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, Secretary of Environment and Natural Resources, and JOEL D. MUYCO, Director of Mines and Geosciences Bureau, respondents.
development and utilization of the country's natural resources. The options open to the State are through direct undertaking or by entering into co-production, joint venture; or production-sharing agreements, or by entering into agreement with foreign-owned corporations for large-scale exploration, development and utilization. Article XII, Section 2 of the 1987 Constitution provides:
ROMERO, J.: The instant petition seeks a ruling from this Court on the validity of two Administrative Orders issued by the Secretary of the Department of Environment and Natural Resources to carry out the provisions of certain Executive Orders promulgated by the President in the lawful exercise of legislative powers. Herein controversy was precipitated by the change introduced by Article XII, Section 2 of the 1987 Constitution on the system of exploration, development and utilization of the country's natural resources. No longer is the utilization of inalienable lands of public domain through "license, concession or lease" under the 1935 and 1973 Constitutions 1 allowed under the 1987 Constitution. The adoption of the concept of jura regalia 2 that all natural resources are owned by the State embodied in the 1935, 1973 and 1987 Constitutions, as well as the recognition of the importance of the country's natural resources, not only for national economic development, but also for its security and national defense, 3 ushered in the adoption of the constitutional policy of "full control and supervision by the State" in the exploration,
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or product-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. xxx xxx xxx The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources. The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution. (Emphasis supplied) Pursuant to the mandate of the above-quoted provision, legislative acts 4 were successively issued by the President in the exercise of her legislative power. 5 To implement said legislative acts, the Secretary of the Department of Environment and Natural Resources (DENR) in turn promulgated Administrative Order Nos. 57 and 82, the validity and constitutionality of which are being challenged in this petition. On July 10, 1987, President Corazon C. Aquino, in the exercise of her then legislative powers under Article II, Section 1 of the Provisional Constitution and Article XIII, Section 6 of the 1987 Constitution, promulgated Executive Order No. 211 prescribing the interim procedures in the processing and approval of applications for the exploration, development and utilization of minerals pursuant to the 1987 Constitution in order to ensure the continuity of mining operations and activities and to hasten the development of mineral resources. The pertinent provisions read as follows:
Sec. 1. Existing mining permits, licenses, leases and other mining grants issued by the Department of Environment and Natural Resources and Bureau of Mines and Geo-Sciences, including existing operating agreements and mining service contracts, shall continue and remain in full force and effect, subject to the same terms and conditions as originally granted and/or approved. Sec. 2. Applications for the exploration, development and utilization of mineral resources, including renewal applications for approval of operating agreements and mining service contracts, shall be accepted and processed and may be approved; concomitantly thereto, declarations of locations and all other kinds of mining applications shall be accepted and registered by the Bureau of Mines and Geo-Sciences. Sec. 3. The processing, evaluation and approval of all mining applications, declarations of locations, operating agreements and service contracts as provided for in Section 2 above, shall be governed by Presidential Decree No. 463, as amended, other existing mining laws and their implementing rules and regulations: Provided, however, that the privileges granted, as well as the terms and conditions thereof shall be subject to any and all modifications or alterations which Congress may adopt pursuant to Section 2, Article XII of the 1987 Constitution. On July 25, 1987, President Aquino likewise promulgated Executive Order No. 279 authorizing the DENR Secretary to negotiate and conclude joint venture, co-production, or production-sharing agreements for the exploration, development and utilization of mineral resources, and prescribing the guidelines for such agreements and those agreements involving technical or financial
279. other existing mining laws. co-production. 6. development. may consolidate two or more contiguous or geologically — related mining claims or leases and consider them as one contract area for purposes of determining the subject of the joint venture. or production-sharing agreements for the exploration. except small scale mining leases and those pertaining to sand and gravel and quarry resources covering an area of twenty (20) hectares or less. and utilization of mineral resources with any Filipino citizens. laying down the "Procedural Guidelines on the Award of Mineral Production Sharing Agreement (MPSA) through Negotiation. 82 provides: . 57 or until July 17. 279. Section 3 of DENR Administrative Order No. which are not inconsistent with the provisions of this Executive Order. as amended. shall be converted into production-sharing agreements within one (1) year from the effectivity of these guidelines. 57. and their implementing rules and regulations. In the execution of a joint venture. 7. All provisions of Presidential Decree No. or corporation or association at least sixty percent (60%) of whose capital is owned by Filipino citizens. or parts thereof. and shall include the minimum terms and conditions prescribed in Section 2 hereof. 82. 463. 82 enumerates the persons or entities required to submit Letter of Intent (LOIs) and Mineral Production Sharing Agreement (MPSAs) within two (2) years from the effectivity of DENR Administrative Order No. Sec. 1980. Failure to do so within the prescribed period shall cause the abandonment of mining. joint venture. including the Government. or productionsharing agreements may be for a period not exceeding twenty-five years. 57. for and in behalf of the Government. co-production. quarry and sand and gravel claims. the DENR Secretary issued on June 23. 1991." 6 Under the transitory provision of said DENR Administrative Order No. 1.assistance by foreign-owned corporations for large-scale exploration. captioned "Guidelines of Mineral Production Sharing Agreement under Executive Order No." 7 Section 3 of the aforementioned DENR Administrative Order No. all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. the Secretary of the DENR Administrative Order No. The Secretary shall promulgate such supplementary rules and regulations as may be necessary to effectively implement the provisions of this Executive Order. shall continue in force and effect. xxx xxx xxx Sec. or production-sharing agreement. Pursuant to Section 6 of Executive Order No. 211. the contracting parties. 1989 DENR Administrative Order No. and utilization of minerals. development. The pertinent provisions relevant to this petition are as follows: Sec. On November 20. series of 1990. Such joint venture. co-production or production agreements. embodied in its Article 9. The Secretary of the Department of Environment and Natural Resources (hereinafter referred to as "the Secretary") is hereby authorized to negotiate and enter into. renewable for not more than twenty-five years. co-production. series of 1989.
Pampanga refused to renew its Mines Temporary Permit after it expired on July 31. issued a Temporary Restraining Order. 1991.000. 10 thru its President. The issuance and the impeding implementation by the DENR of Administrative Order Nos. exploration permitees. Submission of Letter of Intent (LOIs) and MPSAs). Administrative Order No. . 9 On November 13. 57 and 82. Series of 1989 and 1990. All holders of DOL acquired after the effectivity of DENR A. respectively.O. it joined petitioner herein in seeking to annul Administrative Order Nos. On the other hand. iii. 57 and 82 after their respective effectivity dates compelled the Miners Association of the Philippines. 57 or until July 17. the DENR. 3 in San Fernando. 57 and 82 in excess of his rule-making power under Section 6 of Executive Order No. 57. 57 and 82 and prayed that the DENR. sought to intervene11 in this case alleging that because of the temporary order issued by the Court . quarry and sand gravel permits. petitioner contends that both orders violate the non-impairment of contract provision under Article III. Declaration of Location (DOL) holders. petitioner Miners Association of the Philippines. 1991. 57 unduly pre-terminates existing mining agreements and automatically converts them into production-sharing agreements within one (1) year from its effectivity date. 3 be ordered to issue a Mines Temporary Permit in its favor to enable it to operate during the pendency of the suit.O.Sec. as amended. quarry and sand and gravel claims. mining lease applicants. 3. enjoining the enforcement and implementation of DENR Administrative Order Nos. 279. Continental Marble Corporation.00 bond. No. quarry applicants and other mining applicants whose mining/quarry applications have not been perfected prior to the effectivity of DENR Administrative Order No. i. the Court. In this petition for certiorari. Section 10 of the 1987 Constitution on the ground that Administrative Order No. 1991. Regional Office No. 1991 shall cause the abandonment of their mining. Inc. Failure to submit letters of intent and MPSA applications/proposals within the prescribed period shall cause the abandonment of mining. 57. 211 and 279. ii. Regional Office No. David. 82 declares that failure to submit Letters of Intent and Mineral Production-Sharing Agreements within two (2) years from the date of effectivity of said guideline or on July 17. The following shall submit their LOIs and MPSAs within two (2) years from the effectivity of DENR A. Holders of mining leases or similar agreements which were granted after (the) effectivity of 1987 Constitution. 1991. Claiming that its rights and interests are prejudicially affected by the implementation of DENR Administrative Order Nos. 57 and 82. mainly contends that respondent Secretary of DENR issued both Administrative Order Nos. upon posting of a P500. acting on petitioner's urgent exparte petition for issuance of a restraining order/preliminary injunction. On July 2. Inc. 8 to file the instant petition assailing their validity and constitutionality before this Court. Felipe A. On the assumption that the questioned administrative orders do not conform with Executive Order Nos.
