Mustang Lumber, Inc. v. Court of Appeals,G.R. No.
104988 Rules, from filing a complaint before the Provincial Prosecutor for petitioner's alleged violation of Section 68 of PD 705,
FACTS: Acting on an information that a huge stockpile of narra flitches, shorts, and slabs were seeninside petitioner's
lumberyard, a team of foresters and policeman was organized and sent to conductsurveillance. In the course
thereof, the team members saw coming out from the lumberyard thepetitioner's truck loaded with lumber.
The driver could not produce the required invoices and transportdocuments, the team seized the truck together with
its cargo and impounded them.
ISSUE(S): Whether or not the seizure of the truck and its cargo without warrant was unlawful.
HELD: NO. Search of a moving vehicle is one of the five doctrinally accepted exceptions to
theconstitutional mandate that no search or seizure shall be made except by virtue of a warrant issued by ajudge after
personally determining the existence of probable cause
Merida v People
FACTS: On 23 December 1998, Tansiongco learned that petitioner cut a narra tree in the Mayod Property.
Tansiongco reported the matter to Florencio Royo (Royo), the punong barangay of Ipil. On 24 December1998, 7
Royosummoned petitioner to a meeting with Tansiongco. When confronted during the meeting about the felled narra
tree, petitioner admitted cutting the tree but claimed that he did so with the permission of one Vicar Calix (Calix) who,
according to petitioner, bought the Mayod Property from Tansiongco in October 1987 under a pacto de retro sale.
Petitioner showed to Royo Calix's written authorization signed by Calix's wife. On 11 January 1999, Tansiongco
reported the tree-cutting to the Department of Environment and Natural Resources (DENR) forester Thelmo S.
Hernandez (Hernandez) in Sibuyan, Romblon.
DECISION OF LOWER COURTS:* DENR forester: ordered petitioner not to convert the felled tree trunk into lumber.
On 26 January 1999, Tansiongco informed Hernandez that petitioner had converted the narra trunk into
lumber. Hernandez, with other DENR employees and enforcement officers, went to the Mayod Property and
saw that the narra tree had been cut into six smaller pieces of lumber. Hernandez took custodyof the lumber, 9
deposited them for safekeeping with Royo, and issued an apprehension receipt to petitioner. A larger portion
of the felled tree remained at the Mayod Property. The DENR subsequently conducted an investigation on the matter.
*
RTC (uponcomplaint of Tansiongco): Petitioner was charged in the Regional Trial Court of Romblon, Romblon,
Branch 81 (trial court) with violation of Section 68 of PD 705, as amended, for "cut[ting], gather[ing], collect[ing] and
remov[ing]" a lone narra tree inside a private land in Mayod, Ipil, Magdiwang, Romblon (Mayod Property) over which
private complainant Oscar M. Tansiongco (Tansiongco) claims ownership. * CA: affirmed trial court.
ISSUES & RULINGS: 1)Whether the trial court acquired jurisdiction over Criminal Case No. 2207 even though it was
based on a complaint filed by Tansiongco and not by a DENR forest officer; and YES, DENR has jurisdiction.
[NOTE: This dispositive no longer applicable since the Rules of Procedure for Environmental cases requires complaint
to be filed first with the DENR, but the preliminary investigation is done by the prosecutor] Section 80 of PD 705
provides in relevant parts: SECTION 80. Arrest; Institution of criminal actions. -x x x x Reports and complaintsregarding
the commission of any of the offenses defined in this Chapter, not committed in the presence of any forest officer or
employee, or any of the deputized officers or officials, shall immediately be investigated by the forest officer assigned
in the area where the offense was allegedly committed, who shall thereupon receive the evidence supporting the report
or complaint. If there is prima facie evidence to support the complaint or report, the investigating forest officer shall file
the necessary complaint with the appropriate official authorized by law to conduct a preliminary investigation of criminal
cases and file an information in Court. (Emphasis supplied) Here, it was not "forest officers or employees of the Bureau
of Forest Development or any of the deputized officers or officials" who reported to Hernandez the tree-cutting in the
Mayod Property but Tansiongco, a private citizen who claims ownership over the Mayod Property. Thus, Hernandez
cannot be faulted for not conducting an investigation to determine "if there is prima facie evidence to support the
complaint or report." At any rate, Tansiongco was not precluded, either under Section 80 of PD 705 or the Revised
as amended. For its part, the trial court correctly took cognizance of Criminal Case No. 2207 as the case falls within
its exclusive original jurisdiction.2) Whether petitioner is liable for violationof Section 68 of PD 705, as amended. YES.
Before his trial, petitioner consistently represented to the authorities that he cut a narra tree in the Mayod Property and
that he did so only with Calix's permission. However, when he testified, petitionerdenied cutting the tree in question.
We sustain the lower courts' rulings that petitioner's extrajudicial admissions bind him. 3) Is the narra tree timber? YES.
