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G.R. No. 98332 January 16, 1995
MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner,
vs.
HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment andNatural Resources, and JOEL D. MUYCO, Director of Mines and
Geosciences Bureau, respondents.
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 theprovisions 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 Constitutions1
allowed under the 1987 Constitution.
The adoption of the concept of jura regalia2
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,
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:
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
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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
acts4
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
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assistance by foreign-owned corporations for large-scale
exploration, development, and utilization of minerals. The pertinent
provisions relevant to this petition are as follows:
Sec. 1. The Secretary of the Department of Environment and NaturalResources (hereinafter referred to as "the Secretary") is hereby
authorized to negotiate and enter into, for and in behalf of the
Government, joint venture, co-production, or production-sharing
agreements for the exploration, development, and utilization of
mineral resources with any Filipino citizens, or corporation or
association at least sixty percent (60%) of whose capital is owned by
Filipino citizens. Such joint venture, co-production, or production-
sharing agreements may be for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and shallinclude the minimum terms and conditions prescribed in Section 2
hereof. In the execution of a joint venture, co-production or
production agreements, the contracting parties, including the
Government, 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, co-production, or production-sharing agreement.
xxx xxx xxx
Sec. 6. The Secretary shall promulgate such supplementary rules
and regulations as may be necessary to effectively implement the
provisions of this Executive Order.
Sec. 7. All provisions of Presidential Decree No. 463, as amended,
other existing mining laws, and their implementing rules and
regulations, or parts thereof, which are not inconsistent with the
provisions of this Executive Order, shall continue in force and effect.
Pursuant to Section 6 of Executive Order No. 279, the DENR
Secretary issued on June 23, 1989 DENR Administrative Order No.57, series of 1989, captioned "Guidelines of Mineral Production
Sharing Agreement under Executive Order No. 279."6
Under the
transitory provision of said DENR Administrative Order No. 57,
embodied in its Article 9, all existing mining leases or agreements
which were granted after the effectivity of the 1987 Constitution
pursuant to Executive Order No. 211, 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 converted
into production-sharing agreements within one (1) year from theeffectivity of these guidelines.
On November 20, 1980, the Secretary of the DENR Administrative
Order No. 82, series of 1990, laying down the "Procedural
Guidelines on the Award of Mineral Production Sharing Agreement
(MPSA) through Negotiation."7
Section 3 of the aforementioned DENR Administrative Order No. 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. 57 or until July 17, 1991. Failure to do so within the
prescribed period shall cause the abandonment of mining, quarry
and sand and gravel claims. Section 3 of DENR Administrative Order
No. 82 provides:
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Sec. 3. Submission of Letter of Intent (LOIs) and MPSAs). The
following shall submit their LOIs and MPSAs within two (2) years
from the effectivity of DENR A.O. 57 or until July 17, 1991.
i. Declaration of Location (DOL) holders, mining lease applicants,exploration permitees, quarry applicants and other mining
applicants whose mining/quarry applications have not been
perfected prior to the effectivity of DENR Administrative Order No.
57.
ii. All holders of DOL acquired after the effectivity of DENR A.O. No.
57.
iii. Holders of mining leases or similar agreements which were
granted after (the) effectivity of 1987 Constitution.
Failure to submit letters of intent and MPSA applications/proposals
within the prescribed period shall cause the abandonment of
mining, quarry and sand and gravel claims.
The issuance and the impeding implementation by the DENR of
Administrative Order Nos. 57 and 82 after their respective
effectivity dates compelled the Miners Association of the
Philippines, Inc.8
to file the instant petition assailing their validity
and constitutionality before this Court.
In this petition for certiorari, petitioner Miners Association of the
Philippines, Inc. mainly contends that respondent Secretary of DENR
issued both Administrative Order Nos. 57 and 82 in excess of his
rule-making power under Section 6 of Executive Order No. 279. On
the assumption that the questioned administrative orders do not
conform with Executive Order Nos. 211 and 279, petitioner
contends that both orders violate the
non-impairment of contract provision under Article III, Section 10 of
the 1987 Constitution on the ground that Administrative Order No.
57 unduly pre-terminates existing mining agreements and
automatically converts them into production-sharing agreementswithin one (1) year from its effectivity date. On the other hand,
Administrative Order No. 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,
1991 shall cause the abandonment of their mining, quarry and sand
gravel permits.
On July 2, 1991, the Court, acting on petitioner's urgent ex-
parte petition for issuance of a restraining order/preliminaryinjunction, issued a Temporary Restraining Order, upon posting of a
P500,000.00 bond, enjoining the enforcement and implementation
of DENR Administrative Order Nos. 57 and 82, as amended, Series of
1989 and 1990, respectively.9
On November 13, 1991, Continental Marble Corporation,10
thru its
President, Felipe A. David, sought to intervene11
in this case alleging
that because of the temporary order issued by the Court , the DENR,
Regional Office No. 3 in San Fernando, Pampanga refused to renew
its Mines Temporary Permit after it expired on July 31, 1991.
Claiming that its rights and interests are prejudicially affected by the
implementation of DENR Administrative Order Nos. 57 and 82, it
joined petitioner herein in seeking to annul Administrative Order
Nos. 57 and 82 and prayed that the DENR, Regional Office No. 3 be
ordered to issue a Mines Temporary Permit in its favor to enable it
to operate during the pendency of the suit.
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Public respondents were acquired to comment on the Continental
Marble Corporation's petition for intervention in the resolution of
November 28, 1991.12
Now to the main petition. If its argued that Administrative OrderNos. 57 and 82 have the effect of repealing or abrogating existing
mining laws13
which are not inconsistent with the provisions of
Executive Order No. 279. Invoking Section 7 of said Executive Order
No. 279,14
petitioner maintains that respondent DENR Secretary
cannot provide guidelines such as Administrative Order Nos. 57 and
82 which are inconsistent with the provisions of Executive Order No.