S. by the aforesaid laws. 42 SCRA 660. as amended. Estenzo. the law itself can not be extended. June 30. By such regulations. 33 SCRA 585. of course. the law itself can not be extended. 463. Tupasi Molina. of course. however. August 29. December 29. So long. L-28952. 1970. the case of People v. petitioner would have us rule that DENR Administrative Order Nos. In other words. 57 and 82 issued by the DENR Secretary in the exercise of his rule-making power are tainted with invalidity inasmuch as both contravene or subvert the provisions of Executive Order Nos. 279 because both Executive Order Nos. 1991. So long." Recently. 12 Now to the main petition. Tupasi Molina. 279.Public respondents were acquired to comment on the Continental Marble Corporation's petition for intervention in the resolution of November 28. v. the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. 14 petitioner maintains that respondent DENR Secretary cannot provide guidelines such as Administrative Order Nos. 422. 57 and 82 which are inconsistent with the provisions of Executive Order No. 57 and 82 have the effect of repealing or abrogating existing mining laws 13 which are not inconsistent with the provisions of Executive Order No. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by . By such regulations. and should be for the sole purpose of carrying into effect its general provision. The principle was enunciated as early as 1908 in the case of United States v. 16decided in 1914. 15 The scope of the exercise of such rule-making power was clearly expressed in the case of United States v. Barrias. 109 Phil. If its argued that Administrative Order Nos. L-21906. General Auditing Office. Teoxon vs. of course. 1971. Manuel vs. Members of the Board of Administrators. 29 SCRA 350). An administrative agency cannot amend an act of Congress (Santos vs. as the regulations relate solely to carrying into effect its general provisions. Deluao v. as the regulations relate solely to carrying into effect the provision of the law. By such regulations. however. until Congress opts to modify or alter the same. thus: "Of course. 419. 211 and 279 merely reiterated the acceptance and registration of declarations of location and all other kinds of mining applications by the Bureau of Mines and Geo-Sciences under the provisions of Presidential Decree No. nor intended to be covered. 279. 1969. We disagree. Maceren 17 gave a brief delienation of the scope of said power of administrative officials: Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. and for the sole purpose of carrying into effect its general provisions. L-25619. they are valid. We reiterate the principle that the power of administrative officials to promulgate rules and regulations in the implementation of a statute is necessarily limited only to carrying into effect what is provided in the legislative enactment. Casteel. Invoking Section 7 of said Executive Order No. The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. supra). 211 and 279 or embrace matters not covered. the law itself cannot be extended (U.
211 and 279 as both operate to repeal or abrogate Presidential Decree No. 655. 349). Administrative Law. and other existing mining laws. 69 Phil. Wise & Co. 463. other existing mining laws.the statute.J. and other existing mining laws are deemed repealed and. 279 provides. 114 Phil. Lim. as amended. Section 2 of the 1987 Constitution. ceased to operate as the governing law. and utilization of mineral resources pursuant to Executive Order No. June 27. as the governing law on the acceptance and approval of declarations of location and all other kinds of applications for the exploration. development. as amended. as amended. as amended. and their implementing rules and regulations. 463. has been disallowed by Article XII. 845-46. 57 and 82 contravene Executive Order Nos. the provisions of Presidential Decree No. 194. 78 Phil. Section 7 of Executive Order No. 279 which superseded Executive Order No. 211. Rules that subvert the statute cannot be sanctioned (University of Santo Tomas v. pertains to the old system of exploration. Considering that administrative rules draw life from the statute which they seek to implement. 676. Board of Tax Appeals. Social Security Commission. the provisions dealing on "license. 463. p. In case of discrepancy between the basic law and a rule or regulation issued to implement said law. the basic prevails because said rule or regulations cannot go beyond the terms and provisions of the basic law (People v. see Collector of Internal Revenue v. 382. 211. 279 was passed. By virtue of the said constitutional mandate and its implementing law. It force and effectivity is thus foreclosed. . license and permits are not only inconsistent with the raison d'etre for which Executive Order No. We now examine petitioner's argument that DENR Administrative Order Nos. cited in Victorias Milling Co. 558). 319. however. and other mining laws allegedly acknowledged as the principal law under Executive Order Nos. Specifically. it is obvious that the spring cannot rise higher than its source. 555. v. All provisions of Presidential Decree No. 463. 7. In other words. 463. L-27299. concession or lease" which. 463. is erroneous. Petitioner's insistence on the application of Presidential Decree No. 108 Phil. . Del Mar v. . 1091). but contravene the express mandate of Article XII. therefore. 51 SCRA 340. still govern. 211 and 279. 93 Phil. v. citing 12 C. as amended. Inc. Executive Order No. 1973. The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative agency (Davis. Phil. 197. the provisions of Presidential Decree No. as amended. thus: Sec. which are not inconsistent with the provisions of this Executive Order.. development and utilization of natural resources through "license. Section 2 of the 1987 Constitution. or parts thereof. 376. As to invalid regulations. Villaflor. shall continue in force and effect. as amended. concession or lease" of mineral resources under Presidential Decree No. Meer. in all other areas of administration and management of mineral lands. quarry permits on privately-owned lands of quarry license on public lands under Chapter XIII and other related provisions on lease. xxx xxx xxx . Presidential Decree No. 463. on lease of mining claims under Chapter VIII. Veterans Administration.
In Support of the above contention. 57. Section 10 of the 1987 Constitution because Article 9 of Administrative Order No. development and utilization of natural resources shall be under the full control and supervision of the State. Section 2 of the 1987 Constitution. Moreover. and other mineral oils according to the general terms and conditions provided by law. Given these considerations. or it may opt to enter into co-production. 57 unduly pre-terminates and automatically converts mining leases and other mining agreements into production-sharing agreements within one (1) year from effectivity of said guideline. Section 6 of Executive Order No. we dispel the impression created by petitioner's argument that the questioned administrative orders unduly preterminate existing mining leases in general. Consonant therewith. 57 or until July 17. development. 279 empowers the DENR Secretary to negotiate and enter into voluntary agreements which must set forth the minimum terms and conditions provided under Section 2 thereof. To begin with. concession or lease" granted by the government under the 1973 Constitution or before the effectivity of the 1987 Constitution on . quarry. 279 does not contemplate automatic conversion of mining lease agreements into mining productionsharing agreement as provided under Article 9. while Section 3 of Administrative Order No. Section 2 of the 1987 Constitution does not apply retroactively to "license. Article XII. Administrative Order No. Petitioner likewise maintains that Administrative Order No. it is argued by petitioner that Executive Order No. and sand gravel permits. A distinction which spells a real difference must be drawn. 82. joint venture. Article XII. and utilization of minerals. 57 and/or the consequent abandonment of mining claims for failure to submit LOIs and MPSAs under Section 3. the subject sought to be governed and regulated by the questioned orders is germane to the objects and purposes of Executive Order No. 82. 82 because Section 1 of said Executive Order No. in relation to Administrative Order No. development and utilization of natural resources may be undertaken by means of direct act of the State. 1991 shall cause the abandonment of mining.Upon the effectivity of the 1987 Constitution on February 2. declares that failure to submit Letters of Intent (LOIs) and MPSAs within two (2) years from the effectivity of Administrative Order No. 279 specifically authorizes said official to promulgate such supplementary rules and regulations as may be necessary to effectively implement the provisions thereof. based on real contributions to the economic growth and general welfare of the country. or productionsharing agreements. there is no clear showing that respondent DENR Secretary has transcended the bounds demarcated by Executive Order No. Section 2 of the said Charter explicitly ordains that the exploration. 279 specifically issued to carry out the mandate of Article XII. petroleum. 18 the State assumed a more dynamic role in the exploration. impairs vested rights as to violate the non-impairment of contract doctrine guaranteed under Article III. Administrative Order No. or it may enter into agreements with foreignowned corporations involving either technical or financial assistance for large-scale exploration. development and utilization of the natural resources of the country. the exploration. petitioner contends that the power to regulate and enter into mining agreements does not include the power to preterminate existing mining lease agreements. 279 for the exercise of his rulemaking power tantamount to a grave abuse of discretion. Moreover. 1987.
