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175368 April 11, 2013

Topic: General Supervision of Local Governments & Autonomous Regions - Art. X, Sec. 4 & 16

NATURE OF THE CASE Petition for certiorari, prohibition and mandamus, praying that the Court order the following: (1) declare as unconstitutional Section 17(b)(3)(iii) of R.A. 7160 (Local Government Code) and Section 24 of R.A. 7076 (People's Small-Scale Mining Act of 1991); (2) prohibit and bar respondents from exercising control over provinces; and (3) declare as illegal the DENR Secretarys nullification, voiding and cancellation of the Small-Scale Mining permits issued by the Provincial Governor of Bulacan. THE PARTIES Petitioner: League of Provinces - a duly organized league of local governments incorporated under the Local Government Code; it is composed of 81 provincial governments, including the Province of Bulacan; it states that its petition is a collective action of all provinces through the Leauge, as a favorable ruling will benefit all provinces and all local governments Respondent: DENR and DENR Secretary Angelo Reyes Other parties: Golden Falcon Mineral Exploration Corporation (Golden Falcon) applicant for a Financial and Technical Assistance Agreement (FTAA); filed before Mines and Geosciences Bureau, Regional Office No. III (MGB-RO); application was denied twice Mercado, Cruz, Cruz and Sembrano (MCCS) applicants for Quarry Permit; filed before the Provincial Environment and Natural Resources Office (PENRO) of Bulacan Atlantic Mines and Trading Corporation (AMTC) applicant for Exploration Permit; filed before the PENRO of Bulacan THE FACTS Golden Falcon applied for FTAA before the MGB-RO April 29, 1998 - MGB-RO denied Golden Falcons application for FTAA on for failure to secure the required area clearances from the Forest Management Sector and Lands Management Sector of the DENR-RO. Golden Falcon appealed the denial with the Mines and Geosciences Bureau-Central Office (MGB-CO)

February 10, 2004 - pending Golden Falcon's appeal to the MGB-CO, MCCS filed with the PENRO of Bulacan their applications for quarry permit covering the same area subject of Golden Falcon's FTAA application. July 16, 2004 MGB-CO finally denied Golden Falcons appeal September 13, 2004 - AMTC filed with the PENRO of Bulacan an application for exploration permit covering the same subject area. Confusion of rights resulted from the overlapping applications of AMTC and the persons applying for quarry permits the contention was the date the area of Golden Falcons application became open to other permit applications from other parties October 19, 2004 - upon query by MGB-RO Director Cabantog, DENRMGB Director Ramos stated that the denial of Golden Falcons application became final on August 11, 2004, or fifteen days after Golden Falcon received the order of denial of its application. Hence, the area of Golden Falcons application became open to permit applications only on that date. Subsequently, the Provincial Legal Officer of Bulacan issued a legal opinion on the issue, stating that the subject area became open for new applications on the date of the first denial on April 29, 1998 (MGB-ROs order of denial), as MGB-COs order of denial on July 16, 2004 was a mere reaffirmation of the MGB-ROs April 29 order; hence, the reckoning period should be April 29. Based on this legal opinion, MGB-RO Director Cabantog endorsed the applications for quarry permit, now apparently converted to applications for small-scale mining permit, to the Governor of Bulacan. PENRO of Bulacan recommended to the Governor the approval of said applications. Eventually, the Governor issued the small-scale mining permits. AMTC appealed to the DENR Secretary The DENR Secretary decided in favor of the AMTC and nullified and cancelled the governors issuance of small-scale mining permits. It agreed with DENR-MGB Director Ramos that the area was open to mining location only on August 11, 2004 (15 days after the MGB-CO denial). Hence, the applications for quarry permit filed on February 10, 2004 were null as these were filed when the area was still closed to mining location. On the other hand, AMTC filed its application when the area was already open to other mining applicants, hence, its application was valid. The small-scale mining permits were also issued in violation of Section 4 of R.A. No. 7076 and beyond the authority of the Governor pursuant to Sec. 43 of RA 7942 because the area was never proclaimed to be under the small-scale mining program.

