on the ruling of the Court in Lansang v.
Garcia,3 in which this Court, adopting the submission of the Solicitor General,
formulated the following test of its jurisdiction in such cases:
[J]udicial inquiry into the basis of the questioned proclamation can go no
further than to satisfy the Court not that the President’s decision
is correct and that public safety was endangered by the rebellion and justified
the suspension of the writ, but that in suspending the writ, the President did
not act arbitrarily.
_______________
2
Muskrat v. United States, 279 U.S. 346, 55 L.Ed. 246 (1911).
3
42 SCRA 448, 481 (1971) (emphasis on the original).
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VOL. 347, DECEMBER 6, 2000 315
Cruz vs. Secretary of Environment and Natural Resources
That is why Art. VII, §18 now confers on any citizen standing to question the
proclamation of martial law or the suspension of the privilege of the writ of
habeas corpus. It is noteworthy that Chief Justice Roberto Concepcion, who
chaired the Committee on the Judiciary of the Constitutional Commission,
was the author of the opinions of the Court in Lopez v. Roxas and Lansang v.
Garcia.
Indeed, the judicial power cannot be extended to matters which do not
involve actual cases or controversies without upsetting the balance of power
among the three branches of the government and erecting, as it were, the
judiciary, particularly the Supreme Court, as a third branch of Congress, with
power not only to invalidate statutes but even to rewrite them. Yet that is
exactly what we would be permitting in this case were we to assume
jurisdiction and decide wholesale the constitutional validity of the IPRA
contrary to the established rule that a party can question the validity of a
statute only if, as applied to him, it is unconstitutional. Here the IPRA is
sought to be declared void on its face.
The only instance where a facial challenge to a statute is allowed is when
it operates in the area of freedom of expression. In such instance, the
overbreadth doctrine permits a party to challenge the validity of a statute
even though as applied to him it is not unconstitutional but it might be if
applied to others not before the Court whose activities are constitutionally
protected. Invalidation of the statute “on its face” rather than “as applied” is
permitted in the interest of preventing a “chilling” effect on freedom of
expression. But in other cases, even if it is found that a provision of a statute
is unconstitutional, courts will decree only partial invalidity unless the invalid
portion is so far inseparable from the rest of the statute that a declaration of
partial invalidity is not possible.
For the Court to exercise its power of review when there is no case or
controversy is not only to act without jurisdiction but also to run the risk that,
in adjudicating abstract or hypothetical questions, its decision will be based
on speculation rather than experience. Deprived of the opportunity to observe
the impact of the law, the Court is likely to equate questions of
constitutionality with questions of wisdom and is thus likely to intrude into the
domain of legislation. Constitutional adjudication, it cannot be too often
repeated, cannot take place in a vacuum.
316
316 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
Some of the brethren contend that not deciding the constitutional issues
raised by petitioners will be a “galling cop out” 4 or an “advocacy of timidity, let
alone isolationism.”5 To decline the exercise of jurisdiction in this case is no
more a “cop out” or a sign of “timidity” than it was for Chief Justice Marshall
in Marbury v. Madison6 to hold that petitioner had the right to the issuance of
his commission as justice of the peace of the District of Columbia only to
declare in the end that after all mandamus did not lie, because §13 of the
Judiciary Act of 1789, which conferred original jurisdiction on the United
States Supreme Court to issue the writ of mandamus, was unconstitutional
as the court’s jurisdiction is mainly appellate.
Today Marbury v. Madison is remembered for the institution of the power
of judicial review, and so that there can be no doubt of this power of our
Court, we in this country have enshrined its principle in Art. VIII, §1. Now, the
exercise of judicial review can result either in the invalidation of an act of
Congress or in upholding it. Hence, the checking and legitimating functions of
judicial review so well mentioned in thedecisions7 of this Court.
To decline, therefore, the exercise of jurisdiction where there is no
genuine controversy is not to show timidity but respect for the judgment of a
coequal department of government whose acts, unless shown to be clearly
repugnant to the fundamental law, are presumed to be valid. The polestar of
constitutional adjudication was set forth by Justice Laurel in the Angara case
when he said that “this power of judicial review is limited to actual cases and
controversies to be exercised after full opportunity of argument by the parties,
and limited further to the constitutional question raised or the very lis
mota,presented.”8 For the exercise of this power is legitimate only in the last
resort, and as a necessity in the
_______________
4
Panganiban, J., Separate Opinion, p. 2.
5
Vitug, J., Separate Opinion, p. 1.
6
1 Cranch 137, 2 L.Ed. 60 (1803).
7
Occena v. Commission on Elections; Gonzales v. The National
Treasurer, 104 SCRA 1 (1981); Mitra v. Commission on Elections, 104 SCRA
59 (1981).
8
Angara v. Electoral Commission, 63 Phil. 139, 158 (1936).
317
VOL. 347, DECEMBER 6, 2000 317
Cruz vs. Secretary of Environmentand Natural Resources
determination of real, earnest, and vital controversy between
individuals.9 Until, therefore, an actual case is brought to test the
constitutionality of the IPRA, the presumption of constitutionality, which
inheres in every statute, must be accorded to it.
Justice Kapunan, on the other hand, cites the statement in Severino v.
Governor General,10 reiterated in Tañada v. Tuvera,11 that “when the question
is one of public right and the object of mandamus to procure the enforcement
of a public duty, the people are regarded as the real party in interest, and the
relator at whose instigation the proceedings are instituted need not show that
he has any legal or special interest in the result, it being sufficient that he is a
citizen and as such is interested in the execution of the laws.” On the basis of
this statement, he argues that petitioners have standing tobring
theseproceedings.12
In Severino v. Governor General,13 the question was whether mandamus
lay to compel the Governor General to call a special election on the ground
that it was his duty to do so. The ruling was that he did not have such a duty.
On the other hand, although mandamus was issued in Tañada v. Tuvera, it
was clear that petitioners had standing to bring the suit, because the public
has a right to know and the failure of respondents to publish all decrees and
other presidential issuances in the Official Gazette placed petitioners in
danger of violating those decrees and issuances. But, in this case, what
public right is there for petitioners to enforce when the IPRA does not apply to
them except in general and in common withother citizens?
For the foregoing reasons I vote to dismiss the petition in this case.
_______________
9
Philippine Association of Colleges and Universities v. Secretary of
Education, 97 Phil. 806 (1955).
10
16 Phil. 366 (1913).
11
136 SCRA 27 (1985).
12
Kapunan, J., Separate Opinion, pp. 21-23.
13
Supranote 10.
318
318 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
SEPARATE OPINION
(CONCURRING AND DISSENTING)
PANGANIBAN, J.:
I concur with the draft ponencia of Mr. Justice Santiago M. Kapunan in its
well-crafted handling of the procedural or preliminary issues. In particular, I
agree that petitioners have shown an actual case or controversy involving at
least two constitutional questions of transcendental importance, 1which
deserve judicious disposition on the merits directly by the highest court of the
land.2 Further, I am satisfied that the various aspects of this controversy have
been fully presented and impressively argued by the parties. Moreover,
prohibition and mandamus are proper legal remedies 3 to address the
problems raised by petitioners. In any event, this Court has given due course
to the Petition, heard oral arguments and required the submission of
memoranda. Indeed, it would then be a galling copout for us to dismiss it on
mere technical or procedural grounds.
Protectionof Indigenous Peoples’ Rights Must Be Within the Constitutional
Framework
With due respect, however, I dissent from the ponencia’sresolution of the two
main substantive issues, which constitute the core of this case. Specifically, I
submit that Republic Act (RA) No. 8371, otherwise known as the Indigenous
Peoples’ Rights Act (IPRA) of 1997, violates and contravenes the
Constitution of the Philippines insofar as—
_______________
1
Kilosbayan v. Morato, 250 SCRA 130, 140, November 16,
1995; Association of Small Landowners v. Secretary of Agrarian Reform, 175
SCRA 343, 365, July 14, 1989; Antonio v. Dinglasan, 84 Phil. 368 (1949).
2 4
Tañada v. Angara, 272 SCRA 18, 46, May 2, 1997; Santiago v.
Comelec, 270 SCRA 106, 123-124, March 19, 1997; Basco v. PAGCOR, 197
SCRA 52, 60, May 14, 1991.
3
Tañada v. Angara, ibid.
319
VOL. 347, DECEMBER 6, 2000 319
Cruz vs. Secretary of Environmentand Natural Resources
1. 1.It recognizes or, worse, grants rights of ownership over lands of the
public domain, waters, xxx and other natural resources” which,
under Section 2, Article XII of the Constitution, “are owned by the
State” and “shall not be alienated.” I respectfully reject the
contention that “ancestral lands and ancestral domains are not
public lands and have never been owned by the State.” Such
sweeping statement places substantial portions of Philippine
territory outside the scope of the Philippine Constitution and
beyond the collective reach of the Filipino people. As will be
discussed later, these real properties constitute a third of the entire
Philippine territory; and the resources, 80 percent of the nation’s
natural wealth.
2. 2.It defeats, dilutes or lessens the authority of the State to oversee
the “exploration, development, and utilization of natural resources,”
which the Constitution expressly requires to “be under
the fullcontrol and supervisionof the State.”
True, our fundamental law mandates the protection of the indigenous cultural
communities’ right to their ancestral lands, but such mandate is “subject to
the provisions of this Constitution.”4 I concede that indigenous cultural
communities and indigenous peoples (ICCs/IPs) may be accorded
preferential rights to the beneficial use of public domains, as well as priority in
the exploration, development and utilization of natural resources. Such
privileges, however, must be subject to the fundamental law.
Consistent with the social justice principle of giving more in law to those
who have less in life, Congress in its wisdom may grant preferences and
prerogatives to our marginalized brothers and sisters, subject to the
irreducible caveat that the Constitution must be respected. I personally
believe in according every benefit to the poor, the oppressed and the
disadvantaged, in order to empower them to equally enjoy the blessings of
nationhood. I cannot, however, agree to legitimize perpetual inequality of
access to the nation’s wealth or to stamp the Court’s imprimatur on a law that
offends and degrades the repository of the very authority of this Court—the
Constitution of the Philippines.
_______________
§5, Art. XII, 1987 Constitution.
320
320 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
The Constitution Is a Compact
My basic premise is that the Constitution is the fundamental law of the land,
to which all other laws must conform. 5 It is the people’s quintessential act of
sovereignty, embodying the principles upon which the State and the
government are founded.6 Having the status of a supreme and all-
encompassing law, it speaks for all the people all the time, not just for the
majority or for the minority at intermittent times. Every constitution is a
compact made by and among the citizens of a State to govern themselves in
a certain manner.7 Truly, the Philippine Constitution is a solemn covenant
made by all the Filipinos to govern themselves. No group, however blessed,
and no sector, however distressed, is exempt from its compass.
RA 8371, which defines the rights of indigenous cultural communities and
indigenous peoples, admittedly professes a laudable intent. It was primarily
enacted pursuant to the state policy enshrined in our Constitution to
“recognize and promote the rights of indigenous cultural communities within
the framework of national unity and development.” 8Though laudable and well-
meaning, this statute, however, has provisions that run directly afoul of our
fundamental law from which it claims origin and authority. More specifically,
Sections 3(a) and (b), 5, 6, 7(a) and (b), 8 and other related provisions
contravene the Regalian Doctrine—the basic foundationof the State’s
property regime.
Public Domains and NaturalResources Are Ownedbythe State and Cannot
Be Alienatedor Ceded
Jura regalia was introduced into our political system upon the “discovery” and
the “conquest” of our country in the sixteenth century. Under this concept, the
entire earthly territory known as the
_______________
5
16 CJS §3.
6
16 Am Jur 2d §2.
7
Ibid.
8
§22, Art. II of the Constitution.
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VOL. 347, DECEMBER 6, 2000 321
Cruz vs. Secretary of Environmentand Natural Resources
Philippine Islands was acquired and held by the Crown of Spain. The King,
as then head of State, had the supreme power or exclusive dominion over all
our lands, waters, minerals and other natural resources. By royal decrees,
though, private ownership of real property was recognized upon the showing
of (1) a title deed; or (2) ancient possession in the concept of owner,
according to which a title could be obtained by prescription. 9 Refusal to abide
by the system and its implementing laws meant the abandonment or waiver
of ownership claims.
By virtue of the 1898 Treaty of Paris, the Philippine archipelago was
ceded to the United States. The latter assumed administration of the
Philippines and succeeded to the property rights of the Spanish Crown. But
under the Philippine Bill of 1902, the US Government allowed and granted
patents to Filipino and US citizens for the “free and open xxx exploration,
occupation and purchase [of mines] and the land in which they are
found.”10 To a certain extent, private individuals were entitled to own, exploit
and dispose of mineral resources and other rights arising from mining
patents.
This US policy was, however, rejected by the Philippine Commonwealth
in 1935 when it crafted and ratified our first Constitution. Instead, the said
Constitution embodied the Regalian Doctrine, which more definitively
declared as belonging to the State all lands of the public domain, waters,
minerals and other natural resources.11 Although respecting mining patentees
under the Philippine Bill of 1902, it restricted the further exploration,
development and utilization of natural resources, both as to who might be
entitled to undertake such activities and for how long. The pertinent provision
reads:
_______________
9
Abaoag v. Director of Lands, 45 Phil. 518 (1923), cited in petitioners’
Memorandum.
10
Soledad M. Cagampang-de Castro, The Economic Policies on Natural
Resources Under the 1987 Constitution Revisited,” Journal of the Integrated
Bar of the Philippines,Vol. XXV, Nos. 3 & 4 (1999), p. 51.
11
In a republican system of government, the concept of jura regalia is
stripped of royal overtones; ownership is vested in the State, instead.
(Joaquin G. Bernas, SJ, The Constitution of the Republic of the Philippines:
A Commentary, 1996 ed.,pp. 1009-1010.)
322
322 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
“SECTION 1. [Art. XIII]. 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 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, renewable for another 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 concept was carried over in the 1973 and the 1987 Constitutions. Hence,
Sections 8 and 9, Article XIV of the 1973 Constitution, state:
“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, 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.
SEC. 9. The disposition, exploration, development, exploitation, or
utilization of any of the natural resources of the Philippines 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. The National
Assembly, 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 foreign person or entity
for the exploration, development, exploitation, or utilization of any of the
natural resources. Existing valid and binding service
323
VOL. 347, DECEMBER 6, 2000 323
Cruz vs. Secretary of Environment and Natural Resources
contracts for financial, technical, management, or other forms of assistance
are hereby recognized as such.”
Similarly, Section 2, Article XII of the 1987 Constitution, provides:
“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
citizen, 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 adoption of the Regalian Doctrine by the Philippine Commonwealth was
initially impelled by the desire to preserve the
324
324 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
nation’s wealth in the hands of the Filipinos themselves. Nationalism was
fervent at the time, and our constitutional framers decided to embody the
doctrine in our fundamental law. Charging the State with the conservation of
the national patrimony was deemed necessary for Filipino posterity. The
arguments in support of the provision are encapsulated by Aruego as follows:
“[T]he natural resources, particularly the mineral resources which constituted
a great source of wealth, belonged not only to the generation then but also to
the succeeding generation and consequently should be conserved for
them.”12
Thus, after expressly declaring that all lands of the public domain, waters,
minerals, all forces of energy and other natural resources belonged to the
Philippine State, the Commonwealth absolutely prohibited the alienation of
these natural resources. Their disposition, exploitation, development and
utilization were further restricted only to Filipino citizens and entities that were
60 percent Filipino-owned. The present Constitution even goes further by
declaring that such activities “shall be under the full control and supervision
of the State.” Additionally, it enumerates land classifications and expressly
states that only agricultural lands of the public domain shall be alienable. We
quote below the relevant provision:13
“SEC. 3. Lands of the public domain are classified into agricultural, forest or
timber, mineral lands, and national parks. Agricultural lands of the public
domain may be further classified by law according to the uses to which they
may be devoted. Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-five years,
and not to exceed one thousand hectares in area. x x x.”
Mr. Justice Kapunan upholds private respondents and intervenors in their
claim that all ancestral domains and lands are outside
_______________
12
II Aruego, The Framing of the Philippine Constitution 603, quoted in
Bernas,supra,p. 1010.
13
§3, Art. XII, 1987 Constitution.
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VOL. 347, DECEMBER 6, 2000 325
Cruz vs. Secretary of Environmentand Natural Resources
the coverage of public domain; and that these properties—including forests,
bodies of water, minerals and parks found therein—are private and have
never been part of the public domain, because they have belonged to the
indigenous people’s ancestors since time immemorial.
I submit, however, that all Filipinos, whether indigenous or not, are
subject to the Constitution. Indeed, no one is exempt from its all-
encompassing provisions. Unlike the 1935 Charter, which was subject to “any
existing right, grant, lease or concession,” the 1973 and the 1987
Constitutions spoke in absolute terms. Because of the State’s implementation
of policies considered to be for the common good, all those concerned have
to give up, under certain conditions, evenvested rights of ownership.
In Republic v. Court of Appeals,14 this Court said that once minerals are
found even in private land, the State may intervene to enable it to extract the
minerals in the exercise of its sovereign prerogative. The land is converted
into mineral land and may not be used by any private person, including the
registered owner, for any other purpose that would impede the mining
operations. Such owner would be entitled to just compensation for the loss
sustained.
In Atok Big-Wedge Mining Company v. IAC,15 the Court clarified that while
mining claim holders and patentees have the exclusive right to the
possession and enjoyment of the located claim, their rights are not absolute
or strictly one of ownership. Thus, failure to comply with the requirements of
pertinent mining laws was deemed an abandonment or awaiverof the claim.
Verily, as petitioners undauntedly point out, four hundred years of
Philippine political history cannot be set aside or ignored by IPRA, however
well-intentioned it may be. The perceived lack of understanding of the cultural
minorities cannot be remedied by conceding the nation’s resources to their
exclusive advantage. They cannot be more privileged simply because they
have chosen to ignore state laws. For having chosen not to be enfolded by
statutes
_______________
14
160 SCRA 228, 239, April 15, 1988.
15
261 SCRA 528, September 9,1996.
326
326 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
on perfecting land titles, ICCs/IPs cannot now maintain their ownership of
lands and domains by insisting on their concept of “native title” thereto. It
would be plain injustice to the majority of Filipinos who have abided by the
law and, consequently, deserve equal opportunity to enjoy the country’s
resources.
Respondent NCIP claims that IPRA does not violate the Constitution,
because it does not grant ownership of public domains and natural resources
to ICCs/IPs. “Rather, it recognizes and mandates respect for the rights of
indigenous peoples over their ancestral lands and domains that had never
been lands of the public domain.”16 I say, however, that such claim finds no
legal support. Nowhere in the Constitution is there a provision that exempts
such lands and domains from its coverage. Quite the contrary, it declares
that all lands of the public domain and natural resources “are owned by the
State”; and “with the exception of agricultural lands, all other natural
resources shallnotbe alienated.”
As early as Oh Cho v. Director of Lands,17 the Court declared as
belonging to the public domain all lands not acquired from the government,
either by purchase or by grant under laws, orders or decrees promulgated by
the Spanish government; or by possessory information under Act 496
(MortgageLaw).
