Philippine Fisheries Code of 1998

G.R. No. 224804. September 21, 2016 ]

EFREN R. LEYNES VS. PEOPLE OF THE PHILIPPINES,

Facts

That on or about the 9th day of July 2009 and [for] sometime[s]
prior thereto, at Sitio Bigyan, [Barangay] Sibulan, Municipality of
Polillo, Province of Quezon, Philippines

and within the jurisdiction of this Honorable Court, the above named-
accused, conspiring and confederating together and mutually helping
one another, did then and there willfully, unlawfully, and feloniously
enter, occupy, possess, and make fishpond one half (1/2) hectare, more
or less, of the mangrove forest area, causing damage to the mangroves
found therein, without any authority under a license agreement, lease,
license, or permit from the proper government authority, to the damage
and prejudice of the government of the Philippines.

During arraignment,

petitioner Efren and Alan entered a plea of not guilty. While their co-
accused, Javier, remained at large. After pre-trial, trial on the merits
ensued.

The defendants denied the charge against them. The defendants

contend that
 they cannot be convicted for improving and rehabilitating the mangrove
forest because the act punishable under Section 94 of R.A. No. 8550 is
"conversion."

According to defendants, the construction of dikes and installation

of an outlet (prinsa) do not amount to conversion, but a
rehabilitation and improvement of the mangrove forest.

In fact, Efren was able to work in the aforesaid fishpond as a young

man when it was still owned by his grandfather Emilio Leynes, who has
a tax declaration issued in his name, showing ownership over the subject
mangrove area. Efren introduced improvements in the area by virtue of a
Certificate of Non Coverage issued in his favor by the Department of
Natural Resources.

On 25 April 2014, the Regional Trial Court (RTC)

convicted petitioner Efren. However, the RTC dismissed the charge

against Alan for failure of the prosecution to prove conspiracy between
him and Efren and/or participation in the commission of the offense. On
the other hand, the case against Javier was archived while he is still at
large. The RTC resolved that the fact that Efren's grandfather was issued
a tax declaration does not justify his continued possession and
introduction of improvements. As regards the Certificate of Non
Coverage issued in favor of Efren, the RTC determined that: (1) "the
issuance thereof shall not exempt the grantee from compliance with
applicable environmental laws, rules and regulations, including the
permitting requirements of other government agencies, and (2) only the
granting of fishpond lease agreement pursuant to Sec. 45 of R.A. 8550
could exempt accused [Efren] from prosecution under Sec. 94 of the
same law."

The pertinent portions of the RTC Decision read:

IN THE LIGHT OF THE FOREGOING, judgment is hereby
rendered against accused Efren Leynes finding him guilty beyond
reasonable doubt of the crime of violation of Sec. 94 of R.A. 8550
With respect to accused Alan Leynes, the information for violation of
Sec. 94 of R.A. 8550 filed-against him is ordered DISMISSED.

On appeal, the CA affirmed Efren's conviction

. The CA considered Efren's Letter of Appeal, where he admitted to the
destruction of the mangrove area, as a judicial admission. Absent any
showing that the Letter of Appeal was made through palpable mistake,
the same is conclusive against Efren.
ISSUE:
Is Leynes, in cutting a mangrove tree, guilty of the crime of conversion
of mangroves under section 94 of RA 8550?
Our Ruling

For an offense of conversion of mangrove forest to exist, the

following elements must concur:
1. The site of the fishpond is a mangrove forest;
2. There was a conversion of the mangrove area into a fishpond; and
3. The appellant made the conversion.
The presence of the first and third elements, i.e., the site of the fishpond
is a mangrove forest and the appellant made the conversion, are
undisputed. Now, the discussion of whether or not there was a
conversion of the mangrove forest into a fishpond.

The relevant provision is Section 94, R.A. No. 8550, to wit:

It shall be unlawful for any person to convert mangroves into
fishponds or for any other purposes.

As stated, the law punishes "conversion" of mangrove forest into

fishponds or for any other purposes.
Efren argues that he cannot be convicted

of the offense because his act of introducing improvements and

rehabilitating the mangrove forest area do not amount to conversion.
Also, when he improved and rehabilitated the same, it was already a
fishpond.

Efren's contention must fail.

As defined, conversion means

"the act or process of changing from one form, state, etc., to

another."[5] In the case at bar, Efren's acts of cutting mangrove trees,
constructing a dike, installing an outlet (prinsa), and excavating in the
mangrove forest constitute conversion because it altered the natural
structure and form of the mangrove forest. Even if we consider Efren's
defense that when he inherited the mangrove forest area from his
grandfather it was already fishpond, such does not absolve him from
liability. His continued introduction of improvements and continued use
of the mangrove forest area as a fishpond, despite knowledge of the
same being a mangrove forest area, impose upon him criminal liability.

In any case, what the law prohibits is not only the conversion of the
mangrove forest into fishponds

, but its conversion into any other purpose. Indeed, Efren may not have
caused the conversion of the mangrove forest into a fishpond, but his
acts of cutting mangrove trees, constructing a dike, installing an outlet
(prinsa), and excavating in the mangrove forest altered the natural
structure and form of the mangrove forest—an act punishable by Sec. 94
of R.A. No. 8550.

Anent his claim of good faith, this Court, as already held in our past
pronouncements, cannot give credence to such defense. R.A. No. 8550 is
a special law. It punishes conversion of mangrove forests into fishponds
and for other purposes. As a special law, failure to comply with the same
being malum prohihitum, intent to commit it or good faith is
immaterial.[6]

As regards Efren's defense that the mangrove forest area is covered

by a tax declaration

, we reiterate the findings of the lower court that the issuance of a tax
declaration does not justify Efren's continued possession and
introduction of improvements. In fact, pursuant to Section 75 of P.D.
No. 705,[7] the issuance of a tax declaration of a land not classified as
alienable and disposable is a criminal act. The tax declaration issued in
his favor cannot act as a shield from criminal liability.

Efren also cannot invoke the Certificate of Non Coverage issued in

his name as a permit to introduce improvements in the mangrove
forest

. As correctly held by the RTC: (1) "the issuance thereof shall not
exempt the grantee from compliance with applicable environmental
laws, rules and regulations, including, the permitting requirements of
other government agencies, and (2) only the granting of fishpond lease
agreement pursuant to Sec. 45 of R.A. 8550 could exempt accused
[Efren] from prosecution of Sec. 94 of the same law."
. Absent any fishpond lease agreement, Efren, despite the issuance of a
Certificate of Non Coverage in his name, is not exempted from
compliance with applicable environmental laws, rules and regulations,
such as Sec. 94 of R.A. No. 8550.

In any case, as correctly held by the lower court, Efren is estopped

from claiming that he did not convert the mangrove forest area

. In his Letter of Appeal, Efren admitted that "he caused the cutting of
number of trees inside the old fishpond", which is deemed as a judicial
admission. A judicial admission, verbal or written, is made by a party in
the course of the proceedings in the same case which does not require
proof.[8]

In the case at bar, no denial was made on the part of Efren that he cut a
number of trees in the mangrove forest.[

. A judicial admission also removes an admitted fact from the field

of controversy

. Consequently, an admission made in the pleadings cannot be

controverted by the party making such admission and are conclusive as
to such party, and all proofs to the contrary or inconsistent therewith
should be ignored, whether objection is interposed by the party or not.
Thus, Efren's judicial admission, in addition to the aforementioned
grounds, is a sufficient ground to sustain a conviction.

It is high time, therefore, and to avoid confusion, that mangrove

forests do not consists of the typical mangrove trees only.

As defined, mangroves are "a community of intertidal plants including

all species of trees, shrubs, vines and herbs found on coasts, swamps, or
border of swamps."[12] Contrary to Efren's belief, "the word 'mangroves'
refers to a group of plants which may actually belong to several families
(species that distinctly belong to their own evolutionary group)."[13] By
cutting a tree in the mangrove forest, regardless of its species, Efren
caused conversion of the same.

WHEREFORE, the Decision of the Honorable Court of Appeals dated

3 December 2015 in CA-G.R. CR No. 36638, which sentenced
petitioner Efren R. Leynes to suffer the penalty of six (6) years and one
(1) day, as minimum, up to twelve (12) years, as maximum, and a fine of
Eighty Thousand Pesos (P80,000.00), for the offense of conversion of
mangroves as punishable under Section 94 of Republic Act No. 8550,
otherwise known as the "Philippine Fisheries Code of 1998", is
hereby AFFIRMED
The Philippine Mining Act of 2009

.R. No. 127882 December 1, 2004

LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., vs.

VICTOR O. RAMOS,

FACTS

The Petition for Prohibition and Mandamus before the Court

challenges the constitutionality of

(1) Republic Act No. [RA] 7942 (The Philippine Mining Act of 1995);
(2) its Implementing Rules and Regulations (DENR Administrative
Order No. [DAO] 96-40); and (3) the FTAA dated March 30,
1995,6 executed by the government with Western Mining Corporation
(Philippines), Inc. (WMCP).7

On January 27, 2004, the Court en banc promulgated its Decision8

granting the Petition and declaring the unconstitutionality of certain

provisions of RA 7942, DAO 96-40, as well as of the entire FTAA
executed between the government and WMCP, mainly on the finding
that FTAAs are service contracts prohibited by the 1987
Constitution.

The Decision struck down the subject FTAA for being similar to service
contracts,9 which, though permitted under the 1973 Constitution,10 were
subsequently denounced for being antithetical to the principle of
sovereignty over our natural resources, because they allowed foreign
control over the exploitation of our natural resources, to the prejudice of
the Filipino nation.
Subsequently, respondents filed separate Motions for
Reconsideration. In a Resolution dated March 9, 2004

, the Court required petitioners to comment thereon. In the Resolution of

June 8, 2004, it set the case for Oral Argument on June 29, 2004.

After hearing the opposing sides

, the Court required the parties to submit their respective Memoranda in

amplification of their arguments. In a Resolution issued later the same
day, June 29, 2004, the Court noted, inter alia, the Manifestation and
Motion (in lieu of comment) filed by the Office of the Solicitor General
(OSG) on behalf of public respondents.

Issues

1. Has the case been rendered moot by the sale of WMC shares in
WMCP to Sagittarius (60 percent of Sagittarius' equity is owned by
Filipinos and/or Filipino-owned corporations while 40 percent is owned
by Indophil Resources NL, an Australian company) and by the
subsequent transfer and registration of the FTAA from WMCP to
Sagittarius?

2. Assuming that the case has been rendered moot, would it still be
proper to resolve the constitutionality of the assailed provisions of the
Mining Law, DAO 96-40 and the WMCP FTAA?

3. What is the proper interpretation of the phrase Agreements Involving

Either Technical or Financial Assistance contained in paragraph 4 of
Section 2 of Article XII of the Constitution?

First Issue:

Mootness

. According to petitioners, the FTAAs entered into by the government

with foreign-owned corporations are limited by the fourth paragraph of
the said provision to agreements involving only technical or financial
assistance for large-scale exploration, development and utilization of
minerals, petroleum and other mineral oilsThe Decision merely
shrugged off the Manifestation by WMPC informing the Court (1) that
on January 23, 2001, WMC had sold all its shares in WMCP to
Sagittarius Mines, Inc., 60 percent of whose equity was held by
Filipinos; and (2) that the assailed FTAA had likewise been transferred
from WMCP to Sagittarius.11 The ponencia declared that the instant case
had not been rendered moot by the transfer and registration of the FTAA
to a Filipino-owned corporation, and that the validity of the said transfer
remained in dispute and awaited final judicial determination.12 Patently
therefore, the Decision is anchored on the assumption that WMCP had
remained a foreign corporation.

The crux of this issue of mootness is the fact

that WMCP, at the time it entered into the FTAA, happened to be

wholly owned by WMC Resources International Pty., Ltd. (WMC),
which in turn was a wholly owned subsidiary of Western Mining
Corporation Holdings Ltd., a publicly listed major Australian mining
and exploration company.

The nullity of the FTAA was obviously premised upon the

contractor being a foreign corporation

. Had the FTAA been originally issued to a Filipino-owned corporation,

there would have been no constitutionality issue to speak of. Upon the
other hand, the conveyance of the WMCP FTAA to a Filipino
corporation can be likened to the sale of land to a foreigner who
subsequently acquires Filipino citizenship, or who later resells the same
land to a Filipino citizen. And, inasmuch as the FTAA is to be
implemented now by a Filipino corporation, it is no longer possible for
the Court to declare it unconstitutional.
The case pending in the Court of Appeals is a dispute between two
Filipino companies (Sagittarius and Lepanto), both claiming the
right to purchase the foreign shares in WMCP

. So, regardless of which side eventually wins, the FTAA would still be
in the hands of a qualified Filipino company. Considering that there is
no longer any justiciable controversy, the plea to nullify the Mining Law
has become a virtual petition for declaratory relief, over which this
Court has no original jurisdiction.

In their Final Memorandum

, however, petitioners argue that the case has not become moot,
considering the invalidity of the alleged sale of the shares in WMCP
from WMC to Sagittarius, and of the transfer of the FTAA from WMCP
to Sagittarius, resulting in the change of contractor in the FTAA in
question. And even assuming that the said transfers were valid, there still
exists an actual case predicated on the invalidity of RA 7942 and its
Implementing Rules and Regulations (DAO 96-40).

No Transgression of the Constitution

by the Transfer of the WMCP Shares

Petitioners claim, first, that the alleged invalidity of the transfer of the
WMCP shares to Sagittarius violates the fourth paragraph of Section 2
of Article XII of the Constitution; second, that it is contrary to the
provisions of the WMCP FTAA itself; and third, that the sale of the
shares is suspect and should therefore be the subject of a case in which
its validity may properly be litigated.

On the first ground, petitioners assert that paragraph 4 of Section 2

of Article XII permits the government to enter into FTAAs only
with foreign-owned corporations

. Petitioners insist that the first paragraph of this constitutional provision

limits the participation of Filipino corporations in the exploration,
development and utilization of natural resources to only three species of
contracts -- production sharing, co-production and joint venture --. In
short, petitioners claim that a Filipino corporation is not allowed by the
Constitution to enter into an FTAA with the government.

However, a textual analysis of the first paragraph of Section 2 of

Article XII does not support petitioners' argument. The pertinent
part of the said provision states:

"Sec. 2. x x x The exploration, development and utilization of natural

resources shall be under the full control and supervision of the State.
The State may directly undertake such activities, or it may enter into co-
production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per
centum of whose capital is owned by such citizens

Besides, even assuming (purely for argument's sake) that a constitutional

limitation barring Filipino corporations from holding and
implementing an FTAA actually exists, nevertheless, such provision
would apply only to the transfer of the FTAA to Sagittarius, but
definitely not to the sale of WMC's equity stake in WMCP to
Sagittarius.

otherwise, an unreasonable curtailment of property rights without due

process of law would ensue. Petitioners' argument must therefore fail.

FTAA Not Intended

Solely for Foreign Corporation

Equally barren of merit is the second ground cited by petitioners -- that

the FTAA was intended to apply solely to a foreign corporation, as can
allegedly be seen from the provisions therein. They manage to cite only
one WMCP FTAA provision that can be regarded as clearly intended to
apply only to a foreign contractor: Section 12, which provides for
international commercial arbitration under the auspices of the
International Chamber of Commerce, after local remedies are exhausted.
This provision, however, does not necessarily imply that the WMCP
FTAA cannot be transferred to and assumed by a Filipino corporation
like Sagittarius, in which event the said provision should simply be
disregarded as a superfluity.