279 because both Executive Order Nos. 211 and 279 merely
reiterated the acceptance and registration of declarations of
location and all other kinds of mining applications by the Bureau ofMines and Geo-Sciences under the provisions of Presidential Decree
No. 463, as amended, until Congress opts to modify or alter the
same.
In other words, petitioner would have us rule that DENR
Administrative Order Nos. 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. 211 and 279 or embrace matters not covered, nor
intended to be covered, by the aforesaid laws.
We disagree.
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. The principle was enunciated
as early as 1908 in the case ofUnited States v. Barrias.15
The scope
of the exercise of such rule-making power was clearly expressed in
the case ofUnited States v. Tupasi Molina,16
decided in 1914, thus:
"Of course, the regulations adopted under legislative authority by a
particular department must be in harmony with the provisions ofthe law, and for the sole purpose of carrying into effect its general
provisions. By such regulations, of course, the law itself can not be
extended. So long, however, as the regulations relate solely to
carrying into effect its general provisions. By such regulations, of
course, the law itself can not be extended. So long, however, as the
regulations relate solely to carrying into effect the provision of the
law, they are valid."
Recently, the case ofPeople v. Maceren
17
gave a brief delienationof 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 should be for the sole purpose of carrying into effect its
general provision. By such regulations, of course, the law itself
cannot be extended (U.S. v. Tupasi Molina, supra). An
administrative agency cannot amend an act of Congress (Santos vs.
Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the Board of
Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs.
General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660;
Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350).
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. The power cannot be extended to amending or expanding
the statutory requirements or to embrace matters not covered by
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the statute. Rules that subvert the statute cannot be sanctioned
(University of Santo Tomas v. Board of Tax Appeals, 93 Phil. 376,
382, citing 12 C.J. 845-46. As to invalid regulations, see Collector of
Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v. Meer, 78
Phil. 655, 676; Del Mar v. Phil. Veterans Administration, L-27299,June 27, 1973, 51 SCRA 340, 349).
xxx xxx xxx
. . . The rule or regulation should be within the scope of the
statutory authority granted by the legislature to the administrative
agency (Davis, Administrative Law, p. 194, 197, cited in Victorias
Milling Co., Inc. v. Social Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule orregulation 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. Lim, 108 Phil. 1091).
Considering that administrative rules draw life from the statute
which they seek to implement, it is obvious that the spring cannot
rise higher than its source. We now examine petitioner's argument
that DENR Administrative Order Nos. 57 and 82 contravene
Executive Order Nos. 211 and 279 as both operate to repeal or
abrogate Presidential Decree No. 463, as amended, and other
mining laws allegedly acknowledged as the principal law under
Executive Order Nos. 211 and 279.
Petitioner's insistence on the application of Presidential Decree No.
463, as amended, as the governing law on the acceptance and
approval of declarations of location and all other kinds of
applications for the exploration, development, and utilization of
mineral resources pursuant to Executive Order No. 211, is
erroneous. Presidential Decree No. 463, as amended, pertains to
the old system of exploration, development and utilization of
natural resources through "license, concession or lease" which,
however, has been disallowed by Article XII, Section 2 of the 1987Constitution. By virtue of the said constitutional mandate and its
implementing law, Executive Order No. 279 which superseded
Executive Order No. 211, the provisions dealing on "license,
concession or lease" of mineral resources under Presidential Decree
No. 463, as amended, and other existing mining laws are deemed
repealed and, therefore, ceased to operate as the governing law. In
other words, in all other areas of administration and management
of mineral lands, the provisions of Presidential Decree No. 463, as
amended, and other existing mining laws, still govern. Section 7 ofExecutive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as amended,
other existing mining laws, and their implementing rules and
regulations, or parts thereof, which are not inconsistent with the
provisions of this Executive Order, shall continue in force and effect.
Specifically, the provisions of Presidential Decree No. 463, as
amended, on lease of mining claims under Chapter VIII, quarry
permits on privately-owned lands of quarry license on public lands
under Chapter XIII and other related provisions on lease, license and
permits are not only inconsistent with the raison d'etre for which
Executive Order No. 279 was passed, but contravene the express
mandate of Article XII, Section 2 of the 1987 Constitution. It force
and effectivity is thus foreclosed.
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Upon the effectivity of the 1987 Constitution on February 2,
1987,18
the State assumed a more dynamic role in the exploration,
development and utilization of the natural resources of the country.
Article XII, Section 2 of the said Charter explicitly ordains that the
exploration, development and utilization of natural resources shallbe under the full control and supervision of the State. Consonant
therewith, the exploration, development and utilization of natural
resources may be undertaken by means of direct act of the State, or
it may opt to enter into co-production, joint venture, or production-
sharing agreements, or it may enter into agreements with foreign-
owned corporations involving either technical or financial assistance
for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general
terms and conditions provided by law, based on real contributionsto the economic growth and general welfare of the country.
Given these considerations, there is no clear showing that
respondent DENR Secretary has transcended the bounds
demarcated by Executive Order No. 279 for the exercise of his rule-
making power tantamount to a grave abuse of discretion. Section 6
of Executive Order No. 279 specifically authorizes said official to
promulgate such supplementary rules and regulations as may be
necessary to effectively implement the provisions thereof.Moreover, the subject sought to be governed and regulated by the
questioned orders is germane to the objects and purposes of
Executive Order No. 279 specifically issued to carry out the mandate
of Article XII, Section 2 of the 1987 Constitution.
