ENVIRONMENTAL LAW DIGESTS (FEB.
20,2019)
Miners Association of the Philippines v. Factoran, Case Digest
G.R. No. 98332 January 16, 1995
Facts : 463, as amended, pursuant to Executive Order No. 211. Police Power,
Former President Corazon Aquino issued Executive Order Nos 211 and
279 in the exercise of her legislative powers. EO No. 211 prescribes
the interim procedures in the processing and approval of applications
for the exploration, development and utilization of minerals pursuant
to Section 2, Article XII of the 1987 Constitution. EO No. 279
authorizes the DENR Secretary to negotiate and conclude joint-
venture, co-production, or production- sharing agreements for the
exploration, development, and utilization of mineral resources.
The issuance and the impeding implementation by the DENR of
Administrative Order Nos. 57 which declares that all existing mining
leases or agreements which were granted after the effectivity of the
1987 Constitution…shall be converted into production-sharing
agreements within one (1) year from the effectivity of these
guidelines.” and Administrative Order No. 82 which provides that a
failure to submit Letter of Intent and Mineral Production-Sharing
Agreement within 2 years from the effectivity of the Department
Administrative Order No. 57 shall cause the abandonment of the
mining, quarry, and sand and gravel claims, after their respective
effectivity dates compelled the Miners Association of the Philippines,
Inc., an organization composed of mining prospectors and claim
owners and claim holders, to file the instant petition assailing their
validity and constitutionality before this Court.
Issue : DENR Administrative Order 96-40, adopted on December 20, 1996.
Are the two Department Administrative Orders valid?
Ruling : ground that they allow fully foreign owned corporations like WMCP
Yes. Petitioner's insistence on the application of Presidential Decree
No. 463, as amended, as the governing law on the acceptance and
approval of declarations of location and all other kinds of applications
for the exploration, development, and utilization of mineral resources
pursuant to Executive Order No. 211, is erroneous. Presidential
Decree No. 463, as amended, pertains to the old system of
exploration, development and utilization of natural resources through
"license, concession or lease" which, however, has been disallowed
by Article XII, Section 2 of the 1987 Constitution. By virtue of the said
constitutional mandate and its implementing law, Executive Order
No. 279 which superseded Executive Order No. 211, the provisions
dealing on "license, concession or lease" of mineral resources under
Presidential Decree No. 463, as amended, and other existing mining
laws are deemed repealed and, therefore, ceased to operate as the
governing law. In other words, in all other areas of administration and
management of mineral lands, the provisions of Presidential Decree
No. 463, as amended, and other existing mining laws, still govern.
Section 7 of Executive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as amended,
other existing mining laws, and their implementing rules and
regulations, or parts thereof, which are not inconsistent with the
provisions of this Executive Order, shall continue in force and effect.
Well -settled is the rule, however, that regardless of the reservation
clause, mining leases or agreements granted by the State, such as
those granted pursuant to Executive Order No. 211 referred to this
petition, are subject to alterations through a reasonable exercise of
the police power of the State.
Accordingly, the State, in the exercise of its police power in this
regard, may not be precluded by the constitutional restriction on non-
impairment of contract from altering, modifying and amending the
mining leases or agreements granted under Presidential Decree No.
being co-extensive with the necessities of the case and the demands
of public interest; extends to all the vital public needs. The passage of
Executive Order No. 279 which superseded Executive Order No. 211
provided legal basis for the DENR Secretary to carry into effect the
mandate of Article XII, Section 2 of the 1987 Constitution.
WHEREFORE, the petition is DISMISSED for lack of merit.
LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS,
Secretary Department of Environment and Natural Resources; H.
RAMOS, Director, Mines and Geosciences Bureau (MGB-DENR); R.
TORRES, Executive Secretary; and WMC (PHILIPPINES) INC.
The constitutional provision allowing the President to enter into FTAA
is a exception to the rule that participation in the nation’s natural
resources is reserved exclusively to Filipinos. Provision must be
construed strictly against their enjoyment by non-Filipinos.
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995.
Before the effectivity of RA 7942, or on March 30, 1995, the President
signed a Financial and Technical Assistance Agreement (FTAA) with
WMCP, a corporation organized under Philippine laws, covering close
to 100,000 hectares of land in South Cotabato, Sultan
Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, the
Environment Secretary Victor Ramos issued
DENR Administrative Order 95-23, which was later repealed by
Petitioners prayed that RA 7942, its implementing rules, and the FTAA
between the government and WMCP be declared unconstitutional on
to exploit, explore and develop Philippine mineral resources in
contravention of Article XII Section 2 paragraphs 2 and 4 of the
Charter.
In January 2001, WMC – a publicly listed Australian mining and
exploration company – sold its whole stake in WMCP to Sagittarius
Mines, 60% of which is owned by Filipinos while 40% of which is
owned by Indophil Resources, an Australian company. DENR
approved the transfer and registration of the FTAA in Sagittarius‘
name but Lepanto Consolidated assailed the same. The latter case is
still pending before the Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987,
authorizes the DENR to accept, consider and evaluate proposals from
foreign owned corporations or foreign investors for contracts or
agreements involving wither technical or financial assistance for large
scale exploration, development and utilization of minerals which
upon appropriate recommendation of the (DENR) Secretary, the
President may execute with the foreign proponent. WMCP likewise
contended that the annulmentof the FTAA would violate a treaty
between the Philippines and Australia which provides for the
protection of Australian investments.
ISSUES:
1. Whether or not the Philippine Mining Act is unconstitutional for
allowing fully foreign-owned corporations to exploit the Philippine
mineral resources. 2. Whether or not the FTAA between the
government and WMCP is a ―service contract that permits fully
foreign owned companies to exploit the Philippine mineral resources.
COMPILED BY PRAISAH MARJOREY F. PICOT 1