No Need for a Separate

Litigation of the Sale of Shares

Petitioners claim as third ground the "suspicious" sale of shares from

WMC to Sagittarius; hence, the need to litigate it in a separate case.
Section 40 of RA 7942 (the Mining Law) allegedly requires the
President's prior approval of a transfer.

Section 40 expressly applies to the assignment or transfer of the

FTAA, not to the sale and transfer of shares of stock in WMCP.

Moreover, when the transferee of an FTAA is

another foreign corporation, there is a logical application of the
requirement of prior approval by the President of the Republic and
notification to Congress in the event of assignment or transfer of an
FTAA. In this situation, such approval and notification are appropriate
safeguards, considering that the new contractor is the subject of a
foreign government.

On the other hand, when the transferee of the FTAA happens to be

a Filipino corporation, the need for such safeguard is not critical;
hence, the lack of prior approval and notification may not be
deemed fatal as to render the transfer invalid.

Besides, it is not as if approval by the President is entirely absent in this

instance. Petitioners also question the sale price and the financial
capacity of the transferee. According to the Deed of Absolute Sale dated
January 23, 2001, executed between WMC and Sagittarius, the price of
the WMCP shares was fixed at US$9,875,000, equivalent to P553
million at an exchange rate of 56:1. Sagittarius had an authorized capital
stock of P250 million and a paid up capital of P60 million. Therefore, at
the time of approval of the sale by the DENR, the debt-to-equity ratio of
the transferee was over 9:1 -- hardly ideal for an FTAA contractor,
according to petitioners.

However, private respondents counter that the Deed of Sale specifically

provides that the payment of the purchase price would take place only
after Sagittarius' commencement of commercial production from mining
operations, if at all. Consequently, under the circumstances, we believe
it would not be reasonable to conclude, as petitioners did, that the
transferee's high debt-to-equity ratio per se necessarily carried negative
implications for the enterprise; and it would certainly be improper to
invalidate the sale on that basis, as petitioners propose.

FTAA Not Void,

Thus Transferrable

To bolster further their claim that the case is not moot, petitioners insist
that the FTAA is void and, hence cannot be transferred; and that its
transfer does not operate to cure the constitutional infirmity that is
inherent in it; neither will a change in the circumstances of one of the
parties serve to ratify the void contract.

While the discussion in their Final Memorandum was skimpy,

petitioners in their Comment (on the MR) did ratiocinate that this
Court had declared the FTAA to be void because, at the time it was
executed with WMCP,

the latter was a fully foreign-owned corporation, in which the former

vested full control and management with respect to the exploration,
development and utilization of mineral resources, contrary to the
provisions of paragraph 4 of Section 2 of Article XII of the Constitution.
And since the FTAA was per se void, no valid right could be transferred;
neither could it be ratified, so petitioners conclude.
the FTAA does not vest in the foreign corporation full control and
supervision over the exploration, development and utilization of mineral
resources, to the exclusion of the government.

. The present Petition has been filed, precisely because the grantee of
the FTAA was a wholly owned subsidiary of a foreign corporation.
It cannot be gainsaid that anyone would have asserted that the same
FTAA was void if it had at the outset been issued to a Filipino
corporation.

The FTAA, therefore, is not per se defective or unconstitutional. It was

questioned only because it had been issued to an allegedly non-qualified,
foreign-owned corporation.

. In the present case, the issuance/grant of the subject FTAA to the

then foreign-owned WMCP was not illegal, void or unconstitutional
at the time.

The matter had to be brought to court, precisely for adjudication as to

whether the FTAA and the Mining Law had indeed violated the
ConstitutionAt bottom, we find completely outlandish petitioners'
contention that an FTAA could be entered into by the government only
with a foreign corporation, never with a Filipino enterprise.

Second Issue:

Whether the Court Can Still Decide the Case,

Even Assuming It Is Moot

All the protagonists are in agreement that the Court has jurisdiction
to decide this controversy, even assuming it to be moot.

Petitioners stress the following points. First, while a case becomes moot
and academic when "there is no more actual controversy between the
parties or no useful purpose can be served in passing upon the
merits,"18 what is at issue in the instant case is not only the validity of
the WMCP FTAA, but also the constitutionality of RA 7942 and its
Implementing Rules and Regulations. Second, the acts of private
respondent cannot operate to cure the law of its alleged
unconstitutionality or to divest this Court of its jurisdiction to
decide. Third, the Constitution imposes upon the Supreme Court the
duty to declare invalid any law that offends the Constitution.

Petitioners also argue that no amendatory laws have been passed to

make the Mining Act of 1995 conform to constitutional strictures
(assuming that, at present, it does not); that public respondents will
continue to implement and enforce the statute until this Court rules
otherwise;

and that the said law continues to be the source of legal authority in
accepting, processing and approving numerous applications for mining
rights.

We are convinced. We now agree that the Court must recognize the
exceptional character of the situation and the paramount public
interest involved, as well as the necessity for a ruling to put an end to
the uncertainties plaguing the mining industry and the affected
communities as a result of doubts cast upon the constitutionality and
validity of the Mining Act, the subject FTAA and future FTAAs

, and the need to avert a multiplicity of suits. Paraphrasing Gonzales v.

Commission on Elections,21 it is evident that strong reasons of public
policy demand that the constitutionality issue be resolved now.22

Public respondents ask the Court to avoid a situation in which the

constitutionality issue may again arise with respect to another FTAA, the
resolution of which may not be achieved until after it has become too
late for our mining industry to grow out of its infancy.

The mootness of the case in relation to the WMCP FTAA led the
undersigned ponente to state in his dissent to the Decision
that there was no more justiciable controversy and the plea to nullify the
Mining Law has become a virtual petition for declaratory relief.26

Additionally, the entry of CMP into this case has also effectively
forestalled any possible objections arising from the standing or legal
interest of the original parties.

For all the foregoing reasons, we believe that the Court should proceed
to a resolution of the constitutional issues in this case.

Third Issue:

The Proper Interpretation of the Constitutional Phrase

"Agreements Involving Either Technical or Financial Assistance"

The constitutional provision at the nucleus of the controversy is

paragraph 4 of Section 2 of Article XII of the 1987 Constitution. In
order to appreciate its context, Section 2 is reproduced in full:
"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.
Petitioners claim that the phrase "agreements x x x involving either
technical or financial assistance" simply means technical assistance or
financial assistance agreements, nothing more and nothing else. They
insist that there is no ambiguity in the phrase, and... that a plain reading
of paragraph 4 quoted above leads to the inescapable conclusion that
what a foreign-owned corporation may enter into with the government is
merely an agreement for either financial or technical assistance only, for
the large-scale... exploration, development and utilization of minerals,
petroleum and other mineral oils; such a limitation, they argue, excludes
foreign management and operation of a mining enterprise
We do not see how applying a strictly literal or verba legis
interpretation of paragraph 4 could inexorably lead to the
conclusions arrived at in the ponencia. First, the drafters' choice of
words -- their use of the phrase agreements x x x involving... either
technical or financial assistance -- does not indicate the intent to
exclude other modes of assistance.
The drafters opted to use involving when they could have simply said
agreements for financial or technical assistance, if that was their
intention to... begin with. In this case, the limitation would be very clear
and no further debate would ensue
In contrast, the use of the word "involving" signifies the possibility
of the inclusion of other forms of assistance or activities having to do
with, otherwise related to or compatible with financial or technical
assistance. The word "involving" as used in this context... has three
connotations that can be differentiated thus:
one, the sense of "concerning," "having to do with," or "affecting"; two,
"entailing," "requiring," "implying" or "necessitating"; and three,
"including," "containing" or "comprising."
Plainly, none of the three connotations convey a sense of exclusivity.
Moreover, the word "involving," when understood in the sense of
"including," as in including technical or financial assistance,
necessarily implies that there are activities other than those..
. that are being included. In other words, if an agreement includes
technical or financial assistance, there is apart from such assistance --
something else already in, and covered or may be covered by, the said
agreement.
In short, it allows for the possibility that matters, other than those
explicitly mentioned, could be made part of the agreement. Thus, we
are now led to the conclusion that the use of the word "involving"
implies that these agreements with foreign corporations are not
... limited to mere financial or technical assistance. The difference in
sense becomes very apparent when we juxtapose "agreements for
technical or financial assistance" against "agreements including
technical or financial assistance." This much is... unalterably clear
in a verba legis approach.
Second, if the real intention of the drafters was to confine foreign
corporations to financial or technical assistance and nothing more,
their language would have certainly been so unmistakably
restrictive and stringent as to leave no doubt in anyone's mind
about... their true intent
. For example, they would have used the sentence foreign corporations
are absolutely prohibited from involvement in the management or
operation of mining or similar ventures or words of similar import. A
search for such stringent wording yields... negative results. Thus, we
come to the inevitable conclusion that there was a conscious and
deliberate decision to avoid the use of restrictive wording that bespeaks
an intent not to use the expression "agreements x x x involving either
technical or financial assistance"... in an exclusionary and limiting
manner.
Principles:
All mineral resources are owned by the State. Their exploration,
development and utilization (EDU) must always be subject to the full
control and supervision of the State. More specifically, given the
inadequacy of Filipino capital and technology in... large-scale EDU
activities, the State may secure the help of foreign companies in all
relevant matters -- especially financial and technical assistance --
provided that, at all times, the State maintains its right of full control.
The foreign assistor or contractor... assumes all financial, technical and
entrepreneurial risks in the EDU activities; hence, it may be given
reasonable management, operational, marketing, audit and other
prerogatives to protect its investments and to enable the business to
succeed.
On the basis of this control standard, this Court upholds the
constitutionality of the Philippine Mining Law, its Implementing Rules
and Regulations -- insofar as they relate to financial and technical
agreements -- as well as the subject Financial and Technical Assistance
Agreement (FTAA).

More Than Mere Financial

and Technical Assistance
Entailed by the Agreements

foreign investment in and management of an enterprise involved in

large-scale exploration, development and utilization of minerals,
petroleum, and other mineral oils.

The foregoing are mere fragments of the framers' lengthy discussions of

the provision dealing with agreements x x x involving either technical or
financial assistance, which ultimately became paragraph 4 of Section 2
of Article XII of the Constitution. Beyond any doubt, the members of
the ConCom were actually debating about the martial-law-era service
contracts for which they were crafting appropriate safeguards.

In the voting that led to the approval of Article XII by the ConCom, the
explanations given by Commissioners Gascon, Garcia and Tadeo
indicated that they had voted to reject this provision on account of their
objections to the "constitutionalization" of the "service contract"
concept.

The deliberations of the ConCom and some commissioners' explanation

of their votes leave no room for doubt that the service contract concept
precisely underpinned the commissioners' understanding of the
"agreements involving either technical or financial assistance."

Ultimate Test: State's "Control"

Determinative of Constitutionality
But we are not yet at the end of our quest. Far from it. It seems that we
are confronted with a possible collision of constitutional provisions. On
the one hand, paragraph 1 of Section 2 of Article XII explicitly mandates
the State to exercise "full control and supervision" over the exploration,
development and utilization of natural resources. On the other hand,
paragraph 4 permits safeguarded service contracts with foreign
contractors. There is thus a legitimate ground to be concerned that either
the State's full control and supervision may rule out any exercise of
management authority by the foreign contractor; or, the other way
around, allowing the foreign contractor full management prerogatives
may ultimately negate the State's full control and supervision.

The concept of control53 adopted in Section 2 of Article XII must be

taken to mean less than dictatorial, all-encompassing control; but
nevertheless sufficient to give the State the power to direct, restrain,
regulate and govern the affairs of the extractive enterprises. Control by
the State may be on a macro level, through the establishment of policies,
guidelines, regulations, industry standards and similar measures that
would enable the government to control the conduct of affairs in various
enterprises and restrain activities deemed not desirable or beneficial.

The question to be answered, then, is whether RA 7942 and its

Implementing Rules enable the government to exercise that degree
of control sufficient to direct and regulate the conduct of affairs of
individual enterprises and restrain undesirable activities.

On the resolution of these questions will depend the validity and

constitutionality of certain provisions of the Philippine Mining Act of
1995 (RA 7942) and its Implementing Rules and Regulations (DAO 96-
40), as well as the WMCP FTAA.

The State does not supposedly act as the owner of the natural resources
for and on behalf of the Filipino people; it practically has little effective
say in the decisions made by the enterprise. Petitioners then conclude
that the law, the implementing regulations, and the WMCP FTAA cede
"beneficial ownership" of the mineral resources to the foreign contractor.
A careful scrutiny of the provisions of RA 7942 and its Implementing
Rules belies petitioners' claims. Paraphrasing the Constitution, Section 4
of the statute clearly affirms the State's control thus:

"Sec. 4. Ownership of Mineral Resources. – Mineral resources

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

"The State shall recognize and protect the rights of the

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

The aforequoted provision is substantively reiterated in Section 2 of

DAO 96-40 as follows:

"Sec. 2. Declaration of Policy. All mineral resources in public

and private lands within the territory and exclusive economic
zone of the Republic of the Philippines are owned by the State.
It shall be the responsibility of the State to promote their
rational exploration, development, utilization and conservation
through the combined efforts of the Government and private
sector in order to enhance national growth in a way that
effectively safeguards the environment and protects the rights
of affected communities."

Sufficient Control Over Mining

Operations Vested in the State
by RA 7942 and DAO 96-40

RA 7942 provides for the State's control and supervision over mining
operations. The following provisions thereof establish the mechanism of
inspection and visitorial rights over mining operations and institute
reportorial requirements in this manner:
 1. Sec. 8 which provides for the DENR's power of over-all
supervision and periodic review for "the conservation,
management, development and proper use of the State's mineral
resources";

2. Sec. 9 which authorizes the Mines and Geosciences Bureau

(MGB) under the DENR to exercise "direct charge in the
administration and disposition of mineral resources", and
empowers the MGB to "monitor the compliance by the contractor
of the terms and conditions of the mineral agreements", "confiscate
surety and performance bonds", and deputize whenever necessary
any member or unit of the Phil. National Police, barangay, duly
registered non-governmental organization (NGO) or any qualified
person to police mining activities;

Section 3(aq) of RA 7942

Not Unconstitutional

An objection has been expressed that Section 3(aq)55 of RA 7942 --

which allows a foreign contractor to apply for and hold an exploration
permit -- is unconstitutional. The reasoning is that Section 2 of Article
XII of the Constitution does not allow foreign-owned corporations to
undertake mining operations directly. They may act only as contractors
of the State under an FTAA; and the State, as the party directly
undertaking exploitation of its natural resources, must hold through the
government all exploration permits and similar authorizations. Hence,
Section 3(aq), in permitting foreign-owned corporations to hold
exploration permits, is unconstitutional.

The objection, however, is not well-founded. While the Constitution

mandates the State to exercise full control and supervision over the
exploitation of mineral resources, nowhere does it require the
government to hold all exploration permits and similar authorizations.

Pursuant to Section 20 of RA 7942, an exploration permit merely grants

to a qualified person the right to conduct exploration for all minerals in
specified areas. Such a permit does not amount to an authorization to
extract and carry off the mineral resources that may be discovered.

Thus, the permit grantee may apply for an MPSA, a joint venture
agreement, a co-production agreement, or an FTAA over the permit
area, and the application shall be approved if the permit grantee meets
the necessary qualifications and the terms and conditions of any such
agreement. Therefore, the contractor will be in a position to extract
minerals and earn revenues only when the MPSA or another mineral
agreement, or an FTAA, is granted. At that point, the contractor's rights
and obligations will be covered by an FTAA or a mineral agreement.