Petitioner likewise maintains that Administrative Order No. 57, in
relation to Administrative Order No. 82, impairs vested rights as to
violate the non-impairment of contract doctrine guaranteed under
Article III, Section 10 of the 1987 Constitution because Article 9 of
Administrative Order No. 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, while Section 3 of Administrative OrderNo. 82, declares that failure to submit Letters of Intent (LOIs) and
MPSAs within two (2) years from the effectivity of Administrative
Order No. 57 or until July 17, 1991 shall cause the abandonment of
mining, quarry, and sand gravel permits.
In Support of the above contention, it is argued by petitioner that
Executive Order No. 279 does not contemplate automatic
conversion of mining lease agreements into mining production-
sharing agreement as provided under Article 9, AdministrativeOrder No. 57 and/or the consequent abandonment of mining claims
for failure to submit LOIs and MPSAs under Section 3,
Administrative Order No. 82 because Section 1 of said Executive
Order No. 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. Moreover,
petitioner contends that the power to regulate and enter into
mining agreements does not include the power to preterminate
existing mining lease agreements.
To begin with, we dispel the impression created by petitioner's
argument that the questioned administrative orders unduly
preterminate existing mining leases in general. A distinction which
spells a real difference must be drawn. Article XII, Section 2 of the
1987 Constitution does not apply retroactively to "license,
concession or lease" granted by the government under the 1973
Constitution or before the effectivity of the 1987 Constitution on
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February 2, 1987. The intent to apply prospectively said
constitutional provision was stressed during the deliberations in the
Constitutional Commission,19
thus:
MR. DAVIDE: Under the proposal, I notice that except for the[inalienable] lands of the public domain, all other natural resources
cannot be alienated and in respect to [alienable] lands of the public
domain, private corporations with the required ownership by
Filipino citizens can only lease the same. Necessarily, insofar as
other natural resources are concerned, it would only be the State
which can exploit, develop, explore and utilize the same. However,
the State may enter into a joint venture, co-production or
production-sharing. Is that not correct?
MR. VILLEGAS: Yes.
MR. DAVIDE: Consequently, henceforth upon, the approval of this
Constitution, no timber or forest concession, 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: Would Commissioner Monsod like to comment on
that? I think his answer is "yes."
MR. DAVIDE: So, 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. VILLEGAS: This is not applied retroactively. They will be
respected.
MR. DAVIDE: In effect, they will be deemed repealed?
MR. VILLEGAS: No. (Emphasis supplied)
During the transition period or after the effectivity of the 1987
Constitution on February 2, 1987 until the first Congress under said
Constitution was convened on July 27, 1987, two (2) successive
laws, Executive Order Nos. 211 and 279, were promulgated to
govern the processing and approval of applications for the
exploration, development and utilization of minerals. To carry out
the purposes of said laws, the questioned Administrative Order Nos.
57 and 82, now being assailed, were issued by the DENR Secretary.
Article 9 of Administrative Order No. 57 provides:
ARTICLE 9
TRANSITORY PROVISION
9.1. All existing mining leases or agreements which were granted
after the effectivity of the 1987 Constitution pursuant to Executive
Order No. 211, 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.
All such leases or agreements shall be converted into productionsharing agreement within one (1) year from the effectivity of these
guidelines. However, 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.
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It is clear from the aforestated provision that Administrative Order
No. 57 applies only to all existing mining leases or agreements
which were granted after the effectivity of the 1987 Constitution
pursuant to Executive Order No. 211. It bears mention that under
the text of Executive Order No. 211, there is a reservation clausewhich 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. 211, shall be subject to any and all modifications or alterations
which Congress may adopt pursuant to Article XII, Section 2 of the
1987 Constitution. Hence, the strictures of the
non-impairment of contract clause under Article III, Section 10 of
the 1987 Constitution20
do not apply to the aforesaid leases or
agreements granted after the effectivity of the 1987 Constitution,pursuant to Executive Order No. 211. They can be amended,
modified or altered by a statute passed by Congress to achieve the
purposes of Article XII, Section 2 of the 1987 Constitution.
Clearly, Executive Order No. 279 issued on July 25, 1987 by
President Corazon C. Aquino in the exercise of her legislative power
has the force and effect of a statute or law passed by Congress. As
such, it validly modified or altered the privileges granted, as well as
the terms and conditions of mining leases and agreements underExecutive Order No. 211 after the effectivity of the 1987
Constitution by 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
assistance by foreign-owned corporations for large-scale
exploration, development, and utilization of minerals.
Well -settled is the rule, however, that regardless of the reservation
clause, mining leases or agreements granted by the State, such asthose granted pursuant to Executive Order No. 211 referred to this
petition, are subject to alterations through a reasonable exercise of
the police power of the State. In the 1950 case ofOngsiako v.
Gamboa,21
where the constitutionality of Republic Act No. 34
changing the 50-50 sharecropping system in existing agricultural
tenancy contracts to 55-45 in favor of tenants was challenged, the
Court, upholding the constitutionality of the law, 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.
Such provisions are restricted to contracts which respect property,
or some object or value, 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, and involving the public rights and public welfare of the
entire community affected by it. They do not prevent a proper
exercise by the State of its police powers. By enacting regulations
reasonably necessary to secure the health, safety, morals, comfort,
or general welfare of the community, even the contracts may
thereby be affected; for such matter can not be placed by contract
beyond the power of the State shall regulates and control them.22
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In Ramas v. CAR and Ramos23
where the constitutionality of Section
14 of Republic Act No. 1199 authorizing the tenants to charge from
share to leasehold tenancy was challenged on the ground that it
impairs the obligation of contracts, the Court ruled that obligations
of contracts must yield to a proper exercise of the police powerwhen 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, therefore, not arbitrary or
oppressive.
The economic policy on the exploration, development and
utilization of the country's natural resources under Article XII,
Section 2 of the 1987 Constitution could not be any clearer. As
enunciated in Article XII, Section 1 of the 1987 Constitution, theexploration, development and utilization of natural resources under
the new system mandated in Section 2, is geared towards a more
equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially
the underprivileged.