HELD:
First Issue: RA 7942 is Unconstitutional
RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for
permitting fully foreign owned corporations to exploit the Philippine
natural resources.
Article XII Section 2 of the 1987 Constitution retained the
Regalian Doctrinewhich states that ―All lands of the public domain,
waters, minerals, coal, petroleum, and other minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. The same section also states that,
―the exploration and development and utilization of natural
resources shall be under the full control and supervision of the State.
Conspicuously absent in Section 2 is the provision in the 1935 and
1973 Constitution authorizing the State to grant licenses, concessions,
or leases for the exploration, exploitation, development, or utilization
of natural resources. By such omission, the utilization of
inalienable lands of the public domain through license, concession or
lease is no longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct
equity investment for the purpose of exploiting a particular natural
resource within a given area. The concession amounts to complete
control by the concessionaire over the country‘s natural resource, for
it is given exclusive and plenary rights to exploit a particular resource
at the point of extraction.
The 1987 Constitution, moreover, has deleted the phrase
―management or other forms of assistance in the 1973 Charter. The
present Constitution now allows only ―technical and financial
assistance. The management and the operation of the mining
activities by foreign contractors, the primary feature of the service
contracts was precisely the evil the drafters of the 1987 Constitution
sought to avoid.
The constitutional provision allowing the President to enter into
FTAAs is an exception to the rule that participation in the nation‘s
natural resources is reserved exclusively to Filipinos. Accordingly, such
provision must be construed strictly against their enjoyment by non-
Filipinos. Therefore, RA 7942 is invalid insofar as the said act
authorizes service contracts. Although the statute employs the phrase
―financial and technical agreements in accordance with the 1987
Constitution, its pertinent provisions actually treat these agreements
as service contracts that grant beneficial ownership to foreign
contractors contrary to the fundamental law.
The underlying assumption in the provisions of the law is that the
foreign contractor manages the mineral resources just like the foreign
contractor in a service contract. By allowing foreign contractors to
manage or operate all the aspects of the mining operation, RA 7942
has, in effect, conveyed beneficial ownership over the nation‘s
mineral resources to these contractors, leaving the State with nothing
but bare title thereto.
The same provisions, whether by design or inadvertence, permit a
circumvention of the constitutionally ordained 60-40% capitalization
requirement for corporations or associations engaged in the
exploitation, development and utilization of Philippine natural
resources.
When parts of a statute are so mutually dependent and connected as
conditions, considerations, inducements or compensations for each
other as to warrant a belief that the legislature intended them as a
whole, then if some parts are unconstitutional, all provisions that are
thus dependent, conditional or connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned
corporations are limited only to merely technical or financial
assistance to the State for large scale exploration, development and
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utilization of minerals, petroleum and other mineral oils.
Second Issue: RP Government-WMCP FTAA is a Service Contract
The FTAA between he WMCP and the Philippine government is
likewise unconstitutional since the agreement itself is a service
contract.
Section 1.3 of the FTAA grants WMCP a fully foreign owned
corporation, the exclusive right to explore, exploit, utilize and dispose
of all minerals and by-products that may be produced from the
contract area. Section 1.2 of the same agreement provides that EMCP
shall provide all financing, technology, management, and personnel
necessary for the Mining Operations.
These contractual stipulations and related provisions in the FTAA
taken together, grant WMCP beneficial ownership over natural
resources that properly belong to the State and are intended for the
benefit of its citizens. These stipulations are abhorrent to the 1987
Constitution. They are precisely the vices that the fundamental law
seeks to avoid, the evils that it aims to suppress. Consequently, the
contract from which they spring must be struck down.
La Bugal-B’laan Tribal Association, Inc. Vs Ramos
Natural Resources and Environmental Laws
G.R. No. 127882; January 27, 2004
FACTS:
This petition for prohibition and mandamus challenges the
constitutionality of Republic Act No. 7942 (The Philippine Mining Act
of 1995), its implementing rules and regulations and the Financial and
Technical Assistance Agreement (FTAA) dated March 30, 1995 by the
government with Western Mining Corporation(Philippines) Inc.
(WMCP).
Accordingly, the FTAA violated the 1987 Constitution in that it is a
service contract and is 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.
ISSUE:
What is the proper interpretation of the phrase “Agreements
involving Either Technical or Financial Assistance” contained in
paragraph 4, Section 2, Article XII of the Constitution.
HELD:
The Supreme Court upheld 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.
Full control is not anathematic to day-to-day management by the
contractor, provided that the State retains the power to direct overall
strategy; and to set aside, reverse or modify plans and actions of the
contractor. The idea of full control is similar to that which is exercised
by the board of directors of a private corporation, the performance of
managerial, operational, financial, marketing and other functions may
be delegated to subordinate officers or given to contractual entities,
but the board retains full residual control of the business.
LEPANTO CONSOLIDATED MINING COMPANY v. WMC RESOURCES
INTERNATIONAL PTY. LTD. and WMC (PHILIPPINES), INC.
412 SCRA 101 (2003), THIRD DIVISION
COMPILED BY PRAISAH MARJOREY F. PICOT 2

In a contract denominated as “Tampakan Option Agreement”,
respondent WMC Resources International Pty. Ltd. (WMC), through
its local subsidiary Western Mining Corporation (Philippines), Inc.
(WMCP), acquired the mining claims in Tampakan, South Cotabato of
the Tampakan Companies. The “Tampakan Option Agreement” was
amended by subsequent agreements under which the Tampakan
Companies were given preferential option to acquire the shares of
WMC in WMCP and Hillcrest Inc. in the event WMC decided to sell
them. WMC, by a Sale and Purchase Agreement, sold to
Lepanto Consolidated Mining Company (Lepanto) its shares of stock.
As the Tampakan Companies later availed of their preferential right
under the “Tampakan Option Agreement,” a Sale and
Purchase Agreement was concluded between WMC and the
Tampakan Companies over the same shares of stock priorly
purchased by Lepanto.
The Tampakan Companies notified the Director of the Mines and
Geosciences Bureau (MGB) of the DENR of the exercise of their
preemptive right to buy WMC‘s equity in WMCP and Hillcrest, Inc.
Lepanto wrote the DENR Secretary about the invalidity of said
agreement and reiterated its request for the approval of its
acquisition of the disputed shares.
Lepanto subsequently filed before the Regional Trial Court (RTC) of
Makati a complaint against WMC, WMCP, Tampakan Companies.
WMC et al. filed before the RTC a Joint Motion to Dismiss on the
ground of forum shopping. The RTC denied WCM et al.‘s Motion to
Dismiss. On appeal, the CA granted the petition of respondents ruling
that Lepanto is guilty of forum shopping. Petitioners filed a motion for
reconsideration with the CA. The CA denied said motion.
ISSUE:
Whether or not Lepanto is guilty of forum shopping
HELD:
It is clear from the proceedings before the DENR, specifically before
the MGB, that the issue of which –– between petitioner and
respondent Tampakan Companies –– possesses the better right to
acquire the mining rights, claims and interests held by WMC through
its local subsidiary WMCP, especially with respect to the 1995 FTAA,
had been brought to the fore. The MGB cannot just assess the
qualifications of petitioner and of the Tampakan Companies as
potential transferee or assignee of the rights and obligations of
WMCP under the FTAA without also resolving the issue of which has
priority of right to become one.
True, the questioned agreements of sale between Lepanto and WMC
on one hand and between WMC and the Tampakan Companies on the
other pertain to transfer of shares of stock from one entity to another.
But said shares of stock represent ownership of mining rights or
interest in mining agreements. Hence, the power of the MGB to rule
on the validity of the questioned agreements of sale, which was raised
by Lepanti before the DENR, is inextricably linked to the very nature
of such agreements over which the MGB has jurisdiction under the
law. Unavoidably, there is identity of reliefs that Lepanto seeks from
both the MGB and the RTC.
Forum shopping exists when both actions involve the same
transactions, same essential facts and circumstances and raise
identical causes of actions, subject matter, and issues. Such elements
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are evidently present in both the proceedings before the MGB and
before the trial court. The case instituted with the RTC was
thus correctly ordered dismissed by the appellate court on the
ground of forum shopping. Besides, not only did Lepanto commit
forum shopping but it also failed to exhaust administrative remedies
by opting to go ahead in seeking reliefs from the court even while
those same reliefs were appropriately awaiting resolution by the
MGB.
BENGUET CORPORATION vs. DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES
G.R. No. 163101
Facts:
On June 1, 1987, Benguet and J.G. Realty entered into a
RAWOP, wherein J.G. Realty was acknowledged as the owner of four
mining claims respectively named as Bonito-I, Bonito-II, Bonito-III, and
Bonito-IV, with a total area of 288.8656 hectares, situated in Barangay
Luklukam, Sitio Barging Bayan, Municipality of Jose Panganiban,
Camarines Norte. The parties also executed a Supplemental
Agreement dated June 1, 1987. The mining claims were covered by
MPSA Application No. APSA-V-0009 jointly filed by J.G. Realty as claim
owner and Benguet as operator.
Thus, on August 9, 1989, the Executive Vice-President of
Benguet, Antonio N. Tachuling, issued a letter informing J.G. Realty of
its intention to develop the mining claims. However, on February 9,
1999, J.G. Realty, through its President, Johnny L. Tan, then sent a
letter to the President of Benguet informing the latter that it was
terminating the RAWOP.
In response, Benguet’s Manager for Legal Services,
Reynaldo P. Mendoza, wrote J.G. Realty a letter dated March 8, 1999,
therein alleging that Benguet complied with its obligations under the
RAWOP by investing PhP 42.4 million to rehabilitate the mines, and
that the commercial operation was hampered by the non-issuance of
a Mines Temporary Permit by the Mines and Geosciences Bureau
(MGB) which must be considered as force majeure, entitling Benguet
to an extension of time to prosecute such permit. On June 7, 2000,
J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of
the RAWOP with the Legaspi City POA, Region V, docketed as DENR
Case No. 2000-01 and entitled J.G. Realty v. Benguet.
On March 19, 2001, the POA issued a Decision, dwelling
upon the issues of (1) whether the arbitrators had jurisdiction over
the case; and (2) whether Benguet violated the RAWOP justifying the
unilateral cancellation of the RAWOP by J.G. Realty. The dispositive
portion stated:
WHEREFORE, premises considered, the
June 01, 1987 [RAWOP] and its Supplemental
Agreement is hereby declared cancelled and
without effect. BENGUET is hereby excluded from
the joint MPSA Application over the mineral
claims denominated as "BONITO-I", "BONITO-II",
"BONITO-III" and "BONITO-IV".
SO ORDERED.
COMPILED BY PRAISAH MARJOREY F. PICOT 3

