H3 Property

8/3/2019 H3 Property

1/28

G.R. No. 98332 January 16, 1995

MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner,

vs.

HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment andNatural Resources, and JOEL D. MUYCO, Director of Mines and

Geosciences Bureau, respondents.

ROMERO,J.:

The instant petition seeks a ruling from this Court on the validity of

two Administrative Orders issued by the Secretary of the

Department of Environment and Natural Resources to carry out theprovisions of certain Executive Orders promulgated by the President

in the lawful exercise of legislative powers.

Herein controversy was precipitated by the change introduced by

Article XII, Section 2 of the 1987 Constitution on the system of

exploration, development and utilization of the country's natural

resources. No longer is the utilization of inalienable lands of public

domain through "license, concession or lease" under the 1935 and

1973 Constitutions1

allowed under the 1987 Constitution.

The adoption of the concept of jura regalia2

that all natural

resources are owned by the State embodied in the 1935, 1973 and

1987 Constitutions, as well as the recognition of the importance of

the country's natural resources, not only for national economic

development, but also for its security and national

defense,3

ushered in the adoption of the constitutional policy of

"full control and supervision by the State" in the exploration,

development and utilization of the country's natural resources. The

options open to the State are through direct undertaking or by

entering into co-production, joint venture; or production-sharing

agreements, or by entering into agreement with foreign-owned

corporations for large-scale exploration, development and

utilization.

Article XII, Section 2 of the 1987 Constitution provides:

Sec. 2. All lands of the public domain, waters, minerals, coal,

petroleum, and other mineral oils, all forces of potential energy,

fisheries, forests or timber, wildlife, flora and fauna, and other

natural resources are owned by the State. With the exception of

agricultural lands, all other natural resources shall not be

alienated. The exploration, development, and utilization of natural

resources shall be under the full control and supervision of the State.

The State may directly undertake such activities, or it may enter into

co-production, joint venture, or product-sharing agreements with

Filipino citizens, or corporations or associations at least sixty per

centum of whose capital is owned by such citizens. Such agreements

may be for a period not exceeding twenty-five years, renewable for

not more than twenty-five years, and under such terms and

conditions as may be provided by law. In cases of water rights for

irrigation, water supply, fisheries, or industrial uses other than the

development of water power, beneficial use may be the measure

and limit of the grant.

xxx xxx xxx

The President may enter into agreements with foreign-owned

corporations involving either technical or financial assistance for


2/28

large-scale exploration, development, and utilization of minerals,

petroleum, and other mineral oils according to the general terms

and conditions provided by law, based on real contributions to the

economic growth and general welfare of the country. In such

agreements, the State shall promote the development and use of

local scientific and technical resources.

The President shall notify the Congress of every contract entered

into in accordance with this provision, within thirty days from its

execution. (Emphasis supplied)

Pursuant to the mandate of the above-quoted provision, legislative

acts4

were successively issued by the President in the exercise of

her legislative

power. 5

To implement said legislative acts, the Secretary of the Department

of Environment and Natural Resources (DENR) in turn promulgated

Administrative Order Nos. 57 and 82, the validity and

constitutionality of which are being challenged in this petition.

On July 10, 1987, President Corazon C. Aquino, in the exercise of her

then legislative powers under Article II, Section 1 of the Provisional

Constitution and Article XIII, Section 6 of the 1987 Constitution,promulgated Executive Order No. 211 prescribing the interim

procedures in the processing and approval of applications for the

exploration, development and utilization of minerals pursuant to

the 1987 Constitution in order to ensure the continuity of mining

operations and activities and to hasten the development of mineral

resources. The pertinent provisions read as follows:

Sec. 1. Existing mining permits, licenses, leases and other mining

grants issued by the Department of Environment and Natural

Resources and Bureau of Mines and Geo-Sciences, including existing

operating agreements and mining service contracts, shall continue

and remain in full force and effect, subject to the same terms and

conditions as originally granted and/or approved.

Sec. 2. Applications for the exploration, development and utilization

of mineral resources, including renewal applications for approval of

operating agreements and mining service contracts, shall be

accepted and processed and may be approved; concomitantly

thereto, declarations of locations and all other kinds of mining

applications shall be accepted and registered by the Bureau of

Mines and Geo-Sciences.

Sec. 3. The processing, evaluation and approval of all mining

applications, declarations of locations, operating agreements and

service contracts as provided for in Section 2 above, shall be

governed by Presidential Decree No. 463, as amended, other

existing mining laws and their implementing rules and

regulations: Provided, however, that the privileges granted, as well

as the terms and conditions thereof shall be subject to any and all

modifications or alterations which Congress may adopt pursuant to

Section 2, Article XII of the 1987 Constitution.

On July 25, 1987, President Aquino likewise promulgated Executive

Order No. 279 authorizing the DENR Secretary to negotiate and

conclude joint venture, co-production, or production-sharing

agreements for the exploration, development and utilization of

mineral resources, and prescribing the guidelines for such

agreements and those agreements involving technical or financial


3/28

assistance by foreign-owned corporations for large-scale

exploration, development, and utilization of minerals. The pertinent

provisions relevant to this petition are as follows:

Sec. 1. The Secretary of the Department of Environment and NaturalResources (hereinafter referred to as "the Secretary") is hereby

authorized to negotiate and enter into, for and in behalf of the

Government, joint venture, co-production, or production-sharing

agreements for the exploration, development, and utilization of

mineral resources with any Filipino citizens, or corporation or

association at least sixty percent (60%) of whose capital is owned by

Filipino citizens. Such joint venture, co-production, or production-

sharing agreements may be for a period not exceeding twenty-five

years, renewable for not more than twenty-five years, and shallinclude the minimum terms and conditions prescribed in Section 2

hereof. In the execution of a joint venture, co-production or

production agreements, the contracting parties, including the

Government, may consolidate two or more contiguous or

geologically related mining claims or leases and consider them as

one contract area for purposes of determining the subject of the

joint venture, co-production, or production-sharing agreement.

xxx xxx xxx

Sec. 6. The Secretary shall promulgate such supplementary rules

and regulations as may be necessary to effectively implement the

provisions of this Executive Order.

Sec. 7. All provisions of Presidential Decree No. 463, as amended,

other existing mining laws, and their implementing rules and

regulations, or parts thereof, which are not inconsistent with the

provisions of this Executive Order, shall continue in force and effect.

Pursuant to Section 6 of Executive Order No. 279, the DENR

Secretary issued on June 23, 1989 DENR Administrative Order No.57, series of 1989, captioned "Guidelines of Mineral Production

Sharing Agreement under Executive Order No. 279."6

Under the

transitory provision of said DENR Administrative Order No. 57,

embodied in its Article 9, all existing mining leases or agreements

which were granted after the effectivity of the 1987 Constitution

pursuant to Executive Order No. 211, except small scale mining

leases and those pertaining to sand and gravel and quarry resources

covering an area of twenty (20) hectares or less, shall be converted

into production-sharing agreements within one (1) year from theeffectivity of these guidelines.