The exploration, development and utilization of the country's
natural resources are matters vital to the public interest and the
general welfare of the people. The recognition of the importance of
the country's natural resources was expressed as early as the 1984
Constitutional Convention. In connection therewith, the 1986 U.P.
Constitution Project observed: "The 1984 Constitutional Convention
recognized the importance of our natural resources not only for its
security and national defense. Our natural resources which
constitute the exclusive heritage of the Filipino nation, should be
preserved for those under the sovereign authority of that nation
and for their prosperity. This will ensure the country's survival as a
viable and sovereign republic."
Accordingly, the State, in the exercise of its police power in thisregard, may not be precluded by the constitutional restriction on
non-impairment of contract from altering, modifying and amending
the mining leases or agreements granted under Presidential Decree
No. 463, as amended, pursuant to Executive Order No. 211. Police
Power, being co-extensive with the necessities of the case and the
demands of public interest; extends to all the vital public needs. The
passage of Executive Order No. 279 which superseded Executive
Order No. 211 provided legal basis for the DENR Secretary to carry
into effect the mandate of Article XII, Section 2 of the 1987Constitution.
Nowhere in Administrative Order No. 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,
pursuant to Executive Order No. 211, to production-sharing
agreements. The provision in Article 9 of Administrative Order No.
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. On the contrary, the use of the
term "production-sharing agreement" if they are so minded.
Negotiation negates compulsion or automatic conversion as
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suggested by petitioner in the instant petition. 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. 82.
We, therefore, 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, their economic growth and
welfare. The validity and constitutionality of Administrative Order
Nos. 57 and 82 must be sustained, and their force and effect
upheld.
We now, proceed to the petition-in-intervention. Under Section 2,
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 in the success of either of the parties, or an interest
against both, 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. "Continental Marble Corporation
has not sufficiently shown that it falls under any of the categories
mentioned above. The refusal of the DENR, Regional Office No. 3,
San Fernando, 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. Whether or not Continental Marble
matter best addressed to the appropriate government body but
certainly, not through this Court. Intervention is hereby DENIED.
WHEREFORE, the petition is DISMISSED for lack of merit. The
Temporary Restraining Order issued on July 2, 1991 is hereby
LIFTED.
SO ORDERED.
PNOC-ENERGY DEVELOPMENT CORPORATION
(PNOC-EDC),
Petitioner,
- versus -
EMILIANO G. VENERACION, JR.,
Respondent.
G. R. No. 129820
Present:
PANGANIBAN, C.J. ,
Chairman,
YNARES-SANTIAGO
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ .
Promulgated:
November 30, 2006
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D E C I S I O N
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari, under Rule 45 of the
Rules of Court, seeking to set aside the Order, dated 21 May
1997issued by the Mines Adjudication Board (MAB) of the
Department of Environmental and Natural Resources
(DENR),[1]
declaring that the respondent Emiliano Veneracion has a
preferential right over the contested Block 159.
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 del Sur.
On 31 January 1989, respondent applied with the Mines and Geo-
Sciences Development Services, DENR, Region
IX, Zamboanga City for a Declaration of Location (DOL) over Block
159 of the Malangas Coal Reservation, situated
at Barangays Payongan and Kauswagan,
Alicia, Zamboanga del Sur. On 18 May 1989, the Office of the
Regional Executive Director (RED) of the DENR informed therespondent that his DOL cannot be registered since Block 159 was
part of the Malangas Coal Reservation, as provided under
Proclamation No. 284, issued by the President on 19 July
1938.[2]
With the endorsement of the Office of Energy Affairs (OEA)
and the DENR Secretary, 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.[3]
The petitioner applied for a mineral prospecting permit over Block
159 (and Blocks 120 and 160) with the OEA, which the latter
granted on 4 September 1989. TheMalangas Coal Reservation was,
at that time, under the administration of the OEA.[4]
When it had
initially applied for a mineral prospecting permit over lands within
the MalangasCoal Reservation, the OEA advised it to obtain the
permission of the Bureau of Mines and Geo-Sciences (BMGS).[5]
On 18 October 1991, petitioner submitted to the DENR an
application/proposal for a Mineral Production Sharing Agreement
(MPSA) over Blocks 120, 159 and 160 of theMalangas Coal
Reservation.[6]
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On 21 February 1992, the Officer-In-Charge Regional Technical
Director Dario R. Mioza 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.[7]
Nevertheless, the petitionerdid not exclude Block 159 from its MPSA. Records also show that it
had not applied for nor was it able to obtain an Exploration Permit
from the BMGS over Block 159.
On 13 April 1992, Presidential Proclamation No. 890 was issued,
which effectively excluded Block 159 from the operation of
Proclamation No. 284, and declared Block No. 159 as government
mineral reservation open for disposition to qualified mining
applicants, pursuant to Executive Order No. 279.[8]
On 26 May 1992, petitioners application for MPSA covering Coal
Block Nos. 120, 159 and 160 was accepted for filing.[9]
Respondent
immediately filed, on 28 May 1992, a protest to the petitioners
inclusion of Block 159 in its application for MPSA before the RED of
the DENR Office in Zamboanga City.[10]
After the parties were heard, the RED, in an Order, dated 12 April
1993, ruled in favor of the respondent and ordered the petitioner to
amend its MPSA by excluding therefrom Block 159.[11]
On 18 May
1993, petitioner filed a Motion for Reconsideration of the Order
dated 12 April 1993,[12]
which the RED denied in an Order dated 5
July 1993.[13]
On 30 July 1993, petitioner filed an appeal with the DENR Secretary
questioning the Orders issued by the RED.[14]
While the case was pending, respondent applied for a MPSA. On 31
July 1992, he paid the processing fee for a MPSA covering Block 159
and was able to comply with all other requirements of the MPSA
application.[15]
On 4 October 1994, the Office of the Secretary dismissed the appeal
on the ground that petitioners right to appeal had already
prescribed.[16]
Section 50 of Presidential Decree No. 463 provides
therefore for a five-day reglementary period from the receipt of the
order or decision of the Director.[17]
Petitioner received its copy of
the assailed Order dated 12 April 1993 on 7 May 1993, but filed its
Motion for Reconsideration only on 18 May 1993, or eleven daysafter its receipt thereof. Thereafter, petitioner received a copy of
the Order dated 5 July 1993 on 16 July 1993, but filed its appeal only
on 30 July 1993 or nine days after the allowable period to appeal.