The closest this Court came to defining the term "timber" in Section 68 was to provide that "timber," includes "lumber"
or "processed log." In other jurisdictions, timber is determined by compliance with specified dimensions or certain
"stand age" or "rotation age." In Mustang Lumber, Inc. v. Court of Appeals, this Court was faced with a similar task of
having to define a term in Section 68 of PD 705 -"lumber" -to determine whether possession of lumber is punishable
under that provision. In ruling in the affirmative, we held that "lumber" should be taken in its ordinary or common
usagemeaning to refer to "processed log or timber," We see no reason why, as in Mustang, the term "timber" under
Section 68 cannot be taken in its common acceptation as referring to "wood used for or suitable for building or for
carpentry or joinery." Indeed, tree saplings or tiny tree stems that are too small for use as posts, panelling, beams,
tables, or chairs cannot be considered timber. Undoubtedly, the narra tree petitioner felled and converted to lumber
was "timber" fit "for building or for carpentry or joinery" and thus falls under the ambit of Section 68 of PD 705, as
amended.
PAAT vs CA, Baculi
FACTS: On May 19, 1989, the truck of Victoria de Guzman was seized by the DENRpersonnel in Aritao, Nueva Ecija
when it was on its way to Bulacan because the driverwas not able to produce the required forest documents for the
forest products found concealed in the truck. The CENRO of Aritao issued on May 23, 1989 an order ofconfiscation
and gave the owners 15 days to submit an explanation. However, theowners failed to submit the required explanation.
The DENR Regional DirectorBaggayan sustained the confiscation and order of forfeiture. The private respondentsfiled
a case of replevin to the Regional Trial Court Branch 2 of Cagayan. Theycontended that the DENR has no authority to
confiscate and forfeit conveyances usedin transporting illegal forest products in favour of the government but rather
the court,based on the second paragraph of Section 68 of PD 705, as amended by EO 277. Inaddition, they argued
that since there is no crime punishable is the same Section other than qualified theft, and the petitioners admitted that
they could not be charged withsuch offense, hence, their truck should not be confiscated. The RTC decided in favourof
the respondents. The petitioners filed a petition for certiorari to the Supreme Court.
ISSUE: Whether or not the petitioners violated Section 68 of PD 705, as amended by EO277, which shall, therefore,
be a ground for confiscation of their truck?
HELD: When the statue is clear and explicit, there is hardly room for any extended court ratiocination or
rationalization.It is clear in the introduction of EO 277 amending Sec. 68 of PD 705 that to ―cut,gather, collect,
remove....or possess any timber or other forest products without thelegal documents as require by the existing forest
laws and regulations, shall bepunished with the penalties imposed under Art. 309 and 310 of the RPC‖. Then it
isobvious that petitioners have the violated EO 277 when its truck which contains forestproducts was not able to present
legal documents. The truck should, therefore, besubject for confiscation.
Lalican v. Vergara. G.R. No. 108619, July 31, 1997, 276
FACTS: Lalican and three others were charged with illegal possession of lumber without legal documents, in
violation of Section 68 of P.D. No. 705 (The Forestry Reform Code of the Philippines). Lalican moved to quash
the information, arguing that the law does not apply to lumber, which is different from timber or other forest
products. The RTC initially granted the motion, but later set it aside upon the prosecution's motion for
reconsideration. Lalican filed a petition for certiorari with the Supreme Court.
ISSUE: Does Sec. 68 of P.D. No. 705, as amended, cover illegal possession of lumber as well as timber? RULING:
YES. Punished [in Sec. 68 of P.D. No. 705, as amended by Executive Order No. 277] are: (a) the cutting,
gathering, collection, or removal of timber or other forest products from the places therein mentioned without any
authority; or (b) possession of timber or other forest products without the legal documents as required under
existing forest laws and regulations.
To exclude possession of "lumber" from the acts penalized in Sec. 68 would certainly emasculate the law itself. A
law should not be so construed as to allow the doing of an act which is prohibited by law, nor so interpreted as to
afford an opportunity to defeat compliance with its terms, create an inconsistency, or contravene the plain words
of the law. 10 After all, the phrase "forest products" is broad enough to encompass lumber which, to reiterate, is
manufactured timber. Xxxx The Court, therefore, finds that the lower court did not gravely abuse its discretion in
denying the quashal of the information. Xxxx
The Court can well take judicial notice of the deplorable problem of deforestation in this country, considering that
the deleterious effects of this problem are now imperiling our lives and properties, more specifically, by causing
rampaging floods in the lowlands. While it is true that the rights of an accused must be favored in the
interpretation of penal provisions of law, it is equally true that when the general welfare and interest of the people
are interwoven in the prosecution of a crime, the Court must arrive at a solution only after a fair and just balancing of
interests. Xxxx WHEREFORE, the instant petition for certiorari and prohibition is hereby DISMISSED
DOCTRINE: The forestry code aims to protect and conserve the forest resources of the country and to penalize
any unauthorized or illegal acts involving timber or other forest products. It should be interpreted in accordance
with its plain words and its purpose, and not in a way that would weaken or contradict its provisions or allow the
evasion of its requirements. The forestry code should also be applied in a manner that balances the rights of
the accused and the interests of the public, especially in view of the serious environmental and social problems
caused by deforestation.