Therefrom, Benguet filed a Notice of Appeal with the MAB
on April 23, 2001, docketed as Mines Administrative Case No. R-M-
2000-01.
Issues:
1. Whether the case should have first been brought to
voluntary arbitration before the POA.
2. Whether or not the cancellation of the RAWOP was
supported by evidence
3. Whether or not there is no unjust enrichment in the
instant case
Ruling:
On the issue of whether POA should have referred the case
to voluntary arbitration, we find that, indeed, POA has no jurisdiction
over the dispute which is governed by RA 876, the arbitration law.
Secs. 11.01 and 11.02 of the RAWOP pertinently provide:
11.01 Arbitration
Any disputes, differences or disagreements between BENGUET and
the OWNER with reference to anything whatsoever pertaining to this
Agreement that cannot be amicably settled by them shall not be cause
of any action of any kind whatsoever in any court or administrative
agency but shall, upon notice of one party to the other, be referred to
a Board of Arbitrators consisting of three (3) members, one to be
selected by BENGUET, another to be selected by the OWNER and the
third to be selected by the aforementioned two arbitrators so
appointed.
xxxx
11.02 Court Action
No action shall be instituted in court as to any matter in dispute as
hereinabove stated, except to enforce the decision of the majority of
the Arbitrators
A contractual stipulation that requires prior resort to voluntary
arbitration before the parties can go directly to court is not illegal and
is in fact promoted by the State.
To reiterate, availment of voluntary arbitration before resort is made
to the courts or quasi-judicial agencies of the government is a valid
contractual stipulation that must be adhered to by the parties.
In other words, in the event a case that should properly be the subject
of voluntary arbitration is erroneously filed with the courts or quasi-
judicial agencies, on motion of the defendant, the court or quasi-
judicial agency shall determine whether such contractual provision for
arbitration is sufficient and effective. If in affirmative, the court or
quasi-judicial agency shall then order the enforcement of said
provision.
HOWEVER, ESTOPPEL APPLIES. The Court ruled that the
jurisdiction of POA and that of MAB can no longer be questioned by
Benguet at this late hour. What Benguet should have done was to
immediately challenge the POA's jurisdiction by a special civil action
for certiorari when POA ruled that it has jurisdiction over the dispute.
To redo the proceedings fully participated in by the parties after the
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lapse of seven years from date of institution of the original action with
the POA would be anathema to the speedy and efficient
administration of justice.
On the issue regarding the cancellation of the RAWOP by
the POA Benguet was remiss in prosecuting the MPSA application and
clearly failed to comply with its obligation in the RAWOP. Based on
the foregoing discussion, the cancellation of the RAWOP was based
on valid grounds and is, therefore, justified. The necessary implication
of the cancellation is the cessation of Benguet’s right to prosecute
MPSA Application No. APSA-V-0009 and to further develop such
mining claims.
There is no unjust enrichment in the instant case. There is
no unjust enrichment when the person who will benefit has a valid
claim to such benefit.
The principle of unjust enrichment under Article 22 requires two
conditions: (1) that a person is benefited without a valid basis or
justification, and
(2) that such benefit is derived at another's expense or damage.
Clearly, there is no unjust enrichment in the instant case as the
cancellation of the RAWOP, which left Benguet without any legal right
to participate in further developing the mining claims, was brought
about by its violation of the RAWOP. Hence, Benguet has no one to
blame but itself for its predicament.
G.R. No. 152644 February 10, 2006
JOHN ERIC LONEY, STEVEN PAUL REID and PEDRO B.
HERNANDEZ, Petitioners,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Decision2 dated 5 November 2001
and the Resolution dated 14 March 2002 of the Court of Appeals. The
5 November 2001 Decision affirmed the ruling of the Regional Trial
Court, Boac, Marinduque, Branch 94, in a suit to quash Informations
filed against petitioners John Eric Loney, Steven Paul Reid, and Pedro
B. Hernandez ("petitioners"). The 14 March 2002 Resolution denied
petitioners’ motion for reconsideration.
The Facts
Petitioners John Eric Loney, Steven Paul Reid, and Pedro B. Hernandez
are the President and Chief Executive Officer, Senior Manager, and
Resident Manager for Mining Operations, respectively, of Marcopper
Mining Corporation ("Marcopper"), a corporation engaged in mining
in the province of Marinduque.
Marcopper had been storing tailings3 from its operations in a pit in
Mt. Tapian, Marinduque. At the base of the pit ran a drainage tunnel
COMPILED BY PRAISAH MARJOREY F. PICOT 4