except small scale mining leases and those pertaining to sand and gravel and quarry resources covering an area of twenty (20) hectares or less shall be subject to these guidelines. VILLEGAS: Would Commissioner Monsod like to comment on that? I think his answer is "yes. 57 provides: ARTICLE 9 TRANSITORY PROVISION 9. henceforth upon. All existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. VILLEGAS: Yes.1. were promulgated to govern the processing and approval of applications for the exploration. DAVIDE: Consequently. now being assailed. All such leases or agreements shall be converted into production sharing agreement within one (1) year from the effectivity of these guidelines. Is that not correct? MR. co-production or production-sharing. VILLEGAS: This is not applied retroactively. 19 thus: MR. explore and utilize the same. what will happen now license or concessions earlier granted by the Philippine government to private corporations or to Filipino citizens? Would they be deemed repealed? MR. 1987. However. they will be deemed repealed? MR. I notice that except for the [inalienable] lands of the public domain. permits or authorization can be exclusively granted to any citizen of the Philippines nor to any corporation qualified to acquire lands of the public domain? MR. VILLEGAS: No. all other natural resources cannot be alienated and in respect to [alienable] lands of the public domain. MR. it would only be the State which can exploit. any minimum firm which has established mining rights under Presidential Decree 463 or other laws may avail of the provisions of EO 279 by following the procedures set down in this document." MR. Article 9 of Administrative Order No. DAVIDE: Under the proposal. (Emphasis supplied) During the transition period or after the effectivity of the 1987 Constitution on February 2. However. The intent to apply prospectively said constitutional provision was stressed during the deliberations in the Constitutional Commission. private corporations with the required ownership by Filipino citizens can only lease the same. development and utilization of minerals. the approval of this Constitution. two (2) successive laws. insofar as other natural resources are concerned. 1987. 211. 1987 until the first Congress under said Constitution was convened on July 27. MR. . They will be respected. 57 and 82. develop. the questioned Administrative Order Nos. To carry out the purposes of said laws. Necessarily. DAVIDE: So. were issued by the DENR Secretary. no timber or forest concession. DAVIDE: In effect.February 2. the State may enter into a joint venture. 211 and 279. Executive Order Nos.
that regardless of the reservation clause. 57 applies only to all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 22 . or some object or value. the strictures of the non-impairment of contract clause under Article III. comfort. Gamboa. safety. Clearly. for such matter can not be placed by contract beyond the power of the State shall regulates and control them. morals. Hence. 211 after the effectivity of the 1987 Constitution by authorizing the DENR Secretary to negotiate and conclude joint venture. It bears mention that under the text of Executive Order No. They can be amended. 211 referred to this petition. or production-sharing agreements for the exploration. however. emphasized the superiority of the police power of the State over the sanctity of this contract: The prohibition contained in constitutional provisions against: impairing the obligation of contracts is not an absolute one and it is not to be read with literal exactness like a mathematical formula. By enacting regulations reasonably necessary to secure the health. and involving the public rights and public welfare of the entire community affected by it. even the contracts may thereby be affected. 211. shall be subject to any and all modifications or alterations which Congress may adopt pursuant to Article XII. 211. Executive Order No. development. 21 where the constitutionality of Republic Act No. development and utilization of mineral resources and prescribing the guidelines for such agreements and those agreements involving technical or financial assistance by foreign-owned corporations for exploration.It is clear from the aforestated provision that Administrative Order No. Such provisions are restricted to contracts which respect property. 34 changing the 50-50 sharecropping system in existing agricultural tenancy contracts to 55-45 in favor of tenants was challenged. co-production. pursuant to Executive Order No. 279 issued on July 25. Aquino in the exercise of her legislative power has the force and effect of a statute or law passed by Congress. the Court. are subject to alterations through a reasonable exercise of the police power of the State. As such. such as those granted pursuant to Executive Order No. modified or altered by a statute passed by Congress to achieve the purposes of Article XII. mining leases or agreements granted by the State. 211. They do not prevent a proper exercise by the State of its police powers. 211. as well as the terms and conditions of mining leases and agreements under Executive Order No. and utilization of minerals. and confer rights which may be asserted in a court of justice. and have no application to statute relating to public subjects within the domain of the general legislative powers of the State. Section 2 of the 1987 Constitution. there is a reservation clause which provides that the privileges as well as the terms and conditions of all existing mining leases or agreements granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. Section 10 of the 1987 Constitution 20 do not apply to the aforesaid leases or agreements granted after the effectivity of the 1987 Constitution. it validly modified or altered the privileges granted. 1987 by President Corazon C. or general welfare of the community. upholding the constitutionality of the law. large-scale Well -settled is the rule. In the 1950 case of Ongsiako v. Section 2 of the 1987 Constitution.
463. being co-extensive with the necessities of the case and the demands of public interest. 211. and wealth. The economic policy on the exploration. 1199 authorizing the tenants to charge from share to leasehold tenancy was challenged on the ground that it impairs the obligation of contracts. This will ensure the country's survival as a viable and sovereign republic. 57 is there any provision which would lead us to conclude that the questioned order authorizes the automatic conversion of mining leases and agreements granted after the effectivity of the 1987 Constitution. not arbitrary or oppressive. should be preserved for those under the sovereign authority of that nation and for their prosperity. Our natural resources which constitute the exclusive heritage of the Filipino nation. may not be precluded by the constitutional restriction on non-impairment of contract from altering. The exploration. therefore. 211 provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII. Section 1 of the 1987 Constitution. development and utilization of natural resources under the new system mandated in Section 2. the Court ruled that obligations of contracts must yield to a proper exercise of the police power when such power is exercised to preserve the security of the State and the means adopted are reasonably adapted to the accomplishment of that end and are. Police Power. Section 2 of the 1987 Constitution. 279 which superseded Executive Order No. Constitution Project observed: "The 1984 Constitutional Convention recognized the importance of our natural resources not only for its security and national defense. In connection therewith.In Ramas v. and an expanding productivity as the key to raising the quality of life for all. As enunciated in Article XII. CAR and Ramos 23 where the constitutionality of Section 14 of Republic Act No. the exploration. development and utilization of the country's natural resources under Article XII. is geared towards a more equitable distribution of opportunities. On the contrary." Accordingly. development and utilization of the country's natural resources are matters vital to the public interest and the general welfare of the people. to production-sharing agreements. pursuant to Executive Order No. a sustained increase in the amount of goods and services produced by the nation for the benefit of the people. Negotiation negates compulsion or automatic conversion as . in the exercise of its police power in this regard. as amended. income. 211. extends to all the vital public needs. pursuant to Executive Order No. the use of the term "production-sharing agreement" if they are so minded. Nowhere in Administrative Order No.P. Section 2 of the 1987 Constitution could not be any clearer. the State. The provision in Article 9 of Administrative Order No. modifying and amending the mining leases or agreements granted under Presidential Decree No. the 1986 U. The recognition of the importance of the country's natural resources was expressed as early as the 1984 Constitutional Convention. The passage of Executive Order No. especially the underprivileged. 57 that "all such leases or agreements shall be converted into production sharing agreements within one (1) year from the effectivity of these guidelines" could not possibility contemplate a unilateral declaration on the part of the Government that all existing mining leases and agreements are automatically converted into production-sharing agreements.
