G.R. No.

157882

March 30, 2006

DIDIPIO EARTH-SAVERS MULTI-PURPOSE ASSOCIATION, INCORPORATED (DESAMA), MANUEL BUTIC, CESAR MARIANO, LAURO ABANCE, BEN TAYABAN, ANTONIO DINGCOG, TEDDY B. KIMAYONG, ALONZO ANANAYO, ANTONIO MALAN-UYA, JOSE BAHAG, ANDRES INLAB, RUFINO LICYAYO, ALFREDO CULHI, CATALILNA INABYUHAN, GUAY DUMMANG, GINA PULIDO, EDWIN ANSIBEY, CORAZON SICUAN, LOPEZ DUMULAG, FREDDIE AYDINON, VILMA JOSE, FLORENTINA MADDAWAT, LINDA DINGCOG, ELMER SICUAN, GARY ANSIBEY, JIMMY MADDAWAT, JIMMY GUAY, ALFREDO CUT-ING, ANGELINA UDAN, OSCAR INLAB, JUANITA CUT-ING, ALBERT PINKIHAN, CECILIA TAYABAN, CRISTA BINWAK, PEDRO DUGAY, SR., EDUARDO ANANAYO, ROBIN INLAB, JR., LORENZO PULIDO, TOMAS BINWAG, EVELYN BUYA, JAIME DINGCOG, DINAOAN CUT-ING, PEDRO DONATO, MYRNA GUAY, FLORA ANSIBEY, GRACE DINAMLING, EDUARDO MENCIAS, ROSENDA JACOB, SIONITA DINGCOG, GLORIA JACOB, MAXIMA GUAY, RODRIGO PAGGADUT, MARINA ANSIBEY, TOLENTINO INLAB, RUBEN DULNUAN, GERONIMO LICYAYO, LEONCIO CUMTI, MARY DULNUAN, FELISA BALANBAN, MYRNA DUYAN, MARY MALAN-UYA, PRUDENCIO ANSIBEY, GUILLERMO GUAY, MARGARITA CULHI, ALADIN ANSIBEY, PABLO DUYAN, PEDRO PUGUON, JULIAN INLAB, JOSEPH NACULON, ROGER BAJITA, DINAON GUAY, JAIME ANANAYO, MARY ANSIBEY, LINA ANANAYO, MAURA DUYAPAT, ARTEMEO ANANAYO, MARY BABLING, NORA ANSIBEY, DAVID DULNUAN, AVELINO PUGUON, LUCAS GUMAWI, LUISA ABBAC, CATHRIN GUWAY, CLARITA TAYABAN, FLORA JAVERA, RANDY SICOAN, FELIZA PUTAKI, CORAZON P. DULNUAN, NENA D. BULLONG, ERMELYN GUWAY, GILBERT BUTALE, JOSEPH B. BULLONG, FRANCISCO PATNAAN, JR., SHERWIN DUGAY, TIRSO GULLINGAY, BENEDICT T. NABALLIN, RAMON PUN-ADWAN, ALFONSO DULNUAN, CARMEN D. BUTALE, LOLITA ANSIBEY, ABRAHAM DULNUAN, ARLYNDA BUTALE, MODESTO A. ANSIBEY, EDUARDO LUGAY, ANTONIO HUMIWAT, ALFREDO PUMIHIC, MIKE TINO, TONY CABARROGUIS, BASILIO TAMLIWOK, JR., NESTOR TANGID, ALEJO TUGUINAY, BENITO LORENZO, RUDY BAHIWAG, ANALIZA BUTALE, NALLEM LUBYOC, JOSEPH DUHAYON, RAFAEL CAMPOL, MANUEL PUMALO, DELFIN AGALOOS, PABLO CAYANGA, PERFECTO SISON, ELIAS NATAMA, LITO PUMALO, SEVERINA DUGAY, GABRIEL PAKAYAO, JEOFFREY SINDAP, FELIX TICUAN, MARIANO S. MADDELA, MENZI TICAWA, DOMINGA DUGAY, JOE BOLINEY, JASON ASANG, TOMMY ATENYAYO, ALEJO AGMALIW, DIZON AGMALIW, EDDIE ATOS, FELIMON BLANCO, DARRIL DIGOY, LUCAS BUAY, ARTEMIO BRAZIL, NICANOR MODI, LUIS REDULFIN, NESTOR JUSTINO, JAIME CUMILA, BENEDICT GUINID, EDITHA ANIN, INOH-YABAN BANDAO, LUIS BAYWONG, FELIPE DUHALNGON, PETER BENNEL, JOSEPH T. BUNGGALAN, JIMMY B. KIMAYONG, HENRY PUGUON, PEDRO BUHONG, BUGAN NADIAHAN, SR., MARIA EDEN ORLINO, SPC, PERLA VISSORO, and BISHOP RAMON VILLENA, Petitioners, vs. ELISEA GOZUN, in her capacity as SECRETARY of the DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES (DENR), HORACIO RAMOS, in his capacity as Director of the Mines and Geosciences Bureau (MGB-DENR), ALBERTO ROMULO, in his capacity as the Executive Secretary of the Office of the President, RICHARD N. FERRER, in his capacity as Acting Undersecretary of the Office of the President, IAN HEATH SANDERCOCK, in his capacity as President of CLIMAX-ARIMCO Mining Corporation.Respondents. DECISION CHICO-NAZARIO, J.: This petition for prohibition and mandamus under Rule 65 of the Rules of Court assails the constitutionality of Republic Act No. 7942 otherwise known as the Philippine Mining Act of 1995, together with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the Financial and Technical Assistance Agreement (FTAA) entered into on 20 June 1994 by the Republic of the Philippines and Arimco Mining Corporation (AMC), a corporation established under the laws of Australia and owned by its nationals. On 25 July 1987, then President Corazon C. Aquino promulgated Executive Order No. 279 which authorized the DENR Secretary to accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts of agreements involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, which, upon appropriate recommendation of the Secretary, the President may execute with the foreign proponent. On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No. 7942 entitled, "An Act Instituting A New System of Mineral Resources Exploration, Development, Utilization and Conservation," otherwise known as the Philippine Mining Act of 1995.