On the other hand, Intervenors Flavier, et al. 18differentiate the concept of
ownership of ICCs/IPs from that which is defined in Articles 427 and 428 of
the Civil Code. They maintain that “[t]here are variations among
ethnolinguistic groups in the Cordillera, but a fair synthesis of these refers to
'xxx the tribal right to use the land or to territorial control xxx, a collective right
to freely use the particular territory x x x [in]the concept oftrusteeship.’”
In other words, the “owner” is not an individual. Rather, it is a tribal
community that preserves the property for the common but nonetheless
exclusive and perpetual benefit of its members, without the attributes of
alienation or disposition. This concept, however, still perpetually withdraws
such property from the control of
_______________
16
NCIP’s Memorandum, p. 24.
17
75 Phil. 890, 892, August 31, 1946.
18
Intervenors’Memorandum, pp; 33 et seq.
327
VOL. 347, DECEMBER 6, 2000 327
Cruz vs. Secretary of Environmentand Natural Resources
the State and from its enjoyment by other citizens of the Republic. The
perpetual and exclusive character of private respondents’ claims
simplymakes them repugnant to basic fairness andequality.
Private respondents and intervenors trace their “ownership” of ancestral
domains and lands to the pre-Spanish conquest. I should say that, at the
time, their claims to such lands and domains was limited to the surfaces
thereof since their ancestors were agriculture-based. This must be the
continuing scope of the indigenous groups’ ownership claims: limited to land,
excluding the natural resources found within.
In any event, if all that the ICCs/IPs demand is preferential use—not
ownership—of ancestral domains, then I have no disagreement. Indeed,
consistent with the Constitution is IPRA’s Section 5719—without the too-broad
definitions under Section 3 (a) and (b)—insofar as it grants them priority
rights in harvesting, extracting, developing or exploiting natural resources
within ancestral domains.
The concerted effort to malign the Regalian Doctrine as a vestige of the
colonial past must fail. Our Constitution vests the ownership of natural
resources, not in colonial masters, but in all the Filipino people. As the
protector of the Constitution, this Court has the sworn duty to uphold the
tenets of that Constitution—not to dilute, circumventorcreate exceptions to
them.
Cariño v. InsularGovernment Was Modified by the Constitution
In this connection, I submit that Cariño v. Insular Government20 has been
modified or superseded by our 1935, 1973 and 1987 Constitutions.
Its ratio should be understood as referring only to a means by which public
agricultural land may be acquired by citizens. I must also stress that the claim
of Petitioner Cariño refers to
_______________
 19
“SEC. 57. Natural Resources within Ancestral Domains.—The ICCs/IPs
shall have priority rights in the harvesting, extraction, development or
exploitation of any natural resources within the ancestral domains, x x x.
20
41 Phil. 935, February 23, 1909.
328
328 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
land ownership only, not to the natural resources underneath or to the aerial
and cosmic space above.
Significantly, in Director of Land Management v. Court of Appeals,21 a
Decision handed down after our three Constitutions had taken effect, the
Court rejected a cultural minority member’s registration of land under CA
141, Section 48 (c).22 The reason was that the property fell within the Central
Cordillera Forest Reserve. This Court quoted with favor the solicitor general’s
following statements:
“3. The construction given by respondent Court of Appeals to the particular
provision of law involved, as to include even forest reserves as susceptible to
private appropriation, is to unconstitutionally apply such provision. For, both
the 1973 and present Constitutions do not include timber or forest lands as
alienable. Thus, Section 8, Article XIV of 1973 Constitution states that Svith
the exception of agricultural, industrial or commercial, residential and
resettlement lands of the public domain, natural resources shall not be
alienated.’ The new Constitution, in its Article XII, Section 2, also expressly
states that “with the exception of agricultural lands, all other natural
resources shall not be alienated.’”
Just recently, in Gordula v. Court of Appeals,23 the Court also stated that
“forest land is incapable of registration, and its inclusion in a title nullifies that
title. To be sure, the defense of indefeasibility of a certificate of title issued
pursuant to a free patent does not lie against the state in an action for
reversion of the land covered thereby when such land is a part of a public
forest or of a forest reservation, the patent covering forest land being void ab
initio.”
_______________
21
172 SCRA 455, 463, April 18, 1989, per Gutierrez, Jr., J.
22
(c) Members of the national cultural minorities who by themselves or
through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of lands of the public
domain suitable to agriculture, whether disposable or not, under a bona fide
claim of ownership for at least 30 years shall be entitled to the rights granted
in subsection (b) hereof. (As amended by R.A. No. 3872, section 1, approved
June 18, 1964).”
23
284 SCRA 617, 633, January22, 1998, per Puno,J.
329
VOL. 347, DECEMBER 6, 2000 329
Cruz vs. Secretary of Environmentand Natural Resources
RA 8371 Violates the Inalienability ofNatural Resources and of Public
Domains
The ponencia theorizes that RA 8371 does not grant to ICCs/IPs ownership
of the natural resources found within ancestral domains. However, a simple
reading of the very wordings of the law belies this statement.
Section 3 (a)24 defines and delineates ancestral domains as “all areas
generally belonging to ICCs/IPs comprising lands, inland waters, coastal
areas, and natural resourcestherein, held under a claim of ownership,
occupied or possessed by ICCs/IPs, by themselves or through their
ancestors, communally or individually since time immemorial, continuously to
the present except when interrupted by war, force majeure or displacement x
xx. It shall include ancestral lands, forests, pasture, residential, agricultural,
and other lands individually owned whether alienable and disposable or
otherwise, hunting grounds x x x bodies of water, mineral and other natural
resources x x x.” (Emphasis ours.)
Clearly, under the above-quoted provision of IPRA, ancestral domains of
ICCs/IPs encompass the natural resources found
_______________
24
“a) Ancestral Domains—Subject to Section 56 hereof, refers to all areas
generally belonging to ICCs/IPs comprising lands, inland waters, coastal
areas, and natural resources therein, held under a claim of ownership,
occupied or possessed by ICCs/IPs, by themselves or through their
ancestors, communally or individually since time immemorial, continuously to
the present except when interrupted by war, force majeureor displacement by
force, deceit, stealth or as a consequence of government projects or any
other voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure their economic,
social and cultural welfare. It shall include ancestral lands individually owned
whether alienable and disposable or otherwise, hunting grounds, burial
grounds, worship areas, bodies of water, mineral and other natural
resources, and lands which may no longer be exclusively occupied by
ICCs/IPs but from which they traditionally had access to for their subsistence
and traditional activities, particularly the home ranges of ICCs/IPs who are
still nomadic and/or shiftingcultivators.”
330
330 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
therein. And Section 7 guarantees recognition and protection of
their rightsofownership andpossessionover such domains.
The indigenous concept of ownership, as defined under Section 5 of the
law, “holds that ancestral domains are the ICC’s/IP’s private but community
property which belongs to all generations and therefore cannot be sold,
disposed or destroyed.” Simply put, the law declares that ancestral domains,
including the natural resources found therein, are owned by ICCs/IPs and
cannot be sold, disposed or destroyed. Not only does it vest ownership, as
understood under the Civil Code; it adds perpetual exclusivity. This means
that while ICCs/IPs could own vast ancestral domains, the majority of
Filipinos who are not indigenous can never own any part thereof.
On the other hand, Section 3 (b) 25 of IPRA defines ancestral lands as
referring to ‘lands occupied, possessed and utilized by individuals, families
and clans of the ICCs/IPs since time immemorial x x x, under claims of
individual or traditional group ownership, x x x including, but not limited to,
residential lots, rice terraces or paddies, private forests, swidden farms and
tree lots.” Section 8 recognizes and protects “the right of ownership and
possession of ICCs/IPs to their ancestral lands.” Such ownership need not be
by virtue of a certificate of title, but simply by possession since time
immemorial.
I believe these statutory provisions directly contravene Section 2, Article
XII of the Constitution, more specifically the declaration that the State owns
all lands of the public domain, minerals and natural resources—none of
which, except agricultural lands, can be
_______________
25
“b) Ancestral Lands—Subject to Section 56 hereof, refers to lands
occupied, possessed and utilized by individuals, families and clans who are
members of the ICCs/IPs since time immemorial, by themselves or through
their predecessors-in-interest, under claims of individual or traditional group
ownership, continuously, to the present except when interrupted by
war, force majeure or displacement by force, deceit, stealth, or as a
consequence of government projects and other voluntary dealings entered
into by government and private individuals/corporations, including, but not
limited to, residential lots, rice terraces or paddies, private forests,
swiddenfarms and tree lots.”
331
VOL. 347, DECEMBER 6, 2000 331
Cruz vs. Secretary of Environment and Natural Resources
alienated. In several cases, this Court has consistently held that non-
agricultural land must first be reclassified and converted into alienable or
disposable land for agricultural purposes by a positive act of the
government.26 Mere possession or utilization thereof, however long, does not
automatically convert them into private properties. 27 The presumption is that
“all lands not appearing to be clearly within private ownership are presumed
to belong to the State. Hence, x xx all applicants in land registration
proceedings have the burden of overcoming the presumption that the land
thus sought to be registered forms part of the public domain. Unless the
applicant succeeds in showing by clear and convincing evidence that the
property involved was acquired by him or his ancestors either by composition
title from the Spanish Government or by possessory information title, or any
other means for the proper acquisition of public lands, the property must be
held to be part of the public domain. The applicant must present competent
and persuasive proof to substantiate his claim; he may not rely on general
statements, or mere conclusions of law other than factual evidenceof
possession and title.”28
Respondents insist, and the ponencia agrees, that paragraphs (a) and (b)
of Section 3 are merely definitions and should not be construed
independently of the other provisions of the law. But, precisely, a definition is
“a statement of the meaning of a word or word group.” 29 It determines or
settles the nature of the thing or person defined. 30 Thus, after defining a term
as encompassing several items, one cannot thereafter say that the same
term should be interpreted as excluding one or more of the enumerated items
in its
_______________
26
Director of Lands and Director of Forest Development v. Intermediate
Appellate Court, March 2, 1993, 219 SCRA 339; Director of Lands v.
Aquino, 192 SCRA 296, December 17, 1990; Sunbeam Convenience Foods,
Inc.v. Court of Appeals, January29, 1990, 181 SCRA 443.
27
Ibid.; Margolles v. Court of Appeals, February 14, 1994, 230 SCRA
97; Gordula v. Court of Appeals, supra.
28
Republic v. Sayo, October 31, 1990, 191 SCRA 71, per Narvasa, J.
(laterCJ). See also Republic v. Court of Appeals, supra.
29
Webster’s Third New International Dictionary; Petitioners’
Memorandum, p. 41.
30
Ibid.
332
332 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
bound by the law. In other words, since RA 8371 defines ancestral domains
as including the natural resources found therein and further states that
ICCs/IPs own these ancestral domains, then it means that ICCs/IPs
canownnatural resources.
In fact, Intervenors Flavier, et al. submit that everything above and
below these ancestral domains, with no specific limits, likewise belongs to
ICCs/IPs. I say that this theory directly contravenes the Constitution. Such
outlandish contention further disregards international law which, by
constitutional fiat, has been adopted as part of the law of the land. 31
No Land Area Limits Are Specified by RA 8371
Under Section 3, Article XII of the Constitution, Filipino citizens may acquire
no more than 12 hectares of alienable public land, whether by purchase,
homestead or grant. More than that, but not exceeding 500 hectares, they
may hold by lease only.
RA 8371, however, speaks of no area or term limits to ancestral lands
and domains. In fact, by their mere definitions, they could cover vast tracts of

the nation’s territory. The properties under the assailed law cover everything
held, occupied or possessed “by themselves or through their ancestors,
communally or individually since time immemorial.” It also includes all “lands
which may no longer be exclusively occupied by [them] but from which they
traditionally had access to for their subsistence and traditional activities,
particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators.”
Nomadic groups have no fixed area within which they hunt or forage for
food. As soon as they have used up the resources of a certain area, they
move to another place or go back to one they used to occupy. From year to
year, a growing tribe could occupy and use enormous areas, to which they
could claim to have had “traditional access.” If nomadic ICCs/IPs succeed in
acquiring title to their enlarging ancestral domain or land, several thousands
of
_______________
31
§2, Art. II of the Constitution.
333
VOL. 347, DECEMBER 6, 2000 333
Cruz vs. Secretary of Environment and Natural Resources
hectares of land may yet be additionally delineated as their private property.
Similarly, the Bangsa Moro people’s claim to their ancestral land is not
based on compounded or consolidated title, but “on a collective stake to the
right to claim what their forefathers secured for them when they first set foot
on our country.”32 They trace their right to occupy what they deem to be their
ancestral land way back to their ancient sultans and datus, who had settled in
many islands that have become part of Mindanao. This long history of
occupation is the basisof their claim to their ancestral lands. 33
Already, as of June 1998, over 2.5 million hectares have been claimed by
various ICCs/IPs as ancestral domains; and over 10 thousand hectares, as
ancestral lands.34 Based on ethnographic surveys, the solicitor general
estimates that ancestral domains cover 80 percent of our mineral resources
and between 8 and 10 million of the 30 million hectares of land in the
country.35 This means that four fifths of its natural resources and one third of
the country’s land will be concentrated among 12 million Filipinos constituting
110 ICCs,36 while over 60 million other Filipinos constituting the
overwhelming majority will have to share the remaining. These figures
indicate a violation of the constitutional principle of a “more equitable
distribution of opportunities, income, and wealth” among Filipinos.
_______________
32
Cecilio R. Laurente, ‘The King’s Hand: The Regalian Doctrine as a
Contributing Factor in the Mindanao Conflict,” Human Rights Agenda,Vol. 5,
Issue No. 7, July & August 2000, pp. 6-7.
33
Ibid.
34
Solicitor General’s Memorandum, p. 3; rollo, p. 651.
35
Ibid., pp. 4-5.
36
Ibid. See also Datu Vic Saway, indigenous Peoples and the Uplands: A
Situatfoner,” Proceedings of the 6th Upland NGO Consultative Conference,
23-27 August 1998, p. 30.
334
334 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
RA 8371 Abdicates the StateDuty to Take Full Control and Supervision
ofNatural Resources
Section 2, Article XII of the Constitution, further provides that “[t]he
exploration, development, and utilization of natural resources shall be under
the full control and supervision of the State.” The State may (1) directly
undertake such activities; or (2) enter into co-production, joint yenture or
production-sharing agreements with Filipino citizens or entities, 60 percent of
whose capital is owned by Filipinos.37 Such agreements, however, shall not
exceed 25 years, renewable for the same period and under terms and
conditionsas may be providedby law.
But again, RA 8371 relinquishes this constitutional power of full control in
favor of ICCs/IPs, insofar as natural resources found within their territories
are concerned. Pursuant to their rights of ownership and possession, they
may develop and manage the natural resources, benefit from and share in
the profits from the allocation and the utilization thereof. 38 And they may
exercise such right without any time limit, unlike non-ICCs/IPs who may do
so only for a period not exceeding 25 years, renewable for a like
period.39 Consistent with the Constitution, the rights of ICCs/IPs to exploit,
develop and utilize natural resources must also be limited to such period.
In addition, ICCs/IPs are given the right to negotiate directly the terms
and conditions for the exploration of natural resources, 40 a right vested by the
Constitution only in the State. Congress, through IPRA, has in effect
abdicated in favor of a minority group the State’s power of ownership and full
control over a substantial
_______________
37
Or (3) in case of large-scale exploration, development and utilization of
minerals, enter—through the President—into “agreements with foreign-
owned corporations involving either technical or financial assistance.”
(Miners Association of the Philippines v. Factoran, Jr., 240 SCRA 100,
January 16, 1995.)
38
§7(b), RA 7381.
39
§57, ibid.
40
§7(b), ibid.
335
VOL. 347, DECEMBER 6, 2000 335
 Cruz vs. Secretary of Environment and Natural Resources
part of the national patrimony, in contravention of our most fundamental law.
I make clear, however, that to the extent that ICCs/IPs may undertake
small-scale utilization of natural resources and cooperative fish farming, I
absolutely have no objection. These undertakings are certainly allowed under
the third paragraph of Section 2, Article XII of the Constitution.
Having already disposed of the two major constitutional dilemmas
wrought by RA 8371—(1) ownership of ancestral lands and domains and the
natural resources therein; and (2) the ICCs/IPs’ control of the exploration,
development and utilization of such resources—I believe I should no longer
tackle the following collateral issues petitioners have brought up:
1. 1.Whether the inclusion of private lands within the coverage of
ancestral domains amounts to undue deprivation of private property
2. 2.Whether ICCs/IPs may regulate the entry/exit of migrants
3. 3.Whether ancestral domains are exempt from real property taxes,
special levies and other forms of exaction
4. 4.Whether customary laws and traditions of ICCs/IPs should first be
applied in the settlements of disputes over their rights and claims
5. 5.Whether the composition and the jurisdiction of the National
Commission of Indigenous Peoples (NCIP) violate the due process
and equal protection clauses
6. 6.Whether members of the ICCs/IPs may be recruited into the armed
forces against their will
I believe that the first three of the above collateral issues have been rendered
academic or, at least, no longer of “transcendental importance,” in view of my
contention that the two major IPRA propositions are based on
unconstitutional premises. On the other hand, I think that in the case of the
last three, it is best to await specific cases filed by those whose rights may
have been injured by specific provisions of RA 8371.
336
336 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Epilogue
Section 5,Article XII ofthe Constitution, provides:
“SEC. 5. The State, subject to the provisions of this Constitution and national
development policies and programs, shall protect the rights of indigenous
cultural communities to their ancestral lands to ensure their economic, social,
andcultural well being.
“The Congress may provide for the applicability of customary laws
governing properly rights and relations in determining the ownership and
extent of ancestral domain.”
Clearly, there are two parameters that must be observed in the protection of
the rights of ICCs/IPs: (1) the provisions of the 1987 Constitution
and(2)national development policies andprograms.
Indigenous peoples may have long been marginalized in Philippine
politics and society. This does not, however, give Congress any license to
accord them rights that the Constitution withholds from the rest of the Filipino
people. I would concede giving them priority in the use, the enjoyment and
the preservation of their ancestral lands and domains. 41 But to
grant perpetual ownership and control of the nation’s substantial wealth to
them, to the exclusion of other Filipino citizens who have chosen to live and
abide by our previous and present Constitutions, would be not only unjust but
also subversive of therule of law.
In giving ICCs/IPs rights in derogation of our fundamental law, Congress
is effectively mandating “reverse discrimination.” In seeking to improve their
lot, it would be doing so at the expense of the majority of the Filipino people.
Such short-sighted and misplaced generosity will spread the roots of
discontent and, in the long term, fan the fires of turmoil to a conflagration of
national proportions.
Peace cannot be attained by brazenly and permanently depriving the
many in order to coddle the few, however disadvantaged they may have
been. Neither can a just society be approximated by maiming the healthy to
place them at par with the injured. Nor can
_______________
41
As stated earlier, Sec. 57 of IPRA, insofar as it grants them such priority,
is constitutional.
337
VOL. 347, DECEMBER 6, 2000 337
Cruz vs. Secretary of Environment and Natural Resources
the nation survive by enclaving its wealth for the exclusive benefit of favored
minorities.
