La Bugal-B'Laan Vs Ramos

La Bugal-B'Laan Tribal Assn vs Ramos
G.R. No 127882
December 1, 2004
PANGANIBAN, J.:
Facts:
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of RA 7942, or on
March 30, 1995, the President signed a Financial and Technical Assistance Agreement (FTAA) with
WMCP, a corporation organized under Philippine laws, covering close to 100,000 hectares of land in
South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, the
Environment Secretary Victor Ramos issued DENR Administrative Order 95-23, which was later repealed
by DENR Administrative Order 96-40, adopted on December 20, 1996.
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government and
WMCP be declared unconstitutional on ground that they allow fully foreign owned corporations like
WMCP to exploit, explore and develop Philippine mineral resources in contravention of Article XII Section
2 paragraphs 2 and 4 of the Charter.
In January 2001, WMC - a publicly listed Australian mining and exploration company - sold its whole stake
in WMCP to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is owned by
Indophil Resources, an Australian company. DENR approved the transfer and registration of the FTAA in
Sagittarius name but Lepanto Consolidated assailed the same. The latter case is still pending before the
Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept, consider
and evaluate proposals from foreign owned corporations or foreign investors for contracts or agreements
involving wither technical or financial assistance for large scale exploration, development and utilization of
minerals which upon appropriate recommendation of the (DENR) Secretary, the President may execute
with the foreign proponent. WMCP likewise contended that the annulment of the FTAA would violate a
treaty between the Philippines and Australia which provides for the protection of Australian investments.
Issue:
Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned corporations
to exploit the Philippine mineral resources.
Held:
RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned
corporations to exploit the Philippine natural resources.
Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that All lands
of the public domain, waters, minerals, coal, petroleum, and other minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. The same section also states that, the exploration and
development and utilization of natural resources shall be under the full control and supervision of the
State.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution authorizing the
State to grant licenses, concessions, or leases for the exploration, exploitation, development, or utilization
of natural resources. By such omission, the utilization of inalienable lands of the public domain through
license, concession or lease is no longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct equity investment for the purpose of
exploiting a particular natural resource within a given area. The concession amounts to complete control
by the concessionaire over the countrys natural resource, for it is given exclusive and plenary rights to
exploit a particular resource at the point of extraction.
The 1987 Constitution, moreover, has deleted the phrase management or other forms of assistance in
the 1973 Charter. The present Constitution now allows only technical and financial assistance. The
management and the operation of the mining activities by foreign contractors, the primary feature of the
service contracts was precisely the evil the drafters of the 1987 Constitution sought to avoid.
The constitutional provision allowing the President to enter into FTAAs is an exception to the rule that
participation in the nations natural resources is reserved exclusively to Filipinos. Accordingly, such
provision must be construed strictly against their enjoyment by non-Filipinos. Therefore, RA 7942 is
invalid insofar as the said act authorizes service contracts. Although the statute employs the phrase
financial and technical agreements in accordance with the 1987 Constitution, its pertinent provisions
actually treat these agreements as service contracts that grant beneficial ownership to foreign contractors
contrary to the fundamental law.
The underlying assumption in the provisions of the law is that the foreign contractor manages the mineral
resources just like the foreign contractor in a service contract. By allowing foreign contractors to manage
or operate all the aspects of the mining operation, RA 7942 has, in effect, conveyed beneficial ownership
over the nations mineral resources to these contractors, leaving the State with nothing but bare title
thereto.
The same provisions, whether by design or inadvertence, permit a circumvention of the constitutionally
ordained 60-40% capitalization requirement for corporations or associations engaged in the exploitation,
development and utilization of Philippine natural resources.
When parts of a statute are so mutually dependent and connected as conditions, considerations,
inducements or compensations for each other as to warrant a belief that the legislature intended them as
a whole, then if some parts are unconstitutional, all provisions that are thus dependent, conditional or
connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to merely
technical or financial assistance to the State for large scale exploration, development and utilization of
minerals, petroleum and other mineral oils.

La Bugal-B'Laan Vs Ramos

Uploaded by

Copyright:

Available Formats

La Bugal-B'Laan Vs Ramos

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

La Bugal-B'Laan Vs Ramos

Uploaded by

Copyright:

Available Formats

La Bugal-B'Laan Tribal Assn vs Ramos

You might also like