On November 20, 1980, the Secretary of the DENR Administrative

Order No. 82, series of 1990, laying down the "Procedural

Guidelines on the Award of Mineral Production Sharing Agreement

(MPSA) through Negotiation."7

Section 3 of the aforementioned DENR Administrative Order No. 82

enumerates the persons or entities required to submit Letter of

Intent (LOIs) and Mineral Production Sharing Agreement (MPSAs)within two (2) years from the effectivity of DENR Administrative

Order No. 57 or until July 17, 1991. Failure to do so within the

prescribed period shall cause the abandonment of mining, quarry

and sand and gravel claims. Section 3 of DENR Administrative Order

No. 82 provides:


4/28

Sec. 3. Submission of Letter of Intent (LOIs) and MPSAs). The

following shall submit their LOIs and MPSAs within two (2) years

from the effectivity of DENR A.O. 57 or until July 17, 1991.

i. Declaration of Location (DOL) holders, mining lease applicants,exploration permitees, quarry applicants and other mining

applicants whose mining/quarry applications have not been

perfected prior to the effectivity of DENR Administrative Order No.

57.

ii. All holders of DOL acquired after the effectivity of DENR A.O. No.

57.

iii. Holders of mining leases or similar agreements which were

granted after (the) effectivity of 1987 Constitution.

Failure to submit letters of intent and MPSA applications/proposals

within the prescribed period shall cause the abandonment of

mining, quarry and sand and gravel claims.

The issuance and the impeding implementation by the DENR of

Administrative Order Nos. 57 and 82 after their respective

effectivity dates compelled the Miners Association of the

Philippines, Inc.8

to file the instant petition assailing their validity

and constitutionality before this Court.

In this petition for certiorari, petitioner Miners Association of the

Philippines, Inc. mainly contends that respondent Secretary of DENR

issued both Administrative Order Nos. 57 and 82 in excess of his

rule-making power under Section 6 of Executive Order No. 279. On

the assumption that the questioned administrative orders do not

conform with Executive Order Nos. 211 and 279, petitioner

contends that both orders violate the

non-impairment of contract provision under Article III, Section 10 of

the 1987 Constitution on the ground that Administrative Order No.

57 unduly pre-terminates existing mining agreements and

automatically converts them into production-sharing agreementswithin one (1) year from its effectivity date. On the other hand,

Administrative Order No. 82 declares that failure to submit Letters

of Intent and Mineral Production-Sharing Agreements within two

(2) years from the date of effectivity of said guideline or on July 17,

1991 shall cause the abandonment of their mining, quarry and sand

gravel permits.

On July 2, 1991, the Court, acting on petitioner's urgent ex-

parte petition for issuance of a restraining order/preliminaryinjunction, issued a Temporary Restraining Order, upon posting of a

P500,000.00 bond, enjoining the enforcement and implementation

of DENR Administrative Order Nos. 57 and 82, as amended, Series of

1989 and 1990, respectively.9

On November 13, 1991, Continental Marble Corporation,10

thru its

President, Felipe A. David, sought to intervene11

in this case alleging

that because of the temporary order issued by the Court , the DENR,

Regional Office No. 3 in San Fernando, Pampanga refused to renew

its Mines Temporary Permit after it expired on July 31, 1991.

Claiming that its rights and interests are prejudicially affected by the

implementation of DENR Administrative Order Nos. 57 and 82, it

joined petitioner herein in seeking to annul Administrative Order

Nos. 57 and 82 and prayed that the DENR, Regional Office No. 3 be

ordered to issue a Mines Temporary Permit in its favor to enable it

to operate during the pendency of the suit.


5/28

Public respondents were acquired to comment on the Continental

Marble Corporation's petition for intervention in the resolution of

November 28, 1991.12

Now to the main petition. If its argued that Administrative OrderNos. 57 and 82 have the effect of repealing or abrogating existing

mining laws13

which are not inconsistent with the provisions of

Executive Order No. 279. Invoking Section 7 of said Executive Order

No. 279,14

petitioner maintains that respondent DENR Secretary

cannot provide guidelines such as Administrative Order Nos. 57 and

82 which are inconsistent with the provisions of Executive Order No.

279 because both Executive Order Nos. 211 and 279 merely

reiterated the acceptance and registration of declarations of

location and all other kinds of mining applications by the Bureau ofMines and Geo-Sciences under the provisions of Presidential Decree

No. 463, as amended, until Congress opts to modify or alter the

same.

In other words, petitioner would have us rule that DENR

Administrative Order Nos. 57 and 82 issued by the DENR Secretary

in the exercise of his rule-making power are tainted with invalidity

inasmuch as both contravene or subvert the provisions of Executive

Order Nos. 211 and 279 or embrace matters not covered, nor

intended to be covered, by the aforesaid laws.

We disagree.

We reiterate the principle that the power of administrative officials

to promulgate rules and regulations in the implementation of a

statute is necessarily limited only to carrying into effect what is

provided in the legislative enactment. The principle was enunciated

as early as 1908 in the case ofUnited States v. Barrias.15

The scope

of the exercise of such rule-making power was clearly expressed in

the case ofUnited States v. Tupasi Molina,16

decided in 1914, thus:

"Of course, the regulations adopted under legislative authority by a

particular department must be in harmony with the provisions ofthe law, and for the sole purpose of carrying into effect its general

provisions. By such regulations, of course, the law itself can not be

extended. So long, however, as the regulations relate solely to

carrying into effect its general provisions. By such regulations, of

course, the law itself can not be extended. So long, however, as the

regulations relate solely to carrying into effect the provision of the

law, they are valid."

Recently, the case ofPeople v. Maceren

17

gave a brief delienationof the scope of said power of administrative officials:

Administrative regulations adopted under legislative authority by a

particular department must be in harmony with the provisions of

the law, and should be for the sole purpose of carrying into effect its

general provision. By such regulations, of course, the law itself

cannot be extended (U.S. v. Tupasi Molina, supra). An

administrative agency cannot amend an act of Congress (Santos vs.

Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the Board of

Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs.

General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660;

Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350).

The rule-making power must be confined to details for regulating

the mode or proceeding to carry into effect the law as it has been

enacted. The power cannot be extended to amending or expanding

the statutory requirements or to embrace matters not covered by


6/28

the statute. Rules that subvert the statute cannot be sanctioned

(University of Santo Tomas v. Board of Tax Appeals, 93 Phil. 376,

382, citing 12 C.J. 845-46. As to invalid regulations, see Collector of

Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v. Meer, 78

Phil. 655, 676; Del Mar v. Phil. Veterans Administration, L-27299,June 27, 1973, 51 SCRA 340, 349).

xxx xxx xxx

. . . The rule or regulation should be within the scope of the

statutory authority granted by the legislature to the administrative

agency (Davis, Administrative Law, p. 194, 197, cited in Victorias

Milling Co., Inc. v. Social Security Commission, 114 Phil. 555, 558).

In case of discrepancy between the basic law and a rule orregulation issued to implement said law, the basic prevails because

said rule or regulations cannot go beyond the terms and provisions

of the basic law (People v. Lim, 108 Phil. 1091).

Considering that administrative rules draw life from the statute

which they seek to implement, it is obvious that the spring cannot

rise higher than its source. We now examine petitioner's argument

that DENR Administrative Order Nos. 57 and 82 contravene

Executive Order Nos. 211 and 279 as both operate to repeal or

abrogate Presidential Decree No. 463, as amended, and other

mining laws allegedly acknowledged as the principal law under

Executive Order Nos. 211 and 279.

Petitioner's insistence on the application of Presidential Decree No.