Crescencio vs. People
Facts:
Ma. Mimie Crescencio was convicted for violating Section 68 of Presidential Decree (P.D.) No. 705, also known as the
Revised Forestry Code of the Philippines. The Regional Trial Court (RTC) of Talibon, Bohol, found her guilty of
possession of lumber without proper documents. The Court of Appeals (CA) dismissed her appeal for failure to serve
a copy of the Appellant's Brief to the Office of the Solicitor General (OSG).
On March 15, 1994, the Chief of the Forest Protection Unit of the Department of Environment and Natural Resources
(DENR) and his team went to Crescencio's house in Talibon, Bohol. They found forest products, specifically 24 pieces
of magsihagon lumber, under her house and at the shoreline nearby. Crescencio admitted ownership of the lumber but
failed to present proper documents to support her claim. The DENR personnel confiscated the lumber and issued a
seizure receipt to Crescencio. Crescencio was charged with violation of Section 68 of the Forestry Code. She pleaded
not guilty, but the RTC convicted her and sentenced her to imprisonment.
Issue:
Is the CA's dismissal of Crescencio's appeal due to her failure to serve a copy of the Appellant's Brief to the OSG
proper, considering the circumstances and the interest of substantial justice?
Ruling:
The CA's dismissal of Crescencio's appeal purely on technical grounds, without considering the merits of the case, is
not proper. The CA should have ruled on the appeal, especially when it involves the petitioner's liberty.
Even if the technicality issue is set aside, the Court finds that the prosecution was able to prove Crescencio's guilt
beyond reasonable doubt.
The DENR personnel had the authority to conduct a warrantless search and seizure under the plain view doctrine. The
lumber was plainly exposed to sight, and the DENR personnel had the right to be in the position to see it. The DENR
personnel had the authority to arrest Crescencio without a warrant. Crescencio's defense of having supporting
documents to prove the legality of the lumber's source was not sufficient.
Mere possession of forest products without proper documents is a crime under the Forestry Code. The prosecution
presented evidence, including a seizure receipt and testimonies of witnesses, to establish Crescencio's possession of
the lumber. The lower court erred in determining the value of the confiscated lumber.
The Court imposes the minimum penalty under the Revised Penal Code and increases it by two degrees due to the
nature of the offense.
The Court imposes an indeterminate penalty of four months and one day of arresto mayor as minimum to three years,
six months, and twenty-one days of prision correctional as maximum.
The Court affirms the RTC's decision with the modification of the penalty imposed on Crescencio.
REPUBLIC OF THE PHILIPPINES, represented by the DENR, petitioner, vs. PAGADIAN CITY TIMBER CO.,
INC., respondentG.R. No. 159308September 16, 2008.
DOCTRINE:A license agreement is a privilege granted by the State to a person to utilize forest resourceswithin
any forest land with the right of possession and occupation thereof to the exclusion of others, except the
government, but with the corresponding obligation to develop, protect, and rehabilitate the same in accordance with
the terms and conditions set forth in said agreement.License Agreements are not contracts within the purview of the
due process and the non impairment clause enshrined in the Constitution.