leading to the Boac and Makalupnit rivers. It appears that Marcopper
had placed a concrete plug at the tunnel’s end. On 24 March 1994,
tailings gushed out of or near the tunnel’s end. In a few days, the Mt.
Tapian pit had discharged millions of tons of tailings into the Boac and
Makalupnit rivers.
In August 1996, the Department of Justice separately charged
petitioners in the Municipal Trial Court of Boac, Marinduque ("MTC")
with violation of Article 91(B),4 sub-paragraphs 5 and 6 of Presidential
Decree No. 1067 or the Water Code of the Philippines ("PD
1067"),5 Section 86 of Presidential Decree No. 984 or the National
Pollution Control Decree of 1976 ("PD 984"),7 Section 1088 of Republic
Act No. 7942 or the Philippine Mining Act of 1995 ("RA 7942"), 9 and
Article 36510 of the Revised Penal Code ("RPC") for Reckless
Imprudence Resulting in Damage to Property.11
Petitioners moved to quash the Informations on the following
grounds: (1) the Informations were "duplicitous" as the Department
of Justice charged more than one offense for a single act; (2)
petitioners John Eric Loney and Steven Paul Reid were not yet officers
of Marcopper when the incident subject of the Informations took
place; and (3) the Informations contain allegations which constitute
legal excuse or justification.
The Ruling of the MTC
In its Joint Order of 16 January 1997 ("Joint Order"), the MTC12 initially
deferred ruling on petitioners’ motion for lack of "indubitable ground
for the quashing of the [I]nformations x x x." The MTC scheduled
petitioners’ arraignment in February 1997. However, on petitioners’
motion, the MTC issued a Consolidated Order on 28 April 1997
("Consolidated Order"), granting partial reconsideration to its Joint
Order and quashing the Informations for violation of PD 1067 and PD
984. The MTC maintained the Informations for violation of RA 7942
and Article 365 of the RPC. The MTC held:
[T]he 12 Informations have common allegations of pollutants pointing
to "mine tailings" which were precipitately discharged into the
Makulapnit and Boac Rivers due to breach caused on the Tapian
drainage/tunnel due to negligence or failure to institute adequate
measures to prevent pollution and siltation of the Makulapnit and
Boac River systems, the very term and condition required to be
undertaken under the Environmental Compliance Certificate issued
on April 1, 1990.
The allegations in the informations point to same set [sic] of evidence
required to prove the single fact of pollution constituting violation of
the Water Code and the Pollution Law which are the same set of
evidence necessary to prove the same single fact of pollution, in
proving the elements constituting violation of the conditions of ECC,
issued pursuant to the Philippine Mining Act. In both instances, the
terms and conditions of the Environmental Compliance Certificate
were allegedly violated. In other words, the same set of evidence is
required in proving violations of the three (3) special laws.
After carefully analyzing and weighing the contending arguments of
the parties and after taking into consideration the applicable laws and
jurisprudence, the Court is convinced that as far as the three (3)
aforesaid laws are concerned, only the Information for [v]iolation of
Philippine Mining Act should be maintained. In other words, the
Informations for [v]iolation of Anti-Pollution Law (PD 984) and the
Water Code (PD 1067) should be dismissed/quashed because the
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elements constituting the aforesaid violations are absorbed by the
same elements which constitute violation of the Philippine Mining Act
(RA 7942).
Therefore, x x x Criminal Case[] Nos. 96-44, 96-45 and 96-46 for
[v]iolation of the Water Code; and Criminal Case[] Nos. 96-47, 96-48
and 96-49 for [v]iolation of the Anti-Pollution Law x x x are hereby
DISMISSED or QUASHED and Criminal Case[] Nos. 96-50, 96-51 and
96-52 for [v]iolation of the Philippine Mining Act are hereby retained
to be tried on the merits.
The Information for [v]iolation of Article 365 of the Revised Penal
Code should also be maintained and heard in a full blown trial because
the common accusation therein is reckless imprudence resulting to
[sic] damage to property. It is the damage to property which the law
punishes not the negligent act of polluting the water system. The
prosecution for the [v]iolation of Philippine Mining Act is not a bar to
the prosecution for reckless imprudence resulting to [sic] damage to
property.13
The MTC re-scheduled petitioners’ arraignment on the remaining
charges on 28 and 29 May 1997. In the hearing of 28 May 1997,
petitioners manifested that they were willing to be arraigned on the
charge for violation of Article 365 of the RPC but not on the charge for
violation of RA 7942 as they intended to appeal the Consolidated
Order in so far as it maintained the Informations for that offense.
After making of record petitioners’ manifestation, the MTC
proceeded with the arraignment and ordered the entry of "not guilty"
pleas on the charges for violation of RA 7942 and Article 365 of the
RPC.
Petitioners subsequently filed a petition for certiorari with the
Regional Trial Court, Boac, Marinduque, assailing that portion of the
Consolidated Order maintaining the Informations for violation of RA
7942. Petitioners’ petition was raffled to Branch 94. For its part, public
respondent filed an ordinary appeal with the same court assailing that
portion of the Consolidated Order quashing the Informations for
violation of PD 1067 and PD 984. Public respondent’s appeal was
raffled to Branch 38. On public respondent’s motion, Branch 38
ordered public respondent’s appeal consolidated with petitioners’
petition in Branch 94.
The Ruling of Branch 94
In its Resolution14 of 20 March 1998, Branch 94 granted public
respondent’s appeal but denied petitioners’ petition. Branch 94 set
aside the Consolidated Order in so far as it quashed the Informations
for violation of PD 1067 and PD 984 and ordered those charges
reinstated. Branch 94 affirmed the Consolidated Order in all other
respects. Branch 94 held:
After a careful perusal of the laws concerned, this court is of the
opinion that there can be no absorption by one offense of the three
other offenses, as [the] acts penalized by these laws are separate and
distinct from each other. The elements of proving each violation are
not the same with each other. Concededly, the single act of dumping
mine tailings which resulted in the pollution of the Makulapnit and
Boac rivers was the basis for the information[s] filed against the
accused each charging a distinct offense. But it is also a well-
established rule in this jurisdiction that –
COMPILED BY PRAISAH MARJOREY F. PICOT 5