Rather, the law must help the powerless by enabling them to take
advantage of opportunities and privileges that are open to all and by
preventing the powerful from exploiting and oppressing them. This is the
essence of social justice—empowering and enabling the poor to be able to
compete with the rich and, thus, equally enjoy the blessings of prosperity,
freedom and dignity.
WHEREFORE, I vote to partially GRANT the Petition and to DECLARE
as UNCONSTITUTIONAL Sections 3(a) and (b), 5, 6, 7(a) and (b), 8 and
related provisions of RA 8371.
Petition dismissed.
 G.R. No. 127882. January 27, 2004.*
LA BUGAL-B’LAAN TRIBAL ASSOCIATION, INC., represented by its
Chairman F’LONG MIGUEL M. LUMAYONG, WIGBERTO E. TAÑADA,
PONCIANO BENNAGEN, JAIME TADEO, RENATO R. CONSTANTINO, JR.,
F’LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM L. DABIE,
SIMEON H. DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN,
MARCELO L. GUSANAN, QUINTOL A. LABUAYAN, LOMINGGES D.
LAWAY, BENITA P. TACUAYAN, minors JOLY L. BUGOY, represented by his
father UNDERO D. BUGOY, ROGER M. DADING, represented by his father
ANTONIO L. DADING, ROMY M. LAGARO, represented by his father
TOTING A. LAGARO, MIKENY JONG B. LUMAYONG, represented by his
father MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by his
mother EDITHA T. MIGUEL, ALDEMAR L. SAL, represented by his father
DANNY M. SAL, DAISY RECARSE, represented by her mother LYDIA S.
SANTOS, EDWARD M. EMUY, ALAN P. MAM
_______________
*
EN BANC.
149
VOL. 421, JANUARY 27, 2004 149
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
PARAIR, MARIO L. MANGCAL, ALDEN S. TUSAN, AMPARO S. YAP,
VIRGILIO CULAR, MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN
CARLO CULAR, VIRGILIO CULAR, JR., represented by their father
VIRGILIO CULAR, PAUL ANTONIO P. VILLAMOR, represented by his
parents JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR, ANA GININA
R. TALJA, represented by her father MARIO JOSE B. TALJA, SHARMAINE
R. CUNANAN, represented by her father ALFREDO M. CUNANAN,
ANTONIO JOSE A. VITUG III, represented by his mother ANNALIZA A.
VITUG, LEAN D. NARVADEZ, represented by his father MANUEL E.
NARVADEZ, JR., ROSERIO MARALAG LINGATING, represented by her
father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E. DE
VERA, MARIA MILAGROS L. SAN JOSE, SR,, SUSAN O. BOLANIO, OND,
LOLITA G. DEMONTEVERDE, BENJIE L. NEQUINTO, 1 ROSE LILIA S.
ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C. REYES,
LEAN LOUEL A. PERIA, represented by his father ELPIDIO V.
PERIA,2 GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN
VISAYAS, (GF-WV), ENVIRONMENTAL LEGAL ASSISTANCE CENTER
(ELAC), PHILIPPINE KAISAHAN TUNGO SA KAUNLARAN NG
KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN), 3 KAISAHAN
TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG
PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR AGRARIAN REFORM
and RURAL DEVELOPMENT SERVICES, INC. (PARRDS), PHILIPPINE
PARTNERSHIP FOR THE DEVELOPMENT OF HUMAN RESOURCES IN
THE RURAL AREAS, INC. (PHILDHRRA), WOMEN’S LEGAL BUREAU
(WLB), CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, INC.
(CADI), UPLAND DEVELOPMENT INSTITUTE (UDI), KINAIYAHAN
FOUNDATION, INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL
(SALIGAN), LEGAL RIGHTS AND NATURAL RESOURCES
_______________
1
Appears as “Nequito” in the caption of the Petition by “Nequinto” in the
body. (Rollo, p. 12.)
2
As appears in the body of the Petition. (Id., at p. 13.) The caption of the
petition does not include Louel A. Peria as one of the petitioners but the
name of his father Elpidio V. Peria appears therein.
3
Appears as “Kaisahan Tungo sa Kaunlaran ng Kanayunan at
Repormang Pansakahan (KAISAHAN)” in the caption of the Petition by
“Philippine Kaisahan Tungo sa Kaunlaran ng Kanayunan at Repormang
Pansakahan (KAISAHAN)” in the body. (Id., at p. 14.)
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150 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
CENTER, INC. (LRC), petitioners, vs. VICTOR O. RAMOS, SECRETARY,
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR),
HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES BUREAU
(MGB-DENR), RUBEN TORRES; EXECUTIVE SECRETARY, and WMC
(PHILIPPINES), INC.,4respondents.
Judicial Review; Requisites.—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.
Same; Same; Words and Phrases; An actual case or controversy
means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory.—An actual case or controversy
means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the decision of the court
would amount to an advisory opinion. The power does not extend to
hypothetical questions since any attempt at abstraction could only lead to
dialectics and barren legal questions and to sterile conclusions unrelated to
actualities.
Same; Same; Same; Locus Standi; “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, alleging more than a generalized
grievance.—“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, alleging more than a generalized grievance. 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.” Unless a person is injuriously
affected in any of his constitutional rights by the operation of statute or
ordinance, he has no standing.
_______________
4
Erroneously designated in the Petition as “Western Mining Philippines
Corporation.” (Id., at p. 212.) Subsequently, WMC (Philippines), Inc. was
renamed “Tampakan Mineral Resources Corporation.” (Id., at p. 778.)
151
VOL. 421, JANUARY 27, 2004 151
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Same; Same; 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.—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: 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].)
Same; Same; The third requisite for judicial review 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.—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. 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.
Same; Prohibition; Words and Phrases; Prohibition is a preventive
remedy; While the execution of the contract itself may be fait accompli, its
implementation is not.—Prohibition is a preventive remedy. It seeks a
152
152 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
judgment ordering the defendant to desist from continuing with the
commission of an act perceived to be illegal. 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.
Same; Hierarchy of Courts; 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 the Supreme Court in the first instance.—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. When the issues raised are of
paramount importance to the public, this Court may brush aside technicalities
of procedure.
National Economy and Patrimony; Regalian Doctrine; The first
sentence of Section 2, Article XII of the Constitution, 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.—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. 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.
Same; Same; The Regalian doctrine extends not only to land but also
to “all natural wealth that may be found in the bowels of the earth.”—The
Philippines having passed to Spain by virtue of discovery and conquest,
earlier Spanish decrees declared that “all lands were held from the
153
VOL. 421, JANUARY 27, 2004 153
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Crown.” The Regalian doctrine extends not only to land but also to “all
natural wealth that may be found in the bowels of the earth.” 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. Mining laws during the Spanish regime reflected this
perspective.
Same; Same; 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; 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
while under the American doctrine, mineral rights are included in a grant of
land by the government.—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. 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. Thus, earlier jurisprudence 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, perfect 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.
Same; Same; Concession System; Words and Phrases; Under the
concession system, the concessionaire makes a direct equity investment for
the purpose of exploiting a particular natural resource within a given area—
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.—Section 21 also made
possible the concession (frequently styled “permit,” “license” or “lease”)
system. 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.). Under the concession system, the
concessionaire makes a direct equity investment for the purpose of exploiting
a particular natural resource within a given area. Thus, the
154
154 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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. 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.
Same; Same; Same; 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.—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. 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.
Same; Same; Same; Nationalization; Objectives of Nationalization; The
nationalization and conservation of the natural resources of the country was
one of the fixed and dominating objectives of the 1935 Constitutional
Convention.—The nationalization and conservation of the natural resources
of the country was one of the fixed and dominating objectives of the 1935
Constitutional Convention. 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.
Same; Same; Same; Same; Parity Amendments; The swell of
nationalism that suffused the 1935 Constitution was radically diluted when in
November 1946, the Parity Amendment, which came in the form of an
“Ordinance Appended to the Constitution,” was ratified in a plebiscite.—The
swell of nationalism that suffused the 1935 Constitution was radically diluted
when on November l946, the Parity Amendment, which came in the form of
an “Ordinance Appended to the Constitution,” was ratified in a plebiscite. 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. 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.
Same; Same; Service Contracts; The Oil Exploration and Development
Act of 1972 (Presidential Decree No. 87); Words and Phrases; The Oil
Exploration and Development Act of 1972 signaled a transformation from the
concession system to the exploration for and production of indigenous
155
VOL. 421, JANUARY 27, 2004 155
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
petroleum through “service contracts”; “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.—The promulgation on
December 31, 1972 of Presidential Decree No. 87, 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.” “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. 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.
Same; Same; Same; It has been opined, though, that, in the
Philippines, the concept of a service contract, at least in the petroleum
industry, was basically a concession regime with a production-sharing
element.—Ostensibly, the service contract system had certain advantages
over the concession regime. 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.
Same; Same; Same; While Section 9, Article XIV of the 1973
Constitution 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.—On January 17, 1973, then
President Ferdinand E. Marcos proclaimed the ratification of a new
Constitution. Article 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:
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
156
156 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
with any person or entity for the exploration or utilization of natural
resources.
Same; Same; Same; Conspicuously absent in Section 2, Article XII of
the 1987 Constitution 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.—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. Under this provision, the State
assumes “a more dynamic role” in the exploration, development and
utilization of natural resources. 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.
Same; Same; Under the 1987 Constitution, the State itself may
undertake the operation of a concession or enter into joint ventures.—Having
omitted the provision on the concession system, Section 2 proceeded to
introduce “unfamiliar language”: 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.” One, the State may directly undertake these
activities itself; or two, it may enter into coproduction, joint venture, or
production-sharing agreements with Filipino citizens, or entities at least 60%
of whose capital is owned-by such citizens.
157
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Same; Same; Same; Limitations on Technical or Financial Assistance
Agreements.—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 sizeof the activities: only large-scale exploration, development,
and utilization is allowed. The term “large-scale usually refers to very capital-
intensive activities.” 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. 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 notificationrequirement. 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.
Same; Same; Same; Modes by Which the State May Explore, Develop
and Utilize 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. Except to charge the Mines and Geosciences Bureau of
the DENR with performing researches and surveys, and a passing mention of
government-owned or controlled corporations, 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.
158
158 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
7076 (the People’s Small-Scale Mining Act of 1991) and other pertinent
laws. R.A. No. 7942 primarily concerns itself with the second and fourth
modes.
Same; Same; Same; Words and Phrases; “Production Sharing
Agreements,” “Co-Production Agreements,” and “Joint Venture Agreements,”
Explained.—Mineral production sharing, co-production and joint venture
agreements are collectively classified by R.A. No. 7942 as “mineral
agreements.” The Government participates the least in a mineral production
sharing agreement (MPSA). In an MPSA, the Government grants the
contractor the exclusive right to conduct mining operations within a contract
area and shares in the gross output. The MPSA contractor provides the
financing, technology, management and personnel necessary for the
agreement’s implementation. The total government share in an MPSA is the
excise tax on mineral products under Republic Act No. 7729, amending
Section 151 (a) of the National Internal Revenue Code, as amended. In a co-
production agreement (CA), the Government provides inputs to the mining
operations other than the mineral resource, 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. Aside from earnings in equity, the Government
in a JVA is also entitled to a share in the gross output. The Government may
enter into a CA or JVA with one or more contractors.
Same; Statutes; Statutory Construction; Executive Order (E.O.) No.
279; 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.—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 ismandatory under E.O. No. 200, and what due process requires, as
this Court held in Tañada v. Tuvera, is 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.
Same; Same; Same; 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
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Official Gazette on 3 August 1987.—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. Hence, the due process clause,
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
Gazette 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.
Same; Same; Same; 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.—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.
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.
Same; Same; 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; 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.—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.
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. 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. 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.
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Same; Same; 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.—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. 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.
Same; Same; Service Contracts; If the Constitutional Commission
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”).—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. 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.
Same; Same; Same; The insights of the proponents of the U.P. Law
Draft are instructive in interpreting the phrase “technical or financial
assistance.”—It appears that Proposed Resolution No. 496, which was the
draft Article on National Economy and Patrimony, adopted the concept of
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“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. The former, as well as Article XII, as adopted, employed the same
terminology, x x x The insights of the proponents of the U.P. Law draft are,
therefore, instructive in interpreting the phrase “technical or financial
assistance.”
Same; Same; Same; 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.—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.
Same; Same; Same; 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; 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.”—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, necessity, 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
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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. 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.”
Same; Same; Same; Loose statements of some of the Commissioners
in the CONCOM do not necessarily translate to the adoption of the 1973
Constitution provision allowing service contracts.—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. 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.
Same; Same; Same; Administrative Law; 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.—WMCP cites Opinion No. 75, s. 1987, and Opinion No. 175, s.
1990 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
preexisting law; and the administrative interpretation, of the law is at best
advisory, for it is the courts that finally determine what the law means.
Same; Same; Same; The President may enter into FTAAs with foreign-
owned corporation in the exploitation of our natural resources.—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,
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the provision is “very restrictive.” 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.”
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.
Same; Same; Same; Philippine Mining Act of 1995 (Republic Act No.
7942); With the foregoing discussion in mind, this Court finds that R.A. No.
7942 is invalid insofar as said Act authorizes service contracts.—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.
Same; Same; Same; Same; The underlying assumption in all some of
the provisions of R.A. No. 7942 is that the foreign contractor manages the
mineral resources, just like the foreign contractor in a service contract; 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.—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). 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, provided that it reduces its equity in the
corporation, partnership, association or cooperative to forty percent (40%).
Finally, under the Act, an FTAA contractor warrants that it “has or has access
to all the financing, managerial, and technical expertise . . . .” This suggests
that an FTAA contractor is bound to provide some managementassistance—
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.
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Same; Same; Same; Same; Provisions of R.A. No. 7942 Violative of
Section 2, Article XII of the Constitution.—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, 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, which enumerates the terms and conditions for every financial or
technical assistance agreement; (5) Section 39, which allows the contractor
in a financial and technical assistance agreement to convert the same into a
mineral production-sharing agreement; Section 37, which prescribes the
procedure for filing and evaluation of financial or technical assistance
agreement proposals; Section 38, which limits the term of financial or
technical assistance agreements; Section 40, which allows the assignment or
transfer of financial or technical assistance agreements; Section 41, which
allows the withdrawal of the contractor in an FTAA; The second and third
paragraphs of Section 81, which provide for the Government’s share in a
financial and technical assistance agreement; and Section 90, which
provides for incentives to contractors in FTAAs insofar as it applies to said
contractors;
Same; Same; Same; Same; 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.—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.
Same; International Law; Treaties; Equal Protection Clause; The
annulment of the FTAA would not constitute a breach of the Agreement on
the Promotion and Protection of Investments between the Philippine and
Australian Governments, for the decision herein invalidating the subject
FTAA forms part of the legal system of the Philippines, and the equal
protection clause guarantees that such decision shall apply to all contracts
belonging to the same class, hence, upholding rather than violating, the “fair
and
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equitable treatment” stipulation in said treaty.—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. The equal protection clause 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.
Same; Statutory Construction; A constitution is not to be interpreted as
demanding the impossible or the impracticable—and unreasonable or absurd
consequences, if possible, should be avoided—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.—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 andfinancial assistance agreement. Petitioners’ contention does not
lie. To adhere to the literal language of the Constitution would lead to absurd
consequences. 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.
[Italics 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.
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. That
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is a strong argument against its adoption. Accordingly, petitioners’
interpretation must be rejected.
VITUG, J., Separate Opinion:
National Economy and Patrimony; Statutory Construction; It could not
have been the object of the framers of the Charter to limit the contracts which
the President may enter into, to mere “agreements for financial and technical
assistance; The Constitution has not prohibited the State from itself
exploring, developing, or utilizing the country’s natural resources, and, for
this purpose, it may, enter into the necessary agreements with individuals or
entities in the pursuit of a feasible operation.”—The majority would cite the
emphatic statements of Commissioners Villegas and Davide that the
country’s natural resources are exclusively reserved for Filipino citizens and
that, according to Commissioner Villegas, “the deletion of the phrase ‘service
contracts’ (is the) 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.” These
declarations do not necessarily mean that the Government may no longer
enter into service contracts with foreign entities. In order to uphold and
strengthen the national policy of preserving and developing the country’s
natural resources exclusively for the Filipino people, the present Constitution
indeed has provided for safeguards to prevent the execution of service
contracts of the old regime, but not of service contracts per se. It could not
have been the object of the framers of the Charter to limit the contracts which
the President may enter into, to mere “agreements for financial and technical
assistance.” One would take it that the usual terms and conditions
recognized and stipulated in agreements of such nature have been
contemplated. Basically, the financier and the owner of know-how would
understandably satisfy itself with the proper implementation and the
profitability of the project. It would be abnormal for the financier and owner of
the know-how not to assure itself that all the activities needed to bring the
project into fruition are properly implemented, attended to, and carried out.
Needless to say, no foreign investor would readily lend financial or technical
assistance without the proper incentives, including fair returns, therefor. The
Constitution has not prohibited the State from itself exploring, developing, or
utilizing the country’s natural resources, and, for this purpose, it may, I
submit, enter into the necessary agreements with individuals or entities in the
pursuit of a feasible operation.
Same; Supreme Court; Judicial Review; Separation of Powers; While I
cannot ignore an impression of the business community that the Supreme
Court is wont, at times, to interfere with the economic decisions of Congress
and the government’s economic managers, I must hasten to add, however,
that in so voting as above, I have not been unduly overwhelmed by that
perception.—Just a word. While I cannot ignore an impression of the busi-
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ness community that the Court is wont, at times, to interfere with the
economic decisions of Congress and the government’s economic managers,
I must hasten to add, however, that in so voting as above, I have not been
unduly overwhelmed by that perception. Quite the contrary, the Court has
always proceeded with great caution, such as now, in resolving cases that
could inextricably involve policy questions thought to be best left to the
technical expertise of the legislative and executive departments.
PANGANIBAN, J., Separate Opinion:
Moot and Academic Issues; I believe that the Court should dismiss the
Petition on the ground of mootness—a decision on the constitutionality issue
should await the wisdom of a new day when the Court would have a live
case before it.—With due respect, I believe that the Court should dismiss the
Petition on the ground of mootness. I submit that a decision on the
constitutionality issue should await the wisdom of a new day when the Court
would have a live case before it. The nullity of the FTAA is unarguably
premised upon the contractor being a foreign corporation. Had the FTAA
been originally issued to a Filipino-owned corporation, we would have had no
constitutionality issue to speak of. Upon the other hand, conveyance of the
FTAA to a Filipino corporation can be likened to the sale of land to a foreigner
who subsequently acquires Filipino citizenship, or who later re-sells the same
land to a Filipino citizen. The conveyance would be validated, as the property
in question would no longer be owned by a disqualified vendee. Since the
FTAA is now to be implemented by a Filipino corporation, how can the Court
still declare it unconstitutional? The CA case is a dispute between two Filipino
companies (Sagittarius and Lepanto) both claiming the right to purchase the
foreign shares in WMCP. So regardless of which side eventually wins, the
FTAA would still be in the hands of a qualified Filipino company.