463, as amended, as the governing law on the acceptance and

approval of declarations of location and all other kinds of

applications for the exploration, development, and utilization of

mineral resources pursuant to Executive Order No. 211, is

erroneous. Presidential Decree No. 463, as amended, pertains to

the old system of exploration, development and utilization of

natural resources through "license, concession or lease" which,

however, has been disallowed by Article XII, Section 2 of the 1987Constitution. By virtue of the said constitutional mandate and its

implementing law, Executive Order No. 279 which superseded

Executive Order No. 211, the provisions dealing on "license,

concession or lease" of mineral resources under Presidential Decree

No. 463, as amended, and other existing mining laws are deemed

repealed and, therefore, ceased to operate as the governing law. In

other words, in all other areas of administration and management

of mineral lands, the provisions of Presidential Decree No. 463, as

amended, and other existing mining laws, still govern. Section 7 ofExecutive Order No. 279 provides, thus:

Sec. 7. All provisions of Presidential Decree No. 463, as amended,

other existing mining laws, and their implementing rules and

regulations, or parts thereof, which are not inconsistent with the

provisions of this Executive Order, shall continue in force and effect.

Specifically, the provisions of Presidential Decree No. 463, as

amended, on lease of mining claims under Chapter VIII, quarry

permits on privately-owned lands of quarry license on public lands

under Chapter XIII and other related provisions on lease, license and

permits are not only inconsistent with the raison d'etre for which

Executive Order No. 279 was passed, but contravene the express

mandate of Article XII, Section 2 of the 1987 Constitution. It force

and effectivity is thus foreclosed.


7/28

Upon the effectivity of the 1987 Constitution on February 2,

1987,18

the State assumed a more dynamic role in the exploration,

development and utilization of the natural resources of the country.

Article XII, Section 2 of the said Charter explicitly ordains that the

exploration, development and utilization of natural resources shallbe under the full control and supervision of the State. Consonant

therewith, the exploration, development and utilization of natural

resources may be undertaken by means of direct act of the State, or

it may opt to enter into co-production, joint venture, or production-

sharing agreements, or it may enter into agreements with foreign-

owned corporations involving either technical or financial assistance

for large-scale exploration, development, and utilization of

minerals, petroleum, and other mineral oils according to the general

terms and conditions provided by law, based on real contributionsto the economic growth and general welfare of the country.

Given these considerations, there is no clear showing that

respondent DENR Secretary has transcended the bounds

demarcated by Executive Order No. 279 for the exercise of his rule-

making power tantamount to a grave abuse of discretion. Section 6

of Executive Order No. 279 specifically authorizes said official to

promulgate such supplementary rules and regulations as may be

necessary to effectively implement the provisions thereof.Moreover, the subject sought to be governed and regulated by the

questioned orders is germane to the objects and purposes of

Executive Order No. 279 specifically issued to carry out the mandate

of Article XII, Section 2 of the 1987 Constitution.

Petitioner likewise maintains that Administrative Order No. 57, in

relation to Administrative Order No. 82, impairs vested rights as to

violate the non-impairment of contract doctrine guaranteed under

Article III, Section 10 of the 1987 Constitution because Article 9 of

Administrative Order No. 57 unduly pre-terminates and

automatically converts mining leases and other mining agreements

into production-sharing agreements within one (1) year from

effectivity of said guideline, while Section 3 of Administrative OrderNo. 82, declares that failure to submit Letters of Intent (LOIs) and

MPSAs within two (2) years from the effectivity of Administrative

Order No. 57 or until July 17, 1991 shall cause the abandonment of

mining, quarry, and sand gravel permits.

In Support of the above contention, it is argued by petitioner that

Executive Order No. 279 does not contemplate automatic

conversion of mining lease agreements into mining production-

sharing agreement as provided under Article 9, AdministrativeOrder No. 57 and/or the consequent abandonment of mining claims

for failure to submit LOIs and MPSAs under Section 3,

Administrative Order No. 82 because Section 1 of said Executive

Order No. 279 empowers the DENR Secretary to negotiate and

enter into voluntary agreements which must set forth the minimum

terms and conditions provided under Section 2 thereof. Moreover,

petitioner contends that the power to regulate and enter into

mining agreements does not include the power to preterminate

existing mining lease agreements.

To begin with, we dispel the impression created by petitioner's

argument that the questioned administrative orders unduly

preterminate existing mining leases in general. A distinction which

spells a real difference must be drawn. Article XII, Section 2 of the

1987 Constitution does not apply retroactively to "license,

concession or lease" granted by the government under the 1973

Constitution or before the effectivity of the 1987 Constitution on


8/28

February 2, 1987. The intent to apply prospectively said

constitutional provision was stressed during the deliberations in the

Constitutional Commission,19

thus:

MR. DAVIDE: Under the proposal, I notice that except for the[inalienable] lands of the public domain, all other natural resources

cannot be alienated and in respect to [alienable] lands of the public

domain, private corporations with the required ownership by

Filipino citizens can only lease the same. Necessarily, insofar as

other natural resources are concerned, it would only be the State

which can exploit, develop, explore and utilize the same. However,

the State may enter into a joint venture, co-production or

production-sharing. Is that not correct?

MR. VILLEGAS: Yes.

MR. DAVIDE: Consequently, henceforth upon, the approval of this

Constitution, no timber or forest concession, permits or

authorization can be exclusively granted to any citizen of the

Philippines nor to any corporation qualified to acquire lands of the

public domain?

MR. VILLEGAS: Would Commissioner Monsod like to comment on

that? I think his answer is "yes."

MR. DAVIDE: So, what will happen now license or concessions

earlier granted by the Philippine government to private

corporations or to Filipino citizens? Would they be deemed

repealed?

MR. VILLEGAS: This is not applied retroactively. They will be

respected.

MR. DAVIDE: In effect, they will be deemed repealed?

MR. VILLEGAS: No. (Emphasis supplied)

During the transition period or after the effectivity of the 1987

Constitution on February 2, 1987 until the first Congress under said

Constitution was convened on July 27, 1987, two (2) successive

laws, Executive Order Nos. 211 and 279, were promulgated to

govern the processing and approval of applications for the

exploration, development and utilization of minerals. To carry out

the purposes of said laws, the questioned Administrative Order Nos.

57 and 82, now being assailed, were issued by the DENR Secretary.

Article 9 of Administrative Order No. 57 provides:

ARTICLE 9

TRANSITORY PROVISION

9.1. All existing mining leases or agreements which were granted

after the effectivity of the 1987 Constitution pursuant to Executive

Order No. 211, except small scale mining leases and those

pertaining to sand and gravel and quarry resources covering an area

of twenty (20) hectares or less shall be subject to these guidelines.

All such leases or agreements shall be converted into productionsharing agreement within one (1) year from the effectivity of these

guidelines. However, any minimum firm which has established

mining rights under Presidential Decree 463 or other laws may avail

of the provisions of EO 279 by following the procedures set down in

this document.


9/28

It is clear from the aforestated provision that Administrative Order

No. 57 applies only to all existing mining leases or agreements

which were granted after the effectivity of the 1987 Constitution

pursuant to Executive Order No. 211. It bears mention that under

the text of Executive Order No. 211, there is a reservation clausewhich provides that the privileges as well as the terms and

conditions of all existing mining leases or agreements granted after

the effectivity of the 1987 Constitution pursuant to Executive Order

No. 211, shall be subject to any and all modifications or alterations

which Congress may adopt pursuant to Article XII, Section 2 of the

1987 Constitution. Hence, the strictures of the

non-impairment of contract clause under Article III, Section 10 of

the 1987 Constitution20

do not apply to the aforesaid leases or

agreements granted after the effectivity of the 1987 Constitution,pursuant to Executive Order No. 211. They can be amended,

modified or altered by a statute passed by Congress to achieve the

purposes of Article XII, Section 2 of the 1987 Constitution.

