G.R. No.
157882             March 30, 2006 GABRIEL PAKAYAO, JEOFFREY SINDAP, FELIX
DIDIPIO EARTH-SAVERS’ MULTI-PURPOSE
ASSOCIATION, INCORPORATED (DESAMA), MANUEL
BUTIC, CESAR MARIANO, LAURO ABANCE, BEN
TAYABAN, ANTONIO DINGCOG, TEDDY B.
KIMAYONG, ALONZO ANANAYO, ANTONIO MALAN-
UYA, JOSE BAHAG, ANDRES INLAB, RUFINO
LICYAYO, ALFREDO CULHI, CATALILNA INABYUHAN,
GUAY DUMMANG, GINA PULIDO, EDWIN ANSIBEY,
CORAZON SICUAN, LOPEZ DUMULAG, FREDDIE
AYDINON, VILMA JOSE, FLORENTINA MADDAWAT,
LINDA DINGCOG, ELMER SICUAN, GARY ANSIBEY,
JIMMY MADDAWAT, JIMMY GUAY, ALFREDO CUT-
ING, ANGELINA UDAN, OSCAR INLAB, JUANITA CUT-
ING, ALBERT PINKIHAN, CECILIA TAYABAN, CRISTA
BINWAK, PEDRO DUGAY, SR., EDUARDO ANANAYO,
ROBIN INLAB, JR., LORENZO PULIDO, TOMAS
BINWAG, EVELYN BUYA, JAIME DINGCOG,
DINAOAN CUT-ING, PEDRO DONATO, MYRNA
GUAY, FLORA ANSIBEY, GRACE DINAMLING,
EDUARDO MENCIAS, ROSENDA JACOB, SIONITA
DINGCOG, GLORIA JACOB, MAXIMA GUAY,
RODRIGO PAGGADUT, MARINA ANSIBEY,
TOLENTINO INLAB, RUBEN DULNUAN, GERONIMO
LICYAYO, LEONCIO CUMTI, MARY DULNUAN, FELISA
BALANBAN, MYRNA DUYAN, MARY MALAN-UYA,
PRUDENCIO ANSIBEY, GUILLERMO GUAY,
MARGARITA CULHI, ALADIN ANSIBEY, PABLO
DUYAN, PEDRO PUGUON, JULIAN INLAB, JOSEPH
NACULON, ROGER BAJITA, DINAON GUAY, JAIME
ANANAYO, MARY ANSIBEY, LINA ANANAYO,
MAURA DUYAPAT, ARTEMEO ANANAYO, MARY
BABLING, NORA ANSIBEY, DAVID DULNUAN,
AVELINO PUGUON, LUCAS GUMAWI, LUISA ABBAC,
CATHRIN GUWAY, CLARITA TAYABAN, FLORA
JAVERA, RANDY SICOAN, FELIZA PUTAKI, CORAZON
P. DULNUAN, NENA D. BULLONG, ERMELYN
GUWAY, GILBERT BUTALE, JOSEPH B. BULLONG,
FRANCISCO PATNAAN, JR., SHERWIN DUGAY, TIRSO
GULLINGAY, BENEDICT T. NABALLIN, RAMON PUN-
ADWAN, ALFONSO DULNUAN, CARMEN D. BUTALE,
LOLITA ANSIBEY, ABRAHAM DULNUAN, ARLYNDA
BUTALE, MODESTO A. ANSIBEY, EDUARDO LUGAY,
ANTONIO HUMIWAT, ALFREDO PUMIHIC, MIKE
TINO, TONY CABARROGUIS, BASILIO TAMLIWOK,
JR., NESTOR TANGID, ALEJO TUGUINAY, BENITO
LORENZO, RUDY BAHIWAG, ANALIZA BUTALE,
NALLEM LUBYOC, JOSEPH DUHAYON, RAFAEL
CAMPOL, MANUEL PUMALO, DELFIN AGALOOS,
PABLO CAYANGA, PERFECTO SISON, ELIAS
NATAMA, LITO PUMALO, SEVERINA DUGAY,
TICUAN, MARIANO S. MADDELA, MENZI TICAWA,
DOMINGA DUGAY, JOE BOLINEY, JASON ASANG,
TOMMY ATENYAYO, ALEJO AGMALIW, DIZON
AGMALIW, EDDIE ATOS, FELIMON BLANCO, DARRIL
DIGOY, LUCAS BUAY, ARTEMIO BRAZIL, NICANOR
MODI, LUIS REDULFIN, NESTOR JUSTINO, JAIME
CUMILA, BENEDICT GUINID, EDITHA ANIN, INOH-
YABAN BANDAO, LUIS BAYWONG, FELIPE
DUHALNGON, PETER BENNEL, JOSEPH T.
BUNGGALAN, JIMMY B. KIMAYONG, HENRY
PUGUON, PEDRO BUHONG, BUGAN NADIAHAN,
SR., MARIA EDEN ORLINO, SPC, PERLA VISSORO,
and BISHOP RAMON VILLENA, Petitioners,
vs.
ELISEA GOZUN, in her capacity as SECRETARY of the
DEPARTMENT OF ENVIRONMENT and NATURAL
RESOURCES (DENR), HORACIO RAMOS, in his
capacity as Director of the Mines and Geosciences
Bureau (MGB-DENR), ALBERTO ROMULO, in his
capacity as the Executive Secretary of the Office of
the President, RICHARD N. FERRER, in his capacity
as Acting Undersecretary of the Office of the
President, IAN HEATH SANDERCOCK, in his capacity
as President of CLIMAX-ARIMCO Mining
Corporation. Respondents.
DECISION
CHICO-NAZARIO, J.:
This petition for prohibition and mandamus under
Rule 65 of the Rules of Court assails the
constitutionality of Republic Act No. 7942 otherwise
known as the Philippine Mining Act of 1995, together
with the Implementing Rules and Regulations issued
pursuant thereto, Department of Environment and
Natural Resources (DENR) Administrative Order No.
96-40, s. 1996 (DAO 96-40) and of the Financial and
Technical Assistance Agreement (FTAA) entered into
on 20 June 1994 by the Republic of the Philippines
and Arimco Mining Corporation (AMC), a corporation
established under the laws of Australia and owned
by its nationals.
On 25 July 1987, then President Corazon C. Aquino
promulgated Executive Order No. 279 which
authorized the DENR Secretary to accept, consider
and evaluate proposals from foreign-owned
corporations or foreign investors for contracts of
agreements involving either technical or financial
assistance for large-scale exploration, development,
and utilization of minerals, which, upon appropriate
recommendation of the Secretary, the President may
execute with the foreign proponent.
On 3 March 1995, then President Fidel V. Ramos
signed into law Rep. Act No. 7942 entitled, "An Act
Instituting A New System of Mineral Resources
Exploration, Development, Utilization and
Conservation," otherwise known as the Philippine
Mining Act of 1995.
On 15 August 1995, then DENR Secretary Victor O.
Ramos issued DENR Administrative Order (DAO) No.
23, Series of 1995, containing the implementing
guidelines of Rep. Act No. 7942. This was soon
superseded by DAO No. 96-40, s. 1996, which took
effect on 23 January 1997 after due publication.
Previously, however, or specifically on 20 June 1994,
President Ramos executed an FTAA with AMC over a
total land area of 37,000 hectares covering the
provinces of Nueva Vizcaya and Quirino. Included in
this area is Barangay Dipidio, Kasibu, Nueva Vizcaya.
Subsequently, AMC consolidated with Climax Mining
Limited to form a single company that now goes
under the new name of Climax-Arimco Mining
Corporation (CAMC), the controlling 99% of
stockholders of which are Australian nationals.
On 7 September 2001, counsels for petitioners filed
a demand letter addressed to then DENR Secretary
Heherson Alvarez, for the cancellation of the CAMC
FTAA for the primary reason that Rep. Act No. 7942
and its Implementing Rules and Regulations DAO 96-
40 are unconstitutional. The Office of the Executive
Secretary was also furnished a copy of the said
letter. There being no response to both letters,
another letter of the same content dated 17 June
2002 was sent to President Gloria Macapagal Arroyo.
This letter was indorsed to the DENR Secretary and
eventually referred to the Panel of Arbitrators of the
Mines and Geosciences Bureau (MGB), Regional
Office No. 02, Tuguegarao, Cagayan, for further
action.
On 12 November 2002, counsels for petitioners
received a letter from the Panel of Arbitrators of the
MGB requiring the petitioners to comply with the
Rules of the Panel of Arbitrators before the letter
may be acted upon.
Yet again, counsels for petitioners sent President
Arroyo another demand letter dated 8 November
2002. Said letter was again forwarded to the DENR
Secretary who referred the same to the MGB,
Quezon City.
In a letter dated 19 February 2003, the MGB rejected
the demand of counsels for petitioners for the
cancellation of the CAMC FTAA.1avvphil.net
Petitioners thus filed the present petition for
prohibition and mandamus, with a prayer for a
temporary restraining order. They pray that the
Court issue an order:
1. enjoining public respondents from acting
on any application for FTAA;
2. declaring unconstitutional the Philippine
Mining Act of 1995 and its Implementing
Rules and Regulations;
3. canceling the FTAA issued to CAMC.
In their memorandum petitioners pose the following
issues:
I
Whether or not Republic Act No. 7942 and the CAMC
FTAA are void because they allow the unjust and
unlawful taking of property without payment of just
compensation , in violation of Section 9, Article III of
the Constitution.
II
Whether or not the Mining Act and its Implementing
Rules and Regulations are void and unconstitutional
for sanctioning an unconstitutional administrative
process of determining just compensation.
III
Whether or not the State, through Republic Act No.
7942 and the CAMC FTAA, abdicated its primary
responsibility to the full control and supervision over
natural resources.
IV
Whether or not the respondents’ interpretation of
the role of wholly foreign and foreign-owned
corporations in their involvement in mining
enterprises, violates paragraph 4, section 2, Article
XII of the Constitution.
V challenged has had a direct adverse effect on the
WHETHER OR NOT THE 1987 CONSTITUTION
PROHIBITS SERVICE CONTRACTS.1
Before going to the substantive issues, the
procedural question raised by public respondents
shall first be dealt with. Public respondents are of
the view that petitioners’ eminent domain claim is
not ripe for adjudication as they fail to allege that
CAMC has actually taken their properties nor do they
allege that their property rights have been
endangered or are in danger on account of CAMC’s
FTAA. In effect, public respondents insist that the
issue of eminent domain is not a justiciable
controversy which this Court can take cognizance of.
A justiciable controversy is defined as a definite and
concrete dispute touching on the legal relations of
parties having adverse legal interests which may be
resolved by a court of law through the application of
a law.2 Thus, courts have no judicial power to review
cases involving political questions and as a rule, will
desist from taking cognizance of speculative or
hypothetical cases, advisory opinions and cases that
have become moot.3 The Constitution is quite
explicit on this matter.4 It provides that judicial
power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable. Pursuant to
this constitutional mandate, courts, through the
power of judicial review, are to entertain only real
disputes between conflicting parties through the
application of law. For the courts to exercise the
power of judicial review, the following must be
extant (1) there must be an actual case calling for
the exercise of judicial power; (2) the question must
be ripe for adjudication; and (3) the person
challenging must have the "standing."5
An actual case or controversy involves a conflict of
legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished
from a hypothetical or abstract difference or
dispute.6 There must be a contrariety of legal rights
that can be interpreted and enforced on the basis of
existing law and jurisprudence.
Closely related to the second requisite is that the
question must be ripe for adjudication. A question is
considered ripe for adjudication when the act being
individual challenging it.7
The third requisite is legal standing or locus standi. It
is defined as a personal or 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.8 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."9 Unless a person is injuriously affected in
any of his constitutional rights by the operation of
statute or ordinance, he has no standing.10
In the instant case, there exists a live controversy
involving a clash of legal rights as Rep. Act No. 7942
has been enacted, DAO 96-40 has been approved
and an FTAAs have been entered into. The FTAA
holders have already been operating in various
provinces of the country. Among them is CAMC
which operates in the provinces of Nueva Vizcaya
and Quirino where numerous individuals including
the petitioners are imperiled of being ousted from
their landholdings in view of the CAMC FTAA. In light
of this, the court cannot await the adverse
consequences of the law in order to consider the
controversy actual and ripe for judicial
intervention.11 Actual eviction of the land owners
and occupants need not happen for this Court to
intervene. As held in Pimentel, Jr. v. Hon. Aguirre 12:
By the mere enactment of the questioned law or the
approval of the challenged act, the dispute is said to
have ripened into a judicial controversy even
without any other overt act. Indeed, even a singular
violation of the Constitution and/or the law is
enough to awaken judicial duty.13
Petitioners embrace various segments of the society.
These include Didipio Earth-Savers’ Multi-Purpose
Association, Inc., an organization of farmers and
indigenous peoples organized under Philippine laws,
representing a community actually affected by the
mining activities of CAMC, as well as other residents
of areas affected by the mining activities of CAMC.
These petitioners have the standing to raise the
constitutionality of the questioned FTAA as they
allege a personal and substantial injury.14 They assert
that they are affected by the mining activities of
CAMC. Likewise, they are under imminent threat of
being displaced from their landholdings as a result of
the implementation of the questioned FTAA. They
thus meet the appropriate case requirement as they
assert an interest adverse to that of respondents
who, on the other hand, claim the validity of the
assailed statute and the FTAA of CAMC.
Besides, the transcendental importance of the issues
raised and the magnitude of the public interest
involved will have a bearing on the country’s
economy which is to a greater extent dependent
upon the mining industry. Also affected by the
resolution of this case are the proprietary rights of
numerous residents in the mining contract areas as
well as the social existence of indigenous peoples
which are threatened. Based on these
considerations, this Court deems it proper to take
cognizance of the instant petition.
Having resolved the procedural question, the
constitutionality of the law under attack must be
addressed squarely.
First Substantive Issue: Validity of Section 76 of Rep.
Act No. 7942 and DAO 96-40
In seeking to nullify Rep. Act No. 7942 and its
implementing rules DAO 96-40 as unconstitutional,
petitioners set their sight on Section 76 of Rep. Act
No. 7942 and Section 107 of DAO 96-40 which they
claim allow the unlawful and unjust "taking" of
private property for private purpose in contradiction
with Section 9, Article III of the 1987 Constitution
mandating that private property shall not be taken
except for public use and the corresponding
payment of just compensation. They assert that
public respondent DENR, through the Mining Act and
its Implementing Rules and Regulations, cannot, on
its own, permit entry into a private property and
allow taking of land without payment of just
compensation.
Interpreting Section 76 of Rep. Act No. 7942 and
Section 107 of DAO 96-40, juxtaposed with the
concept of taking of property for purposes of
eminent domain in the case of Republic v. Vda. de
Castellvi,15 petitioners assert that there is indeed a
"taking" upon entry into private lands and
concession areas.
Republic v. Vda. de Castellvi defines "taking" under
the concept of eminent domain as entering upon
private property for more than a momentary period,
and, under the warrant or color of legal authority,
devoting it to a public use, or otherwise informally
appropriating or injuriously affecting it in such a way
as to substantially oust the owner and deprive him of
all beneficial enjoyment thereof.
From the criteria set forth in the cited case,
petitioners claim that the entry into a private
property by CAMC, pursuant to its FTAA, is for more
than a momentary period, i.e., for 25 years, and
renewable for another 25 years; that the entry into
the property is under the warrant or color of legal
authority pursuant to the FTAA executed between
the government and CAMC; and that the entry
substantially ousts the owner or possessor and
deprives him of all beneficial enjoyment of the
property. These facts, according to the petitioners,
amount to taking. As such, petitioners question the
exercise of the power of eminent domain as
unwarranted because respondents failed to prove
that the entry into private property is devoted for
public use.
Petitioners also stress that even without the doctrine
in the Castellvi case, the nature of the mining
activity, the extent of the land area covered by the
CAMC FTAA and the various rights granted to the
proponent or the FTAA holder, such as (a) the right
of possession of the Exploration Contract Area, with
full right of ingress and egress and the right to
occupy the same; (b) the right not to be prevented
from entry into private lands by surface owners
and/or occupants thereof when prospecting,
exploring and exploiting for minerals therein; (c) the
right to enjoy easement rights, the use of timber,
water and other natural resources in the Exploration
Contract Area; (d) the right of possession of the
Mining Area, with full right of ingress and egress and
the right to occupy the same; and (e) the right to
enjoy easement rights, water and other natural
resources in the Mining Area, result in a taking of
private property.
Petitioners quickly add that even assuming arguendo
that there is no absolute, physical taking, at the very
least, Section 76 establishes a legal easement upon
the surface owners, occupants and concessionaires
of a mining contract area sufficient to deprive them
of enjoyment and use of the property and that such
burden imposed by the legal easement falls within
the purview of eminent domain.
To further bolster their claim that the legal easement
established is equivalent to taking, petitioners cite
the case of National Power Corporation v.
Gutierrez16 holding that the easement of right-of-
way imposed against the use of the land for an
indefinite period is a taking under the power of
eminent domain.
Traversing petitioners’ assertion, public respondents
argue that Section 76 is not a taking provision but a
valid exercise of the police power and by virtue of
which, the state may prescribe regulations to
promote the health, morals, peace, education, good
order, safety and general welfare of the people. This
government regulation involves the adjustment of
rights for the public good and that this adjustment
curtails some potential for the use or economic
exploitation of private property. Public respondents
concluded that "to require compensation in all such
circumstances would compel the government to
regulate by purchase."
Public respondents are inclined to believe that by
entering private lands and concession areas, FTAA
holders do not oust the owners thereof nor deprive
them of all beneficial enjoyment of their properties
as the said entry merely establishes a legal easement
upon surface owners, occupants and concessionaires
of a mining contract area.
Taking in Eminent Domain Distinguished from
Regulation in Police Power
The power of eminent domain is the inherent right
of the state (and of those entities to which the
power has been lawfully delegated) to condemn
private property to public use upon payment of just
compensation.17 On the other hand, police power is
the power of the state to promote public welfare by
restraining and regulating the use of liberty and
property.18 Although both police power and the
power of eminent domain have the general welfare
for their object, and recent trends show a
mingling19 of the two with the latter being used as an
implement of the former, there are still traditional
distinctions between the two.
Property condemned under police power is usually
noxious or intended for a noxious purpose; hence,
no compensation shall be paid.20 Likewise, in the
exercise of police power, property rights of private
individuals are subjected to restraints and burdens in
order to secure the general comfort, health, and
prosperity of the state. Thus, an ordinance
prohibiting theaters from selling tickets in excess of
their seating capacity (which would result in the
diminution of profits of the theater-owners) was
upheld valid as this would promote the comfort,
convenience and safety of the customers.21 In U.S. v.
Toribio,22 the court upheld the provisions of Act No.
1147, a statute regulating the slaughter of carabao
for the purpose of conserving an adequate supply of
draft animals, as a valid exercise of police power,
notwithstanding the property rights impairment that
the ordinance imposed on cattle owners. A zoning
ordinance prohibiting the operation of a lumber yard
within certain areas was assailed as unconstitutional
in that it was an invasion of the property rights of
the lumber yard owners in People v. de
Guzman.23 The Court nonetheless ruled that the
regulation was a valid exercise of police power. A
similar ruling was arrived at in Seng Kee S Co. v.
Earnshaw and Piatt24 where an ordinance divided the
City of Manila into industrial and residential areas.
A thorough scrutiny of the extant jurisprudence
leads to a cogent deduction that where a property
interest is merely restricted because the continued
use thereof would be injurious to public welfare, or
where property is destroyed because its continued
existence would be injurious to public interest, there
is no compensable taking.25 However, when a
property interest is appropriated and applied to
some public purpose, there is compensable taking. 26
According to noted constitutionalist, Fr. Joaquin
Bernas, SJ, in the exercise of its police power
regulation, the state restricts the use of private
property, but none of the property interests in the
bundle of rights which constitute ownership is
appropriated for use by or for the benefit of the
public.27 Use of the property by the owner was
limited, but no aspect of the property is used by or
for the public.28 The deprivation of use can in fact be
total and it will not constitute compensable taking if
nobody else acquires use of the property or any
interest therein.29
If, however, in the regulation of the use of the
property, somebody else acquires the use or interest
thereof, such restriction constitutes compensable
taking. Thus, in City Government of Quezon City v.
Ericta,30 it was argued by the local government that
an ordinance requiring private cemeteries to reserve
6% of their total areas for the burial of paupers was
a valid exercise of the police power under the
general welfare clause. This court did not agree in
the contention, ruling that property taken under the
police power is sought to be destroyed and not, as in
this case, to be devoted to a public use. It further
declared that the ordinance in question was actually
a taking of private property without just
compensation of a certain area from a private
cemetery to benefit paupers who are charges of the
local government. Being an exercise of eminent
domain without provision for the payment of just
compensation, the same was rendered invalid as it
violated the principles governing eminent domain.
In People v. Fajardo,31 the municipal mayor refused
Fajardo permission to build a house on his own land
on the ground that the proposed structure would
destroy the view or beauty of the public plaza. The
ordinance relied upon by the mayor prohibited the
construction of any building that would destroy the
view of the plaza from the highway. The court ruled
that the municipal ordinance under the guise of
police power permanently divest owners of the
beneficial use of their property for the benefit of the
public; hence, considered as a taking under the
power of eminent domain that could not be
countenanced without payment of just
compensation to the affected owners. In this case,
what the municipality wanted was to impose an
easement on the property in order to preserve the
view or beauty of the public plaza, which was a form
of utilization of Fajardo’s property for public
benefit.32
While the power of eminent domain often results in
the appropriation of title to or possession of
property, it need not always be the case. Taking may
include trespass without actual eviction of the
owner, material impairment of the value of the
property or prevention of the ordinary uses for
which the property was intended such as the
establishment of an easement.33 In Ayala de Roxas v.
City of Manila,34 it was held that the imposition of
burden over a private property through easement
was considered taking; hence, payment of just
compensation is required. The Court declared:
And, considering that the easement intended to be
established, whatever may be the object thereof, is
not merely a real right that will encumber the
property, but is one tending to prevent the exclusive
use of one portion of the same, by expropriating it
for public use which, be it what it may, can not be
accomplished unless the owner of the property
condemned or seized be previously and duly
indemnified, it is proper to protect the appellant by
means of the remedy employed in such cases, as it is
only adequate remedy when no other legal action
can be resorted to, against an intent which is nothing
short of an arbitrary restriction imposed by the city
by virtue of the coercive power with which the same
is invested.
And in the case of National Power Corporation v.
Gutierrez,35 despite the NPC’s protestation that the
owners were not totally deprived of the use of the
land and could still plant the same crops as long as
they did not come into contact with the wires, the
Court nevertheless held that the easement of right-
of-way was a taking under the power of eminent
domain. The Court said:
In the case at bar, the easement of right-of-way is
definitely a taking under the power of eminent
domain. Considering the nature and effect of the
installation of 230 KV Mexico-Limay transmission
lines, the limitation imposed by NPC against the use
of the land for an indefinite period deprives private
respondents of its ordinary use.
A case exemplifying an instance of compensable
taking which does not entail transfer of title is
Republic v. Philippine Long Distance Telephone
Co.36 Here, the Bureau of Telecommunications, a
government instrumentality, had contracted with
the PLDT for the interconnection between the