National Economy and Patrimony; Statutory Construction; If the
intention of the drafters were strictly to confine foreign corporations to
financial or technical assistance and nothing more, their language would
have been unmistakably restrictive and stringent.—First, the drafters’ choice
of words—their use of the phrase “agreements x x x involving x x x technical
or financial assistance”—does not absolutely indicate the intent to exclude
other modes of assistance. Rather, the phrase signifies the possibility of the
inclusion of other activities, provided they bear some reasonable relationship
to and compatibility with financial or technical assistance. If the intention of
the drafters were strictly to confine foreign corporations to financial or
technical assistance and nothing more, I am certain that their language would
have been unmistakably restrictive and stringent. They would have said, for
example: “Foreign corporations are prohibited from providing management or
other forms of assistance,” or words to that effect. The conscious avoidance
of restrictive wording bespeaks an intent
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not to employ—in an exclusionary, inflexible and limiting manner—the
expression “agreements involving technical or financial assistance.”
Same; Same; Service Contracts; The present Constitution still
recognizes and allows service contracts (and has not rendered them taboo),
albeit subject to several restrictions and modifications aimed at avoiding the
pitfalls of the past.—Second, I believe the foregoing position is supported by
the fact that our present Constitution still recognizes and allows service
contracts (and has not rendered them taboo), albeit subject to several
restrictions and modifications aimed at avoiding the pitfalls of the past. Below
are some excerpts from the deliberations of the Constitutional Commission
(Concom), showing that its members discussed “technical or financial
agreements” in the same breath as “service contracts” and used the terms
interchangeably.
Same; Same; Same; In the minds of the commissioners, the concept of
technical and financial assistance agreements did not exist at all apart from
the concept of service contracts duly modified to prevent abuses—“technical
and financial agreements” were understood by the delegates to include
service contracts duly modified to prevent abuses.—The foregoing is but a
small sampling of the lengthy discussions of the constitutional commissioners
on the subject of service contracts and technical and financial assistance
agreements. Quoting the rest of their discussions would have taken up
several more pages, and these have thus been omitted for the sake of
brevity. In any event, it would appear that the members of the Concom
actually had in mind the Marcos era service contracts that they were familiar
with(but which they duly modified and restricted so as to prevent
abuses), when they were crafting and polishing the provisions dealing with
financial and/or technical assistance agreements. These provisions
ultimately became the fourth and the fifth paragraphs of Section 2 of Article
XII of the 1987 Constitution. Put differently, “technical and financial
assistance agreements” were understood by the delegates to include service
contracts duly modified to prevent abuses. Since the drafters were referring
only to service contracts to be granted to foreigners and to nothing else, this
fact necessarily implies that we ought not treat the idea of “agreements
involving either technical or financial assistance” as having any significance
or existence apart from service contracts. In other words, in the minds of the
commissioners, the concept of technical and financial assistance agreements
did not exist at all apart from the concept of service contracts duly modified
to prevent abuses.
Same; Same; Same; Current business practices often require
borrowers seeking huge loans to allow creditors access to financial records
and other data, and probably a seat or two on the former’s board of directors,
or at least some participation in certain management decisions that may
have an impact on the financial health or long-term viability of the debtor,
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which of course will directly affect the latter’s capacity to repay its
loans.—Tantamount to closing one’s eyes to reality is the insistence that the
term “agreements involving technical or financial assistance” refers only
to purely technical or financial assistance to be rendered to the State by a
foreign corporation (and must perforce exclude management and other forms
of assistance). Nowadays, securing the kind of financial assistancerequired
by large-scale explorations, which involve hundreds of millions of dollars, is
not just a matter of signing a simple promissory note in favor of a lender.
Current business practices often require borrowers seeking huge loans to
allow creditors access to financial records and other data, and probably a
seat or two on the former’s board of directors; or at least some participation
in certain management decisions that may have an impact on the financial
health or long-term viability of the debtor, which of course will directly affect
the latter’s capacity to repay its loans. Prudent lending practices necessitate
a certain degree of involvement in the borrower’s management process.
Same; Same; Same; If the Supreme Court closes its doors to
international realities and unilaterally sets up its own concepts of strict
technical and financial assistance, then it may unwittingly make the country a
virtual hermit—an economic isolationist—in the real world of finance.—Given
the modern-day reality that even the World Bank (WB) and the International
Monetary Fund (IMF) do not lend on the basis merely of bare promissory
notes, but on some conditionalities designed to assure the borrowers’
financial viability, I would like to hear in an Oral Argument in a live, not a
moot, case what these international practices are and how they impact on
our constitutional restrictions. This is not to say that we should bend our
basic law; rather, we should find out what kind of FTAA provisions are
realistic vis-à-vis these international standards and our constitutional
protection. Unless there is a live FTAA, the Court would not be able to
analyze the provisions vis-à-vis the Constitution, the Mining Law and these
modern day lending practices. I mentioned the WB and the IMF, not
necessarily because I agree with their oftentimes stringent policies, but
because they set the standards that international and multinational financial
institutions often take bearings from. The WB and IMF are akin (though not
equivalent) to the Bangko Sentral, which all Philippine banks must abide
by. If this Court closes its doors to these international realities and unilaterally
sets up its own concepts of strict technical and financial assistance, then it
may unwittingly make the country a virtual hermit—an economic isolationist
—in the real world of finance.
Constitutions; Statutory Construction; The commissioners fully realized
that their work would have to withstand the test of time, that the Charter,
though crafted with the wisdom born of past experiences and lessons
painfully learned, would have to be a living document that would answer the
needs of the nation well into the future.—I believe that the
170
170 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Concom did not mean to tie the hands of the President and restrict the
latter only to agreements on rigid financial and technical assistance
and nothing else. The commissioners fully realized that their work would
have to withstand the test of time; that the Charter, though crafted with the
wisdom born of past experiences and lessons painfully learned, would
have to be a living document that would answer the needs of the nation well
into the future. Thus, the unerring emphasis on flexibility and adaptability.
SPECIAL CIVIL ACTION in the Supreme Court. Mandamus and Prohibition.
The facts are stated in the opinion of the Court.
Marivic M.V.F. Leonen, Edgar DL Bernal, Ingrid Rosalie L. Gorre and
Emily L. Manuel for petitioners.
Ma. Paz G. Luna for petitioner David de Vera, et al.
Magistrado A. Mendoza for petitioner KAISAHAN.
The Solicitor General for public respondents.
Factoran and Associates Law Office; Belo, Gozon, Elma, Parel,
Asuncion and Lucila; and Azcuna, Yorac, Sarmiento, Arroyo & Chua for
private respondent WMC (Phils.).
Mario C.V. Jalandoni co-counsel for WMC (Phils.).
CARPIO-MORALES, J.:
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
 7
Technical Assistance Agreement (FTAA) entered into on March 30, 1995 by Exec. Order No. 279 (1987), sec. 4.
8
the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a Rep. Act No. 7942 (1995), sec. 15.
9
corporation organized under Philippine laws. Id., sec. 26 (a)-(c).
10
On July 25, 1987, then President Corazon C. Aquino issued Executive Id., sec. 29.
Order (E.O.) No. 2796 authorizing the DENR Secretary to 11
Id., sec. 30.
12
Id., sec. 31.
13
_______________ Id., sec. 32.
14
Id., ch. VI.
15
5
An Act Instituting A New System of Mineral Resources Exploration, Id., secs. 27 and 33 in relation to sec. 3 (aq).
16
Development, Utilization and Conservation. Id., sec. 72.
17
6
Authorizing the Secretary of Environment and Natural Resources to Id., sec. 73.
Negotiate and Conclude Joint Venture, Co-Production, or Production- 172
171 172 SUPREME COURT REPORTS ANNOTATED
VOL. 421, JANUARY 27, 2004 171 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos ment18 rights, and the right to possess explosives.19 Surface owners,
accept, consider and evaluate proposals from foreign-owned corporations or occupants, or concessionaires are forbidden from preventing holders of
foreign investors for contracts of agreements involving either technical or mining rights from entering private lands and concession areas. 20 A
financial assistance for large-scale exploration, development, and utilization procedure for the settlement of conflicts is likewise provided for. 21
of minerals, which, upon appropriate recommendation of the Secretary, the The Act restricts the Conditions for exploration, 22quarry23 and
President may execute with the foreign proponent. In entering into such other24 permits. It regulates the transport, sale and processing of
proposals, the President shall consider the real contributions to the economic minerals,25 and promotes the development of mining communities, science
growth and general welfare of the country that will be realized, as well as the and mining technology,26 and safety and environmental protection.27
development and use of local scientific and technical resources that will be The government’s share in the agreements is spelled out and
promoted by the proposed contract or agreement. Until Congress shall allocated,28 taxes and fees are imposed,29 incentives granted.30 Aside from
determine otherwise, large-scale mining, for purpose of this Section, shall penalizing certain acts,31 the law likewise specifies grounds for the
mean those proposals for contracts or agreements for mineral resources cancellation, revocation and termination of agreements and permits. 32
exploration, development, and utilization involving a committed capital in a On April 9, 1995, 30 days following its publication on March 10, 1995 in
single mining unit project of at least Fifty Million Dollars in United States Malaya and Manila Times, two newspapers of general circulation, R.A. No.
currency (US $50,000,000.00).7 7942 took effect.33
On March 3, 1995, then President Fidel V. Ramos approved R.A. No. Shortly before the effectivity of R.A. No. 7942, however, or on March 30,
7942 to “govern the exploration, development, utilization and processing of 1995, the President entered into an FTAA with WMCP covering 99,387
all mineral resources.”8 R.A. No. 7942 defines the modes of mineral hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North
agreements for mining operations, 9 outlines the procedure for their filing and Cotabato.34
approval,10 assignment/transfer11 and withdrawal,12 and fixes their
13
terms. Similar provisions govern financial or technical assistance _______________
agreements.14
The law prescribes the qualifications of contractors 15 and grants them 18
Id., sec. 75.
certain rights, including timber, 16 water17 and ease- 19
Id., sec. 74.
20
Id., sec. 76.
21
_______________ Id., ch. XIII.
22
Id., secs. 20-22.
23
Sharing Agreements for the Exploration, Development and Utilization of Id., secs. 43, 45.
24
Mineral Resources, and Prescribing the Guidelines for such Agreements and Id., secs. 46-49, 51-52.
25
those Agreements involving Technical or Financial Assistance by Foreign- Id., ch. IX.
26
Owned Corporations for Large-Scale Exploration, Development and Id., ch. X.
27
Utilization of Minerals. Id., ch. XI.
 28
Id., ch. XIV. _______________
29
Id., ch. XV.
30
Id., ch. XVI. 35
Rollo, p. 22.
31
Id., ch. XIX 36
Ibid.
32
Id., ch. XVII. 37
Ibid.
33
Section 116, R.A. No. 7942 provides that the Act “shall take effect thirty 38
Ibid. The number has since risen to 129 applications when the
(30) days following its complete publication in two (2) newspapers of general petitioners filed their Reply. (Rollo, p. 363.)
circulation in the Philippines.” 39
Id., at p. 22.
34
WMCP FTAA, sec. 4.1. 174
173 174 SUPREME COURT REPORTS ANNOTATED
VOL. 421, JANUARY 27, 2004 173 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR III
Administrative Order (DAO) No. 95-23, s. 1995, otherwise known as the
Implementing Rules and Regulations of R.A. No. 7942. This was later x x x in signing and promulgating DENR Administrative Order No. 96-40
repealed by DAO No. 96-40, s. 1996 which was adopted on December 20, implementing Republic Act No. 7942, the latter being unconstitutional in that
1996. it violates Sec. 1, Art. III of the Constitution;
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, IV
7942 and DAO No. 96-40, 35 giving the DENR fifteen days from receipt 36 to act
thereon. The DENR, however, has yet to respond or act on petitioners’ x x x in signing and promulgating DENR Administrative Order No. 96-40
letter.37 implementing Republic Act No. 7942, the latter being unconstitutional in that
Petitioners thus filed the present petition for prohibition and mandamus, it allows enjoyment by foreign citizens as well as fully foreign owned
with a prayer for a temporary restraining order. They allege that at the time of corporations of the nation’s marine wealth contrary to Section 2, paragraph 2
the filing of the petition, 100 FTAA applications had already been filed, of Article XII of the Constitution;
covering an area of 8.4 million hec-tares, 38 64 of which applications are by
fully foreign-owned corporations covering a total of 5.8 million hectares, and V
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 x x x in signing and promulgating DENR Administrative Order No. 96-40
jurisdiction: implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows priority to foreign and fully foreign owned corporations in the
I exploration, development and utilization of mineral resources contrary to
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 VI
it allows fully foreign owned corporations to explore, develop, utilize and
exploit mineral resources in a manner contrary to Section 2, paragraph 4, x x x in signing and promulgating DENR Administrative Order No. 96-40
Article XII of the Constitution; implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows the inequitable sharing of wealth contrary to Sections [sic] 1,
II paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the Constitution;

x x x in signing and promulgating DENR Administrative Order No. 96-40 VII

implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows the taking of private property without the determination of public use x x x in recommending approval of and implementing the Financial and
and for just compensation; 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:
1. (a)Permanently enjoining respondents from acting on any application
for Financial or Technical Assistance Agreements;
2. (b)Declaring the Philippine Mining Act of 1995 or Republic Act No.
7942 as unconstitutional and null and void;
3. (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
_______________
40
Id., at pp. 23-24.
175
VOL. 421, JANUARY 27, 2004 175
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
1. (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 andexploration
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.44 WMCP 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. 46It further claims
that by such sale and transfer of shares, “WMCP has ceased to be
connected in any way with WMC.”47
_______________
41
Id., at pp. 52-53. Emphasis and italics supplied.
42
WMCP FTAA, p. 2.
43
Rollo, p. 220.
44
Id., at p. 754.
45
Vide Note 4.
46
Rollo, p. 754.
47
Id., at p. 755.
176
176 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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, 2002,50Lepanto filed a petition for review 51 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
_______________
48
Id., at pp. 761-763.
49
Id., at pp. 764-776.
 50
Id., at pp. 782-786.
51
Docketed as C.A.-G.R. No. 74161.
52
G.R. No. 153885, entitled Lepanto Consolidated Mining Company v.
WMC Resources International Pty. Ltd., et al., decided September 24,
2003, 412 SCRA 101 and G.R. No. 156214, entitled Lepanto Mining
Company v. WMC Resources International Pty. Ltd., WMC (Philippines), Inc.,
Southcot Mining Corporation, Tampakan Mining Corporation and Sagittarius
Mines, Inc., decided September 23, 2003.
53
Section 12, Rule 43 of the Rules of Court, invoked by private
respondent, states, “The appeal shall not stay the award, judgment, final
order or resolution sought to be reviewed unless the Court of Appeals shall
direct otherwise upon such terms as it may deem just.”
54
WMCP’s Reply (dated May 6, 2003) to Petitioners’ Comment (to the
Manifestation and Supplemental Manifestation), p. 3.
177
VOL. 421, JANUARY 27, 2004 177
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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.
I question of standing is whether a party alleges “such personal stake in the
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. (1)The existence of an actual and appropriate case;
2. (2)A personal and substantial interest of the party raising the
constitutional question;
3. (3)The exercise of judicial review is pleaded at the earliest
opportunity; and
4. (4)The constitutional question is the lis mota of the case.58
_______________
55
Ibid.
56
Ibid.
57
WMCP’s Reply (dated May 6, 2003) to Petitioners’ Comment (to the
Manifestation and Supplemental Manifestation), p. 4.
58
Philippine Constitution Association v. Enriquez, 235 SCRA
506(1994); National Economic Protectionism Association v. Ongpin, 171
SCRA 657 (1989); Dumlao v. Commission on Elections, 95 SCRA
392 (1980).
178
178 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 questions 62 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,64 alleging more than a generalized grievance. 65 The gist of 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
_______________
59
Dumlao v. Commission on Elections, supra.
60
Board of Optometry v. Colet, 260 SCRA 88 (1996).
61
Dumlao v. Commission on Elections, supra.
 62
Subic Bay Metropolitan Authority v. Commission on Elections, 262
SCRA 492 (1996).
63
Angara v. Electoral Commission, 63 Phil. 139 (1936).
64
Integrated Bar of the Philippines v. Zamora, 338 SCRA 81, 100
(2000); Dumlao v. Commission on Elections, supra; People v. Vera, 65 Phil.
56 (1937).
65
Dumlao v. Commission on Elections, supra.
66
Integrated Bar of the Philippines v. Zamora, supra.
67
Ermita-Malate Hotel and Motel Operators Association, Inc. v. City
Mayor of Manila, 21 SCRA 449 (1967).
179
VOL. 421, JANUARY 27, 2004 179
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
_______________
68
Petitioners Roberto P. Amloy, Raqim L. Dabie, Simeon H. Dolojo,
Imelda Gandon, Leny B. Gusanan, Marcelo L. Gusanan, Quintal A.
Labuayan, Lomingges Laway, and Benita P. Tacuayan.
69
Petitioners F’long Agustin M. Dabie, Mario L. Mangcal, Alden S. Tusan,
Sr. Susuan O. Bolanio, OND, Lolita G. Demonteverde, Benjie L. Nequinto,
Rose Lilia S. Romano and Amparo S. Yap.
70
Rollo, p. 6.
71
Id., at p. 337, citing Malabanan v. Gaw Ching, 181 SCRA 84 (1990).
72
246 SCRA 540 (1995).
180
180 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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,
181
 VOL. 421, JANUARY 27, 2004 181
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 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
_______________
73
People v. Vera, supra.
74
Militante v. Court of Appeals, 330 SCRA 318 (2000).
75
Ibid.
182
182 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
to 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 pre
183
VOL. 421, JANUARY 27, 2004 183
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
vent 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. (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. (2)It allows foreign-owned companies to extend both technical and
financial assistance, instead of “eithertechnical 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:
_______________
76
Cruz v. Secretary, of Environment and Natural Resources, 347 SCRA
128 (2000), Kapunan, J., Separate Opinion. [Emphasis supplied.]
77
Joya v. Presidential Commission on Good Government, 225 SCRA
568 (1993).
78
Integrated Bar of the Philippines v. Zamora, supra.
184
184 SUPREME COURT REPORTS ANNOTATED
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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 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.
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
_______________
79
J. Bernas, S.J., The 1987 Constitution of the Philippines: A
Commentary 1009 (1996).
185
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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
_______________
80
Cruz v. Secretary of Environment and Natural Resources, supra,
Kapunan, J., Separate Opinion.
81
Id., Puno, J., Separate Opinion, and Panganiban, J., Separate Opinion.
82
Cariño v. Insular Government, 212 US 449, 53 L.Ed. 595 (1909). For
instance, Law 14, Title 12, Book 4 of the Recopilacion de Leyes de las
Indias proclaimed:
We having acquired full sovereignty over the Indies, and all lands, territories,
and possessions not heretofore ceded away by our royal predecessors, or by
us, or in our name, still pertaining to the royal crown and patrimony, it is our
will that all lands which are held without proper and true deeds of grant be
restored to us according as they belong to us, in order that after reserving
before all what to us or to our viceroys, audiencias, and governors may seem
necessary for public squares, ways, pastures, and commons in those places
which are peopled, taking into consideration not only their present condition,
but also their future and their probable increase, and after distributing to the
natives what may be necessary for tillage and pasturage, confirming them in
what they now have and giving them more if necessary, all the rest of said
lands may remain free and unencumbered for us to dispose of as we may
wish.