Clearly, Executive Order No. 279 issued on July 25, 1987 by

President Corazon C. Aquino in the exercise of her legislative power

has the force and effect of a statute or law passed by Congress. As

such, it validly modified or altered the privileges granted, as well as

the terms and conditions of mining leases and agreements underExecutive Order No. 211 after the effectivity of the 1987

Constitution by authorizing the DENR Secretary to negotiate and

conclude joint venture, co-production, or production-sharing

agreements for the exploration, development and utilization of

mineral resources and prescribing the guidelines for such

agreements and those agreements involving technical or financial

assistance by foreign-owned corporations for large-scale

exploration, development, and utilization of minerals.

Well -settled is the rule, however, that regardless of the reservation

clause, mining leases or agreements granted by the State, such asthose granted pursuant to Executive Order No. 211 referred to this

petition, are subject to alterations through a reasonable exercise of

the police power of the State. In the 1950 case ofOngsiako v.

Gamboa,21

where the constitutionality of Republic Act No. 34

changing the 50-50 sharecropping system in existing agricultural

tenancy contracts to 55-45 in favor of tenants was challenged, the

Court, upholding the constitutionality of the law, emphasized the

superiority of the police power of the State over the sanctity of this

contract:

The prohibition contained in constitutional provisions against:

impairing the obligation of contracts is not an absolute one and it is

not to be read with literal exactness like a mathematical formula.

Such provisions are restricted to contracts which respect property,

or some object or value, and confer rights which may be asserted in

a court of justice, and have no application to statute relating to

public subjects within the domain of the general legislative powers

of the State, and involving the public rights and public welfare of the

entire community affected by it. They do not prevent a proper

exercise by the State of its police powers. By enacting regulations

reasonably necessary to secure the health, safety, morals, comfort,

or general welfare of the community, even the contracts may

thereby be affected; for such matter can not be placed by contract

beyond the power of the State shall regulates and control them.22


10/28

In Ramas v. CAR and Ramos23

where the constitutionality of Section

14 of Republic Act No. 1199 authorizing the tenants to charge from

share to leasehold tenancy was challenged on the ground that it

impairs the obligation of contracts, the Court ruled that obligations

of contracts must yield to a proper exercise of the police powerwhen such power is exercised to preserve the security of the State

and the means adopted are reasonably adapted to the

accomplishment of that end and are, therefore, not arbitrary or

oppressive.

The economic policy on the exploration, development and

utilization of the country's natural resources under Article XII,

Section 2 of the 1987 Constitution could not be any clearer. As

enunciated in Article XII, Section 1 of the 1987 Constitution, theexploration, development and utilization of natural resources under

the new system mandated in Section 2, is geared towards a more

equitable distribution of opportunities, income, and wealth; a

sustained increase in the amount of goods and services produced by

the nation for the benefit of the people; and an expanding

productivity as the key to raising the quality of life for all, especially

the underprivileged.

The exploration, development and utilization of the country's

natural resources are matters vital to the public interest and the

general welfare of the people. The recognition of the importance of

the country's natural resources was expressed as early as the 1984

Constitutional Convention. In connection therewith, the 1986 U.P.

Constitution Project observed: "The 1984 Constitutional Convention

recognized the importance of our natural resources not only for its

security and national defense. Our natural resources which

constitute the exclusive heritage of the Filipino nation, should be

preserved for those under the sovereign authority of that nation

and for their prosperity. This will ensure the country's survival as a

viable and sovereign republic."

Accordingly, the State, in the exercise of its police power in thisregard, may not be precluded by the constitutional restriction on

non-impairment of contract from altering, modifying and amending

the mining leases or agreements granted under Presidential Decree

No. 463, as amended, pursuant to Executive Order No. 211. Police

Power, being co-extensive with the necessities of the case and the

demands of public interest; extends to all the vital public needs. The

passage of Executive Order No. 279 which superseded Executive

Order No. 211 provided legal basis for the DENR Secretary to carry

into effect the mandate of Article XII, Section 2 of the 1987Constitution.

Nowhere in Administrative Order No. 57 is there any provision

which would lead us to conclude that the questioned order

authorizes the automatic conversion of mining leases and

agreements granted after the effectivity of the 1987 Constitution,

pursuant to Executive Order No. 211, to production-sharing

agreements. The provision in Article 9 of Administrative Order No.

57 that "all such leases or agreements shall be converted into

production sharing agreements within one (1) year from the

effectivity of these guidelines" could not possibility contemplate a

unilateral declaration on the part of the Government that all

existing mining leases and agreements are automatically converted

into

production-sharing agreements. On the contrary, the use of the

term "production-sharing agreement" if they are so minded.

Negotiation negates compulsion or automatic conversion as


11/28

suggested by petitioner in the instant petition. A mineral

production-sharing agreement (MPSA) requires a meeting of the

minds of the parties after negotiations arrived at in good faith and

in accordance with the procedure laid down in the subsequent

Administrative Order No. 82.

We, therefore, rule that the questioned administrative orders are

reasonably directed to the accomplishment of the purposes of the

law under which they were issued and were intended to secure the

paramount interest of the public, their economic growth and

welfare. The validity and constitutionality of Administrative Order

Nos. 57 and 82 must be sustained, and their force and effect

upheld.

We now, proceed to the petition-in-intervention. Under Section 2,

Rule 12 of the Revised Rules of Court, an intervention in a case is

proper when the intervenor has a "legal interest in the matter in

litigation, or in the success of either of the parties, or an interest

against both, or when he is so situated as to be adversely affected

by a distribution or other disposition of property in the custody of

the court or of an officer thereof. "Continental Marble Corporation

has not sufficiently shown that it falls under any of the categories

mentioned above. The refusal of the DENR, Regional Office No. 3,

San Fernando, Pampanga to renew its Mines Temporary Permit

does not justify such an intervention by Continental Marble

Corporation for the purpose of obtaining a directive from this Court

for the issuance of said permit. Whether or not Continental Marble

matter best addressed to the appropriate government body but

certainly, not through this Court. Intervention is hereby DENIED.

WHEREFORE, the petition is DISMISSED for lack of merit. The

Temporary Restraining Order issued on July 2, 1991 is hereby

LIFTED.

SO ORDERED.

PNOC-ENERGY DEVELOPMENT CORPORATION

(PNOC-EDC),

Petitioner,

- versus -

EMILIANO G. VENERACION, JR.,

Respondent.

G. R. No. 129820

Present:

PANGANIBAN, C.J. ,

Chairman,

YNARES-SANTIAGO

AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ .

Promulgated:

November 30, 2006

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x


12/28

D E C I S I O N

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari, under Rule 45 of the

Rules of Court, seeking to set aside the Order, dated 21 May

1997issued by the Mines Adjudication Board (MAB) of the

Department of Environmental and Natural Resources

(DENR),[1]

declaring that the respondent Emiliano Veneracion has a

preferential right over the contested Block 159.

