LA BUGAL BLAAN TRIBAL ASSOCIATION INC., et al. vs VICTOR O.

RAMOS, SECRETARY DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES; HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCESBUREAU MGB!DENR";
G.R. N#. $%&''% (ANUARY %&, %))*

FACTS+ The Philippine Mining Act took effect onApril 9, 1995. Before the effectivity of RA 7942, or on March !, 1995, the Pre"i#ent "igne# a $inancial an# Technical A""i"tance Agree%ent &$TAA' (ith )M*P, a corporation organi+e# ,n#er Philippine la(",covering clo"e to 1!!, !!! hectare" of lan# in -o,th *ota.ato, -,ltan /,#arat, 0avao #el -,r an# 1orth *ota.ato. 2n A,g,"t 15, 1995, the 3nviron%ent -ecretary 4ictor Ra%o" i"",e# 031R A#%ini"trative 2r#er 9552 , (hich (a" later repeale# .y 031R A#%ini"trative 2r#er 9654!, a#opte# on 0ece%.er 2!, 1996. Petitioner" praye# that RA 7942, it" i%ple%enting r,le", an# the $TAA .et(een the govern%ent an# )M*P .e #eclare# ,ncon"tit,tional on gro,n# that they allo( f,lly foreign o(ne# corporation" like )M*P to e7ploit, e7plore an# #evelop Philippine %ineral re"o,rce" in contravention of Article 899 -ection 2 paragraph" 2 an# 4 of the *harter. 9n :an,ary 2!!1, MM* ; a p,.licly li"te# A,"tralian %ining an# e7ploration co%pany ; "ol# it" (hole "take in )M*P to -agittari," Mine", 6!< of (hich i" o(ne# .y $ilipino" (hile 4!< of (hich i" o(ne# .y 9n#ophil Re"o,rce", an A,"tralian co%pany. 031R approve# the tran"fer an# regi"tration of the $TAA in -agittari,"= na%e .,t >epanto *on"oli#ate# a""aile# the "a%e. The latter ca"e i" "till pen#ing .efore the*o,rt of Appeal". 32 279, i"",e# .y for%er Pre"i#ent A?,ino on :,ly25, 19@7, a,thori+e" the 031R to accept, con"i#er an# eval,ate propo"al" fro% foreign o(ne# corporation" or foreign inve"tor" for contract" or agree%ent" involving either technical or financial a""i"tance for large "cale e7ploration, #evelop%ent an# ,tili+ation of %ineral" (hich ,pon appropriate reco%%en#ation of the &031R' -ecretary, the pre"i#ent %ay e7ec,te (ith foreign proponent. )M*P like(i"e conten#e# that the ann,l%ent of the $TAA (o,l# violate a treaty .et(een the Philippine" an# A,"tralia (hich provi#e" for the protection of A,"tralian inve"t%ent". ISSUES+ 1. )hether or not the Philippine Mining Act i" ,ncon"tit,tional for allo(ing f,lly foreign o(ne# corporation" to e7ploit Philippine %ineral re"o,rce". 2. )hether or not the $TAA .et(een the govern%ent an# )M*P i" a A"ervice contractB that per%it" f,lly foreign o(ne# co%panie" to e7ploit Philippine %ineral re"o,rce". . )hether the *o,rt ha" a role in the e7erci"e of the po(er of control over the 30C of o,r nat,ral re"o,rce". HELD+ 1' RA 7942 or the Philippine Mining Act of 1995 i" ,ncon"tit,tional for per%itting f,lly foreign o(ne# corporation" to e7ploit Philippine nat,ral re"o,rce".