83
Republic v. Court of Appeals, 160 SCRA 228 (1988). It has been noted,
however, that “the prohibition in the [1935] Constitution against alienation by
the state of mineral lands and minerals is not properly a part of the Regalian
doctrine but a separate national policy designed to
186
186 SUPREME COURT REPORTS ANNOTATED
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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
_______________
conserve our mineral resources and prevent the state from being
deprived of such minerals as are essential to national defense.” (A.
Noblejas, Philippine Law on Natural Resources 126-127 [1959 ed.], citing V.
Francisco, The New Mining Law.)
84
Cruz v. Secretary of Environment and Natural Resources, supra,
Kapunan, J., Separate Opinion, citing A. Noblejas, Philippine Law on Natural
Resources 6 (1961). Noblejas continues:
Thus, they asserted their right of ownership over mines and minerals or
precious metals, golds, and silver as distinct from the right of ownership of
the land in which the minerals were found. Thus, when on a piece of land
mining was more valuable than agriculture, the sovereign retained ownership
of mines although the land has been alienated to private ownership.
Gradually, the right to the ownership of minerals was extended to base
metals. If the sovereign did not exploit the minerals, they grant or sell it as a
right separate from the land. (Id., at p. 6.)
85
In the unpublished case of Lawrence v. Garduño (L-10942, quoted in V.
FRANCISCO, Philippine Law on Natural Resources 14-15 [1956]), this Court
observed:
The principle underlying Spanish legislation on mines is that these are
subject to the eminent domain of the state. The Spanish law of July 7, 1867,
amended by the law of March 4, 1868, in article 2 says: “The ownership of
the substances enumerated in the preceding article (among them those of
inflammable nature), belong[s] to the state, and they cannot be disposed of
without the government authority.”
The first Spanish mining law promulgated for these Islands (Decree of
Superior Civil Government of January 28, 1964), in its Article I, says: “The
supreme ownership of mines throughout the kingdom belong[s] to the crown
and to the king. They shall not be exploited except by persons who obtained
special grant from this superior government and by those who may secure it
thereafter, subject to this regulation.”
Article 2 of the royal decree on ownership of mines in the Philippine
Islands, dated May 14, 1867, which was the law in force at the time of the
cession of these Islands to the Government of the United States, says: “The
ownership of the substances enumerated in the preceding article (among
them those of inflammable nature)
187
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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 on
_______________
belongs to the state, and they cannot be disposed of without an
authorization issued by the Superior Civil Governor.”
Furthermore, all those laws contained provisions regulating the manner of
prospecting, locating and exploring mines in private property by persons
other than the owner of the land as well as the granting of concessions,
which goes to show that private land did not include, without express grant,
the mines that might be found therein.
Analogous provisions are found in the Civil Code of Spain determining
the ownership of mines. In its Article 339 (Article 420, New Civil Code)
enumerating properties of public ownership, the mines are included until
specially granted to private individuals. In its article 350 (Art. 437, New Civil
Code) declaring that the proprietor of any parcel of land is the owner of its
surface and of everything under it, an exception is made as far as mining
laws are concerned. Then in speaking of minerals, the Code in its articles
426 and 427 (Art. 519, New Civil Code) provides rules governing the digging
of pits by third persons on private-owned lands for the purpose of prospecting
for minerals.
86
Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, 261 SCRA
528(1996).
87
Ibid.
188
188 SUPREME COURT REPORTS ANNOTATED
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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, perfect 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
_______________
88
Cruz v. Secretary of Environment and Natural Resources, supra,
Kapunan, J., Separate Opinion.
89
Ibid.
90
McDaniel v. Apacible and Cuisia, 42 Phil. 749 (1922).
91
NOBLEJAS, supra, at p. 5.
189
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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, 100approved on May
14, 1917, which provided for the leasing and development of coal lands in the
Philippines, both utilized the concession system.101
_______________
 92
V.M.A. Dimagiba, Service Contract Concepts in Energy, 57 PHIL. L. J.
307, 313 (1982).
93
P.A. Agabin, Service Contracts: Old Wine in New Bottles?, in II DRAFT
PROPOSAL OF THE 1986 U.P. Law Constitution Project 3.
94
Id., at pp. 2-3.
95
Id., at p. 3.
96
Ibid.
97
Ibid.
98
Ibid.
99
An Act to Provide for the Exploration, Location and Lease of Lands
Containing Petroleum and other Mineral Oils and Gas in the Philippine
Islands.
100
An Act to Provide for the Leasing and Development of Coal Lands in
the Philippine Islands.
101
Agabin, supra, at p. 3.
190
190 SUPREME COURT REPORTS ANNOTATED
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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
_______________
102
People v. Linsangan, 62 Phil. 646 (1935).
103
Ibid.
104
Ibid.
105
Ibid.
106
Ibid.
107
Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, supra.
108
BERNAS, S.J., supra, at pp. 1009-1010, citing Lee Hong Hok v.
David, 48 SCRA 372 (1972).
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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 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
_______________
109
II J. Aruego, The Framing of the Philippine Constitution 592 (1949).
110
Id., at pp. 600-601.
111
Id., at p. 604. Delegate Aruego expounds: At the time of the framing of
the Philippine Constitution, Filipino capital had been known to be rather shy.
Filipinos hesitated as
192
192 SUPREME COURT REPORTS ANNOTATED
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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.
The swell of nationalism that suffused the 1935 Constitution was radically
diluted when on November l946, the Parity Amendment, which came in the
form of an “Ordinance Appended to the
_______________
a general rule to invest a considerable sum of their capital for the
development, exploitation, and utilization of the natural resources of the
country. They had not as yet been so used to corporate enterprises as the
peoples of the West. This general apathy, the delegates knew, would mean
the retardation of the development of the natural resources, unless foreign
capital would be encouraged to come in and help in that development. They
knew that the nationalization of the natural resources would certainly not
encourage the investment of foreign capital into them. But there was a
general feeling in the Convention that it was better to have such development
retarded or even postponed altogether until such time when the Filipinos
would be ready and willing to undertake it rather than permit the natural
resources to be placed under the ownership or control of foreigners in order
that they might be immediately developed, with the Filipinos of the future
serving not as owners but at most as tenants or workers under foreign
masters. By all means, the delegates believed, the natural resources should
be conserved for Filipino posterity.
The nationalization of natural resources was also intended as an
instrument of national defense. The Convention felt that to permit foreigner to
own or control the natural resources would be to weaken the national
defense. It would be making possible the gradual extension of foreign
influence into our politics, thereby increasing the possibility of foreign control.
x x x.
Not only these. The nationalization of the natural resources, it was
believed, would prevent making the Philippines a source of international
conflicts with the consequent danger to its internal security and
independence. For unless the natural resources were nationalized, with the
nationals of foreign countries having the opportunity to own or control them,
conflicts of interest among them might arise inviting danger to the safety and
independence of the nation. (Id., at pp. 605-606.)
193
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
_______________
112
Palting v. San Jose Petroleum Inc., 18 SCRA 924 (1966); Republic v.
Quasha, 46 SCRA 160 (1972).
113
Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, supra.
114
Article VI thereof provided:
1. The disposition, exploitation, development and utilization of all agricultural,
timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces and of sources of potential
energy, and other natural resources of either Party, and the operation of
public utilities, shall, if open to any person, be open to citizens of the other
Party and to all forms of business enterprise owned or controlled directly or
indirectly, by citizens of such other Party in the same manner as to and under
the same conditions imposed upon citizens or corporations or associations
owned or controlled by citizens of the Party granting the right.
 194 Nevertheless, the Government reserved the right to undertake such work
194 SUPREME COURT REPORTS ANNOTATED itself.120 This proceeded from the theory that all natural deposits or
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos occurrences of petroleum or natural gas in public and/or private lands in the
The Petroleum Act of 1949 and Philippines belong to the State. 121 Exploration and exploitation concessions
The Concession System did not confer upon the concessionaire ownership over the petroleum lands
In the meantime, Republic Act No. 387,115 also known as the Petroleum Act of and petroleum deposits.122 However, they did grant concessionaires the right
1949, was approved on June 18, 1949. The Petroleum Act of 1949 employed to explore, develop, exploit, and utilize them for the period and under the
the concession system for the exploitation of the nation’s petroleum conditions determined by the law.123
resources. Among the kinds of concessions it sanctioned were exploration Concessions were granted at the complete risk of the concessionaire; the
and exploitation concessions, which respectively granted to the Government did not guarantee the existence of petroleum or undertake, in
concessionaire the exclusive right to explore for116 or develop117 petroleum any case, title warranty.124
within specified areas. Concessionaires were required to submit information as maybe required
Concessions may be granted only to duly qualified persons 118 who have by the Secretary of Agriculture and Natural Resources, including reports of
sufficient finances, organization, resources, technical compe- geological and geophysical examinations, as well as production
reports.125Exploration126 and exploitation127 concessionaires were also
_______________ required to submit work programs.

2. The rights provided for in Paragraph 1 may be exercised x x x in the _______________

case of citizens of the United States, with respect to natural resources in the
119
public domain in the Philippines, only through the medium of a corporation Id., art. 31. The same provision recognized the rights of American
organized under the laws of the Philippines and at least 60% of the capital citizens under the Parity Amendment:
stock of which is owned and controlled by citizens of the United States x x x. During the effectivity and subject to the provisions of the ordinance appended
3. The United States of America reserves the rights of the several States to the Constitution of the Philippines, citizens of the United States and all
of the United States to limit the extent to which citizens or corporations or forms of business enterprises owned and controlled, directly or indirectly, by
associations owned or controlled by citizens of the Philippines may engage in citizens of the United States shall enjoy the same rights and obligations
the activities specified in this article. The Republic of the Philippines reserves under the provisions of this Act in the same manner as to, and under the
the power to deny and of the rights specified in this Article to citizens of the same conditions imposed upon, citizens of the Philippines or corporations or
United States who are citizens of States, or to corporations or associations at associations owned or controlled by citizens of the Philippines.
120
least 60% of whose capital stock or capital is owned or controlled by citizens Id., art. 10.
121
of States, which deny like rights to citizens of the Philippines, or to Id., art 3.
122
corporations or associations which are owned or controlled by citizens of the Id., art. 9.
123
Philippines x x x. Ibid.
124
115
An Act to Promote the Exploration, Development, Exploitation, and Rep. Act No. 387 (1949), as amended, art. 8.
125
Utilization of the Petroleum Resources of the Philippines; to Encourage the Id., art. 25.
126
Conservation of such Petroleum Resources; to Authorize the Secretary of Id., art. 47.
127
Agriculture and Natural Resources to Create an Administration Unit and a Id., art. 60.
Technical Board in the Bureau of Mines; to Appropriate Funds therefor; and 196
for other purposes. 196 SUPREME COURT REPORTS ANNOTATED
116
Rep. Act No. 387 (1949), as amended, art. 10 (b). La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
117
Id., art. 10 (c). Exploitation concessionaires, in particular, were obliged to pay an annual
118
Id., art. 5. exploitation tax,128 the object of which is to induce the concessionaire to
195 actually produce petroleum, and not simply to sit on the concession without
VOL. 421, JANUARY 27, 2004 195 developing or exploiting it.129 These concessionaires were also bound to pay
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos the Government royalty, which was not less than 12 1/2% of the petroleum
tence, and skills necessary to conduct the operations to be under-taken. 119 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
_______________
128
Id., art. 64. Article 49, R.A. No. 387 originally imposed an annual
exploration tax on exploration concessionaires but this provision was
repealed by Section 1, R.A. No. 4304.
129
Francisco, supra, at p. 103.
130
Rep. Act No. 387 (1949), as amended, art. 65.
131
Francisco, supra, at p.103.
132
Rep. Act No. 387 (1949), as amended, art. 90 (b) 3.
133
Id., art. 90 (b) 4.
134
Id., art. 93-A.
135
Id., art. 93.
136
Ibid.
137
Rep. Act No. 387 (1949), as amended, art. 94.
197
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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
_______________
138
Id., art. 106.
139
Id., art. 95.
140
Ibid.
141
Rep. Act No. 387 (1949), as amended, art. 95 (e).
142
Dimagiba, supra, at p. 315, citing Fabrikant, Oil Discovery and
Technical Change in Southeast Asia, Legal Aspects of Production Sharing
198
198 SUPREME COURT REPORTS ANNOTATED
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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 in
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 within 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.
_______________
Contracts in the Indonesian Petroleum Industry, pp. 101-102, sections
13C.24 and 13C.25 (1972).
143
Agabin, supra, at p. 4.
144
Dimagiba, supra, at p. 318.
199
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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.149The contractor must be technically competent and financially capable
to undertake the operations required in the contract. 150
_______________
145
Amending Presidential Decree No. 8 issued on October 2, 1972, and
Promulgating an Amended Act to Promote the Discovery and Production of
Indigenous Petroleum and Appropriate Funds Therefor.
146
Pres. Decree No. 87 (1972), sec. 4.
147
Agabin, supra, at p. 6.
148
M. Magallona, Service Contracts in Philippine Natural Resources, 9
WORLD BULL. 1, 4 (1993).
149
Pres. Decree No. 87 (1972), sec. 6.
150
Id., sec. 4.
200
200 SUPREME COURT REPORTS ANNOTATED
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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
_______________
151
Id., sec. 6.
 152
Id., sec. 7.
153
Id., sec. 8.
154
Ibid.
155
Ibid.
156
Pres. Decree No. 87 (1972), sec. 9.
157
Id., sec. 12.
158
Id., sec. 13.
159
Dimagiba draws the following comparison between the service
contract scheme and the concession system: In both the concession system
and the service contract scheme, work and financial obligations are required
of the developer. Under Republic Act No. 387 and Presidential Decree No.
87, the concessionaire and the service contractors are extracted certain
taxes in favor of the government. In both arrangements, the
explorationist/developer is given incentives in the form of tax exemptions in
the importation or disposition of machinery, equipment, materials and spare
parts needed in petroleum operations.
201
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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.161 Article XIV on the
_______________
The concessionaire and the service contractor are required to keep in
their files valuable data and information and may be required to submit
needed technological or accounting reports to the Government. Duly
authorized representatives of the Government could, under the law, inspect
or audit the books of accounts of the contract holder.
In both systems, signature, discovery or production bonuses may be
given by the developer to the host Government. The concession system,
however, differs considerably from the service contract system in important
areas of the operations. In the concession system, the Government merely
receives fixed royalty which is a certain percentage of the crude oil produced
or other units of measure, regardless of whether the concession holder
makes profits or not. This is not so in the service contract system. A certain
percentage of the gross production is set aside for recoverable expenditures
by the contractor. Of the net proceeds the parties are entitled percentages of
share that will accrue to each of them.
In the royalty system, the concessionaire may be discouraged to produce
more for the reason that since the royalty paid to the host country is closely
linked to the volume of production, the greater the produce, the more amount
or royalty would be allocated to the Government. This is not so in the
production sharing system. The share of the Government depends largely on
the net proceeds of production after reimbursing the service contractor of its
recoverable expenses. As a general rule, the Government plays a passive
role in the
concession system, more particularly, interested in receiving royalties
from the concessionaire. In the production-sharing arrangement, the
Government plays a more active role in the management and monitoring of
oil operations and requires the service contractor entertain obligations
designed to bring more economic and technological benefits to the host
country. (Dimagiba, supra, at pp. 330-331.)
160
Agabin, supra, at p. 6.
161
The antecedents leading to the Proclamation are narrated in Javellana
v. Executive Secretary, 50 SCRA 55 (1973):
On March 16, 1967, Congress of the Philippines passed Resolution No. 2,
which was amended by Resolution No. 4, of said body,adopted on June 17,
1967, calling a convention to propose amend
202
202 SUPREME COURT REPORTS ANNOTATED
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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 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.
_______________
ments to the Constitution of the Philippines. Said Resolution No. 2, as
amended, was implemented by Republic Act No. 6132 approved on August
24, 1970, pursuant to the provisions of which the election of delegates to said
convention was held on November 10, 1970, and the 1971 Convention
began to perform its functions on June 1, 1971. While the Convention was in
session on September 21, 1972, the President issued Proclamation No. 1081
placing the entire Philippines under Martial Law. On November 29, 1972, the

President of the Philippines issued Presidential Decree No. 73, submitting to
the Filipino people for ratification or rejection the Constitution of the Republic
of the Philippines proposed by the 1971 Constitutional Convention, and
appropriating funds therefor, as well as setting the plebiscite for such
ratification on January 15, 1973. On January 17, 1973, the President issued
Proclamation No. 1102 certifying and proclaiming that the Constitution
proposed by the 1971 Constitutional Convention “has been ratified by an
overwhelming majority of all the votes cast by the members of all the
Barangays (Citizens Assemblies) throughout the Philippines, and has thereby
come into effect.”
203
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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
_______________
162
BERNAS, S.J., supra, at p. 1016, Note 28, citing Session of November
25, 1972.
163
Agabin, supra, at p. 1, quoting Sanvictores, The Economic Provisions
in the 1973 Constitution, in Espiritu, 1979 Philconsa Reader on Constitutional
and Policy Issues 449.
164
BERNAS, S.J., supra, at p. 1016, Note 28, citing Session of November
25, 1972.
165
Ibid.
166
Ibid.
167
Allowing Citizens of the Philippines or Corporations or Associations at
least Sixty Per Centum of the Capital of which is Owned by such Citizens to
Enter into Service Contracts with Foreign Persons, Corpora
204
204 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
_______________
tions for the Exploration, Development, Exploitation or Utilization of Lands
of the Public Domain, Amending for the purpose certain provisions of
Commonwealth Act No. 141.
168
Pres. Decree No. 151 (1973), sec. 1.
169
Providing for A Modernized System of Administration and Disposition
of Mineral Lands and to Promote and Encourage the Development and
Exploitation thereof.
170
Revising and Consolidating All Laws and Decrees Affecting Fishing
and Fisheries.
 171
Pres. Decree No. 704 (1975), sec. 21.
172
Revising Presidential Decree No. 389, otherwise known as The
Forestry Reform Code of the Philippines.
173
Pres. Decree No. 705 (1975), sec. 62.
205
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Yet another law allowing service contracts, this time for geothermal
resources, was Presidential Decree No. 1442, 174which 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,
_______________
174
An Act to Promote the Exploration and Development of Geothermal
Resources.
175
Magallona, supra, at p. 6.
176
Declaring a National Policy to Implement the Reforms Mandated by
the People, Protecting their Basic Rights, Adopting a Provisional Constitution,
and Providing for an Orderly Transition to a Government under a New
Constitution.
177
CONST., art. XVIII, sec. 27; De Leon v. Esguerra, 153 SCRA
602(1987).
206
206 SUPREME COURT REPORTS ANNOTATED
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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
_______________
178
Miners Association of the Philippines, Inc. v. Factoran, Jr., 240 SCRA
100 (1995).
179
Ibid.
180
Ibid.
181
J. Bernas, S.J., The Intent of the 1986 Constitution Writers 812 (1995).
182
Miners Association of the Philippines, Inc. v. Factoran, Jr., supra.
207
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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-scaleexploration,
development, and utilization is allowed. The term “large-scale usually refers
to very capital-intensive activities.”183
_______________
183
III Records of the Constitutional Commission 255.