JJ. 2006 x--------------------------------------------------x . A mineral production-sharing agreement (MPSA) requires a meeting of the minds of the parties after negotiations arrived at in good faith and in accordance with the procedure laid down in the subsequent Administrative Order No. not through this Court. 3. Whether or not Continental Marble matter best addressed to the appropriate government body but certainly.suggested by petitioner in the instant petition. 57 and 82 must be sustained. the petition is DISMISSED for lack of merit. Chairman. WHEREFORE. SO ORDERED. "Continental Marble Corporation has not sufficiently shown that it falls under any of the categories mentioned above. proceed to the petition-in-intervention. SR. C. . EMILIANO G. 82. Under Section 2. We now. therefore. Pampanga to renew its Mines Temporary Permit does not justify such an intervention by Continental Marble Corporation for the purpose of obtaining a directive from this Court for the issuance of said permit. VENERACION. G. PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC). San Fernando. 129820 Present: PANGANIBAN. Promulgated: November 30. R. Regional Office No. The Temporary Restraining Order issued on July 2. Respondent.. CALLEJO. or in the success of either of the parties. We. Intervention is hereby DENIED. and their force and effect upheld. Rule 12 of the Revised Rules of Court. an intervention in a case is proper when the intervenor has a "legal interest in the matter in litigation... or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof. 1991 is hereby LIFTED. rule that the questioned administrative orders are reasonably directed to the accomplishment of the purposes of the law under which they were issued and were intended to secure the paramount interest of the public.versus YNARES-SANTIAGO AUSTRIA-MARTINEZ. The refusal of the DENR. their economic growth and welfare. and CHICO -NAZARIO. No. Petitioner.J. or an interest against both. JR. The validity and constitutionality of Administrative Order Nos.
Zamboanga del Sur. the respondent petitioned the Office of the President for the withdrawal of Block 159 from the coal reservation and its conversion into a mineral reservation. On 18 May 1989. 284. the OEA advised it to obtain the permission of the Bureau of Mines and Geo-Sciences (BMGS). 159 and 160 of theMalangas Coal Reservation.DECISION CHICO-NAZARIO. On 18 October 1991. dated 21 May 1997 issued by the Mines Adjudication Board (MAB) of the Department of Environmental and Natural Resources (DENR). issued by the President on 19 July 1938. at that time. When it had initially applied for a mineral prospecting permit over lands within the MalangasCoal Reservation. petitioner submitted to the DENR an application/proposal for a Mineral Production Sharing Agreement (MPSA) over Blocks 120. Region . under Rule 45 of the Rules of Court. respondent applied with the Mines and GeoSciences Development Services.: IX. The petitioner applied for a mineral prospecting permit over Block 159 (and Blocks 120 and 160) with the OEA. On 31 January 1989. under the administration of the OEA. Alicia. seeking to set aside the Order. This is a Petition for Review on Certiorari. DENR. J. TheMalangas Coal Reservation was. declaring that the respondent Emiliano Veneracion has a preferential right over the contested Block 159. as provided under Proclamation No. the Office of the Regional Executive Director (RED) of the DENR informed the respondent that his DOL cannot be registered since Block 159 was part of the Malangas Coal Reservation. Zamboanga del Sur. situated at Barangays Payongan and Kauswagan. which the latter granted on 4 September 1989. This case involves the conflicting claims of the petitioner Philippine National Oil Corporation-Energy Development Corporation and the respondent over the mining rights over Block 159 of the Malangas Coal Reservation. Alicia. Zamboanga City for a Declaration of Location (DOL) over Block 159 of the Malangas Coal Reservation. With the endorsement of the Office of Energy Affairs (OEA) and the DENR Secretary.
 While the case was pending. petitioner. and declared Block No. 284. On 13 April 1992. Nevertheless. On 18 May On 25 October 1994. which the RED denied in an Order dated 5 July 1993. on 28 May 1992. which effectively excluded Block 159 from the operation of Proclamation No. petitioner’s application for MPSA covering Coal Block Nos. but filed its appeal only on 30 July 1993 or nine days after the allowable period to appeal. Petitioner received its copy of the assailed Order dated 12 April 1993 on 7 May 1993. Thereafter. respondent applied for a MPSA. petitioner filed an appeal with the DENR Secretary questioning the Orders issued by the RED. dated 12 April 1993. 890 was issued. Section 50 of Presidential Decree No. in an Order. but filed its Motion for Reconsideration only on 18 May 1993. Respondent immediately filed. On 31 July 1992. the Officer-In-Charge Regional Technical Director Dario R. he paid the processing fee for a MPSA covering Block 159 and was able to comply with all other requirements of the MPSA application. Records also show that it had not applied for nor was it able to obtain an Exploration Permit from the BMGS over Block 159. the Office of the Secretary dismissed the appeal on the ground that petitioner’s right to appeal had already prescribed. petitioner received a copy of the Order dated 5 July 1993 on 16 July 1993. 1993. a protest to the petitioner’s inclusion of Block 159 in its application for MPSA before the RED of the DENR Office in Zamboanga City. or eleven days after its receipt thereof. ruled in favor of the respondent and ordered the petitioner to amend its MPSA by excluding therefrom Block 159. through a letter addressed to the DENR Secretary. 159 as government mineral reservation open for disposition to qualified mining applicants. 463 provides therefore for a five-day reglementary period from the receipt of the order or decision of the Director. dated 4 . After the parties were heard. On 30 July 1993. Miñoza of the Mines and Geo-Sciences Developmental Service (MGDS) advised the petitioner to amend its application for MPSA by excluding Block 159 as the same is covered by the application of the respondent.On 21 February 1992. 279. 159 and 160 was accepted for filing. On 4 October 1994. the RED. On 26 May 1992. pursuant to Executive Order No. the petitioner did not exclude Block 159 from its MPSA. petitioner filed a Motion for Reconsideration of the Order dated 12 April 1993. sought the reconsideration of the Decision. 120. Presidential Proclamation No.
dated 21 December 1994. dated 21 December 1994. dated 5 August 1996. in accordance with Section 78 of Republic Act No 7942. 890 excluding Block 159 from the Malangas Coal Reservation and allowing its disposition. In a Resolution. pointed out that the said preferential right does not necessarily lead to the granting of the respondent’s MPSA. The MAB. the Orders of the RED were in accordance with the evidence on record and the pertinent laws on the matter. dated 4 October 1994. reversing the Resolution. Ramos issued an Order. It took cognizance of the appeal filed by petitioner. since the records show that only one MPSA was filed after the issuance of Proclamation 890 – that of the respondent’s. the MAB resolved the motion in favor of the respondent and affirmed the assailed Order. On 20 August 1996. respondent filed a Motion for Reconsideration of the Resolution. which was then the governing law on the matter. petitioner filed a Motion for Reconsideration of the Order. was erroneous and improper and could not have been legally accepted. On 1 February 1995. petitioner filed a MPSA on 18 October 1991. otherwise known as The Philippine Mining Act of 1995. nevertheless.October 1994. The MAB noted that petitioner did not file for an exploration permit nor applied for the exclusion of Block 159. Thus. It ruled that the Orders issued by the RED have already become final and executory when the petitioner failed to file its appeal five days after it had received the Orders. (2) application for exploration permit. and gave due course to the MPSA of the petitioner. And. (4) Presidential Declaration on exclusion as recommended by the Secretary. dated 21 December 1994 and reinstating the Decision. the preferential right over Block 159 was acquired by the respondent. but merely consists of the right to have his application evaluated and the prohibition against accepting other . Alcala reversed the Decision. The MAB ruled that the petitioner filed its appeal beyond the five-day prescriptive period provided under Presidential Decree No. (3) application for exclusion of the land from such reservation. As a result. dated 5 August 1996. On 21 May 1997. the DENR Secretary no longer had the jurisdiction to issue the assailed Resolution. Moreover. dated 5 August 1996. The now DENR Secretary Victor O. It added that after looking into the merits of the case. 463. and (5) application for Lease thereof with priority given to holder of exploration Permit. or almost six (6) months prior to the issuance of Proclamation No. dated 21 December 1994. It ruled that the proper procedure with respect to the mining rights application over Block 159 when it was still part of the Malangas Coal Reservation required the following: (1) application for prospecting permit with the OEA or other office having jurisdiction over said reservation. the then DENR Secretary Angel C. while it was still part of a government reservation other than a mineral reservation. dated 4 October 1994. The MAB also decreed that the respondent had preferential mining rights over Block 159. the application for a MPSA over Block 159.