On 25 October 1994, petitioner, through a letter addressed to the
DENR Secretary, sought the reconsideration of the Decision, dated 4
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October 1994.[18]
In a Resolution, dated 21 December 1994, the
then DENR Secretary Angel C. Alcala reversed the Decision, dated 4
October 1994, and gave due course to the MPSA of the
petitioner.[19]
On 1 February 1995, respondent filed a Motion for Reconsideration
of the Resolution, dated 21 December 1994.[20]
The now DENR
Secretary Victor O. Ramos issued an Order, dated 5 August 1996,
reversing the Resolution, dated 21 December 1994 and reinstating
the Decision, dated 4 October 1994. 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. As a result, the DENR Secretary no longer had the
jurisdiction to issue the assailed Resolution, dated 21 December
1994. It added that after looking into the merits of the case, the
Orders of the RED were in accordance with the evidence on record
and the pertinent laws on the matter.[21]
On 20 August 1996, petitioner filed a Motion for Reconsideration of
the Order, dated 5 August 1996. On 21 May 1997, the MAB
resolved the motion in favor of the respondent and affirmed the
assailed Order, dated 5 August 1996.[22]
It took cognizance of the
appeal filed by petitioner, in accordance with Section 78 of Republic
Act No 7942, otherwise known as The Philippine Mining Act of
1995.[23]
The MAB ruled that the petitioner filed its appeal beyond
the five-day prescriptive period provided under Presidential Decree
No. 463, which was then the governing law on the matter.
The MAB also decreed that the respondent had preferential mining
rights over Block 159. 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; (2) application for
exploration permit; (3) application for exclusion of the land from
such reservation; (4) Presidential Declaration on exclusion as
recommended by the Secretary; and (5) application for Lease
thereof with priority given to holder of exploration Permit.
The MAB noted that petitioner did not file for an exploration permit
nor applied for the exclusion of Block 159. Moreover, petitioner
filed a MPSA on 18 October 1991, or almost six (6) months prior to
the issuance of Proclamation No. 890 excluding Block 159 from
the Malangas Coal Reservation and allowing its disposition. Thus,
the application for a MPSA over Block 159, while it was still part of a
government reservation other than a mineral reservation, was
erroneous and improper and could not have been legally
accepted. And, since the records show that only one MPSA wasfiled after the issuance of Proclamation 890 that of the
respondents, the preferential right over Block 159 was acquired by
the respondent. The MAB, nevertheless, pointed out that the said
preferential right does not necessarily lead to the granting of the
respondents MPSA, but merely consists of the right to have his
application evaluated and the prohibition against accepting other
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mining applications over Block 159 pending the processing of his
MPSA.
Hence, this Petition for Review on Certiorari.
The correct mode of appeal would have been to file a petition for
review under Rule 43, before the Court of Appeals. Petitioners
reliance on Section 79 of the Philippine Mining Act of 1995 is
misplaced.[24]
Republic Act No. 7902 expanded the appellate
jurisdiction of the Court of Appeals to include:
Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-
judicial agencies, instrumentalities, boards or commissions
x x x except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code
of the Philippines under Presidential Decree No. 442, as amended,
the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section17 of the Judiciary Act of 1948.
With the enactment of Republic Act No. 7902, this Court issued
Circular No. 1-95 dated 16 May 1995 governing appeals from all
quasi-judicial bodies to the Court of Appeals by petition for review,
regardless of the nature of the question raised. Said circular was
incorporated in Rule 43 of the Rules of Civil Procedure.[25]
In
addition, this Court held in a line of cases that appeals from
judgments and final orders of quasi-judicial bodies are required tobe brought to the Court of Appeals, under the requirements and
conditions set forth in Rule 43 of the Rules of Civil
Procedure.[26]
Nevertheless, this Court has taken into account the
fact that these cases were promulgated after the petitioner filed
this appeal on 4 August 1997, and decided to take cognizance of the
present case.
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 REDs Order dated 12 April 1993; and (2) whether or not the
petitioner acquired a preferential right on mining rights over Block
159.
This Court finds no merit in this Petition.
Petitioner alleges that Section 61 of Commonwealth Act No.
137[27]
governs the petitioners appeal of the Orders, dated 12 April
1993 and 5 July 1993, and not Section 50 of Presidential Decree No.
463. He further adds that even if Presidential Decree No. 463 was
applicable in this case, his appeal should have been allowed on
grounds of substantial justice.
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When Presidential Decree No. 463 was enacted in 1974, Section 50
of the law had clearly intended to repeal the corresponding
provision found in Section 61 of Commonwealth Act No. 137, 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. Section 61 of Commonwealth Act No. 137, as amended,
provides that:
SEC. 61. - Conflicts and disputes arising out of mining locations shall
be submitted to the Director of Mines for decision:
Provided, That the decision or order of the Director of Mines maybe appealed to the Secretary of Agriculture and Natural Resources
within thirty days from receipt of such decision or order. In case
any one of the parties should disagree from the decision or order of
the Secretary of Agriculture and Natural Resources, the matter may
be taken to the Court of Appeals or the Supreme Court, as the case
may be, within thirty days from the receipt of such decision or
order, otherwise the said decision or order shall be final and binding
upon the parties concerned. x x x.