"A single act may offend against two or more entirely distinct and
unrelated provisions of law, and if one provision requires proof of an
additional fact or element which the other does not, an acquittal or
conviction or a dismissal of the information under one does not bar
prosecution under the other. x x x."
xxxx
[T]he different laws involve cannot absorb one another as the
elements of each crime are different from one another. Each of these
laws require [sic] proof of an additional fact or element which the
other does not although they stemmed from a single act.15
Petitioners filed a petition for certiorari with the Court of Appeals
alleging that Branch 94 acted with grave abuse of discretion because
(1) the Informations for violation of PD 1067, PD 984, RA 7942 and the
Article 365 of the RPC "proceed from and are based on a single act or
incident of polluting the Boac and Makalupnit rivers thru dumping of
mine tailings" and (2) the duplicitous nature of the Informations
contravenes the ruling in People v. Relova.16 Petitioners further
contended that since the acts complained of in the charges for
violation of PD 1067, PD 984, and RA 7942 are "the very same acts
complained of" in the charge for violation of Article 365 of the RPC,
the latter absorbs the former. Hence, petitioners should only be
prosecuted for violation of Article 365 of the RPC.17
The Ruling of the Court of Appeals
In its Decision of 5 November 2001, the Court of Appeals affirmed
Branch 94’s ruling. The appellate court held:
The records of the case disclose that petitioners filed a motion to
quash the aforementioned Informations for being duplicitous in
nature. Section 3 of Rule 117 of the Revised Rules of Court specifically
provides the grounds upon which an information may be quashed. x
xx
xxxx
[D]uplicity of Informations is not among those included in x x x
[Section 3, Rule 117].
xxxx
We now go to petitioners’ claim that the resolution of the public
respondent contravened the doctrine laid down in People vs. Relova
for being violative of their right against multiple prosecutions.
In the said case, the Supreme Court found the People’s argument with
respect to the variances in the mens rea of the two offenses being
charged to be correct. The Court, however, decided the case in the
context of the second sentence of Article IV (22) of the 1973
Constitution (now under Section 21 of Article III of the 1987
Constitution), rather than the first sentence of the same section. x x x
xxxx
[T]he doctrine laid down in the Relova case does not squarely apply
to the case at Bench since the Informations filed against the
ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)
petitioners are for violation of four separate and distinct laws which
are national in character.
xxxx
This Court firmly agrees in the public respondent’s understanding that
the laws by which the petitioners have been [charged] could not
possibly absorb one another as the elements of each crime are
different. Each of these laws require [sic] proof of an additional fact
or element which the other does not, although they stemmed from a
single act. x x x
xxxx
[T]his Court finds that there is not even the slightest indicia of
evidence that would give rise to any suspicion that public respondent
acted with grave abuse of discretion amounting to excess or lack of
jurisdiction in reversing the Municipal Trial Court’s quashal of the
Informations against the petitioners for violation of P.D. 1067 and P.D.
984. This Court equally finds no error in the trial court’s denial of the
petitioner’s motion to quash R.A. 7942 and Article 365 of the Revised
Penal Code.18
Petitioners sought reconsideration but the Court of Appeals denied
their motion in its Resolution of 14 March 2002.
Petitioners raise the following alleged errors of the Court of Appeals:
I. THE COURT OF APPEALS COMMITTED A R[E]VERSIBLE
ERROR IN MAINTAINING THE CHARGES FOR VIOLATION OF
THE PHILIPPINE MINING ACT (R.A. 7942) AND REINSTATING
THE CHARGES FOR VIOLATION OF THE WATER CODE (P.D.
1067) AND POLLUTION CONTROL LAW (P.D. 984),
CONSIDERING THAT:
A. THE INFORMATIONS FOR VIOLATION OF THE
WATER CODE (P.D. 1067), THE POLLUTION
CONTROL LAW (P.D. 984), THE PHILIPPINE
MINING ACT (R.A. 7942) AND ARTICLE 365 OF THE
REVISED PENAL CODE PROCEED FROM AND ARE
BASED ON A SINGLE ACT OR INCIDENT OF
POLLUTING THE BOAC AND MAKULAPNIT RIVERS
THRU DUMPING OF MINE TAILINGS.
B. THE PROSECUTION OF PETITIONERS FOR
DUPLICITOUS AND MULTIPLE CHARGES
CONTRAVENES THE DOCTRINE LAID DOWN IN
PEOPLE VS. RELOVA, 148 SCRA 292 [1986 THAT
"AN ACCUSED SHOULD NOT BE HARASSED BY
MULTIPLE PROSECUTIONS FOR OFFENSES WHICH
THOUGH DIFFERENT FROM ONE ANOTHER ARE
NONETHELESS EACH CONSTITUTED BY A
COMMON SET OR OVERLAPPING SETS OF
TECHNICAL ELEMENTS."
II. THE COURT OF APPEALS COMMITTED A REVERSIBLE
ERROR IN RULING THAT THE ELEMENT OF LACK OF
NECESSARY OR ADEQUATE PRECAUTION, NEGLIGENCE,
RECKLESSNESS AND IMPRUDENCE UNDER ARTICLE 356 [sic]
OF THE REVISED PENAL CODE DOES NOT FALL WITHIN THE
AMBIT OF ANY OF THE ELEMENTS OF THE PERTINENT
COMPILED BY PRAISAH MARJOREY F. PICOT 6