This case involves the conflicting claims of the petitioner

Philippine National Oil Corporation-Energy Development

Corporation and the respondent over the mining rights over Block

159 of the Malangas Coal Reservation, Alicia, Zamboanga del Sur.

On 31 January 1989, respondent applied with the Mines and Geo-

Sciences Development Services, DENR, Region

IX, Zamboanga City for a Declaration of Location (DOL) over Block

159 of the Malangas Coal Reservation, situated

at Barangays Payongan and Kauswagan,

Alicia, Zamboanga del Sur. On 18 May 1989, the Office of the

Regional Executive Director (RED) of the DENR informed therespondent that his DOL cannot be registered since Block 159 was

part of the Malangas Coal Reservation, as provided under

Proclamation No. 284, issued by the President on 19 July

1938.[2]

With the endorsement of the Office of Energy Affairs (OEA)

and the DENR Secretary, the respondent petitioned the Office of the

President for the withdrawal of Block 159 from the coal reservation

and its conversion into a mineral reservation.[3]

The petitioner applied for a mineral prospecting permit over Block

159 (and Blocks 120 and 160) with the OEA, which the latter

granted on 4 September 1989. TheMalangas Coal Reservation was,

at that time, under the administration of the OEA.[4]

When it had

initially applied for a mineral prospecting permit over lands within

the MalangasCoal Reservation, the OEA advised it to obtain the

permission of the Bureau of Mines and Geo-Sciences (BMGS).[5]

On 18 October 1991, petitioner submitted to the DENR an

application/proposal for a Mineral Production Sharing Agreement

(MPSA) over Blocks 120, 159 and 160 of theMalangas Coal

Reservation.[6]
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn1


13/28

On 21 February 1992, the Officer-In-Charge Regional Technical

Director Dario R. Mioza of the Mines and Geo-Sciences

Developmental Service (MGDS) advised the petitioner to amend its

application for MPSA by excluding Block 159 as the same is covered

by the application of the respondent.[7]

Nevertheless, the petitionerdid not exclude Block 159 from its MPSA. Records also show that it

had not applied for nor was it able to obtain an Exploration Permit

from the BMGS over Block 159.

On 13 April 1992, Presidential Proclamation No. 890 was issued,

which effectively excluded Block 159 from the operation of

Proclamation No. 284, and declared Block No. 159 as government

mineral reservation open for disposition to qualified mining

applicants, pursuant to Executive Order No. 279.[8]

On 26 May 1992, petitioners application for MPSA covering Coal

Block Nos. 120, 159 and 160 was accepted for filing.[9]

Respondent

immediately filed, on 28 May 1992, a protest to the petitioners

inclusion of Block 159 in its application for MPSA before the RED of

the DENR Office in Zamboanga City.[10]

After the parties were heard, the RED, in an Order, dated 12 April

1993, ruled in favor of the respondent and ordered the petitioner to

amend its MPSA by excluding therefrom Block 159.[11]

On 18 May

1993, petitioner filed a Motion for Reconsideration of the Order

dated 12 April 1993,[12]

which the RED denied in an Order dated 5

July 1993.[13]

On 30 July 1993, petitioner filed an appeal with the DENR Secretary

questioning the Orders issued by the RED.[14]

While the case was pending, respondent applied for a MPSA. On 31

July 1992, he paid the processing fee for a MPSA covering Block 159

and was able to comply with all other requirements of the MPSA

application.[15]

On 4 October 1994, the Office of the Secretary dismissed the appeal

on the ground that petitioners right to appeal had already

prescribed.[16]

Section 50 of Presidential Decree No. 463 provides

therefore for a five-day reglementary period from the receipt of the

order or decision of the Director.[17]

Petitioner received its copy of

the assailed Order dated 12 April 1993 on 7 May 1993, but filed its

Motion for Reconsideration only on 18 May 1993, or eleven daysafter its receipt thereof. Thereafter, petitioner received a copy of

the Order dated 5 July 1993 on 16 July 1993, but filed its appeal only

on 30 July 1993 or nine days after the allowable period to appeal.

On 25 October 1994, petitioner, through a letter addressed to the

DENR Secretary, sought the reconsideration of the Decision, dated 4
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn7


14/28

October 1994.[18]

In a Resolution, dated 21 December 1994, the

then DENR Secretary Angel C. Alcala reversed the Decision, dated 4

October 1994, and gave due course to the MPSA of the

petitioner.[19]

On 1 February 1995, respondent filed a Motion for Reconsideration

of the Resolution, dated 21 December 1994.[20]

The now DENR

Secretary Victor O. Ramos issued an Order, dated 5 August 1996,

reversing the Resolution, dated 21 December 1994 and reinstating

the Decision, dated 4 October 1994. It ruled that the Orders issued

by the RED have already become final and executory when the

petitioner failed to file its appeal five days after it had received the

Orders. As a result, the DENR Secretary no longer had the

jurisdiction to issue the assailed Resolution, dated 21 December

1994. It added that after looking into the merits of the case, the

Orders of the RED were in accordance with the evidence on record

and the pertinent laws on the matter.[21]

On 20 August 1996, petitioner filed a Motion for Reconsideration of

the Order, dated 5 August 1996. On 21 May 1997, the MAB

resolved the motion in favor of the respondent and affirmed the

assailed Order, dated 5 August 1996.[22]

It took cognizance of the

appeal filed by petitioner, in accordance with Section 78 of Republic

Act No 7942, otherwise known as The Philippine Mining Act of

1995.[23]

The MAB ruled that the petitioner filed its appeal beyond

the five-day prescriptive period provided under Presidential Decree

No. 463, which was then the governing law on the matter.

The MAB also decreed that the respondent had preferential mining

rights over Block 159. It ruled that the proper procedure with

respect to the mining rights application over Block 159 when it was

still part of the Malangas Coal Reservation required the following:

(1) application for prospecting permit with the OEA or other office

having jurisdiction over said reservation; (2) application for

exploration permit; (3) application for exclusion of the land from

such reservation; (4) Presidential Declaration on exclusion as

recommended by the Secretary; and (5) application for Lease

thereof with priority given to holder of exploration Permit.

The MAB noted that petitioner did not file for an exploration permit

nor applied for the exclusion of Block 159. Moreover, petitioner

filed a MPSA on 18 October 1991, or almost six (6) months prior to

the issuance of Proclamation No. 890 excluding Block 159 from

the Malangas Coal Reservation and allowing its disposition. Thus,

the application for a MPSA over Block 159, while it was still part of a

government reservation other than a mineral reservation, was

erroneous and improper and could not have been legally

accepted. And, since the records show that only one MPSA wasfiled after the issuance of Proclamation 890 that of the

respondents, the preferential right over Block 159 was acquired by

the respondent. The MAB, nevertheless, pointed out that the said

preferential right does not necessarily lead to the granting of the

respondents MPSA, but merely consists of the right to have his

application evaluated and the prohibition against accepting other
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn18


15/28

mining applications over Block 159 pending the processing of his

MPSA.

Hence, this Petition for Review on Certiorari.