Article 899 -ection 2 of the 19@7 *on"tit,tion retaine# the Regalian #octrine (hich "tate" that AAll lan#" of the p,.lic #o%ain, (ater", %ineral", coal, petrole,%, an# other %ineral", coal, petrole,%, an# other %ineral oil", all force" of potential energy, fi"herie", fore"t" or ti%.er, (il#life, flora an# fa,na, an# other nat,ral re"o,rce" are o(ne# .y the -tate.B The "a%e "ection al"o "tate" that, Ae7ploration an# #evelop%ent an# ,tili+ation of nat,ral re"o,rce" "hall .e ,n#er the f,ll control an# ",pervi"ion of the -tate.B *on"pic,o,"ly a."ent in -ection 2 i" the provi"ion in the 19 5 an# 197 *on"tit,tion" a,thori+ing the -tate to grant licen"e", conce""ion", or lea"e" for the e7ploration, e7ploitation, #evelop%ent or ,tili+ation of nat,ral re"o,rce". D ",ch o%i""ion, the ,tili+ation of inaliena.le lan#" of p,.lic #o%ain thro,gh licen"e conce""ion or lea"e i" no longer allo(e# ,n#er the 19@7 *on"tit,tion. Cn#er the conce""ion "y"te%, the conce""ionaire %ake" a #irect e?,ity inve"t%ent for the p,rpo"e of e7ploiting a partic,lar nat,ral re"o,rce (ithin a given area. The conce""ion a%o,nt" to co%plete control .y the conce""ionaire over the co,ntry=" nat,ral re"o,rce, for it i" given e7cl,"ive an# plenary right" to e7ploit a partic,lar re"o,rce at the point of e7traction. The 19@7 *on"tit,tion, %oreover, ha" #elete# the phra"e A%anage%ent or other for%" of a""i"tanceB in the 197 *harter. The pre"ent *on"tit,tion no( allo(" only Atechnical an# financial a""i"tance.B The %anage%ent or operation of %ining activitie" .y foreign contractor", the pri%ary feat,re of "ervice contract" (a" preci"ely the evil the #rafter" of the 19@7 *on"tit,tion "o,ght to avoi#. The con"tit,tional provi"ion allo(ing the Pre"i#ent to enter into $TAA" i" an e7ception to the r,le that participation in the nation=" nat,ral re"o,rce" i" re"erve# e7cl,"ively to $ilipino". Accor#ingly ",ch provi"ion %,"t .e con"tr,e# "trictly again"t their enEoy%ent .y non5$ilipino". Therefore RA 7942 i" invali# in"ofar a" "ai# act a,thori+e" "ervice contract". Altho,gh the "tat,te e%ploy" the phra"e Afinancial an# technical agree%ent"B in accor#ance (ith the 19@7 *on"tit,tion, it" pertinent provi"ion" act,ally treat the"e agree%ent" a" "ervice contract" that grant .eneficial o(ner"hip to foreign contractor" contrary to the f,n#a%ental la(. The ,n#erlying a"",%ption in the provi"ion" of the la( i" that the foreign contractor %anage" the %ineral re"o,rce" E,"t like the foreign contractor in a "ervice contract. By allo(ing foreign contractor" to %anage or operate all the a"pect" of the %ining operation, RA 7942 ha" in effect conveye# .eneficial o(ner"hip over the nation=" %ineral re"o,rce" to the"e contractor", leaving the -tate (ith nothing .,t .are title thereto. The "a%e provi"ion", (hether .y #e"ign or ina#vertence, per%it a circ,%vention of the con"tit,tionally or#aine# 6!54!< capitali+ation re?,ire%ent for corporation" or a""ociation" engage# in the e7ploitation, #evelop%ent an# ,tili+ation of Philippine nat,ral re"o,rce". )hen part" of a "tat,te are "o %,t,ally #epen#ent an# connecte# a" con#ition", con"i#eration", in#,ce%ent" or co%pen"ation" for each other a" to (arrant a .elief that the legi"lat,re inten#e# the% a" a (hole, then if "o%e part" are ,ncon"tit,tional, all provi"ion" that are th," #epen#ent, con#itional or connecte# %,"t fall (ith the%.