In brief, the exploration permit serves a practical and legitimate

purpose in that it protects the interests and preserves the rights of
the exploration permit grantee (the would-be contractor) -- foreign
or local -- during the period of time that it is spending heavily on
exploration works, without yet being able to earn revenues to recoup
any of its investments and expenditures. The Terms of the WMCP
FTAA

No Surrender of Control
Under the WMCP FTAA

Petitioners, however, take aim at Clause 8.2, 8.3, and 8.5 of the WMCP
FTAA which, they say, amount to a relinquishment of control by the
State, since it "cannot truly impose its own discretion" in respect of the
submitted work programs.

From the provisions quoted above, petitioners generalize by asserting

that the government does not participate in making critical decisions
regarding the operations of the mining firm. Furthermore, while the
State can require the submission of work programs and budgets, the
decision of the contractor will still prevail, if the parties have a
difference of opinion with regard to matters affecting operations and
management.
Given Away for Free by RA 7942

Nevertheless, if only to disabuse our minds, we should address the

contention that our mineral resources are effectively given away for free
by the law (RA 7942) in general and by Sections 80, 81, 84 and 112 in
particular.

Foreign contractors do not just waltz into town one day and leave the
next, taking away mineral resources without paying anything. In order to
get at the minerals, they have to invest huge sums of money (tens or
hundreds of millions of dollars) in exploration works first. If the
exploration proves unsuccessful, all the cash spent thereon will not be
returned to the foreign investors; rather, those funds will have been
infused into the local economy, to remain there permanently. The
benefits therefrom cannot be simply ignored. And assuming that the
foreign contractors are successful in finding ore bodies that are viable
for commercial exploitation, they do not just pluck out the minerals and
cart them off. They have first to build camp sites and roadways; dig
mine shafts and connecting tunnels; prepare tailing ponds, storage areas
and vehicle depots; install their machinery and equipment, generator
sets, pumps, water tanks and sewer systems, and so on.

Section 7.9 of the WMCP FTAA

Invalid and Disadvantageous

Having defended the WMCP FTAA, we shall now turn to two defective
provisos. Let us start with Section 7.9 of the WMCP FTAA. While
Section 7.7 gives the government a 60 percent share in the net mining
revenues of WMCP from the commencement of commercial production,
Section 7.9 deprives the government of part or all of the said 60 percent.
Under the latter provision, should WMCP's foreign shareholders -- who
originally owned 100 percent of the equity -- sell 60 percent or more of
its outstanding capital stock to a Filipino citizen or corporation, the State
loses its right to receive its 60 percent share in net mining revenues
under Section 7.7.
Section 7.9 provides:

The percentage of Net Mining Revenues payable to the

Government pursuant to Clause 7.7 shall be reduced by 1percent
of Net Mining Revenues for every 1percent ownership interest in
the Contractor (i.e., WMCP) held by a Qualified Entity.83

Evidently, what Section 7.7 grants to the State is taken away in the next
breath by Section 7.9 without any offsetting compensation to the
State. Thus, in reality, the State has no vested right to receive any
income from the FTAA for the exploitation of its mineral resources.
Worse, it would seem that what is given to the State in Section 7.7 is by
mere tolerance of WMCP's foreign stockholders, who can at any time
cut off the government's entire 60 percent share. They can do so by
simply selling 60 percent of WMCP's outstanding capital stock to a
Philippine citizen or corporation. Moreover, the proceeds of such sale
will of course accrue to the foreign stockholders of WMCP, not to the
State.

The sale of 60 percent of WMCP's outstanding equity to a corporation

that is 60 percent Filipino-owned and 40 percent foreign-owned will still
trigger the operation of Section 7.9. Effectively, the State will lose its
right to receive all 60 percent of the net mining revenues of WMCP;
and foreign stockholders will own beneficially up to 64 percent of
WMCP, consisting of the remaining 40 percent foreign equity therein,
plus the 24 percent pro-rata share in the buyer-corporation.84

Section 7.8(e) of the WMCP FTAA

Also Invalid and Disadvantageous

Section 7.8(e) of the WMCP FTAA is likewise invalid. It provides thus:

"7.8 The Government Share shall be deemed to include all of the

following sums:
 "(e) an amount equivalent to whatever benefits that may be
extended in the future by the Government to the Contractor
or to financial or technical assistance agreement contractors
in general;

Section 7.8(e) is out of place in the FTAA. It makes no sense why, for
instance, money spent by the government for the benefit of the
contractor in building roads leading to the mine site should still be
deductible from the State's share in net mining revenues. Allowing this
deduction results in benefiting the contractor twice over. It
constitutes unjust enrichment on the part of the contractor at the expense
of the government, since the latter is effectively being made to pay twice
for the same item.91 For being grossly disadvantageous and prejudicial to
the government and contrary to public policy, Section 7.8(e) is
undoubtedly invalid and must be declared to be without effect.
Fortunately, this provision can also easily be stricken off without
affecting the rest of the FTAA.

Section 3.3 of the WMCP

FTAA Constitutional

Section 3.3 of the WMCP FTAA is assailed for violating supposed

constitutional restrictions on the term of FTAAs. The provision in
question reads:

"3.3 This Agreement shall be renewed by the Government for a

further period of twenty-five (25) years under the same terms and
conditions provided that the Contractor lodges a request for
renewal with the Government not less than sixty (60) days prior to
the expiry of the initial term of this Agreement and provided that
the Contractor is not in breach of any of the requirements of this
Agreement."

Allegedly, the above provision runs afoul of Section 2 of Article XII of

the 1987 Constitution, which states:
 "Sec. 2. years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law.

We hold that the term limitation of twenty-five years does not apply to
FTAAs. The reason is that the above provision is found within
paragraph 1 of Section 2 of Article XII, which refers to mineral
agreements -- co-production agreements, joint venture agreements and
mineral production-sharing agreements -- which the government may
enter into with Filipino citizens and corporations, at least 60 percent
owned by Filipino citizens. The word "such" clearly refers to these three
mineral agreements -- CPAs, JVAs and MPSAs -- not to FTAAs.

Not Forbidden by the Constitution

The Constitution has never prohibited foreign corporations from

acquiring and enjoying "beneficial interest" in the development of
Philippine natural resources. The State itself need not directly undertake
exploration, development, and utilization activities. Alternatively, the
Constitution authorizes the government to enter into joint venture
agreements (JVAs), co-production agreements (CPAs) and mineral
production sharing agreements (MPSAs) with contractors who are
Filipino citizens or corporations that are at least 60 percent Filipino-
owned. They may do the actual "dirty work" -- the mining operations.

In the case of a 60 percent Filipino-owned corporation, the 40 percent

individual and/or corporate non-Filipino stakeholders obviously
participate in the beneficial interest derived from the development and
utilization of our natural resources. They may receive by way of
dividends, up to 40 percent of the contractor's earnings from the mining
project.. Hence, the non-Filipino stakeholders may in that manner also
participate in the management of the contractor's natural resource
development work. All of this is permitted by our Constitution, for any
natural resource, and without limitation even in regard to the magnitude
of the mining project or operations (see paragraph 1 of Section 2 of
Article XII).
It is clear, then, that there is nothing inherently wrong with or
constitutionally objectionable about the idea of foreign individuals and
entities having or enjoying "beneficial interest" in -- and participating in
the management of operations relative to -- the exploration,
development and utilization of our natural resources.

WMCP FTAA Likewise Gives the

State Full Control and Supervision

In fine, the FTAA provisions do not reduce or abdicate State

control.

DIAMOND DRILLING CORPORATION OF THE PHILIPPINES,

PETITIONER, v. CRESCENT MINING AND DEVELOPMENT
CORPORATION, RESPONDENT.

The Facts4

On October 27, 1993, Crescent Mining and Development

Corporation (Crescent), a Filipino corporation, and Pacific Falkon
Resources Corporation (PFRC), a Canadian corporation, entered
into a Joint Venture Agreement (JVA)

in preparation for the formation of a joint venture to undertake copper

and gold mining operations within a 534-hectare area in Guinaoang and
Bulalacao, Mankayan, Benguet (the Guinaoang Project).

On November 12, 1996, the Republic of the Philippines, through

then DENR Secretary Victor Ramos, and by virtue of Republic Act
(R.A.) No. 79425 (Mining Act) and DENR Administrative Order No.
96-40, awarded MPSA No. 057-96-CAR to Crescent

. Under the agreement, Crescent was granted the exclusive right to

conduct initial exploration and possible development and commercial
utilization of minerals that may be found within the Guinaoang Project
area.

On August 5, 1997, Crescent and PFRC executed a Letter-

Agreement amending the JVA. Under their new arrangement,
PFRC acquired a 40% stake in the Guinaoang Project

. A copy of the Letter-Agreement was then sent by the parties to, and
recorded in, the Regional Office of the Mines and Geosciences Bureau
(MGB) in Baguio City.

On January 11, 2000, DDCP, PFRC's drilling contractor, filed a

Complaint for collection of sum of money with damages

and prayer for the issuance of a writ of preliminary attachment against

PFRC before the RTC of Makati City.

After ex parte presentation of evidence, the trial court issued an Order

dated January 28, 2011 granting the application for the issuance of a
preliminary attachment.After PFRC failed to file its responsive pleading
within the reglementary period, the trial court issued an Order dated
January 5, 2001 declaring PFRC in default.7

On April 23, 2001, the trial court rendered a Decision 8 holding

PFRC liable to DDCP

in the amount of US $307,726.00 for aggregate unpaid billings, interest,

and attorney's fees, as well as for the amount of P300,000.00 as
exemplary damages.

On December 31, 2001, PFRC's interest in the Guinaoang Project

was publicly auctioned whereupon DDCP came out as the highest
bidder.

Thereafter, a Certificate of Sale was issued by the Sheriff of the RTC of

Makati City in favor of DDCP. The sale was duly registered with the
MGB-CAR. Hence, DDCP became the 40% equitable owner.
In 2008, DDCP requested the MGB to record its 40% interest in the
Guinaoang Project.

The request was denied by then DENR-MGB Director Horacio C.

Ramos (Director Ramos) on the ground that DDCP has not acquired any
interest in MPSA No. 057-96-CAR since the said Agreement is between
the government and Crescent; that PFRC has no equity in Crescent; and,
that the decision in Civil Case No. 00-055 only involves PFRC, and not
Crescent.

The MGB, through Director Ramos, also ratiocinated that the JVA
between PFRC and Crescent as regards the Guinaoang Project is a
private matter between the said corporations such that the
conveyance by PFRC to DDCP

of its interest therein is not within the DENR Secretary's authority to

approve.

In view of the denial, DDCP filed a Motion dated June 2, 2011 praying
that an order be issued directing the DENR Secretary, thru the MGB
Director, to amend MPSA No. 057-96-CAR by incorporating the 40%
ownership of DDCP therein. After the parties' submissions, the trial
court issued the assailed Order9 on August 31, 2011 granting DDCP's
motion. The decretal portion of the issuance reads:

WHEREFORE, the Secretary of the [DENR]; thru the Director of the

[MGB], is hereby DIRECTED to AMEND [MPSA] No. [0]57-96-CAR
by APPENDING the name of [DDCP] as joint contractor thereto with
forty percent (40%) ownership therein, subject to compliance with
nationality and other qualification requirements of [R.A.] No. 7942, or
the Philippine Mining Act of 1995, and its implementing Rules and
Regulations.

Its motion for reconsideration having been denied, the DENR filed a
petition for certiorari with the CA, which was docketed as CA-G.R. SP
No. 124038.
 Rulings of the CA

WHEREFORE, premises considered, the Petition is GRANTED. The

Order dated 31 August 2011 of the [RTC], National Capital Judicial
Region, Makati City, Branch 133, in Civil Case No. 00-055
is ANNULLED; and all the respondents, as well as any person/s acting
for and on their behalf, are ENJOINED from enforcing or implementing
the same.

The CA 17th Division agreed with Crescent's assertion

that the trial court no longer had jurisdiction to issue the assailed order,
as DDCP's motion to amend MPSA No. 057-96-CAR is essentially a
motion for execution of the Decision dated April 23, 2001 which was
filed beyond the five-year period within which a decision may be
executed by motion. CA-G.R. SP No. 124038

In its Decision13 dated December 14, 2012, the CA 2nd Division ruled

against DENR and in favor of DDCP, disposing thus:

WHEREFORE, the instant petition is DENIED. The assailed

issuances STAND. No costs.

Relying on Section 30 of R.A. No. 7942 and Section 46 of DENR

Administrative Order No. 20-21, the CA 2nd Division held that the
assignment of the 40% share in the Guinaoang Project in favor of PFRC
should be deemed automatically approved, since the DENR failed to act
on the registration of the JVA between Crescent and PFRC. Therefore,
PFRC became the absolute owner of a 40% share in MPSA No. 057-96-
CAR.

The DENR and DDCP filed their respective motions for reconsideration
which were both denied by the appellate court.

The Issues
DDCP raises the following issues in G.R. No. 201785:

A. THE HONORABLE CA GRAVELY ERRED WHEN IT RULED

THAT THE COURT A QUO ACTED IN EXCESS OF ITS
JURISDICTION, OR WITH GRAVE ABUSE OF DISCRETION,
IN GRANTING DDCP'S MOTION TO DIRECT THE
DENR/MGB TO AMEND THE MPSA; and
B. THE HONORABLE CA SHOULD HAVE OUTRIGHTLY
DISMISSED THE PETITION FOR CERTIORARI AND
PROHIBITION BECAUSE CRESCENT HAD OTHER PLAIN,
SPEEDY AND ADEQUATE REMEDIES IN THE ORDINARY
COURSE OF LAW THAT IT INEXPLICABLY FAILED TO
AVAIL OF.18

The DENR raised the following issues in its petition:

I. WHETHER THE DENR CAN BE BOUND BY THE TERMS OF

THE TRIAL COURT'S DECISION IN CIVIL CASE NO. 00-055
WITHOUT BEING A PARTY THERETO;
II. WHETHER THE TERMS OF A FINAL AND EXECUTORY
DECISION CAN BE MODIFIED DURING ITS EXECUTION
STAGE;
III. WHETHER OR NOT THE ORDER OF THE TRIAL COURT
DIRECTING THE AMENDMENT OF THE MPSA TO
INCLUDE DDCP AS A NEW JOINT CONTRACTOR
CONTRAVENED THE PROVISIONS OF THE PHILIPPINE
MINING ACT OF 1995, ITS IMPLEMENTING RULES AND
REGULATIONS (IRR), AND THE TERMS OF MPSA NO. 057-
96-CAR ITSELF;
IV. WHETHER OR NOT THE AMENDMENT OF THE MPSA IS A
DISCRETIONARY FUNCTION ON THE PART OF THE DENR,
WHOSE PERFORMANCE CANNOT BE DIRECTED BY
JUDICIAL ORDER; and
V. WHETHER THE ACQUISITION BY DDCP OF PFRC'S 40%
INTEREST IN THE GUINAOANG PROJECT COVERED BY
MPSA NO. 057-96-CAR, CONSTITUTES A CONVEYANCE
BY ASSIGNMENT UNDER R.A. NO. 7942.19

Ruling of the Court

Propriety of resort to certiorari

The Court is not obliged to tackle this issue, as DDCP did not raise it
before the appellate court.