Government Telephone System and that of the
PLDT, so that the former could make use of the lines
and facilities of the PLDT. In its desire to expand
services to government offices, the Bureau of
Telecommunications demanded to expand its use of
the PLDT lines. Disagreement ensued on the terms of
the contract for the use of the PLDT facilities. The
Court ruminated:
Normally, of course, the power of eminent domain
results in the taking or appropriation of title to, and
possession of, the expropriated property; but no
cogent reason appears why said power may not be
availed of to impose only a burden upon the owner
of the condemned property, without loss of title and
possession. It is unquestionable that real property
may, through expropriation, be subjected to an
easement right of way.37
In Republic v. Castellvi,38 this Court had the occasion
to spell out the requisites of taking in eminent
domain, to wit:
(1) the expropriator must enter a private
property;
(2) the entry must be for more than a
momentary period.
(3) the entry must be under warrant or
color of legal authority;
(4) the property must be devoted to public
use or otherwise informally appropriated or
injuriously affected;
(5) the utilization of the property for public
use must be in such a way as to oust the
owner and deprive him of beneficial
enjoyment of the property.
As shown by the foregoing jurisprudence, a
regulation which substantially deprives the owner of
his proprietary rights and restricts the beneficial use
and enjoyment for public use amounts to
compensable taking. In the case under
consideration, the entry referred to in Section 76
and the easement rights under Section 75 of Rep.
Act No. 7942 as well as the various rights to CAMC
under its FTAA are no different from the deprivation
of proprietary rights in the cases discussed which
this Court considered as taking. Section 75 of the law
in question reads:
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, tailing 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.
Section 76 provides:
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.
The CAMC FTAA grants in favor of CAMC the right of
possession of the Exploration Contract Area, the full
right of ingress and egress and the right to occupy
the same. It also bestows CAMC the right not to be
prevented from entry into private lands by surface
owners or occupants thereof when prospecting,
exploring and exploiting minerals therein.
The entry referred to in Section 76 is not just a
simple right-of-way which is ordinarily allowed under
the provisions of the Civil Code. Here, the holders of
mining rights enter private lands for purposes of
conducting mining activities such as exploration,
extraction and processing of minerals. Mining right
holders build mine infrastructure, dig mine shafts
and connecting tunnels, prepare tailing ponds,
storage areas and vehicle depots, install their
machinery, equipment and sewer systems. On top of
this, under Section 75, easement rights are accorded
to them where they may build warehouses, port
facilities, electric transmission, railroads and other
infrastructures necessary for mining operations. All
these will definitely oust the owners or occupants of
the affected areas the beneficial ownership of their
lands. Without a doubt, taking occurs once mining
operations commence.
Section 76 of Rep. Act No. 7942 is a Taking Provision
Moreover, it would not be amiss to revisit the history
of mining laws of this country which would help us
understand Section 76 of Rep. Act No. 7942.
This provision is first found in Section 27 of
Commonwealth Act No. 137 which took effect on 7
November 1936, viz:
Before entering private lands the prospector shall
first apply in writing for written permission of the
private owner, claimant, or holder thereof, and in
case of refusal by such private owner, claimant, or
holder to grant such permission, or in case of
disagreement as to the amount of compensation to
be paid for such privilege of prospecting therein, the
amount of such compensation shall be fixed by
agreement among the prospector, the Director of
the Bureau of Mines and the surface owner, and in
case of their failure to unanimously agree as to the
amount of compensation, all questions at issue shall
be determined by the Court of First Instance.
Similarly, the pertinent provision of Presidential
Decree No. 463, otherwise known as "The Mineral
Resources Development Decree of 1974," provides:
SECTION 12. Entry to Public and Private Lands. — A
person who desires to conduct prospecting or other
mining operations within public lands covered by
concessions or rights other than mining shall first
obtain the written permission of the government
official concerned before entering such lands. In the
case of private lands, the written permission of the
owner or possessor of the land must be obtained
before entering such lands. In either case, if said
permission is denied, the Director, at the request of
the interested person may intercede with the owner
or possessor of the land. If the intercession fails, the
interested person may bring suit in the Court of First
Instance of the province where the land is situated. If
the court finds the request justified, it shall issue an
order granting the permission after fixing the
amount of compensation and/or rental due the
owner or possessor: Provided, That pending final
adjudication of such amount, the court shall upon
recommendation of the Director permit the
interested person to enter, prospect and/or
undertake other mining operations on the disputed
land upon posting by such interested person of a
bond with the court which the latter shall consider
adequate to answer for any damage to the owner or
possessor of the land resulting from such entry,
prospecting or any other mining operations.
Hampered by the difficulties and delays in securing
surface rights for the entry into private lands for
purposes of mining operations, Presidential Decree
No. 512 dated 19 July 1974 was passed into law in
order to achieve full and accelerated mineral
resources development. Thus, Presidential Decree
No. 512 provides for a new system of surface rights
acquisition by mining prospectors and claimants.
Whereas in Commonwealth Act No. 137 and
Presidential Decree No. 463 eminent domain may
only be exercised in order that the mining claimants
can build, construct or install roads, railroads, mills,
warehouses and other facilities, this time, the power
of eminent domain may now be invoked by mining
operators for the entry, acquisition and use of
private lands, viz:
SECTION 1. Mineral prospecting, location,
exploration, development and exploitation is hereby
declared of public use and benefit, and for which the
power of eminent domain may be invoked and
exercised for the entry, acquisition and use of
private lands. x x x.
The evolution of mining laws gives positive indication
that mining operators who are qualified to own
lands were granted the authority to exercise
eminent domain for the entry, acquisition, and use
of private lands in areas open for mining operations.
This grant of authority extant in Section 1 of
Presidential Decree No. 512 is not expressly repealed
by Section 76 of Rep. Act No. 7942; and neither are
the former statutes impliedly repealed by the
former. These two provisions can stand together
even if Section 76 of Rep. Act No. 7942 does not
spell out the grant of the privilege to exercise
eminent domain which was present in the old law.
It is an established rule in statutory construction that
in order that one law may operate to repeal another
law, the two laws must be inconsistent.39 The former
must be so repugnant as to be irreconciliable with
the latter act. Simply because a latter enactment
may relate to the same subject matter as that of an
earlier statute is not of itself sufficient to cause an
implied repeal of the latter, since the new law may
be cumulative or a continuation of the old one. As
has been the ruled, repeals by implication are not
favored, and will not be decreed unless it is manifest
that the legislature so intended.40 As laws are
presumed to be passed with deliberation and with
full knowledge of all existing ones on the subject, it is
but reasonable to conclude that in passing a statute
it was not intended to interfere with or abrogate any
former law relating to the same matter, unless the
repugnancy between the two is not only
irreconcilable, but also clear and convincing, and
flowing necessarily from the language used, unless
the later act fully embraces the subject matter of the
earlier, or unless the reason for the earlier act is
beyond peradventure removed.41 Hence, every effort
must be used to make all acts stand and if, by any
reasonable construction, they can be reconciled, the
latter act will not operate as a repeal of the earlier.
Considering that Section 1 of Presidential Decree No.
512 granted the qualified mining operators the
authority to exercise eminent domain and since this
grant of authority is deemed incorporated in Section
76 of Rep. Act No. 7942, the inescapable conclusion
is that the latter provision is a taking provision.
While this Court declares that the assailed provision
is a taking provision, this does not mean that it is
unconstitutional on the ground that it allows taking
of private property without the determination of
public use and the payment of just compensation.
The taking to be valid must be for public use.42 Public
use as a requirement for the valid exercise of the
power of eminent domain is now synonymous with
public interest, public benefit, public welfare and
public convenience.43 It includes the broader notion
of indirect public benefit or advantage. Public use as
traditionally understood as "actual use by the public"
has already been abandoned.44
Mining industry plays a pivotal role in the economic
development of the country and is a vital tool in the
government’s thrust of accelerated recovery. 45 The
importance of the mining industry for national
development is expressed in Presidential Decree No.
463:
WHEREAS, mineral production is a major support of
the national economy, and therefore the intensified
discovery, exploration, development and wise
utilization of the country’s mineral resources are
urgently needed for national development.
Irrefragably, mining is an industry which is of public
benefit.
That public use is negated by the fact that the state
would be taking private properties for the benefit of
private mining firms or mining contractors is not at
all true. In Heirs of Juancho Ardona v.
Reyes,46 petitioners therein contended that the
promotion of tourism is not for public use because
private concessionaires would be allowed to
maintain various facilities such as restaurants,
hotels, stores, etc., inside the tourist area. The Court
thus contemplated:
The rule in Berman v. Parker [348 U.S. 25; 99 L. ed.
27] of deference to legislative policy even if such
policy might mean taking from one private person
and conferring on another private person applies as
well in the Philippines.
". . . Once the object is within the authority of
Congress, the means by which it will be attained is
also for Congress to determine. Here one of the
means chosen is the use of private enterprise for
redevelopment of the area. Appellants argue that
this makes the project a taking from one
businessman for the benefit of another
businessman. But the means of executing the project
are for Congress and Congress alone to determine,
once the public purpose has been established. x x
x"47
Petitioners further maintain that the state’s
discretion to decide when to take private property is
reduced contractually by Section 13.5 of the CAMC
FTAA, which reads:
If the CONTRACTOR so requests at its option, the
GOVERNMENT shall use its offices and legal powers
to assist in the acquisition at reasonable cost of any
surface areas or rights required by the CONTRACTOR
at the CONTRACTOR’s cost to carry out the Mineral
Exploration and the Mining Operations herein.
All obligations, payments and expenses arising from,
or incident to, such agreements or acquisition of
right shall be for the account of the CONTRACTOR
and shall be recoverable as Operating Expense.
According to petitioners, the government is reduced
to a sub-contractor upon the request of the private
respondent, and on account of the foregoing
provision, the contractor can compel the
government to exercise its power of eminent
domain thereby derogating the latter’s power to
expropriate property.
The provision of the FTAA in question lays down the
ways and means by which the foreign-owned
contractor, disqualified to own land, identifies to the
government the specific surface areas within the
FTAA contract area to be acquired for the mine
infrastructure.48 The government then acquires
ownership of the surface land areas on behalf of the
contractor, through a voluntary transaction in order
to enable the latter to proceed to fully implement
the FTAA. Eminent domain is not yet called for at this
stage since there are still various avenues by which
surface rights can be acquired other than
expropriation. The FTAA provision under attack
merely facilitates the implementation of the FTAA
given to CAMC and shields it from violating the Anti-
Dummy Law. Hence, when confronted with the same
question in La Bugal-B’Laan Tribal Association, Inc. v.
Ramos,49 the Court answered:
Clearly, petitioners have needlessly jumped to
unwarranted conclusions, without being aware of
the rationale for the said provision. That provision
does not call for the exercise of the power of
eminent domain -- and determination of just
compensation is not an issue -- as much as it calls for
a qualified party to acquire the surface rights on
behalf of a foreign-owned contractor.
Rather than having the foreign contractor act
through a dummy corporation, having the State do
the purchasing is a better alternative. This will at
least cause the government to be aware of such
transaction/s and foster transparency in the
contractor’s dealings with the local property owners.
The government, then, will not act as a
subcontractor of the contractor; rather, it will
facilitate the transaction and enable the parties to
avoid a technical violation of the Anti-Dummy Law.
There is also no basis for the claim that the Mining
Law and its implementing rules and regulations do
not provide for just compensation in expropriating
private properties. Section 76 of Rep. Act No. 7942
and Section 107 of DAO 96-40 provide for the
payment of just compensation:
Section 76. xxx Provided, that any damage 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.
Section 107. Compensation of the Surface Owner
and Occupant- Any damage done to the property of
the surface owners, occupant, or concessionaire
thereof as a consequence of the mining operations
or as a result of the construction or installation of
the infrastructure mentioned in 104 above shall be
properly and justly compensated.
Such compensation shall be based on the agreement
entered into between the holder of mining rights
and the surface owner, occupant or concessionaire
thereof, where appropriate, in accordance with P.D.
No. 512. (Emphasis supplied.)
Second Substantive Issue: Power of Courts to
Determine Just Compensation
Closely-knit to the issue of taking is the
determination of just compensation. It is contended
that Rep. Act No. 7942 and Section 107 of DAO 96-40
encroach on the power of the trial courts to
determine just compensation in eminent domain
cases inasmuch as the same determination of proper
compensation are cognizable only by the Panel of
Arbitrators.
The question on the judicial determination of just
compensation has been settled in the case of Export
Processing Zone Authority v. Dulay50 wherein the
court declared that the determination of just
compensation in eminent domain cases is a judicial
function. Even as the executive department or the
legislature may make the initial determinations, the
same cannot prevail over the court’s findings.
Implementing Section 76 of Rep. Act No. 7942,
Section 105 of DAO 96-40 states that holder(s) of
mining right(s) shall not be prevented from entry
into its/their contract/mining areas for the purpose
of exploration, development, and/or utilization. That
in cases where surface owners of the lands,
occupants or concessionaires refuse to allow the
permit holder or contractor entry, the latter shall
bring the matter before the Panel of Arbitrators for
proper disposition. Section 106 states that voluntary
agreements between the two parties permitting the
mining right holders to enter and use the surface
owners’ lands shall be registered with the Regional
Office of the MGB. In connection with Section 106,
Section 107 provides that the compensation for the
damage done to the surface owner, occupant or
concessionaire as a consequence of mining
operations or as a result of the construction or
installation of the infrastructure shall be properly
and justly compensated and that such compensation
shall be based on the agreement between the holder
of mining rights and surface owner, occupant or
concessionaire, or where appropriate, in accordance
with Presidential Decree No. 512. In cases where
there is disagreement to the compensation or where
there is no agreement, the matter shall be brought
before the Panel of Arbitrators. Section 206 of the
implementing rules and regulations provides an
aggrieved party the remedy to appeal the decision of
the Panel of Arbitrators to the Mines Adjudication
Board, and the latter’s decision may be reviewed by
the Supreme Court by filing a petition for review on
certiorari.51
An examination of the foregoing provisions gives no
indication that the courts are excluded from taking
cognizance of expropriation cases under the mining
law. The disagreement referred to in Section 107
does not involve the exercise of eminent domain,
rather it contemplates of a situation wherein the
permit holders are allowed by the surface owners
entry into the latters’ lands and disagreement
ensues as regarding the proper compensation for the
allowed entry and use of the private lands.
Noticeably, the provision points to a voluntary sale
or transaction, but not to an involuntary sale.
The legislature, in enacting the mining act, is
presumed to have deliberated with full knowledge of
all existing laws and jurisprudence on the subject.
Thus, it is but reasonable to conclude that in passing
such statute it was in accord with the existing laws
and jurisprudence on the jurisdiction of courts in the
determination of just compensation and that it was
not intended to interfere with or abrogate any
former law relating to the same matter. Indeed,
there is nothing in the provisions of the assailed law
and its implementing rules and regulations that
exclude the courts from their jurisdiction to
determine just compensation in expropriation
proceedings involving mining operations. Although
Section 105 confers upon the Panel of Arbitrators
the authority to decide cases where surface owners,
occupants, concessionaires refuse permit holders
entry, thus, necessitating involuntary taking, this
does not mean that the determination of the just
compensation by the Panel of Arbitrators or the
Mines Adjudication Board is final and conclusive. The
determination is only preliminary unless accepted by
all parties concerned. There is nothing wrong with
the grant of primary jurisdiction by the Panel of
Arbitrators or the Mines Adjudication Board to
determine in a preliminary matter the reasonable
compensation due the affected landowners or
occupants.52 The original and exclusive jurisdiction of
the courts to decide determination of just
compensation remains intact despite the preliminary
determination made by the administrative agency.
As held in Philippine Veterans Bank v. Court of
Appeals53:
The jurisdiction of the Regional Trial Courts is not
any less "original and exclusive" because the
question is first passed upon by the DAR, as the
judicial proceedings are not a continuation of the
administrative determination.
Third Substantive Issue: Sufficient Control by the
State Over Mining Operations
Anent the third issue, petitioners charge that Rep.
Act No. 7942, as well as its Implementing Rules and
Regulations, makes it possible for FTAA contracts to
cede over to a fully foreign-owned corporation full
control and management of mining enterprises, with
the result that the State is allegedly reduced to a
passive regulator dependent on submitted plans and
reports, with weak review and audit powers. The
State is not acting as the supposed owner of the
natural resources for and on behalf of the Filipino
people; it practically has little effective say in the
decisions made by the enterprise. In effect,
petitioners asserted that the law, the implementing
regulations, and the CAMC FTAA cede beneficial
ownership of the mineral resources to the foreign
contractor.
It must be noted that this argument was already
raised in La Bugal-B’Laan Tribal Association, Inc. v.
Ramos,54 where the Court answered in the following
manner:
RA 7942 provides for the state’s control and
supervision over mining operations. The following
provisions thereof establish the mechanism of
inspection and visitorial rights over mining
operations and institute reportorial requirements in
this manner:
1. Sec. 8 which provides for the DENR’s
power of over-all supervision and periodic
 review for "the conservation, management,
development and proper use of the State’s
mineral resources";
2. Sec. 9 which authorizes the Mines and
Geosciences Bureau (MGB) under the DENR
to exercise "direct charge in the
administration and disposition of mineral
resources", and empowers the MGB to
"monitor the compliance by the contractor
of the terms and conditions of the mineral
agreements", "confiscate surety and
performance bonds", and deputize
whenever necessary any member or unit of
the Phil. National Police, barangay, duly
registered non-governmental organization
(NGO) or any qualified person to police
mining activities;
3. Sec. 66 which vests in the Regional
Director "exclusive jurisdiction over safety
inspections of all installations, whether
surface or underground", utilized in mining
operations.
4. Sec. 35, which incorporates into all FTAAs
the following terms, conditions and
warranties:
"(g) Mining operations shall be conducted in
accordance with the provisions of the Act and its IRR.
"(h) Work programs and minimum expenditures
commitments.
xxxx
"(k) Requiring proponent to effectively use
appropriate anti-pollution technology and facilities
to protect the environment and restore or
rehabilitate mined-out areas.
"(l) The contractors shall furnish the Government
records of geologic, accounting and other relevant
data for its mining operation, and that books of
accounts and records shall be open for inspection by
the government. x x x.
"(m) Requiring the proponent to dispose of the
minerals at the highest price and more
advantageous terms and conditions.
xxxx
"(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."
The foregoing provisions of Section 35 of RA 7942
are also reflected and implemented in Section 56 (g),
(h), (l), (m) and (n) of the Implementing Rules, DAO
96-40.
Moreover, RA 7942 and DAO 96-40 also provide
various stipulations confirming the government’s
control over mining enterprises:
o The contractor is to relinquish to the
government those portions of the contract
area not needed for mining operations and
not covered by any declaration of mining
feasibility (Section 35-e, RA 7942; Section
60, DAO 96-40).
o The contractor must comply with the
provisions pertaining to mine safety, health
and environmental protection (Chapter XI,
RA 7942; Chapters XV and XVI, DAO 96-40).
o For violation of any of its terms and
conditions, government may cancel an
FTAA. (Chapter XVII, RA 7942; Chapter XXIV,
DAO 96-40).
o An FTAA contractor is obliged to open its
books of accounts and records for
0inspection by the government (Section 56-
m, DAO 96-40).
o An FTAA contractor has to dispose of the
minerals and by-products at the highest
market price and register with the MGB a
copy of the sales agreement (Section 56-n,
DAO 96-40).
o MGB is mandated to monitor the
contractor’s compliance with the terms and
conditions of the FTAA; and to deputize,
when necessary, any member or unit of the
Philippine National Police, the barangay or a
DENR-accredited nongovernmental
organization to police mining activities
(Section 7-d and -f, DAO 96-40).
o An FTAA cannot be transferred or assigned
without prior approval by the President
(Section 40, RA 7942; Section 66, DAO 96-
40).
o A mining project under an FTAA cannot 2. Drilling
proceed to the
construction/development/utilization stage, 3. Mineral resources and reserves
unless its Declaration of Mining Project
Feasibility has been approved by 4. Energy consumption
government (Section 24, RA 7942).
o The Declaration of Mining Project Feasibility 5. Production
filed by the contractor cannot be approved
without submission of the following
6. Sales and marketing
documents:

1. Approved mining project
feasibility study (Section 53-d, DAO
96-40)
2. Approved three-year work
program (Section 53-a-4, DAO 96-
40)
7. Employment
8. Payment of taxes, royalties, fees
and other Government Shares
9. Mine safety, health and
environment

3. Environmental compliance 10. Land use

certificate (Section 70, RA 7942)
4. Approved environmental
protection and enhancement
program (Section 69, RA 7942)
o An FTAA pertaining to areas within
5. Approval by the Sangguniang
Panlalawigan/Bayan/Barangay
(Section 70, RA 7942; Section 27,
RA 7160)
o An FTAA contractor is required to post a
6. Free and prior informed consent
by the indigenous peoples
concerned, including payment of
royalties through a Memorandum
of Agreement (Section 16, RA
7942; Section 59, RA 8371)
o The FTAA contractor is obliged to assist in
the development of its mining community,
promotion of the general welfare of its
o Other reports to be submitted by the
inhabitants, and development of science
and mining technology (Section 57, RA
7942).
o The FTAA contractor is obliged to submit
reports (on quarterly, semi-annual or
annual basis as the case may be; per Section
270, DAO 96-40), pertaining to the
following:
1. Exploration
11. Social development
12. Explosives consumption
government reservations cannot be granted
without a written clearance from the
government agencies concerned (Section
19, RA 7942; Section 54, DAO 96-40).
financial guarantee bond in favor of the
government in an amount equivalent to its
expenditures obligations for any particular
year. This requirement is apart from the
representations and warranties of the
contractor that it has access to all the
financing, managerial and technical
expertise and technology necessary to carry
out the objectives of the FTAA (Section 35-
b, -e, and -f, RA 7942).
contractor, as required under DAO 96-40,
are as follows: an environmental report on
the rehabilitation of the mined-out area
and/or mine waste/tailing covered area,
and anti-pollution measures undertaken
(Section 35-a-2); annual reports of the
mining operations and records of geologic
accounting (Section 56-m); annual progress
reports and final report of exploration
activities (Section 56-2).
 o Other programs required to be submitted
by the contractor, pursuant to DAO 96-40,
are the following: a safety and health
program (Section 144); an environmental
work program (Section 168); an annual
environmental protection and
enhancement program (Section 171).
The foregoing gamut of requirements, regulations,
restrictions and limitations imposed upon the FTAA
contractor by the statute and regulations easily
overturns petitioners’ contention. The setup under
RA 7942 and DAO 96-40 hardly relegates the State to
the role of a "passive regulator" dependent on
submitted plans and reports. On the contrary, the
government agencies concerned are empowered to
approve or disapprove -- hence, to influence, direct
and change -- the various work programs and the
corresponding minimum expenditure commitments
for each of the exploration, development and
utilization phases of the mining enterprise.
Once these plans and reports are approved, the
contractor is bound to comply with its commitments
therein. Figures for mineral production and sales are
regularly monitored and subjected to government
review, in order to ensure that the products and by-
products are disposed of at the best prices possible;
even copies of sales agreements have to be
submitted to and registered with MGB. And the
contractor is mandated to open its books of
accounts and records for scrutiny, so as to enable
the State to determine if the government share has
been fully paid.
The State may likewise compel the contractor’s
compliance with mandatory requirements on mine
safety, health and environmental protection, and the
use of anti-pollution technology and facilities.
Moreover, the contractor is also obligated to assist
in the development of the mining community and to
pay royalties to the indigenous peoples concerned.
Cancellation of the FTAA may be the penalty for
violation of any of its terms and conditions and/or
noncompliance with statutes or regulations. This
general, all-around, multipurpose sanction is no
trifling matter, especially to a contractor who may
have yet to recover the tens or hundreds of millions
of dollars sunk into a mining project.
Overall, considering the provisions of the statute and
the regulations just discussed, we believe that the
State definitely possesses the means by which it can
have the ultimate word in the operation of the
enterprise, set directions and objectives, and detect
deviations and noncompliance by the contractor;
likewise, it has the capability to enforce compliance
and to impose sanctions, should the occasion
therefor arise.
In other words, the FTAA contractor is not free to do
whatever it pleases and get away with it; on the
contrary, it will have to follow the government line if
it wants to stay in the enterprise. Ineluctably then,
RA 7942 and DAO 96-40 vest in the government
more than a sufficient degree of control and
supervision over the conduct of mining operations.
Fourth Substantive Issue: The Proper Interpretation
of the Constitutional Phrase "Agreements Involving
Either Technical or Financial Assistance
In interpreting the first and fourth paragraphs of
Section 2, Article XII of the Constitution, petitioners
set forth the argument that foreign corporations are
barred from making decisions on the conduct of
operations and the management of the mining
project. The first paragraph of Section 2, Article XII
reads:
x x x 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 percentum 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 x x x.
The fourth paragraph of Section 2, Article XII
provides:
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
x x x.
Petitioners maintain that the first paragraph bars
aliens and foreign-owned corporations from entering
into any direct arrangement with the government
including those which involve co-production, joint
venture or production sharing agreements. They
likewise insist that the fourth paragraph allows
foreign-owned corporations to participate in the
large-scale exploration, development and utilization
of natural resources, but such participation,
however, is merely limited to an agreement for
either financial or technical assistance only.
Again, this issue has already been succinctly passed
upon by this Court in La Bugal-B’Laan Tribal
Association, Inc. v. Ramos.55 In discrediting such
argument, the Court ratiocinated:
Petitioners claim that the phrase "agreements x x x
involving either technical or financial
assistance" simply means technical assistance or
financial assistance agreements, nothing more and
nothing else. They insist that there is no ambiguity in
the phrase, and that a plain reading of paragraph 4
quoted above leads to the inescapable conclusion
that what a foreign-owned corporation may enter
into with the government is merely an agreement
for either financial or technical assistance only, for
the large-scale exploration, development and
utilization of minerals, petroleum and other mineral
oils; such a limitation, they argue, excludes foreign
management and operation of a mining enterprise.
This restrictive interpretation, petitioners believe, is
in line with the general policy enunciated by the
Constitution reserving to Filipino citizens and
corporations the use and enjoyment of the country’s
natural resources. They maintain that this Court’s
Decision of January 27, 2004 correctly declared the
WMCP FTAA, along with pertinent provisions of RA
7942, void for allowing a foreign contractor to have
direct and exclusive management of a mining
enterprise. Allowing such a privilege not only runs
counter to the "full control and supervision" that the
State is constitutionally mandated to exercise over
the exploration, development and utilization of the
country’s natural resources; doing so also vests in
the foreign company "beneficial ownership" of our
mineral resources. It will be recalled that the
Decision of January 27, 2004 zeroed in on
"management or other forms of assistance" or other
activities associated with the "service contracts" of
the martial law regime, since "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."
xxxx
We do not see how applying a strictly literal or verba
legis  interpretation of paragraph 4 could inexorably
lead to the conclusions arrived at in
the ponencia. First, the drafters’ choice of words --
their use of the phrase agreements x x
x involving either technical or financial assistance --
does not indicate the intent to exclude other modes
of assistance. The drafters opted to
use involving when they could have simply
said agreements for financial or technical
assistance, if that was their intention to begin with.
In this case, the limitation would be very clear and
no further debate would ensue.
In contrast, the use of the word "involving" signifies
the possibility of the inclusion of other forms of
assistance or activities having to do with, otherwise
related to or compatible with financial or technical
assistance. The word "involving" as used in this
context has three connotations that can be
differentiated thus: one,  the sense of "concerning,"
"having to do with," or "affecting"; two, "entailing,"
"requiring," "implying" or "necessitating"; and three,
"including," "containing" or "comprising."
Plainly, none of the three connotations convey a
sense of exclusivity. Moreover, the word "involving,"
when understood in the sense of "including," as
in including technical or financial
assistance, necessarily implies that there
are activities other than those that are being
included. In other words, if an
agreement includes technical or financial assistance,
there is apart from such assistance -- something else
already in, and covered or may be covered by, the
said agreement.
In short, it allows for the possibility that
matters, other than those explicitly mentioned,
could be made part of the agreement. Thus, we are
now led to the conclusion that the use of the word
"involving" implies that these agreements with
foreign corporations are not limited to mere
financial or technical assistance. The difference in
sense becomes very apparent when we juxtapose
"agreements for technical or financial assistance"
against "agreements including technical or financial
assistance." This much is unalterably clear in a verba
legis approach.
Second, if the real intention of the drafters was to
confine foreign corporations to financial or technical
assistance and nothing more, their language would
have certainly been so unmistakably restrictive and
stringent as to leave no doubt in anyone’s mind
about their true intent. For example, they would
have used the sentence foreign corporations are
absolutely prohibited from involvement in the
management or operation of mining or similar
ventures or words of similar import. A search for
such stringent wording yields negative results. Thus,
we come to the inevitable conclusion that there
was a conscious and deliberate decision to avoid
the use of restrictive wording that bespeaks an
intent not to use the expression "agreements x x x
involving either technical or financial assistance" in
an exclusionary and limiting manner.
Fifth Substantive Issue: Service Contracts Not
Deconstitutionalized
Lastly, petitioners stress that the service contract
regime under the 1973 Constitution is expressly
prohibited under the 1987 Constitution as the term
service contracts found in the former was deleted in
the latter to avoid the circumvention of
constitutional prohibitions that were prevalent in the
1987 Constitution. According to them, the framers of
the 1987 Constitution only intended for foreign-
owned corporations to provide either technical
assistance or financial assistance. Upon perusal of
the CAMC FTAA, petitioners are of the opinion that
the same is a replica of the service contract
agreements that the present constitution allegedly
prohibit.
Again, this contention is not well-taken. The mere
fact that the term service contracts found in the
1973 Constitution was not carried over to the
present constitution, sans any categorical statement
banning service contracts in mining activities, does
not mean that service contracts as understood in the
1973 Constitution was eradicated in the 1987
Constitution.56 The 1987 Constitution allows the
continued use of service contracts with foreign
corporations as contractors who would invest in and
operate and manage extractive enterprises, subject
to the full control and supervision of the State; this
time, however, safety measures were put in place to
prevent abuses of the past regime.57 We ruled, thus:
To our mind, however, such intent cannot be
definitively and conclusively established from the
mere failure to carry the same expression or term
over to the new Constitution, absent a more specific,
explicit and unequivocal statement to that effect.
What petitioners seek (a complete ban on foreign
participation in the management of mining
operations, as previously allowed by the earlier
Constitutions) is nothing short of bringing about a
momentous sea change in the economic and
developmental policies; and the fundamentally
capitalist, free-enterprise philosophy of our
government. We cannot imagine such a radical
shift being undertaken by our government, to the
great prejudice of the mining sector in particular and
our economy in general, merely on the basis of
the omission of the terms service contract from or
the failure to carry them over to the new
Constitution. There has to be a much more definite
and even unarguable basis for such a drastic reversal
of policies.
xxxx
The foregoing are mere fragments of the framers’
lengthy discussions of the provision dealing
with agreements x x x involving either technical or
financial assistance, which ultimately became
paragraph 4 of Section 2 of Article XII of the
Constitution. Beyond any doubt, the members of the
ConCom were actually debating about the martial-
law-era service contracts for which they were
crafting  appropriate safeguards.
In the voting that led to the approval of Article XII by
the ConCom, the explanations given by
Commissioners Gascon, Garcia and Tadeo indicated
that they had voted to reject this provision on
account of their objections to the
"constitutionalization" of the "service contract"
concept.
Mr. Gascon said, "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." Mr. Garcia
explained, "Service contracts  are given
constitutional legitimization in Sec. 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." Likewise, Mr.
Tadeo cited inter alia the fact that service contracts
continued to subsist, enabling foreign interests to
benefit from our natural resources. It was hardly
likely that these gentlemen would have objected so
strenuously, had the provision called for mere
technical or financial assistance and nothing more.
The deliberations of the ConCom and some
commissioners’ explanation of their votes leave no
room for doubt that the service contract concept
precisely underpinned the commissioners’
understanding of the "agreements involving either
technical or financial assistance."
xxxx
From the foregoing, we are impelled to conclude
that the phrase agreements involving either
technical or financial assistance, referred to in
paragraph 4, are in fact service contracts. But unlike
those of the 1973 variety, the new ones are between
foreign corporations acting as contractors on the one
hand; and on the other, the government as principal
or "owner" of the works. In the new service
contracts, the foreign contractors provide capital,
technology and technical know-how, and managerial
expertise in the creation and operation of large-scale
mining/extractive enterprises; and the government,
through its agencies (DENR, MGB), actively exercises
control and supervision over the entire operation.
xxxx
It is therefore reasonable and unavoidable to make
the following conclusion, based on the above
arguments. As written by the framers and ratified
and adopted by the people, the Constitution allows
the continued use of service contracts with foreign
corporations -- as contractors who would invest in
and operate and manage extractive enterprises,
subject to the full control and supervision of the
State -- sans the abuses of the past regime. The
purpose is clear: to develop and utilize our mineral,
petroleum and other resources on a large scale for
the immediate and tangible benefit of the Filipino
people.58
WHEREFORE, the instant petition for prohibition and
mandamus is hereby DISMISSED. Section 76 of
Republic Act No. 7942 and Section 107 of DAO 96-
40; Republic Act No. 7942 and its Implementing
Rules and Regulations contained in DAO 96-40 –
insofar as they relate to financial and technical
assistance agreements referred to in paragraph 4 of
Section 2 of Article XII of the Constitution are NOT
UNCONSTITUTIONAL.
SO ORDERED.
G.R. No. 137174               July 10, 2000
REPUBLIC OF THE PHILIPPINES, Represented by the
POLLUTION ADJUDICATION BOARD
(DENR), petitioner,
vs.
MARCOPPER MINING CORPORATION, respondent.
DECISION
GONZAGA-REYES, J.:
In this petition for review on certiorari, petitioner
REPUBLIC OF THE PHILIPPINES through the Pollution
Adjudication Board of the Department of
Environment and Natural Resources seeks to annul
the Decision1 of the Court of Appeals2 in CA-G.R. SP
No. 44656 setting aside the Order3 of the Pollution
Adjudication Board4 in DENR-PAB Case No. 04-00597-
96; as well as the Resolution5 denying
reconsideration of said Decision.
The following antecedent facts are undisputed:
Respondent Marcopper Mining Corporation (MMC)
was issued a temporary permit to operate a
tailings6 sea disposal system under TPO No. POW-85-
454-EJ for the period October 31, 1985 to October
21, 1986. Before it expired, MMC filed an application
for the renewal thereof with the National Pollution
Control Commission (NPCC). On September 20,
1986, MMC received a telegraphic order from the
NPCC directing the former to "(i)mmediately cease
and desist from discharging mine tailings into Section 96 of the National Pollution Control
Calancan Bay." The directive was brought about Commission (NPCC) Rules and Regulations, which
through the efforts of certain religious groups which were adopted by the Board, provides that in no case
had been protesting MMC’s tailings sea disposal can a permit be valid for more than one (1) year.
system. MMC requested the NPCC to refrain from
implementing the aforesaid directive until its Records show that Marcopper Mining Corporation
adoption of an alternative tailings disposal system. has not filed any application for renewal of the
The NPCC granted MMC’s request and called a permit.
conference to discuss possible alternative disposal
systems. Consequently, an Environmental Technical Marcopper Mining Corporation is hereby ordered to
Committee, composed of representatives from the cease and desist from discharging mine tailings into
NPCC, the Bureau of Mines and Geo-Sciences, and Calancan Bay immediately upon receipt of this
MMC was created to study the feasibility of various Order.
tailings disposal systems that may be appropriate for
utilization by MMC and to submit its findings and
SO ORDERED."9
recommendations thereon.
Immediately thereafter, the DENR Undersecretary
Meanwhile, after the expiration of MMC’s TPO No.
for Environment and Research issued a telegraphic
POW-85-454-EJ on October 21, 1986, the NPCC
order dated April 15, 1988, enjoining immediate
issued to MMC a new temporary permit, TPO No.
compliance by MMC of the cease and desist order of
POW-86-454-EJ dated November 11, 1986, to expire
April 11, 1988.
on February 10, 1987, with the condition that "[t]he
tailings disposal system shall be transferred to San
MMC appealed the above orders of April 11, 1988
Antonio Pond within two (2) months from the date
and April 15, 1988 to the Office of the President,
of this permit." MMC moved for the deletion of the
docketed as O.P. Case No. 3802. In an Order dated
condition stating that it needed to develop and mine
May 2, 1988, the Office of the President denied
the ore deposits underneath the San Antonio pond
MMC’s requests for issuance of restraining orders
for it to continue its mining operations. In a letter-
against the orders of the PAB. Consequently, MMC
manifestation dated February 5, 1987, MMC
filed an "Urgent Ex-Parte Partial Motion for
requested the NPCC for an extension of TPO No.
Reconsideration" dated May 6, 1988, seeking the
POW-86-454-EJ and the indefinite suspension of the
reconsideration of the above Order. In an Order
condition in said permit until such time that the
dated May 13, 1988, the Office of the President
NPCC shall have finally resolved the NPCC case
granted the above partial motion for
entitled "Msgr. Rolly Oliverio, et al. vs. Marcopper
reconsideration, thus:
Mining Corporation."

"WHEREFORE, the instant "Urgent Ex-Parte Motion

In the meantime, the NPCC was abolished by
for Reconsideration" is hereby GRANTED, and the
Executive Order No. 1927 dated June 10, 1987, and
Order of this Office, dated May 2, 1988, is hereby set
its powers and functions were integrated into the
aside insofar as it denies respondent-appellant’s
Environmental Management Bureau and into the
requests for issuance of restraining orders.
Pollution Adjudication Board (PAB).8

Accordingly, the Pollution Adjudication Board, its

On April 11, 1988, the Secretary of Environment and
agents, deputies or representatives are hereby
Natural Resources, in his capacity as Chairman of the
enjoined from enforcing its cease and desist order of
PAB, issued an Order directing MMC to "cease and
April 15, 1988 pending resolution by this Office of
desist from discharging mine tailings into Calancan
respondent-appellant’s appeal from said orders.
Bay." The order reads:

It is further directed that the status quo obtaining

The Temporary Permit to Operate issued to
prior to the issuance of said cease and desist order
Marcopper Mining Corporation expired on February
be maintained until further orders from this Office.
10, 1987.
It is understood, however, that during the efficacy of
this restraining order, respondent-appellant shall
immediately undertake, at a cost of not less than
P30,000.00 a day, the building of artificial reefs and
planting of sea grass, mangroves and vegetation on
the causeway of Calancan Bay under the supervision
of the Pollution Adjudication Board and subject to
such guidelines as the Board may impose.
SO ORDERED."10
In line with the directive from the Office of the
President, the Calancan Bay Rehabilitation Project
(CBRP) was created, and MMC remitted the amount
of P30,000.00 a day, starting from May 13, 1988 to
the Ecology Trust Fund (ETF) thereof. However, on
June 30, 1991, MMC stopped discharging its tailings
in the Bay, hence, it likewise ceased from making
further deposits to the ETF.
From the issuance of the Order on May 13, 1988
until the cessation of the tailings disposal on June 30,
1991, MMC made its contribution to the ETF in the
total amount of Thirty-Two Million Nine Hundred
and Seventy-Five Thousand Pesos (P32,975,000.00).
Thereafter, MMC filed a Motion dated July 9, 1991
manifesting that it would discontinue its
contributions/deposits to the ETF since it had
stopped dumping tailings in the Bay. MMC prayed
that the Order issued by the Office of the President
on May 13, 1988 be lifted.
On February 5, 1993, the Office of the President
rendered a decision in O.P. Case No. 3802 dismissing
the appeal; affirming the cease and desist Order
issued by the PAB; and lifting the TRO dated May 13,
1988. The Office of the President resolved the appeal
in this wise:
"This brings to the fore the primordial issue of
whether or not the Secretary of Environment and
Natural Resources gravely erred in declaring the TPO
No. POW-86-454-EJ issued to respondent-appellant
MMC expired on February 10, 1987, and in ordering
the latter to cease and desist from discharging mine
tailings into Calancan Bay.
Respondent-appellant argues that the cease and
desist orders were issued by the PAB ex-parte, in
violation of its procedural and substantive rights
provided for under Section 7 (a) of P.D. No. 984
requiring a public hearing before any order or
decision for the discontinuance of discharge of a
sewage or industrial wastes into the water, air or
land could be issued by the PAB.
We are not persuaded.
Section 7(a) of P.D. No. 984, reads in part:
"Sec. 7(a) Public Hearing. – Public hearing shall be
conducted by the Commissioner, Deputy
Commissioner or any senior official duly designated
by the Commissioner prior to issuance or
promulgation of any order or decision by the
Commissioner requiring the discontinuance of
discharge of sewage, industrial wastes and other
wastes into the water, air or land resources of the
Philippines as provided in the Decree: provided, that
whenever the Commission finds a prima facie
evidence that the discharged sewage or wastes are
of immediate threat to life, public health, safety or
welfare, or to animal or plant life, or exceeds the
allowable standards set by the Commission, the
Commissioner may issue an ex-parte order directing
the discontinuance of the same or the temporary
suspension or cessation of operation of the
establishment or person generating such sewage or
wastes without the necessity of a prior public
hearing. x x x . (underscoring supplied).
Clearly then, it is self-indulgent nonsense to assume
that the DENR Secretary, acting as PAB Chairman, is
absolutely without authority to issue an ex-
parte order requiring the discontinuance of
discharge of sewage or other industrial wastes
without public hearing. As can be gleaned from the
afroequoted proviso, this authority to issue an ex-
parte order suspending the discharge of industrial
wastes is postulated upon his finding of prima-
facie evidence of an imminent "threat to life, public
health, safety or welfare, to animal or plant life or
exceeds the allowable standards set by the
Commission."11
In a letter dated January 22, 199712 , Municipal
Mayor Wilfredo A. Red of Sta. Cruz, Marinduque
informed the PAB that MMC stopped remitting the
amount of 30,000.00 per day as of July 1, 1991 to the
ETF of the CBRP. This letter-complaint of Mayor Red
was docketed as DENR-PAB Case No. 04-00597-96,
for violation of P.D. 98413 and its implementing Rules
and Regulations.
In an order dated April 23, 1997, the PAB ruled that
the obligation of MMC to deposit P30,000.00 per day
to the ETF of the CBRP subsists, as provided for in
the Order of the Office of the President dated May
13, 1988, during the "efficacy of said order
restraining the PAB from enforcing its cease and
desist order against MMC". Since the Order was
lifted only on February 5, 1993, the obligation of
MMC to remit was likewise extinguished only on said
date and not earlier as contended by MMC from the
time it ceased dumping tailings into the Bay on July
1, 1991. We quote in part:
"The issue before this Board is whether Marcopper
Mining Corporation is still obliged to remit the
amount of P30,000.00 to the CBRP. The answer by
the Order from the Office of the President dated 13
May 1988, which states that the obligation on the
part of Marcopper Mining to pay the amount of
P30,000.00 per day for the rehabilitation of Calancan
Bay is binding only during the efficacy of the said
Order.
The record further shows that on 05 February 1993,
the Office of the President lifted its Order dated 13
May 1988. This means that as of the date of the
lifting, Marcopper Mining Corporation no longer had
any obligation to remit the amount of P30,000.00 to
the CBRP. Thus, Marcopper’s obligation only runs
from 13 May 1988 to 05 February 1993. Beyond the
cut-off date of 05 February 1993, Marcopper is no
longer obligated to remit the amount of P30,000.00
per day to the CBRP.
It does not matter whether Marcopper was no
longer dumping its tail minings into the sea even
before the cut-off date of 05 February 1993. The
obligation of Marcopper to pay the amount of
P30,000.00 to the CBRP arises from the Office of the
President Order dated 13 May 1988, not from it
dumping of mine tailings.
WHEREFORE, Marcopper Mining Corporation is
hereby ordered to pay the CBRP the amount of
P30,000.00 per day, computed from the date
Marcopper Mining Corporation stopped paying on
01 July 1991, up to the formal lifting of the subject
Order from the Office of the President on 05
February 1993.
SO ORDERED."14
MMC assailed the aforequoted Order dated April 23,
1997 of the PAB as null and void for having been
issued without jurisdiction or with grave abuse of
discretion in a petition for Certiorari and Prohibition
(with prayer for temporary restraining order and
preliminary injunction) before the Court of Appeals
which was docketed as CA-G.R. No. SP-44656. In a
Resolution dated July 15, 1997, the Court of Appeals
required the PAB and its members to comment on
said petition.
On November 19, 1997, the Office of the Solicitor
General, on behalf of the PAB and its members, filed
with the Court of Appeals the required comment.
On September 15, 1997, for purposes of determining
whether or not to grant MMC’s prayer for a
temporary restraining order and preliminary
injunction, the Court of Appeals conducted a hearing
where counsel for the parties were heard on oral
arguments.
In a Resolution dated September 19, 1997, the Court
of Appeals issued a writ of preliminary injunction,
conditioned upon the filing of a bond by MMC in the
amount of P500,000.00 enjoining the PAB and its
members to cease and desist from enforcing the
assailed Order dated April 23, 1997, until it had
made a full determination on the merits of the case.
On January 7, 1998, the Court of Appeals
promulgated a Decision in CA-G.R. SP No. 44656, the
dispositive portion of which reads:
"In view of the foregoing, the instant petition is
hereby GRANTED and, accordingly, the questioned
Order of respondent Pollution Adjudication Board
dated 23 April 1997 is hereby SET ASIDE.
Respondents are ordered to REFRAIN and DESIST
from enforcing aforesaid Order. The injunctive bond
filed by the petitioner in the amount of Five Hundred
Thousand (P500,000.00) is hereby RELEASED."
The motion for reconsideration of the above decision
was denied in a Resolution dated January 13, 1999 of
the Court of Appeals.
Hence, the instant petition on the following grounds:
I
The Court of Appeals erred in ruling that Republic
Act No. 7942 (otherwise known as the Philippine
Mining Act of 1995) repealed the provisions of
Republic Act No. 3931, as amended by Presidential
Decree No. 984, (otherwise known as the National
Pollution Control Decree of 1976), with respect to
the power and function of petitioner Pollution
Adjudication Board to issue, renew or deny permits
for the discharge of the mine tailings.
II
Respondent Marcopper Mining Corporation bound
itself to pay the amount of P30,000.00 a day for the
duration of the period starting May 13, 1988 up to
February 5, 1993.
III
Respondent Marcopper Mining Corporation was not
deprived of due process of law when petitioner
Pollution Adjudication Board directed it to comply
with its long-existing P30,000.00 per day obligation
under the Order of the Office of the President dated
May 13, 1988.15
In setting aside the Order of the PAB dated April 23,
1997, requiring MMC to pay its arrears in deposits,
the Court of Appeals ruled that the PAB exceeded its
power and authority in issuing the subject Order for
the following reasons:
"The applicable and governing law in this petition is
Republic Act No. 7942 otherwise known as the
Philippine Mining Act of 1995 ("Mining Act",
approved on March 3, 1995).
Chapter XI of the Mining Act contains a series of
provisions relating to safety and environmental
protection on mining and quarrying operations.
More specifically, Section 67 of the Mining Act in
essence, grants the mines regional director the
power to issue orders or to take appropriate
measures to remedy any practice connected with
mining or quarrying operations which is not in
accordance with safety and anti-pollution laws and
regulations.
From a reading of that provision, it would appear
therefore that prior to the passage of the Mining
Act, the Pollution Adjudication Board had jurisdiction
to act on pollution-related matters in the mining
business. With the effectivity of the Mining Act and
in congruence with its Sec. 115 (i.e., Repealing and
Amending Clause), the power to impose measures
against violations of environmental policies by
mining operators is now vested on the mines
regional director. Be that as it may, we are
constrained to enunciate that the PAB had no
authority to issue the challenged Order dated 23
April 1997. More so, respondent PAB as petitioner
argued and We note, had remained perplexingly
silent on the matter for almost six (6) years from July
1991 when MMC ceased to make its deposits up to
April 1997 when respondent PAB precipitately issued
the Order requiring MMC to pay its arrears in
deposits to the ETF. And PAB, apparently oblivious to
MMC’s economic quandary had issued said
Order ex-parte without hearing or notice.
xxx
As a general rule, the adjudication of pollution cases
pertains to the Pollution Adjudication Board (PAB),
except in cases where the special law, expressly or
impliedly, provides for another forum, as in the
instant petition.
Thus under Republic Act No. 7942 and its
implementing rules and regulations, the mines
regional director, in consultation with
the Environmental Management Bureau (italics
ours), is specifically mandated to carry out and make
effective the declared national policy that the State
shall promote the rational exploration, development,
utilization and conservation of all mineral resources
in public and private lands within the territory and
exclusive economic zone of the Republic of the
Philippines, through the combined efforts of
government and the private sector in order to
enhance national growth and protect the rights of
affected communities. (Sec. 2, R.A. 7942).
Under this expansive authority, the Mines Regional
Director, by virtue of this special law, has the
primary responsibility to protect the communities
surrounding a mining site from the deleterious
effects of pollutants emanating from the dumping of
tailing wastes from the surrounding areas. Thus, in
the exercise of its express powers under this special
law, the authority of the Mines Regional Director to
impose appropriate protective and/or preventive
measures with respect to pollution cases within
mining operations is perforce, implied. Otherwise,
the special law granting this authority may well be
relegated to a mere paper tiger – talking protection
but allowing pollution.
It bears mention that the Pollution Adjudication
Board has the power to issue an ex-parte order
when there is prima facie evidence of an
establishment exceeding the allowable standards set
by the anti-pollution laws of the country. (Pollution
Adjudication Board v. Court of Appeals, et al., 195
SCRA 112). However, with the passage of R.A. 7942,
insofar as the regulation, monitoring and
enforcement of anti-pollution laws are concerned
with respect to mining establishments, the Mines
Regional Director has a broad grant of power and
authority. Clearly, pollution-related issues in mining
operations are addressed to the Mines Regional
Director, not the Pollution Adjudication Board.
This being the case, the questioned Order dated 23
April 1997 requiring MMC to pay its arrears in
deposits was beyond the power and authority of the
Pollution Adjudication Board to issue and as such,
petitioner may seek appropriate injunctive relief
from the court. Thus, certiorari lies against public
respondent PAB."16
The Court of Appeals likewise ruled that the
obligation of MMC to contribute to the ETF of the
CBRP ceased inasmuch as the latter discontinued
dumping tailings into the Bay and the actual funds in
the ETF are sufficient to rehabilitate the Bay. It
ratiocinated thus:
"In the instant case, it is of record that petitioner
MMC undertakes its obligation to provide for the
rehabilitation of the Bay waters. This obligation,
through its monetary contribution to the ETF, is
however anchored on its continuing disposal of the
mines tailings waste into the Bay. Hence, since it
ceased its mining operations in the affected area as
of July 1991 and had not been discharging any
tailings wastes since then, its consequent duty to
rehabilitate the polluted waters, if any, no longer
exists.
xxx
Be that as it may, this Court observes that out of the
approximate sum of thirty-two (32) million pesos
contributed by the petitioner to the ETF there is
admittedly an existing estimated balance of fourteen
(14) million pesos in the Fund. For its part, petitioner
does not renege on its obligation to rehabilitate and
in fact undertakes to continue the rehabilitation
process until its completion within two (2) years time
and which would only cost six (6) million pesos. Thus,
as petitioner convincingly argued and which
respondent unsatisfactorily rebuked, the existing
fourteen (14) million pesos in the ETF is more than
enough to complete the rehabilitation project. (TSN,
Hearing dated 15 September 1997, at pp. 56 to 62,
Rollo).
xxx. Without much ado, the Court concurs with the
finding that to demand a daily deposit of thirty
thousand (P30, 000.00) pesos even if the root of the
obligation, that is, the dumping of tailings waste, had
ceased to exist, is indubitably of a herculean and
onerous burden on the part of petitioner amounting
to a deprivation of its property and a denial of its
right to due process."17
Unsatisfied, the OSG argues that the Philippine
Mining Act of 1995 did not amend or repeal the
provisions of Republic Act No. 3931, as amended by
Presidential Decree No. 984 (otherwise known as the
National Pollution Control Decree of 1976); that the
Mines Regional Director has no power over areas
outside mining installations and over areas which are
not part of the mining or quarrying operations such
as Calancan Bay; that the powers of the Mines
Regional Director cannot be exercised to the
exclusion of other government agencies; that the
jurisdiction of a Mines Regional Director with respect
to anti-pollution laws is limited to practices
committed within the confines of a mining or
quarrying installation; that the dumping of mine
tailings into Calancan Bay occurred long before the
effectivity of the Philippine Mining Act and that
MMC cannot hide under cover of this new law. The
OSG further argues that the portion of the Order of
May 13, 1988, setting the period of time within
which MMC shall pay P30,000.00 per day, which is
during the efficacy of the restraining order was never
questioned or appealed by MMC. Finally, the OSG
argues that PAB did not violate MMC’s right to due
process by the issuance of the Order dated April 23,
1988 without notice and hearing as it was simply
requiring MMC to comply with an obligation in an
Order which has long become final and executory.
In the context of the established facts, the issue that
actually emerges is: Has the PAB under RA 3931 as
amended by PD 984 (National Pollution Control
Decree of 1976) been divested of its authority to try
and hear pollution cases connected with mining
operations by virtue of the subsequent enactment of
RA 7942 (Philippine Mining Act of 1995)? As
mentioned earlier, the PAB took cognizance and
ruled on the letter-complaint (for violation of PD 984
and its implementing rules and regulations) filed
against MMC by Marinduque Mayor Wilfredo Red. In
the subject Order dated April 23, 1997, the PAB
ruled that MMC should pay its arrears in deposits to
the ETF of the CBRP computed from the day it
stopped dumping and paying on July 1, 1991 up to
the lifting of the Order of the Office of the President
dated May 13, 1988 on February 5, 1993.
The answer is in the negative. We agree with the
Solicitor General that the Court of Appeals
committed reversible error in ruling that the PAB had
no authority to issue the Order dated April 23, 1997.
Republic Act No. 3931 (An Act Creating The National
Water And Air Pollution Control Commission) was
passed in June 18, 1964 to maintain reasonable
standards of purity for the waters and air of the
country with their utilization for domestic,
agricultural, industrial and other legitimate
purposes. Said law was revised in 1976 by
Presidential Decree No. 984 (Providing For The
Revision Of Republic Act No. 3931, Commonly
Known As The Pollution Control Law, And For Other
Purposes) to strengthen the National Pollution
Control Commission to best protect the people from
the growing menace of environmental pollution.
Subsequently, Executive Order No. 192, s. 1987 (The
Reorganization Act of the DENR) was passed. The
internal structure, organization and description of
the functions of the new DENR, particularly the
Mines and Geosciences Bureau, reveals no provision
pertaining to the resolution of cases involving
violations of the pollution laws.18 The Mines and Geo-
Sciences Bureau was created under the said EO 192
to absorb the functions of the abolished Bureau of
Mines and Geo-Sciences, Mineral Reservations
Development Board and the Gold Mining Industry
Development Board to, among others, recommend
policies, regulations and programs pertaining to
mineral resources development; assist in the
monitoring and evaluation of the Bureau’s programs
and projects; and to develop and promulgate
standards and operating procedures on mineral
resources development.19
On the other hand, the PAB was created and granted
under the same EO 192 broad powers to adjudicate
pollution cases in general. Thus,
SEC. 19. Pollution Adjudication Board. – There is
hereby created a Pollution Adjudication Board under
the Office of the Secretary. The Board shall be
composed of the Secretary as Chairman, two (2)
Undersecretaries as may be designated by the
Secretary, the Director of Environmental
management, and three (3) others to be designated
by the Secretary as members. The Board shall
assume the powers and functions of the
Commission/Commissioners of the National
Pollution Control Commission with respect to the
adjudication of pollution cases under Republic Act
3931 and Presidential Decree 984, particularly with
respect to Section 6 letters e, f, g, j, k, and p of P.D.
984. The Environmental Management Bureau shall
serve as the Secretariat of the Board. These powers
and functions may be delegated to the regional
offices of the Department in accordance with rules
and regulations to be promulgated by the Board.20
Section 6 letters e, f, g, j, k, and p of PD 984 referred
to above are quoted as follows:
SEC. 6. Powers and Functions. The Commission shall
have the following powers and functions:
(e) Issue orders or decision to compel
compliance with the provisions of this
Decree and its implementing rules and
regulations only after proper notice and
hearing.
(f) Make, alter or modify orders requiring
the discontinuance of pollution specifying
the conditions and the time within which
such discontinuance must be accomplished.
(g) Issue, renew, or deny permits, under
such conditions as it may determine to be
reasonable, for the prevention and
abatement of pollution, for the discharge of
sewage, industrial waste, or for the
installation or operation of sewage works
and industrial disposal system or parts
thereof: Provided, however, That the
 Commission, by rules and regulations, may
require subdivisions, condominium,
hospitals, public buildings and other similar
human settlements to put up appropriate
central sewerage system and sewage
treatment works, except that no permits
shall be required to any sewage works or
changes to or extensions of existing works
that discharge only domestic or sanitary
wastes from a singles residential building
provided with septic tanks or their
equivalent. The Commission may impose
reasonable fees and charges for the
issuance or renewal of all permits required
herein.
(h)
(i)
(j) Serve as arbitrator for the determination
of reparations, or restitution of the
damages and losses resulting from
pollution.
(k) Deputize in writing or request assistance
of appropriate government agencies or
instrumentalities for the purpose of
enforcing this Decree and its implementing
rules and regulations and the orders and
decisions of the Commission.
(l)
(m)
(n)
(o)
(p) Exercise such powers and perform such
other functions as may be necessary to
carry out its duties and responsibilities
under this Decree.
Section 7(a) of P.D. No. 984 further provides in part:
"Sec. 7(a) Public Hearing. – Public hearing shall be
conducted by the Commissioner, Deputy
Commissioner or any senior official duly designated
by the Commissioner prior to issuance or
promulgation of any order or decision by the
Commissioner requiring the discontinuance of
discharge of sewage, industrial wastes and other
wastes into the water, air or land resources of the
Philippines as provided in the Decree: provided, that
whenever the Commission finds a prima facie
evidence that the discharged sewage or wastes are
of immediate threat to life, public health, safety or
Welfare, or to animal or plant life, or exceeds the
allowable standards set by the Commission, the
Commissioner may issue and ex-parte order
directing the discontinuance of the same or the
temporary suspension or cessation of operation of
the establishment or person generating such sewage
or wastes without the necessity of a prior public
hearing. x x x . (underscoring supplied).
The ruling of the Court of Appeals that the PAB has
been divested of authority to act on pollution-
related matters in mining operations is anchored on
the following provisions of RA 7942 (Philippine
Mining Act of 1995):
SEC. 67. Power to Issue Orders. – The mines regional
director shall, in consultation with the Environmental
Management Bureau, forthwith or within such time
as specified in his order, require the contractor to
remedy any practice connected with mining or
quarrying operations, which is not in accordance
with safety and anti-pollution laws and regulations.
In case of imminent danger to life or property, the
mines regional director may summarily suspend the
mining or quarrying operations until the danger is
removed, or appropriate measures are taken by the
contractor or permittee.
And
SEC. 115. Repealing and Amending Clause. – All laws,
executive orders, presidential decrees, rules and
regulations, or parts thereof which are inconsistent
with any of the provisions of this Act are hereby
repealed or amended accordingly.
The other provisions in Chapter XI on Safety and
Environmental Protection found in RA 7942 promote
the safe and sanitary upkeep of mining areas to
achieve waste-free and efficient mine development
with particular concern for the physical and social
rehabilitation of areas and communities affected by
mining activities21 , without however, arrogating unto
the mines regional director any adjudicative
responsibility.
From a careful reading of the foregoing provisions of
law, we hold that the provisions of RA 7942 do not
necessarily repeal RA 3931, as amended by PD 984
and EO 192. RA 7942 does not contain any provision
which categorically and expressly repeals the
provisions of the Pollution Control Law. Neither
could there be an implied repeal. It is well-settled
that repeals of laws by implication are not favored
and that courts must generally assume their
congruent application. Thus, it has been held:
"The two laws must be absolutely incompatible, and
a clear finding thereof must surface, before the
inference of implied repeal may be drawn. The rule
is expressed in the maxim, interpretare et
concordare leqibus est optimus interpretendi, i.e.,
every statute must be so interpreted and brought
into accord with other laws aas to form a uniform
system of jurisprudence. The fundament is that the
legislature should be presumed to have known the
existing laws on the subject and not have enacted
conflicting statutes. Hence, all doubts must be
resolved against any implied repeal, and all efforts
should be exerted in order to harmonize and give
effect to all laws on the subject."22
There is no irreconcilable conflict between the two
laws. Section 19 of EO 192 vested the PAB with the
specific power to adjudicate pollution cases in
general. Sec. 2, par. (a) of PD 984 defines the term
"pollution" as referring to any alteration of the
physical, chemical and biological properties of any
water, air and/or land resources of the Philippines ,
or any discharge thereto of any liquid, gaseous or
solid wastes as will or is likely to create or to render
such water, air and land resources harmful,
detrimental or injurious to public health, safety or
welfare or which will adversely affect their utilization
for domestic, commercial, industrial, agricultural,
recreational or other legitimate purposes.
On the other hand, the authority of the mines
regional director is complementary to that of the
PAB. Section 66 of RA 7942 gives the mines regional
director exclusive jurisdiction over the safety
inspection of all installations, surface or
underground in mining operations. Section 67
thereof vests upon the regional director power to
issue orders requiring a contractor to remedy any
practice connected with mining or quarrying
operations which is not in accordance with safety
and anti-pollution laws and regulations; and to
summarily suspend mining or quarrying operations
in case of imminent danger to life or property. The
law likewise requires every contractor to undertake
an environmental protection and enhancement
program which shall be incorporated in the work
program which the contractor shall submit as an
accompanying document to the application for a
mineral agreement or permit. In addition, an
environmental clearance certificate is required based
on an environment impact assessment. The law also
requires contractors and permittees to rehabilitate
the mined-out areas, and set up a mine
rehabilitation fund. Significantly, the law allows and
encourages people’s organizations and non-
governmental organizations to participate in
ensuring that contractors/permittees shall observe
all the requirements of environmental protection.
From the foregoing, it readily appears that the
power of the mines regional director does not
foreclose PAB’s authority to determine and act on
complaints filed before it. The power granted to the
mines regional director to issue orders requiring the
contractor to remedy any practice connected with
mining or quarrying operations or to summarily
suspend the same in cases of violation of pollution
laws is for purposes of effectively regulating and
monitoring activities within mining operations and
installations pursuant to the environmental
protection and enhancement program undertaken
by contractors and permittees in procuring their
mining permit. While the mines regional director has
express administrative and regulatory powers over
mining operations and installations, it has no
adjudicative powers over complaints for violation of
pollution control statutes and regulations.
True, in Laguna Lake Development Authority
vs. Court of Appeals,23 this Court held that
adjudication of pollution cases generally pertains to
the Pollution Adjudication Board (PAB) except where
the special law provides for another forum.
However, contrary to the ruling of the Court of
Appeals, RA 7942 does not provide for another
forum inasmuch as RA 7942 does not vest quasi-
judicial powers in the Mines Regional Director. The
authority is vested and remains with the PAB.
Neither was such authority conferred upon the Panel
of Arbitrators and the Mines Adjudication Board
which were created by the said law. The provisions
creating the Panel of Arbitrators for the settlement
of conflicts refers to disputes involving rights to
mining areas, mineral agreements or permits and
those involving surface owners, occupants and
claim-holders/concessionaires.24 The scope of
authority of the Panel of Arbitrators and the Mines
Adjudication Board conferred by RA 7942 clearly
exclude adjudicative responsibility over pollution
cases. Nowhere is there vested any authority to
adjudicate cases involving violations of pollution
laws and regulations in general.
Thus, there is no genuine conflict between RA 7942
and RA 3931 as amended by PD 984 that precludes
their co-existence. Moreover, it has to be conceded
that there was no intent on the part of the
legislature to repeal the said law. There is nothing in
the sponsorship speech25 of the law’s proponent,
Representative Renato Yap, and the deliberations
that followed thereafter, to indicate a legislative
intent to repeal the pollution law. Instead, it appears
that the legislature intended to maximize the
exploration, development and utilization of the
country’s mineral resources to contribute to the
achievement of national economic and social
development with due regard to the social and
environmental cost implications relative thereto. The
law intends to increase the productivity of the
country’s mineral resources while at the same time
assuring its sustainability through judicious use and
systematic rehabilitation. Henceforth, the
Department of Environment and Natural Resources
as the primary government agency responsible for
the conservation, management, development, and
proper use of the State’s mineral resources, through
its Secretary, has the authority to enter into mineral
agreements on behalf of the Government upon the
recommendation of the Director, and to promulgate
such rules and regulations as may be necessary to
carry out the provisions of RA 7942.26 The PAB and
the Mines Regional Director, with their
complementary functions and through their
combined efforts, serve to accomplish the mandate
of RA 3931 (National Pollution Control Decree of
1976) as amended by PD 984 and EO 192 and that of
RA 7942 (Philippine Mining Act of 1995).
That matter settled, we now go to the issue of
whether the appellate court erred in ruling that
there is no basis for further payments by MMC to
the Ecology Trust Fund of the Calancan Bay
Rehabilitation Project considering that MMC
"convincingly argued and which respondent
unsatisfactorily rebuked, the existing fourteen (14)
million pesos in the ETF is more than enough to
complete the rehabilitation project." Indeed, the
records reveal that witness for PAB, Mr. Edel
Genato, who is the Technical Resource person of the
PAB for the project admitted that the funds in the
ETF amounting to about Fourteen Million Pesos are
more than sufficient to cover the costs of
rehabilitation. Hereunder are excerpts from the
transcript of stenographic notes taken during the
hearing held on September 15, 1997:
ATTY. HERNANDEZ:27
I would like your Honor, if the court will allow, our
witness from the EBRB Your Honor would attest to
that . . .
JUSTICE JACINTO:
Is it not being taken from the 14 million?
ATTY. HERNANDEZ:
Yes, Your Honor.
JUSTICE RASUL:
What is his role?
ATTY. HERNANDEZ:
He is our Technical Resource person Your Honor, of
the project.
JUSTICE RASUL:
In other words, he has participated in the . .
(inaudible)?
ATTY. HERNANDEZ:
Yes, Your Honor.
JUSTICE RASUL:
Do you agree with him? MR. EDEL GENATO:

MR. EDEL GENATO: Well Your Honor, I cannot comment on the amount
Your Honor.
Yes, Your Honor, that the Calancan rehabilitation
program is being funded by Marcopper through the JUSTICE RASUL:
Ecology Trust Fund.
You have already made your comment, but you
JUSTICE RASUL: received some signal from your lawyer.

Will the construction be finished in two years time? ATTY. HERNANDEZ:

MR. EDEL GENATO: Your Honor . . .

Presently, under the Steering Committee of the MR. EDEL GENATO:

Calancan Bay Rehabilitation, there is another phase
that is being proposed. Actually the two years time No, no Your Honor. . .
will definitely cover the other phase of the . .
(inaudible) JUSTICE RASUL:

JUSTICE RASUL: My question is, do you agree with him that the 14
million fund will be enough to sustain the
Never mind that. Will the amount be sufficient to the construction up to the end?
end of the construction?
MR. EDEL GENATO:
MR. EDEL GENATO:
Two years?
Yes, Sir.
JUSTICE RASUL:
JUSTICE RASUL:
Yes.
Enough?
MR. EDEL GENATO:
MR. EDEL GENATO:
Your Honor. . .
Yes, Sir.
JUSTICE AMIN:
JUSTICE RASUL:
Categorical answer.
There is no more need for collecting the 30 thousand
a day? . . . Do not . . . I will hold you for contempt . . . JUSTICE RASUL:

ATTY. HERNANDEZ: You just answer, is it enough, in your own honest

way, on your honor?
I’m sorry Your Honor.
MR. EDEL GENATO:
JUSTICE RASUL:
I think so Your Honor.28
Again.
We must sustain the appellate court on this point on
account of the testimony of Mr. Edel
Genato.1âwphi1 Further, we note that the Office of
the President never objected nor ruled on the
manifestation dated July 9, 1991 filed by MMC that it
would stop paying since it already ceased dumping
mine tailings into the bay. Still further, the order of
the OP directing MMC to rehabilitate at a cost of
P30,000.00 a day "during the efficacy of the
restraining order" had become functus officio  since
MMC voluntarily stopped dumping mine tailings into
the bay.
To sum up, PAB has jurisdiction to act and rule on
the letter-complaint of Mayor Wilfredo Red of
Marinduque for violation of PD 984 and its
implementing rules and regulations which
jurisdiction was not lost upon the passage of RA
7942 (the Philippine Mining Act of 1995).
Nevertheless, MMC must be declared not to have
arrears in deposits as admittedly, the ETF already has
more than sufficient funds to undertake the
rehabilitation of Calancan Bay.
WHEREFORE, the petition is hereby partially
GRANTED. The assailed Decision is REVERSED insofar
as the jurisdiction of the PAB to act on the complaint
is concerned; but AFFIRMED insofar as Marcopper
Mining Corporation has no arrears in deposits with
the Ecology Trust Fund of the Calancan Bay
Rehabilitation Project.
SO ORDERED.
G.R. No. 175368               April 11, 2013
LEAGUE OF PROVINCES OF THE
PHILIPPINES, Petitioner,
vs.
DEPARTMENT OF ENVIRONMENT and NATURAL
RESOURCES and HON. ANGELO T. REYES, in his
capacity as Secretary of DENR, Respondents.
DECISION
PERALTA, J.:
This is a petition for certiorari, prohibition and
mandamus,1 praying that this Court order the
following: ( 1) declare as unconstitutional Section
17(b)(3)(iii) of Republic Act (R.A.) No. 7160,
otherwise known as The Local Government Code of
1991 and Section 24 of Republic Act (R.A.) No. 7076,
otherwise known as the People's Small-Scale Mining
Act of 1991; (2) prohibit and bar respondents from
exercising control over provinces; and (3) declare as
illegal the respondent Secretary of the Department
of Energy and Natural Resources' (DENR)
nullification, voiding and cancellation of the Small-
Scale Mining permits issued by the Provincial
Governor of Bulacan.
The Facts are as follows:
On March 28, 1996, Golden Falcon Mineral
Exploration Corporation (Golden Falcon) filed with
the DENR Mines and Geosciences Bureau Regional
Office No. III (MGB R-III) an Application for Financial
and Technical Assistance Agreement (FTAA) covering
an area of 61,136 hectares situated in the
Municipalities of San Miguel, San Ildefonso,
Norzagaray and San Jose del Monte, Bulacan.2
On April 29, 1998, the MGB R-III issued an Order
denying Golden Falcon's Application for Financial
and Technical Assistance Agreement for failure to
secure area clearances from the Forest Management
Sector and Lands Management Sector of the DENR
Regional Office No. III.3
On November 11, 1998, Golden Falcon filed an
appeal with the DENR Mines and Geosciences
Bureau Central Office (MGB-Central Office), and
sought reconsideration of the Order dated April 29,
1998.4
On February 10, 2004, while Golden Falcon's appeal
was pending, Eduardo D. Mercado, Benedicto S.
Cruz, Gerardo R. Cruz and Liberato Sembrano filed
with the Provincial Environment and Natural
Resources Office (PENRO) of Bulacan their respective
Applications for Quarry Permit (AQP), which covered
the same area subject of Golden Falcon's Application
for Financial and Technical Assistance Agreement. 5
On July 16, 2004, the MGB-Central Office issued an
Order denying Golden Falcon's appeal and affirming
the MGB R-III's Order dated April 29, 1998.
On September 13, 2004, Atlantic Mines and Trading
Corporation (AMTC) filed with the PENRO of Bulacan
an Application for Exploration Permit (AEP) covering
5,281 hectares of the area covered by Golden
Falcon's Application for Financial and Technical
Assistance Agreement.6
On October 19, 2004, DENR-MGB Director Horacio C.
Ramos, in response to MGB R-III Director Arnulfo V.
Cabantog's memorandum query dated September 8,
2004, categorically stated that the MGB-Central
Office's Order dated July 16, 2004 became final on
August 11, 2004, fifteen (15) days after Golden
Falcon received the said Order, per the Certification
dated October 8, 2004 issued by the Postmaster II of
the Philippine Postal Corporation of Cainta, Rizal. 7
Through letters dated May 5 and May 10, 2005,
AMTC notified the PENRO of Bulacan and the MGB
R-III Director, respectively, that the subject
Applications for Quarry Permit fell within its
(AMTC's) existing valid and prior Application for
Exploration Permit, and the the former area of
Golden Falcon was open to mining location only on
August 11, 2004 per the Memorandum dated
October 19, 2004 of the MGB Director, Central
Office.8
On June 24, 2005, Ricardo Medina, Jr., PENRO of
Bulacan, indorsed AMTC's letter to the Provincial
Legal Officer, Atty. Eugenio F. Resurreccion, for his
legal opinion on which date of denial of Golden
Falcon's application/appeal – April 29, 1998 or July
16, 2004 − is to be considered in the deliberation of
the Provincial Mining Regulatory Board (PMRB) for
the purpose of determining when the land subject of
the Applications for Quarry Permit could be
considered open for application.
On June 28, 2005, Provincial Legal Officer Eugenio
Resurreccion issued a legal opinion stating that the
Order dated July 16, 2004 of the MGB-Central Office
was a mere reaffirmation of the Order dated April
29, 1998 of the MGB R-III; hence, the Order dated
April 29, 1998 should be the reckoning period of the
denial of the application of Golden Falcon.
On July 22, 2005, AMTC filed with the PMRB of
Bulacan a formal protest against the aforesaid
Applications for Quarry Permit on the ground that
the subject area was already covered by its
Application for Exploration Permit. 9
On August 8, 2005, MGB R-III Director Cabantog,
who was the concurrent Chairman of the PMRB,
endorsed to the Provincial Governor of Bulacan,
Governor Josefina M. dela Cruz, the aforesaid
Applications for Quarry Permit that had apparently
been converted to Applications for Small-Scale
Mining Permit of Eduardo D. Mercado, Benedicto S.
Cruz, Gerardo R. Cruz and Lucila S. Valdez (formerly
Liberato Sembrano).10
On August 9, 2005, the PENRO of Bulacan issued four
memoranda recommending to Governor Dela Cruz
the approval of the aforesaid Applications for Small-
Scale Mining Permit.11
On August 10, 2005, Governor Dela Cruz issued the
corresponding Small-Scale Mining Permits in favor of
Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R.
Cruz and Lucila S. Valdez.12
Subsequently, AMTC appealed to respondent DENR
Secretary the grant of the aforesaid Small-Scale
Mining Permits, arguing that: (1) The PMRB of
Bulacan erred in giving due course to the
Applications for Small-Scale Mining Permit without
first resolving its formal protest; (2) The areas
covered by the Small-Scale Mining Permits fall within
the area covered by AMTC's valid prior Application
for Exploration Permit; (3) The Applications for
Quarry Permit were illegally converted to
Applications for Small-Scale Mining Permit; (4)
DENR-MGB Director Horacio C. Ramos' ruling that
the subject areas became open for mining location
only on August 11, 2004 was controlling; (5) The
Small-Scale Mining Permits were null and void
because they covered areas that were never
declared People's Small-Scale Mining Program sites
as mandated by Section 4 of the People's Small-Scale
Mining Act of 1991; and (6) Iron ore is not
considered as one of the quarry resources, as
defined by Section 43 of the Philippine Mining Act of
1995, which could be subjects of an Application for
Quarry Permit.13
On August 8, 2006, respondent DENR Secretary
rendered a Decision14 in favor of AMTC. The DENR
Secretary agreed with MGB Director Horacio C.
Ramos that the area was open to mining location
only on August 11, 2004, fifteen (15) days after the
receipt by Golden Falcon on July 27, 2004 of a copy
of the MGB-Central Office's Order dated July 16,
2004, which Order denied Golden Falcon's appeal.
According to the DENR Secretary, the filing by
Golden Falcon of the letter-appeal suspended the
finality of the Order of denial issued on April 29,
1998 by the Regional Director until the resolution of
the appeal on July 16, 2004 by the MGB-Central
Office. He stated that the Applications for Quarry
Permit were filed on February 10, 2004 when the
area was still closed to mining location; hence, the
Small-Scale Mining Permits granted by the PMRB and
the Governor were null and void. On the other hand,
the DENR Secretary declared that AMTC filed its
Application for Exploration Permit when the area
was already open to other mining applicants; thus,
AMTC’s Application for Exploration Permit was valid.
Moreover, the DENR Secretary held that the
questioned Small-Scale Mining Permits were issued
in violation of Section 4 of R.A. No. 7076 and beyond
the authority of the Provincial Governor pursuant to
Section 43 of R.A. No. 7942, because the area was
never proclaimed to be under the People's Small-
Scale Mining Program. Further, the DENR Secretary
stated that iron ore mineral is not considered among
the quarry resources.
The dispositive portion of the DENR Secretary’s
Decision reads:
WHEREFORE, the Application for Exploration Permit,
AEP-III-02-04 of Atlantic Mines and Trading Corp. is
declared valid and may now be given due course.
The Small-Scale Mining Permits, SSMP-B-002-05 of
Gerardo Cruz, SSMP-B-003-05 of Eduardo D.
Mercado, SSMP-B-004-05 of Benedicto S. Cruz and
SSMP-B-005-05 of Lucila S. Valdez are declared NULL
AND VOID. Consequently, the said permits are
hereby CANCELLED.15
Hence, petitioner League of Provinces filed this
petition.
Petitioner is a duly organized league of local
governments incorporated under R.A. No. 7160.
Petitioner declares that it is composed of 81
provincial governments, including the Province of
Bulacan. It states that this is not an action of one
province alone, but the collective action of all
provinces through the League, as a favorable ruling
will not only benefit one province, but all provinces
and all local governments.
Petitioner raises these issues:
I
WHETHER OR NOT SECTION 17(B)(3)(III) OF THE,
1991 LOCAL GOVERNMENT CODE AND SECTION 24
OF THE PEOPLE'S SMALL-SCALE MINING ACT OF 1991
ARE UNCONSTITUTIONAL FOR PROVIDING FOR
EXECUTIVE CONTROL AND INFRINGING UPON THE
LOCAL AUTONOMY OF PROVINCES.
II
WHETHER OR NOT THE ACT OF RESPONDENT [DENR]
IN NULLIFYING, VOIDING AND CANCELLING THE
SMALL-SCALE MINING PERMITS AMOUNTS TO
EXECUTIVE CONTROL, NOT MERELY SUPERVISION
AND USURPS THE DEVOLVED POWERS OF ALL
PROVINCES.16
To start, the Court finds that petitioner has legal
standing to file this petition because it is tasked
under Section 504 of the Local Government Code of
1991 to promote local autonomy at the provincial
level;17 adopt measures for the promotion of the
welfare of all provinces and its officials and
employees;18 and exercise such other powers and
perform such other duties and functions as the
league may prescribe for the welfare of the
provinces.19
Before this Court determines the validity of an act of
a co-equal and coordinate branch of the
Government, it bears emphasis that ingrained in our
jurisprudence is the time-honored principle that a
statute is presumed to be valid.20 This presumption is
rooted in the doctrine of separation of powers which
enjoins upon the three coordinate departments of
the Government a becoming courtesy for each
other's acts.21 This Court, however, may declare a
law, or portions thereof, unconstitutional where a
petitioner has shown a clear and unequivocal breach
of the Constitution,22 leaving no doubt or hesitation
in the mind of the Court.23
In this case, petitioner admits that respondent DENR
Secretary had the authority to nullify the Small-Scale
Mining Permits issued by the Provincial Governor of
Bulacan, as the DENR Secretary has control over the
PMRB, and the implementation of the Small-Scale
Mining Program is subject to control by respondent
DENR.
Control of the DENR/DENR Secretary over small-
scale mining in the provinces is granted by three
statutes: (1) R.A. No. 7061 or The Local Government
Code of 1991; (2) R.A. No. 7076 or the People's Small
Scale Mining Act of 1991; and (3) R.A. No. 7942,
otherwise known as the Philippine Mining Act of
1995.24 The pertinent provisions of law sought to be
declared as unconstitutional by petitioner are as
follows:
R.A. No. 7061 (The Local Government Code of 1991)
SEC. 17. Basic Services and Facilities. - (a) Local
government units shall endeavor to be self-reliant
and shall continue exercising the powers and
discharging the duties and functions currently vested
upon them. They shall also discharge the functions
and responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local
government units shall likewise exercise such other
powers and discharge such other functions and
responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the
basic services and facilities enumerated herein.
(b) Such basic services and facilities include, but are
not limited to, the following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to
supervision, control and review of the DENR,
enforcement of forestry laws limited to community-
based forestry projects, pollution control law, small-
scale mining law, and other laws on the protection of
the environment; and mini-hydro electric projects
for local purposes; x x x25
R.A. No. 7076 (People's Small-Scale Mining Act of
1991)
Sec. 24. Provincial/City Mining Regulatory Board. -
There is hereby created under the direct supervision
and control of the Secretary a provincial/city mining
regulatory board, herein called the Board, which
shall be the implementing agency of the
Department, and shall exercise the following powers
and functions, subject to review by the Secretary:
(a) Declare and segregate existing gold-rush
areas for small-scale mining;
(b) Reserve future gold and other mining
areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and
regulations related to small-scale mining;
(e) Settle disputes, conflicts or litigations
over conflicting claims within a people’s
small-scale mining area, an area that is
declared a small-mining; and
(f) Perform such other functions as may be
necessary to achieve the goals and
objectives of this Act.26
Petitioner contends that the aforecited laws and
DENR Administrative Order No. 9640 (the
Implementing Rules and Regulations of the
Philippine Mining Act of 1995) did not explicitly
confer upon respondents DENR and the DENR
Secretary the power to reverse, abrogate, nullify,
void, or cancel the permits issued by the Provincial
Governor or small-scale mining contracts entered
into by the PMRB. The statutes are also silent as to
the power of respondent DENR Secretary to
substitute his own judgment over that of the
Provincial Governor and the PMRB.
Moreover, petitioner contends that Section 17 (b)(3)
(iii) of the Local Government Code of 1991 and
Section 24 of R.A. No. 7076, which confer upon
respondents DENR and the DENR Secretary the
power of control are unconstitutional, as the
Constitution states that the President (and Executive
Departments and her alter-egos) has the power of
supervision only, not control, over acts of the local
government units, and grants the local government
units autonomy, thus:
The 1987 Constitution:
Article X, Section 4. The President of the Philippines
shall exercise general supervision over local
governments. Provinces with respect to component
cities and municipalities, and cities and
municipalities with respect to component barangays,
shall ensure that the acts of their component units
are within the scope of their prescribed powers and
functions.27
Petitioner contends that the policy in the above-
cited constitutional provision is mirrored in the Local
Government Code, which states:
SEC. 25. National Supervision over Local Government
Units. - (a) Consistent with the basic policy on local
autonomy, the President shall exercise general
supervision over local government units to ensure
that their acts are within the scope of their
prescribed powers and functions.
The President shall exercise supervisory authority
directly over provinces, highly urbanized cities, and
independent component cities; through the province
with respect to component cities and municipalities;
and through the city and municipality with respect to
barangays.28
Petitioner contends that the foregoing provisions of
the Constitution and the Local Government Code of
1991 show that the relationship between the
President and the Provinces or respondent DENR, as
the alter ego of the President, and the Province of
Bulacan is one of executive supervision, not one of
executive control. The term "control" has been
defined as the power of an officer to alter or modify
or set aside what a subordinate officer had done in
the performance of his/her duties and to substitute
the judgment of the former for the latter, while the
term "supervision" is the power of a superior officer
to see to it that lower officers perform their function
in accordance with law.29
Petitioner argues that respondent DENR Secretary
went beyond mere executive supervision and
exercised control when he nullified the small-scale
mining permits granted by the Provincial Governor
of Bulacan, as the former substituted the judgment
of the latter.
Petitioner asserts that what is involved here is a
devolved power.
Under the Local Government Code of 1991, the
power to regulate small-scale mining has been
devolved to all provinces. In the exercise of devolved
powers, departmental approval is not necessary. 30
Petitioner contends that if the provisions in Section
24 of R.A. No. 7076 and Section 17 (b)(3)(iii) of the
Local Government Code of 1991 granting the power
of control to the DENR/DENR Secretary are not
nullified, nothing would stop the DENR Secretary
from nullifying, voiding and canceling the small-scale
mining permits that have been issued by a Provincial
Governor.
Petitioner submits that the statutory grant of power
of control to respondents is unconstitutional, as the
Constitution only allows supervision over local
governments and proscribes control by the executive
departments.
In its Comment, respondents, represented by the
Office of the Solicitor General, stated that contrary
to the assertion of petitioner, the power to
implement the small-scale mining law is expressly
limited in Section 17 (b)(3)(iii) of the Local
Government Code, which provides that it must be
carried out "pursuant to national policies and subject
to supervision, control and review of the DENR."
Moreover, the fact that the power to implement the
small-scale mining law has not been fully devolved to
provinces is further amplified by Section 4 of the
People's Small-Scale Mining Act of 1991, which
provides, among others, that the People's Small-
Scale Mining Program shall be implemented by the
DENR Secretary.
The petition lacks merit.
Paragraph 1 of Section 2, Article XII (National
Economy and Patrimony) of the
Constitution31 provides that "the exploration,
development and utilization of natural resources
shall be under the full control and supervision of the
State."
Moreover, paragraph 3 of Section 2, Article XII of the
Constitution provides that "the Congress may, by
law, allow small-scale utilization of natural resources
by Filipino citizens x x x."
Pursuant to Section 2, Article XII of the Constitution,
R.A. No. 7076 or the People's Small-Scale Mining Act
of 1991, was enacted, establishing under Section 4
thereof a People's Small-Scale Mining Program to be
implemented by the DENR Secretary in coordination
with other concerned government agencies.
The People's Small-Scale Mining Act of 1991 defines
"small-scale mining" as "refer[ring] to mining
activities, which rely heavily on manual labor using
simple implement and methods and do not use
explosives or heavy mining equipment." 32
It should be pointed out that the Administrative
Code of 198733 provides that the DENR is, subject to
law and higher authority, in charge of carrying out
the State's constitutional mandate, under Section 2,
Article XII of the Constitution, to control and
supervise the exploration, development, utilization
and conservation of the country's natural resources.
Hence, the enforcement of small-scale mining law in
the provinces is made subject to the supervision,
control and review of the DENR under the Local
Government Code of 1991, while the People’s Small-
Scale Mining Act of 1991 provides that the People’s
Small-Scale Mining Program is to be implemented by
the DENR Secretary in coordination with other
concerned local government agencies.
Indeed, Section 4, Article X (Local Government) of
the Constitution states that "[t]he President of the
Philippines shall exercise general supervision over
local governments," and Section 25 of the Local
Government Code reiterates the same. General
supervision by the President means no more than
seeing to it that laws are faithfully executed or that
subordinate officers act within the law. 34
The Court has clarified that the constitutional
guarantee of local autonomy in the Constitution Art.
X, Sec. 2 refers to the administrative autonomy of
local government units or, cast in more technical
language, the decentralization of government
authority.35 It does not make local governments
sovereign within the State.36 Administrative
autonomy may involve devolution of powers, but
subject to limitations like following national policies
or standards,37 and those provided by the Local
Government Code, as the structuring of local
governments and the allocation of powers,
responsibilities, and resources among the different
local government units and local officials have been
placed by the Constitution in the hands of
Congress38 under Section 3, Article X of the
Constitution.
Section 3, Article X of the Constitution mandated
Congress to "enact a local government code which
shall provide for a more responsive and accountable
local government structure instituted through a
system of decentralization with effective
mechanisms of recall, initiative, and referendum,
allocate among the different local government units
their powers, responsibilities, and resources, and
provide for the qualifications, election, appointment
and removal, term, salaries, powers and functions
and duties of local officials, and all other matters
relating to the organization and operation of the
local units."
In connection with the enforcement of the small-
scale mining law in the province, Section 17 of the
Local Government Code provides:
SEC. 17. Basic Services and Facilities. - (a) Local
government units shall endeavor to be self-reliant
and shall continue exercising the powers and
discharging the duties and functions currently vested
upon them. They shall also discharge the functions
and responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local
government units shall likewise exercise such other
powers and discharge such other functions and
responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the
basic services and facilities enumerated herein.
(b) Such basic services and facilities include, but are
not limited to, the following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to
supervision, control and review of the DENR,
enforcement of forestry laws limited to community-
based forestry projects, pollution control law, small-
scale mining law, and other laws on the protection of
the environment; and mini-hydro electric projects
for local purposes;39
Clearly, the Local Government Code did not fully
devolve the enforcement of the small-scale mining
law to the provincial government, as its enforcement
is subject to the supervision, control and review of
the DENR, which is in charge, subject to law and
higher authority, of carrying out the State's
constitutional mandate to control and supervise the
exploration, development, utilization of the
country's natural resources.40
Section 17 (b)(3)(iii) of the Local Government Code
of 1991 is in harmony with R.A. No. 7076 or the
People's Small-Scale Mining Act of 1991,41 which
established a People's Small-Scale Mining Program
to be implemented by the Secretary of the DENR,
thus:
Sec. 2. Declaration of Policy. – It is hereby declared
of the State to promote, develop, protect and
rationalize viable small-scale mining activities in
order to generate more employment opportunities
and provide an equitable sharing of the nation's
wealth and natural resources, giving due regard to
existing rights as herein provided.
xxxx
Sec. 4. People's Small-Scale Mining Program. - For
the purpose of carrying out the declared policy
provided in Section 2 hereof, there is hereby
established a People's Small-Scale Mining Program
to be implemented by the Secretary of the
Department of Environment and Natural Resources,
hereinafter called the Department, in coordination
with other concerned government agencies,
designed to achieve an orderly, systematic and
rational scheme for the small-scale development and
utilization of mineral resources in certain mineral
areas in order to address the social, economic,
technical, and environmental problems connected
with small-scale mining activities.
xxxx
Sec. 24. Provincial/City Mining Regulatory Board. –
There is hereby created under the direct supervision
and control of the Secretary a provincial/city mining
regulatory board, herein called the Board, which
shall be the implementing agency of the
Department, and shall exercise the following powers
and functions, subject to review by the Secretary:
(a) Declare and segregate existing
gold-rush areas for small-scale
mining;
(b) Reserve future gold and other
mining areas for small-scale
mining;
(c) Award contracts to small-scale
miners;
(d) Formulate and implement rules
and regulations related to small-
scale mining;
(e) Settle disputes, conflicts or
litigations over conflicting claims
within a people’s small-scale
mining area, an area that is
declared a small-mining; and
(f) Perform such other functions as
may be necessary to achieve the
goals and objectives of this Act.42
DENR Administrative Order No. 34, series of 1992,
containing the Rules and Regulations to implement
R.A. No. 7076, provides:
SEC. 21. Administrative Supervision over the People's
Small-Scale Mining Program. − The following DENR
officials shall exercise the following supervisory
functions in the implementation of the Program:
21.1 DENR Secretrary – direct
supervision and control over the
program and activities of the small-
scale miners within the people's
small-scale mining area;
21.2 Director − the Director shall:
a. Recommend the depth
or length of the tunnel or
adit taking into account
the: (1) size of
membership and
capitalization of the
cooperative; (2) size of
mineralized areas; (3)
quantity of mineral
deposits; (4) safety of
miners; and (5)
environmental impact and
other considerations;
 b. Determine the right of
small-scale miners to
existing facilities in
consultation with the
operator, claimowner,
landowner or lessor of an
affected area upon
declaration of a small-
scale mining area;
c. Recommend to the
Secretary the withdrawal
of the status of the
people's small-scale
mining area when it can
no longer be feasibly
operated on a small-scale
basis; and
d. See to it that the small-
scale mining contractors
abide by small-scale mines
safety rules and
regulations.
xxxx
SEC. 22. Provincial/City Mining Regulatory Board. −
The Provincial/City Mining Regulatory Board created
under R.A. 7076 shall exercise the following powers
and functions, subject to review by the Secretary:
22.1 Declares and segregates
existing gold rush area for small-
scale mining;
22.2 Reserves for the future,
mineralized areas/mineral lands
for people's small-scale mining;
22.3 Awards contracts to small-
scale miners’ cooperative;
22.4 Formulates and implements
rules and regulations related to
R.A. 7076;
22.5 Settles disputes, conflicts or
litigations over conflicting claims
within ninety (90) days upon filing
of protests or complaints;
Provided, That any aggrieved party
may appeal within five (5) days
from the Board's decision to the
Secretary for final resolution
otherwise the same is considered
final and executory; and
22.6 Performs such other functions
as may be necessary to achieve the
goals and objectives of R.A. 7076.
SEC. 6. Declaration of People's Small-Scale Mining
Areas. – The Board created under R.A. 7076 shall
have the authority to declare and set aside People's
Small-Scale Mining Areas in sites onshore suitable for
small-scale mining operations subject to review by
the DENR Secretary thru the Director. 43
DENR Administrative Order No. 23, otherwise known
as the Implementing Rules and Regulations of R.A.
No. 7942, otherwise known as the Philippine Mining
Act of 1995, adopted on August 15, 1995, provides
under Section 12344 thereof that small-scale mining
applications should be filed with the PMRB45 and the
corresponding permits shall be issued by the
Provincial Governor, except small-scale mining
applications within the mineral reservations.
Thereafter, DENR Administrative Order No. 96-40,
otherwise known as the Revised Implementing Rules
and Regulations of R.A. No. 7942, otherwise known
as the Philippine Mining Act of 1995, adopted on
December 19, 1996, provides that applications for
Small-Scale Mining Permits shall be filed with the
Provincial Governor/City Mayor through the
concerned Provincial/City Mining Regulatory Board
for areas outside the Mineral Reservations and with
the Director though the Bureau for areas within the
Mineral Reservations.46 Moreover, it provides that
Local Government Units shall, in coordination with
the Bureau/ Regional Offices and subject to valid and
existing mining rights, "approve applications for
small-scale mining, sand and gravel, quarry x x x and
gravel permits not exceeding five (5) hectares." 47
Petitioner contends that the Local Government Code
of 1991, R.A. No. 7076, DENR Administrative Orders
Nos. 95-23 and 96-40 granted the DENR Secretary
the broad statutory power of control, but did not
confer upon the respondents DENR and DENR
Secretary the power to reverse, abrogate, nullify,
void, cancel the permits issued by the Provincial
Governor or small-scale mining contracts entered
into by the Board.
The contention does not persuade.
The settlement of disputes over conflicting claims in
small-scale mining is provided for in Section 24 of
R.A. No. 7076, thus:
Sec. 24. Provincial/City Mining Regulatory Board. −
There is hereby created under the direct supervision
and control of the Secretary a provincial/city mining
regulatory board, herein called the Board, which
shall be the implementing agency of the
Department, and shall exercise the following powers
and functions, subject to review by the Secretary:
xxxx
(e) Settle disputes, conflicts or litigations over
conflicting claims within a people's small-scale
mining area, an area that is declared a small mining
area; x x x
Section 24, paragraph (e) of R.A. No. 7076 cited
above is reflected in Section 22, paragraph 22.5 of
the Implementing Rules and Regulations of R.A. No.
7076, to wit:
SEC. 22. Provincial/City Mining Regulatory Board. –
The Provincial/City Mining Regulatory Board created
under R.A. No. 7076 shall exercise the following
powers and functions, subject to review by the
Secretary:
xxxx
22.5 Settles disputes, conflicts or litigations over
conflicting claims within ninety (90) days upon filing
of protests or complaints; Provided, That any
aggrieved party may appeal within five (5) days from
the Board's decision to the Secretary for final
resolution otherwise the same is considered final
and executory; x x x
In this case, in accordance with Section 22,
paragraph 22.5 of the Implementing Rules and
Regulations of R.A. No. 7076, the AMTC filed on July
22, 2005 with the PMRB of Bulacan a formal protest
against the Applications for Quarry Permits of
Eduardo Mercado, Benedicto Cruz, Liberato
Sembrano (replaced by Lucila Valdez) and Gerardo
Cruz on the ground that the subject area was already
covered by its Application for Exploration
Permit.48 However, on August 8, 2005, the PMRB
issued Resolution Nos. 05-8, 05-9, 05-10 and 05-11,
resolving to submit to the Provincial Governor of
Bulacan the Applications for Small-Scale Mining
Permits of Eduardo Mercado, Benedicto Cruz, Lucila
Valdez and Gerardo Cruz for the granting/issuance of
the said permits.49 On August 10, 2005, the Provincial
Governor of Bulacan issued the Small-Scale Mining
Permits to Eduardo Mercado, Benedicto Cruz, Lucila
Valdez and Gerardo Cruz based on the legal opinion
of the Provincial Legal Officer and the Resolutions of
the PMRB of Bulacan.
Hence, AMTC filed an appeal with respondent DENR
Secretary, appealing from Letter-Resolution No. 05-
1317 and Resolution Nos. 05-08, 05-09, 05-10 and
05-11, all dated August 8, 2005, of the PMRB of
Bulacan, which resolutions gave due course and
granted, on August 10, 2005, Small-Scale Mining
Permits to Eduardo D. Mercado, Benedicto S. Cruz,
Lucila Valdez and Gerardo Cruz involving parcels of
mineral land situated at Camachin, Doña Remedios
Trinidad, Bulacan.
The PMRB of Bulacan filed its Answer, stating that it
is an administrative body, created under R.A. No.
7076, which cannot be equated with the court
wherein a full-blown hearing could be conducted,
but it is enough that the parties were given the
opportunity to present evidence. It asserted that the
questioned resolutions it issued were in accordance
with the mining laws and that the Small-Scale Mining
Permits granted were registered ahead of AMTC's
Application for Exploration Permit. Further, the
Board stated that the Governor of Bulacan had the
power to approve the Small-Scale Mining Permits
under R.A. No. 7160.
The DENR Secretary found the appeal meritorious,
and resolved these pivotal issues: (1) when is the
subject mining area open for mining location by
other applicants; and (2) who among the applicants
have valid applications.1âwphi1 The pertinent
portion of the decision of the DENR Secretary reads:
We agree with the ruling of the MGB Director that
the area is open only to mining location on August
11, 2004, fifteen (15) days after the receipt by
Golden Falcon on July 27, 2004 of a copy of the
subject Order of July 16, 2004.1âwphi1 The filing by
Golden Falcon of the letter-appeal suspended the
finality of the Order of Denial issued on April 29,
1998 by the Regional Director until the Resolution
thereof on July 16, 2004.
Although the subject AQPs/SSMPs were processed in
accordance with the procedures of the PMRB,
however, the AQPs were filed on February 10, 2004
when the area is still closed to mining location.
Consequently, the SSMPs granted by the PMRB and
the Governor are null and void making thereby AEP
No. III-02-04 of the AMTC valid, it having been filed
when the area is already open to other mining
applicants.
Records also show that the AQPs were converted
into SSMPs. These are two (2) different applications.
The questioned SSMPs were issued in violation of
Section 4 of RA 7076 and beyond the authority of the
Provincial Governor pursuant to Section 43 of RA
7942 because the area was never proclaimed as
"People's Small-Scale Mining Program." Moreover,
iron ore mineral is not considered among the quarry
resources.
xxxx
WHEREFORE, the Application for Exploration Permit,
AEP-III-02-04 of Atlantic Mines and Trading Corp. is
declared valid and may now be given due course.
The Small-Scale Mining Permits, SSMP-B-002-05 of
Gerardo Cruz, SSMP-B-003-05 of Eduardo D.
Mercado, SSMP-B-004-05 of Benedicto S. Cruz and
SSMP-B-005-05 of Lucila S. Valdez are declared NULL
AND VOID. Consequently, the said permits are
hereby CANCELLED.50
The Court finds that the decision of the DENR
Secretary was rendered in accordance with the
power of review granted to the DENR Secretary in
the resolution of disputes, which is provided for in
Section 24 of R.A. No. 707651 and Section 22 of its
Implementing Rules and Regulations.52 It is noted
that although AMTC filed a protest with the PMRB
regarding its superior and prior Application for
Exploration Permit over the Applications for Quarry
Permit, which were converted to Small-Scale Mining