On 15 August 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 23, Series of 1995, containing the implementing guidelines of Rep. Act No. 7942. This was soon superseded by DAO No. 96-40, s. 1996, which took effect on 23 January 1997 after due publication. Previously, however, or specifically on 20 June 1994, President Ramos executed an FTAA with AMC over a total land area of 37,000 hectares covering the provinces of Nueva Vizcaya and Quirino. Included in this area is Barangay Dipidio, Kasibu, Nueva Vizcaya. Subsequently, AMC consolidated with Climax Mining Limited to form a single company that now goes under the new name of Climax-Arimco Mining Corporation (CAMC), the controlling 99% of stockholders of which are Australian nationals. On 7 September 2001, counsels for petitioners filed a demand letter addressed to then DENR Secretary Heherson Alvarez, for the cancellation of the CAMC FTAA for the primary reason that Rep. Act No. 7942 and its Implementing Rules and Regulations DAO 96-40 are unconstitutional. The Office of the Executive Secretary was also furnished a copy of the said letter. There being no response to both letters, another letter of the same content dated 17 June 2002 was sent to President Gloria Macapagal Arroyo. This letter was indorsed to the DENR Secretary and eventually referred to the Panel of Arbitrators of the Mines and Geosciences Bureau (MGB), Regional Office No. 02, Tuguegarao, Cagayan, for further action. On 12 November 2002, counsels for petitioners received a letter from the Panel of Arbitrators of the MGB requiring the petitioners to comply with the Rules of the Panel of Arbitrators before the letter may be acted upon. Yet again, counsels for petitioners sent President Arroyo another demand letter dated 8 November 2002. Said letter was again forwarded to the DENR Secretary who referred the same to the MGB, Quezon City. In a letter dated 19 February 2003, the MGB rejected the demand of counsels for petitioners for the cancellation of the CAMC FTAA.
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Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They pray that the Court issue an order: 1. enjoining public respondents from acting on any application for FTAA; 2. declaring unconstitutional the Philippine Mining Act of 1995 and its Implementing Rules and Regulations; 3. canceling the FTAA issued to CAMC. In their memorandum petitioners pose the following issues: I Whether or not Republic Act No. 7942 and the CAMC FTAA are void because they allow the unjust and unlawful taking of property without payment of just compensation , in violation of Section 9, Article III of the Constitution. II Whether or not the Mining Act and its Implementing Rules and Regulations are void and unconstitutional for sanctioning an unconstitutional administrative process of determining just compensation. III Whether or not the State, through Republic Act No. 7942 and the CAMC FTAA, abdicated its primary responsibility to the full control and supervision over natural resources. IV Whether or not the respondents interpretation of the role of wholly foreign and foreign-owned corporations in their involvement in mining enterprises, violates paragraph 4, section 2, Article XII of the Constitution.

V WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS. 1 Before going to the substantive issues, the procedural question raised by public respondents shall first be dealt with. Public respondents are of the view that petitioners eminent domain claim is not ripe for adjudication as they fail to allege that CAMC has actually taken their properties nor do they allege that their property rights have been endangered or are in danger on account of CAMCs FTAA. In effect, public respondents insist that the issue of eminent domain is not a justiciable controversy which this Court can take cognizance of. A justiciable controversy is defined as a definite and concrete dispute touching on the legal relations of parties having adverse legal interests which may be resolved by a court of law through the application of a law.2 Thus, courts have no judicial power to review cases involving political questions and as a rule, will desist from taking cognizance of speculative or hypothetical cases, advisory opinions and cases that have become moot.3 The Constitution is quite explicit on this matter.4 It provides that judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable. Pursuant to this constitutional mandate, courts, through the power of judicial review, are to entertain only real disputes between conflicting parties through the application of law. For the courts to exercise the power of judicial review, the following must be extant (1) there must be an actual case calling for the exercise of judicial power; (2) the question must be ripe for adjudication; and (3) the person challenging must have the "standing."5 An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute.6 There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence. Closely related to the second requisite is that the question must be ripe for adjudication. A question is considered ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it.7 The third requisite is legal standing or locus standi. It is defined as a personal or substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging more than a generalized grievance.8 The gist of the question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions."9 Unless a person is injuriously affected in any of his constitutional rights by the operation of statute or ordinance, he has no standing.10 In the instant case, there exists a live controversy involving a clash of legal rights as Rep. Act No. 7942 has been enacted, DAO 96-40 has been approved and an FTAAs have been entered into. The FTAA holders have already been operating in various provinces of the country. Among them is CAMC which operates in the provinces of Nueva Vizcaya and Quirino where numerous individuals including the petitioners are imperiled of being ousted from their landholdings in view of the CAMC FTAA. In light of this, the court cannot await the adverse consequences of the law in order to consider the controversy actual and ripe for judicial intervention.11 Actual eviction of the land owners and occupants need not happen for this Court to intervene. As held in Pimentel, Jr. v. Hon. Aguirre12: By the mere enactment of the questioned law or the approval of the challenged act, the dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty.13 Petitioners embrace various segments of the society. These include Didipio Earth-Savers Multi-Purpose Association, Inc., an organization of farmers and indigenous peoples organized under Philippine laws, representing a community actually affected by the mining activities of CAMC, as well as other residents of areas affected by the mining activities of CAMC. These petitioners have the standing to raise the constitutionality of the questioned FTAA as they allege a personal and substantial injury.14 They assert that they are affected by the mining activities of CAMC. Likewise, they are under imminent threat of being displaced from their landholdings as a result of the implementation of the questioned FTAA. They thus meet the appropriate case requirement as they assert an interest adverse to that of respondents who, on the other hand, claim the validity of the assailed statute and the FTAA of CAMC. Besides, the transcendental importance of the issues raised and the magnitude of the public interest involved will have a bearing on the countrys economy which is to a greater extent dependent upon the mining industry.