FACTS: Petitioner, through the the DENR and respondent Pagadian City Timber Co. In. executed an Industrial Forest
Management (IFMA) No. R-9-040 whereby petitioner, represented by the then Regional Executive Director (RED)
for Region IX, authorized respondent to develop, utilize, and manage a specified forest are covering 1,999.14
hectares located in Barangays Langapod, Cogonan, and Datagan, Municipality of Labangan, Zamboanga del
Sur, for the production of timber and other forest products subject to a production-sharing scheme.Respondent
later submitted the required Comprehensive Developmentand Management Plan (CDMP) which the DENR
approved. Inresponse to the numerous complaints filed by members of the Subanen tribe regarding respondent’s
alleged failure to implement the CDMP, disrespect of their rights as an indigenous people, and the constant
threats and harassment by armed men employed by respondent, REDDENR Region IX, issued Regional
Special Order No. 217 creating a regional team to evaluate and assess IFMA No. R-9-040.DENR sent a letterto
respondent, giving notice of the evaluation and assessment to be conducted on the areathe DENR requested any
representative of the company to appear at the CENRO Office, Pagadian City, and bring with him documents and
maps concerning its IFMA operations.a DENR Evaluation Teamwent to the IFMA site.After a briefing conference
between the Evaluation Team and respondent’s Operations Manager, Inocencio Santiago, actual field evaluation
and assessment followed.an exit conference and dialogue on post evaluation and assessment of IFMA R-9-04
was held between DENR officialsand IFMA Representative and Operations Manager Inocencio Santiago at the
CENRO, Pagadian. The evaluation team made recommendations and submitted to the DENR a
Memorandum regarding the performace evaluation of IFMA No. R-9-040. RED Mendoza recommended to the
DENR Secretary the cancellation of IFMA No. R-9- 040 for the FAILURE TO IMPLEMENT THE APPROVED
COMPREHENSIVE DEVELOPMENT AND MANAGEMENT PLANand for the FAILURE TO IMPLEMENT OR
ADOPT AGREEMENT WITH COMMUNITIES AND OTHER RELEVANT SECTORS.Respondent’s President,
Filomena S. San Juan, wrote DENR Secretary Cerilles that the company was surprised to receive the Order of
the cancellation of IFMA No. R-9-040. She appealed for the reconsideration of the Order asking that a re-
investigationbe conducted to comply with due process.Respondent appealed to the Office of the President
(OP).the OP
affirmed the cancellation order based on the results of the actual evaluation and assessment of the DENR team. It
ruled that the cancellation of IFMA No. R-9-040 was primarily and specifically governed by Section 26 of
Department Administrative Order (DAO) 97-04. Relative to respondent’s invocation of due process, the OP
held that respondent was afforded the right to be heard when it filed its motion for reconsideration and its subsequent
appeal to the OP.The CA ruled in favor of respondents. In striking down the rulings of the OP and the Orderthe CA
declared that IFMA No. R-9-040 was a contract that could not be unilaterally cancelled without infringing on
the rights of respondent to due process and against impairment of contracts. The appellate court agreed with
respondent when the latter argued that it was entitled to the benefits of Sections 35 and 36of IFMA No. R-9-040 such
that respondent shouldhave been given 30 days, after due notice, to remedy any breach or default of the provisions of
the IFMA and/or that the dispute regarding the bases for the cancellation of the IFMA should have first been
submitted to arbitration.
ISSUE/S:
1.Whether the CA gravely erred in ruling that IFMA No. R9-040 is a contract and not a mere privilege granted by the
State to respondent.-YES
2.Whether the CA seriously erred in ordaining that respondent can rightfully invoke prior resort to arbitration or the
option to mend it violations under IFMA No. R9-040.-YES
HELD:
1.IFMA No. R-9-040 is a license agreement under Presidential Decree (P.D.) No. 705 (Revised Forestry Code), the
law which is the very basis for its existence. Under Section 3, paragraph (dd) thereof, a license agreement is defined
as “a privilegegranted by the State to a person to utilize forest resources within any forest land with the right of
possession and occupation thereof to the exclusion of others, except the government, but with the corresponding
obligation to develop, protect and rehabilitate the same in accordance with the terms and conditions set forth in
said agreement.”An IFMA has for its precursor the Timber License Agreement (TLA), one of the tenurial
instruments issued by the State to its grantees for the efficient management of the country’s dwindling forest
resources. Jurisprudence has been consistent in holding that license agreements are not contracts within the
purview of the due process and the non-impairment of contracts clauses enshrined in the Constitution.
2.It is also futile for respondent to claim that it is entitled to an arbitration under Section 36 of IFMA No. R-9-040
before the license agreement may be canceled. A reading of the said Section shows that the dispute should
bebased on the provisions of the IFMA to warrant a referral to arbitration of an irreconcilable conflict between the
IFMA holder and the DENR Secretary. In this case, the cancellation was grounded on Section 26 of DAO
No. 97-04, particularly respondent’s failure to implement the approved CDMP and its failure to implement or
adopt agreements made with communities and other relevant sectors. The contrary notwithstanding, what remains
is that respondent never refuted the findings of the Evaluation Team when given the opportunity to do so but waited
until IFMA No. R-9-040 was already cancelled before it made its vigorous objections as to the conduct of the evaluation,
harping only on its alleged right to due process.Indeed, respondent was given the opportunity to contest the
findings that caused the cancellation of its IFMA when it moved to reconsider the Order of cancellation and when it
filed its appeal and motion for reconsideration before the OP.
DISPOSITIVE PORTION:WHEREFORE, the Decision dated October 18,2001 and the Resolution dated July 24, 2003
of the Court of Appeals in CA-G.R. SP No. 59194 are REVERSED and SET ASIDE, and the Order dated June 7, 1999
of then DENR Secretary Antonio Cerilles, and the Resolutions of the Office of the President dated January 12, 2000
and May 8, 2000 affirming the said Order, are REINSTATED and AFFIRMED. No pronouncement as to costs.SO
ORDERED.
