MINERS ASSOCIATION OF THE PHILIPPINES, INC.

, petitioner,
vs.
HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment and Natural Resources, and JOEL
D. MUYCO, Director of Mines and Geosciences Bureau, respondents.
G.R. No. 98332 January 16, 1995

Facts:
Former president, Corazon Aquino, in the exercise of her lawful legislative powers, promulgated
executive orders pursuant to the mandate of the 1987 Constitution. Such executive orders authorized
the Department of Environment and Natural Resources (DENR) Secretary to negotiate and conclude
joint-venture, co-production, or production- sharing agreements for the exploration, development, and
utilization of mineral resources. Utilization of inalienable lands of public domain through "license,
concession or lease" under the 1935 and 1973 Constitutions was no longer allowed by virtue of Article
XII, Section 2 of the current Constitution.
To implement such, the DENR issued (1) Administrative Order No. 57 which declared that all existing
mining leases or agreements which were granted after the effectivity of the 1987 Constitution shall be
converted into production-sharing agreements after one year of effectivity of the guidelines; and (2)
Administrative Order No. 82 which provided that failure to submit Letter of Intent (LOI) and Mineral
Production-Sharing Agreement (MPSA) within 2 years from the effectivity of the Department
Administrative Order No. 57 shall cause the abandonment of the mining, quarry, and sand and gravel
claims.
The petitioner contended that Administrative Orders violate the non-impairment of contract provision
under Article III, Section 10 of the 1987 Constitution, and that DENR exceeded its rule-making power
by abrogating existing mining laws such as Presidential Decree No. 463.

Issue:
Whether or not the Administrative Orders are valid.

Ruling:
The two administrative orders are valid. Provisions of Presidential Decree No. 463, dealing to the old
system through license, concession or lease are no longer allowed under the 1987 Constitution, and
thus, are deemed repealed. The provisions of Presidential Decree No. 463 on lease of mining claims
under Chapter VIII, quarry permits on privately-owned lands of quarry license on public lands and
other related provisions on lease, contravene the express mandate of Article XII, Section 2 of the 1987
Constitution. Now, the State assumes full control and supervision of the exploration, development and
utilization of natural resources. Consistent with this, the exploration, development and utilization of
natural resources may be undertaken by means of direct act of the State, or it may opt to enter into co-
production, joint venture, or production-sharing agreements, or it 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.
Article XII, Section 2 of the 1987 Constitution does not apply retroactively to "license, concession or
lease" granted by the government under the 1973 Constitution or before the effectivity of the 1987
Constitution on February 2, 1987, but prospectively. Administrative Order No. 57 applies only to all
existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution
pursuant to Executive Order No. 211. However, mining leases or agreements granted under Presidential
Decree No. 463 may be altered through a reasonable exercise of the State’s police power, it being co-
extensive with the demands of public interest. The questioned administrative orders were intended to
secure the paramount interest of the public and their general welfare.