Section 50 of Presidential Decree No. 463 reads:
Sec. 50. Appeals. - Any party not satisfied with the decision or order
of the Director, may, within five (5) days from receipt thereof,
appeal to the Minister [now Secretary]. Decisions of the Minister
[now Secretary] are likewise appealable within five (5) days from
receipt thereof by the affected party to the President whosedecision shall be final and executory.
Petitioners insistence that the 30-day reglementary period
provided by Section 61 of Commonwealth Act No. 137, as amended,
applies, cannot be sustained by this Court. By providing a five-day
period within which to file an appeal on the decisions of theDirector of Mines and Geo-Sciences, Presidential Decree No. 463
unquestionably repealed Section 61 of Commonwealth Act No. 137.
In Pearson v. Intermediate Appellate Court,[28]
this Court extensively
discussed the development of the law on the adjudication of mining
claims, as seen in the provisions of Commonwealth Act No. 137,
Presidential Decree No. 463, until its present state under Republic
Act No. 7942. 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.
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[W]ith the issuance of Presidential Decree Nos. 99-A, 309, and 463,
the procedure of adjudicating conflicting mining claims has been
made completely administrative in character, with the President as
the final appeal authority. Section 50 of P.D. 463, providing for a
modernized system of administration and disposition of minerallands, to promote and encourage the development and exploitation
thereof, mandates on the matter of "Protests, Adverse Claims and
Appeals," the following procedure:
Appeals Any party not satisfied with the decision or order of the
Director may, within five (5) days from receipt thereof appeal, to
the Secretary. 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.
It should be noted that before its amendment, the Mining Law (C.A.
No. 137) required that after the filing of adverse claim with the
Bureau of Mines, the adverse claimant had to go to a court of
competent jurisdiction for the settlement of the claim. With the
amendment seeking to expedite the resolution of mining conflicts,
the Director of Mines became the mandatory adjudicator of adverseclaims, instead of the Court of First instance. Thus, it cannot escape
notice that under Section 61 of the Mining Law, as amended by
Republic Act Nos. 746 and 4388, 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. In contrast, under the decrees issued at
the onset of martial law, 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.D. No. 463) and Section
7 of P.D. No. 1281 in relation to P.D. No. 309.
The trend at present is to make the adjudication of mining cases a
purely administrative matter. This does not mean that
administrative bodies have complete rein over mining disputes. The
very terms of Section 73 of the Mining Law, as amended by R.A. No.
4388, in requiring that the adverse claim must "state in full detail
the nature, 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. 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. Questions and controversies that are judicial, not
administrative, 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. 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, such
as "granting of license, permits, lease and contracts, or approving,
rejecting, reinstating or cancelling applications, or deciding
conflicting applications," and (2) controversies or disagreements of
civil or contractual nature between litigants which are questions of
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a judicial nature that may be adjudicated only by the courts of
justice.
This distinction is carried on even under the present law. Findings of
fact by the Mines Adjudication Board, which exercises appellate
jurisdiction over decisions or orders of the panel of arbitrators, shall
be conclusive and binding on the parties, and its decision or order
shall be final and executory. But resort to the appropriate court,
through a petition for review by certiorari, involving questions of
law, may be made within thirty days from the receipt of the order or
decision of the Mines Adjudication Board.
Nor can petitioner invoke the doctrine that rules of technicalitymust yield to the broader interest of substantial justice. While every
litigant must be given the amplest opportunity for the proper and
just determination of his cause, free from the constraints of
technicalities, the failure to perfect an appeal within the
reglementary period is not a mere technicality. It raises a
jurisdictional problem as it deprives the appellate court of
jurisdiction over the appeal. 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.[29]
Petitioner invokes the judicial policy of allowing appeals, although
filed late, when the interest of justice so requires. Procedural law
has its own rationale in the orderly administration of justice,
namely, to ensure the effective enforcement of substantive rights
by providing for a system that obviates arbitrariness, caprice,
despotism, or whimsicality in the settlement of disputes. Hence,
rules of procedure must be faithfully followed except only when for
persuasive reasons, they may be relaxed to relieve a litigant of an
injustice not commensurate with his failure to comply with the
prescribed procedure. Concomitant to a liberal application of therules of procedure should be an effort on the part of the party
invoking liberality to explain his failure to abide by the rules .[30]
In
the instant case, petitioner failed to state any compelling reason for
not filing its appeal within the mandated period. Instead, the
records show that after failing to comply with the period within
which to file their motion for reconsideration on time, they again
failed to file their appeal before the Office of the DENR Secretary
within the time provided by law.
Even if petitioner had not lost its right to appeal, it cannot claim any
mining rights over Block 159 for failure to comply with the legal
requirements. Petitioner applied for an MPSA with the DENR on 18
October 1991, prior to the release of Block 159 from
the Malangas Coal Reservation under Proclamation No. 890 on 13
April 1992. Thus, the provisions on the acquisition of mining rights
within a government reservation other than a mineral reservation
under Presidential Decree No. 463 and the Consolidated Mines
Administrative Order (CMAO) should apply.
As a general rule, prospecting and exploration of minerals in a
government reservation is prohibited under Section 13 of
Presidential Decree No. 463. However, the same rule provides an
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exception involving instances when the government agency
concerned allows it.
Section 13. Areas Closed to Mining Location. No prospecting and
exploration shall be allowed:
(a) In military, and other Government reservations except when
authorized by the proper Government agency concerned.
