4. La Bugal-Blaan Tribal Association, Inc. v. Ramos, GR No. 127882, Jan.
27,
2004, 445 SCRA 1
FACTS:
In January 2001, WMC – a publicly listed Australian mining and exploration
company – sold its whole stake in WMCP to Sagittarius Mines, 60% of which is
owned by Filipinos while 40% of which is owned by Indophil Resources, an
Australian company. DENR approved the transfer and registration of the FTAA in
Sagittarius ‘name but Lepanto Consolidated assailed the same.
On 27 January 2004, the Court en banc promulgated its Decision granting the
Petition of La Bugal, et. al declaring the unconstitutionality of certain provisions of RA
7942, DAO 96-40, as well as of the entire FTAA executed between the government
and WMCP. It was found that the FTAAs are service contracts prohibited under the
1987 Constitution.
The Decision struck down the subject FTAA for being antithetical to the
principle of sovereignty over our natural resources as they allowed foreign control
over the exploitation of our natural resources, to the prejudice of the Filipino nation,
though it was previously permitted under the 1973 Constitution. It quoted several
legal scholars and authors who had criticized service contracts for, inter alia, vesting
in the foreign contractor exclusive management and control of the enterprise,
including operation of the field in the event petroleum was discovered; control of
production, expansion and development; nearly unfettered control over the
disposition and sale of the products discovered/extracted; effective ownership of the
natural resource at the point of extraction; and beneficial ownership of our economic
resources.
According to the Decision, the 1987 Constitution (Section 2 of Article XII)
effectively banned such service contracts. Subsequently, Victor O. Ramos
(Secretary, Department of Environment and Natural Resources [DENR]), Horacio
Ramos (Director, Mines and Geosciences Bureau [MGB-DENR]), Ruben Torres
(Executive Secretary), and the WMC (Philippines) Inc. filed separate Motions for
Reconsideration.
ISSUE:
Whether or not the Philippine Mining Act is unconstitutional.
RULING OF THE COURT:
No. The Philippine Mining Act is not unconstitutional. It is expressed that
Section 3 of RA 7942 — which allows a foreign contractor to apply for and hold an
exploration permit — is unconstitutional. The reasoning is that Section 2 of Article XII
of the Constitution does not allow foreign-owned corporations to undertake mining
operations directly. They may act only as contractors of the State under an FTAA;
and the State, as the party directly undertaking exploitation of its natural resources,
must hold through the government all exploration permits and similar authorizations.
The objection, however, is not well-founded. While the Constitution mandates
the State to exercise full control and supervision over the exploitation of mineral
resources, nowhere does it require the government to hold all exploration permits
and similar authorizations. In fact, there is no prohibition at all against foreign or local
corporations or contractors holding exploration permits. The reason is not hard to
see.
The crux of the controversy is the amount of discretion to be accorded the
Executive Department, particularly the President of the Republic, in respect of
negotiations over the terms of FTAAs, particularly when it comes to the government
share of financial benefits from FTAAs. The Court believes that it is not
unconstitutional to allow a wide degree of discretion to the Chief Executive, given the
nature and complexity of such agreements, the humongous amounts of capital and
financing required for large-scale mining operations, the complicated technology
needed, and the intricacies of international trade, coupled with the State’s need to
maintain flexibility in its dealings, in order to preserve and enhance our country’s
competitiveness in world markets.
The Constitution of the Philippines is the supreme law of the land. It is the
repository of all the aspirations and hopes of all the people. We fully sympathize with
the plight of Petitioner La Bugal B’laan and other tribal groups, and commend their
efforts to uplift their communities. However, we cannot justify the invalidation of an
otherwise constitutional statute along with its implementing rules, or the nullification
of an otherwise legal and binding FTAA contract.
We must never forget that it is not only our less privileged brethren in tribal
and cultural communities who deserve the attention of this Court; rather, all parties
concerned — including the State itself, the contractor (whether Filipino or foreign),
and the vast majority of our citizens — equally deserve the protection of the law and
of this Court. To stress, the benefits to be derived by the State from mining activities
must ultimately serve the great majority of our fellow citizens. They have as much
right and interest in the proper and well-ordered development and utilization of the
country’s mineral resources as the petitioners.
Verily, the mineral wealth and natural resources of this country are
meant to benefit not merely a select group of people living in the areas locally
affected by mining activities, but the entire Filipino nation, present and future,
to whom the mineral wealth really belong. This Court has therefore weighed
carefully the rights and interests of all concerned, and decided for the greater good
of the greatest number. JUSTICE FOR ALL, not just for some; JUSTICE FOR THE
PRESENT AND THE FUTURE, not just for the here and now.