This Court finds no merit in this Petition. under the requirements and conditions set forth in Rule 43 of the Rules of Civil Procedure. Nevertheless. . 442. before the Court of Appeals. his appeal should have been allowed on grounds of substantial justice. orders or awards of Regional Trial Courts and quasijudicial agencies. He further adds that even if Presidential Decree No. 1-95 dated 16 May 1995 governing appeals from all Petitioner alleges that Section 61 of Commonwealth Act No. the Labor Code of the Philippines under Presidential Decree No. this Petition for Review on Certiorari. and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.mining applications over Block 159 pending the processing of his MPSA. 137 governs the petitioner’s appeal of the Orders. Republic Act No. 463 was applicable in this case. 463. boards or commissions x x x except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution. and (2) whether or not the petitioner acquired a preferential right on mining rights over Block 159. resolutions. as amended. Exclusive appellate jurisdiction over all final judgments. In addition. There are two main issues that need to be resolved in this case: (1) whether or not the petitioner has already lost its right to appeal the RED’s Order dated 12 April 1993. and decided to take cognizance of the present case. With the enactment of Republic Act No. instrumentalities. dated 12 April 1993 and 5 July 1993. and not Section 50 of Presidential Decree No. regardless of the nature of the question raised. decisions. Hence. The correct mode of appeal would have been to file a petition for review under Rule 43. 7902. this Court held in a line of cases that appeals from judgments and final orders of quasi-judicial bodies are required to be brought to the Court of Appeals. the provisions of this Act. Petitioner’s reliance on Section 79 of the Philippine Mining Act of 1995 is misplaced. this Court has taken into account the fact that these cases were promulgated after the petitioner filed this appeal on 4 August 1997. 7902 expanded the appellate jurisdiction of the Court of Appeals to include: quasi-judicial bodies to the Court of Appeals by petition for review. this Court issued Circular No. Said circular was incorporated in Rule 43 of the Rules of Civil Procedure.
Section 50 of the law had clearly intended to repeal the corresponding provision found in Section 61 of Commonwealth Act No. It was noted that there was a clear effort to modernize the system of administration and disposition of mineral lands and that the procedure of adjudicating mining claims had become increasingly administrative in character. By providing a five-day period within which to file an appeal on the decisions of the Director of Mines and Geo-Sciences. this Court extensively discussed the development of the law on the adjudication of mining claims. as amended. provides that: Sec. 137. the matter may be taken to the Court of Appeals or the Supreme Court. as seen in the provisions of Commonwealth Act No.Conflicts and disputes arising out of mining locations shall be submitted to the Director of Mines for decision: Provided. 50. 7942. x x x. may. 463 was enacted in 1974. and to shorten the 30-day period within which to file an appeal from the Decision of the Director of Mines and Geo-Sciences to five days. 137. . Presidential Decree No. 463 unquestionably repealed Section 61 of Commonwealth Act No. within five (5) days from receipt thereof. Appeals. applies. SEC. 137. 463. Section 61 of Commonwealth Act No. That the decision or order of the Director of Mines may be appealed to the Secretary of Agriculture and Natural Resources within thirty days from receipt of such decision or order. within thirty days from the receipt of such decision or order.Any party not satisfied with the decision or order of the Director. appeal to the Minister [now Secretary]. Intermediate Appellate Court. 61. as amended. 137. cannot be sustained by this Court. Petitioner’s insistence that the 30-day reglementary period provided by Section 61 of Commonwealth Act No. In case any one of the parties should disagree from the decision or order of the Secretary of Agriculture and Natural Resources. Section 50 of Presidential Decree No. 463 reads: In Pearson v. . as the case may be. Presidential Decree No. 137. Decisions of the Minister [now Secretary] are likewise appealable within five (5) days from receipt thereof by the affected party to the President whose decision shall be final and executory. . until its present state under Republic Act No. otherwise the said decision or order shall be final and binding upon the parties concerned.When Presidential Decree No.
A. This does not mean that administrative bodies have complete rein over mining disputes. The very terms of Section 73 of the Mining Law. lease and contracts.A. Questions and controversies that are judicial. within five (5) days from receipt thereof appeal. the Mining Law (C. With the amendment seeking to expedite the resolution of mining conflicts. with the President as the final appeal authority. 1281 in relation to P. No. to the Secretary. providing for a modernized system of administration and disposition of mineral lands. the adverse claimant had to go to a court of competent jurisdiction for the settlement of the claim. No. 309. 463) and Section 7 of P. to promote and encourage the development and exploitation thereof. rejecting. in nature can be resolved only by the regular courts in whom is vested the judicial power to resolve and adjudicate such civil disputes and controversies between litigants in accordance with the established norms of law and justice. it cannot escape notice that under Section 61 of the Mining Law. The trend at present is to make the adjudication of mining cases a purely administrative matter. it has been expressly provided that the decisions of the same Secretary in mining cases are appealable to the President of the Philippines under Section 50 of the Mineral Resources Development Decree of 1974 (P.[W]ith the issuance of Presidential Decree Nos. or approving. the procedure of adjudicating conflicting mining claims has been made completely administrative in character." and (2) controversies or disagreements of civil or contractual nature between litigants which are questions of It should be noted that before its amendment. Decisions of the Supreme Court on mining disputes have recognized a distinction between (1) the primary powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau directors) of an executive or administrative nature. 463.D. Thus. Adverse Claims and Appeals. appeals from the decision of the Secretary of Agriculture and Natural Resources (then Minister of Natural Resources) on conflicts and disputes arising out of mining locations may be made to the Court of Appeals or the Supreme Court as the case may be.D. 309. the onset of martial law. 99-A. mandates on the matter of "Protests. In contrast. The controversies to be submitted and resolved by the Director of Mines under the sections referred only to the overlapping of claims and administrative matters incidental thereto. boundaries and extent of the adverse claim" show that the conflicts to be decided by reason of such adverse claim refer primarily to questions of fact. under the decrees issued at . permits. instead of the Court of First instance. Decisions of the Secretary are likewise appealable within five (5) days from receipt thereof by the affected party to the President of the Philippines whose decision shall be final andexecutory. not administrative. 137) required that after the filing of adverse claim with the Bureau of Mines. 4388. in requiring that the adverse claim must "state in full detail the nature. as amended by Republic Act Nos. and 463. No. as amended by R. such as "granting of license." the following procedure: Appeals — Any party not satisfied with the decision or order of the Director may. the Director of Mines became the mandatory adjudicator of adverse claims. Section 50 of P. No.D. 746 and 4388.D. or deciding conflicting applications. reinstating or cancelling applications. No.
463. or whimsicality in the settlement of disputes. and its decision or order shall be final and executory. which exercises appellate jurisdiction over decisions or orders of the panel of arbitrators. Petitioner invokes the judicial policy of allowing appeals. But resort to the appropriate court. In the instant case. Procedural law has its own rationale in the orderly administration of justice. it cannot claim any mining rights over Block 159 for failure to comply with the legal requirements. It raises a jurisdictional problem as it deprives the appellate court of jurisdiction over the appeal.a judicial nature that may be adjudicated only by the courts of justice. rules of procedure must be faithfully followed except only when for persuasive reasons. through a petition for review by certiorari. However. they again failed to file their appeal before the Office of the DENR Secretary within the time provided by law. prior to the release of Block 159 from the Malangas Coal Reservation under Proclamation No. As a general rule. they may be relaxed to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed procedure. 890 on 13 April 1992. the records show that after failing to comply with the period within which to file their motion for reconsideration on time. petitioner failed to state any compelling reason for not filing its appeal within the mandated period. the same rule provides an . although filed late. The right to appeal is not part of due process of law but is a mere statutory privilege to be exercised only in the manner and in accordance with the provisions of the law. when the interest of justice so requires. Nor can petitioner invoke the doctrine that rules of technicality must yield to the broader interest of substantial justice. Thus. may be made within thirty days from the receipt of the order or decision of the Mines Adjudication Board. This distinction is carried on even under the present law. shall be conclusive and binding on the parties. despotism. Petitioner applied for an MPSA with the DENR on 18 October 1991. prospecting and exploration of minerals in a government reservation is prohibited under Section 13 of Presidential Decree No. namely. the provisions on the acquisition of mining rights within a government reservation other than a mineral reservation under Presidential Decree No. Concomitant to a liberal application of the rules of procedure should be an effort on the part of the party invoking liberality to explain his failure to abide by the rules. the failure to perfect an appeal within the reglementary period is not a mere technicality. Findings of fact by the Mines Adjudication Board. to ensure the effective enforcement of substantive rights by providing for a system that obviates arbitrariness. involving questions of law. While every litigant must be given the amplest opportunity for the proper and just determination of his cause. Instead. Hence. Even if petitioner had not lost its right to appeal. 463 and the Consolidated Mines Administrative Order (CMAO) should apply. caprice. free from the constraints of technicalities.