Section 8 of Presidential Decree No. 463 reiterates the rule and
clarifies it further by stating that prospecting, exploration and
exploitation of minerals on reserved lands other than mineral
reservations may be undertaken by the proper government
agency. As an exception to this rule, qualified persons may
undertake the said prospecting, exploration and exploitation when
the said agencies cannot undertake them.
Section 8. Prospecting, Exploration and Exploitation of Minerals in
Reserved Lands. Prospecting, exploration and exploitation of
minerals in reserved lands other than mineral reservations may be
undertaken by the proper government agency. In the event that
the said agencies cannot undertake the prospecting, exploration
and exploitation of minerals in reserved lands, qualified persons
may be permitted to undertake such prospecting, exploration and
exploitation in accordance with the rules and regulations
promulgated by the Secretary [Minister]. The right to exploit the
minerals found therein shall be awarded by the President under
such terms and conditions as recommended by the Director andapproved by the Secretary [Minister]: Provided, That the party who
undertook prospecting, exploration and exploitation of said are
shall be given priority.
Notwithstanding the provisions of the preceding paragraph, a
special permit may be issued by the Director to the
exploration permitee to extract, remove and dispose of minerals in
limited quantities as verified by the Bureau of Mines [Director of
Mines and Geo-Sciences].
Section 15 of the CMAO is more straightforward when it states that
government reserved lands are open for prospecting, subject to the
rules and regulations provided therein.
SEC. 15. Government Reserved Land. Lands reserved by the
Government for purposes other than mining are open to
prospecting. Any interested party may file an application therefore
with the head of the agency administering said land, subject always
to compliance with pertinent laws and rules and regulations
8/3/2019 H3 Property
20/28
covering such reserved land. Such application shall be acted upon
within thirty (30) days. In such cases, the compensation due the
surface owner shall accrue equally to the agency administering the
reserved land and the Bureau of Mines.
The law enumerates the following requirements: (1) a prospecting
permit from the agency that has jurisdiction over the area, in this
case, the OEA;[31]
(2) an exploration permit from the BMGS;[32]
(3) if
the exploration reveals the presence of commercial deposit,
the permitee applies before the BMGS for the exclusion of the area
from the reservation;[33]
(4) granting by the president of theapplication to exclude the area from the reservation;
[34]and (5) a
mining agreement approved by the DENR Secretary.
In this case, petitioner complied with the first requirement and
obtained a prospecting permit from the OEA. In its correspondence
with the petitioner, the OEA, however, advised the petitioner on
two separate occasions to obtain a prospecting permit from the
BMGS, although the OEA was probably referring to an exploration
permit.[35]
The petitioner did not apply for an exploration permit
with the BMGS, 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 BMGS informed the petitioner that the
respondents claim over Block 159 had already preceded that of the
petitioner.[36]
The advice given by the BMGS was justified since at
that time, the respondent already had a pending application for the
exclusion of Block 159 from the Malangas Coal Reservation.
Thereafter, the petitioner filed his MPSA application, without
complying with the second, third and fourth requisites. Since it
ignored the sound advice of the OEA and the BMGS, thegovernment agencies concerned, and stubbornly insisted on its
incorrect procedure, petitioner cannot complain now that its MPSA
was revoked for failure to comply with the legal requirements.
In contrast, the respondent applied for a DOL as early as 30 January
1989. The DENR Regional Office refused to register the
respondents 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 respondent
followed this advice. The BMGS then treated the respondents
application for a DOL as an application for an exploration permit
and caused a verification report of the area applied for, as provided
under Section 99 of the CMAO.[37]
Upon the application of the
respondent, the OEA and thereafter the DENR Secretary endorsed
the respondents application for the exclusion of the area from the
reservation.[38]
This application was granted by the President,
through Proclamation No. 890, which provided that the mining
rights to Block 159 will be disposed of in accordance with Executive
Order No. 279. On 30 July 1992, respondent filed his
MPSA.[39]
On 12 April 1993, the RED of Zamboanga City ordered
that the respondents MPSA be given due course.[40]
Although the
respondents applications may not follow the strict letter of the law,
there was substantial compliance with the requirements of the
law. Hence, the respondent was able to acquire a preferential right
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on the mining claims over Block 159, as provided under Section 101
of the CMAO.
Even if it were to be assumed that the respondent failed to comply
with these requirements, this would not be fatal to his cause since
he filed his MPSA on 31 July 1992, after the issuance of
Proclamation No. 890; therefore, 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, wherein a different set of rules would
apply. 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. In this case, the
respondent was the only applicant to the mining rights over Block
159, apart from the petitioner who was not qualified for failure to
comply with the legal requirements. Proclamation No. 890
specifically provides that Executive Order No. 279 should be
applied. Records indicate that the provisions of Executive Order No.
279 have been complied with.[41]
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The
assailedDecision of the Mines Adjudication Board ishereby AFFIRMED. No costs.
SO ORDERED.
[G.R. No. 135190. April 3, 2002]
SOUTHEAST MINDANAO GOLD MINING
CORPORATION,petitioner, vs. BALITE PORTAL MINING
COOPERATIVE and others similarly situated; and THE HONORABLE
ANTONIO CERILLES, in his capacity as Secretary of the Department
of Environment and Natural Resources (DENR), PROVINCIALMINING REGULATORY BOARD OF DAVAO (PMRB-
Davao), respondents.
D E C I S I O N
YNARES-SANTIAGO,J.:
This is a petition for review of the March 19, 1998 decision of the
Court of Appeals in CA-G.R. SP No. 44693, dismissing the special civil
action for certiorari, prohibition and mandamus, and the resolutiondated August 19, 1998 denying petitioners motion for
reconsideration.
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. Located at Mt. Diwata in the municipalities of Monkayo
and Cateel in Davao Del Norte, the land has been embroiled in
controversy since the mid-80s due to the scramble over gold
deposits found within its bowels.