Cn#er Article 899 -ection 2 of the 19@7 *harter, foreign o(ne# corporation" are li%ite# only to %erely technical or financial a""i"tance to the -tate for large "cale e7ploration, #evelop%ent an# ,tili+ation of %ineral", petrole,% an# other %ineral oil". 2' The $TAA .et(een )M*P an# the Philippine govern%ent i" like(i"e ,ncon"tit,tional "ince the agree%ent it"elf i" a "ervice contract. -ection 1. of the $TAA grant" )M*P, a f,lly foreign o(ne# corporation, the Ae7cl,"ive right to e7plore, e7ploit, ,tili+e an# #i"po"e of all %ineral" an# .ypro#,ct" that %ay .e pro#,ce# fro% the contract area.B -ection 1.2 of the "a%e agree%ent provi#e" that )M*P "hall provi#e Aall financing, technology, %anage%ent, an# per"onnel nece""ary for the Mining 2peration".B The"e contract,al "tip,lation" an# relate# provi"ion" in the $TAA taken together, grant )M*P .eneficial o(ner"hip over nat,ral re"o,rce" that properly .elong to the -tate an# are inten#e# for the .enefit of it" citi+en". The"e "tip,lation" are a.horrent to the 19@7 *on"tit,tion. They are preci"ely the vice" that the f,n#a%ental la( "eek" to avoi#, the evil" that it ai%" to ",ppre"". *on"e?,ently, the contract fro% (hich they "pring %,"t .e "tr,ck #o(n. ' The *hief 37ec,tive i" the official con"tit,tionally %an#ate# to Aenter into agree%ent" (ith foreign o(ne# corporation".B 2n the other han#, *ongre"" %ay revie( the action of the Pre"i#ent once it i" notifie# of Aevery contract entere# into in accor#ance (ith thi" Fcon"tit,tionalG provi"ion (ithin thirty #ay" fro% it" e7ec,tion.B 9n contra"t to thi" e7pre"" %an#ate of the Pre"i#ent an# *ongre"" in the e7ploration, #evelop%ent an# ,tili+ation &30C' of nat,ral re"o,rce", Article 899 of the *on"tit,tion i" "ilent on the role of the E,#iciary. Ho(ever, "ho,l# the Pre"i#ent an#Ior *ongre"" gravely a.,"e their #i"cretion in thi" regar#J the co,rt" %ay 55 in a proper ca"e 55 e7erci"e their re"i#,al #,ty ,n#er Article 4999. *learly then, the E,#iciary "ho,l# not inor#inately interfere in the e7erci"e of thi" pre"i#ential po(er of control over the 30C of o,r nat,ral re"o,rce". Cn#er the #octrine of "eparation of po(er" an# #,e re"pect for co5 e?,al an# coor#inate .ranche" of govern%ent, the *o,rt %,"t re"train it"elf fro% intr,#ing into policy %atter" an# %,"t allo( the Pre"i#ent an# *ongre"" %a7i%,% #i"cretion in ,"ing the re"o,rce" of o,r co,ntry an# in "ec,ring the a""i"tance of foreign gro,p" to era#icate the grin#ing poverty of o,r people an# an"(er their cry for via.le e%ploy%ent opport,nitie" in the co,ntry. AThe E,#iciary i" loath to interfere (ith the #,e e7erci"e .y coe?,al .ranche" of govern%ent of their official f,nction".B A" aptly "pelle# o,t "even #eca#e" ago .y :,"tice Keorge Malcol%, A:,"t a" the -,pre%e *o,rt, a" the g,ar#ian of con"tit,tional right", "ho,l# not "anction ,",rpation" .y any other #epart%ent of govern%ent, "o "ho,l# it a" "trictly confine it" o(n "phere of infl,ence to the po(er" e7pre""ly or .y i%plication conferre# on it .y the 2rganic Act.B >et the #evelop%ent of the %ining in#,"try .e the re"pon"i.ility of the political .ranche" of govern%ent. An# let not the *o,rt interfere inor#inately an# ,nnece""arily.