exploration and exploitation of minerals on reserved lands other than mineral reservations may be undertaken by the proper government agency. 15. exploration and exploitation when the said agencies cannot undertake them. qualified persons SEC. subject always to compliance with pertinent laws and rules and regulations . That the party who undertook prospecting. exploration and exploitation of said are shall be given priority. Section 13. The right to exploit the minerals found therein shall be awarded by the President under such terms and conditions as recommended by the Director and approved by the Secretary [Minister]: Provided. and other Government reservations except when authorized by the proper Government agency concerned. qualified persons may undertake the said prospecting. exploration and exploitation of minerals in reserved lands other than mineral reservations may be undertaken by the proper government agency. (a) In military. 463 reiterates the rule and clarifies it further by stating that prospecting. – No prospecting and exploration shall be allowed: may be permitted to undertake such prospecting. remove and dispose of minerals in limited quantities as verified by the Bureau of Mines [Director of Mines and Geo-Sciences]. a special permit may be issued by the Director to the exploration permitee to extract.exception involving instances when the government agency concerned allows it. Section 15 of the CMAO is more straightforward when it states that government reserved lands are open for prospecting. Prospecting. As an exception to this rule. exploration and exploitation in accordance with the rules and regulations promulgated by the Secretary [Minister]. exploration and exploitation of minerals in reserved lands. Section 8 of Presidential Decree No. Notwithstanding the provisions of the preceding paragraph. Areas Closed to Mining Location. Section 8. – Lands reserved by the Government for purposes other than mining are open to prospecting. In the event that the said agencies cannot undertake the prospecting. subject to the rules and regulations provided therein. Exploration and Exploitation of Minerals in Reserved Lands. – Prospecting. Government Reserved Land. Any interested party may file an application therefore with the head of the agency administering said land.
petitioner cannot complain now that its MPSA was revoked for failure to comply with the legal requirements. The BMGS then treated the respondent’s application for a DOL as an application for an exploration permit and caused a verification report of the area applied for. In such cases. and stubbornly insisted on its incorrect procedure. third and fourth requisites. advised the petitioner on two separate occasions to obtain a “prospecting permit” from the BMGS. the RED of Zamboanga City ordered that the respondent’s MPSA be given due course. Such application shall be acted upon within thirty (30) days. the respondent already had a pending application for the exclusion of Block 159 from the Malangas Coal Reservation. 279. In this case. Although the respondent’s applications may not follow the strict letter of the law. the compensation due the surface owner shall accrue equally to the agency administering the reserved land and the Bureau of Mines. the respondent applied for a DOL as early as 30 January 1989. and (5) a mining agreement approved by the DENR Secretary. Thereafter. Upon the application of the respondent. nor would the BMGS have granted petitioner an exploration permit because when petitioner wrote to the BMGS informing the latter of its intention to enter into an MPSA with the DENR over Block 159. the permitee applies before the BMGS for the exclusion of the area from the reservation. Since it ignored the sound advice of the OEA and the BMGS. that time. there was substantial compliance with the requirements of the law. (2) an exploration permit from the BMGS.covering such reserved land. The DENR Regional Office refused to register the respondent’s DOL since Block 159 was still part of the Malangas Coal Reservation and advised the respondent to apply for the exclusion of the area from the reservation. The petitioner did not apply for an exploration permit with the BMGS. although the OEA was probably referring to an exploration permit. however. the OEA. (3) if the exploration reveals the presence of commercial deposit. The respondent followed this advice. through Proclamation No. The law enumerates the following requirements: (1) a prospecting permit from the agency that has jurisdiction over the area. (4) granting by the president of the application to exclude the area from the reservation. In its correspondence with the petitioner. the OEA and thereafter the DENR Secretary endorsed the respondent’s application for the exclusion of the area from the reservation. without complying with the second. On 12 April 1993. the respondent was able to acquire a preferential right . The advice given by the BMGS was justified since at In contrast. as provided under Section 99 of the CMAO. This application was granted by the President. the OEA. the BMGS informed the petitioner that the respondent’s claim over Block 159 had already preceded that of the petitioner. On 30 July 1992. which provided that the mining rights to Block 159 will be disposed of in accordance with Executive Order No. the petitioner filed his MPSA application. 890. the government agencies concerned. respondent filed his MPSA. Hence. in this case. petitioner complied with the first requirement and obtained a prospecting permit from the OEA.
the respondent was the only applicant to the mining rights over Block 159. The only effect of his failure to comply with the requirements CMAO on government reservations is that he loses the preferential right over the area involved. as provided under Section 101 of the CMAO.” Located at Mt.R. such that finding a “win-win” solution became a veritable needle in a haystack.R. prohibition and mandamus. the provisions on the application of mining rights over government reservations would no longer apply to him because Block 159 was already converted into a mineral reservation. dismissing the special civil action for certiorari. SO ORDERED. Diwata in the municipalities of Monkayo and Cateel in Davao Del Norte. BALITE PORTAL MINING COOPERATIVE and others similarly situated. Even if it were to be assumed that the respondent failed to comply with these requirements. April 3. SOUTHEAST MINDANAO GOLD MINING CORPORATION. The instant case involves a rich tract of mineral land situated in the Agusan-Davao-Surigao Forest Reserve known as the “Diwalwal Gold Rush Area. after the issuance of Proclamation No.: This is a petition for review of the March 19. 279 should be applied. No costs. 1998 denying petitioner’s motion for reconsideration. J. The assailed Decision of the Mines Adjudication Board is hereby AFFIRMED. man-made or otherwise. 135190. petitioner. wherein a different set of rules would apply. the land has been embroiled in controversy since the mid-80’s due to the scramble over gold deposits found within its bowels. Records indicate that the provisions of Executive Order No. in his capacity as Secretary of the Department of Environment and Natural Resources (DENR). 44693. vs. therefore. PROVINCIAL MINING REGULATORY BOARD OF DAVAO (PMRBDavao). brought about by unregulated mining activities. 279 have been complied with. SP No. In this case. the instant Petition is DENIED. 890. 890 specifically provides that Executive Order No. IN VIEW OF THE FOREGOING. 2002] . From 1985 to 1991. 1998 decision of the Court of Appeals in CA-G.on the mining claims over Block 159. DECISION YNARES-SANTIAGO. Proclamation No. and the resolution dated August 19. Peace and order deteriorated rapidly. apart from the petitioner who was not qualified for failure to comply with the legal requirements. this would not be fatal to his cause since he filed his MPSA on 31 July 1992. The multifarious problems spawned by the gold rush assumed gargantuan proportions. with hundreds of people perishing in mine accidents. and THE HONORABLE ANTONIO CERILLES. respondents. No. thousands of people flocked to Diwalwal to stake their respective claims. [G.