OLYMPIO REVALDO, Petitioner, v. PEOPLE OF THE PHILIPPINES (2009)
FACTS:
Petitioner was charged with the offense of illegal possession of premium hardwood lumber in violation of Section 68
of the Forestry Code. That on or about the 17th day of June 1992, Revaldo, with intent of gain, did then and there
willfully, unlawfully and feloniously possess 96.14 board ft. of flat lumber with a total value of P1,730.52, Philippine
Currency, without any legal document as required under existing forest laws and regulations from proper government
authorities, to the damage and prejudice of the government. Upon arraignment, petitioner, assisted by counsel, pleaded
not guilty. Trial ensued. The RTC rendered judgment on 1997 convicting petitioner of the offense charged, he appealed
and the Court of Appeals ruled that motive or intention is immaterial for the reason that mere possession of the lumber
without the legal documents gives rise to criminal liability. Hence, this petition for certiorari. Petitioner contends that
the warrantless search and seizure conducted by the police officers was illegal and thus the items seized should not
have been admitted in evidence against him. Petitioner argues that the police officers were not armed with a search
warrant when they went to his house to verify the report that petitioner had in his possession lumber without the
corresponding license.
ISSUE: Whether or not the evidence obtained without search warrant is admissible in court.
RULING:
When the police officers arrived at the house of petitioner, the lumber were lying around the vicinity of petitioner’s
house. The lumber were in plain view.
Under the plain view doctrine, objects falling in “plain view” of an officer who has a right to be in the position to have
that view are subject to seizure and may be presented as evidence. When asked whether he had the necessary permit
to possess the lumber, petitioner failed to produce one. Petitioner merely replied that the lumber in his possession was
intended for the repair of his house and for his furniture shop. There was thus probable cause for the police officers to
confiscate the lumber. There was, therefore, no necessity for a search warrant. Petitioner was in possession of the
lumber without the necessary documents when the police officers accosted him. In open court, petitioner categorically
admitted the possession and ownership of the confiscated lumber as well as the fact that he did not have any legal
documents therefore and that he merely intended to use the lumber for the repair of his dilapidated house. Mere
possession of forest products without the proper documentation consummates the crime. Dura lex sed lex. The law
may be harsh but that is the law. Therefore, the appealed decision convicting petitioner for violation of Section 68 (now
Section 77) of the Forestry Code is affirmed.
DIDIPIO v GOZUN GR No. 157882 March 30, 2006
FACTS:
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.
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 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.
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.
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.
ISSUES & RULINGS:
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.
NO.
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. 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.
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.
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.
NO.
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. 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.
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.
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.
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.
LA BUGAL v. RAMOS
FACTS: Petitioners prayed that RA 7942, its implementing rules, and the Financial and Technical Assistance
Agreement (FTAA) between the government and Western Mining Corporation (Philippines), Inc. (WMCP) be declared
unconstitutional on ground that they allow fully foreign owned corporations like WMCP to exploit, explore and develop
Philippine mineral resources in contravention of Article XII Section 2 paragraphs 2 and 4 of the Charter.
In January 2001, WMC – a publicly listed Australian mining and exploration company – sold its whole stake in WMCP
to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is owned by Indophil Resources, an
Australian company. DENR approved the transfer and registration of the FTAA in Sagittarius‘ name but Lepanto
Consolidated assailed the same.
On 27 January 2004, the Court en banc promulgated its Decision granting the Petition of La Bugal, et. al declaring the
unconstitutionality of certain provisions of RA 7942, DAO 96-40, as well as of the entire FTAA executed between the
government and WMCP. It was found that the FTAAs are service contracts prohibited under the 1987 Constitution.
The Decision struck down the subject FTAA for being antithetical to the principle of sovereignty over our natural
resources as they allowed foreign control over the exploitation of our natural resources, to the prejudice of the Filipino
nation, though it was previously permitted under the 1973 Constitution. It quoted several legal scholars and authors
who had criticized service contracts for, inter alia, vesting in the foreign contractor exclusive management and control
of the enterprise, including operation of the field in the event petroleum was discovered; control of production,
expansion and development; nearly unfettered control over the disposition and sale of the products
discovered/extracted; effective ownership of the natural resource at the point of extraction; and beneficial ownership
of our economic resources. According to the Decision, the 1987 Constitution (Section 2 of Article XII) effectively banned
such service contracts. Subsequently, Victor O. Ramos (Secretary, Department of Environment and Natural Resources
[DENR]), Horacio Ramos (Director, Mines and Geosciences Bureau [MGB-DENR]), Ruben Torres (Executive
Secretary), and the WMC (Philippines) Inc. filed separate Motions for Reconsideration.
ISSUE:
Whether the Philippine Mining Act is unconstitutional.
HELD:
No. The Philippine Mining Act is not unconstitutional. It is expressed that Section 3 of RA 7942 — which allows a
foreign contractor to apply for and hold an exploration permit — is unconstitutional. The reasoning is that Section 2 of
Article XII of the Constitution does not allow foreign-owned corporations to undertake mining operations directly. They
may act only as contractors of the State under an FTAA; and the State, as the party directly undertaking exploitation
of its natural resources, must hold through the government all exploration permits and similar authorizations.
