Posted: March 31, 2006
By Jay B. Rempillo, Supreme Court News Flash March 2006

The Supreme Court upheld anew the constitutionality of the Philippine Mining Act of 1995 (RA 7942) and its Implementing Rules and Regulations (IRR).

In a 39-page decision penned by Justice Minita V. Chico-Nazario, the Court’s First Division dismissed the petition questioning the constitutionality of sec. 76 of RA 7942 and its IRR, Department of Environment and Natural Resources Administrative Order 96-40, as well as the Financial and Technical Assistance Agreement entered into by the government with Arimco Mining Corporation (later renamed Climax-Arimco Mining Corporation or CAMC).

In a March 28, 2006 resolution, the Banc affirmed the First Division’s decision stating that “there is no need for the Court en banc to tackle the case because the Decision of the First Division did not declare unconstitutional any law or regulation; it merely followed the Court en banc’s earlier Decision in La Bugal B’laan vs. Ramos.”

The petition was filed by the Didipio Earth-Savers’ Multi-Purpose Association, Inc., (DESAMA), et al. against CAMC, the majority of stockholders of which are Australians, operating in the provinces of Nueva Vizcaya and Quirino. DESAMA, an organization of farmers and indigenous peoples, is joined in the petition by other residents of areas affected by CAMC’s mining activities.

The Court held that while sec. 76 is a taking provision “this does not mean that it is unconstitutional on the ground that it allows taking of private property without the determination of public use and the payment of just compensation.”

The Court added that there was no basis for the petitioners’ contention that The Mining Law and its Implementing Rules and Regulations do not provide for just compensation in expropriating private properties. It pointed out that sec. 76 of RA 7942 and sec. 107 of DAO 96-40 provide for the payment of just compensation.

The Court also said that an examination of the assailed provisions gave no indication that the courts are excluded from taking cognizance of expropriation cases under the mining law. It stressed that original and exclusive jurisdiction of the courts to decide determination of just compensation remains intact despite the preliminary determination made by the Panel of Arbitrators or the Mines Adjudication Board.

The Court also dismissed the petitioners’ contention that the assailed provisions of FTAA cede over to the CMAC full control and management of mining enterprises. It said that the said issue was already raised and resolved in La Bugal-B’laan Tribal Association, Inc. v. Ramos where the Court upheld The Mining Law. In La Bugal, the Court held that RA 7942 and DAO 96-40 vest the government “more than a sufficient degree of control and supervision over the conduct of mining operations.”

Further reiterating its ruling in La Bugal, the Court said that the Constitution expressly allows service contracts in the large-scale exploration, development, and utilization of minerals, petroleum, and mineral oils via “agreements with foreign-owned corporations involving either technical or financial assistance” as provided by law. The Court said that these agreements with foreign corporations are not limited to mere financial or technical assistance.

“The 1987 Constitution allows the continued use of service contracts with foreign corporations as contractors who would invest in and operate and manage extractive enterprises, subject to the full control and supervision of the State,” the Court said.

In La Bugal, the Court held RA 7942 and its IRR constitutional. In a resolution penned by then Justice Artemio V. Panganiban, the longest ruling in the Court’s 104-year history, the Court likewise ruled that all but two provisions of the FTAA executed in 1995 between the government and Western Mining Corporation Philippines, do not contravene the Constitution.

“The mining industry plays a pivotal role in the economic development of the country and is a vital tool in the government’s thrust of accelerated recovery,” the Court said in La Bugal.

Concurring were Chief Justice Artemio V. Panganiban, Justices Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez, and Romeo J. Callejo, Sr. (GR No. 157882, Didipio Earth-Savers’ Multi-Purpose Association, Incorporated, et al. v. DENR Sec. Gozun, et al., March 30, 2006)