Permits, the PMRB did not resolve the same, but
issued Resolution Nos. 05-08 to 05-11 on August 8,
2005, resolving to submit to the Provincial Governor
of Bulacan the Applications for Small-Scale Mining
Permits of Eduardo Mercado, Benedicto Cruz, Lucila
Valdez and Gerardo Cruz for the granting of the said
permits. After the Provincial Governor of Bulacan
issued the Small-Scale Mining Permits on August 10,
2005, AMTC appealed the Resolutions of the PMRB
giving due course to the granting of the Small-Scale
Mining Permits by the Provincial Governor.
Hence, the decision of the DENR Secretary, declaring
that the Application for Exploration Permit of AMTC
was valid and may be given due course, and
canceling the Small-Scale Mining Permits issued by
the Provincial Governor, emanated from the power
of review granted to the DENR Secretary under R.A.
No. 7076 and its Implementing Rules and
Regulations. The DENR Secretary's power to review
and, therefore, decide, in this case, the issue on the
validity of the issuance of the Small-Scale Mining
Permits by the Provincial Governor as recommended
by the PMRB, is a quasi-judicial function, which
involves the determination of what the law is, and
what the legal rights of the contending parties are,
with respect to the matter in controversy and, on the
basis thereof and the facts obtaining, the
adjudication of their respective rights. 53 The DENR
Secretary exercises quasi-judicial function under R.A.
No. 7076 and its Implementing Rules and
Regulations to the extent necessary in settling
disputes, conflicts or litigations over conflicting
claims. This quasi-judicial function of the DENR
Secretary can neither be equated with "substitution
of judgment" of the Provincial Governor in issuing
Small-Scale Mining Permits nor "control" over the
said act of the Provincial Governor as it is a
determination of the rights of AMTC over conflicting
claims based on the law.
In determining whether Section 17 (b)(3)(iii) of the
Local Government Code of 1991 and Section 24 of
R.A. No. 7076 are unconstitutional, the Court has
been guided by Beltran v. The Secretary of
Health, 54 which held:
The fundamental criterion is that all reasonable
doubts should be resolved in favor of the
constitutionality of a statute. Every law has in its
favor the presumption of constitutionality. For a law
to be nullified, it must be shown that there is a clear
and unequivocal breach of the Constitution. The
ground for nullity must be clear and beyond
reasonable doubt. Those who petition this Court to
declare a law, or parts thereof, unconstitutional
must clearly establish the basis therefor. Otherwise,
the petition must fail. 55
In this case, the Court finds that the grounds raised
by petitioner to challenge the constitutionality of
Section 17 (b )(3)(iii) of the Local Government Code
of 1991 and Section 24 'of R.A. No.7076 failed to
overcome the constitutionality of the said provisions
of law.
WHEREFORE, the petition is DISMISSED for lack of
merit.
No costs.
SO ORDERED.
THIRD DIVISION
G.R. No. 237172, September 18, 2019
MARIO JOEL T. REYES,1 PETITIONER, v. PEOPLE OF
THE PHILIPPINES, RESPONDENT.
DECISION
LEONEN, J.:
The approval of small scale mining permits is a
discretionary act of provincial governors. A provincial
governor is considered to have been grossly and
inexcusably negligent in renewing a small scale
mining permit despite knowing that the extraction
limits have already been exhausted by the applicant
mining company.
Likewise, the grant of bail after a judgment of
conviction is discretionary upon the courts. Bail may
be denied if the courts find any of the circumstances
present in Rule 114, Section 5 of the Rules of Court.2
This Court resolves a Petition for Review on
Certiorari3 filed by Mario Joel T. Reyes (Reyes), then
Governor of Palawan, assailing the Decision 4  and
Resolution5  of the Sandiganbayan, which found him
guilty beyond reasonable doubt of violation of
Section 3(e) of Republic Act No. 3019, or the Anti-
Graft and Corrupt Practices Act, when he renewed
the small scale mining permit of a mining company
despite it violating the terms and conditions of its
previous permit. In an Urgent Motion to Review
Resolution Revoking Bail, he also assails the
Sandiganbayan Resolution6  revoking his bail due to
previous violations of the conditions of bail and for
possibility of flight.
Olympic Mines and Development Corporation
(Olympic Mines) is a grantee of mining lease
contracts in Narra and Española, Palawan.7
On July 18, 2003, the company entered into a 25-
year Operating Agreement, under which it granted
Platinum Group Metal Corporation (Platinum Group)
exclusive privilege to control, possess, manage or
operate, and conduct mining operations within the
Toronto Nickel Mine in Narra and Pulot Nickel Mine
in Española. Olympic Mines "also authorized
Platinum Group to market or dispose minerals and
mineral products obtained from the areas." 8
On January 21, 2004, Olympic Mines and Platinum
Group separately applied for small scale mining
permits before the Provincial Mining Regulatory
Board.9
The two (2) applications were approved by Reyes,
then the Palawan Governor. He issued SSMP PLW
No. 37 for a 19.800-hectare property in San Isidro,
Narra, Palawan in favor of Olympic Mines. Under the
permit, which was valid from November 4, 2004 to
November 3, 2006, Olympic Mines was allowed to
extract 50,000 dry metric tons of laterite ore.10 
Within the same duration, Platinum Group was
similarly allowed, under SSMP PLW No. 39, to extract
50,000 dry metric tons of laterite ore in San Isidro,
Narra and in Pulot, Española.11
On October 22, 2004, the Department of
Environment and Natural Resources issued Olympic
Mines' and Platinum Group's Environmental
Compliance Certificates, which imposed a limit of
50,000 dry metric tons of nickel/ore mineral to be
extracted per year.12
From May 30, 2005 to April 3, 2006, Platinum Group
transported, for itself and on behalf of Olympic
Mines, a total of 203,399.135 dry metric tons of
nickel ore extracted under their permits. 13
On March 10. 2006, Olympic Mines applied for the
renewal of SSMP PLW No. 37 before the Provincial
Mining Regulatory Board. At the time of its
application, Olympic Mines had already exhausted its
50,000-dry metric ton limit under SSMP PLW No. 37
and its 100,000-dry metric ton limit under its
Environmental Compliance Certificates. 14
In Resolution No. 024-2006, the Provincial Mining
Regulatory Board unanimously recommended to
then Governor Reyes that the application be
approved.15
On April 6, 2006, then Governor Reyes issued SSMP
PLW No. 37.1, valid from April 6, 2006 to April 5,
2008, granting Olympic Mines the right to extract
50,000 dry metric tons of laterite ore per year within
the same area covered by SSMPPLWNo. 37.16
From June 2, 2006 to July 31, 2006, Platinum Group
transported, on behalf of Olympic Mines and on its
own behalf, 79,330 dry metric tons of nickel ore
under SSMP PLW No. 37.1 and SSMP PLW No. 39.1.17
In a September 25, 2006 Order, then Environment
and Natural Resources Secretary Angelo Reyes,
acting on Citinickel Mines' complaint, cancelled
Olympic Mines' Environmental Compliance
Certificates for over-extraction of minerals. 18
On appeal, the Office of the President reversed this
Order and reinstated the cancelled Environmental
Compliance Certificates on the following grounds: (1)
Republic Act No. 707619 has already repealed the
limit of 50,000 dry metric tons on ore extraction; (2)
the condition in the Environment Compliance
Certificates referred to nickel and not nickel ore; and
(3) there was no proof on the amount of nickel
extracted from the nickel ore.20
Reyes and Andronico J. Baguyo (Baguyo), Head of
the Provincial Mining Regulatory Board, however,
were charged with violation of Section 3(e) of
Republic Act No. 3019 when they allegedly gave
unwarranted benefits, preference, and advantage to
Olympic Mines in the renewal of its Small Scale
Mining Permit.21The Information against them read:
That on or about April 6, 2006, or sometime prior or
subsequent thereto, in Puerto Princesa City,
Palawan, and within the jurisdiction of this
Honorable Court, accused JOEL T. REYES, a high
ranking public officer being Governor of the Province
of Palawan and accused ANDRONICO J. BAGUYO,
Mining Operations Officer IV, Provincial Environment
and Natural Resources Office and concurrent Head
of the Provincial Mining Regulatory Board (PMRB)
Technical Secretariat, taking advantage of their
respective positions and committing the offense in
relation to office, conspiring and confederating with
each other, did then and there willfully, knowingly
and criminally, with manifest partiality, evident bad
faith or, at the very least, gross and inexcusable
negligence, grant and issue Small Scale Mining
Permit Number SSMP PLW No. 37-1 to Olympic
Mines and Development Corporation (OMDC) for a
period of April 6, 2006 to April 5, 2008 as renewal of
its previous mining permit (SSMP PLW No. 37)
despite the fact that said previous mining permit is
valid and subsisting up to November 3, 2006 and
even as said OMDC already mined and extracted the
annual maximum 50,000 dry metric tons (DMT) of
ore set forth in its previous permit (or 100,000 DMT
for the two-year period), allowing in the process
OMDC to mine and extract ore in excess of the
allowable limit; and despite OMDC's violations of its
prior mining permit such as, but not limited to: (1)
over-extraction of ore and (2) the use of heavy
equipment in its mining operations which is
prohibited by Republic Act 7076 and Presidential
Decree 1899, as amended, thereby giving
unwarranted benefits, preference and advantage to
OMDC. to the damage and prejudice of the
government and People of Palawan.
CONTRARY TO LAW.22 (Citation omitted)
Upon arraignment, Reyes and Baguyo pleaded not
guilty to the charge.23 Trial on the merits then
ensued.
As his defense, Reyes contended that there was no
criminal intent or negligence on his part since he
signed and approved SSMP PLW No. 37.1 based on
the favorable recommendation of the Provincial
Mining Regulatory Board. He also argued that over-
extraction of nickel could not have been proven
through Olympic Mines' Ore Transport Permits since
these only showed the transport of the minerals.
Moreover, he pointed out that the volume in the
permits referred to the combined volume of ore
extracted by Olympic Mines and Platinum Group. 24
On August 29, 2017, the Sandiganbayan rendered its
Decision25 finding Reyes guilty of violation of
Republic Act No. 3019, Section 3(e).26 Baguyo,
however, was acquitted. The dispositive portion of
the Decision read:
WHEREFORE, accused JOEL TOLENTINO REYES is
found GUILTY beyond reasonable doubt of violation
of Section 3(e) of Republic Act No. 3019, and is
sentenced to an indeterminate penalty of
imprisonment of six (6) years and one (1) month, as
minimum, to eight (8) years, as maximum, with
perpetual disqualification from holding public office.
Accused ANDRONICO JARA BAGUYO is ACQUITTED of
the crime charged for failure of the prosecution to
establish his guilt beyond reasonable doubt.
SO ORDERED.27
According to the Sandiganbayan, there was no
manifest partiality since the renewal of SSMP PLW
No. 37 was not shown to have been granted to favor
Olympic Mines alone and no other mining
company.28 It also found no evident bad faith since
the applicable laws did not expressly prohibit the
renewal of small scale mining permits before they
expired.29
The Sandiganbayan, however, found that there was
gross inexcusable negligence when Reyes renewed
SSMP PLW No. 37.1 during the validity of SSMP PLW
No. 37. Citing SR Metals, Inc. v. Reyes,30 it stated that
the 50,000-dry metric ton limit under Presidential
Decree No. 189931 was not repealed by Republic Act
No. 7076. It explained that the annual production
limit in Republic Act No. 7076 includes other
materials lumped together with the sought-after
material, while Presidential Decree No. 1899 refers
to ore in its unprocessed form. The Sandiganbayan
ruled that by renewing SSMP PLW No. 37 before it
expired, Reyes allowed Olympic Mines to extract
nickel ore after its privilege had been exhausted for
the period. Reyes allowed Olympic Mines, through
Platinum Group, to do an act which it would have
been otherwise prohibited.32
The Sandiganbayan found no merit in Reyes'
argument that he merely relied on the Provincial
Mining Regulatory Board's recommendation, stating
that "his authority to approve small mining permits
calls for the dual role of allowing the exploration and
exploitation of, and conserving and preserving the
natural resources within the provinces' territorial
jurisdiction."33 It noted that the Board's
recommendation was subject to certain conditions,
and that Reyes failed to inquire if they had been met
before approving the renewal.34
The Sandiganbayan likewise found that Reyes acted
with gross inexcusable negligence when Olympic
Mines' agent, Platinum Group, used heavy
machinery in its operations. It noted that the use of
sophisticated mining equipment was not allowed in
small scale mining.35
Thus, through his gross inexcusable negligence,
Reyes was found to have given Olympic Mines
unwarranted benefits when he allowed it to extract
nickel ore beyond the limits allowed by law, as well
as when he failed to impose sanctions for the
violation of the Small Scale Mining Permit's terms,
which caused undue injury to the government. 36
The Sandiganbayan acquitted Baguyo since his
signature on SSMP PLW No. 37.1 appears to be a
"Certified Machine Copy." It also found no indication
that he participated in the preparation and issuance
of the permit.37
Reyes filed a Motion for Reconsideration, which was
denied by the Sandiganbayan in its January 25, 2018
Resolution.38 Hence, he filed this Petition.39
Petitioner maintains that he relied in good faith on
the recommendation of the Provincial Mining
Regulatory Board, it being the specialized agency
with the duty and technical expertise to evaluate
small scale mining permit applications. He points out
that it is the Mines and Geosciences Bureau, not the
provincial governor, which has the duty to ensure
that the terms and conditions of small scale mining
applications are complied with.40
Petitioner further argues that SR Metals  should not
have been given retroactive application when it is
prejudicial to the accused. In any case, he points out
that this Decision only shows that there has already
been an issue as to how to interpret the 50,000-dry
metric ton threshold. Therefore, he insists, there was
reasonable doubt in his case.41
Petitioner likewise submits the Urgent Motion to
Review the Revocation of Bail assailing the
Sandiganbayan's January 17, 2018
Resolution,42 which had revoked his bail. The
Sandiganbayan cited that: (1) he violated the
conditions of his bail without any justification after
he had failed to appear before the Sandiganbayan
despite a directive for him to do so; and (2) there
was a probability of flight.43
The Sandiganbayan had previously granted
petitioner bail in the amount of P60,000.00 on
August 29, 2017, right after his conviction. Petitioner
explains that this was distinct from the bail he
posted on September 1, 2011 to stay the warrant of
his arrest. He states that any violation of the
conditions of his bail was prior to his conviction;
thus, the bail he posted on September 1, 2011 was
considered cancelled. He likewise argues that this
violation was justified since he did not believe that
he would be tried fairly if he stayed in the country. 44
Petitioner argues that he was "vindicated"45 when
the Court of Appeals, in CA-G.R. SP. No. 132847,
through Associate Justice Normandie Pizarro, found
no probable cause to find him liable for the murder
of radio personality Gerry Ortega and dismissed the
case against him. He argues that there was no
reason to revoke his bail in this case since the Court
of Appeals had already dismissed the case against
him, negating any possibility of flight. He points out
that he even voluntarily surrendered when the
Sandiganbayan issued its January 17, 2018
Resolution.46
Respondent People of the Philippines, through the
Office of the Ombudsman, counters that all the
elements of violation of Section 3(e) of Republic Act
No. 3019 were sufficiently established by the
prosecution. It points out that based on the evidence
presented, Olympic Mines violated the terms and
conditions of its Small Scale Mining Permit when
Platinum Group extracted, on Olympic Mines' behalf,
more than the 50,000-dry metric ton limit under the
law. It contends that the Office of the Governor of
Palawan, through petitioner, acted with gross
inexcusable negligence in allowing the renewal of
Olympic Mines and Platinum Group's Small Scale
Mining Permit despite their blatant violations of
law.47
Respondent likewise asserts that the Sandiganbayan
did not commit grave abuse of discretion when it
cancelled petitioner's bail. It states that petitioner
had already been convicted, and that the
Sandiganbayan cited two (2) grounds for the bail's
cancellation: (a) when petitioner failed to appear in
court despite a directive to do so; and (b) the
probability of flight.48
Additionally, respondent submits that the
Sandiganbayan's factual findings are conclusive on
this Court since there was no grave abuse of
discretion on its part when it arrived at its
conclusions.49
In rebuttal, petitioner maintains that the questions
raised in his Petition were proper in a petition for
review on certiorari since he argued that the assailed
judgment was issued by the Sandiganbayan without
any legal basis.50 He likewise insists that he merely
relied on the Provincial Mining Regulatory Board's
recommendation when he renewed the Small Scale
Mining Permit, which cannot be considered gross
inexcusable negligence on his part.51
This Court is now asked to resolve the following
issues:
First, whether or not the Sandiganbayan erred in
finding petitioner Mario Joel T. Reyes guilty of
violation of Section 3(e) of Republic Act No. 3019
when he approved the renewal of Olympic Mines'
Small Scale Mining Permit; and Second, whether or
not the Sandiganbayan erred in revoking his bail on
the ground of violation of the conditions of his bail
and for possibility of flight.
Section 3(e) of Republic Act No. 3019, or the Anti-
Graft and Corrupt Practices Act, provides:
SECTION 3. Corrupt practices of public officers. — In
addition to acts or omissions of public officers
already penalized by existing law, the following shall
constitute corrupt practices of any public officer and
are hereby declared to be unlawful:
(e) Causing any undue injury to any party, including
the Government, or giving any private party any
unwarranted benefits, advantage or preference in
the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad
faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or
government corporations charged with the grant of
licenses or permits or other concessions.
To prove guilt, the prosecution must establish the
following elements:
1) The  accused must be a public officer discharging
administrative, judicial or official functions;
2) He must have acted with manifest partiality,
evident bad faith or inexcusable negligence; and
3) That his action caused undue injury to any party,
including the government, or gave any private party
unwarranted benefits, advantage or preference in
the discharge of his functions.52 (Citation omitted)
Here, the prosecution has duly proven the existence
of the first element. Petitioner was the Palawan
Governor during the alleged commission of the
crime. As provincial governor, he had the duty under
the Local Government Code to adopt measures for
the conservation of the natural resources within the
province:
ARTICLE I
The Provincial Governor
SECTION 465. The Chief Executive: Powers, Duties,
Functions, and Compensation. —. . .
(3) Initiate and maximize the generation of resources
and revenues, and apply the same to the
implementation of development plans, program
objectives and priorities as provided for under
Section 18 of this Code, particularly those resources
and revenues programmed for agro-industrial
development and country-wide growth and progress
and, relative thereto, shall:
....
(v) Adopt adequate measures to safeguard and
conserve land, mineral, marine, forest and other
resources of the province, in coordination with the
mayors of component cities and municipalities;
(vi) Povide efficient and effective property and
supply management in the province; and protect the
funds, credits, rights, and other properties of the
province[.]
Petitioner was likewise tasked with approving the
permits for small scale mining operations within the
province:
Section 8. Role of Local Government
Subject to Section 8 of the Act and pursuant to the
Local Government Code and other pertinent laws,
the Local Government Units (LGUs) shall have the
following roles in mining projects within their
respective jurisdictions:
b. In coordination with the Bureau/Regional Office(s)
and subject to valid and existing mining rights, to
approve applications for small-scale mining, sand
and gravel, quarry, guano, gemstone gathering and
gratuitous permits and for industrial sand and gravel
permits not exceeding five (5) hectares [.]53
Petitioner's approval of small scale mining permits
was within his official duties as the local chief
executive of the province. To prove a violation of the
Anti-Graft and Corrupt Practices Act, however, the
prosecution must also establish that his approval of
these permits was done through manifest partiality,
evident bad faith, or inexcusable negligence.
Commission of the offense through any of these
three (3) modes is sufficient for a conviction.54 These
modes, however, are distinct from one another.
In Albert v. Sandiganbayan,55 this Court defines each
mode of commission:
There is "manifest partiality" when there is a clear,
notorious, or plain inclination or predilection to favor
one side or person rather than another. "Evident bad
faith" connotes not only bad judgment but also
palpably and patently fraudulent and dishonest
purpose to do moral obliquity or conscious
wrongdoing for some perverse motive or ill will.
"Evident bad faith" contemplates a state of mind
affirmatively operating with furtive design or with
some motive or self-interest or ill will or for ulterior
purposes. "Gross inexcusable negligence" refers to
negligence characterized by the want of even the
slightest care, acting or omitting to act in a situation
where there is a duty to act, not inadvertently but
willfully and intentionally, with conscious
indifference to consequences insofar as other
persons may be affected.56
Here, since the renewal of Olympic Mines' SSMP
PLW No. 37.1 was not exclusively granted to Olympic
Mines, the Sandiganbayan found that petitioner was
not proven to be manifestly partial to Olympic
Mines.57 It also could not find any evident bad faith
when petitioner approved SSMP PLW No. 37.1
before the expiration of SSMP PLW No. 37 since the
law existing at the time did not expressly prohibit the
renewal of small scale mining permits before their
expiration.58
The Sandiganbayan, however, found that petitioner
committed gross inexcusable negligence when he
approved Olympic Mines' SSMP PLW No. 37.1,
considering that Olympic Mines violated the terms
and conditions of SSMP PLW No. 37.
Small scale mining was first defined in Presidential
Decree No. 1899,59 which was issued on January 23,
1984. Section 1 of the law states:
SECTION 1. Small-scale mining refers to any single
unit mining operation having an annual production
of not more than 50,000 metric tons of ore and
satisfying the following requisites:
1. The working is artisanal, either open cast or
shallow underground mining,  without the use  of
sophisticated  mining equipment;
2. Minimal investment on infrastructures and
processing plant;
3. Heavy reliance on manual labor; and
4.  Owned, managed or controlled by an individual or
entity qualified under existing mining laws, rules and
regulations.
Considering that the operative phrase is "small
scale," Presidential Decree No. 1899 limits
production to only 50,000 metric tons of ore. Tasked
with implementing the law,60the Department of
Environment and Natural Resources issued Mines
Administrative Order No. MRD-41, series of 1984,
which provided:
SECTION 2. Who May Qualify for the Issuance of a
Small Scale Mining Permit. — Any qualified person as
defined in Sec. 1 of these Regulations, preferably
claim owners and applicants for or holders of quarry
permits and/or licenses may be issued a small scale
mining permit provided that their mining operations,
whether newly-opened, existing or rehabilitated,
involve:
(a) a single mining unit having an annual production
not exceeding 50,000 metric tons of run-of-mine ore,
either an open cast mine working or a sub-surface
mine working which is driven to such distance as
safety conditions and practices will allow[.]61
In 1991, Congress enacted Republic Act No. 7076, or
the People's Small-scale Mining Act of 1991. This law
defined "small scale mining" as "mining activities
which rely heavily on manual labor using simple
implements and methods and do not use explosives
or heavy mining equipment[.]"62 Unlike Presidential
Decree No. 1899, Republic Act No. 7076 did not
include an extraction threshold of 50,000 metric tons
of ore. This led the Department of Justice to issue
Opinion No. 74, series of 2006, opining that Republic
Act No. 7076 effectively repealed the 50,000-metric
ton threshold mandated by Presidential Decree No.
1899.63
This erroneous interpretation by the Department of
Justice has since been rectified in SR Metals.64 In any
case, petitioner contends that at the time of the
mining activities in this case, there had already been
a controversy on whether Republic Act No. 7076
impliedly repealed Presidential Decree No. 1899's
50,000-dry metric ton threshold. To find any merit in
this argument, however, would be to misread SR
Metals.
In SR Metals65 SAN R Mining and Construction
Corporation and Galeo Equipment and Mining
Company, Inc. were each granted small scale mining
permits to extract nickel and cobalt in a mining site
in Agusan del Norte. Subsequently, however, Agusan
del Norte Governor Erlpe John M. Amante (Governor
Amante) questioned the amounts being extracted by
the mining companies since they had already
extracted 177,297 dry metric tons of nickel and
cobalt. The mining companies explained to Governor
Amante that they, in reality, only extracted 1,699.66
metric tons of nickel and cobalt "ore," or the
material that had already undergone a scientific
process to separate the metal from the unwanted
rocks and minerals.66
Unsatisfied with this explanation, Governor Amante
sought the opinion of the Department of Justice on
the matter. This was why, on November 30, 2006,
then Justice Secretary Raul M. Gonzalez issued
Department of Justice Opinion No. 74, where it was
opined that Republic Act No. 7076 had already
repealed the 50,000-dry metric ton threshold set by
Presidential Decree No. 1899. It was also opined that
even assuming that there was no repeal, "ore"
should be confined only to material that has
economic value to the mining companies.67
This Court proceeded to resolve the main issue of
the proper interpretation of "ore" within the context
of the dry metric ton threshold. To resolve this issue,
however, it had to first pass upon the issue of the
"implied repeal." It was then categorically held that
Republic Act No. 7076 did not repeal the dry metric
ton threshold set by Presidential Decree No. 1899
since "[Presidential Decree No.] 1899 applies to
individuals, partnerships[,] and corporations while
[Republic Act No.] 7076 applies to cooperatives."68
This Court likewise recognized that the Department
of Environment and Natural Resources had already
issued Memorandum Circular No. 2007-07, or the
"Clarificatory Guidelines in the Implementation of
the Small-Scale Mining Laws," which provides:
V. Maximum Annual Production
For metallic minerals, the maximum annual
production under an SSMP/SSMC shall be 50,000 dry
metric tons (DMT[s]) of ore, while for non-metallic
minerals, the maximum annual production shall be
50,000 DMT[s] of the material itself, e.g., 50,000
DMT[s] of limestone, 50,000 DMT[s] of silica, or
50,000 DMT[s] of perlite.
The maximum annual production above shall include
low-grade and/or marginal ore, and/or minerals or
rocks that are intended for sampling and/or
metallurgical testing purpose/s.69
Thus, contrary to petitioner's contention, the
"implied repeal" only became a controversy when
Department of Justice Opinion No. 74 was issued on
November 30, 2006, or after the mining activities in
this case had occurred from May 2005 to April 2006.
At the time the mining activities occurred, mining
companies were aware of the existence of the
50,000-dry metric ton threshold. Petitioner, as the
local chief executive, is presumed to have been
aware of it as well.
In this case, the Sandiganbayan found that from May
30, 2005 to April 3, 2006, Platinum Group
transported a total of 203,399.135 dry metric tons of
nickel ore under Olympic Mines' SSMP PLW No. 37
and Platinum Group's SSMP PLW No. 3970 This is
clearly beyond the 100,000-dry metric ton threshold
of the combined permits, a fact that petitioner does
not dispute. His act of renewing Olympic Mines'
Small Scale Mining Permits, despite a blatant
violation of the terms of the permit, was correctly
characterized as gross inexcusable negligence.
In an attempt to disclaim liability, petitioner argues
that he merely relied on the recommendation of the
Provincial Mining Regulatory Board to renew
Olympic Mines' permit. This argument, however, is
unmeritorious.
Samson A. Negosa (Negosa), a member of the
Provincial Mining Regulatory Board from 1993 to
2010,71 appeared on petitioner's behalf and testified:
The role of PMRB is only recommendatory. The
PMRB's recommendation is not automatically
approved by the Governor. The Governor issues the
SSMP on the basis of the PMRB's recommendation.
The Governor has the prerogative to review the
recommendation of PMRB.72
Thus, while the Provincial Mining Regulatory Board is
the technical body that recommends the approval of
applications for small scale mining permits, the
provincial governor still has the correlative duty to
review its recommendation.
The duty to approve was, therefore, discretionary on
petitioner, not ministerial.
Negosa, petitioner's own witness, likewise testified
that the Provincial Mining Regulatory Board did not
have jurisdiction over ore transport permits. Thus,
when the Provincial Mining Regulatory Board
recommended the permit's renewal, it would have
been unaware that Olympic Mines had already
exhausted its extraction limit. Negosa stated:
He has no personal knowledge of the contents,
veracity and truthfulness of Ore Transport Permits
(OTPs) issued before 2007 because the PMRJB had
no jurisdiction over OTPs prior to 2007.73 (Citation
omitted)
In contrast, petitioner, as provincial governor, signs
the ore transport permits of small scale
miners.74 Therefore, it can be presumed that unlike
the Provincial Mining Regulatory Board, petitioner
was aware of the amounts of ore being transported
by Olympic Mines. Had he taken the slightest care,
he would have taken the Provincial Mining
Regulatory Board's recommendation together with
the amounts in the Ore Transport Permits and
realized that he should not have renewed Olympic
Mines' Small Scale Mining Permit after all.
The controversy in SR Metals, by contrast, arose
because a provincial governor questioned the over-
extraction of minerals by mining companies within
his province. This Court recognized that irresponsible
mining activities posed an environmental threat:
It must be emphasized that mining, whether small or
large-scale, raises environmental concerns. To allow
such a scenario will further cause damage to the
environment such as erosion and sedimentation,
landslides, deforestation, acid rock drainage, etc. As
correctly argued by the Solicitor General, extracting
millions of DMTs of run-of-mine ore will mean
irreversible degradation of the natural resources and
possible landslides and flashfloods.75(Citation
omitted)
Petitioner, as the local chief executive, had the duty
to act within the best interests of his constituents
and to safeguard the environment's natural
resources. The dry metric ton threshold set by the
law ensures that small scale mining activities will not
result in environmental damage. Petitioner's gross
inexcusable negligence, thus, caused undue injury to
the Province of Palawan, as it exposed the province
to various environmental threats resulting from
irresponsible mining.
There was, thus, no error in the Sandiganbayan's
finding that petitioner was guilty beyond reasonable
doubt of violating Section 3(e) of the Anti-Graft and
Corrupt Practices Act. Under Section 9 of the law,
the offense is punishable by "imprisonment for not
less than six years and one month nor more than
fifteen years [and] perpetual disqualification from
public office[.]" The Sandiganbayan, therefore, did
not err in imposing the indeterminate penalty of six
(6) years and one (1) month as minimum to eight (8)
years as maximum with perpetual disqualification
from public office.
II
Bail after conviction is not a matter of right. Its grant
or cancellation is within the sound discretion of the
court.
As early as 1936, this Court has already recognized
that the grant of bail after conviction, not being a
constitutional right, is left to the discretion of the
courts:
Under the law, persons convicted of non-capital
crimes, who appeal from a judgment sentencing
them to penalties other than death, have no
absolute right to bail, except when said penalties are
imposed upon them by the justice of the peace
courts, as the right to bail after conviction is not
authorized by the Constitution and is, as a general
rule, not recognized (3 Ruling Case Law, par. 14, p.
15), it being clearly stated in section 64 of General
Orders, No. 58, as amended by section 2 of Act No.
4178, that:
"After judgment by a justice of the peace, the
defendant shall be admitted to bail as of right, and,
in all non-capital cases after judgment by any other
court, as a matter of judicial
discretion. . . ."76 (Emphasis supplied)
Indeed, even the 1987 Constitution mandates that
bail is a matter of right in bailable offenses before
conviction:
Article III
Bill of Rights
SECTION 13. All persons, except those charged with
offenses punishable by reclusion perpetua when
evidence of guilt is strong, shall, before conviction,
be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to
bail shall not be impaired even when the privilege of
the writ of habeas corpus is suspended. Excessive
bail shall not be required.
Rule 114, Section 5 of the Rules of Court, therefore,
provides:
SECTION 5. Bail, when discretionary. —  Upon
conviction by the Regional Trial Court of an offense
not punishable by death, reclusion perpetua, or life
imprisonment, admission to bail is discretionary. The
application for bail may be filed and acted upon by
the trial court despite the filing of a notice of appeal,
provided it has not transmitted the original record to
the appellate court. However, if the decision of the
trial court convicting the accused changed the nature
of the offense from non-bailable to bailable, the
application for bail can only be filed with and
resolved by the appellate court.
Should the court grant the application, the accused
may be allowed to continue on provisional liberty
during the pendency of the appeal under the same
bail subject to the consent of the bondsman.
If the penalty imposed by the trial court is
imprisonment exceeding six (6) years, the accused
shall be denied bail, or his bail shall be cancelled
upon a showing by the prosecution, with notice to
the accused, of the following or other similar
circumstances:
(a) That he is a recidivist, quasi-recidivist, or habitual
delinquent, or has committed the crime aggravated
by the circumstance of reiteration;
(b) That he has previously escaped from legal
confinement, evaded sentence,  or violated the
conditions of his bail without valid justification;
(c)  That he committed the offense while under
probation, parole, or conditional pardon;
(d) That the circumstances of his case indicate the
probability of flight if released on bail; or