The correct mode of appeal would have been to file a petition for

review under Rule 43, before the Court of Appeals. Petitioners

reliance on Section 79 of the Philippine Mining Act of 1995 is

misplaced.[24]

Republic Act No. 7902 expanded the appellate

jurisdiction of the Court of Appeals to include:

Exclusive appellate jurisdiction over all final judgments, decisions,

resolutions, orders or awards of Regional Trial Courts and quasi-

judicial agencies, instrumentalities, boards or commissions

x x x except those falling within the appellate jurisdiction of the

Supreme Court in accordance with the Constitution, the Labor Code

of the Philippines under Presidential Decree No. 442, as amended,

the provisions of this Act, and of subparagraph (1) of the third

paragraph and subparagraph (4) of the fourth paragraph of Section17 of the Judiciary Act of 1948.

With the enactment of Republic Act No. 7902, this Court issued

Circular No. 1-95 dated 16 May 1995 governing appeals from all

quasi-judicial bodies to the Court of Appeals by petition for review,

regardless of the nature of the question raised. Said circular was

incorporated in Rule 43 of the Rules of Civil Procedure.[25]

In

addition, this Court held in a line of cases that appeals from

judgments and final orders of quasi-judicial bodies are required tobe brought to the Court of Appeals, under the requirements and

conditions set forth in Rule 43 of the Rules of Civil

Procedure.[26]

Nevertheless, this Court has taken into account the

fact that these cases were promulgated after the petitioner filed

this appeal on 4 August 1997, and decided to take cognizance of the

present case.

There are two main issues that need to be resolved in this case: (1)

whether or not the petitioner has already lost its right to appeal

the REDs Order dated 12 April 1993; and (2) whether or not the

petitioner acquired a preferential right on mining rights over Block

159.

This Court finds no merit in this Petition.

Petitioner alleges that Section 61 of Commonwealth Act No.

137[27]

governs the petitioners appeal of the Orders, dated 12 April

1993 and 5 July 1993, and not Section 50 of Presidential Decree No.

463. He further adds that even if Presidential Decree No. 463 was

applicable in this case, his appeal should have been allowed on

grounds of substantial justice.
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn24


16/28

When Presidential Decree No. 463 was enacted in 1974, Section 50

of the law had clearly intended to repeal the corresponding

provision found in Section 61 of Commonwealth Act No. 137, and to

shorten the 30-day period within which to file an appeal from the

Decision of the Director of Mines and Geo-Sciences to five

days. Section 61 of Commonwealth Act No. 137, as amended,

provides that:

SEC. 61. - Conflicts and disputes arising out of mining locations shall

be submitted to the Director of Mines for decision:

Provided, That the decision or order of the Director of Mines maybe appealed to the Secretary of Agriculture and Natural Resources

within thirty days from receipt of such decision or order. In case

any one of the parties should disagree from the decision or order of

the Secretary of Agriculture and Natural Resources, the matter may

be taken to the Court of Appeals or the Supreme Court, as the case

may be, within thirty days from the receipt of such decision or

order, otherwise the said decision or order shall be final and binding

upon the parties concerned. x x x.

Section 50 of Presidential Decree No. 463 reads:

Sec. 50. Appeals. - Any party not satisfied with the decision or order

of the Director, may, within five (5) days from receipt thereof,

appeal to the Minister [now Secretary]. Decisions of the Minister

[now Secretary] are likewise appealable within five (5) days from

receipt thereof by the affected party to the President whosedecision shall be final and executory.

Petitioners insistence that the 30-day reglementary period

provided by Section 61 of Commonwealth Act No. 137, as amended,

applies, cannot be sustained by this Court. By providing a five-day

period within which to file an appeal on the decisions of theDirector of Mines and Geo-Sciences, Presidential Decree No. 463

unquestionably repealed Section 61 of Commonwealth Act No. 137.

In Pearson v. Intermediate Appellate Court,[28]

this Court extensively

discussed the development of the law on the adjudication of mining

claims, as seen in the provisions of Commonwealth Act No. 137,

Presidential Decree No. 463, until its present state under Republic

Act No. 7942. It was noted that there was a clear effort to

modernize the system of administration and disposition of mineral

lands and that the procedure of adjudicating mining claims had

become increasingly administrative in character.
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn28


17/28

[W]ith the issuance of Presidential Decree Nos. 99-A, 309, and 463,

the procedure of adjudicating conflicting mining claims has been

made completely administrative in character, with the President as

the final appeal authority. Section 50 of P.D. 463, providing for a

modernized system of administration and disposition of minerallands, to promote and encourage the development and exploitation

thereof, mandates on the matter of "Protests, Adverse Claims and

Appeals," the following procedure:

Appeals Any party not satisfied with the decision or order of the

Director may, within five (5) days from receipt thereof appeal, to

the Secretary. Decisions of the Secretary are

likewise appealable within five (5) days from receipt thereof by

the affected party to the President of the Philippines whose

decision shall be final andexecutory.

It should be noted that before its amendment, the Mining Law (C.A.

No. 137) required that after the filing of adverse claim with the

Bureau of Mines, the adverse claimant had to go to a court of

competent jurisdiction for the settlement of the claim. With the

amendment seeking to expedite the resolution of mining conflicts,

the Director of Mines became the mandatory adjudicator of adverseclaims, instead of the Court of First instance. Thus, it cannot escape

notice that under Section 61 of the Mining Law, as amended by

Republic Act Nos. 746 and 4388, appeals from the decision of the

Secretary of Agriculture and Natural Resources (then Minister of

Natural Resources) on conflicts and disputes arising out of mining

locations may be made to the Court of Appeals or the Supreme

Court as the case may be. In contrast, under the decrees issued at

the onset of martial law, it has been expressly provided that the

decisions of the same Secretary in mining cases are appealable to

the President of the Philippines under Section 50 of the Mineral

Resources Development Decree of 1974 (P.D. No. 463) and Section

7 of P.D. No. 1281 in relation to P.D. No. 309.

The trend at present is to make the adjudication of mining cases a

purely administrative matter. This does not mean that

administrative bodies have complete rein over mining disputes. The

very terms of Section 73 of the Mining Law, as amended by R.A. No.

4388, in requiring that the adverse claim must "state in full detail

the nature, boundaries and extent of the adverse claim" show that

the conflicts to be decided by reason of such adverse claim refer

primarily to questions of fact. The controversies to be submitted

and resolved by the Director of Mines under the sections referred

only to the overlapping of claims and administrative matters

incidental thereto. Questions and controversies that are judicial, not

administrative, in nature can be resolved only by the regular courts

in whom is vested the judicial power to resolve and adjudicate such

civil disputes and controversies between litigants in accordance

with the established norms of law and justice. Decisions of the

Supreme Court on mining disputes have recognized a distinction

between (1) the primary powers granted by pertinent provisions of

law to the then Secretary of Agriculture and Natural Resources (and

the bureau directors) of an executive or administrative nature, such

as "granting of license, permits, lease and contracts, or approving,

rejecting, reinstating or cancelling applications, or deciding

conflicting applications," and (2) controversies or disagreements of

civil or contractual nature between litigants which are questions of


18/28

a judicial nature that may be adjudicated only by the courts of

justice.

This distinction is carried on even under the present law. Findings of

fact by the Mines Adjudication Board, which exercises appellate

jurisdiction over decisions or orders of the panel of arbitrators, shall

be conclusive and binding on the parties, and its decision or order

shall be final and executory. But resort to the appropriate court,

through a petition for review by certiorari, involving questions of

law, may be made within thirty days from the receipt of the order or

decision of the Mines Adjudication Board.