Puting-Bato Gold Miners Cooperative. declaring 729 hectares of the Diwalwal area as non-forest land open to smallscale mining. 1994.Rosendo Villaflor. 006(XI) . 8-8-94 entitled. Garcia. The statute also authorized the PMRB to declare and set aside small-scale mining areas subject to review by the DENR Secretary and award mining contracts to small-scale miners under certain conditions.Monkayo Integrated Small Scale Miner’s Association. The Court found that Apex did not comply with the procedural requisites for acquiring mining rights within forest reserves.. Hon. 7076. Not long thereafter. c) MAC Case No. In due time. 369. v. 007(XI) . MAC Case No. et al. Inc. 008(XI) . 011(XI) . DENR Secretary Fulgencio S.JB Management Mining Corporation.. 133 was subsequently challenged before this Court in “Apex Mining Co. Jose T. which included the hotly-contested Diwalwal area. 010(XI) . et al.Davao United Miners Cooperative. while the RED Mines case was pending.. 133) over 4. 012(XI) .The issuance was made pursuant to the powers vested in the DENR Secretary by Proclamation No. 133 (EP No. Congress enacted on June 27. MAC Case No. After publication of the application. On December 21. a petition for the cancellation of EP No.Paper Industries Corporation of the Philippines. Amacio. . Subsequently. MAC Case No. Marcopper Mining Corporation. the Mines and Geosciences Bureau Regional Office No. f) g) h) i) MAC Case No.” On February 16. docketed as RED Mines Case No.. Marcopper Mining Corporation (Marcopper) was granted Exploration Permit No. 009(XI) ..Balite Integrated Small Scale Miner’s Cooperative.On March 10. et al. Cancio C. 66. or the People’s Small-Scale Mining Act. 005(XI) . Marcopper assigned its EP No. Factoran issued Department Administrative Order (DAO) No. d) MAC Case No. the following filed their oppositions: a) b) MAC Case No.491 hectares of land. 1991 Republic Act No. Apex Mining Corporation (Apex). Inc. 133 to petitioner Southeast Mindanao Gold Mining Corporation (SEM). v. The law established a People’s Small-Scale Mining Program to be implemented by the Secretary of the DENR and created the Provincial Mining Regulatory Board (PMRB) under the DENR Secretary’s direct supervision and control.Marcopper’s acquisition of mining rights over Diwalwal under its EP No. “Rosendo Villaflor. XI in Davao City (MGB-XI) accepted and registered the integrated MPSA application of petitioner. 1991. which in turn applied for an integrated MPSA over the land covered by the permit. 1988. MAC Case No.” where Marcopper’s claim was sustained over that of another mining firm. et al.Antonio Dacudao. which established the Agusan-Davao-Surigao Forest Reserve.Atty. 133 and the admission of a Mineral Production Sharing Arrangement (MPSA) proposal over Diwalwal was filed before the DENR Regional Executive Director. e) MAC Case No. 004(XI) .
133. authorizing the issuance of ore transport permits (OTPs) to small-scale miners operating in the Diwalwal mines. 128 are DISMISSED.Balite Communal Portal Mining Cooperative. Such study shall include. the DENR Secretary and Balite Communal Portal Mining Cooperative (BCPMC). or both. and that the memorandum order arbitrarily imposed the unwarranted In the meantime. The DENR shall study thoroughly and exhaustively the option of direct state utilization of the mineral resources in the Diwalwal Gold-Rush Area. or both. with the appropriate government instrumentalities or private entities. 97-03 which provided. 1997. x x x On July 16.j) MAC Case No. that: 1. The Undersecretary for Field Operations. Branch 61. 133 is hereby reiterated and all the adverse claims against MPSAA No. 1997. et al. prohibition and mandamus before the Court of Appeals against PMRB-Davao. Series of 1997. and the Director of the Mines and Geo-sciences Bureau are hereby ordered to undertake such studies. the above-enumerated MAC cases were referred to a Regional Panel of Arbitrators (RPA) tasked to resolve disputes involving conflicting mining rights. 016(XI) . that the DENR Secretary unduly usurped and interfered with the jurisdiction of the RPA which had dismissed all adverse claims against SEM in the Consolidated Mines cases. in carrying out the declared policy of rationalizing the mining operations in the Diwalwal Gold Rush Area. . including profit-sharing arrangements with small-scale miners.00 worth of gold ore per truckload from SEM’s mining claim. 1997. Republic Act No. 1995. petitioner filed a complaint for damages before the Regional Trial Court of Makati City. such agreements shall include provisions for profit-sharing between the state and the said parties. On April 1. was enacted. 97-03 on the ground that the “direct state utilization” espoused therein would effectively impair its vested rights under EP No. which was consolidated with the MAC cases. as well as the Undersecretary for Legal and Legislative Affairs and Attached Agencies. against the DENR Secretary and PMRB-Davao. which represented all the OTP grantees.Romeo Altamera. the validity of Exploration Permit No. 26. 97-01(XI) . as well as the payment of royalties to indigenous cultural communities. and k) MAC Case No. 7942. on June 13. 1997. 1997. but shall not be limited to. the DENR Secretary issued Memorandum Order No. Pursuant to this statute. Meanwhile. On June 24. petitioner filed a special civil action for certiorari.000. It prayed for the nullification of the above-quoted Memorandum Order No. among others. the RPA resolved the Consolidated Mines cases and decreed in an Omnibus Resolution as follows: VIEWED IN THE LIGHT OF THE FOREGOING. SEM alleged that the illegal issuance of the OTPs allowed the extraction and hauling of P60. on May 30. studying and weighing the feasibility of entering into management agreements or operating agreements. Provincial Mining Regulatory Board of Davao passed Resolution No. the Philippine Mining Act. among others. Thus. on March 3. The RPA subsequently took cognizance of the RED Mines case.
fix any obligation. after determining its feasibility through studies. 1998. AND HAS DECIDED A QUESTION OF SUBSTANCE NOT THERETOFORE DETERMINED BY THIS HONORABLE SUPREME COURT. It was thus premature for petitioner to claim that its “constitutionallyprotected rights” under EP No. THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR IN HOLDING THAT AN ACTION ON THE VALIDITY OF ORE TRANSPORT PERMIT (OTP) IS VESTED IN THE REGIONAL PANEL OF ARBITRATORS. SP Nos. II. Petitioner filed a motion for reconsideration of the above decision. OR HAS DECIDED IT IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH APPLICABLE DECISIONS OF THIS HONORABLE COURT IN UPHOLDING THE QUESTIONED ACTS OF RESPONDENT DENR SECRETARY WHICH ARE IN VIOLATION OF MINING LAWS AND IN DEROGATION OF PETITIONER’S VESTED RIGHTS OVER THE AREA COVERED BY ITS EP NO. 61215 and 61216. 97-03 since the same was merely a directive to conduct studies on the various options available to the government for solving the Diwalwal conflict. In the first assigned error.R. the appellate court pointed out that petitioner’s rights under EP No. docketed as G. through a division of five members voting 3-2. sacrosanct or immutable. amended or modified by the Chief Executive when the national interest so requires. Meanwhile.condition that certain studies be conducted before mining and environmental laws are enforced by the DENR. the permit can be revoked. THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR. setting aside the judgment of the RPA. Additionally. legal relationship or right. docketed as G. 1998. Being in the nature of a privilege granted by the State. the Court of Appeals. MO 97-03 was only the initial step in the ladder of administrative process and did not. It ruled that the DENR Secretary did not abuse his discretion in issuing Memorandum Order No. as yet. which was denied for lack of merit on August 19. 133. On March 19. 133 have been encroached upon. which were docketed as CA-G. 1998.R. The assailed memorandum did not conclusively adopt “direct state utilization” as official government policy on the matter.R. 132475 and 132528. This MAB decision was then elevated to this Court by way of a consolidated petition. on January 6. however. Hence this petition. reasoning that said issue was within the exclusive jurisdiction of the RPA. Nos. In a resolution dated September 11. The Court of Appeals. were referred to the Court of Appeals for proper disposition pursuant to Rule 43 of the 1997 Rules of Civil Procedure. SP No.R. 133 are not inviolable. are still pending before the Court of Appeals. much less. declined to rule on the validity of the OTPs. Nos. the MAB rendered a decision in the Consolidated Mines cases. raising the following errors: I. 132475 and 132528. violated by its issuance. 44693. dismissed the petition in CA-G. the appealed Consolidated Mines cases. petitioner insists that the Court of Appeals erred when it concluded that the assailed memorandum . but was simply a manifestation of the DENR’s intent to consider it as one of its options. 2000. These cases.