208
208 SUPREME COURT REPORTS ANNOTATED
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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 natural
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.]
_______________
184
Id., at pp. 355-356.
185
Const. (1986), art. II, sec. 1.
209
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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:
1. (1)The State may directly undertake such activities.
 2. (2)The State may enter into co-production, joint venture or
production-sharing agreements with Filipino citizens or qualified
corporations.
3. (3)Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens.
4. (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.
_______________
186
Cruz v. Secretary of Environment and Natural Resources, supra,
Puno, J., Separate Opinion.
187
Rep. Act No. 7942 (1995), sec. 9.
188
SEC. 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 other
210
210 SUPREME COURT REPORTS ANNOTATED
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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. 7076 189 (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 contractor 192 the exclusive
right to conduct mining operations within a contract area 193 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
_______________
wise 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.
189
An Act Creating A People’s Small-Scale Mining Program and for other
purposes.
190
Rep. Act No. 7942 (1995), sec. 42.
191
Id., secs. 3 (ab) and 26.
192
“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. (Id., sec. 3[g].)
193
“Contract area” means land or body of water delineated for purposes
of exploration, development, or utilization of the minerals found therein. (Id.,
sec. 3[f].)
194
“Gross output” means the actual market value of minerals or mineral
products from its mining area as defined in the National Internal Revenue
Code (Id., sec. 3[v]).
195
Id., sec. 26 (a).
196 An Act Reducing Excise Tax Rates on Metallic and Non-Metallic
Minerals and Quarry Resources, amending for the purpose Section 151 (a) of
the National Internal Revenue Code, as amended.
197
Rep. Act No. 7942 (1995), sec. (80).
211
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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’s 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. 201 The
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 to 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.204A “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 accor-
_______________
198
Id., Sec. 26 (b).
199
“Mineral resource” means any concentration of minerals/rocks with
potential economic value. (Id., sec. 3[ad].)
200
Id., sec. 26 (c).
201
Ibid.
202
Id., sec. 3 (h).
203
Id., sec. 3 (x).
204
Id., sec. 26, last par.
205
Id., sec. 27.
212
212 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
dance 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
209
Id., sec. 3 (t).
210
Id., sec. 3 (aq). Id., sec. 3 (aq).
211
The maximum areas in cases of mineral agreements are prescribed in
Section 28 as follows:
SEC. 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. (1)For individuals, ten (10) blocks; and
2. (2)For partnerships, cooperatives, associations, or corporations, one
hundred (100) blocks.
(b) Onshore, in the entire Philippines—
1. (1)For individuals, twenty (20) blocks; and
2. (2)For partnerships, cooperatives, associations, or corporations, two
hundred (200) blocks.
(c) Offshore, in the entire Philippines—
1. (1)For individuals, fifty (50) blocks;
213
VOL. 421, JANUARY 27, 2004 213
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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. 212The
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
206
Id., sec. 3 (aq). presented by the petition is now in order.
207
Id., sec. 3 (r).
208
Id., sec. 33. _______________
 1. (2)For partnerships, cooperatives, associations, or corporations five
hundred (500) blocks; and
2. (3)For the exclusive economic area, 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 214
claimowner/lessee/permittee/licensee entered into under Presidential Decree
No. 463.
On the other hand, Section 34, which governs the maximum area for
FTAAs provides:
SEC. 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.
212
Id., sec. 33.
213
Id., sec. 81.
214
214 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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.
_______________
Kapatiran v. Tan, 163 SCRA 371 (1988).
215
Providing for the Publication of Laws either in the Official Gazette or in
a Newspaper of General Circulation in the Philippines as a Requirement for
their Effectivity.
216
Section 1, E.O. No. 200 was subsequently incorporated in the
Administrative Code of 1987 (Executive Order No. 292 as Section 18,
Chapter 5 (Operation and Effect of Laws), Book 1 (Sovereignty and General
Administration).
215
VOL. 421, JANUARY 27, 2004 215
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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.218Hence, 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 2. (b)opts to apply for a Mining Production Sharing Agreement [Section
explicitly states: 4.2],
SEC. 6. The incumbent President shall continue to exercise legislative
powers until the first Congress is convened. 3. (c)relinquishes control over portions thereof at their own choice
[Section 4.6],
_______________
217
4. (d)submits work programs, incurs expenditures, and makes reports
136 SCRA 27 (1985). during the exploration period [Section 5],
218
Manila Prince Hotel v. Government Service Insurance System, 267
SCRA 408 (1997).
219 5. (e)submits a Declaration of Mining Feasibility [Sections 5.4 and 5.5],
CONST., art. 3, sec. 1.
220
83 O.G. (Suppl.) 3528-115 to 3528-117 (August 1987).
221
Miners Association of the Philippines, Inc. v. Factoran, Jr., supra. 6. (f)during the development period, determines the timetable, submits
216 work programs, provides the reports and
216 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos 217
The convening of the first Congress merely precluded the exercise of VOL. 421, JANUARY 27, 2004 217
legislative powers by President Aquino; it did not prevent the effectivity of La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
laws she had previously enacted. Petitioners’ submission is well-taken. It is a cardinal rule in the interpretation
There can be no question, therefore, that E.O. No. 279 is an effective, of constitutions that the instrument must be so construed as to give effect to
and a validly enacted, statute. the intention of the people who adopted it. 223 This intention is to be sought in
The Constitutionality of the WMCP FTAA the constitution itself, and the apparent meaning of the words is to be taken
Petitioners submit that, in accordance with the text of Section 2, Article XII of as expressing it, except in cases where that assumption would lead to
the Constitution, FTAAs should be limited to absurdity, ambiguity, or contradiction.224 What the Constitution says according
“technical or financial assistance” only. They observe, however, that, contrary to the text of the provision, therefore, compels acceptance and negates the
to the language of the Constitution, the WMCP FTAA allows WMCP, a fully power of the courts to alter it, based on the postulate that the framers and the
foreign-owned mining corporation, to extend more than mere financial or people mean what they say.225 Accordingly, following the literal text of the
technical assistance to the State, for it permits WMCP to manage and Constitution, assistance accorded by foreign-owned corporations in the large-
operate every aspect of the mining activity.222 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
222
Petitioners note in their Memorandum that the FTAA: x x x guarantees possible services,” perhaps, “scientific and/or technological in basis.” 226 It
that wholly foreign owned [WMCP] entered into the FTAA in order to facilitate thus posits that it may also well include “the area of management or
“the large scale exploration, development and commercial exploitation of operations . . . so long as such assistance requires specialized knowledge or
mineral deposits that may be found to exist within the Contract area.” skills, and are related to the exploration, development and utilization of
[Section 1.1] As a contractor it also has the “exclusive right to explore, mineral resources.”227
exploit, utilize, process and dispose of all mineral products and by-products
thereof that may be derived or produced from the Contract Area.” [Section _______________
1.3] Thus, it is divided into an “exploration and feasibility phase” [Section 3.2
(a)] and a “construction, development and production phase.” [Section 3. 2 1. determines and executes expansions, modifications, improvements
(b).] and replacements of new mining facilities within the area [Section
Thus, it is this wholly foreign owned corporation that, among other things: 6],

1. (a)operates within a prescribed contract area [Section 4],

 2. (g)complies with the conditions for environmental protection and
industrial safety, posts the necessary bonds and makes
representations and warranties to the government [Section 10.5].
The contract subsists for an initial term of twenty-five (25) years from the date
of its effectivity [Section 3.1] and renewable for a further period of twenty-five
years under the same terms and conditions upon application by private
respondent [Section 3.3]. (Rollo, pp. 458-459.)
223
H. C. Black, Handbook on the Construction and Interpretation of the
Laws § 8.
224
Ibid.
225
J.M. Tuason & Co., Inc. v. Land Tenure Association, 31 SCRA
413(1970).
226
Rollo, p. 580.
227
Ibid. Emphasis supplied.
218
218 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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:
_______________
228
People v. Manantan, 115 Phil. 657; 5 SCRA 684 (1962); Commission
on Audit of the Province of Cebu v. Province of Cebu, 371 SCRA 196 (2001).
229
Rollo, p. 569.
230
III Record of the Constitutional Commission pp. 351-352.
219
VOL. 421, JANUARY 27, 2004 219
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 Iegitimization 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’ 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 or 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
_______________
231
V Record of the Constitutional Commission 844.
232
Id., at p. 841.
233
Id., at p. 842.
220
220 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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.
_______________
234
Id., at p. 844.
235
Vide Cherey v. Long Beach, 282 NY 382, 26 NE 2d 945, 127 ALR
1210 (1940), cited in 16 Am Jur 2d Constitutional Law §79.
221
VOL. 421, JANUARY 27, 2004 221
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
[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 co-production 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 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?
_______________
 236
Civil Liberties Union v. Executive Secretary, 194 SCRA 317, 325
(1991).
237
III Record of the Constitutional Commission 278.
222
222 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 suggest that:
The exploration, development, and utilization of natural resources . . .
may be directly undertaken by the State, or it may enter into coproduction,
joint venture, production-sharing agreements with . . . corporations or
associations at least sixty percent 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.]
_______________
238
Id., at pp. 316-317.
223
VOL. 421, JANUARY 27, 2004 223
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 persuasive 240 and leaves
no doubt as to the intention of the framers to eliminate service contracts
altogether. He writes:
_______________
239
III Record of the Constitutional Commission 358-359.
240
Vera v. Avelino, 77 Phil. 192 (1946).
224
224 SUPREME COURT REPORTS ANNOTATED
 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos mer, as well as Article XII, as adopted, employed the same terminology, as
Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly the comparative table below shows:
technological undertakings for which the President may enter into contracts DRAFT OF THE UP PROPOSED ARTICLE XII OF THE
with foreign-owned corporations, and enunciates strict conditions that should LAW CONSTITUTION RESOLUTION NO. 496 1987
govern such contracts. x x x. PROJECT OF THE CONSTITUTION
This provision balances the need for foreign capital and technology with CONSTITUTIONAL
the need to maintain the national sovereignty. It recognizes the fact that as COMMISSION
long as Filipinos can formulate their own terms in their own territory, there is Sec. 1. All lands of Sec. 3. All lands of the Sec. 2. All lands of
no danger of relinquishing; sovereignty to foreign interests. the public domain, public domain, waters, the public domain,
Are service contracts allowed under the new Constitution? No. Under the waters, minerals, coal, minerals, coal, petroleum waters, minerals, coal,
new Constitution, foreign investors (fully alien-owned) can NOT participate in petroleum and other and other mineral oils, all petroleum, and other
Filipino enterprises except to provide: (1) Technical Assistance for highly mineral oils, all forces forces of potential mineral oils, all forces
technical enterprises; and (2) Financial Assistance for large-scale of potential energy, energy, fisheries,forests, of potential energy,
enterprises. fisheries, flora and flora and fauna, and fisheries, forests or
The intent of this provision, as well as other provisions on foreign fauna and other other natural resources timber, wildlife, flora
investments, is to prevent the practice (prevalent in the Marcos government) natural resources of are owned by the State. and fauna, and other
of skirting the 60/40 equation using the cover of service the Philippines are With the exception of natural resources are
contracts.241 [Emphasis supplied.] owned by the State. agricultural lands, all owned by the State.
Furthermore, it appears that Proposed Resolution No. 496, 242 which was the With the exception of other natural resources With the exception of
draft Article on National Economy and Patrimony, adopted the concept of agricultural lands, all shall not be alienated. agricultural lands, all
“agreements . . . involving either technical or financial assistance” contained other natural The exploration, other natural
in the “Draft of the 1986 U.P. Law Constitution Project” (U.P. Law draft) which resources shall not be development, and resources shall not be
was taken into consideration during the deliberation of the CONCOM. 243 The alienated. The utilization of natural alienated. The
for- exploration, resources shall be under exploration,
development and the full control and development, and
_______________ utilization of natural supervision of the State. utilization of natural
resources shall be Such activities may be resources shall be
241
J. Nolledo, The New Constitution of the Philippines Annotated 924-926 under the full control directly undertaken by under the full control
(1990). and supervision of the the State, or it may enter and supervision of the
242
Resolution to Incorporate in the New Constitution an Article on State. Such activities into co-production, joint State. The State may
National Economy and Patrimony. may be directly venture, production- directly undertake
243
The Chair of the Committee on National Economy and Patrimony, undertaken by the sharing agreements with such activities or it
alluded to it in the discussion on the capitalization requirement: state, or it may enter Filipino citizens or may enter into co-
MR. VILLEGAS. We just had a long discussion with the members of the team into co-production, corporations or production, joint
from the UP Law Center who provided us a draft. The phrase that is joint venture, associations at least sixty venture, or
contained here which we adopted from the UP draft is “60 percent of voting production sharing percent of whose voting production-sharing
stock.” (III Record of the Constitutional Commission 255.) agreements with stock or controlling agreements with
Likewise, in explaining the reasons for the deletion of the term Filipino citizens or interest is owned by such Filipino citizens, or
“exploitation”: corporations or citi- corporations or
MR. VILLEGAS. Madam President, following the recommendation in the UP associations sixty associations at least
draft, we omitted “exploitation” first of all because it is believed to be percent of whose sixty per centum of
subsumed under “development” and secondly because it has a derogatory voting stock or whose capital is
connotation. (Id., at p. 358.) controlling interest is owned by such
225 owned by such citizens. Such
VOL. 421, JANUARY 27, 2004 225 citizens for a period of agreements may be
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos not more than twenty- for a period not ex-
 DRAFT OF THE UP PROPOSED ARTICLE XII OF THE special law provide terms and conditions involving either technical
LAW CONSTITUTION RESOLUTION NO. 496 1987 the terms and under which a foreign- or financial assistance for
PROJECT OF THE CONSTITUTION conditions under large-scale explo
CONSTITUTIONAL which a foreign-
COMMISSION owned corpo
five years, renewable 227
for not more than VOL. 421, JANUARY 27, 2004 227
twenty-five years La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
226 ration may enter into owned corporation ration, development, and
226 SUPREME COURT REPORTS ANNOTATED agreements with the may enter into utilization of minerals,
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos government agreements with the petroleum, and other
and under such zens. Such agreements ceeding twenty-five years, involving either government mineral oils according to
terms and shall be for a period of renewable for not more technical or financial involving either the general terms and
conditions as may twenty-five years, than twenty-five years, assistancefor large- technical or financial conditions provided by
be provided by law. renewable for not more and under such terms and scale exploration, assistance for large- law, based on real
In case as to water than twenty-five years, conditions as may be development, or scale exploration, contributions to the
rights for irrigation, and under such terms provided by law. In case of utilizat ion of natural development, and economic growth and
water supply, and conditions as may water rights for irrigation, resources. [Emphasis utilization of natural general welfare of the
fisheries, or be provided by law. In water, supply, fisheries, or supplied.] resources. [Emphasis country. In such
industrial uses other cases of water rights industrial uses other than supplied.] agreements, the State
than the for irrigation, water the development of water shall promote the
development of supply, fisheries or power, beneficial use may development and use of
water power, industrial uses other be the measure and limit local scientific and
beneficial use may than the development of the grant. The State technical resources.
be the measure and for water power, shall protect the nation’s [Emphasis supplied.] The
limit of the grant. beneficial use may be marine wealth in its President shall notify the
the measure and limit archipelagic waters, Congress of every
of the grant. territorial sea, and contract entered into in
exclusive economic zone, accordance with this
and reserve its use and provision, within thirty
enjoyment exclusively to days from its execution.
Filipino citizens. The insights of the proponents of the U.P. Law draft are, therefore, instructive
The National The Congress may The Congress may, by in interpreting the phrase “technical or financial assistance.”
Assembly may by by law allow small- law, allow small-scale In his position paper entitled Service Contracts: Old Wine in New
law allow small- scale utilization of utilization of natural Bottles?, Professor Pacifico A. Agabin, who was a member of the working
scale utilization of natural resources by resources by Filipino group that prepared the U.P. Law draft, criticized service contracts for they
natural resources Filipino citizens, as well citizens, as well as “lodge exclusive management and control of the enterprise to the service
by Filipino citizens. as cooperative fish cooperative fish farming, contractor, which is reminiscent of the old concession regime. Thus,
farming in rivers, lakes, with priority to subsistence notwithstanding the provision of the Constitution that natural resources
bays, and lagoons. fishermen and fish- belong to the State, and that these shall not be alienated, the service contract
workers in rivers, lakes, system renders nugatory the constitutional provisions cited.” 244 He
bays, and lagoons. elaborates:
The National The President with The President may Looking at the Philippine model, we can discern the following ves-tiges of the
Assembly, may by the concurrence of enter into agreements with concession regime, thus:
two-thirds vote of all Congress, by special foreign owned
its members by law, shall provide the corporations _______________
 244
Id., at p. 12.
228
228 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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. Italics 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
_______________
245
Id., at pp. 15-16.
229
VOL. 421, JANUARY 27, 2004 229
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 or 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
_______________
246
M. Magallona, Nationalism and Its Subversion in the Constitution 5, in
II DRAFT PROPOSAL OF THE 1986 U.P. Law Constitution Project.
247
Agabin, supra, at p. 16.
230
230 SUPREME COURT REPORTS ANNOTATED
 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
_______________
248
E. Labitag, Philippine Natural Resources: Some Problems and
Perspectives 17 in II DRAFT PROPOSAL of the 1986 U.P. Law Constitution
Project.
249
I Draft Proposal of the 1986 U.P. Law Constitution Project 11-13.
231
VOL. 421, JANUARY 27, 2004 231
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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, necessity, 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
232
232 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
by itself; second, by virtue of co-production, joint venture, production sharing
agreements with Filipino citizens or corporations or associations sixty percent
(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.”
_______________
250
Id., at pp. 9-11. Professor Labitag also suggests that: x x x. The
concession regime of natural resources disposition should be discontinued.
Instead the State shall enter into such arrangements and agreements like co-
production, joint ventures, etc. as shall bring about effective control and a
larger share in the proceeds, harvest or production. (Labitag, supra, at p. 17.)
233
VOL. 421, JANUARY 27, 2004 233
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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, Commis-
_______________
251
Vide Note 147.
252
Vide Note 230. The question was posed before the Jamir amendment
and subsequent proposals introducing other limitations. Comm. Villegas’
response that there was no requirement in the 1973 Constitution for a law to
govern service contracts and that, in fact, there were then no such laws is
inaccurate. The 1973 Charter required similar legislative approval, although it
did not specify the form it should take: “The Batasang Pambansa, in the
national interest, may allow such citizens . . . to enter into service contracts . .
. .” As previously noted, however, laws authorizing service contracts were
actually enacted by presidential decree.
253
Vide Note 238.
254
Vide Note 241.
255
Vide Note 231.