Propriety of execution by motion

"It is axiomatic that after a judgment has been fully satisfied, the case is
deemed terminated once and for all."22 "[I]t is when the judgment has
been satisfied that the same passes beyond review, for satisfaction
thereof is the last act and end of the proceedings

Applying these principles to the case at bar, the Court holds that the
judgment in favor of DDCP should be deemed fully satisfied at the
time it filed the motion to amend the MPSA

. The trial court had already lost jurisdiction by the time it issued the
assailed order, for upon the acquisition by judicial sale of DDCP of
PFRC's 40% interest in the Guinaoang Project, DDCP had already
acquired property of its judgment debtor which stands as payment for
the judgment debt.

DDCP's assertion that the assailed order is a mere continuation of

the execution proceedings is unavailing

. It must be noted that PFRC was a foreign corporation whose only

attachable property in this jurisdiction was its 40% share in the
Guinaoang Project. Under the JVA between Crescent and PFRC, the
40% share in the Guinaoang Project pertained to the "Assets" of the
Project,29 defined as "the Claims, Mineral Production Agreement, In
turn, the Letter�Agreement dated August 5, 1997 referred to the
"execut[ion of] the necessary and recordable transfer documents to
evidence the ownership of PFRC of Forty Per Cent (40%) interest in the
Guinaoang Project and the 1996 Mineral Production Sharing
Agreement."31

By the execution sale, DDCP became subrogated to all the rights of

PFRC under the JVA and the Letter-Agreement dated August 5,
1997.

The right to demand the amendment of the MPSA to reflect the 40%
interest therein is only one among the bundle of rights that DDCP had
acquired in the execution sale.Tthe remedy of DDCP no longer lays with
the trial court but with the DENR Secretary, because the approval of an
amendment to an MPSA to reflect a transfer or assignment of rights
therein is a power and function of the DENR Secretary under Section 30
of the Mining Act - which brings us to the substantive issues of the case.

Principle of state control over mining agreements; Nature of

DENR Secretary's power to approve transfers or assignments of
MPSA rights

Both the DENR and Crescent counter that the MPSA cannot be amended
to reflect such designation without their consent. The DENR further
asserts that it cannot be bound by the provisions of the JVA, therefore, it
cannot be compelled to amend the MPSA in accordance with the said
JVA.

The Court sustains the position of the government

. An MPSA can only be amended to include a new co-contractor if the

government, through the DENR, approves the amendment; and the
requirements set by law are complied with; as this is tantamount to a
transfer of a mineral agreement right.
SEC. 4. Ownership of Mineral Resources. � Mineral resources are
owned by the State and the exploration, development, utilization,
and processing thereof shall be under its full control and
supervision.

the projects nevertheless remain as State projects and can never be

purely private endeavors.

Also, despite entering into co-production, joint venture, or

production-sharing agreements, the State remains in full control
and supervision over such projects.

The Mining Act fleshes out the power of the state over mineral
agreements. Section 8 of said law vests in the DENR the primary
responsibility "for the conservation, management, development, and
proper use of the State's mineral resources including those in
reservations, watershed areas, and lands of the public domain." Pursuant
to this responsibility, the DENR is given the following powers:

a. To promulgate rules and regulations as may be necessary to

implement the intent and provisions of the Act;
b. To enter into Mineral Agreements on behalf of the Government or
recommend Financial or Technical Assistance Agreement (FTAA)
to the President upon endorsement of the Director;
c. To enforce applicable related laws such as the Administrative
Code, the Civil Code, etc.; and
d. To exercise such other authority vested by the Act and as provided
for in these IRR.

DDCP anchors its right to become a co-contractor on its acquisition

by judicial sale of PFRC's 40% interest in the Guinaoang Project

. PFRC's right to this 40% interest is, in turn, based on the Letter-
Agreement dated August 5, 1997 between it and Crescent. These
transactions, through which Crescent and PFRC successively "disposed
of or parted with an asset or an interest in an asset,"52 both constitute
transfers of rights in the MPSA. Transfers of rights in an MPSA are
governed by Section 30 of the Mining Act and Section 46 of its
IRR, viz.:

SEC. 30. Assignment/Transfer.

Under these provisions, the requisites fm: a valid transfer or assignment

of rights in an MPSA are as follows:

1. An application for transfer or assignment filed by the contractor

named in the MPSA;
2. Payment of application fee with the MGB or concerned DENR
Regional Office;
3. Submission of a Deed of Assignment with a stipulation that the
transferee/assignee assumes all obligations of the
transferor/assignor under the Agreement;
4. Proof of compliance by the transferor/assignor or Contractor with
all the terms and conditions of the Agreement and the provisions of
the Mining Act and its IRR at the time of transfer/assignment;
5. Approval of the DENR Secretary; and
6. Assumption by the transferee/assignee of all the obligations and
responsibilities of the transferor/assignor under the Mineral
Agreement.

DDCP admits that the Letter-Agreement dated August 5, 1997

between Crescent and PFRC is not compliant with these requisites

.53 Instead, it claims that pursuant to the automatic approval clause in

Section 30 of the Mining Act, the transfer should be deemed approved
because the DENR failed to act on the said Letter-Agreement within 30
days after its registration therewith.

DDCP is mistaken.

As correctly pointed out by the Solicitor General, the Letter-

�Agreement dated August 5, 1997 cannot operate to transfer any
rights under MPSA No. 057-96-CAR because such Letter-
Agreement is not compliant with Section 46 of the Mining Act's
IRR.

Moreover, given the powers and the mandate vested in the DENR
and the MGB with respect to mineral agreements, it is evident that
the DENR Secretary's power to approve transfers and assignments
of mineral agreements and mineral agreement rights is
discretionary in nature and therefore outside the reach of the trial
court's orders.54 In determining whether or not to approve an
assignment or transfer of mineral agreement rights, the DENR
Secretary determines if the assignee/transferee is a "qualified
person" under the definition of the Mining Act.

To conclude

, the Court reiterates the long-standing doctrine that the buyer in an

execution sale only acquires the right of the judgment
debtor.57 Therefore, DDCP could only have acquired those rights and
interests which may legally be held by its debtor, PFRC, under the law
and the JVA with Crescent. The right to be included in MPSA No. 057-
96-CAR as a co-contractor is not among those rights.

WHEREFORE, premises considered, the petition in G.R. No. 207360

is hereby GRANTED. The Decision dated December 14, 2012 and
Resolution dated May 16, 2013 of the Court of Appeals in CA-G.R. SP
No. 124038 are hereby REVERSED and SET ASIDE. The petition in
G.R. No. 201785 is hereby DENIED. The Decision dated January 30,
2012 and Resolution dated May 7, 2012 of the Court of Appeals in CA-
G.R. SP No. 121603 are hereby AFFIRMED.

[G.R. NO. 157882 : March 30, 2006]

DIDIPIO EARTH-SAVERS' MULTI-PURPOSE ASSOCIATION,
INCORPORATED (DESAMA), v. ELISEA GOZUN,

FACTS

This petition for prohibition and mandamus under Rule 65 of the

Rules of Court assails the constitutionality of Republic Act No. 7942
otherwise known as the Philippine Mining Act of 1995

, together with the Implementing Rules and Regulations issued pursuant

thereto, Department of Environment and Natural Resources (DENR)
Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the
Financial and Technical Assistance Agreement (FTAA) entered into on
20 June 1994 by the Republic of the Philippines and Arimco Mining
Corporation (AMC), a corporation established under the laws of
Australia and owned by its nationals.

On 25 July 1987, then President Corazon C. Aquino promulgated

Executive Order No. 279

which authorized the DENR Secretary to accept, consider and evaluate

proposals from foreign-owned corporations or foreign investors for
contracts of agreements involving either technical or financial assistance
for large-scale exploration, development, and utilization of minerals,
which, upon appropriate recommendation of the Secretary, the President
may execute with the foreign proponent.

On 3 March 1995, then President Fidel V. Ramos signed into law

Rep. Act No. 7942 entitled, "An Act Instituting A New System of
Mineral Resources Exploration, Development, Utilization and
Conservation," otherwise known as the Philippine Mining Act of
1995.

President Ramos executed an FTAA with AMC over a total land area of
37,000 hectares covering the provinces of Nueva Vizcaya and Quirino.
Included in this area is Barangay Dipidio, Kasibu, Nueva Vizcaya.
Subsequently, AMC consolidated with Climax Mining Limited to
form a single company that now goes under the new name of
Climax-Arimco Mining Corporation (CAMC),

the controlling 99% of stockholders of which are Australian nationals.

On 7 September 2001, counsels for petitioners filed a demand letter

addressed to then DENR Secretary Heherson Alvarez, for the
cancellation of the CAMC FTAA

for the primary reason that Rep. Act No. 7942 and its Implementing
Rules and Regulations DAO 96-40 are unconstitutional.

Yet again, counsels for petitioners sent President Arroyo another

demand letter dated 8 November 2002. Said letter was again forwarded
to the DENR Secretary who referred the same to the MGB, Quezon
City.

In a letter dated 19 February 2003, the MGB rejected the demand of

counsels for petitioners for the cancellation of the CAMC
FTAA.ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

Petitioners thus filed the present petition for prohibition

and mandamus, with a prayer for a temporary restraining order.
They pray that the Court issue an order:

1. enjoining public respondents from acting on any application for

FTAA;

2. declaring unconstitutional the Philippine Mining Act of 1995 and its

Implementing Rules and Regulations;

3. canceling the FTAA issued to CAMC.

ISSUES

I
Whether or not Republic Act No. 7942 and the CAMC FTAA are void
because they allow the unjust and unlawful taking of property without
payment of just compensation, in violation of Section 9, Article III of
the Constitution.

II

Whether or not the Mining Act and its Implementing Rules and
Regulations are void and unconstitutional for sanctioning an
unconstitutional administrative process of determining just
compensation.

III

Whether or not the State, through Republic Act No. 7942 and the
CAMC FTAA, abdicated its primary responsibility to the full control
and supervision over natural resources.

IV

Whether or not the respondents' interpretation of the role of wholly

foreign and foreign-owned corporations in their involvement in mining
enterprises, violates paragraph 4, section 2, Article XII of the
Constitution.

WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS

SERVICE CONTRACTS.1

In the instant case, there exists a live controversy involving a clash

of legal rights as Rep. Act No. 7942 has been enacted, DAO 96-40
has been approved and an FTAAs have been entered into

. The FTAA holders have already been operating in various provinces of

the country. Among them is CAMC which operates in the provinces of
Nueva Vizcaya and Quirino where numerous individuals including the
petitioners are imperiled of being ousted from their landholdings in view
of the CAMC FTAA.

Besides, the transcendental importance of the issues raised and the

magnitude of the public interest involved will have a bearing on the
country's economy which is to a greater extent dependent upon the
mining industry. Having resolved the procedural question, the
constitutionality of the law under attack must be addressed
squarely.

First Substantive Issue: Validity of Section 76 of Rep. Act No. 7942

and DAO 96-40

In seeking to nullify Rep. Act No. 7942 and its implementing rules DAO
96-40 as unconstitutional, petitioners set their sight on Section 76 of
Rep. Act No. 7942 and Section 107 of DAO 96-40 which they claim
allow the unlawful and unjust "taking" of private property for private
purpose in contradiction with Section 9, Article III of the 1987
Constitution mandating that private property shall not be taken except
for public use and the corresponding payment of just compensation.
They assert that public respondent DENR, through the Mining Act and
its Implementing Rules and Regulations, cannot, on its own, permit
entry into a private property and allow taking of land without payment
of just compensation.

Republic v. Vda. de Castellvi defines

"taking" under the concept of eminent domain as entering upon private

property for more than a momentary period, and, under the warrant or
color of legal authority, devoting it to a public use, or otherwise
informally appropriating or injuriously affecting it in such a way as to
substantially oust the owner and deprive him of all beneficial enjoyment
thereof.

From the criteria set forth in the cited case, petitioners claim that
the entry into a private property by CAMC, pursuant to its FTAA,
is for more than a momentary period, i.e., for 25 years, and
renewable for another 25 years;

that the entry into the property is under the warrant or color of legal
authority pursuant to the FTAA executed between the government and
CAMC; and that the entry substantially ousts the owner or possessor and
deprives him of all beneficial enjoyment of the property. These facts,
according to the petitioners, amount to taking.

Petitioners also stress that even without the doctrine in the Castellvi
case, the nature of the mining activity, the extent of the land area
covered by the CAMC FTAA and the various rights granted to the
proponent or the FTAA holder

, such as (a) the right of possession of the Exploration Contract Area,

with full right of ingress and egress and the right to occupy the same; (b)
the right not to be prevented from entry into private lands by surface
owners and/or occupants thereof when prospecting, exploring and
exploiting for minerals therein; (c) the right to enjoy easement rights, the
use of timber, water and other natural resources in the Exploration
Contract Area; (d) the right of possession of the Mining Area, with full
right of ingress and egress and the right to occupy the same; and (e) the
right to enjoy easement rights, water and other natural resources in the
Mining Area, result in a taking of private property.

Traversing petitioners' assertion, public respondents

argue that Section 76 is not a taking provision but a valid exercise of the
police power and by virtue of which, the state may prescribe regulations
to promote the health, morals, peace, education, good order, safety and
general welfare of the people. This government regulation involves the
adjustment of rights for the public good and that this adjustment curtails
some potential for the use or economic exploitation of private property.
Public respondents concluded that "to require compensation in all such
circumstances would compel the government to regulate by purchase."
Public respondents are inclined to believe that by entering private lands
and concession areas, FTAA holders do not oust the owners thereof nor
deprive them of all beneficial enjoyment of their properties as the said
entry merely establishes a legal easement upon surface owners,
occupants and concessionaires of a mining contract area.

Taking in Eminent Domain Distinguished from Regulation in Police

Power

The power of eminent domain is the inherent right of the state (and of
those entities to which the power has been lawfully delegated) to
condemn private property to public use upon payment of just
compensation.17 On the other hand, police power is the power of the
state to promote public welfare by restraining and regulating the use of
liberty and property.18 Although both police power and the power of
eminent domain have the general welfare for their object, and recent
trends show a mingling19 of the two with the latter being used as an
implement of the former, there are still traditional distinctions between
the two.

And, considering that the easement intended to be established,

whatever may be the object thereof, is not merely a real right that
will encumber the property, but is one tending to prevent the
exclusive use of one portion of the same, by expropriating it for
public use which, be it what it may, can not be accomplished unless
the owner of the property condemned or seized be previously and
duly indemnified

, it is proper to protect the appellant by means of the remedy employed

in such cases, as it is only adequate remedy when no other legal action
can be resorted to, against an intent which is nothing short of an
arbitrary restriction imposed by the city by virtue of the coercive power
with which the same is invested.

In the case at bar, the easement of right-of-way is definitely a taking

under the power of eminent domain
. Considering the nature and effect of the installation of 230 KV Mexico-
Limay transmission lines, the limitation imposed by NPC against the use
of the land for an indefinite period deprives private respondents of its
ordinary use.

Normally, of course, the power of eminent domain results in the taking

or appropriation of title to, and possession of, the expropriated property;
but no cogent reason appears why said power may not be availed of to
impose only a burden upon the owner of the condemned property,
without loss of title and possession. It is unquestionable that real
property may, through expropriation, be subjected to an easement right
of way.37

In Republic v. Castellvi,38 this Court had the occasion to spell out

the requisites of taking in eminent domain, to wit:

(1) the expropriator must enter a private property;

(2) the entry must be for more than a momentary period.

(3) the entry must be under warrant or color of legal authority;

(4) the property must be devoted to public use or otherwise informally

appropriated or injuriously affected;

(5) the utilization of the property for public use must be in such a way as
to oust the owner and deprive him of beneficial enjoyment of the
property.

As shown by the foregoing jurisprudence, a regulation which

substantially deprives the owner of his proprietary rights and
restricts the beneficial use and enjoyment for public use amounts to
compensable taking.