The objection, however, is not well-founded. While the Constitution mandates the State to exercise full control and
supervision over the exploitation of mineral resources, nowhere does it require the government to hold all exploration
permits and similar authorizations. In fact, there is no prohibition at all against foreign or local corporations or
contractors holding exploration permits. The reason is not hard to see.
The crux of the controversy is the amount of discretion to be accorded the Executive Department, particularly the
President of the Republic, in respect of negotiations over the terms of FTAAs, particularly when it comes to the
government share of financial benefits from FTAAs. The Court believes that it is not unconstitutional to allow a wide
degree of discretion to the Chief Executive, given the nature and complexity of such agreements, the humongous
amounts of capital and financing required for large-scale mining operations, the complicated technology needed, and
the intricacies of international trade, coupled with the State’s need to maintain flexibility in its dealings, in order to
preserve and enhance our country’s competitiveness in world markets.
The Constitution of the Philippines is the supreme law of the land. It is the repository of all the aspirations and hopes
of all the people. We fully sympathize with the plight of Petitioner La Bugal B’laan and other tribal groups, and commend
their efforts to uplift their communities. However, we cannot justify the invalidation of an otherwise constitutional statute
along with its implementing rules, or the nullification of an otherwise legal and binding FTAA contract.
We must never forget that it is not only our less privileged brethren in tribal and cultural communities who deserve the
attention of this Court; rather, all parties concerned — including the State itself, the contractor (whether Filipino or
foreign), and the vast majority of our citizens — equally deserve the protection of the law and of this Court. To stress,
the benefits to be derived by the State from mining activities must ultimately serve the great majority of our fellow
citizens. They have as much right and interest in the proper and well-ordered development and utilization of the
country’s mineral resources as the petitioners.
Verily, the mineral wealth and natural resources of this country are meant to benefit not merely a select group of people
living in the areas locally affected by mining activities, but the entire Filipino nation, present and future, to whom the
mineral wealth really belong. This Court has therefore weighed carefully the rights and interests of all concerned, and
decided for the greater good of the greatest number. JUSTICE FOR ALL, not just for some; JUSTICE FOR THE
PRESENT AND THE FUTURE, not just for the here and now.
Celestial v. Macroasia
FACTS :The Secretary of Agriculture and Natural Resources and Infanta Mineral andIndustrial Corporation (Infanta)
entered into a Mining Lease Contract V-1050.Infanta’s corporate name was then changed to Cobertson
HoldingsCorporation and subsequently to its present name, Macroasia Corporation.After sometime, Celestial filed a
Petition to cancel the subject mining leasecontracts and other mining claims of Macroasia including those covered by
MiningLease Contract No. V-1050, before the Panel of Arbitrators (POA) of the Minesand Geo-Sciences Bureau (MGB)
of the DENR. Blue Ridge, in an earlier letter-petition, also wrote the Director of Mines toseek cancellation of mining
lease contracts and other mining rights of Macroasiaand another entity, Lebach Mining Corporation (Lebach), in mining
areas inBrooke’s Point.
Celestial is the assignee of 144 mining claims covering such areas contiguous to Infanta’s (now Macroasia)
mining lode claims. Celestial also holds an MPSA with the government which covers 2,835 hectares located
atIpilan/Maasin, Brooke’s Point, Palawan and two pending applications covering another 4,040 hectares in Barangay
Mainit also in Brooke’s Point. Celestial sought the cancellation of Macroasia’s lease contracts. Macroasia refuted the
grounds for cancellation invoked by Celestial. Based on the records of the Bureau of Mines and findings of the field
investigations, the POA granted the petition of Celestial to cancel the MiningLease Contracts of Macroasia; and found
the claims of the others indubitably meritorious. It gave Celestial the preferential right to Macroasia’s mining areas.
Itupheld Blue Ridge’s petition, but only as against the Mining Lease Contract areas of Lebach, and the said leased
areas were declared automatically abandoned. Itgave Blue Ridge priority right to the aforesaid Lebach’s areas/mining
claims. Blueridge and Macroasia appealed before the MAB. Lebach did not file any notice of appeal with the required
memorandum of appeal; thus, with respect to Lebach, the above resolution became final andexecutory. The MAB
made a decision upholding the Decision of the POA to cancel the Mining Lode/Lease Contracts of Macroasia. However,
the MAB, subsequently issued a resolution vacating its previous decision, holding that neither the POA nor the MAB
had the power to revoke a mineral agreement duly entered into by the DENR Secretary.
The MAB furtherheld that the power to cancel or revoke a mineral agreement was exclusively lodged with the DENR
Secretary. Celestial and Blue Ridge made an appeal. The CA Special12th Division affirmed the MAB Resolution which
upheldthe exclusive authority of the DENR Secretary to approve, cancel, and revoke mineral agreements. The CA also
denied Celestial’s Motion for Reconsideration.