234
234 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
sioners 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
preexisting 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 the foreign-owned corporation, as such permittee, may apply for a financial
into FTAAs with foreign-owned corporations is an exception to the rule that and technical assistance agreement.266
participation in the nation’s natural resources is reserved exclusively to “Development” is
Filipinos. Accordingly, such provision must be construed strictly against their the work undertaken to explore and prepare an ore body or a mineral deposit
enjoyment by non-Filipinos. As Commissioner Villegas emphasized, the for hiring, including the construction of necessary infrastructure and related
provision is “very restrictive.”259 Commissioner Nolledo also remarked that facilities.267
“entering into service contracts is an exception to the rule on protection of “Utilization” “means the extraction or disposition of minerals.” 268 A stipulation
natural resources for the interest of the nation and, therefore, being an that the proponent shall disposeof the minerals and byproducts produced at
exception, it should be subject, whenever possible, to stringent the highest price and more advantageous terms and conditions as provided
rules.”260 Indeed, exceptions should be strictly but reasonably construed; they for under the implementing rules and regulations is required to be
extend only so far as their language fairly warrants and all doubts should be incorporated in every FTAA.269
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 262
Rep. Act No. 7942 (1995), sec. 3 (q).
accordance with the 1987 Constitution, it actually treats these agreements as 263
Id., sec. 3 (aq).
service contracts that grant beneficial ownership to foreign contractors 264
Id., sec. 20.
contrary to the fundamental law. 265
Id., sec. 23, first par.
266
Id., sec. 23, last par.
_______________ 267
Id., sec. 3 (j).
268
Id., sec. 3 (az).
256 269
Dated July 28, 1987. Id., sec. 35 (m).
257
Dated October 3, 1990. 236
258
Peralta v. Civil Service Commission, 212 SCRA 425 (1992). 236 SUPREME COURT REPORTS ANNOTATED
259
Vide Note 238. La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
260
III Record of the Constitutional Commission 354. A foreign-owned/controlled corporation may likewise be granted a mineral
261
Salaysay v. Castro, 98 Phil. 364 (1956). processing permit.270 “Mineral processing” is the milling, beneficiation or
235 upgrading of ores or minerals and rocks or by similar means to convert the
VOL. 421, JANUARY 27, 2004 235 same into marketable products.271
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos An FTAA contractor makes a warranty that the mining operations shall be
Section 33, which is found under Chapter VI (Financial or Technical conducted in accordance with the provisions of R.A. No. 7942 and its4
Assistance Agreement) of R.A. No. 7942 states: implementing rules272and for work programs and minimum expenditures and
SEC. 33. Eligibility.—Any qualified person with technical and financial commitments.273 And it obliges itself to furnish the Government records of
capability to undertake large-scale exploration, development, and utilization geologic, accounting, and other relevant data for its mining operation. 274
of mineral resources in the Philippines may enter into a financial or technical “Mining operation,” as the law defines it, means mining activities
assistance agreement directly with the Government through the Department. involving exploration, feasibility, development, utilization, and processing.275
[Emphasis supplied.] The underlying assumption in all these provisions is that the foreign
“Exploration,” as defined by R.A. No. 7942, contractor manages the mineral resources, just like the foreign contractor in a
means the searching or prospecting for mineral resources by geological, service contract.
geochemical or geophysical surveys, remote sensing, test pitting, trenching, Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs
drilling, shaft sinking, tunneling or any other means for the purpose of the same auxiliary mining rights that it grants contractors in mineral
determining the existence, extent, quantity and quality thereof and the agreements (MPSA, CA and JV).276 Parenthetically,
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, 270
Id., secs. 3 (aq) and 56.
 271
Id., sec. 3 (y).
272
Id., sec. 35 (g).
273
Id., sec. 35 (h).
274
Id., sec. 35 (1).
275
Id., sec. 3 (af).
276
SEC. 72. Timber Rights.—Any provision of the law to the contrary
notwithstanding, a contractor may be granted a right to cut trees or timber
within his mining areas 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 exiting 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. [Emphasis supplied.]
SEC. 73. Water Rights.—A contractor shall have water rights for
mining operations upon approval of application with the appropriate gov
237
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
_______________
ernment 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. [Emphasis
supplied.]
SEC. 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 an 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.
[Emphasis supplied.]
SEC. 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. [Emphasis supplied.]
SEC. 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.
[Emphasis supplied.]
238
238 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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 managementassistance—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. (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.
1. (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;
_______________
277
Id., sec. 39, first par.
278
Id., sec. 39, second par.
279
Id., sec. 35 (e).
280
SEC. 23. Rights and Obligations of the Permittee.—x x x. 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 neces
239
VOL. 421, JANUARY 27, 2004 239
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
1. (3)Section 33, which prescribes the eligibility of a contractor in a
financial or technical assistance agreement;
2. (4)Section 35,281 which enumerates the terms and conditions for
every financial or technical assistance agreement;
_______________
sary qualifications and the terms and conditions of any such
agreement: Provided That the exploration period covered by the exploration
period of the mineral agreement or financial or technical assistance
agreement.
281
SEC. 35. Terms and Conditions.—The following terms, conditions, and
warranties shall be incorporated in the financial or technical assistance
agreement, to wit:
1. (a)A firm commitment in the form of 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;
2. (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;
3. (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;
4. (d)Representations and warranties that the applicant has all the
qualifications and none of the disqualifications for entering into the
agreement;
5. (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;
6. (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
240
240 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
(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;
_______________
 1. 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;
2. (g)The mining operations shall be conducted in accordance with the
provisions of this Act and its implementing rules and regulations;
3. (h)Work programs and minimum expenditures commitments;
4. (i)Preferential use of local goods and services to the maximum extent
practicable;
5. (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;
6. (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;
7. (l)The contractors shall furnish the Government records of geologic,
accounting, and other relevant data for its mining operation, and
that book of accounts and records shall be open for inspection by
the government;
8. (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;
9. (n)Provide for consultation and arbitration with respect to the
interpretation and implementation of the terms and conditions of the
agreements; and
10. (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.
282
SEC. 39. Option to Convert into 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 regula-
241
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(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;
_______________
tions; 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.
283
SEC. 56. Eligibility of Foreign-owned/-controlled Corporation.—A
foreign owned/-controlled corporation may be granted a mineral processing
permit.
284
SEC. 3. Definition of Terms.—As used in and for purposes of this Act,
the following terms, whether in singular or plural, shall mean:
xxx
(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.
285
SEC. 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.
286
SEC. 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.
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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
_______________
287
SEC. 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.
288
SEC. 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.
289
SEC. 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.
290
SEC. 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.
291
SEC. 81. Government Share in Other Mineral Agreements.—
x x x.
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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:
_______________
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.
292
SEC. 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.
293
Lidasan v. Commission on Elections, 21 SCRA 496 (1967).
294
Vide also WMCP FTAA, sec. 10.2 (a).
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244 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
1. (b)to extract and carry away any Mineral samples from the Contract
area for the purpose of conducting tests and studies in respect
thereof;

2. (c)to determine the mining and treatment processes to be utilized
during the Development/Operating Period and the project facilities
to be constructed during the Development and Construction Period;
3. (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 lands by surface owners and/or
occupants thereof when prospecting, exploring and exploiting for
minerals therein;
xxx
1. (f)to construct roadways, mining, drainage, power generation and
transmission facilities and all other types of works on the Contract
Area;
2. (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;
3. (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
1. (l)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,
_______________
295
WMCP, sec. 10.2.
296
Id., sec. 11.
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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.
_______________
297
Id., sec. 10.1 (a).
298
Id., sec. 10.1 (c).
299
Id., sec. 6.4.
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246 SUPREME COURT REPORTS ANNOTATED
 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
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.
_______________
300
Rollo, pp. 563-564.
301
Civil Code, Art. 8.
302
Const., Art III, Sec. 1.
247
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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 [Italics 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:
1. (a)The proviso in Section 3 (aq),
2. (b)Section 23,
3. (c)Section 33 to 41,
4. (d)Section 56,
5. (e)The second and third paragraphs of Section 81, and
_______________
303
Vide Note 223.
304
Rollo, p. 243.
305
Civil Liberties Union v. Executive Secretary, supra.
306
Automotive Parts & Equipment Company, Inc. v. Lingad, 30 SCRA
248 (1969).
307
Ibid.
248
248 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
1. (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.
Davide, Jr. (C.J.), Puno, Quisumbing, Carpio, Corona, Callejo,
Sr. and Tinga, JJ., concur.
Vitug, J., Please see separate opinion.
Panganiban, J., Please see separate opinion.
Ynares-Santiago, I join J. Panganiban’s separate opinion.
Sandoval-Gutierrez, J., I join Mr. Justice Panganiban in his separate
opinion.
Austria-Martinez, J., I join Justice Panganiban in his separate
opinion.
Azcuna, J., I take no part—one of the parties was a client.
SEPARATE OPINION
VITUG, J.:
Petitioners, in the instant petition for prohibition and mandamus, assail the
constitutionality of Republic Act No. 7942, otherwise also known as the
Philippine Mining Act of 1995, as well as its Implementing Rules and
Regulations (Administrative Order [DAO] 96-40) issued by the Department of
Environment and Natural Resources, and the Financial and Technical
Assistance Agreement (FTAA) entered into pursuant to Executive Order (EO)
No. 279, by the Republic of the Philippines and Western Mining Corporation
(Philippines), Inc. (WMCP). WMCP is owned by WMC Resources
International Pty., Ltd, a wholly owned subsidiary of Western Mining
Corporation Holdings Limited, a publicly-listed major Australian mining and
exploration company.
The premise for the constitutional challenge is Section 2, Article XII, of the
1987 Constitution which provides:
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
“All lands of public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wild life,
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. x x x.
“x x x xxx x x x.
“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.”
After a careful reading of the provisions of Republic Act No. 7942, I join the
majority in invalidating the following portions of the law: a) Section 3 (aq)
which considers a foreign-owned corporation itself qualified, not only to enter
into financial or technical assistance agreements, but also for an exploration
or mineral processing permit; b) Section 35 (g), (l), (m) which state the rights
and obligations of a foreign-owned corporations pursuant to its “mining
operations”; and c) Section 56 which provides that foreign-owned or
controlled corporations are eligible to be granted a mineral processing
permit.
The ponencia, so eloquently expressed and so well ratiocinated, would
also say that the Philippine Mining Act and its implementing rules or decrees
contain provisions which, in effect, authorize the Government to enter into
service contracts with foreign-owned corporations, thereby granting beneficial
ownership over natural resources to foreign contractors in violation of the
fundamental law. Thus, it would strike down Sections 3 (aq), 23, 33 to 41, 56,
81, and 90 of the statute and related sections in DAO 96-40. The FTAA
executed between the Government and WMCP is being invalidated for being
in the nature of a service contract. The ponencia posits
250
250 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
that the adoption of the terms “agreements x x x involving either technical or
financial assistance” in the 1987 Constitution, in lieu of “service contracts”
found in the 1973 Charter, reflects the intention of the framers to disallow the
execution of service contracts with foreign entities for the exploration,
development, exploitation and utilization of the country’s natural resources.
The proposition is one that I, most respectfully, cannot fully share. The
deliberations of the Constitutional Commission do not disclose, in any evident
manner, such intention on the part of the drafters, viz.:
“MR. JAMIR. Yes, Madam President. With respect to the second paragraph
of Section 3, my amendment by substitution reads: THE PRESIDENT
MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED
CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL
ASSISTANCE FOR LARGE-SCALE EXPLORATION, DEVELOPMENT
AND UTILIZATION OF NATURAL RESOURCES ACCORDING TO THE
TERMS AND CONDITIONS PROVIDED BY LAW.
 “x x x
“MR. SUAREZ. Thank you, Madam President. Will Commissioner Jamir
answer a few clarificatory questions?
“MR. JAMIR. Yes, Madam President.
“MR. SUAREZ. This particular portion of the section has reference to what
was popularly known before as service contracts, among other things; is
that correct?
“MR. JAMIR. Yes, Madam President.
“MR. SUAREZ. As it is formulated, the President may enter into service
contracts but subject to the guidelines that may be promulgated by
Congress?
“MR. JAMIR. That is correct.
“MR. SUAREZ. Therefore, the aspect of negotiation and consummation will
fall on the President, not upon Congress?
“MR. JAMIR. That is also correct, Madam President.
“MR. SUAREZ. Except that all of these contracts, service or otherwise must
be made strictly in accordance with guidelines prescribed by Congress?
“MR. JAMIR. That is also correct.”1
_______________
1
III Record of the Constitutional Commission 348.
251
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The significance of the change in the terminology is clarified in the following
exchanges during the deliberations:
“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.”2
The Constitutional Commission has also agreed to include the additional
requirement that said agreements must be “based on real contributions to the
economic growth and general welfare of the country.” Upon the suggestion of
then Commissioner Davide, the scope of “these service contracts” has
likewise been limited to large-scale exploration, development, and utilization
of minerals, petroleum, and other mineral oils. The then Commissioner,
explains: “And so, we believe that we should really, if we want to
grant service contracts at all, limit the same to only those particular areas
where Filipino capital may not be sufficient x x x.”3
The majority would cite the emphatic statements of Commissioners
Villegas and Davide that the country’s natural resources are exclusively
reserved for Filipino citizens4 and that, according to Commissioner Villegas,
“the deletion of the phrase ‘service contracts’ (is the) 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.”5 These declarations do not necessarily
mean that the Government may no longer enter into service contracts with
foreign entities. In order to uphold and strengthen the national policy of
preserving and developing the country’s natural resources exclusively for the
Filipino people, the present Constitution indeed has provided for safeguards
to prevent the execution of service contracts of the old regime, but not of
service contracts per se. It could
_______________
2
Id., p. 352.
3
Id., p. 355.
4
Decision, pp. 69-71.
5
Id., p. 69.
252
252 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
not have been the object of the framers of the Charter to limit the contracts
which the President may enter into, to mere “agreements for financial and
technical assistance.” One would take it that the usual terms and conditions
recognized and stipulated in agreements of such nature have been
contemplated. Basically, the financier and the owner of know-how would
understandably satisfy itself with the proper implementation and the
profitability of the project. It would be abnormal for the financier and owner of
the know-how not to assure itself that all the activities needed to bring the
project into fruition are properly implemented, attended to, and carried out.
Needless to say, no foreign investor would readily lend financial or technical
assistance without the proper incentives, including fair returns, therefor.
The Constitution has not prohibited the State from itself exploring,
developing, or utilizing the country’s natural resources, and, for this purpose,
it may, I submit, enter into the necessary agreements with individuals or
entities in the pursuit of a feasible operation.
The fundamental law is deemed written in every contract. The FTAA
entered into by the government and WMCP recognizes this vital principle.
Thus, two of the agreement’s whereas clauses provide:
“WHEREAS, the 1987 Constitution of the Republic of the Philippines
provides in Article XII, Section 2 that all lands of the public domain, waters,
minerals, coal, petroleum, and other natural resources are owned by the
State, and that the exploration, development and utilization of natural
resources shall be under the full control and supervision of the State; and
“WHEREAS, the Constitution further provides that the Government may
enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large scale exploration, development and
utilization of minerals.”
The assailed contract or its provisions must then be read in conformity with
abovementioned constitutional mandate. Hence, Section 10.2 (a) of the
FTAA, for instance, which states that “the Contractor shall have the exclusive
right to explore for, exploit, utilize, process, market, export and dispose of all
minerals and products and by-products thereof that may be derived or
produced from the Contract Area and to otherwise conduct Mining
Operations in the Contract Area in accordance with the terms and conditions
hereof,
253
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
must be taken to mean that the foregoing rights are to be exercised by
WMCP for and in behalf of the State and that WMCP, as the Contractor,
would be bound to carry out the terms and conditions of the agreement
acting for and in behalf of the State. In exchange for the financial and
technical assistance, inclusive of its services, the Contractor enjoys an
exclusivity of the contract and a corresponding compensation therefor.
Except as so expressed elsewhere above, I see, therefore, no
constitutional impairment in the enactment of Republic Act No. 7942, as well
as its implementing rules, and in the execution by the Government of the
Financial and Technical Agreement with WMCP; and I so vote accordingly.
Just a word. While I cannot ignore an impression of the business
community that the Court is wont, at times, to interfere with the economic
decisions of Congress and the government’s economic managers, I must
hasten to add, however, that in so voting as above, I have not been unduly
overwhelmed by that perception. Quite the contrary, the Court has always
proceeded with great caution, such as now, in resolving cases that could
inextricably involve policy questions thought to be best left to the technical
expertise of the legislative and executive departments.
SEPARATE OPINION
PANGANIBAN, J.:
Petitioners challenge the constitutionality of (1) RA 7942 (The Philippine
Mining Act of 1995), (2) its Implementing Rules and Regulations (DENR
Administrative Order [DAO] 96-40); and (3) the Financial and Technical
Assistance Agreement (FTAA) dated March 30, 1995, by and between the
government and Western Mining Corporation (Phils.), Inc. (WMCP).
Crux of the Controversy
The crux of the controversy is the fact that WMCP, at the time it entered into
the FTAA, was wholly owned by WMC Resources International Pty., Ltd.
(WMC), which in turn was a wholly owned subsidiary of Western Mining
Corporation Holdings, Ltd., a publicly listed major Australian mining and
exploration company.
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Petitioners thus argue that the FTAA was executed in violation of Section 2 of
Article XII of the 1987 Constitution. Allegedly, according to the fourth
paragraph thereof, FTAAs entered into by the government with foreign-
owned corporations are limited to agreements involving merely technical or
financial assistance to the State for large-scale exploration, development and
utilization of minerals, petroleum and other mineral oils. The FTAA in
question supposedly permits the foreign contractor to manage and control
the mining operations fully, and is therefore no different from the “service
contracts” that were prevalent under the martial law regime, and that are now
disallowed by Section 2 of Article XII of the present Constitution.
On January 23, 2001, all the shares of WMC in WMCP—according to the
latter’s Manifestation subsequently filed with this Court—had been sold to
Sagittarius Mines, Inc., in which 60 percent of the equity is Filipino-owned. In
the same Manifestation, the Court was further informed that the assailed
FTAA had likewise been transferred from WMCP to Sagittarius.
The well-researched ponencia of esteemed justice Conchita Carpio-
Morales nevertheless declares that the instant case has not been rendered
moot by the FTAA’s transfer to and registration in the name of a Filipino-
owned corporation, and that the validity of that transfer remains in dispute
and awaits final judicial determination. 1It then proceeds to decide the instant
case on the assumption that WMCP remains a foreign corporation.
Controversy Now Moot
With due respect, I believe that the Court should dismiss the Petition on the
ground of mootness. I submit that a decision on the constitutionality issue
should await the wisdom of a new day when the Court would have
a live case before it.
The nullity of the FTAA is unarguably premised upon the contractor being
a foreign corporation. Had the FTAA been originally issued to a Filipino-
owned corporation, we would have had no con-
_______________
1
That is, the Court of Appeals’ resolution of the petition for review—
docketed as CA-G.R. No. 74161 and lodged by Lepanto Consolidated Mining
—of the Decision of the Office of the President, which upheld the Order of the
DENR secretary approving the transfer to, and the registration of the FTAA in
the name of, Sagittarius Mines, Inc.
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stitutionality issue to speak of. Upon the other hand, conveyance of the FTAA
to a Filipino corporation can be likened to the sale of land to a foreigner who
subsequently acquires Filipino citizenship, or who later re-sells the same land
to a Filipino citizen. The conveyance would be validated, as the property in
question would no longer be owned by a disqualified vendee. 2
Since the FTAA is now to be implemented by a Filipino corporation, how
can the Court still declare it unconstitutional? The CA case is a dispute
between two Filipino companies (Sagittarius and Lepanto) both claiming the
right to purchase the foreign shares in WMCP. So regardless of which side
eventually wins, the FTAA would still be in the hands of a qualified Filipino
company.