PROVISIONS OF THE WATER CODE, POLLUTION CONTROL
LAW AND PHILIPPINE MINING ACT CHARGED AGAINST
PETITIONERS[.]19
The Issues
The petition raises these issues:
(1) Whether all the charges filed against petitioners except
one should be quashed for duplicity of charges and only the
charge for Reckless Imprudence Resulting in Damage to
Property should stand; and
(2) Whether Branch 94’s ruling, as affirmed by the Court of
Appeals, contravenes People v. Relova.
The Ruling of the Court
The petition has no merit.
No Duplicity of Charges in the Present Case
Duplicity of charges simply means a single complaint or information
charges more than one offense, as Section 13 of Rule 11020 of the
1985 Rules of Criminal Procedure clearly states:
Duplicity of offense. – A complaint or information must charge but one
offense, except only in those cases in which existing laws prescribe a
single punishment for various offenses.
In short, there is duplicity (or multiplicity) of charges when a single
Information charges more than one offense.21
Under Section 3(e), Rule 11722 of the 1985 Rules of Criminal
Procedure, duplicity of offenses in a single information is a ground to
quash the Information. The Rules prohibit the filing of such
Information to avoid confusing the accused in preparing his
defense.23 Here, however, the prosecution charged each petitioner
with four offenses, with each Information charging only one offense.
Thus, petitioners erroneously invoke duplicity of charges as a ground
to quash the Informations. On this score alone, the petition deserves
outright denial.
The Filing of Several Charges is Proper
Petitioners contend that they should be charged with one offense
only — Reckless Imprudence Resulting in Damage to Property —
because (1) all the charges filed against them "proceed from and are
based on a single act or incident of polluting the Boac and Makalupnit
rivers thru dumping of mine tailings" and (2) the charge for violation
of Article 365 of the RPC "absorbs" the other charges since the
element of "lack of necessary or adequate protection, negligence,
recklessness and imprudence" is common among them.
The contention has no merit.
As early as the start of the last century, this Court had ruled that a
single act or incident might offend against two or more entirely
distinct and unrelated provisions of law thus justifying the
prosecution of the accused for more than one offense.24 The only limit
ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)
to this rule is the Constitutional prohibition that no person shall be
twice put in jeopardy of punishment for "the same offense."25 In
People v. Doriquez,26 we held that two (or more) offenses arising from
the same act are not "the same" —
x x x if one provision [of law] requires proof of an additional fact or
element which the other does not, x x x. Phrased elsewise, where two
different laws (or articles of the same code) define two crimes, prior
jeopardy as to one of them is no obstacle to a prosecution of the
other, although both offenses arise from the same facts, if each crime
involves some important act which is not an essential element of the
other.27 (Emphasis supplied)
Here, double jeopardy is not at issue because not all of its elements
are present.28 However, for the limited purpose of controverting
petitioners’ claim that they should be charged with one offense only,
we quote with approval Branch 94’s comparative analysis of PD 1067,
PD 984, RA 7942, and Article 365 of the RPC showing that in each of
these laws on which petitioners were charged, there is one essential
element not required of the others, thus:
In P.D. 1067 (Philippines Water Code), the additional element to be
established is the dumping of mine tailings into the Makulapnit River
and the entire Boac River System without prior permit from the
authorities concerned. The gravamen of the offense here is the
absence of the proper permit to dump said mine tailings. This element
is not indispensable in the prosecution for violation of PD 984 (Anti-
Pollution Law), [RA] 7942 (Philippine Mining Act) and Art. 365 of the
Revised Penal Code. One can be validly prosecuted for violating the
Water Code even in the absence of actual pollution, or even [if] it has
complied with the terms of its Environmental Compliance Certificate,
or further, even [if] it did take the necessary precautions to prevent
damage to property.
In P.D. 984 (Anti-Pollution Law), the additional fact that must be
proved is the existence of actual pollution. The gravamen is the
pollution itself. In the absence of any pollution, the accused must be
exonerated under this law although there was unauthorized dumping
of mine tailings or lack of precaution on its part to prevent damage to
property.
In R.A. 7942 (Philippine Mining Act), the additional fact that must be
established is the willful violation and gross neglect on the part of the
accused to abide by the terms and conditions of the Environmental
Compliance Certificate, particularly that the Marcopper should
ensure the containment of run-off and silt materials from reaching the
Mogpog and Boac Rivers. If there was no violation or neglect, and that
the accused satisfactorily proved [sic] that Marcopper had done
everything to ensure containment of the run-off and silt materials,
they will not be liable. It does not follow, however, that they cannot
be prosecuted under the Water Code, Anti-Pollution Law and the
Revised Penal Code because violation of the Environmental
Compliance Certificate is not an essential element of these laws.
On the other hand, the additional element that must be established
in Art. 365 of the Revised Penal Code is the lack of necessary or
adequate precaution, negligence, recklessness and imprudence on
the part of the accused to prevent damage to property. This element
is not required under the previous laws. Unquestionably, it is different
from dumping of mine tailings without permit, or causing pollution to
the Boac river system, much more from violation or neglect to abide
by the terms of the Environmental Compliance Certificate. Moreover,
COMPILED BY PRAISAH MARJOREY F. PICOT 7

the offenses punished by special law are mal[a] prohibita in contrast
with those punished by the Revised Penal Code which are mala in se.29
Consequently, the filing of the multiple charges against petitioners,
although based on the same incident, is consistent with settled
doctrine.
On petitioners’ claim that the charge for violation of Article 365 of the
RPC "absorbs" the charges for violation of PD 1067, PD 984, and RA
7942, suffice it to say that a mala in se felony (such as Reckless
Imprudence Resulting in Damage to Property) cannot absorb mala
prohibita crimes (such as those violating PD 1067, PD 984, and RA
7942). What makes the former a felony is criminal intent (dolo) or
negligence (culpa); what makes the latter crimes are the special laws
enacting them.
People v. Relova not in Point
Petitioners reiterate their contention in the Court of Appeals that
their prosecution contravenes this Court’s ruling in People v. Relova.
In particular, petitioners cite the Court’s statement in Relova that the
law seeks to prevent harassment of the accused by "multiple
prosecutions for offenses which though different from one another
are nonetheless each constituted by a common set or overlapping
sets of technical elements."
This contention is also without merit.1avvphil.net
The issue in Relova is whether the act of the Batangas Acting City
Fiscal in charging one Manuel Opulencia ("Opulencia") with theft of
electric power under the RPC, after the latter had been acquitted of
violating a City Ordinance penalizing the unauthorized installation of
electrical wiring, violated Opulencia’s right against double jeopardy.
We held that it did, not because the offenses punished by those two
laws were the same but because the act giving rise to the charges was
punished by an ordinance and a national statute, thus falling within
the proscription against multiple prosecutions for the same act under
the second sentence in Section 22, Article IV of the 1973 Constitution,
now Section 21, Article III of the 1987 Constitution. We held:
The petitioner concludes that:
"The unauthorized installation punished by the ordinance [of
Batangas City] is not the same as theft of electricity [under the
Revised Penal Code]; that the second offense is not an attempt to
commit the first or a frustration thereof and that the second offense
is not necessarily included in the offense charged in the first
information."
The above argument[ ] made by the petitioner [is] of course correct.
This is clear both from the express terms of the constitutional
provision involved – which reads as follows:
"No person shall be twice put in jeopardy of punishment for the same
offense. If an act is punished by a law and an ordinance, conviction or
acquittal under either shall constitute a bar to another prosecution
for the same act." x x x
and from our case law on this point. The basic difficulty with the
petitioner’s position is that it must be examined, not under the terms
of the first sentence of Article IV (22) of the 1973 Constitution, but
ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)
rather under the second sentence of the same section. The first
sentence of Article IV (22) sets forth the general rule: the
constitutional protection against double jeopardy is not available
where the second prosecution is for an offense that is different from
the offense charged in the first or prior prosecution, although both
the first and second offenses may be based upon the same act or set
of acts. The second sentence of Article IV (22) embodies an exception
to the general proposition: the constitutional protection, against
double jeopardy is available although the prior offense charged under
an ordinance be different from the offense charged subsequently
under a national statute such as the Revised Penal Code, provided
that both offenses spring from the same act or set of acts. x x
x30 (Italicization in the original; boldfacing supplied)
Thus, Relova is no authority for petitioners’ claim against multiple
prosecutions based on a single act not only because the question of
double jeopardy is not at issue here, but also because, as the Court of
Appeals held, petitioners are being prosecuted for an act or incident
punished by four national statutes and not by an ordinance and a
national statute. In short, petitioners, if ever, fall under the first
sentence of Section 21, Article III which prohibits multiple prosecution
for the same offense, and not, as in Relova, for offenses arising from
the same incident.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 5
November 2001 and the Resolution dated 14 March 2002 of the Court
of Appeals.
DIDIPIO EARTH-SAVERS’ MULTI-PURPOSE ASSOCIATION,
INCORPORATED (DESAMA), Petitioners
vs.
ELISEA GOZUN, in her capacity as SECRETARY of the DEPARTMENT
OF ENVIRONMENT and NATURAL RESOURCES (DENR), Respondents
Facts:
This petition for prohibition and mandamus ssails 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.
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.
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.
COMPILED BY PRAISAH MARJOREY F. PICOT 8