Nor can petitioner invoke the doctrine that rules of technicalitymust yield to the broader interest of substantial justice. While every

litigant must be given the amplest opportunity for the proper and

just determination of his cause, free from the constraints of

technicalities, the failure to perfect an appeal within the

reglementary period is not a mere technicality. It raises a

jurisdictional problem as it deprives the appellate court of

jurisdiction over the appeal. The right to appeal is not part of due

process of law but is a mere statutory privilege to be exercised only

in the manner and in accordance with the provisions of the law.[29]

Petitioner invokes the judicial policy of allowing appeals, although

filed late, when the interest of justice so requires. Procedural law

has its own rationale in the orderly administration of justice,

namely, to ensure the effective enforcement of substantive rights

by providing for a system that obviates arbitrariness, caprice,

despotism, or whimsicality in the settlement of disputes. Hence,

rules of procedure must be faithfully followed except only when for

persuasive reasons, they may be relaxed to relieve a litigant of an

injustice not commensurate with his failure to comply with the

prescribed procedure. Concomitant to a liberal application of therules of procedure should be an effort on the part of the party

invoking liberality to explain his failure to abide by the rules .[30]

In

the instant case, petitioner failed to state any compelling reason for

not filing its appeal within the mandated period. Instead, the

records show that after failing to comply with the period within

which to file their motion for reconsideration on time, they again

failed to file their appeal before the Office of the DENR Secretary

within the time provided by law.

Even if petitioner had not lost its right to appeal, it cannot claim any

mining rights over Block 159 for failure to comply with the legal

requirements. Petitioner applied for an MPSA with the DENR on 18

October 1991, prior to the release of Block 159 from

the Malangas Coal Reservation under Proclamation No. 890 on 13

April 1992. Thus, the provisions on the acquisition of mining rights

within a government reservation other than a mineral reservation

under Presidential Decree No. 463 and the Consolidated Mines

Administrative Order (CMAO) should apply.

As a general rule, prospecting and exploration of minerals in a

government reservation is prohibited under Section 13 of

Presidential Decree No. 463. However, the same rule provides an
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn29


19/28

exception involving instances when the government agency

concerned allows it.

Section 13. Areas Closed to Mining Location. No prospecting and

exploration shall be allowed:

(a) In military, and other Government reservations except when

authorized by the proper Government agency concerned.

Section 8 of Presidential Decree No. 463 reiterates the rule and

clarifies it further by stating that prospecting, exploration and

exploitation of minerals on reserved lands other than mineral

reservations may be undertaken by the proper government

agency. As an exception to this rule, qualified persons may

undertake the said prospecting, exploration and exploitation when

the said agencies cannot undertake them.

Section 8. Prospecting, Exploration and Exploitation of Minerals in

Reserved Lands. Prospecting, exploration and exploitation of

minerals in reserved lands other than mineral reservations may be

undertaken by the proper government agency. In the event that

the said agencies cannot undertake the prospecting, exploration

and exploitation of minerals in reserved lands, qualified persons

may be permitted to undertake such prospecting, exploration and

exploitation in accordance with the rules and regulations

promulgated by the Secretary [Minister]. The right to exploit the

minerals found therein shall be awarded by the President under

such terms and conditions as recommended by the Director andapproved by the Secretary [Minister]: Provided, That the party who

undertook prospecting, exploration and exploitation of said are

shall be given priority.

Notwithstanding the provisions of the preceding paragraph, a

special permit may be issued by the Director to the

exploration permitee to extract, remove and dispose of minerals in

limited quantities as verified by the Bureau of Mines [Director of

Mines and Geo-Sciences].

Section 15 of the CMAO is more straightforward when it states that

government reserved lands are open for prospecting, subject to the

rules and regulations provided therein.

SEC. 15. Government Reserved Land. Lands reserved by the

Government for purposes other than mining are open to

prospecting. Any interested party may file an application therefore

with the head of the agency administering said land, subject always

to compliance with pertinent laws and rules and regulations


20/28

covering such reserved land. Such application shall be acted upon

within thirty (30) days. In such cases, the compensation due the

surface owner shall accrue equally to the agency administering the

reserved land and the Bureau of Mines.

The law enumerates the following requirements: (1) a prospecting

permit from the agency that has jurisdiction over the area, in this

case, the OEA;[31]

(2) an exploration permit from the BMGS;[32]

(3) if

the exploration reveals the presence of commercial deposit,

the permitee applies before the BMGS for the exclusion of the area

from the reservation;[33]

(4) granting by the president of theapplication to exclude the area from the reservation;

[34]and (5) a

mining agreement approved by the DENR Secretary.

In this case, petitioner complied with the first requirement and

obtained a prospecting permit from the OEA. In its correspondence

with the petitioner, the OEA, however, advised the petitioner on

two separate occasions to obtain a prospecting permit from the

BMGS, although the OEA was probably referring to an exploration

permit.[35]

The petitioner did not apply for an exploration permit

with the BMGS, nor would the BMGS have granted petitioner an

exploration permit because when petitioner wrote to the BMGS

informing the latter of its intention to enter into an MPSA with the

DENR over Block 159, the BMGS informed the petitioner that the

respondents claim over Block 159 had already preceded that of the

petitioner.[36]

The advice given by the BMGS was justified since at

that time, the respondent already had a pending application for the

exclusion of Block 159 from the Malangas Coal Reservation.

Thereafter, the petitioner filed his MPSA application, without

complying with the second, third and fourth requisites. Since it

ignored the sound advice of the OEA and the BMGS, thegovernment agencies concerned, and stubbornly insisted on its

incorrect procedure, petitioner cannot complain now that its MPSA

was revoked for failure to comply with the legal requirements.

In contrast, the respondent applied for a DOL as early as 30 January

1989. The DENR Regional Office refused to register the

respondents DOL since Block 159 was still part of

the Malangas Coal Reservation and advised the respondent to apply

for the exclusion of the area from the reservation. The respondent

followed this advice. The BMGS then treated the respondents

application for a DOL as an application for an exploration permit

and caused a verification report of the area applied for, as provided

under Section 99 of the CMAO.[37]

Upon the application of the

respondent, the OEA and thereafter the DENR Secretary endorsed

the respondents application for the exclusion of the area from the

reservation.[38]

This application was granted by the President,

through Proclamation No. 890, which provided that the mining

rights to Block 159 will be disposed of in accordance with Executive

Order No. 279. On 30 July 1992, respondent filed his

MPSA.[39]

On 12 April 1993, the RED of Zamboanga City ordered

that the respondents MPSA be given due course.[40]

Although the

respondents applications may not follow the strict letter of the law,

there was substantial compliance with the requirements of the

law. Hence, the respondent was able to acquire a preferential right
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn31


21/28

on the mining claims over Block 159, as provided under Section 101

of the CMAO.

Even if it were to be assumed that the respondent failed to comply

with these requirements, this would not be fatal to his cause since

he filed his MPSA on 31 July 1992, after the issuance of

Proclamation No. 890; therefore, the provisions on the application

of mining rights over government reservations would no longer

apply to him because Block 159 was already converted into a

mineral reservation, wherein a different set of rules would

apply. The only effect of his failure to comply with the

requirements CMAO on government reservations is that he loses

the preferential right over the area involved. In this case, the

respondent was the only applicant to the mining rights over Block

159, apart from the petitioner who was not qualified for failure to

comply with the legal requirements. Proclamation No. 890

specifically provides that Executive Order No. 279 should be

applied. Records indicate that the provisions of Executive Order No.