While the CA Special 10th Division granted Blue Ridge’s petition; reversedand set aside the Resolutions of the MAB;
and treated the cancellation of a mininglease agreement as a mining dispute within the exclusive jurisdiction of the
POAunder Sec. 77 of RA 7942, explaining that the power to resolve mining disputes,which is the greater power,
necessarily includes the lesser power to cancel mining agreements.
ISSUE:
Whether or not it is only the Secretary of the DENR who has the jurisdiction to cancel mining contracts and privileges?
HELD:
YES. It is only the Secretary of the DENR who has jurisdiction to cancel mining contracts and privileges.
After a scrutiny of the provisions of PD 463, EO 211, EO 279, RA 7942 and its implementing rules and regulations,
executive issuances, and case law, we rule thatthe DENR Secretary, not the POA, has the jurisdiction to cancel existing
mineral lease contracts or mineral agreements based on the following reasons:The power of the DENR Secretary to
cancel mineral agreements emanates from his administrative authority, supervision, management, and control
overmineral resources under Chapter I, Title XIV of Book IV of the Revised Administrative Code of
1987.It is the DENR, through the Secretary, that manages, supervises, and regulates the use and
development of all mineral resources of the country. It hasexclusive jurisdiction over the management of all lands of
public domain, which covers mineral resources and deposits from said lands. It has the power to oversee, supervise,
and police our natural resources which include mineral resources.
Derived from the broad and explicit powers of the DENR and its Secretary underthe Administrative Code of 1987 is
the power to approve mineral agreements andnecessarily to cancel or cause to cancel said agreements. Under RA
7942, the power of control and supervision of the DENR Secretary over the MGB to cancel or recommend
cancellation of mineral rightsclearly demonstrates the authority of the DENR Secretary to cancel or approve
thecancellation of mineral agreements. The DENR Secretary’s power to cancel mining rights or agreements throughthe
MGB can be inferred from Sec. 230, Chapter XXIV of DENR AO 96-40 oncancellation, revocation, and termination of
a permit/mineral agreement/FTAA
SR Metals vs Reyes
FACTS:
SR Metals Inc. was awarded a 2-yr Small-Scale Mining Permit (SSMP) and were allowed to extract Nickel and Cobalt
(NiCo) in Agusan del Norte. The mining corporations’ ECCs contain a restriction that the amount of Ni-Co ore they are
allowed to extract annually should not exceed 50,000 MTs of ore pursuant to Section 1 of PD 1899.
Gov. Amante of Agusan del Norte questioned the quantity of ore that had been mined and shipped by the mining
corporations. The mining corporations denied having exceeded the extraction limit of 50,000 MTs and explained that
an extracted mass contains only a limited amount/percentage of Ni-Co because it is lumped with gangue (the unwanted
rocks and minerals.)
Gov. Amante sought the opinion of DOJ. By comparing PD 1899 to RA No. 7076, a subsequent law that likewise
defines small-scale mining, the DOJ opined that Section 1 of PD 1899 is deemed to have been impliedly repealed by
RA 7076 as nothing from the provisions of the latter law mentions anything pertaining to an annual production quota
for small-scale mining. DOJ categorically concluded that the term ‘ore’ should be confined only to Ni-Co, that is,
excluding soil and other materials that are of no economic value to the mining corporations.
ISSUE:
Whether or not Sec. 1, PD 1899 violates the equal protection clause.
RULING:
No, while under RA 7076, small-scale mining refers to ‘mining activities which rely heavily on manual labor using simple
implements and methods and do not use explosives or heavy mining equipment. Significantly, this definition does not
provide for annual extraction limit unlike in PD 1899.
DOJ Opinion concluded that since nothing from RA 7076 speaks of an annual production limit, Sec. 1 of PD 1899
should be considered impliedly repealed by RA 7076, the later law. However, while these two laws tackle the definition
of what small-scale mining is, both have different objects upon which the laws shall be applied to. PD 1899 applies to
individuals, partnerships and corporations while RA 7076 applies to cooperatives.
With the 50,000-MT limit likewise imposed on small- scale miners under RA 7076, the issue raised on the violation of
the equal protection clause is moot. The fact is, the DENR treats all small-scale miners equally as the production limit
applies to all of them. There is therefore no more reason for the mining corporations to not recognize and comply with
the said limitation. It must be stressed that the DENR is the government agency tasked with the duty of managing and
conserving the country’s resources; it is also the agency vested with the authority to promulgate rules and regulations
for the implementation of mining laws.