In the case under consideration, the entry referred to in Section 76 and

the easement rights under Section 75 of Rep. Act No. 7942 as well as the
various rights to CAMC under its FTAA are no different from the
deprivation of proprietary rights in the cases discussed which this Court
considered as taking. Section 75 of the law in question reads:

Easement Rights

. - When mining areas are so situated that for purposes of more

convenient mining operations it is necessary to build, construct or install
on the mining areas or lands owned, occupied or leased by other
persons, such infrastructure as roads, railroads, mills, waste dump sites,
tailing ponds, warehouses, staging or storage areas and port facilities,
tramways, runways, airports, electric transmission, telephone or
telegraph lines, dams and their normal flood and catchment areas, sites
for water wells, ditches, canals, new river beds, pipelines, flumes, cuts,
shafts, tunnels, or mills, the contractor, upon payment of just
compensation, shall be entitled to enter and occupy said mining areas or
lands.

The CAMC FTAA grants in favor of CAMC the right of possession

of the Exploration Contract Area, the full right of ingress and egress
and the right to occupy the same

. It also bestows CAMC the right not to be prevented from entry into
private lands by surface owners or occupants thereof when prospecting,
exploring and exploiting minerals therein.

SECTION 1. Mineral prospecting, location, exploration, development

and exploitation is hereby declared of public use and benefit, and for
which the power of eminent domain may be invoked and exercised for
the entry, acquisition and use of private lands. x x x.

Petitioners further maintain that the state's discretion to decide when to

take private property is reduced contractually by Section 13.5 of the
CAMC FTAA, which reads:

If the CONTRACTOR so requests at its option, the GOVERNMENT

shall use its offices and legal powers to assist in the acquisition at
reasonable cost of any surface areas or rights required by the
CONTRACTOR at the CONTRACTOR's cost to carry out the Mineral
Exploration and the Mining Operations herein.

The provision of the FTAA in question lays down the ways and
means by which the foreign-owned contractor, disqualified to own
land, identifies to the government the specific surface areas within
the FTAA contract area to be acquired for the mine infrastructure

.48 The government then acquires ownership of the surface land areas on
behalf of the contractor, through a voluntary transaction in order to
enable the latter to proceed to fully implement the FTAA. Eminent
domain is not yet called for at this stage since there are still various
avenues by which surface rights can be acquired other than
expropriationClearly, petitioners have needlessly jumped to unwarranted
conclusions, without being aware of the rationale for the said provision.
That provision does not call for the exercise of the power of eminent
domain - - and determination of just compensation is not an issue - - as
much as it calls for a qualified party to acquire the surface rights on
behalf of a foreign-owned contractor.

Rather than having the foreign contractor act through a dummy

corporation

, having the State do the purchasing is a better alternative. This will at

least cause the government to be aware of such transaction/s and foster
transparency in the contractor's dealings with the local property owners.
The government, then, will not act as a subcontractor of the
contractor; rather, it will facilitate the transaction and enable the parties
to avoid a technical violation of the Anti-Dummy Law.

Second Substantive Issue: Power of Courts to Determine Just

Compensation

Closely-knit to the issue of taking is the determination of just

compensation. It is contended that Rep. Act No. 7942 and Section 107 of
DAO 96-40 encroach on the power of the trial courts to determine just
compensation in eminent domain cases inasmuch as the same
determination of proper compensation are cognizable only by the Panel
of Arbitrators.

The original and exclusive jurisdiction of the courts to decide

determination of just compensation remains

intact despite the preliminary determination made by the administrative

agency. As held in Philippine Veterans Bank v. Court of Appeals53 :

The jurisdiction of the Regional Trial Courts is not any less "original and
exclusive" because the question is first passed upon by the DAR, as the
judicial proceedings are not a continuation of the administrative
determination.

Third Substantive Issue: Sufficient Control by the State Over

Mining Operations

Anent the third issue, petitioners charge that Rep. Act No. 7942, as well
as its Implementing Rules and Regulations, makes it possible for FTAA
contracts to cede over to a fully foreign-owned corporation full control
and management of mining enterprises, with the result that the State is
allegedly reduced to a passive regulator dependent on submitted plans
and reports, with weak review and audit powers. The State is not acting
as the supposed owner of the natural resources for and on behalf of the
Filipino people; it practically has little effective say in the decisions
made by the enterprise. In effect, petitioners asserted that the law, the
implementing regulations, and the CAMC FTAA cede beneficial
ownership of the mineral resources to the foreign contractor.

It must be noted that this argument was already raised in La Bugal-

B Laan Tribal Association, Inc. v. Ramos,54 where the Court
answered in the following manner:
RA 7942 provides for the state's control and supervision over mining
operations. The following provisions thereof establish the mechanism of
inspection and visitorial rights over mining operations and institute
reportorial requirements in this manner:

1. Sec. 8 which provides for the DENR's power of over-all supervision

and periodic review for "the conservation, management, development
and proper use of the State's mineral resources";

2. Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB)

under the DENR to exercise "direct charge in the administration and
disposition of mineral resources", and empowers the MGB to "monitor
the compliance by the contractor of the terms and conditions of the
mineral agreements", "confiscate surety and performance bonds

In other words, the FTAA contractor is not free to do whatever it

pleases and get away with it; on the contrary, it will have to follow
the government line if it wants to stay in the enterprise.

Ineluctably then, RA 7942 and DAO 96-40 vest in the government more
than a sufficient degree of control and supervision over the conduct of
mining operations.

Fourth Substantive Issue: The Proper Interpretation of the

Constitutional Phrase "Agreements Involving Either Technical or
Financial Assistance

In interpreting the first and fourth paragraphs of Section 2, Article XII of

the Constitution, petitioners set forth the argument that foreign
corporations are barred from making decisions on the conduct of
operations and the management of the mining project. The first
paragraph of Section 2, Article XII reads:

x x x The exploration, development, and utilization of natural resources

shall be under the full control and supervision of the State. The State
may directly undertake such activities, or it may enter into co-
production, joint venture, or production sharing agreements with
Filipino citizens, or corporations or associations at least sixty percentum
of whose capital is owned by such citizens. Such agreements may be for
a period not exceeding twenty five years, renewable for not more than
twenty five years, and under such terms and conditions as may be
provided by law x x x.

The fourth paragraph of Section 2, Article XII provides:

The President may enter into agreements with foreign-owned

corporations involving either technical or financial assistance for large
scale exploration, development, and utilization of minerals, petroleum,
and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth and
general welfare of the country x x x.

Petitioners maintain that the first paragraph bars aliens and

foreign-owned corporations from entering into any direct
arrangement with the government including those which involve co-
production, joint venture or production sharing agreements.

They likewise insist that the fourth paragraph allows foreign-owned

corporations to participate in the large-scale exploration, development
and utilization of natural resources, but such participation, however, is
merely limited to an agreement for either financial or technical
assistance only.

Again, this issue has already been succinctly passed upon by this
Court in La Bugal-B Laan Tribal Association, Inc. v. Ramos.55 In
discrediting such argument, the Court ratiocinated:

Petitioners claim that the phrase "agreements x x x involving either

technical or financial assistance" simply means technical assistance
or financial assistance agreements, nothing more and nothing else
. They insist that there is no ambiguity in the phrase, and that a plain
reading of paragraph 4 quoted above leads to the inescapable conclusion
that what a foreign-owned corporation may enter into with the
government is merely an agreement for either financial or technical
assistance only, for the large-scale exploration, development and
utilization of minerals, petroleum and other mineral oils; such a
limitation, they argue, excludes foreign management and operation of a
mining enterprise.

This restrictive interpretation, petitioners believe, is in line with the

general policy enunciated by the Constitution reserving to Filipino
citizens and corporations the use and enjoyment of the country's natural
resources.

We do not see how applying a strictly literal or verba legis interpretation

of paragraph 4 could inexorably lead to the conclusions arrived at in
the ponencia. First, the drafters' choice of words - - their use of the
phrase agreements x x x involving either technical or financial
assistance - - does not indicate the intent to exclude other modes of
assistance. The drafters opted to use involving when they could have
simply said agreements for financial or technical assistance, if that was
their intention to begin with. In this case, the limitation would be very
clear and no further debate would ensue.

In contrast, the use of the word "involving" signifies the possibility

of the inclusion of other forms of assistance or activities having to do
with, otherwise related to or compatible with financial or technical
assistance. The word "involving" as used in this context has three
connotations that can be differentiated thus: one, the sense of
"concerning," "having to do with," or "affecting"; two, "entailing,"
"requiring," "implying" or "necessitating"; and three, "including,"
"containing" or "comprising."

Plainly, none of the three connotations convey a sense of exclusivity.

Moreover, the word "involving," when understood in the sense of
"including," as in including technical or financial
assistance, necessarily implies that there are activities other
than those that are being included. In other words, if an
agreement includes technical or financial assistance, there is apart
from such assistance - - something else already in, and covered or
may be covered by, the said agreement.

In short, it allows for the possibility that matters, other than those

Fifth Substantive Issue: Service Contracts Not Deconstitutionalized

Lastly, petitioners stress that the service contract regime under the 1973
Constitution is expressly prohibited under the 1987 Constitution as the
term service contracts found in the former was deleted in the latter to
avoid the circumvention of constitutional prohibitions that were
prevalent in the 1987 Constitution. According to them, the framers of the
1987 Constitution only intended for foreign-owned corporations to
provide either technical assistance or financial assistance. Upon perusal
of the CAMC FTAA, petitioners are of the opinion that the same is a
replica of the service contract agreements that the present constitution
allegedly prohibit.

It is therefore reasonable and unavoidable to make the following

conclusion, based on the above arguments. As written by the
framers and ratified and adopted by the people, the Constitution
allows the continued use of service contracts with foreign
corporations - - as contractors who would invest in and operate and
manage extractive enterprises, subject to the full control and
supervision of the State - - sans the abuses of the past regime.

The purpose is clear: to develop and utilize our mineral, petroleum and
other resources on a large scale for the immediate and tangible benefit of
the Filipino people.58

WHEREFORE, the instant petition for prohibition and mandamus is

hereby DISMISSED. Section 76 of Republic Act No. 7942 and Section
107 of DAO 96-40; Republic Act No. 7942 and its Implementing Rules
and Regulations contained in DAO 96-40 - insofar as they relate to
financial and technical assistance agreements referred to in paragraph 4
of Section 2 of Article XII of the Constitution are NOT
UNCONSTITUTIONAL.

G.R. No. 195987, January 12, 2021

PROVINCE OF PAMPANGA, Petitioner, v. EXECUTIVE

SECRETARY ALBERTO ROMULO

FACTS

On March 2, 1992, about a year after Mt. Pinatubo in Zambales had

erupted and spewed lahar and other volcanic material, the
Sangguniang Panlalawigan of Pampanga enacted Tax Ordinance
No. 1,5 or Pampanga's Provincial Tax Code of 1992.

Its Section 6 provided a 10% tax on the fair market value of quarry
resources extracted from public lands and beds of water bodies in the
province, and imposed permit fees for quarry operators.6

On December 14, 1992, the Sangguniang Panlalawigan of Pampanga

passed Tax Ordinance No. 3,7

which fixed the fair market value of sand, gravel, and other quarry
resources at P40.00 per cubic meter and assessed a fee of P4.00 per
cubic meter for every such resource extracted within the province's
jurisdiction.

On October 21, 1998, the Sangguniang Panlalawigan passed Tax

Ordinance No. 1,8 repealing Tax Ordinance No. 3,

series of 1992. Tax Ordinance No. 1 imposed a quarry fee of 10% of the
prevailing fair market value of the extracted materials and directed the
creation of a committee that shall fix the prevailing market value of
quarry resources every quarter.

On January 11, 1999, President Joseph E. Estrada issued

Proclamation No. 66,9

declaring the lahar-affected rivers and embankment areas in the

provinces of Pampanga, Tarlac, and Zambales to be environmentally
critical areas and mineral reservations under the direct control and
supervision of the Department of Environment and Natural Resources.

Proclamation No. 66 authorized the Department of Environment

and Natural Resources Secretary (Environment Secretary) to
engage the services of the Natural Resources Development
Corporation to manage the extraction and transportation of sand,
gravel, and lahar

, as well as to manage the rehabilitation of quarries in Pampanga, Tarlac,

and Zambales.10

On April 23, 2002, President Gloria Macapagal-Arroyo (President

Macapagal-Arroyo) issued Proclamation No. 183, revoking
Proclamation No. 66.11 However, on July 4, 2003, she issued Executive
Order No. 224,12 which rationalized the extraction and disposition of
sand, gravel, and lahar deposits in the provinces of Pampanga, Tarlac,
and Zambales.

On July 18, 2003, the Province of Pampanga filed before the

Regional Trial Court a Petition for Declaratory Relief seeking to
declare Executive Order No. 22413 unconstitutional

. The case was filed against Executive Secretary Alberto G. Romulo

(Executive Secretary Romulo) and the Department of Environment and
Natural Resources.

The Petition alleged, among others, that Executive Order No. 224
violated the principle of local government autonomy under the Local
Government Code; was an invalid exercise of presidential control and
not just general supervision; was a violation of the equal protection
clause; and was a form of executive lawmaking.14

The Province of Pampanga also applied for a temporary restraining

order and writ of preliminary injunction.

On September 1, 2003, the Regional Trial Court issued a Writ of

Preliminary Injunction,18 thus:
WHEREFORE, premises considered, the application for the issuance of
Writ of Preliminary Injunction, being meritorious, the same is hereby
granted.

On May 21, 2004, the Regional Trial Court issued a

Decision20 granting the Petition and declaring Executive Order No.
224 as invalid and unconstitutional.

The trial court emphasized that any diminution or constriction in the

taxing power of the local government units infringes on their authority to
raise their own sources of revenue.21

The trial court noted that both the Local Government Code and the
Philippine Mining Act of 1995 conferred on Pampanga the exclusive
power to impose taxes on extracted sand, gravel, and other quarry
resources, and collect fees from quarry operators, in response to the local
government's constitutional mandate of local autonomy.22 The trial court

Thus, the trial court held Section 4 of Executive Order No. 224 to be
unconstitutional as it empowered a task force comprised of the Mines
and Geosciences Bureau director, as team leader, and the provincial
governor, as deputy team leader, to collect taxes, fees, charges, and
excise taxes.24

The trial court observed that the task force will become the repository of
all local taxes, fees, and charges collected from the extracted quarry
resources and will function as a "regulatory valve" that may reduce,
increase, delay, or even stop the flow of local taxes to the provincial
government.

The trial court eventually struck down Executive Order No. 224 in
its entirety for being a form of executive legislation, without a valid
delegation of legislative authority.27 The dispositive portion of its
Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the Province of Pampanga, by:

1. Declaring that petitioner Province of Pampanga has the

exclusive power and legal authority to issue permit to extract
sand, gravel and other gravel resources within their territorial
jurisdiction pursuant to Section 38 of R.A. 7[16]0 and
applicable related laws such as R.A. 7942; and

Executive Secretary Romulo and the Department of

Environment and Natural Resources appealed.29 On August
24, 2010, the Court of Appeals issued its Decision30 reversing
the Regional Trial Court Decision.