From 1985 to 1991, thousands of people flocked to Diwalwal to
stake their respective claims. Peace and order deteriorated rapidly,
with hundreds of people perishing in mine accidents, man-made or
otherwise, brought about by unregulated mining activities. The
multifarious problems spawned by the gold rush assumed
gargantuan proportions, such that finding a win-win solution
became a veritable needle in a haystack.
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On March 10, 1988, Marcopper Mining Corporation (Marcopper)
was granted Exploration Permit No. 133 (EP No. 133) over 4,491
hectares of land, which included the hotly-contested Diwalwal
area.[1]
Marcoppers acquisition of mining rights over Diwalwal under
its EP No. 133 was subsequently challenged before this Courtin Apex Mining Co., Inc., et al. v. Hon. Cancio C. Garcia, et
al.,[2]
where Marcoppers claim was sustained over that of another
mining firm, Apex Mining Corporation (Apex). The Court found that
Apex did not comply with the procedural requisites for acquiring
mining rights within forest reserves.
Not long thereafter, Congress enacted on June 27, 1991 Republic
Act No. 7076, or the Peoples Small-Scale Mining Act. The law
established a Peoples Small-Scale Mining Program to be
implemented by the Secretary of the DENR[3]
and created the
Provincial Mining Regulatory Board (PMRB) under the DENR
Secretarys direct supervision and control.[4]
The statute also
authorized the PMRB to declare and set aside small-scale mining
areas subject to review by the DENR Secretary[5]
and award mining
contracts to small-scale miners under certain conditions.[6]
On December 21, 1991, DENR Secretary Fulgencio S. Factoran
issued Department Administrative Order (DAO) No. 66, declaring
729 hectares of the Diwalwal area as non-forest land open to small-
scale mining.[7]
The issuance was made pursuant to the powers
vested in the DENR Secretary by Proclamation No. 369, which
established the Agusan-Davao-Surigao Forest Reserve.
Subsequently, a petition for the cancellation of EP No. 133 and the
admission of a Mineral Production Sharing Arrangement (MPSA)
proposal over Diwalwal was filed before the DENR Regional
Executive Director, docketed as RED Mines Case No. 8-8-94
entitled, Rosendo Villaflor, et al. v. Marcopper Mining
Corporation.
On February 16, 1994, while the RED Mines case was pending,
Marcopper assigned its EP No. 133 to petitioner Southeast
Mindanao Gold Mining Corporation (SEM),[8]
which in turn applied
for an integrated MPSA over the land covered by the permit.
In due time, the Mines and Geosciences Bureau Regional Office No.
XI in Davao City (MGB-XI) accepted and registered the integrated
MPSA application of petitioner. After publication of the application,
the following filed their oppositions:
a) MAC Case No. 004(XI) - JB Management Mining Corporation;
b) MAC Case No. 005(XI) - Davao United Miners Cooperative;
c) MAC Case No. 006(XI) - Balite Integrated Small Scale Miners
Cooperative;
d) MAC Case No. 007(XI) - Monkayo Integrated Small Scale
Miners Association, Inc.;
e) MAC Case No. 008(XI) - Paper Industries Corporation of the
Philippines;
f) MAC Case No. 009(XI) - Rosendo Villaflor, et al.;
g) MAC Case No. 010(XI) - Antonio Dacudao;
h) MAC Case No. 011(XI) - Atty. Jose T. Amacio;
i) MAC Case No. 012(XI) - Puting-Bato Gold Miners Cooperative;
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j) MAC Case No. 016(XI) - Balite Communal Portal Mining
Cooperative; and
k) MAC Case No. 97-01(XI) - Romeo Altamera, et al.
In the meantime, on March 3, 1995, Republic Act No. 7942, the
Philippine Mining Act, was enacted. Pursuant to this statute, the
above-enumerated MAC cases were referred to a Regional Panel of
Arbitrators (RPA) tasked to resolve disputes involving conflicting
mining rights. The RPA subsequently took cognizance of the RED
Mines case, which was consolidated with the MAC cases.
On April 1, 1997, Provincial Mining Regulatory Board of Davao
passed Resolution No. 26, Series of 1997, authorizing the issuance
of ore transport permits (OTPs) to small-scale miners operating inthe Diwalwal mines.
Thus, on May 30, 1997, petitioner filed a complaint for damages
before the Regional Trial Court of Makati City, Branch 61, against
the DENR Secretary and PMRB-Davao. SEM alleged that the illegal
issuance of the OTPs allowed the extraction and hauling
of P60,000.00 worth of gold ore per truckload from SEMs mining
claim.
Meanwhile, on June 13, 1997, the RPA resolved the Consolidated
Mines cases and decreed in an Omnibus Resolution as follows:
VIEWED IN THE LIGHT OF THE FOREGOING, the validity of
Exploration Permit No. 133 is hereby reiterated and all the adverse
claims against MPSAA No. 128 are DISMISSED.[9]
On June 24, 1997, the DENR Secretary issued Memorandum Order
No. 97-03[10]
which provided, among others, that:
1. The DENR shall study thoroughly and exhaustively the option
of direct state utilization of the mineral resources in the Diwalwal
Gold-Rush Area. Such study shall include, but shall not be limited to,
studying and weighing the feasibility of entering into management
agreements or operating agreements, or both, with the appropriate
government instrumentalities or private entities, or both, in carrying
out the declared policy of rationalizing the mining operations in the
Diwalwal Gold Rush Area; such agreements shall include provisions
for profit-sharing between the state and the said parties, including
profit-sharing arrangements with small-scale miners,as well as the
payment of royalties to indigenous cultural communities, among
others. The Undersecretary for Field Operations, as well as the
Undersecretary for Legal and Legislative Affairs and Attached
Agencies, and the Director of the Mines and Geo-sciences Bureau
are hereby ordered to undertak