Petitioners filed a demand letter addressed to then DENR Secretary
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.
Issue:
Whether or not Republic Act No. 7942 ,CAMC FTAA and its IRR 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.
Ruling:
Before going to the substantive issues, the procedural question raised
by public respondents shall first be dealt with. Public respondents are
of the view that petitioners’ eminent domain claim is not ripe for
adjudication as they fail to allege that CAMC has actually taken their
properties nor do they allege that their property rights have been
endangered or are in danger on account of CAMC’s FTAA. In effect,
public respondents insist that the issue of eminent domain is not a
justiciable controversy which this Court can take cognizance of.
In the instant case, there exists a live controversy involving a clash of
legal rights as Rep. Act No. 7942 has been enacted, DAO 96-40 has
been approved and an FTAAs have been entered into. The FTAA
holders have already been operating in various provinces of the
country. Among them is CAMC which operates in the provinces of
Nueva Vizcaya and Quirino where numerous individuals including the
petitioners are imperiled of being ousted from their landholdings in
view of the CAMC FTAA. In light of this, the court cannot await the
adverse consequences of the law in order to consider the controversy
actual and ripe for judicial intervention. Actual eviction of the land
owners and occupants need not happen for this Court to intervene.
By the mere enactment of the questioned law or the approval of the
challenged act, the dispute is said to have ripened into a judicial
controversy even without any other overt act. Indeed, even a singular
violation of the Constitution and/or the law is enough to awaken
judicial duty
Petitioners embrace various segments of the society. They assert that
they are affected by the mining activities of CAMC. Likewise, they are
under imminent threat of being displaced from their landholdings as
a result of the implementation of the questioned FTAA. They thus
meet the appropriate case requirement as they assert an interest
adverse to that of respondents who, on the other hand, claim the
validity of the assailed statute and the FTAA of CAMC.
Besides, the transcendental importance of the issues raised and the
magnitude of the public interest involved will have a bearing on the
country’s economy which is to a greater extent dependent upon the
mining industry. Also affected by the resolution of this case are the
proprietary rights of numerous residents in the mining contract areas
as well as the social existence of indigenous peoples which are
threatened. Based on these considerations, this Court deems it
proper to take cognizance of the instant petition.
Considering that Section 1 of Presidential Decree No. 512 granted the
qualified mining operators the authority to exercise eminent domain
and since this grant of authority is deemed incorporated in Section 76
of Rep. Act No. 7942, the inescapable conclusion is that the latter
provision is a taking provision.
ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)
While this Court declares that the assailed provision is a taking
provision, this does not mean that it is unconstitutional on the ground
that it allows taking of private property without the determination of
public use and the payment of just compensation.
The taking to be valid must be for public use. Public use as a
requirement for the valid exercise of the power of eminent domain is
now synonymous with public interest, public benefit, public welfare
and public convenience. It includes the broader notion of indirect
public benefit or advantage. Public use as traditionally understood as
"actual use by the public" has already been abandoned.
Mining industry plays a pivotal role in the economic development of
the country and is a vital tool in the government’s thrust of
accelerated recovery. The importance of the mining industry for
national development is expressed in Presidential Decree No. 463:
Irrefragably, mining is an industry which is of public benefit.
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.
The foregoing gamut of requirements, regulations, restrictions and
limitations imposed upon the FTAA contractor by the statute and
regulations easily overturns petitioners’ contention. The setup under
RA 7942 and DAO 96-40 hardly relegates the State to the role of a
"passive regulator" dependent on submitted plans and reports. On
the contrary, the government agencies concerned are empowered to
approve or disapprove -- hence, to influence, direct and change -- the
various work programs and the corresponding minimum expenditure
commitments for each of the exploration, development and
utilization phases of the mining enterprise.
The State may likewise compel the contractor’s compliance with
mandatory requirements on mine safety, health and environmental
protection, and the use of anti-pollution technology and facilities.
Moreover, the contractor is also obligated to assist in the
development of the mining community and to pay royalties to the
indigenous peoples concerned.
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.
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.
COMPILED BY PRAISAH MARJOREY F. PICOT 9
 ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)

La Bugal-B’laan Tribal Association, Inc. vs. Ramos

Ponente: Panganiban Date: 1 December 2004 Nature: Special Civil Action for Prohibition and Mandamus

Parties Involved:

La Bugal-B’laan Tribal Association, Inc., represented by its Chairman F’long Miguel M. Victor Ramos, DENR Sec.; Horacio Ramos, MGB-DENR Dir.; Ruben Torres, Exec. Sec.
Lumayong; et. al. (petitioner WMCP, Inc. (respondent)

Facts and Background of the Case

- 24 January 2007: the Court en banc declared unconstitutional: (a) certain provisions of RA No. 7942 (Mining Law), (b) its Implementing Rules and Regulations DAO No. 96-40, and
(c) the Financial and Technical Assistance Agreement (FTAA) dated March 30, 1995, executed by the government with Western Mining Corporation (Philippines), Inc. (WMCP), mainly
on the finding that FTAAs are service contracts prohibited by the 1987 Constitution
- Respondents filed separate Motions for Reconsideration

Legal Issues

A. W/N case has been rendered moot by the sale of WMC shares in WMCP to Sagittarius Mines, Inc. (a Filipino corporation) and by the subsequent transfer and registration of the FTAA
from WMCP to Sagittarius.
B. W/N it is still proper to resolve constitutionality of the assailed provisions, assuming that the case has been rendered moot.
C. 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.
D. thus, W/N provisions are unconstitutional.

Contentions and Resolutions

<petitioners> Court <respondents>

A. The case has not become moot:
1- 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. Petitioners claim that a Filipino corporation is not
allowed by the Constitution to enter into an FTAA with the
government.
2-it is contrary to the provisions of the WMCP FTA itself, in that the
FTAA was intended to apply solely to a foreign corporation, as can
allegedly be seen from the provisions therein. [Section 12, which
A. 1- Nowhere in the provision is there any express limitation
or restriction insofar as arrangements other than the three
mentioned contractual schemes are concerned. There is no
reason to believe that the framers of the Constitution, a
majority of whom where obviously concerned with furthering
the development and utilization of the country’s natural
resources, could have wanted to restrict Filipino participation
in that area.