The Court of Appeals ruled that the provisions of Executive

Order No. 224 that carried out the mandate of the Philippine
Mining Act did not conflict with the provincial governor's
authority to issue permits as conferred by the Local
Government Code.31
 Owing to the statutory construction rule that a special law
prevails over a general law, the Court of Appeals held that
the distinction carved out by the Philippine Mining
Act�limiting the governor's authority to issue permits for
applications below five hectares and authorizing the Mines
and Geosciences Bureau to issue permits for applications
above five hectares�was a valid modification of the Local
Government Code.32

The Court of Appeals also brushed aside the Province of

Pampanga's allegation that Executive Order No. 224 violated
the equal protection clause, since there was a reasonable
classification behind the assailed issuance.35

Finally, the Court of Appeals reiterated that Executive Order

No. 224 carried out the policy and objectives of the
Philippine Mining Act, making it "a valid exercise of the
rule-making power of the chief executive."36 The dispositive
of the Court of Appeals Decision reads:
WHEREFORE, premises considered, the instant appeal is granted.
Accordingly, the Decision of the Regional Trial Court, Branch 48 of San
Fernando City, Pampanga dated May 21, 2004 is hereby REVERSED
AND SET ASIDE

The Province of Pampanga moved for reconsideration,38 but its

Motion was denied in the Court of Appeals' February 22, 2011
Resolution.39

In so ruling, the Court of Appeals repeated that the task force created
under Executive Order No. 224 would do nothing more than oversee the
collection of taxes and fees from the quarried construction materials. It
maintained that the task force would benefit the province.40

The Court of Appeals also justified the State control over

Pampanga, Tarlac, and Zambales by citing the need to improve "the
water flows of the river systems and ensure the integrity of the
various protective dikes and infrastructures
"41 which would be under the Department of Environment and Natural
Resources' control and management.42

The Province of Pampanga filed this Petition for Review

.43 Petitioner maintains that Executive Order No. 224 is an ultra
vires act, in that it is an invalid exercise of the president's rule-making
power because it amended the provisions of the Local Government Code
and the Philippine Mining Act, as well as its Implementing Rules and
Regulations.44

Finally, petitioner asserts that Executive Order No. 224 violated its
right to equal protection since it only pertained to the quarry
operations in the provinces of Pampanga, Tarlac, and Zambales,
while other provinces which maintained their own quarry
operations were not included.47

They state that the local governments' power to impose taxes is not
absolute, but is subject to guidelines and limitations provided by
Congress.49 The Philippine Mining Act, they say, limits the local
government's power to impose taxes, which Executive Order No. 224
merely implemented.50

Respondents explain that Executive Order No. 224 recognized the

authorities of both the provincial government and the Mines and
Geosciences Bureau to issue quarry permits
, and did not change the provincial governor's authority to issue permits
for applications with areas below five hectares.

Finally, respondents stress that Executive Order No. 224 does not violate
the equal protection clause because the provinces involved contain vast
lahar deposits, which pose a danger to both life and property, while the
other provinces with quarry operations do not have such hazards.58

In its Reply,59 petitioner contends that the Philippine Mining Act did not
delimit the provincial governor's power to issue permits as provided by
the Local Government Code, but merely supplemented it, as mandated
by the Constitution.60

ISSUE

The sole issue for this Court's resolution is whether or not Executive
Order No. 224 is valid and constitutional.
I

Executive Order No. 224, issued by President Macapagal-Arroyo on

July 4, 2003, states:
RATIONALIZING THE EXTRACTION AND DISPOSITION OF
SAND AND GRAVEL/LAHAR DEPOSITS IN THE PROVINCES
OF PAMPANGA, TARLAC AND ZAMBALES

SECTION 1. Processing and Issuance of Mining Permits. The

issuance of permit to extract and dispose of industrial sand and
gravel/lahar deposits by the MGB shall be governed by Chapter 8 of
R.A. No. 7942 .

The acceptance, processing and evaluation of applications for permits to

extract industrial sand and gravel/lahar deposits in Pampanga, Tarlac
and Zambales shall be undertaken through a Task Force composed of the
MGB and the Provincial Governor.
SEC. 2. Creation of a Task Force. To ensure compliance by all permit
holders with the terms and conditions of their permits, properly monitor
the volume of extracted materials, and collect the proper taxes and fees
from sand and gravel/lahar operations, a Task Force is hereby created
for the purpose to be composed of the following:

a. The [Mines and Geosciences Bureau] Regional Director, by

himself or through his duly authorized representative
� Team Leader
b. The Provincial Governor, by himself or his duly authorized
representative � Deputy Team Leader

SEC. 4. Collection of Taxes, Fees, and Charges. The Task

Force shall be responsible for the collection of all applicable
local taxes, fees and charges and shall, among others:

Executive orders pertain to the president's acts that provide

rules to implement or execute existing laws.67Executive
Secretary v. Southwing Heavy Industries, Inc.68 instructs that
an administrative issuance, such as an executive order, must
comply with the following requisites to be held valid:

For the first requisite, Executive Order No. 224 was issued to
carry out the Philippine Mining Act's provisions, which grant
the State full control and supervision over mineral
resources.70 Section 4 of the law states:

SECTION 4. Ownership of Mineral Resources. Mineral resources

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

The State shall recognize and protect the rights of the indigenous
cultural communities to their ancestral lands as provided for by the
Constitution.

This finds basis in Article XII, Section 271 of the Constitution which
declared all natural resources, including minerals, to be owned by the
State.

For the second requisite, official acts by the government branches are
presumed to be valid, absent strong evidence showing otherwise. Thus,
the presumption is that Executive Order No. 224 was promulgated in
accordance with the prescribed procedure.72

To hurdle the third requisite, Executive Order No. 224 must not be ultra
vires, or an act which goes beyond the limits of its delegated legislative
authority. Here, petitioner assails the issuance for allegedly supplanting
portions of the Local Government Code and the Philippine Mining Act,
along with its Implementing Rules and Regulations.73

Petitioner is mistaken.

The principle of separation of powers dictates that each of the three

government branches has exclusive cognizance of matters falling within
its constitutionally allocated sphere.74

The power to enact laws is primarily lodged with the legislature, which
is generally prohibited from delegating its legislative functions and
duties and relieving itself from its mandate under the Constitution

As shown below, in no way is Executive Order No. 224 an ultra

vires act. It is a valid exercise of the president's ordinance-making
power.
I(A)
To justify the State's supervision and control over the local
government units, respondents point to the first Whereas clause of
Executive Order No. 224, which refers to the Department of
Environment and Natural Resource's power of supervision and
control over the enforcement of environmental protection laws, as
provided in the Local Government Code:
WHEREAS, Section 17(3)(iii) (sic) of Republic Act (R.A.) No. 7160,
otherwise known as the Local Government Code of 1991, provides that
a province shall, subject to the supervision, control and review of the
Secretary of the Department of Environment and Natural Resources
(DENR), enforce small-scale mining law and other laws on the
protection of the environment[.] (Emphasis in the original

The Philippine Mining Act of 1995 is an environmental protection

law.
This already justifies the State's supervision, control, and review of the
concerned local government units' compliance with and enforcement of
existing regulations on quarrying-related activities.

Section 138 of the Local Government Code empowers provincial

governments to issue permits to quarry operators and to collect
taxes on extracted quarry resources within their respective
territorial jurisdictions:
SECTION 138. Tax on Sand, Gravel and Other Quarry Resources.
� The province may levy and collect not more than ten percent (10%)
of fair market value in the locality per cubic meter of ordinary stones,
sand, gravel earth, and other quarry resources, as defined under the
National Internal Revenue Code, as amended, extracted from public
lands or from the beds of seas, lakes, rivers, streams, creeks, and other
public waters within its territorial jurisdiction.

The permit to extract sand, gravel and other quarry resources shall be
issued exclusively by the provincial governor, pursuant to the ordinance
of the sangguniang panlalawigan.

To be clear, the Philippine Mining Act, a later law, modified the

Local Government Code by confining the provincial government's
authority to issue quarry permits to applications for areas below
five hectares and empowering the Department of Environment and
Natural Resources, through the Mines and Geosciences Bureau, to
issue permits to applications for areas above five hectares. Section
43, 46, and 47 of the Philippine Mining Act provides:
SECTION 43. Quarry Permit. � Any qualified person may apply to
the provincial/city mining regulatory board for a quarry permit on
privately-owned lands and/or public lands for building and construction
materials such as marble, basalt, andesite, conglomerate, tuff, adobe,
granite, gabbro, serpentine, inset filling materials, clay for ceramic tiles
and building bricks, pumice, perlite and other similar materials that are
extracted by quarrying from the ground. The provincial governor shall
grant the permit after the applicant has complied with all the
requirements as prescribed by the rules and regulations.

The maximum area which a qualified person may hold at any one time
shall be five hectares (5 has.): Provided, That in large-scale quarry
operations involving cement raw materials, marble, granite, sand and
gravel and construction aggregates, a qualified person and the
government may enter into a mineral agreement as defined herein.

A quarry permit shall have a term of five (5) years, renewable for like
periods but not to exceed a total term of twenty-five (25) years. No
quarry permit shall be issued or granted on any area covered by a
mineral agreement or financial or technical assistance agreement.

SECTION 1. Processing and Issuance of Mining Permits. The

issuance of permit to extract and dispose of industrial sand and
gravel/lahar deposits by the MGB shall be governed by Chapter 8 of
R.A. No. 79[42].

The acceptance, processing and evaluation of applications for permits to

extract industrial sand and gravel/lahar deposits in Pampanga, Tarlac
and Zambales shall be undertaken through a Task Force composed of the
MGB and the Provincial Governor. (Emphasis supplied)
In the case at bar,

The laws make it clear that State control over the local government units'
compliance with and enforcement of quarrying-related activities is valid.
In any case, Executive Order No. 224 simply reinforces the Philippine
Mining Act, and is in no way an ultra vires act.
I(B)

The local government units' power to impose and collect taxes finds
basis in Article X, Section 5 of the Constitution:
SECTION 5. Each local government unit shall have the power to create
its own sources of revenues and to levy taxes, fees, and charges subject
to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy. Such taxes, fees, and
charges shall accrue exclusively to the local governments.

The Local Government Code's enactment in 1991 embodied the basic

policy of local autonomy. A crucial part of local autonomy is fiscal
autonomy,89 which refers to the local government units' power to "create
[their] own sources of revenues and to levy taxes, fees, and
charges"90 that shall then accrue exclusively to them. Fiscal autonomy
also includes their power to allocate resources to align with their own
priorities.91

This Court also notes that the Philippine Mining Act by itself does not
empower the city or municipal treasurers to collect the quarry fees and
taxes, as it was only its Implementing Rules and Regulations that
designated these officials as collection agents. Thus, Section 4 of
Executive Order No. 224, which delegated the collection of quarry taxes
and fees to the task force, can be seen as an amendment to the
Implementing Rules and Regulations.

II

Finally, going back to the requisites for the validity of an

administrative issuance, the fourth requisite demands that the
administrative issuance must be reasonable.

Executive Order No. 224 is a valid and reasonable exercise of the

president's inherent ordinance-making power.99 It provided the necessary
rules for the concerned agency to execute the Philippine Mining Act in
relation to the quarry industry of the provinces affected by Mt.
Pinatubo's eruption, without going beyond the bounds of the law it
meant to implement.

The presumption of constitutionality is rooted in "the doctrine of

separation of powers which enjoins upon each department a
becoming respect for the acts of the other departments."10
2
For the judiciary to justify the nullification of any legislative or
executive act, it must be shown that the statute or issuance clearly
violates the Constitution.

There was no such palpable violation of the Constitution here.

WHEREFORE, the Petition is DENIED. The assailed August 24, 2010

Decision and February 22, 2011 Resolution of the Court of Appeals in
CA-G.R. CV No. 83341 are AFFIRMED.
SO ORDERED.

G.R. No. 175368 April 11, 2013

LEAGUE OF PROVINCES OF THE PHILIPPINES, Petitioner,

vs.
DEPARTMENT OF ENVIRONMENT and NATURAL
RESOURCES

The Facts

On March 28, 1996, Golden Falcon Mineral Exploration

Corporation (Golden Falcon) filed with the DENR Mines and
Geosciences Bureau Regional Office

No. III (MGB R-III) an Application for Financial and Technical

Assistance Agreement (FTAA) covering an area of 61,136 hectares
situated in the Municipalities of San Miguel, San Ildefonso, Norzagaray
and San Jose del Monte, Bulacan.2

On April 29, 1998, the MGB R-III issued an Order denying Golden
Falcon's Application for Financial and Technical Assistance
Agreement

for failure to secure area clearances from the Forest Management Sector
and Lands Management Sector of the DENR Regional Office No. III.3

On November 11, 1998, Golden Falcon filed an appeal with the

DENR

Mines and Geosciences Bureau Central Office (MGB-Central Office),

and sought reconsideration of the Order dated April 29, 1998.4

On February 10, 2004, while Golden Falcon's appeal was pending,

Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz and
Liberato Sembrano filed with the Provincial Environment and
Natural Resources Office (PENRO) of Bulacan their respective
Applications for Quarry Permit (AQP),

which covered the same area subject of Golden Falcon's Application for
Financial and Technical Assistance Agreement.5

On July 16, 2004, the MGB-Central Office issued an Order denying

Golden Falcon's appeal and affirming the MGB R-III's

Order dated April 29, 1998.

On September 13, 2004, Atlantic Mines and Trading Corporation

(AMTC) filed with the PENRO of Bulacan an Application for
Exploration Permit (AEP) covering 5,281 hectares of the area covered
by Golden Falcon's Application for Financial and Technical Assistance
Agreement.6

On July 22, 2005, AMTC filed with the PMRB of Bulacan a formal
protest against the aforesaid Applications for Quarry Permit on the
ground that the subject area was already covered by its Application
for Exploration Permit.9

On August 8, 2005, MGB R-III Director Cabantog, who was the

concurrent Chairman of the PMRB, endorsed to the Provincial
Governor of Bulacan, Governor Josefina M. dela Cruz, the
aforesaid Applications for Quarry Permit that had apparently been
converted to Applications for Small-Scale Mining Permit

of Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz and Lucila

S. Valdez (formerly Liberato Sembrano).10

On August 9, 2005, the PENRO of Bulacan issued four memoranda

recommending to Governor Dela Cruz the approval of the aforesaid
Applications for Small-Scale Mining Permit.11
Subsequently, AMTC appealed to respondent DENR Secretary the
grant of the aforesaid Small-Scale Mining Permits

, arguing that: (1) The PMRB of Bulacan erred in giving due course to
the Applications for Small-Scale Mining Permit without first resolving
its formal protest; (2) The areas covered by the Small-Scale Mining
Permits fall within the area covered by AMTC's valid prior Application
for Exploration Permit; (3) The Applications for Quarry Permit were
illegally converted to Applications for Small-Scale Mining Permit; (4)
DENR-MGB Director Horacio C. Ramos' ruling that the subject areas
became open for mining location only on August 11, 2004 was
controlling; (5) The Small-Scale Mining Permits were null and void
because they covered areas that were never declared People's Small-
Scale Mining Program sites as mandated by Section 4 of the People's
Small-Scale Mining Act of 1991; and (6) Iron ore is not considered as
one of the quarry resources, as defined by Section 43 of the Philippine
Mining Act of 1995, which could be subjects of an Application for
Quarry Permit.13

On August 8, 2006, respondent DENR Secretary rendered a

Decision14 in favor of AMTC

. The DENR Secretary agreed with MGB Director Horacio C. Ramos

that the area was open to mining location only on August 11, 2004,
fifteen (15) days after the receipt by Golden Falcon on July 27, 2004 of a
copy of the MGB-Central Office's Order dated July 16, 2004, which
Order denied Golden Falcon's appeal. stated that the Applications for
Quarry Permit were filed on February 10, 2004 when the area was still
closed to mining location; hence, the Small-Scale Mining Permits
granted by the PMRB and the Governor were null and void. The
dispositive portion of the DENR Secretary’s Decision reads:

WHEREFORE, the Application for Exploration Permit, AEP-III-02-04

of Atlantic Mines and Trading Corp. is declared valid and may now be
given due course. The Small-Scale Mining Permits, SSMP-B-002-05 of
Gerardo Cruz, SSMP-B-003-05 of Eduardo D. Mercado, SSMP-B-004-
05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S. Valdez are
declared NULL AND VOID. Consequently, the said permits are hereby
CANCELLED.15

Hence, petitioner League of Provinces filed this petition.