Furthermore, there being no more justiciable controversy, the plea to
nullify the Mining Law has become a virtual petition for declaratory relief, over
which the Supreme Court has no original jurisdiction.3
At bottom, I rely on the well-settled doctrine that this Court does not
decide constitutional issues, unless they are the very lis mota of the case. 4
Not Limited to Technical or Financial Assistance Only
At any rate, following the literal text of the present
Constitution,5 the ponencia limits to strict technical or financial only the
assistance to be provided to the State by foreign-owned corporations for the
large-scale exploration, development and utilization of minerals, petroleum,
and mineral oils. Such assistance may not
_______________
2
Chavez v. Public Estates Authority and Amari, G.R. No. 133250, July 9,
2002, 384 SCRA 152; May 6, 2003, 403 SCRA 1, and November 11,
2003, 415 SCRA 403.
3
United Residents of Dominican Hill, Inc. v. Commission on the
Settlement of Land Problems, 353 SCRA 782, March 7, 2001; In Re:
Saturnino V. Bermudez, 145 SCRA 163, October 24, 1986; Darnoc Realty
Development Corp. v. Ayala Corp., 202 Phil. 865; 117 SCRA 538, September
30, 1982; De la Llana v. Alba, 198 Phil. 1; 112 SCRA 294, March 12, 1982.
4
Mirasol v. Court of Appeals, 351 SCRA 44, February 1, 2001; Lalican v.
Hon. Vergara, 342 Phil. 485; 276 SCRA 518, July 31, 1997; Ty v.
Trampe, 321 Phil. 103; 250 SCRA 500, December 1, 1995; People v.
Vera, 65 Phil. 56, November 16, 1937.
5
Par. 4, Sec. 2 of Art XII.
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include “management or other forms of assistance” or other activities
associated with the “service contracts” of the past unlamented regime.
Precisely, “the management or operation of mining activities by foreign
contractors, which is the primary feature of service contracts, was x x x the
evil that the drafters of the 1987 Constitution sought to eradicate.”
Again, because of the mootness problem, it would be risky to take
a definitive position on this question. The Court would be speculating on the
contents of the FTAA of a prospective foreign company. The requirements of
“case and controversy” would be lacking. Suffice it to say, at this point, that
the issue even in a live case is not quite that easy to tackle.
First, the drafters’ choice of words—their use of the phrase “agreements x
x x involving x x x technical or financial assistance”—does not absolutely
indicate the intent to exclude other modes of assistance. Rather, the phrase
signifies the possibility of the inclusion of other activities, provided they bear
some reasonable relationship to and compatibility with financial or technical
assistance.
If the intention of the drafters were strictly to confine foreign corporations
to financial or technical assistance and nothing more, I am certain that their
language would have been unmistakably restrictive and stringent. They
would have said, for example: “Foreign corporations are prohibited from
providing management or other forms of assistance,” or words to that effect.
The conscious avoidance of restrictive wording bespeaks an intent not to
employ—in an exclusionary, inflexible and limiting manner—the expression
“agreements involving technical or financial assistance.”
Second, I believe the foregoing position is supported by the fact that our
present Constitution still recognizes and allows service contracts (and has
not rendered them taboo), albeit subject to several restrictions and
modifications aimed at avoiding the pitfalls of the past. Below
are someexcerpts from the deliberations of the Constitutional Commission
(Concom), showing that its members discussed “technical or financial
agreements” in the same breath as “service contracts” and used the terms
interchangeably:
“MR. JAMIR: Yes, Madam President. With respect to the second paragraph
of Section 3, my amendment by substitution reads:
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THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-
OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR
FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION,
DEVELOPMENT AND UTILIZATION OF NATURAL RESOURCES
ACCORDING TO THE TERMS AND CONDITIONS PROVIDED BY LAW.
MR. VILLEGAS: The Committee accepts the amendment. Commissioner
Suarez will give the background x x x.
MR. SUAREZ: Thank you, Madam President x x x.
MR. JAMIR: Yes, Madam President.
MR. SUAREZ: This particular portion of the section has reference to what
was popularly known before as service contracts, among other things, is
that correct?
MR. JAMIR: Yes, Madam President.
MR. SUAREZ: As it is formulated, the President may enter into service
contracts but subject to the guidelines that may be promulgated by
Congress?
MR. JAMIR: That is correct.
MR. SUAREZ: Therefore, that aspect of negotiation and consummation will
fall on the President, not upon Congress?
MR. JAMIR: That is also correct, Madam President.
MR. SUAREZ: Except that all of these contracts, service or otherwise, must
be made strictly in accordance with guidelines prescribed by Congress?
MR. JAMIR: That is also correct.
MR. SUAREZ: And the Gentleman is thinking in terms of a law that uniformly
covers situations of the same nature?
MR. JAMIR: That is 100 percent correct x x x
xxx xxx xxx
THE PRESIDENT: The amendment has been accepted by the Committee.
May we first vote on the last paragraph?
MR. GASCON: Madam President, that is the point of my inquiry x x x
Commissioner Jamir had proposed an amendment with regard to
special service contractswhich was accepted by the Committee. Since
the Committee has accepted it, I would like to ask some questions x x x
As it is proposed now, such service contracts will be entered into by the
President with the guidelines of a general law on service contracts to be
enacted by Congress. Is that correct?
MR. VILLEGAS: The Commissioner is right, Madam President.
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MR. GASCON: According to the original proposal, if the President were to
enter into a particular agreement, he would need the concurrence of
Congress. Now that it has been changed by the proposal of
Commissioner Jamir in that Congress will set the general law to which the
President shall comply, the President will, therefore, not need the
concurrence of Congress every time he enters into service contracts. Is
that correct?
MR. VILLEGAS: That is right.
MR. GASCON: The proposed amendment of Commissioner Jamir is in
direct contrast to my proposed amendment, so I would like to object and
present my proposed amendment to the body x x x.
xxx xxx xxx
MR. GASCON: Yes, it will be up to the body. I feel that the general law to be
set by Congress as regards service contract agreements which the
President will enter into might be too general or since we do not know the
content yet of such a law, it might be that certain agreements will be
detrimental to the interest of the Filipinos. This is in direct contrast to my
proposal which provides that there be effective constraints in the
implementation of service contracts. So instead of a general law to be
passed by Congress to serve as a guideline to the President when
entering into service contract agreements, I propose that every service
contractentered into by the President would need the concurrence of
Congress, so as to assure the Filipinos of their interests with regard to the
issue in Section 3 on all lands of the public domain. My alternative
amendment, which we will discuss later, reads: THAT THE PRESIDENT
SHALL ENTER INTO SUCH AGREEMENTS ONLY WITH THE
CONCURRENCE OF TWO-THIRDS VOTE OF ALL THE MEMBERS OF
CONGRESS SITTING SEPARATELY x x x
MR. BENGZON: The reason we made that shift is that we realized the
original proposal could breed corruption. By the way, this is not just
confined to service contracts but also to financial assistance. If we are
going to make every single contract subject to the concurrence of
Congress—which, according to the Commissioner’s amendment is the
concurrence of two-thirds of Congress voting separately—then (1) there
is a very great chance that each contract will be different from another;
and (2) there is a great temptation that it would breed corruption because
of the great lobbying that is going to happen. And we do not want to
subject our legislature to that. x x x.
MR. GASCON: But my basic problem is that we do not know as of yet the
contents of such a general law as to how much con-
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straints there will be in it. And to my mind, although the committee’s
contention that the regular concurrence from Congress would subject
Congress to extensive lobbying, I think that is a risk we will have to take
since Congress is a body of representatives of the people whose
membership will be changing regularly as there will be changing
circumstances every time certain agreements are made. It would be best
then to keep in tab and attuned to the interest of the Filipino people,
whenever the President enters into any agreement with regard to such an
important matter as technical or financial assistance for large-scale
exploration, development and utilization of natural resources or service
contracts, the people’s elected representatives should be on top of it x x x.
xxx xxx xxx
MR. OPLE: Madam President, we do not need to suspend the session. If
Commissioner Gascon needs a few minutes, I can fill up the remaining
time while he completes his proposed amendment. I just wanted to ask
Commissioner Jamir whether he would entertain a minor amendment to
his amendment, and it reads as follows: THE PRESIDENT SHALL
SUBSEQUENTLY NOTIFY CONGRESS OF EVERY SERVICE
CONTRACT ENTERED INTO IN ACCORDANCE WITH THE GENERAL
LAW. I think the reason is, if I may state it briefly, as Commissioner
Bengzon said, Congress can always change the general law later on to
conform to new perceptions of standards that should be built into service
contracts. But the only way Congress can do this is if there were a
notification requirement from the Office of the President that such service
contracts had been entered into, subject then to the scrutiny of the
Members of Congress. This pertains to a situation where the service
 contracts are already entered into, and all that this amendment seeks is
the reporting requirement from the Office of the President. Will
Commissioner Jamir entertain that?
MR. JAMIR: I will gladly do so, if it is still within my power.
MR.VILLEGAS: Yes, the Committee accepts the amendment.
xxx xxx xxx
SR. TAN: Madam President, may I ask a question? x x x 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.
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SR. TAN: So those are the safeguards.
MR. VILLEGAS: Yes. There was no law at all governing service contracts
before. x x x.
xxx xxx xxx
MR. SARMIENTO: Maybe we can simplify my proposed amendment, so that
it will read: IT SHALL BE THE POLICY OF THE STATE TO PROMOTE,
DEVELOP AND EMPLOY LOCAL SCIENTIFIC AND TECHNOLOGICAL
RESOURCES x x x.
MR. DAVIDE: Could it not be properly accommodated either in the Article on
Declaration of Principles and State Policies or in the Article on Human
Resources because it would not be germane to the Article on National
Economy and Patrimony which we are now treating?
MR. VILLEGAS: I think the intention here, if I understand the amendment to
the amendment, is to make sure that when these technical and scientific
services are rendered by foreigners there would be a deliberate attempt
to develop local talents so that we are not forever dependent on these
foreigners. Am I right?
MR. DAVIDE: So it is in relation to the service contracts? x x x Can it not be
stated that the general law providing for service contracts shall give
priority to the adjective of Commissioner Sarmiento’s amendment? It
should be in the law itself.
MR VILLEGAS: That is why it says, ‘IT SHALL BE THE POLICY OF THE
STATE’ immediately following the statement about Congress.
xxx xxx xxx
THE PRESIDENT: Does Commissioner Gascon insist on his proposed
amendment?
MR. GASCON: I objected to that amendment and after listening to it again, I
feel that I still object on basic principles, that every service contract to be
entered into by the President should be with the concurrence of
Congress. I had earlier presented a proposed amendment of
‘CONCURRENCE OF TWO-THIRDS VOTE OF ALL THE MEMBERS OF
CONGRESS,’ but at this point in time, perhaps to simplify choices, since
basically the proposal of Commissioner Jamir is to set a general law with
regard to service contracts, my proposal is to require concurrence of
Congress every time a service contract is to be made.
THE PRESIDENT: That is clear now. So can we proceed to vote?
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MR. NOLLEDO: x x x Madam President, I have the permission of the Acting
Floor Leader to speak for only two minutes in favor of the amendment of
Commissioner Gascon x x x x With due respect to the members of the
Committee and Commissioner Jamir, I am in favor of the objection of
Commissioner Gascon. Madam President, I was one of those who
refused to sign the 1973 Constitution, and one of the reasons is that there
were many provisions in the Transitory Provisions therein that favored
aliens. I was shocked when I read a provision authorizing service
contracts while we, in this Constitutional Commission, provided for
Filipino control of the economy. We are, therefore, providing for
exceptional instances where aliens may circumvent Filipino control of our
economy. And one way of circumventing the rule in favor of Filipino
control of the economy is to recognize service contracts. As far as I am
concerned, if I should have my own way, I am for the complete deletion of
this provision. However, we are presenting a compromise in the sense
that we are requiring a two-thirds vote of all the Members of Congress as
a safeguard. I think we should not mistrust the future Members of
Congress by saying that the purpose of this provision is to avoid
corruption. We cannot claim that they are less patriotic than we are. I
think the Members of this Commission should know 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. It seems to me
that we are liberalizing the rules in favor of aliens.
I say these things with a heavy heart, Madam President. I do not claim to
be a nationalist, but I love my country. Although we need investments, we
must adopt safeguards that are truly reflective of the sentiments of the people
and not mere cosmetic safeguards as they now appear in the Jamir
amendment. (Applause) x x x.”
The foregoing is but a small sampling of the lengthy discussions of the
constitutional commissioners on the subject of service contracts and
technical and financial assistance agreements. Quoting the rest of their
discussions would have taken up several more pages, and these have thus
been omitted for the sake of brevity. In any event, it would appear that the
members of the Concom actually had in mind the Marcos era
service contracts that they were familiar with (but which they duly modified
and restricted so as to prevent abuses), when they were crafting and
polishing the provisions
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262 SUPREME COURT REPORTS ANNOTATED
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dealing with financial and/or technical assistance agreements. These
provisions ultimately became the fourth and the fifth paragraphs of Section 2
of Article XII of the 1987 Constitution. Put differently, “technical and financial
assistance agreements” were understood by the delegates to include service
contracts duly modified to prevent abuses.
I respectfully submit that the statements of Commissioner Jose Nolledo,
quoted above, are especially pertinent, since they refer specifically to service
contracts in favor of aliens. From his perspective, it is clear to me that the
Concom discussions in their entirety had to do with service contracts that
might be given to foreign-owned corporations as exceptions to the general
principle of Filipino control of the economy.
Commissioner Nolledo sums up these statements by saying: “We are,
therefore, providing for exceptional instances where aliens may circumvent
Filipino control of our economy. And one way of circumventing the rule in
favor of Filipino control of the economy is to recognize service contracts. As
far as I am concerned, if I should have my own way, I am for the complete
deletion of this provision. However, we are presenting a compromise in the
sense that we are requiring a two-thirds vote of all the Members of Congress
as a safeguard. x x x x x x x x x. I think the Members of this Commission
should know 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.
It seems to me that we are liberalizing the rules in favor of aliens. x x x.”
Since the drafters were referring only to service contracts to be granted to
foreigners and to nothing else, this fact necessarily implies that we
ought not treat the idea of “agreements involving either technical or financial
assistance” as having any significance or existence apart from service
contracts. In other words, in the minds of the commissioners, the concept of
technical and financial assistance agreements did not exist at all apart from
the concept of service contracts duly modified to prevent abuses.
Interpretation of the Constitution
in the Light of Present-Day Realities
Tantamount to closing one’s eyes to reality is the insistence that the term
“agreements involving technical or financial assistance”
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refers only to purely technical or financial assistance to be rendered to the
State by a foreign corporation (and must perforce exclude management and
other forms of assistance). Nowadays, securing the kind of financial
assistance required by large-scale explorations, which involve hundreds of
millions of dollars, is not just a matter of signing a simple promissory note in
favor of a lender. Current business practices often require borrowers seeking
huge loans to allow creditors access to financial records and other data, and
probably a seat or two on the former’s board of directors; or at least some
participation in certain management decisions that may have an impact on
the financial health or long-term viability of the debtor, which of course will
directly affect the latter’s capacity to repay its loans. Prudent lending
practices necessitate a certain degree of involvement in the borrower’s
management process.
Likewise, technical assistance, particularly in certain industries like mining
and oil exploration, would likely be from the industry’s leading players. It may
involve the training of personnel and some form of supervision and oversight
with respect to the correct and proper implementation of the technical
assistance. The purpose is to ensure that the technical assistance rendered
will not go to waste, and that the lender's business reputation and successful
track record in the industry will be adequately safeguarded. Thus the
technical assistance arrangements often necessarily include interface with
the management process itself.
The mining industry is in the doldrums, precisely because of lack of
technical and financial resources in our country. If activated properly, the
industry could meaningfully contribute to our economy and lead to the
employment of many of our jobless compatriots. A hasty and premature
decision on the constitutionality of the herein FTAA and the Philippine Mining
Act could unnecessarily burden the recovery of the industry and the
employment opportunities it would likely generate.
Oral Argument Needed
Given the modern-day reality that even the World Bank (WB) and the
International Monetary Fund (IMF) do not lend on the basis merely of bare
promissory notes, but on some conditionalities designed to assure the
borrowers’ financial viability, I would like to hear in an Oral Argument in a live,
not a moot, case what these
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international practices are and how they impact on our constitutional
restrictions. This is not to say that we should bend our basic law; rather, we
should find out what kind of FTAA provisions are realistic vis-à-vis these
international standards and our constitutional protection. Unless there is
a live FTAA, the Court would not be able to analyze the provisions vis-à-
vis the Constitution, the Mining Law and these modern day lending practices.
I mentioned the WB and the IMF, not necessarily because I agree with
their oftentimes stringent policies, but because they set the standards that
international and multinational financial institutions often take bearings from.
The WB and IMF are akin (though not equivalent) to the Bangko
Sentral, which all Philippine banks must abide by. If this Court closes its
doors to these international realities and unilaterally sets up its own concepts
of strict technical and financial assistance, then it may unwittingly make the
country a virtual hermit—an economic isolationist—in the real world of
finance.
I understand that a live case, challenging the Mining Law and an FTAA
relevant thereto, is pending before the Second Division of this Court, where it
is docketed as G.R. No. 157882 (Dipdio Earth Savers Multi-Purpose
Association v. Hon. Elisea Gozun). Can we not consolidate that case with the
current one, call an Oral Argument, and then decide the matter more
definitively? During the Oral Argument, I believe that the Court should invite
as amici curiae (1) a lawyer versed in international finance like retired Justice
Florentino P. Feliciano, (2) a representative of the Banker’s Association of the
Philippines, and (3) a leader of the University of the Philippines Law
Constitution Project.
Constitutional Interpretation and the
Vagaries of Contemporary Events
Finally, I believe that the Concom did not mean to tie the hands of the
President and restrict the latter only to agreements on rigid financial and
technical assistance and nothing else. The commissioners fully realized that
their work would have to withstand the test of time; that the Charter, though
crafted with the wisdom born of past experiences and lessons painfully
learned, would have to be a living document that would answer the needs of
the nation well into the future. Thus, the unerring emphasis on flexibility and
adaptability.
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Commissioner Joaquin Bernas stressed that he voted in favor of the Article,
“because it is flexible enough to allow future legislators to correct whatever
mistakes we may have made.”6 Commissioner Felicitas Aquino noted that
“unlike the other articles of this Constitution, this article whether we like it or
not would have to yield to flexibility and elasticity which inheres in the
interpretation of this provision. Why? Precisely because the forces of
economics are dynamic and are perpetually in motion.” 7
Along the same line, the Court, in Tañada v. Angara,8stressed the need to
interpret the Constitution to cover “refreshing winds of change necessitated
by unfolding events”:
“x x x. Constitutions are designed to meet not only the vagaries of
contemporary events. They should be interpreted to cover even future and
unknown circumstances. It is to the credit of its drafters that a Constitution
can withstand the assaults of bigots and infidels but at the same time bend
with the refreshing winds of change necessitated by unfolding events.”
Accordingly, I vote to DISMISS the Petition.
Petition granted.