COMPILED BY PRAISAH MARJOREY F. PICOT 10


provides for international commercial arbitration under the auspices
of the International Chamber of Commerce, after local remedies are
exhausted—clearly intended to apply only to a foreign contractor]
3-the sale of the shares is suspect and should therefore be the subject
of a case in which it validity may be properly litigated. Section 40 of
RA 7942 allegedly requires the President’s prior approval of a
transfer.
Petitioners also insist that FTAA is void, and hence,
cannot be transferred. 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.
B. 1- What is at issue is not only the validity of the WMCP-
FTAA, but also the constitutionality of RA 7942 and its
Implementing Rules and Regulations
2- 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.
3- the Constitution imposes upon the Supreme Court the duty
to declare invalid any law that offends the Constitution.
C. 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, and such a limitation, they argue,
excludes foreign management and operation of a mining
enterprise.
ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)
2- This provision 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.
3- Section 40 expressly applies to the assignment or transfer
of the FTAA, not to the sale and transfer of shares of stock in
WMCP. When the transfer of the FTAA happens to be a
Filipino corporation, the need for such safeguard is not critical.
Petitioners have assumed as fact that which has yet to be
established. The Decision of the Court declaring the FTAA
void has not yet become final. The FTAA is not per se defective
or unconstitutional. It was questioned only because it had been
issued to an allegedly non-qualified, foreign-owned
corporation.
B. The court concedes that there exists the distinct possibility B. The courts will decide a question—otherwise moot and
that one or more of the future FTAAs will be the subject of yet academic—if it is “capable of repetition yet evading review.”
another suit grounded on constitutional issues. [as of June
2002, some 43 FTAAs had been filed]
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.
The real issue in this case is whether paragraph 4 of Section 2
of Article XII of the Constitution is contravened by RA 7942 and
DAO 96-40. By the mere enactment of the questioned law
or the approval of the challenged action, the dispute is
said to have ripened into a judicial controversy even
without any other overt act.
C. The use of the word “involving” signifies the possibility of C. The FTAA allowed in the Constitution is a comprehensive
the inclusion of other forms of assistance or activities agreement for the foreign-owned corporation’s integrated
having to do with, otherwise related to or compatible with exploration, development and utilization of mineral, petroleum
financial or technical assistance. These agreements with or other mineral oils on a large-scale basis.
foreign corporations are not limited to mere financial or
technical assistance. Otherwise, the language of the drafters
COMPILED BY PRAISAH MARJOREY F. PICOT 11

Court’s previous decision was correct, in that the FTAA
allowed the foreign contractor to have direct and exclusive
management of a mining enterprise, and vests in the foreign
company beneficial ownership of our mineral resources.
The deletion or omission from the 1987 Constitution of the term
“service contracts” found in the 1973 Constitution sufficiently
proves the drafters’ intent to exclude foreigners from the
management of the affected enterprises.
D. RA 7942, as well as its Implementing Rules and
Regulations, makes it possible for FTAA contracts to cede
full control and management of mining enterprises over to
fully foreign-owned corporations, 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 law, the implementing
regulations, and the WMCP FTAA cede “beneficial
ownership” of the mineral resources to the foreign contractor.
Section 3 of RA 7942—which allows a foreign contractor to
apply for and hold an exploration permit—is unconstitutional.
ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)
would have certainly been so unmistakably restrictive and
stringent as to leave no doubt in anyone’s mind about their true
intent. 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.
Such intent cannot be definitively and conclusively established
from the mere failure to carry the same expression or term over
to the new Constitution, absent amore specific, explicit and
unequivocal statement to that effect. Pertinent portions of the
deliberations of the members of the ConCom conclusively
show that they discussed agreements involving either
technical or financial assistance in the same breadth as
service contracts and used the terms interchangeably.
D. The gamut of requirements, regulations, restrictions and
limitations imposed upon the FTAA contractor by the statute
and regulations easily overturns petitioners’ contention. 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.
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 evaluation and analysis of the FTAA provisions
sufficiently overturn petitioners’ litany of objections to
and criticisms of the State’s alleged lack of control. The
provisions vest the State with control and supervision over
practically all aspects of the operations of the FTAA contractor,
including the charging of pre-operating and operating
expenses, and the disposition of mineral products.
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RA 7942 allegedly limits the State’s share in FTAAs with
foreign contractors to just taxes, fees and duties, and depriving
the State of a share in the after-tax income of the enterprise.
The Court does not share the view that in FTAAs with
foreign contractors under RA 7942, the government’s
share is limited to taxes, fees and duties. The inclusion of
the phrase “among other things” in the second paragraph of
Section 81 clearly and unmistakable reveals the legislative
intent to have the State collect more than just the usual taxes,
duties and fees.

BUT, the WMCP FTAA has invalid provisions:

- Section 7.9 of the WMCP FTAA clearly renders illusory the
State’s 60 percent share of WMCP’s revenues in providing
that: should WMCP’s foreign stockholders sell 60 percent or
more of their equity to a Filipino citizen or corporation, the State
loses its right to receive its share in net mining revenues under
Section 7.7, with any offsetting compensation to the State.
- Section 7.8 is likewise invalid, since by allowing the sums
spent by government for the benefit of the contractor to be
deductible from the State’s share in net mining revenues, it
results in benefiting the contractor twice over. This constitute
unjust enrichment on the part of the contractor, at the expense
of the government

Judgment

A. Because of the validity of sale and the transfer, and that the FTAA is not void per se, the case has become moot. However,
B. there is a need to resolve the unconstitutionality of the assailed provisions.
C. The phrase “agreements involving either technical and financial assistance,” as used interchangeably with the term “service contracts” by the drafters of the Constitution and as interpreted
by the court, is not exclusionary and limiting.
D. The assailed provisions are not unconstitutional.

Important Notes

- The FTAA is for the exploration, development and commercial exploitation of mineral deposits in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato, covering an area of
99,837 ha. WMC is wholly owned subsidiary of Western Mining Corporation Holdings Limited, a publicly listed major Australian mining and exploration company.

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 ENVIRONMENTAL LAW DIGESTS (FEB. 20,2019)

- A service contract has been defined as a contractual agreement for engaging in the exploitation and development of petroleum, mineral, energy, land and other natural resources, whereby
a government or an agency thereof, or a private person granted a right or privilege by said government, authorizes the other party—the service contractor—to engage or participate in the
exercise of such right or the enjoyment of the privilege, by providing financial or technical resources, undertaking the exploitation or production of a given resource, or directly managing
the productive enterprise, operations of the exploration and exploitation of the resources, or the disposition or marketing of said resources.

Personal Notes

As to the case being a political question, the EPILOGUE provides:

“The crux of the controversy is the amount of discretion to be accorded the Executive Department, particularly the President of the Republic, in respect of negotiations over the terms of FTAAs,
particularly when it comes to the government share of financial benefits from FTAAs.”

“Verily, under the doctrine of separation of powers and due respect for co-equal and coordinate branches of government, this Court must restrain itself from intruding into policy matters and must
allow the President and Congress maximum discretion in using the resources of our country and in securing the assistance of foreign groups to eradicate the grinding poverty of our people and
answer their cry or viable employment opportunities in this country.”

“Let the development of the mining industry be the responsibility of the political branches of the government. And let not this Court interfere inordinately and unnecessarily.”

- sir pointed out: although the issue is very technical, we must all go back to the basic issue of whether or not Congress, DENR and the President acted within jurisdiction. The issue is always
about jurisdiction.

> and in this case, the court found that they did act within their respective jurisdictions.

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