ISSUES

WHETHER OR NOT SECTION 17(B)(3)(III) OF THE, 1991 LOCAL

GOVERNMENT CODE AND SECTION 24 OF THE PEOPLE'S
SMALL-SCALE MINING ACT OF 1991 ARE
UNCONSTITUTIONAL FOR PROVIDING FOR EXECUTIVE
CONTROL AND INFRINGING UPON THE LOCAL AUTONOMY
OF PROVINCES.

II

WHETHER OR NOT THE ACT OF RESPONDENT [DENR] IN

NULLIFYING, VOIDING AND CANCELLING THE SMALL-SCALE
MINING PERMITS AMOUNTS TO EXECUTIVE CONTROL, NOT
MERELY SUPERVISION AND USURPS THE DEVOLVED
POWERS OF ALL PROVINCES.16

In this case, petitioner admits that respondent DENR Secretary had

the authority to nullify the Small-Scale Mining Permits issued by the
Provincial Governor of Bulacan, as the DENR Secretary has control
over the PMRB

, and the implementation of the Small-Scale Mining Program is subject

to control by respondent DENR.

Petitioner contends that the aforecited laws and DENR

Administrative Order No. 9640 (the Implementing Rules and
Regulations of the Philippine Mining Act of 1995) did not explicitly
confer upon respondents DENR and the DENR Secretary the power
to reverse, abrogate, nullify, void, or cancel the permits issued by
the Provincial Governor or small-scale mining contracts entered
into by the PMRB.

The statutes are also silent as to the power of respondent DENR

Secretary to substitute his own judgment over that of the Provincial
Governor and the PMRB.

Moreover, petitioner contends that Section 17 (b)(3)(iii) of the Local

Government Code of 1991 and Section 24 of R.A. No. 7076, which
confer upon respondents DENR and the DENR Secretary the power
of control are unconstitutional

, as the Constitution states that the President (and Executive

Departments and her alter-egos) has the power of supervision only, not
control, over acts of the local government units, and grants the local
government units autonomy, thus:

The 1987 Constitution:

Article X, Section 4. The President of the Philippines shall exercise

general supervision over local governments

. Provinces with respect to component cities and municipalities, and

cities and municipalities with respect to component barangays, shall
ensure that the acts of their component units are within the scope of their
prescribed powers and functions.27

Petitioner contends that the foregoing provisions of the Constitution

and the Local Government Code of 1991 show that the relationship
between the President and the Provinces or respondent DENR

, as the alter ego of the President, and the Province of Bulacan is one of
executive supervision, not one of executive control. The term "control"
has been defined as the power of an officer to alter or modify or set aside
what a subordinate officer had done in the performance of his/her duties
and to substitute the judgment of the former for the latter, while the term
"supervision" is the power of a superior officer to see to it that lower
officers perform their function in accordance with law.29

Petitioner submits that the statutory grant of power of control to

respondents is unconstitutional

, as the Constitution only allows supervision over local governments and

proscribes control by the executive departments.

In its Comment, respondents, represented by the Office of the Solicitor

General, stated that contrary to the assertion of petitioner, the power to
implement the small-scale mining law is expressly limited in Section 17
(b)(3)(iii) of the Local Government Code, which provides that it must be
carried out "pursuant to national policies and subject to supervision,
control and review of the DENR." Moreover, the fact that the power to
implement the small-scale mining law has not been fully devolved to
provinces is further amplified by Section 4 of the People's Small-Scale
Mining Act of 1991, which provides, among others, that the People's
Small-Scale Mining Program shall be implemented by the DENR
Secretary.

The petition lacks merit.

Paragraph 1 of Section 2, Article XII (National Economy and

Patrimony) of the Constitution31 provides that "the exploration,
development and utilization of natural resources shall be under the full
control and supervision of the State."

Moreover, paragraph 3 of Section 2, Article XII of the Constitution

provides that "the Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens x x x."

Pursuant to Section 2, Article XII of the Constitution, R.A. No. 7076 or

the People's Small-Scale Mining Act of 1991, was enacted, establishing
under Section 4 thereof a People's Small-Scale Mining Program to be
implemented by the DENR Secretary in coordination with other
concerned government agencies.

The People's Small-Scale Mining Act of 1991 defines "small-scale

mining"

as "refer[ring] to mining activities, which rely heavily on manual labor

using simple implement and methods and do not use explosives or heavy
mining equipment."32

It should be pointed out that the Administrative Code of 198733

provides that the DENR is, subject to law and higher authority, in charge
of carrying out the State's constitutional mandate, under Section 2,
Article XII of the Constitution, to control and supervise the exploration,
development, utilization and conservation of the country's natural
resources. Hence, the enforcement of small-scale mining law in the
provinces is made subject to the supervision, control and review of the
DENR under the Local Government Code of 1991, while the People’s
Small-Scale Mining Act of 1991 provides that the People’s Small-Scale
Mining Program is to be implemented by the DENR Secretary in
coordination with other concerned local government agencies.

Sec. 4. People's Small-Scale Mining Program

. - For the purpose of carrying out the declared policy provided in

Section 2 hereof, there is hereby established a People's Small-Scale
Mining Program to be implemented by the Secretary of the Department
of Environment and Natural Resources, hereinafter called the
Department, in coordination with other concerned government agencies,
designed to achieve an orderly, systematic and rational scheme for the
small-scale development and utilization of mineral resources in certain
mineral areas in order to address the social, economic, technical, and
environmental problems connected with small-scale mining activities.:
 21.1 DENR Secretrary – direct supervision and control over the
program and activities of the small-scale miners within the people's
small-scale mining area;

DENR Administrative Order No. 23, otherwise known as the

Implementing Rules and Regulations of R.A. No. 7942, otherwise
known as the Philippine Mining Act of 1995, adopted on August 15,
1995, provides under Section 12344

thereof that small-scale mining applications should be filed with the

PMRB45 and the corresponding permits shall be issued by the Provincial
Governor, except small-scale mining applications within the mineral
reservations.

Thereafter, DENR Administrative Order No. 96-40, otherwise

known as the Revised Implementing Rules and Regulations of R.A.
No. 7942, otherwise known as the Philippine Mining Act of 1995,
adopted on December 19, 1996, provides that applications for Small-
Scale Mining Permits shall be filed with the Provincial
Governor/City Mayor through the concerned Provincial/City
Mining Regulatory Board for areas

outside the Mineral Reservations and with the Director though the
Bureau for areas within the Mineral Reservations.46 Moreover, it
provides that Local Government Units shall, in coordination with the
Bureau/ Regional Offices and subject to valid and existing mining rights,
"approve applications for small-scale mining, sand and gravel, quarry x
x x and gravel permits not exceeding five (5) hectares."47

Petitioner contends that the Local Government Code of 1991, R.A.

No. 7076, DENR Administrative Orders Nos. 95-23 and 96-40
granted the DENR Secretary the broad statutory power of control

, but did not confer upon the respondents DENR and DENR Secretary
the power to reverse, abrogate, nullify, void, cancel the permits issued
by the Provincial Governor or small-scale mining contracts entered into
by the Board.

The contention does not persuade.

The settlement of disputes over conflicting claims in small-scale mining

is provided for in Section 24 of R.A. No. 7076, thus:

Sec. 24. Provincial/City Mining Regulatory Board. − There is hereby

created under the direct supervision and control of the Secretary a
provincial/city mining regulatory board, herein called the Board, which
shall be the implementing agency of the Department, and shall exercise
the following powers and functions, subject to review by the Secretary:

(e) Settle disputes, conflicts or litigations over conflicting claims within

a people's small-scale mining area, an area that is declared a small
mining area; x x x

In this case, in accordance with Section 22, paragraph 22.5 of the

Implementing Rules and Regulations of R.A. No. 7076, the AMTC
filed on July 22, 2005 with the PMRB of Bulacan a formal protest
against the Applications for Quarry Permits of Eduardo Mercado,
Benedicto Cruz, Liberato Sembrano (replaced by Lucila Valdez)

and Gerardo Cruz on the ground that the subject area was already
covered by its Application for Exploration Permit.48 However, on
August 8, 2005, the PMRB issued Resolution Nos. 05-8, 05-9, 05-10
and 05-11, resolving to submit to the Provincial Governor of Bulacan
the Applications for Small-Scale Mining Permits of Eduardo Mercado,
Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the
granting/issuance of the said permits.49 On August 10, 2005, the
Provincial Governor of Bulacan issued the Small-Scale Mining Permits
to Eduardo Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz
based on the legal opinion of the Provincial Legal Officer and the
Resolutions of the PMRB of Bulacan.
Hence, AMTC filed an appeal with respondent DENR Secretary,
appealing from Letter-Resolution No. 05-1317 and

Resolution Nos. 05-08, 05-09, 05-10 and 05-11, all dated August 8,
2005, of the PMRB of Bulacan, which resolutions gave due course and
granted, on August 10, 2005, Small-Scale Mining Permits to Eduardo D.
Mercado, Benedicto S. Cruz, Lucila Valdez and Gerardo Cruz involving
parcels of mineral land situated at Camachin, Doña Remedios Trinidad,
Bulacan.

We agree with the ruling of the MGB Director that the area is open
only to mining location on August 11, 2004, fifteen (15) days after
the receipt by Golden Falcon on July 27, 2004

of a copy of the subject Order of July 16, 2004.1 The filing by Golden
Falcon of the letter-appeal suspended the finality of the Order of Denial
issued on April 29, 1998 by the Regional Director until the Resolution
thereof on July 16, 2004.

WHEREFORE, the Application for Exploration Permit, AEP-III-

02-04 of Atlantic Mines and Trading Corp. is declared valid and
may now be given due course

. The Small-Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz,

SSMP-B-003-05 of Eduardo D. Mercado, SSMP-B-004-05 of Benedicto
S. Cruz and SSMP-B-005-05 of Lucila S. Valdez are declared NULL
AND VOID. Consequently, the said permits are hereby
CANCELLED.50

The Court finds that the decision of the DENR Secretary was
rendered in accordance with the power of review granted to the
DENR Secretary in the resolution of disputes

, which is provided for in Section 24 of R.A. No. 707651 and Section 22

of its Implementing Rules and Regulations.52
Hence, the decision of the DENR Secretary, declaring that the
Application for Exploration Permit of AMTC was valid and may be
given due course, and canceling the Small-Scale Mining Permits
issued by the Provincial Governor, emanated from the power of
review granted to the DENR Secretary under R.A. No. 7076 and its
Implementing Rules and Regulations. The DENR Secretary's power
to review and, therefore, decide, in this case, the issue on the validity
of the issuance of the Small-Scale Mining Permits by the Provincial
Governor as recommended by the PMRB, is a quasi-judicial
function, which involves the determination of what the law is, and
what the legal rights of the contending parties are, with respect to
the matter in controversy and, on the basis thereof and the facts
obtaining, the adjudication of their respective rights.53

In this case, the Court finds that the grounds raised by petitioner to
challenge the constitutionality of Section 17 (b )(3)(iii) of the Local
Government Code of 1991 and Section 24 'of R.A. No.7076 failed to
overcome the constitutionality of the said provisions of law.

WHEREFORE, the petition is DISMISSED for lack of merit.

G.R. No. 149638, December 10, 2014

MONCAYO INTEGRATED SMALL-SCALE MINERS

ASSOCIATION, INC. [MISSMA], Petitioner, v. SOUTHEAST
MINDANAO GOLD MINING CORP.,

Facts

On July 1, 1985, the Bureau of Forest Development issued to

Marcopper Mining Corporation (Marcopper) a prospecting permit
(Permit to Prospect No. 755-123185) covering 4,941 hectares within
the Agusan-Davao-Surigao Forest Reserve. This forest reserve was
instituted by Proclamation No. 369 issued by then Governor
General Dwight F. Davis on February 27, 1931.

On March 10, 1986, the Bureau of Mines and Geo-Sciences issued to

Marcopper a permit to explore (EP 133) covering the same area.

On February 16, 1994, Marcopper assigned EP 133 to Southeast

Mindanao Gold Mining Corporation (SMGMC).

On December 19, 1995, the Mines and Geo-Sciences Bureau director

ordered the publication of SMGMCï
¿½s application for Mineral Production Sharing Agreement (MPSA No.
128) for the 4,941 hectares covered by EP 133.

JB Management Mining Corporation, Davao United Miners

Cooperative, Balite Integrated Small Scale Miners Cooperative,
MISSMA, PICOP, Rosendo Villaflor, et al., Antonio G. Dacudao,
Puting Bato Gold Miners Cooperative, and Romeo Altamera, et al. filed
adverse claims against MPSA No. 128.8chanRoblesvirtualLawlibrary

The adverse claims were anchored on DENR Administrative Order

No. 669 (DAO No. 66) issued on December 27, 1991
, declaring 729 hectares of the Agusan-Davao-Surigao Forest Reserve as
forest land open for small-scale mining purposes, subject to existing and
valid private rights.

The DENR constituted a panel of arbitrators pursuant to Section 77 of

the Philippine Mining Act of 1995 tasked to resolve the adverse claims
against MPSA No. 128.

The Mines Adjudication Board (MAB), in its decision10 dated

January 6, 1998, vacated the decision of the panel of arbitrators:c
WHEREFORE, PREMISES CONSIDERED, the decision of the
Panel of Arbitrators dated 13 June 1997 is hereby VACATED and a
new one entered in the records of the case as follows:

1. SEM�s MPSA application is hereby given due course subject to the

full and strict compliance of the provisions of the Mining Act and its
Implementing Rules and Regulations.

2. The area covered by DAO 66, series of 1991, actually occupied and
actively mined by the small-scale miners on or before August 1, 1987 as
determined by the Provincial Mining Regulatory Board
(�PMRB�), is hereby excluded from the area applied for by
SEM; (Emphasis supplied)

Both SMGMC and the adverse claimants questioned the Mines

Adjudication Board�s decision before this court. These petitions
were remanded to the Court of Appeals as CA-G.R. SP Nos. 61215-
16, later elevated to this court as G.R. No. 152613, G.R. No. 152628,
G.R. Nos 152619-20, and G.R. Nos. 152870-71.12c

Meanwhile, independent of the MAB decision and the appeals to the

Court of Appeals and this court, the Provincial Mining Regulatory
Board of Davao proposed to declare a Peopleï
¿½s Small Scale Mining Area in accordance with the MAB
decision.13chanRoblesvirtualLawlibrary

On February 24, 1992, the notice for the proposed declaration was
approved and issued for publication to notify any and all oppositors
or protestors.
14
Those who filed oppositions included SMGMC, Picop Resources
Incorporated, Mt. Diwata-Upper Ulip Mandaya Tribal Council, and JB
Management Mining Corporation.15chanRoblesvirtualLawlibrary
The Provincial Mining Regulatory Board (PMRB), in its
decision16 dated March 30, 1999, dismissed the oppositions for lack
of merit, then segregated and declared the 729-hectare gold rush
area as People's Small Scale Mining Area:
chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing premises, the instant
protest/opposition of herein Oppositors are hereby DISMISSED for lack
of merit.