THE ISSUES 1. Whether DENRs act of nullifying the small-scale mining permits amounts to executive control, not merely supervision and usurps the devolved powers of all provinces, as the DENR Secretary substituted the judgment of the Provincial Governor of Bulacan. 2. Whether or not Section 17, b(3)(III) of the Local Government Code and Section 24 of the Small-Scale Mining Act, which confer upon DENR and the DENR Secretary the power of control are unconstitutional, as the Constitution states that the President (and Exec Depts) has the power of supervision only, not control over acts of LGUs

THE RULING: DENR Secs act was valid and authorized pursuant to its power of review under the RA 7076 and its IRR; Assailed statutes did not overcome the presumption of constitutionality, hence, are not unconstitutional. Control of the DENR/DENR Secretary over small-scale mining in the provinces is granted by three statutes: (1) R.A. 7061 or The Local Government Code of 1991; (2) R.A. 7076 or the People's Small Scale Mining Act of 1991; and (3) R.A. No. 7942 or the Philippine Mining Act of 1995. Control - the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of his/her duties and to substitute the judgment of the former for the latter Supervision - the power of a superior officer to see to it that lower officers perform their function in accordance with law. The Constitutional guarantee of local autonomy in the Article X, Sec. 2 of the Constitution refers to the administrative autonomy of the LGUs or the decentralization of government authority. It does not make local governments within the State. Administrative autonomy may involve devolution of powers, but it is still subject to limitations, like following national policies or standards and those provided by the Local Government Code, as the structuring of LGUs and the allocation of powers/responsibilities/resources among the LGUs and local officials are placed by the Constitution to Congress under Article X Section 3. It is the DENR which is incharge of carrying out the States constitutional mandate to control and supervise the exploration, development and autilization of the countrrys natural resources, pursuant to the provisions of Section 17, b(3)(III) of the LGC. Hence, the enforcement of the small-scale mining law by the provincial government is subject to the supervision, control and review of the DENR. The LGC did not fully devolve to the provincial government the enforcement of the small-scale mining law.

RA 7076 or the Peoples Small-Scale Mining program was established to be implemented by the DENR Secretary in coordination with other government agencies (Section 4, RA 7076). Section 24 of the law makes the Provincial/ Mining Regulatory Board under the direct supervision and control of the Secretary, its powers and functions subject to review by the same. Under Section 123 of DENR AO No. 23, small-scale mining applications should be filed with the PMRB and the permits shall be issued by the provincial governor, for applications outside the mineral reservations. DENR Administrative Order No. 34 (1992) which contains the IRR of RA 7076 likewise provides that the DENR Secretary shall exercise direct supervision and control over the Peoples Small-Scale Mining Program, and that the Provincial/City Mining Regulatory Boards (PMRB) powers and functions shall be subject to review by the DENR Secretary. DENR Administrative Order No. 96-40 or the Revised IRR of the Philippine Mining Act of 1995 provides that applications for Small-Scale Mining Permits shall be filed with the Provincial Governor/City Mayor through their respective Mining Regulatory Boards for areas outside the Mineral Reservations, and further, that the LGUs in coordination with the Bureau/Regional Offices shall approve applications for small-scale mining, sand and gravel, quarry xxx and gravel permits not exceeding 5 hectares. Petitioners contention that the aforementioned laws and rules did not confer upon DENR and DENR Secretary the power to reverse, abrogate, nullify, void, cancel the permits issued by the Provincial Governor or small-scale mining contracts entered into by the Board are without merit because the DENR Secretary was granted the power of review in the PMRBs resolution of disputes under Sec. 24 of RA 7076 and Section 22 of its IRR. The decision of the DENR Secretary to nullify and cancel the Governors issuance of permits emanated from its power of review under RA 7076 ad its IRR. Its power to review and decide on the validity of the issuance of the Small-Scale Mining Permits by the Provincial Governor is a quasi-judicial function which involves the determination of what the law is and what the legal rights of the contending parties are, with respect to the matter in controversy and on the basis thereof and the facts obtaining, the adjudication of their respective rights. The DENR Secretary exercises quasi-judicial function under RA 7076 and its IRR to the extent necessary in settling disputes, conflicts, or litigations over conflicting claims. This quasi-judicial power of the DENR can neither be equated with substitution of judgment of the Provincial Governor in issuing Small-Scale Mining Permits nor control over the said act of the Provincial Governor as it is a determination of the rights of the AMTC over conflicting claims based on the law.

In Beltran v. Secretary of Health, the Court held that every law has in its favor the presumption of constitutionality. For a law to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear and beyond reasonable doubt. In this case, the grounds raised by the petitioner to challenge the constitutionality of Sec. 17 b(3)(iii) of the LGC and Section 24 of RA 7076 has failed to overcome the constitutionality of the said provisions of the law. Hence, the petition was dismissed for lack of merit.