(e)  That there is undue risk that he may commit
another crime during the pendency of the appeal.
The appellate court may, motu proprio or on motion
of any party, review the resolution of the Regional
Trial Court after notice to the adverse party in either
case. (Emphasis supplied)
After conviction of an offense not punishable by
death, reclusion perpetua, or life imprisonment, the
grant of bail becomes discretionary upon the court,
which may either deny or grant it. In circumstances
where the penalty imposed exceeds six (6) years, the
court is not precluded from cancelling the bail
previously granted upon a showing by the
prosecution of the circumstances enumerated in
Rule 114, Section 5 of the Rules of Court. The
presence of even one (1) of the enumerated
circumstances is sufficient cause to deny or cancel
bail.
Here, the Sandiganbayan initially granted petitioner's
application for bail on August 29, 2017. The
dispositive portion of the Order77 read:
In today's scheduled promulgation of decision, only
the dispositive portion of the decision was read upon
the request of both accused.
Accused Joel Tolentino Reyes was found GUILTY as
charged of Violation of Section 3(e) of Republic Act
No. 3019 while accused Andronico Jara Baguyo was
ACQUITTED of the same charge.
Upon motion of accused Reyes and over the
objection of the prosecution, let his bail be set at
Sixty Thousand Pesos (PhP60,000.00) or double the
amount originally set by the Court for said accused,
to be posted today.
In view of the acquittal of accused Andronico Jara
Baguyo, his bail bond is ordered released, subject to
accounting rules and regulations. Further the Hold
Departure Order of accused Baguyo is lifted.
SO ORDERED.78
The prosecution filed an Urgent Omnibus
Motion79 to cancel petitioner's bail, stating that
petitioner was a flight risk and that his counsel could
not produce him before the Sandiganbayan on
several occasions:
In spite of his conviction, accused Reyes was allowed
bail, over the objections of the prosecution that
accused Reyes was and remains to be a flight risk;
and notwithstanding the fact that during the trial of
the case, his counsel could not produce the accused
before the Honorable Court nor categorically state or
account for his whereabouts on several occasions.
... It will be recalled that accused Reyes was a
fugitive. He, together with his brother, were arrested
in Thailand. Had it not been for the intervention of
Thai authorities, accused Reyes would not have been
deported to face the criminal charges against
him.80 (Citation omitted)
On January 17, 2018, the Sandiganbayan issued a
Resolution81 granting the Urgent Omnibus Motion
and cancelling petitioner's bail. According to the
Sandiganbayan, petitioner had initially been granted
bail when he voluntarily surrendered on September
1, 2011, after he had filed a Waiver of
Appearance/Identity and a Hold Departure Order
was issued against him.82 But on the scheduled
hearings on October 22 and 23, 2013, petitioner
failed to appear,83 and it was later discovered that he
managed to escape to Thailand. He was only
returned to the country with the assistance of Thai
authorities.84 For these reasons, the Sandiganbayan
deemed it necessary to cancel petitioner's bail.
Indeed, the factual findings show the presence of
two (2) circumstances stated in Rule 114, Section 5
of the Rules of Court: (1) petitioner had previously
escaped from legal confinement, evaded sentence,
or violated the conditions of his bail without a valid
justification; and (2) he poses a flight risk if admitted
to bail. The Sandiganbayan did not act arbitrarily or
capriciously, but rather, arrived at its decision with
due consideration of the arguments presented by
the prosecution. In People v. Caderao.85
The right to bail after conviction is not absolute, and
while the person convicted may, upon application be
bailed at the discretion of the court, that discretion
— particularly with respect to extending the bail —
should be exercised, not with laxity, but with caution
and only for strong reasons with the end in view of
upholding the majesty of the laws and the
administration of justice.86
Here, when petitioner fled the country in 2011 after
a warrant of arrest for murder had been filed against
him, he has been a proven flight risk. He has since
been acquitted of this charge by the Court of
Appeals for lack of evidence.87
Petitioner had the propensity to evade the lawful
orders of the court even before he could be
convicted of murder. Since petitioner had already
been convicted, the Sandiganbayan had to be more
circumspect in examining the condition for
petitioner's bail in this case. As the Sandiganbayan
pointed out, petitioner fled despite the existence of
a Hold Departure Order, and thus, "there is indeed a
distinct probability that he would once again escape
considering that the [Sandiganbayan] already found
him guilty and ordered his imprisonment for more
than six (6) years."88 In Obosa v. Court of Appeals:89
[T]he grave caution that must attend the exercise of
judicial discretion in granting bail to a convicted
accused is best illustrated and exemplified in
Administrative Circular No. 12-94 amending Rule
114, Section 5 which now specifically provides that,
although the grant of bail is discretionary in non-
capital offenses [,] nevertheless, when imprisonment
has been imposed on the convicted accused in
excess of six (6) years and circumstances exist (inter
alia, where the accused is found to have previously
escaped from legal confinement or evaded sentence,
or there is an undue risk that the accused may
commit another crime while his appeal is pending)
that point to a considerable likelihood that the
accused may flee if released on bail, then the
accused must be denied bail, or his bail previously
granted should be cancelled.
But the same rationale obtained even under the old
rules on bail (i.e., prior to their amendment by Adm.
Circular 12-94). Senator Vicente J. Francisco's
eloquent explanation on why bail should be denied
as a matter of wise discretion after judgment of
conviction reflects that thinking, which remains valid
up to now:
The importance attached to conviction is due to the
underlying principle that bail should be granted only
where it is uncertain whether the accused is guilty or
innocent, and therefore, where that uncertainty is
removed by conviction it would, generally speaking,
be absurd to admit to bail. After a person has been
tried and convicted the presumption of innocence
which may be relied upon in prior applications is
rebutted, and the burden is upon the accused to
show error in the conviction. From another point of
view it may be properly argued that the probability
of ultimate punishment is so enhanced by the
conviction that the accused is much more likely to
attempt to escape if liberated on bail than before
conviction[.]90
The Sandiganbayan, in its January 17, 2018
Resolution, emphasized:
In ordering the revocation of the grant of bail to
accused Reyes, the Court is also guided by the
teaching of the Supreme Court that after conviction
by the trial court, the presumption of innocence
terminates and, accordingly, the constitutional right
to bail ends. From then on, the grant of bail is
subject to judicial discretion. In the exercise of that
discretion, the proper courts are to be guided by the
fundamental principle that the allowance of bail
pending appeal should be exercised not with laxity
but with grave caution and only for strong reasons,
considering that the accused has been in fact
convicted by the trial court.91 (Citations omitted)
There was. thus, no error in the Sandiganbayan's
exercise of its discretion to cancel petitioner's bail. 
In any case, the review of the Resolution cancelling
his bail has become unnecessary in view of this
Court's finding that petitioner is guilty beyond
reasonable doubt of violation  / of Section 3(e) of the
Anti-Graft and Corrupt Practices Act.
WHEREFORE, the Petition is DENIED. Petitioner
Mario Joel T. Reyes is found GUILTY beyond
reasonable doubt of violation of Section 3(e) of
Republic Act No. 3019. He is sentenced to an
indeterminate penalty of imprisonment of six (6)
years and one (1) month, as minimum, to eight (8)
years, as maximum, with perpetual disqualification
from holding public office.
SO ORDERED.
G.R. No. 149638               December 10, 2014
MONCAYO INTEGRATED SMALL-SCALE MINERS
ASSOCIATION, INC. [MISSMA], Petitioner,
vs.
SOUTHEAST MINDANAO GOLD MINING CORP., JB.
MGT. MINING CORP., PICOP RESOURCES, INC., MT.
DIWATA UPPER ULIP MANDAYA TRIBAL COUNCIL,
INC. AND BALITE INTEGRATED SMALL-SCALE
MINING CORP., (BISSMICO), Respondents.
x-----------------------x
G.R. No. 149916
HON. ANTONIO H. CERILLES, IN HIS CAPACITY AS
SECRETARY OF DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, Petitioner,
vs.
SOUTHEAST MINDANAO GOLD MINING
CORPORATION (SMGMC) AND BALITE INTEGRATED
SMALL-SCALE MINING CORP.,
(BISSMICO), Respondents.
DECISION
LEONEN, J.:
These two consolidated cases involve the "Diwalwal
Gold Rush Area" in Mt. Diwata, Mindanao that has
been embroiled in controversies since the mid-
1980’s.1 The instant controversy focuses on the 729-
hectare portion excluded from respondent
Southeast Mindanao Gold Mining Corporation’s
Mineral Production Sharing Agreement application,
and declared as People’s Small Scale Mining Area.
Due to supervening events, we declare the petitions
moot and academic.
Before us are two petitions for review2 assailing the
Court of Appeals’ August 27, 2001 amended
decision3 that annulled and set aside the Department
of Environment and Natural Resources (DENR)
Secretary’s September 20, 1999 decision 4 for having
been issued with grave abuse of discretion in excess
of his discretion.
Moncayo Integrated Small-Scale Miners Association,
Inc. (MISSMA) filed the first petition5 docketed as
G.R. No. 149638.Then DENR Secretary Antonio H.
Cerilles filed the second petition docketed as G.R.
No. 149916.6
The facts as summarized by the Court of Appeals
follow:7
On July 1, 1985, the Bureau of Forest Development
issued to Marcopper Mining Corporation
(Marcopper) a prospecting permit (Permit to
Prospect No. 755-123185) covering 4,941 hectares
within the AgusanDavao-Surigao Forest Reserve.
Thisforest reserve was instituted by Proclamation
No. 369 issued by then Governor General Dwight F.
Davis on February 27, 1931. On March 10, 1986, the
Bureau of Mines and Geo-Sciences issued to
Marcopper a permit to explore (EP 133) covering the
same area.
On February 16, 1994, Marcopper assigned EP 133 to
Southeast Mindanao Gold Mining Corporation
(SMGMC).
On December 19, 1995, the Mines and Geo-Sciences
Bureau director ordered the publication of SMGMC’s
application for Mineral Production Sharing
Agreement (MPSA No. 128) for the 4,941 hectares
covered by EP 133.
JB Management Mining Corporation, Davao United
Miners Cooperative, Balite Integrated Small Scale
Miners Cooperative, MISSMA, PICOP, Rosendo
Villaflor, et al., Antonio G. Dacudao, Puting Bato Gold
Miners Cooperative, and Romeo Altamera, et al. filed
adverse claims against MPSA No. 128.8
The adverse claims were anchored on DENR
Administrative Order No. 669 (DAO No. 66) issued
on December27, 1991, declaring 729 hectares of the
Agusan-Davao-Surigao Forest Reserve as forest land
open for smallscale mining purposes, subject to
existing and valid private rights.
The DENR constituted a panel of arbitrators pursuant
to Section 77 of the Philippine Mining Act of 1995
taskedto resolve the adverse claims against MPSA
No. 128.
The panel of arbitrators, in its decision dated June
13, 1997, reiterated the validity of EP 133 and
dismissed all adverse claims against MPSA No. 128.
The adverse claimants appealed to the Mines
Adjudication Board.
The Mines Adjudication Board (MAB), in its
decision10 dated January 6, 1998, vacated the
decision of the panel of arbitrators:
WHEREFORE, PREMISES CONSIDERED, the decision
of the Panel of Arbitrators dated 13 June 1997 is
hereby VACATED and a new one entered in the
records of the case as follows:
1. SEM’s MPSA application is hereby given
due course subject to the full and strict
compliance of the provisions of the Mining
Act and its Implementing Rules and
Regulations.
 2. The area covered by DAO 66, series of
1991, actually occupied and actively mined
by the small-scale miners on or before
August 1, 1987 as determined by the
Provincial Mining Regulatory Board
("PMRB"), is hereby excluded from the area
applied for by SEM; (Emphasis supplied)
3. A moratorium on all mining and mining-
related activities, is hereby imposed until
such time that all necessary procedures,
licenses, permits and other requisites as
provided for by RA 7076, the Mining Act
and its Implementing Rules and Regulations
and all other pertinent laws, rules and
regulations are complied with, and the
appropriate environmental protection
measures and safeguards have been
effectively put in place.
4. Consistent with the spirit of RA 7076, the
Board encourages SEM and all small-scale
miners to continue to negotiate in good
faith and arrive at an agreement beneficial
to all. In the event of SEM’s strict and full
compliance with all the requirements of the
Mining Act and its Implementing Rules and
Regulations, and the concurrence of the
small scale miners actually occupying and
actively mining the area, SEM may apply for
the inclusion of portions of the areas
segregated under paragraph 2 hereof, to its
MPSA application. Inthis light, subject to the
preceding paragraph, the contract between
JB and SEM is hereby recognized.
SO ORDERED.11
Both SMGMC and the adverse claimants questioned
the Mines Adjudication Board’s decision before this
court. These petitions were remanded to the Court
of Appeals asCA-G.R. SP Nos. 61215-16, later
elevated to this court as G.R. No. 152613, G.R. No.
152628, G.R. Nos 152619-20, and G.R.Nos. 152870-
71.12
Meanwhile, independent of the MAB decision and
the appeals to the Court of Appeals and this court,
the Provincial Mining Regulatory Board of Davao
proposed to declare a People’s Small Scale Mining
Area in accordance with the MAB decision.13
On February 24, 1992, the notice for the proposed
declaration was approved and issued for publication
to notify any and all oppositors or
protestors.14 Those who filed oppositions included
SMGMC, Picop Resources Incorporated, Mt. Diwata-
Upper Ulip Mandaya Tribal Council, and JB
Management Mining Corporation.15
The Provincial Mining Regulatory Board (PMRB), in
its decision16 dated March 30, 1999, dismissed the
oppositions for lack of merit, then segregated and
declared the 729-hectare gold rush area as People's
Small Scale Mining Area:
WHEREFORE, in view of the foregoing premises, the
instant protest/opposition of herein Oppositors are
hereby DISMISSED for lack of merit. This Board
hereby segregates and declares the 729-hectare
gold rush area in Mt. Diwalwal actually occupied
and actively mined on or before August 1, 1987 as
People’s Small-Scale Mining Area. Thereafter, the
concerned local government unit through the
recommendation of this Board shall issue/execute
the necessary small-scale mining contract to
qualified applicants upon compliance of the
requisites for small scale mining under R.A. 7076 and
its implementing rules and regulations.
SO ORDERED.17
Then DENR Secretary Antonio H. Cerilles, in his
decision dated September 20, 1999, affirmed with
modification the Provincial Mining and Regulatory
Board decision:18
WHEREFORE, premises considered, the Decision of
the PMRB of Compostela Valley dated March 30,
1999 is hereby AFFIRMED, subject to the following
modifications:
1. For effective management and equitable
utilization of resources, the two main areas
of operations as described above of the 729
hectares shall be delineated and embodied
in a Memorandum of Agreement (MOA)
among the stakeholders concerned to
ensure recognition of delineated
boundaries and rational operation of the
concerned areas.
2. These two areas are divided as follows: a)
Block I[BaleteNang Area], composed of Sub-
 Block A and Sub-Block B, intended for
Blucor and Helica Group of Tunnels,
representing MISSMA, and for various
qualified Small-Scale Miners who are
actually occupying and actively mining in
the area and b) Block II [Buenas-Tinago
Area], intended for JB Management, and
other qualified Small-Scale Miners who are
actually occupying and actively mining in
the area.
3. Qualified Small-Scale Miners in each area,
as maybe determined by the PMRB, shall
apply for Small Scale Mining Contracts with
option thereafter to apply for an MPSA.
4. Consistent with the provisions of DENR
Memorandum Order No. 99-02, mineral
processing plants in the Diwalwal area shall
be relocated to processing zones duly
designated by the DENR where appropriate
tailings disposal systems have been put in
place.
5. The Natural Resources Development
Corporation (NRDC), the corporate arm of
the DENR, shall extend the necessary
technical expertise and supervision over all
mining and milling operations in the area,
environmental clean-up and rehabilitation
activities, and the identification of
alternative livelihood activities for the
families of small-scale miners and other
residents in the area.
SO ORDERED.19 (Emphasis and underscoring in the
original)
The DENR Secretary denied reconsideration on
February 2, 2000. SMGMC filed a petition under Rule
43 before the Court of Appeals.
The Court of Appeals, in its decision20 dated July 31,
2000, denied the petition.
The Court of Appeals discussed thatsince "there
being no injunction from the Supreme Court which
would prevent the enforcement of the MAB
decision, respondent DENR Secretary acted with
propriety in issuing the assailed decision which
affirmed the PMRB’s declaration of a People’s Small
Scale Mining Area."21 It also denied the petition
based on litis pendencia, considering that the
pending case before this court assailing the MAB
decision involved a prejudicial question.22
SMGMC and Balite Integrated Small-Scale Mining
Corp. (BISSMICO) filed separate motions for
reconsideration.
The Court of Appeals, in its amended
decision23 dated August 27, 2001, granted the
motions for reconsideration and, consequently, set
aside and annulled the DENR Secretary's decision for
having been issued with grave abuse of discretion in
excess of his jurisdiction.24 The Court of Appeals
limited its discussion on the propriety of the DENR
Secretary’s decision.
It cited at length a memorandum dated March 27,
1998 by then DENR Under secretary, Antonio La
Viña, to support its finding that SMGMC "may apply
and be entitled to a particular area within the 729
hectares potential coverage of the People’s Small-
Scale Mining Area, subject to the fulfilment of
several conditions."25
The Court of Appeals found that the "DENR
Secretary’s outright delineation of the subject area
in favor of certain entities contravenes the mandate
of the MAB Decision and the purpose of RA 7076
(People’s Small Scale Mining Act of 1991), inasmuch
asit disenfranchises the petitioner and other small-
scale miners who may apply for and be awarded
small-scale mining contracts by the local
government units upon recommendation of the
PMRB after the fulfilment of necessary conditions
set forth in the law."26
Hence, these two petitions for reviewwere filed
assailing the Court of Appeals' amended decision.
Petitioner MISSMA27 argues that the Court of
Appeals should not have amended its decision
considering it already found SMGMC guilty of forum
shopping and litis pendencia.28
Petitioner MISSMA contends that the petition
docketed as G.R. No. 132475 assailing the portion of
the MAB’s decision that excluded the 729-hectare
area covered by DAO No. 66 from SMGMC’s Mines
Production Sharing Agreement application29 involves
the same issues as the present cases. MISSMA
submits that "the ultimate objective of the two cases
is [SMGMC] to solely obtain all mining rights over the
subject 729 hectare gold rush area, to the exclusion
of MISSMA and other claimants thereon."30
Petitioner MISSMA also argues that "[i]n carrying
out the function of declaring and segregating gold
rush areas for small-scale mining purposes
[pursuant to Republic Act No. 7076], both the
PMRB, and upon review, the DENR Secretary, may
well act independently of the MAB, which, on the
other hand is a quasi-judicial body tasked to settle
mining conflicts, disputes or claims[.]" 31 Moreover,
the DENR Secretary’s decision only delineated and
identified areas available for small-scale mining
contract applications. The decision did not make
actual awards.32
Petitioner Hon. Antonio H. Cerilles, in his capacity as
then DENR Secretary,33 similarly argues that the
Court of Appeals should have maintained its earlier
decision dismissing the case due to forum shopping
andlitis pendencia.34
In any event, petitioner DENR Secretary argues that
he acted within authority in modifying the PMRB’s
decision, citing Sections 24 and 26 of Republic Act
No. 7076 on the DENR Secretary’s power of "direct
supervision and control."35
Petitioner DENR Secretary adds that "[t]he division
into two areas of the segregated portion of 729-
hectares small-scale mining area does not
contravene the mandate of the MAB decision and
the purpose of R.A. No. 7076, since there is no award
yet of any license or permit made to any qualified
small-scale miner."36
Lastly, petitioner DENR Secretary contends that
these petitions have been mooted by (1) then
President Macapagal-Arroyo’s issuance of
Proclamation No. 297 excluding an area from
Proclamation No. 369 and declaring this as a mineral
reservation and as an environmentally critical area,
and (2) this court’s decision dated June 23, 2006 in
G.R. Nos. 152613, 152628, 152619-20, 152870-71
declaring DAO No. 66 as void, declaring EP 133 as
expired, and underscoring the Executive’s power of
supervision and control over the exploration,
development, and utilization of the country’s
mineral resources.37
Respondent SMGMC counters that no forum
shopping orlitis pendencia exists as the present
petitions "emanated from the decision of the PMRB
declaring the 729 hectares of timberland as People’s
Small-Scale Mining Area, while G.R. No. 132475
emanated from the decision of the MAB on the
MPSA Application of [SMGMC]."38 Records also show
that the case docketed as G.R. No. 132475 was made
known to this court.39
Respondent SMGMC quoted at length DENR
Undersecretary La Viña’s memorandum on the scope
of the MAB decision.40
Respondent SMGMC submits that the DENR
Secretary’s decision "practically abandoned the MAB
decision and fashioned his own formula for disaster,"
such as mentioning the Blucor and Helica groups
which were never parties before the PMRB. 41
Respondent BISSMICO admits and adopts
respondent SMGMC’s memorandum.42
Respondent PICOP discusses the difference between
"forest reserves" and "forest reservations" under
Presidential Decree No. 705,43 and pursuant to
Republic Act No. 309244 enacted on June 17, 1961,
stating that "a law should now be passed by
Congress in order to reclassify areas in forest reserve
to another use."45
Even Executive Order No. 318 issued on June 9, 2004
on guiding principles in Promoting Sustainable Forest
Management in the Philippines provides that
"[c]onversions of forest lands into non-forestry uses
shall be allowed only through an act of Congress and
upon the recommendation of concerned
government agencies."46 Consequently, the PMRB
has no authority to declare the 729 hectares within
the forest reserve as a People’s Small-Scale Mining
Area.47
Respondent PICOP also argues that Proclamation No.
297 by then President Macapagal-Arroyo was
without congressional concurrence as required by
Republic Act No. 3092, thus, revocable.48 Its
memorandum also includes arguments on how
Proclamation No. 297 was the first step in a series of
constitutional violations such as an agreement with
ZTE –NBN involving the gold rush area.49
By resolution50 dated March 4,2013, the parties were
required to file manifestations on "subsequent
developments that may help this court in the
immediate disposition of these cases, orthat may
render the cases moot and academic." 51
Petitioner DENR Secretary, through itscounsel Office
of the Solicitor General, filed its compliance on May
16, 2013.52
Petitioner DENR Secretary submitted a copy of the
letter53 dated April 24, 2013 of the Philippine Mining
Development Corporation (PMDC), the government
office in charge of the Diwalwal area, containing
details of the latest development in the area. The
letter54 provides a brief background, followed by an
enumeration of developments:
I. PMDC 729 Area in the Diwalwal Mineral
Reservation