And even if direct state exploitation was opted by the government. would directly take over the mines after studies point to its viability. in coordination with the other concerned agencies of the government. preserve and enhance the safety of the mining operations and ensure revenues due to the government from the development of the mineral resources and the exploitation thereof. including. said memorandum order dictated the said recourse and. designed to divest petitioner of its vested right to the gold rush area under its EP No. whether or not petitioner actually has a vested right over . As the Court of Appeals extensively discussed in its decision: x x x under the Memorandum Order. According to petitioner. the debilitating adverse effects of mining in the community and at the same time. Contrary to petitioner’s contention. the Petitioner. it did not grant any management/operating or profitsharing agreement to small-scale miners or to any party. With respect to the alleged “vested rights” claimed by petitioner. The government was still in earnest search of better options that would be fair and just to all parties concerned. no valid objection can be entertained against MO 97-03 on grounds which are purely speculative and anticipatory. The said memorandum order did not impose any obligation on the claimants or fix any legal relation whatsoever between and among the parties to the dispute. x x x an extensive and intensive study of all the facets of a direct state exploitation was directed by the Public Respondent DENR Secretary. it is too plain to see. through the DENR. petitioner can show no more than a mere apprehension that the State. Indeed. On the contrary. whose validity is still being disputed in the Consolidated Mines cases. 133 is one of the issues raised in said cases. We are not persuaded. MO 97-03 was issued to preempt the resolution of the Consolidated Mines cases. for that matter. 133. At this stage. But until the DENR actually does so and petitioner’s fears turn into reality. The terms of the memorandum clearly indicate that what was directed thereunder was merely a study of this option and nothing else. it is well to note that the same is invariably based on EP No. We agree with the Court of Appeals’ ruling that the challenged MO 97-03 did not conclusively adopt “direct state utilization” as a policy in resolving the Diwalwal dispute. granted management or operating agreements as well as provided for profit sharing arrangements to illegal small-scale miners. but simply instructed the DENR officials concerned to undertake studies to determine its feasibility. in effect. The “direct state utilization scheme” espoused in the challenged memorandum is nothing but a legal shortcut. notably. petitioner submits. The direct state utilization of the mineral resources in the area was only one of the options of the State. with respondents therein asserting that Marcopper cannot legally assign the permit which purportedly had expired. Consequently. A reading of the appealed MAB decision reveals that the continued efficacy of EP No. x x x that before the State will settle on an option. the DENR still had to promulgate rules and regulations to implement the same x x x. In other words. the petition was premature. the State still had to study prudently and exhaustively the various options available to it in rationalizing the explosive and ever perilous situation in the area.order did not adopt the “direct state utilization scheme” in resolving the Diwalwal dispute. 133.
133 cannot be deemed as a source of any conclusive rights that can be impaired by the issuance of MO 97-03. Again. We cannot rightfully conclude at this point that respondent BCMC and the other mining firms are illegitimate mining operators. i. 133 is misplaced. Neither is it intended to unsettle rights of persons/entities which have been acquired or which may have accrued upon reliance on laws passed by appropriate agencies. Neither can the Apex Mining case foreclose any question pertaining to the continuing validity of EP No.P. 133 merely evidences a privilege granted by the State. whether or not respondent BCMC and the other mining entities it represents are conducting illegal mining activities is a factual matter that has yet to be finally determined in the Consolidated Mines cases. the said case was litigated solely between Marcopper and Apex Mining Corporation and cannot thus be deemed binding and conclusive on respondent BCMC and the other mining entities presently involved. development and utilization of the country’s natural mineral resources are matters impressed with great public interest. 133 and therefore bound by the judgment rendered in the Apex Mining case. Besides. it certainly did not deal with the question raised by the oppositors in the Consolidated Mines cases. it must likewise be pointed out that under no circumstances may petitioner’s rights under EP No.e. Petitioner’s reliance on the Apex Mining case to justify its rights under E. While it is true that the Apex Mining case settled the issue of who between Apex and Marcopper validly acquired mining rights over the disputed area by availing of the proper procedural requisites mandated by law. who were not impleaded as parties therein. No.Diwalwal under EP No. And until a positive pronouncement is made by the appellate court in the Consolidated Mines cases. 133 be regarded as total and absolute. EP No. we would be preempting the resolution of the cases which are still pending before the Court of Appeals. Similarly. 133 is still an indefinite and unsettled matter. Incidentally. Otherwise. modified or rescinded when the national interest so requires. As correctly held by the Court of Appeals in its challenged decision. In no case should the decision be considered as a precedent to resolve or settle claims of persons/entities not parties hereto. 133 had already expired and remained valid subsequent to its transfer by Marcopper to petitioner. While petitioner may be regarded as Marcopper’s successor to EP No. 133 on grounds which arose after the judgment in said case was promulgated. EP No. which may be amended. there is no merit in petitioner’s assertion that MO 97-03 sanctions violation of mining laws by allowing illegal miners to enter into mining agreements with the State. whether EP No. For one. This is necessarily so since the exploration. mining exploration permits do not vest in the grantee any permanent or irrevocable . Like timber permits. the Apex Mining case did not invest petitioner with any definite right to the Diwalwal mines which it could now set up against respondent BCMC and the other mining groups. the same cannot be said of respondent BCMC and the other oppositor mining firms. as clarified in our decision in the Apex Mining case: x x x is conclusive only between the parties with respect to the particular issue herein raised and under the set of circumstances herein prevailing. Clearly then.
which may be undertaken consistently in accordance with the constitutional policy enunciated above. he is presumed to have regularly issued the memorandum with a lawful intent and pursuant to his official functions. is authorized to undertake in the first place. under its allencompassing police power. Chapter II of the Philippine Mining Act of 1995 states: SEC. . utilization. renewable for not more than twenty-five years. In this regard. fisheries. The exploration. and under such terms and conditions as may be provided by law. 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 mineral agreements with contractors. there can be no valid opposition raised against a mere study of an alternative which the State. may alter. Section 2. joint venture. flora and fauna. coal. and processing thereof shall be under its full control and supervision. petitioner’s imputation of bad faith on the part of the DENR Secretary when the latter issued MO 97-03 is not welltaken. As implied earlier. the State need be guided only by the demands of public interest in settling for this option. and other natural resources are owned by the State. All lands of the public domain. .Mineral Resources are owned by the State and the exploration. wildlife. as in this case. by either directly undertaking the same or by entering into agreements with qualified entities. or it may enter into co-production. through the DENR. development. waters. The State may directly undertake such activities. Obviously. Additionally. 4. if it is the only plausible remedy in sight to the gnawing complexities generated by the gold rush. since the State. 2. forests or timber. or industrial uses other than the development of water power. which specifically provides: SEC. water supply. beneficial use may be the measure and limit of the grant. Worth noting is Article XII. The avowed rationale of the memorandum order is clearly and plainly stated in its “whereas” clauses. or production-sharing agreements with Filipino citizens. as well as its material and logistic feasibility. petroleum. all forces of potential energy. In the absence of any concrete evidence that the DENR Secretary violated the law or abused his discretion. Section 4. all other natural resources shall not be alienated. development. The DENR Secretary acted within his authority when he ordered a study of the first option. In cases of water rights for irrigation. fisheries. and other mineral oils. of the 1987 Constitution. the State may not be precluded from considering a direct takeover of the mines. development and utilization of the country’s natural mineral resources. With the exception of agricultural lands.right within the purview of the non-impairment of contract and due process clauses of the Constitution. (Underscoring ours) Thus. minerals. modify or amend the same. in accordance with the demands of the general welfare. or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Ownership of Mineral Resources. Such agreements may be for a period not exceeding twenty-five years. (Underscoring ours) Likewise. the State may pursue the constitutional policy of full control and supervision of the exploration.
44693 is AFFIRMED.R. that respondent BCMC and the other mining firms are illegal miners. The decision of the Court of Appeals in CA-G. Any objection raised against MO 97-03 is likewise premature at this point.Given these considerations. WHEREFORE. in view of the foregoing. SP Nos. These factual issues are to be properly threshed out in CA G. We see no need to rule on the matter of the OTPs.R. inasmuch as it merely ordered a study of an option which the State is authorized by law to undertake. 61215 and 61216. the instant petition is DENIED. SP No. Petitioner cannot claim any absolute right to the Diwalwal mines pending resolution of the Consolidated Mines cases. SO ORDERED. at this point. considering that the grounds invoked by petitioner for invalidating the same are inextricably linked to the issues raised in the Consolidated Mines cases. petitioner’s first assigned error is baseless and premised on tentative assumptions. which have yet to be decided by the Court of Appeals. . much less ask us to assume.
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