League of Provinces of the Philippines v. DENR
G.R. No. 175368. April 11, 2013
FACTS: Golden Falcon filed with the DENR an Application for Financial and Technical Assistance Agreement in
Bulacan. Their subsequent applications and appeals were later denied by the DENR. 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 areaAtlantic Mines and Trading Corporation (AMTC) filed with the
PENRO of Bulacan an Application for Exploration Permit (AEP) covering 5,281 hectares ofthe area covered by
Golden Falcon's Application for Financial and Technical Assistance Agreement.6Director Cabantog, who was the
concurrent Chairman of the Provincial Mining Regulatory Board 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).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 AMTC appealed to respondent DENR Secretary the grant of the aforesaid Small-Scale Mining
PermitsAugust 8, 2006, respondent DENR Secretary rendered a Decision14in favor of AMTC. 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.
ISSUES:
(1)Whetheror not Section 17(B)(3)(III) of R.A. No. 7160 and Section 24 of R.A. No. 7076 are unconstitutional
for providing for executive control and infringing upon the local autonomy of provinces.(2)Whether or not, the
act of respondent 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.
HELD:(1)No. In this case, respondent DENR Secretary has 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.Paragraph 1 of
Section 2, Article XII of the Constitutionprovides that "the exploration, development and utilization of natural
resources shall be under the full control and supervision of the State." Under said provision, the DENR has
the duty 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 reviewof 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. The Court has clarified that
the constitutional guarantee of local autonomy in the ConstitutionArt. X, Sec. 2 refers to the administrative
autonomy of local government units or the decentralization of government authority.It does not make
local governments sovereign within the State.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.Before this Court determines the validity of an act ofa 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. 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.This Court, however, may declare a law, or portions thereof, unconstitutional where a petitioner
has shown a clear and unequivocal breach of the Constitution,leaving no doubt or hesitation in the mind of the
Court.(2)No. 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.
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 grantedto the DENR Secretary under R.A. No. 7076 and its Implementing Rules
and Regulations. The DENR Secretary's power to review and decide 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.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.
Cruz vs Secretary of DENR Case Digest
All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the
exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and supervision of the State. The State may directly
undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit
of the grant. (Sec. 2, Art. XII, 1987 Constitution)
Facts:
Petitioners Isagani Cruz and Cesar Europa filed a suit for prohibition and mandamus as citizens and taxpayers,
assailing the constitutionality of certain provisions of Republic Act No. 8371, otherwise known as the Indigenous
People’s Rights Act of 1997 (IPRA) and its implementing rules and regulations (IRR). The petitioners assail certain
provisions of the IPRA and its IRR on the ground that these amount to an unlawful deprivation of the State’s ownership
over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian
doctrine embodied in section 2, Article XII of the Constitution.
Issue: Whether or not the IPRA law is unconstitutional.
Held:
As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated
upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the
Rules of Civil Procedure, the petition is DISMISSED.(Cruz vs Secretary of DENR, GR. No. 135385, Dec. 6, 2000)
 Alcantara v COSLAP, DENR and Paglangan

Procedural History: This is a petition for review on certiorari assailing the decision of the Court of
Appeals(CA)affirming the decision of COSLAP and denying petitioner’s motion for reconsideration.

Facts: In 1993, petitioner was granted the lease of 923 hectares of public forest land in Sitio Lanton, General Santos
City through Forest Land Grazing Lease Agreement No. 542 (FLGLA No. 542) for 25 years.Before the lease was
granted,private respondent Paglangan along with Sabel Esmael and Lasid Acop filed a letter of complaint with
COSLAP to cancel FLGLA No. 542.Petitioner questioned COSLAP’s jurisdiction to administer and dispose of public
lands. COSLAP went on with the hearing and petitioner alleged that he was not given the opportunity to be present
and participate in the field investigations conducted.

On August 3, 1998 COSLAP cancelled FLGLA No. 542 and petitioner appealed to CA for certiorari. CA dismissed the
petition for certiorari and subsequent motion for reconsideration.Based on the records, the land area being claimedby
private respondents belongs to the B’laan indigenous cultural community since they have been in possession of, and
have been occupying and cultivating the same since time immemorial, a fact has not been disputed by petitioner.

Issue: 1)Whether or not CA erred in ruling that petitioner has recognized COSLAP’s jurisdiction over the case by
participating actively in the proceedings.2)Whether or not COSLAP has jurisdiction over the case.

Ratio Decidendi:

1)Active participation of a respondent in the case pending against him before a court or a quasi-judicial body is
tantamount to recognizing its jurisdiction and therefore cannot question it later after the decision.

2)COSLAP has jurisdiction to resolve land problems or disputes which are critical and explosive in nature, for instance,
between occupants and lease agreement holders.

3)It was likewise declared by the appellate court that FLGLA No. 542 granted to petitioner violated Section 1
of Presidential Decree No. 410[13] which states that all unappropriated agricultural lands forming part of the public
domain are declared part of the ancestral lands of the indigenous cultural groups occupying the same, and these lands
are further declared alienable and disposable, to be distributed exclusively among the members of the indigenous
cultural group concerned.Holding:Petition is denied.