279 have been complied with.[41]

IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The

assailedDecision of the Mines Adjudication Board ishereby AFFIRMED. No costs.

SO ORDERED.

[G.R. No. 135190. April 3, 2002]

SOUTHEAST MINDANAO GOLD MINING

CORPORATION,petitioner, vs. BALITE PORTAL MINING

COOPERATIVE and others similarly situated; and THE HONORABLE

ANTONIO CERILLES, in his capacity as Secretary of the Department

of Environment and Natural Resources (DENR), PROVINCIALMINING REGULATORY BOARD OF DAVAO (PMRB-

Davao), respondents.

D E C I S I O N

YNARES-SANTIAGO,J.:

This is a petition for review of the March 19, 1998 decision of the

Court of Appeals in CA-G.R. SP No. 44693, dismissing the special civil

action for certiorari, prohibition and mandamus, and the resolutiondated August 19, 1998 denying petitioners motion for

reconsideration.

The instant case involves a rich tract of mineral land situated in the

Agusan-Davao-Surigao Forest Reserve known as the Diwalwal Gold

Rush Area. Located at Mt. Diwata in the municipalities of Monkayo

and Cateel in Davao Del Norte, the land has been embroiled in

controversy since the mid-80s due to the scramble over gold

deposits found within its bowels.

From 1985 to 1991, thousands of people flocked to Diwalwal to

stake their respective claims. Peace and order deteriorated rapidly,

with hundreds of people perishing in mine accidents, man-made or

otherwise, brought about by unregulated mining activities. The

multifarious problems spawned by the gold rush assumed

gargantuan proportions, such that finding a win-win solution

became a veritable needle in a haystack.
http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2006/november2006/129820.htm#_ftn41


22/28

On March 10, 1988, Marcopper Mining Corporation (Marcopper)

was granted Exploration Permit No. 133 (EP No. 133) over 4,491

hectares of land, which included the hotly-contested Diwalwal

area.[1]

Marcoppers acquisition of mining rights over Diwalwal under

its EP No. 133 was subsequently challenged before this Courtin Apex Mining Co., Inc., et al. v. Hon. Cancio C. Garcia, et

al.,[2]

where Marcoppers claim was sustained over that of another

mining firm, Apex Mining Corporation (Apex). The Court found that

Apex did not comply with the procedural requisites for acquiring

mining rights within forest reserves.

Not long thereafter, Congress enacted on June 27, 1991 Republic

Act No. 7076, or the Peoples Small-Scale Mining Act. The law

established a Peoples Small-Scale Mining Program to be

implemented by the Secretary of the DENR[3]

and created the

Provincial Mining Regulatory Board (PMRB) under the DENR

Secretarys direct supervision and control.[4]

The statute also

authorized the PMRB to declare and set aside small-scale mining

areas subject to review by the DENR Secretary[5]

and award mining

contracts to small-scale miners under certain conditions.[6]

On December 21, 1991, DENR Secretary Fulgencio S. Factoran

issued Department Administrative Order (DAO) No. 66, declaring

729 hectares of the Diwalwal area as non-forest land open to small-

scale mining.[7]

The issuance was made pursuant to the powers

vested in the DENR Secretary by Proclamation No. 369, which

established the Agusan-Davao-Surigao Forest Reserve.

Subsequently, a petition for the cancellation of EP No. 133 and the

admission of a Mineral Production Sharing Arrangement (MPSA)

proposal over Diwalwal was filed before the DENR Regional

Executive Director, docketed as RED Mines Case No. 8-8-94

entitled, Rosendo Villaflor, et al. v. Marcopper Mining

Corporation.

On February 16, 1994, while the RED Mines case was pending,

Marcopper assigned its EP No. 133 to petitioner Southeast

Mindanao Gold Mining Corporation (SEM),[8]

which in turn applied

for an integrated MPSA over the land covered by the permit.

In due time, the Mines and Geosciences Bureau Regional Office No.

XI in Davao City (MGB-XI) accepted and registered the integrated

MPSA application of petitioner. After publication of the application,

the following filed their oppositions:

a) MAC Case No. 004(XI) - JB Management Mining Corporation;

b) MAC Case No. 005(XI) - Davao United Miners Cooperative;

c) MAC Case No. 006(XI) - Balite Integrated Small Scale Miners

Cooperative;

d) MAC Case No. 007(XI) - Monkayo Integrated Small Scale

Miners Association, Inc.;

e) MAC Case No. 008(XI) - Paper Industries Corporation of the

Philippines;

f) MAC Case No. 009(XI) - Rosendo Villaflor, et al.;

g) MAC Case No. 010(XI) - Antonio Dacudao;

h) MAC Case No. 011(XI) - Atty. Jose T. Amacio;

i) MAC Case No. 012(XI) - Puting-Bato Gold Miners Cooperative;
http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2002/apr2002/135190.htm#_edn1


23/28

j) MAC Case No. 016(XI) - Balite Communal Portal Mining

Cooperative; and

k) MAC Case No. 97-01(XI) - Romeo Altamera, et al.

In the meantime, on March 3, 1995, Republic Act No. 7942, the

Philippine Mining Act, was enacted. Pursuant to this statute, the

above-enumerated MAC cases were referred to a Regional Panel of

Arbitrators (RPA) tasked to resolve disputes involving conflicting

mining rights. The RPA subsequently took cognizance of the RED

Mines case, which was consolidated with the MAC cases.

On April 1, 1997, Provincial Mining Regulatory Board of Davao

passed Resolution No. 26, Series of 1997, authorizing the issuance

of ore transport permits (OTPs) to small-scale miners operating inthe Diwalwal mines.

Thus, on May 30, 1997, petitioner filed a complaint for damages

before the Regional Trial Court of Makati City, Branch 61, against

the DENR Secretary and PMRB-Davao. SEM alleged that the illegal

issuance of the OTPs allowed the extraction and hauling

of P60,000.00 worth of gold ore per truckload from SEMs mining

claim.

Meanwhile, on June 13, 1997, the RPA resolved the Consolidated

Mines cases and decreed in an Omnibus Resolution as follows:

VIEWED IN THE LIGHT OF THE FOREGOING, the validity of

Exploration Permit No. 133 is hereby reiterated and all the adverse

claims against MPSAA No. 128 are DISMISSED.[9]

On June 24, 1997, the DENR Secretary issued Memorandum Order

No. 97-03[10]

which provided, among others, that:

1. The DENR shall study thoroughly and exhaustively the option

of direct state utilization of the mineral resources in the Diwalwal

Gold-Rush Area. Such study shall include, but shall not be limited to,

studying and weighing the feasibility of entering into management

agreements or operating agreements, or both, with the appropriate

government instrumentalities or private entities, or both, in carrying

out the declared policy of rationalizing the mining operations in the

Diwalwal Gold Rush Area; such agreements shall include provisions

for profit-sharing between the state and the said parties, including

profit-sharing arrangements with small-scale miners,as well as the

payment of royalties to indigenous cultural communities, among

others. The Undersecretary for Field Operations, as well as the

Undersecretary for Legal and Legislative Affairs and Attached

Agencies, and the Director of the Mines and Geo-sciences Bureau

are hereby ordered to undertak

Documents

H3 Property