Then DENR Secretary Antonio H. Cerilles, in his decision dated

September 20, 1999, affirmed with modification the Provincial
Mining and Regulatory Board decision:18
WHEREFORE, premises considered, the Decision of the PMRB of
Compostela Valley dated March 30, 1999 is hereby AFFIRMED,
subject to the following modifications:

1. For effective management and equitable utilization of resources, the

two main areas of operations as described above of the 729 hectares
shall be delineated and embodied in a Memorandum of Agreement
(MOA) among the stakeholders concerned to ensure recognition of
delineated boundaries and rational operation of the concerned areas.

The DENR Secretary denied reconsideration on February 2, 2000.

SMGMC filed a petition under Rule 43 before the Court of Appeals.

The Court of Appeals, in its decision20 dated July 31, 2000, denied
the petition.

The Court of Appeals discussed that since �there being no injunction

from the Supreme Court which would prevent the enforcement of the
MAB decision, respondent DENR Secretary acted with propriety in
issuing the assailed decision which affirmed the PMRB�s declaration
of a People�s Small Scale Mining Area.�21 It also denied the
petition based on litis pendencia, considering that the pending case
before this court assailing the MAB decision involved a prejudicial
question.22chanRoblesvirtualLawlibrary

SMGMC and Balite Integrated Small-Scale Mining Corp.

(BISSMICO) filed separate motions for reconsideration.

The Court of Appeals, in its amended decision23 dated August 27, 2001,
granted the motions for reconsideration and, consequently, set aside and
annulled the DENR Secretary's decision for having been issued with
grave abuse of discretion in excess of his jurisdiction.

The Court of Appeals found that the �DENR Secretary�s outright

delineation of the subject area in favor of certain entities contravenes the
mandate of the MAB Decision and the purpose of RA 7076 (People�s
Small-Scale Mining Act of 1991), inasmuch as it disenfranchises the
petitioner and other small-scale miners who may apply for and be
awarded small-scale mining contracts by the local government units
upon recommendation of the PMRB after the fulfilment of necessary
conditions set forth in the law.�26chanRoblesvirtualLawlibrary

Hence, these two petitions for review were filed assailing the Court
of Appeals' amended decision.

Petitioner MISSMA27 argues that the Court of Appeals should not

have amended its decision considering it already found SMGMC
guilty of forum shopping and litis pendencia.28c

Petitioner MISSMA also argues that �[i]n carrying out the function of
declaring and segregating gold rush areas for small-scale mining
purposes [pursuant to Republic Act No. 7076], both the PMRB, and
upon review, the DENR Secretary, may well act independently of the
MAB, which, on the other hand is a quasi-judicial body tasked to settle
mining conflicts, disputes or claims[.]�31 Moreover, the DENR
Secretary�s decision only delineated and
Petitioner Hon. Antonio H. Cerilles, in his capacity as then DENR
Secretary,33 similarly argues that the Court of Appeals should have
maintained its earlier decision dismissing the case due to forum
shopping and litis pendencia.34chanRoblesvirtualLawlibrary

In any event, petitioner DENR Secretary argues that he acted within

authority in modifying the PMRB�s decision, citing Sections 24 and
26 of Republic Act No. 7076 on the DENR Secretary�s power of
�direct supervision and control.�35chanRoblesvirtualLawlibrary

Petitioner DENR Secretary adds that �[t]he division into two

areas of the segregated portion of 729-hectares small-scale mining
area does not contravene the mandate of the MAB decision and the
purpose of R.A. No. 7076, since there is no award yet of any license
or permit made to any qualified small-scale
miner.�36chanRoblesvirtualLawlibrary

Lastly, petitioner DENR Secretary contends that these petitions

have been mooted by (1) then President Macapagal-Arroyo�s
issuance of Proclamation No. 297 excluding an area from
Proclamation No. 369 and declaring this as a mineral reservation
and as an environmentally critical area, and (2) this court�s
decision dated June 23, 2006 in G.R. Nos. 152613, 152628, 152619-
20, 152870-71 declaring DAO No. 66 as void, declaring EP 133 as
expired, and underscoring the Executive�s power of supervision
and control over the exploration, development, and utilization of the
country�s mineral resources.37chanRoblesvirtualLawlibrary

Respondent SMGMC counters that no forum shopping or litis

pendencia exists as the present petitions �emanated from the decision
of the PMRB declaring the 729 hectares of timberland as People�s
Small-Scale Mining Area, while G.R. No. 132475 emanated from the
decision of the MAB on the MPSA Application of
[SMGMC].�38 Records also show that the case docketed as G.R. No.
132475 was made known to this court.39chanRoblesvirtualLawlibrary
Even Executive Order No. 318 issued on June 9, 2004 on guiding
principles in Promoting Sustainable Forest Management in the
Philippines provides that �[c]onversions of forestlands into non-
forestry uses shall be allowed only through an act of Congress and upon
the recommendation of concerned government
agencies.�46 Consequently, the PMRB has no authority to declare the
729 hectares within the forest reserve as a People�s Small-Scale
Mining Area.47chanRoblesvirtualLawlibrary

Respondent PICOP also argues that Proclamation No. 297 by then

President Macapagal-Arroyo was without congressional
concurrence as required by Republic Act No. 3092, thus,
revocable.48 Its memorandum also includes arguments on how
Proclamation No. 297 was the first step in a series of constitutional
violations such as an agreement with ZTE
�NBN involving the gold rush area.49chanRoblesvirtualLawlibrary

Petitioner DENR Secretary, through its counsel Office of the Solicitor

General, filed its compliance on May 16,
2013.52chanRoblesvirtualLawlibrary

PMDC requested NCIP to settle the issues of the tribal leadership

and representation with finality in order to guide PMDC and its
operators/partners, as well as other parties interested in assisting
the tribe.

PMDC is still awaiting the final decision of NCIP. FF Cruz & Co., Inc.
is still actively pursuing its aforesaid Agreement with the ICC.

Counsel for respondent PICOP filed a similar

explanation/compliance.60chanRoblesvirtualLawlibrary

ISSUEShanroblesvirtuallawlibrary

I. Whether the Court of Appeals can set aside the issue of

forum shopping and litis pendencia (SMGMC's petition in
G.R. No. 132475), and dwell on the merits;
II. Whether the DENR Secretary�s decision went beyond the
PMRB�s decision, otherwise, whether the DENR
Secretary can modify the PMRB�s decision; and
III. Whether the DENR Secretary�s modification to divide the
729 hectares into two areas contravened the mandate of the
MAB decision and the purpose of Republic Act No. 7076.

Subsequent developments

Developments after these petitions had been filed in 2001 mooted this
case. The parties recognized these developments in their recent
submissions.

Petitioner DENR Secretary raised that the petitions were mooted by

(a) then President Macapagal-Arroyoï
¿½s issuance of Proclamation No. 297, excluding an area from
Proclamation No. 369 and declaring this area as a mineral reservation
and as an environmentally critical area, and (b) this court�s decision
dated June 23, 2006 in G.R. Nos. 152613, 152628, 152619-20, and
152870-71 declaring DAO No. 66 as void, declaring EP 133 as expired,
and underscoring the Executive�s power of supervision and control
over the exploration, development, and utilization of the country�s
mineral resources.

Proclamation No. 297 dated November 25, 2002 excluded an area of

8,100 hectares in Moncayo, Compostela Valley as a mineral reservation
and as an environmentally critical area:chanroblesvirtuallawlibrary
PROCLAMATION NO. 297

EXCLUDING A CERTAIN AREA FROM THE OPERATION OF

PROCLAMATION NO. 369 DATED FEBRUARY 27, 1931, AND
DECLARING THE SAME AS MINERAL RESERVATION AND
AS ENVIRONMENTALLY CRITICAL AREA

communities to air their views regarding the establishment of a mineral

Mining operations in the area may be undertaken either by the DENR
directly, subject to payment of just compensation that may be due to
legitimate and existing claimants, or thru a qualified contractor, subject
to existing rights, if any.

The DENR shall formulate and issue the appropriate guidelines,

including the establishment of an environmental and social fund, to
implement the intent and provisions of this Proclamation.

Subsequently, DENR Administrative Order No. 2002-18 declared an

emergency situation on the Diwalwal gold rush area and ordered the
stoppage of all mining operations in the area.

Then President Macapagal-Arroyo issued Executive Order No. 217

dated June 17, 2003, creating the National Task Force Diwalwal to
address the situation in the Diwalwal gold rush area.

Forum shopping and litis pendencia

Litis pendencia exists when the following elements are present: �(a)
the identity of parties, or at least such as representing the same interests
in both actions; (b) the identity of rights asserted and relief prayed for,
the relief being founded on the same facts; and (c) the identity of the two
cases such that judgment in one, regardless of which party is successful,
would amount to res judicata in the
other.�76chanRoblesvirtualLawlibrary

The existence of litis pendencia also means that the rule against
forum shopping was violated.77chanRoblesvirtualLawlibrary

The Court of Appeals� July 31, 2000 decision denied SMGMC�s

petition on the ground of litis pendencia and forum shopping
considering the then pending case docketed as G.R. No. 132475
assailing the January 6, 1998 MAB decision recognizing DAO No. 66
by excluding the 729-hectare area.78chanRoblesvirtualLawlibrary

The Court of Appeals� August 27, 2001 amended decision

�maintain that matters pertaining to the petitioner�s rights over the
subject 729-hectare gold rush area have been decided by the Mines
Adjudication Board (MAB), which decision is now with the Supreme
Court for review[,]�79 but it nevertheless annulled the DENR
Secretary�s decision �for having been issued with grave abuse of
discretion in excess of his jurisdiction.�80chanRoblesvirtualLawlibrary

Respondent SMGMC argued in its memorandum that no forum

shopping or litis pendencia exists,81 but later conceded in its
explanation, manifestation, and compliance dated September 1, 2014
that supervening developments, such as this court�s 2006 decision and
2009 resolution in Apex Mining v. SMGMC, mooted these
cases.82chanRoblesvirtualLawlibrary

We do not need to decide on whether there was forum shopping or litis

pendencia. Apex Mining v. SMGMC mooted these petitions.

Moot and academic

Furthermore, since this court has declared that the DENR Secretary had
no authority to issue DAO No. 66 declaring 729 hectares of the Agusan-
Davao-Surigao Forest Reserve as forest land open for small-scale
mining purposes subject to existing and valid private rights, both the
PMRB decision, and the DENR Secretary�s decision affirming it with
modification, are consequently overturned for lack of basis in
delineating the 729 hectares from the MPSA.

Indeed, then President Macapagal-Arroyo issued Proclamation No. 297

excluding an area in Moncayo, Compostela Valley, declaring this as a
mineral reservation and as an environmentally critical area. DENR
Administrative Order No. 2002-18 followed, declaring an emergency
situation in this gold rush area and ordering the stoppage of all mining
operations. Executive Order No. 217 thereafter created the National
Task Force Diwalwal.

Authority and functions

in mining activities

In any case, we discuss the powers of the different agencies in relation to

mining activities as laid down by the relevant laws.

Mines Adjudication Board

Chapter XIII (Settlement of Conflicts) of Republic Act No. 7942 known

as the Mining Act of 1995 provides for the powers of the panel of
arbitrators and the Mines Adjudication Board (MAB). Section 77 states
that �the panel shall have exclusive and original jurisdiction to hear
and decide on the following:chanroblesvirtuallawlibrary

a. Disputes involving rights to mining areas;

b. Disputes involving mineral agreements or permits;
c. Disputes involving surface owners, occupants and
claimholders/ concessionaires; and
 d. Disputes pending before the Bureau and the Department at
the date of the effectivity of this Act.�91

Section 78 provides for the MAB�s appellate jurisdiction over the

decision or order of the panel of arbitrators.92 Section 79 enumerates the
MAB�s powers and functions, including the power �to conduct
hearings on all matters within its
jurisdiction.�93chanRoblesvirtualLawlibrary

Provincial Mining Regulatory Board

While the MAB�s jurisdiction covers the settlement of conflicts over

mining claims, the Provincial Mining Regulatory Board (PMRB) �
created under Republic Act No. 7076 known as the People�s Small-
Scale Mining Act of 1991 � granted powers that include functions
more executive in nature such as declaring and segregating areas for
small-scale mining.94chanRoblesvirtualLawlibrary

Section 24. Provincial/ City Mining Regulatory Board. There is

hereby created under the direct supervision and control of the Secretary
a provincial/city mining regulatory board, herein called the Board, which
shall be the implementing agency of the Department, and shall exercise
the following powers and functions, subject to review by the Secretary:

(a) Declare and segregate existing gold-rich areas for small-scale

mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to small-
scale mining;
(e) Settle disputes, conflicts or litigations over conflicting claims within
a people�s small-scale mining area, an area that is declared a
small mining area; and
(f) Perform such other functions as may be necessary to achieve the
goals and objectives of this Act.95

Section 6 of DAO No. 34�92 also provides that �[t]he Board

created under RA 7076 shall have the authority to declare and set aside
People�s Small-Scale Mining Areas in sites onshore suitable for
small-scale mining operations subject to review by the DENR
Secretary thru the Director[.]�97chanRoblesvirtualLawlibrary

DENR Secretary

Section 26 of Republic Act No. 7076 reiterates the DENR Secretary�s

power of control over �the program and the activities of the small-
scale miners within the people�s small-scale mining
area�:chanroblesvirtuallawlibrary
Section 26. Administrative Supervision over the Peopleï
¿½s Small-scale Mining Program. The Secretary through his
representative shall exercise direct supervision and control over the
program and activities of the small-scale miners within the people�s
small-scale mining area.

The Secretary shall within ninety (90) days from the effectivity of
this Act promulgate rules and regulations to effectively implement
the provisions of the same
. Priority shall be given to such rules and regulations that will ensure the
least disruption in the operations of the small-scale miners.98

Section 21.1 of DAO No. 34�92, the implementing rules and

regulations of Republic Act No. 7076, states that the DENR
Secretary has �direct supervision and control over the program
and the activities of the small-scale miners within the people�s
small-scale mining area.�99chanRoblesvirtualLawlibrary
This court has distinguished the power of control and the power of
supervision as follows:chanroblesvirtuallawlibrary
. . . In administrative law, supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their
duties. If the latter fail or neglect to fulfill them, the former may take
such action or step as prescribed by law to make them perform their
duties.
Control, on the other hand, means the power of an officer to alter or
modify or nullify or set aside what a subordinate officer ha[s] done in
the performance of his

power of control as opposed to power of supervision, he had the power

to affirm with modification the PMRB�s decision.

Executive Department

The Constitution provides that �[t]he State may directly undertake

such activities, or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such
citizens[.]�103chanRoblesvirtualLawlibrary

Moreover, �[t]he President may enter into agreements with foreign-

owned corporations involving either technical or financial assistance for
large scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and
conditions provided by law, based on real contributions to the economic
growth and general welfare of the country[.]�

SEC. 4. Ownership of Mineral Resources. � Mineral resources are

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

The State shall recognize and protect the rights of the indigenous
cultural communities to their ancestral lands as provided for by the
Constitution.105

No. 297 by then President Macapagal-Arroyo was without congressional

concurrence as required by Republic Act No. 3092, thus,
revocable.111 The validity of Proclamation No. 297, however, is not an
issue in these cases. This subsequent development was not litigated, and
this is not the proper case to assail its validity.chanrobleslaw

WHEREFORE, in view of the foregoing, the petitions are DENIED for

being moot and academic.