. . . The Terms of Reference (TOR) for the 729
Bidding [partner of PMDC in the exploration and
development of the project area] was approved by
the Board on 3 March 2010.
On October 25, 2011, PMDC received an order from
the Regional Trial Court . . . enjoining [it] from
bidding the Victory Tunnel and the 729-Area. PMDC
filed a Motion for Reconsideration [which] is still
pending . . .
II. Tribal Mining Area (TRIMA) in the Diwalwal
Mineral Reservation
On 26 June 2009, an Operating Agreement was
entered into by PMDC and the Indigenous Cultural
Community (ICC) belonging to the Mandaya,
Manobo, Manguangan and Dibabawon tribes
covering 2 parcels in the Diwalwal Mineral
Reservation having a total land area of 950 hectares.
....
PMDC requested NCIP to settle the issues of the
tribal leadership and representation with finality in
order to guide PMDC and its operators/partners, as
well as other parties interested in assisting the tribe.
PMDC is still awaiting the final decision of NCIP. FF
Cruz & Co., Inc. is still actively pursuing its aforesaid
Agreement with the ICC.
III. Other Areas in the Diwalwal Mineral Reservation
A. Upper Ulip Property
. . . area of One Thousand Six Hundred Twenty
hectares (1,620 has.) has been awarded, after a
public bidding, to Paraiso Consolidated Mining
Corporation (PACOMINCO) on June 2009.
On 1 March 2012, the PMDC Board approved the
extension of the period for exploration activities for
the Upper Ulip-Paraiso Parcel.
B. Letter V
. . . area of One Thousand Two Hundred Ninety Six
hectares (1,296 has.) has been awarded, after public
bidding, to Black Stone Mineral Resources Inc.
(Blackstone) on March 2010. Blackstone is currently
in the process of securing the Free and Prior-
Informed Consent of the ICC in the Area with the
assistance of NCIP. On 5 March 2013, Blackstone
entered into a Memorandum of Agreement with the
Mandaya tribe for the development of the Letter V
parcel within the [sic] their ancestral domain.
C. Higanteng Bato
. . . area of One Thousand Three Hundred Fifty Nine
hectares (1,359 has.) has been awarded, after a
public bidding, to Carrascal Nickel Corporation (CNC)
on March 2010.
On 19 July 2012, the PMDC Board approved the
assignment of the Rights and Obligations of CNC
inthe Joint Operating Agreement to Giant Stone
Corporation.
IV. NRDC Area (729 Area, 600m asl)
[PMDC has] received reports that NRDC has awarded
approximately 400 hectares of the area under their
administration to JBMMC. However, despite several
requests for information relative to the
aforementioned reports, the NRDC has yet to
provide PMDC of any official documents . . .55
Respondent SMGMC filed an explanation,
manifestation, and compliance discussing that on
June 23, 2006, this court’s First Division rendered a
decision in the consolidated petitions of Apex (G.R.
Nos. 152613 and 152628), Balite Communal Portal
Cooperative (G.R. Nos. 152619-20), and MAB (G.R.
Nos. 152870-71) ruling that EP 133 has expired by
its nonrenewal, that its transfer to SMGMC was
void, and that DAO No. 66 was illegal for having
been issued in excess of the DENR Secretary’s
authority.56 On November 20, 2009, this court En
Banc denied reconsideration, and this decision
became final and executory.57
Respondent SMGMC also manifested that (a) the
above decision and resolution, (b) the issuance of
Proclamation No. 297 dated November 25, 2002,
excluding 8,100 hectares in Moncayo, Compostela
Valley and proclaiming this area as a mineral
reservation and as an environmentally critical area,
and (c) DAO No. 2002-18, are supervening
developments that rendered moot and academic
the issues raised in the present petitions.58
Counsel for respondent MISSMA filed a
manifestation stating that he has exerted diligent
efforts to communicate with MISSMA inrelation to
the March 4, 2013 resolution but this proved futile.
Counsel is not in a position to manifest to this court
on subsequent developments, but he will continue
his attempt to communicate with MISSMA, and will
submit the required manifestation should he
succeed.59
Counsel for respondent PICOP filed a similar
explanation/compliance.60
The issues for resolution may be summarized as
follows:
I. Whether the Court of Appeals canset
aside the issue of forum shopping and litis
pendencia (SMGMC's petition in G.R. No.
132475), and dwell on the merits;
II. Whether the DENR Secretary’s decision
went beyond the PMRB’s decision,
otherwise, whether the DENR Secretary can
modify the PMRB’s decision; and
III. Whether the DENR Secretary’s
modification to divide the 729 hectares into
two areas contravened the mandate of the
MAB decision and the purpose of Republic
Act No. 7076. Subsequent developments
Developments after these petitions had been filed
in 2001 mooted this case. The parties recognized
these developments in their recent submissions.
Petitioner DENR Secretary raised that the petitions
were mooted by (a) then President Macapagal-
Arroyo’s issuance of Proclamation No. 297, excluding
an area from Proclamation No. 369 and declaring
this area as a mineral reservation and asan
environmentally critical area, and (b) this court’s
decision dated June 23, 2006 in G.R. Nos. 152613,
152628, 152619-20, and 152870-71 declaring DAO
No. 66 as void, declaring EP 133 as expired, and
underscoring the Executive’s power of supervision
and control over the exploration, development, and
utilization of the country’s mineral resources.61
Respondent SMGMC similarly manifested that
Proclamation No. 297 dated November 25, 2002 and
this court’s 2006 decision and 2009 resolution in G.R.
Nos. 152613 and 152628, G.R. Nos. 152619-20 and
G.R. Nos. 152870-71 mooted the present cases.62
Proclamation No. 297 dated November 25, 2002
excluded an area of 8,100 hectares in Moncayo,
Compostela Valley as a mineral reservation and as
an environmentally critical area: PROCLAMATION
NO. 297
EXCLUDING A CERTAIN AREA FROM THE OPERATION
OF PROCLAMATION NO. 369 DATEDFEBRUARY 27,
1931, AND DECLARING THE SAME AS MINERAL
RESERVATION AND AS ENVIRONMENTALLY CRITICAL
AREA
WHEREAS, Article XII, Section 2 of the Constitution
provides that the exploration, development, and
utilization of natural resources shall be under the full
control and supervision of the State; WHEREAS, by
virtue of Proclamation No. 369, series of 1931,
certain tracts of public land situated in the then
provinces of Davao, Agusan and Surigao, with an
area of approximately 1,927,400 hectares, were
withdrawn from settlement and disposition,
excluding, however, those portions which had been
certified and/or shall be classified and certified as
non-forest lands; WHEREAS, gold deposits have been
found within the area covered by Proclamation No.
369, in the Municipality of Monkayo, Compostela
Valley Province, and unregulated small to medium-
scale mining operations have, since 1983, been
undertaken therein, causing in the process serious
environmental, health, and peace and order
problems in the area;
WHEREAS, it is in the national interest to prevent the
further degradation of the environment and to
resolve the health and peace and order spawned by
the unregulated mining operations in the said area;
WHEREAS, these problems may be effectively
addressed by rationalizing mining operationsin the
area through the establishment of a mineral
reservation;
WHEREAS, after giving due notice, the Director of
Mines and Geosciences conducted public hearings
on September 6, 9 and 11, 2002 to allow the
concerned sectors and communities to air their
views regarding the establishment of a mineral
reservation in the place in question; WHEREAS,
pursuant to the Philippine Mining Act of 1995 (RA
7942), the President may, upon the recommendation
of the Director of Mines and Geosciences, through
the Secretary of Environment and Natural Resources,
and when the national interest so requires, establish
mineral reservations where mining operations shall
be undertaken by the Department directly or thru a
contractor;
WHEREAS, as a measure to attain and maintain a
rational and orderly balance between socio-
economic growth and environmental protection, the
President may, pursuant to Presidential Decree No.
1586, as amended, proclaim and declare certain
areas in the country as environmentally critical;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO,
President of the Philippines, upon recommendation
of the Department of Environment and Natural
Resources (DENR), and by virtue of the powers
vested inme by law, do hereby exclude certain parcel
of land located in Monkayo, Compostela Valley, and
proclaim the same as mineral reservation and as
environmentally critical area, with metes and bound
as defined by the following geographical
coordinates; . . . .
....
with an area of Eight Thousand One Hundred (8,100)
hectares, more or less.
Mining operations in the area may be undertaken
either by the DENR directly, subject to payment of
just compensation that may be due to legitimate and
existing claimants, or thru a qualified contractor,
subject to existing rights, if any.
The DENR shall formulate and issue the appropriate
guidelines, including the establishment of an
environmental and social fund, to implement the
intent and provisions of this Proclamation.
Subsequently, DENR Administrative Order No. 2002-
18 declared an emergency situation on the
Diwalwalgold rush area and ordered the stoppage of
all mining operations in the area.
Then President Macapagal-Arroyo issued Executive
Order No. 217 dated June 17, 2003, creating the
National Task Force Diwalwal to address the
situation in the Diwalwal gold rush area.
On June 23, 2006, this court promulgated Apex
Mining v. SMGMC,63 ruling on the petitions for
review by Apex, Balite, and the MAB. This court
declared that EP 133 expired on July 7, 1994, and
that its subsequent transfer to SMGMC on February
16, 1994 was void.64 This court also affirmed the
Court of Appeals’ decision declaring DAO No. 66 as
illegal for having been issued in excess of the DENR
Secretary’s authority.65
On November 20, 2009, this court EnBanc denied
reconsideration in Apex Mining v. SMGMC for lack of
merit.66 This court reiterated that Marcopper’s
assignment of EP 133 to SMGMC violated Section 97
of Presidential Decree No. 463 and the terms and
conditions in the permit.67
This court also clarified that its June 23, 2006
decision did not overturn its July 16, 1991 decision in
Apex Mining v. Garcia68 for the following reasons:69
First, the 1991 case of Apex Mining v. Garcia
involved conflicting mining claims between Apex and
Marcopper over the 4,941 hectares disputed area in
Moncayo, Mindanao.70
This court in Apex Mining v. Garciaruled that the
disputed areas, "being clearly within a forest
reserve, are not open to mining location,"71 citing
Sections 8 and 13 of Presidential Decree No. 463, as
amended by Presidential Decree No. 1385. 72 This
court found that "procedural requisites were
complied with and undertaken by MARCOPPER after
it had ascertained that its mining claims were found
to be within the AgusanDavao-Surigao Forest
Reserve. On the other hand, the mining claims and
SSMPs of Apex being located within said forest
reserve are in violation of the law and therefore
result in a failure to validly acquire mining rights." 73
Second, the 1991 Apex Mining v. Garcia case "was
decided on facts and issues that werenot attendant
in [Apex Mining v. SMGMC], such as the expiration
of EP 133, the violation of the condition embodied
in EP 133 prohibiting its assignment, and the
unauthorized and invalid assignment of EP 133 by
[Marcopper] to [SMGMC], since this assignment
was effected without the approval of the Secretary
of DENR."74
This court also mentioned that inthe November 26,
1992 resolution in Apex Mining v. Garcia, this court
clarified that its ruling was "conclusive only between
the parties with respect to the particular issue herein
raised and under the set of circumstances herein
prevailing[.]"75
Forum shopping and litis pendencia
Litis pendencia exists when the following elements
are present: "(a) the identity of parties, or at least
suchas representing the same interests in both
actions; (b) the identity of rights asserted and relief
prayed for, the relief being founded on the same
facts; and (c) the identity of the two cases such that
judgment in one, regardless of which party is
successful, would amount to res judicatain the
other."76
The existence of litis pendenciaalso means that the
rule against forum shopping was violated. 77
The Court of Appeals’ July 31, 2000 decision denied
SMGMC’s petition on the ground of litis pendencia
and forum shopping considering the then pending
case docketed as G.R. No. 132475 assailing the
January 6, 1998 MAB decision recognizing DAO No.
66 by excluding the 729-hectare area. 78
The Court of Appeals’ August 27,2001 amended
decision "maintain that matters pertaining to the
petitioner’s rights over the subject 729-hectare gold
rush area have been decided by the Mines
Adjudication Board (MAB), which decision is now
with the Supreme Court for review[,]"79 but it
nevertheless annulled the DENR Secretary’s decision
"for having been issued with grave abuse of
discretion in excess of his jurisdiction."80
Respondent SMGMC argued in its memorandum
that no forum shopping or litis pendencia
exists,81 but later conceded in its explanation,
manifestation, and compliance dated September 1,
2014 that supervening developments, such as this
court’s 2006 decision and 2009 resolution in Apex
Mining v. SMGMC, mooted these cases.82
We do not need to decide on whether there was
forum shopping or litis pendencia. Apex Mining v.
SMGMC mooted these petitions.
Moot and academic
Apex Mining v. SMGMC consists of two consolidated
cases.83 SMGMC filed the petition docketed as G.R.
No. 132475 assailing the January 6, 1998 MAB
decision excluding the 729-hectares area and
questioning the validity of DAO No. 66. MISSMA and
other mining claimants filed the other petition
docketed as G.R. No. 132528.84
These petitions were remanded to the Court of
Appeals, consolidated as G.R. SP Nos. 61215 and
61216.85 The Court of Appeals declared the MAB
decision as null and void.86 Consequently, Apex filed
a petition docketed as G.R. Nos. 152613 and 152628;
Balite Communal Portal Mining Cooperative, Inc.
filed a petition docketed as G.R. Nos. 152619-20; and
the MAB and its members filed a petition docketed
as G.R. Nos. 152870-71.87
All these petitions were consolidated, and this court
rendered its decision entitled Apex Mining v.
SMGMCon June 23, 2006, and resolution on
November 20, 2009. The 2006 decision held:
WHEREFORE, premises considered, the Petitions of
Apex, Balite and the MAB are PARTIALLY GRANTED,
thus:
1. We hereby REVERSE and SET ASIDE the
Decision of the Court of Appeals, dated 13
 March 2002, and hereby declare that EP
133 of MMC has EXPIRED on 7 July 1994
and that its subsequent transfer to SEM on
16 February 1994 is VOID.
2. We AFFIRM the finding of the Court of
Appeals in the same Decision declaring DAO
No. 66 illegal for having been issued in
excess of the DENR Secretary’s authority.
Consequently, the State, should it so desire, may
now award mining operations in the disputed area to
any qualified entity it may determine. No costs.
SO ORDERED.88
This court denied the motions for reconsiderations,
among others, in its 2009 resolution.89 Since this
court declared that EP 133 expired and its transfer to
SMGMC is void, respondent SMGMC has no more
basis to claim any right over the disputed 729
hectares in the Diwalwal gold rush area excluded
from its MPSA.
Furthermore, since this court has declared that the
DENR Secretary had no authority to issue DAO No.
66 declaring 729 hectares of the Agusan Davao-
Surigao Forest Reserve as forest land open for small-
scale mining purposes subject to existing and valid
private rights, both the PMRB decision, and the
DENR Secretary’s decision affirming it with
modification, are consequently overturned for lack
ofbasis in delineating the 729 hectares from the
MPSA.
The 2009 resolution in Apex Mining v. SMGMC also
ruled that "the State, through the Executive
Department, should it so desire, may now award
mining operations in the disputed area to any
qualified entities it may determine [and] [t]he Mines
and Geosciences Bureau may process exploration
permits pending before it, taking into consideration
the applicable mining laws, rules and regulations
relative thereto."90
Indeed, then President Macapagal-Arroyo issued
Proclamation No. 297 excluding an area in Moncayo,
Compostela Valley, declaring this as a mineral
reservation and as an environmentally critical area.
DENR Administrative Order No. 2002-18 followed,
declaring an emergency situation in this gold rush
area and ordering the stoppage of all mining
operations. Executive Order No. 217 thereafter
created the National Task Force Diwalwal.
Authority and functions
in mining activities
In any case, we discuss the powers of the different
agencies in relation to mining activities as laid down
by the relevant laws.
Mines Adjudication Board
Chapter XIII (Settlement of Conflicts) of Republic Act
No. 7942 known as the Mining Act of 1995 provides
for the powers of the panel of arbitrators and the
Mines Adjudication Board (MAB). Section 77 states
that "the panel shall have exclusive and original
jurisdiction to hear and decide on the following:
a. Disputes involving rights to mining areas;
b. Disputes involving mineral agreements or
permits;
c. Disputes involving surface owners,
occupants and
claimholders/concessionaires; and
d. Disputes pending before the Bureau and
the Department at the date of the
effectivity of this Act."91
Section 78 provides for the MAB’s appellate
jurisdiction over the decision or order of the panel of
arbitrators.92 Section 79 enumerates the MAB’s
powers and functions, including the power "to
conduct hearings on all matters within its
jurisdiction."93
Provincial Mining Regulatory Board
While the MAB’s jurisdiction covers the settlement
of conflicts over mining claims, the Provincial Mining
Regulatory Board (PMRB) — created under Republic
Act No. 7076 known as the People’s Small-Scale
Mining Act of 1991 — granted powers that include
functions more executive in nature such as declaring
and segregating areas for small-scale mining.94
Section 24 of Republic Act No. 7076 provides for the
PMRB’s power to "declare and segregate existing
gold-rich areas for small-scale mining" but "under
the direct supervision and controlof the Secretary":
Section 24. Provincial/ City MiningRegulatory Board.
There is hereby created under the direct supervision
and control of the Secretary a provincial/city mining
regulatory board, herein called the Board, which
shall be the implementing agency of the
Department, and shall exercise the following powers
and functions, subject to review by the Secretary:
(a) Declare and segregate existing gold-rich
areas for small-scale mining;
(b) Reserve future gold and other mining
areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and
regulations related to small-scale mining;
(e) Settle disputes, conflicts or litigations
over conflicting claims within a people’s
small-scale mining area, an area that is
declared a small mining area; and
(f) Perform such other functions as may be
necessary to achieve the goals and
objectives of this Act.95
Section 22 of DAO No. 34–92, the implementing
rules and regulations of Republic Act No. 7076,
similarly states that the "Provincial/City Mining
Regulatory Board created under RA 7076 shall
exercise the following powers and functions, subject
to review by the Secretary[.]"96
Section 6 of DAO No. 34–92 also provides that "[t]he
Board created under RA 7076 shall have the
authority to declare and set aside People’s Small-
Scale Mining Areas in sites onshore suitable for
small-scale mining operations subject to review by
the DENR Secretary thru the Director[.]"97
DENR Secretary
Section 26 of Republic Act No. 7076 reiterates the
DENR Secretary’s power of control over "the
program and the activities of the small-scale miners
within the people’s small-scale mining area": Section
26. Administrative Supervision over the People’s
Small scale Mining Program. The Secretary through
his representative shall exercise direct supervision
and control over the program and activities of the
small-scale miners within the people’s small-scale
mining area. The Secretary shall within ninety (90)
days from the effectivity of this Act promulgate rules
and regulations to effectively implement the
provisions of the same. Priority shall be given to such
rules and regulations that will ensurethe least
disruption in the operations of the small-scale
miners.98
Section 21.1 of DAO No. 34–92, the implementing
rules and regulations of Republic Act No. 7076,
states that the DENR Secretary has "direct
supervision and control over the program and the
activities of the small-scale miners within the
people’s small-scale mining area."99
This court has distinguished the power of control
and the power of supervision as follows:
. . . In administrative law, supervision means
overseeing or the power or authority of an officer to
see that subordinate officers perform their duties. If
the latter fail or neglect to fulfill them, the former
may take such action or step as prescribed by law to
make them perform their duties. Control, on the
other hand, means the power of an officer to alter or
modify or nullify or set aside what a subordinate
officer ha[s] donein the performance of his duties
and to substitute the judgment of the former for
that of the latter.100 (Emphasis supplied)
League of Provinces v. DENR101 discussed that "the
Local Government Code did not fully devolve the
enforcement of the small-scale mining law to the
provincial government, asits enforcement is subject
to the supervision, control and review of the DENR,
which is in charge, subject to law and higher
authority, of carrying out the State’s constitutional
mandate to control and supervise the exploration,
development, utilization of the country’s natural
resources."102 Since the DENR Secretary has power of
control as opposed to power of supervision, he had
the power to affirm with modification the PMRB’s
decision.
Executive Department
The Constitution provides that "[t]he State may
directly undertake such activities, or it may enter
intoco-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[.]"103
Moreover, "[t]he 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 tothe general terms and conditions
provided by law, based on real contributions to the
economic growth and general welfare of the
country[.]"104
Chapter II, Section 4 of Republic Act No. 7942 known
as the Philippine Mining Act of 1995 also provides as
follows:
precluded from considering a direct takeover of the
mines, if it is the only plausible remedy in sight to
the gnawing complexities generated by the gold
rush."109 Incidentally, we acknowledge that PICOP
raised the validity of Proclamation No. 297 in its
memorandum.110 It argues that Proclamation No.
297 by then President Macapagal-Arroyo was
without congressional concurrence as required by
Republic Act No. 3092, thus, revocable.111 The
validity of Proclamation No. 297, however, is not an
issue in these cases.
This subsequent development was not litigated, and
this is not the proper case to assail its validity.
WHEREFORE, in view of the foregoing, the petitions
are DENIED for being moot and academic.

SEC. 4. Ownership of Mineral Resources. – Mineral

resources are owned by the State and the
exploration, development, utilization, and processing
thereof shall be under its full control and
supervision. The state may directly undertake such
activities or it may enter into mineral agreements
with contractors.

The State shall recognize and protect the rights of

the indigenous cultural communities to their
ancestral lands as provided for by the Constitution.105

Section 5 of Republic Act No. 7942 onmineral

reservations provides that "[m]ining operations in
existing mineral reservations and such other
reservations as may thereafter be established, shall
be undertaken by the Department or through a
contractor[.]"106

Apex Mining v. SMGMC discussed that "Section 5 of

Republic Act No. 7942 is a special provision, as it
specifically treats of the establishment of mineral
reservations only.1âwphi1 Said provision grants the
President the power to proclaim a mineral land as a
mineral reservation, regardless of whether such land
is also an existing forest reservation." 107

In the 2002 case of Southeast Mindanao Gold Mining

Corporation v. Balite Portal Mining
Cooperative108 involving the same Diwalwal gold rush
area, this court discussed that "the State may not be