Also affected by the resolution of this case are the proprietary rights of numerous residents in the mining contract areas as well as the social existence of indigenous peoples which are threatened. Based on these considerations, this Court deems it proper to take cognizance of the instant petition. Having resolved the procedural question, the constitutionality of the law under attack must be addressed squarely. First Substantive Issue: Validity of Section 76 of Rep. Act No. 7942 and DAO 96-40 In seeking to nullify Rep. Act No. 7942 and its implementing rules DAO 96-40 as unconstitutional, petitioners set their sight on Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and unjust "taking" of private property for private purpose in contradiction with Section 9, Article III of the 1987 Constitution mandating that private property shall not be taken except for public use and the corresponding payment of just compensation. They assert that public respondent DENR, through the Mining Act and its Implementing Rules and Regulations, cannot, on its own, permit entry into a private property and allow taking of land without payment of just compensation. Interpreting Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40, juxtaposed with the concept of taking of property for purposes of eminent domain in the case of Republic v. Vda. de Castellvi,15 petitioners assert that there is indeed a "taking" upon entry into private lands and concession areas. Republic v. Vda. de Castellvi defines "taking" under the concept of eminent domain as entering upon private property for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as to substantially oust the owner and deprive him of all beneficial enjoyment thereof. From the criteria set forth in the cited case, petitioners claim that the entry into a private property by CAMC, pursuant to its FTAA, is for more than a momentary period, i.e., for 25 years, and renewable for another 25 years; that the entry into the property is under the warrant or color of legal authority pursuant to the FTAA executed between the government and CAMC; and that the entry substantially ousts the owner or possessor and deprives him of all beneficial enjoyment of the property. These facts, according to the petitioners, amount to taking. As such, petitioners question the exercise of the power of eminent domain as unwarranted because respondents failed to prove that the entry into private property is devoted for public use. Petitioners also stress that even without the doctrine in the Castellvi case, the nature of the mining activity, the extent of the land area covered by the CAMC FTAA and the various rights granted to the proponent or the FTAA holder, such as (a) the right of possession of the Exploration Contract Area, with full right of ingress and egress and the right to occupy the same; (b) the right not to be prevented from entry into private lands by surface owners and/or occupants thereof when prospecting, exploring and exploiting for minerals therein; (c) the right to enjoy easement rights, the use of timber, water and other natural resources in the Exploration Contract Area; (d) the right of possession of the Mining Area, with full right of ingress and egress and the right to occupy the same; and (e) the right to enjoy easement rights, water and other natural resources in the Mining Area, result in a taking of private property. Petitioners quickly add that even assuming arguendo that there is no absolute, physical taking, at the very least, Section 76 establishes a legal easement upon the surface owners, occupants and concessionaires of a mining contract area sufficient to deprive them of enjoyment and use of the property and that such burden imposed by the legal easement falls within the purview of eminent domain. To further bolster their claim that the legal easement established is equivalent to taking, petitioners cite the case of National Power Corporation v. Gutierrez16 holding that the easement of right-of-way imposed against the use of the land for an indefinite period is a taking under the power of eminent domain. Traversing petitioners assertion, public respondents argue that Section 76 is not a taking provision but a valid exercise of the police power and by virtue of which, the state may prescribe regulations to promote the health, morals, peace, education, good order, safety and general welfare of the people. This government regulation involves the adjustment of rights for the public good and that this adjustment curtails some potential for the use or economic exploitation of private property. Public respondents concluded that "to require compensation in all such circumstances would compel the government to regulate by purchase."

Public respondents are inclined to believe that by entering private lands and concession areas, FTAA holders do not oust the owners thereof nor deprive them of all beneficial enjoyment of their properties as the said entry merely establishes a legal easement upon surface owners, occupants and concessionaires of a mining contract area. Taking in Eminent Domain Distinguished from Regulation in Police Power The power of eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully delegated) to condemn private property to public use upon payment of just compensation.17 On the other hand, police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property.18 Although both police power and the power of eminent domain have the general welfare for their object, and recent trends show a mingling19 of the two with the latter being used as an implement of the former, there are still traditional distinctions between the two. Property condemned under police power is usually noxious or intended for a noxious purpose; hence, no compensation shall be paid.20 Likewise, in the exercise of police power, property rights of private individuals are subjected to restraints and burdens in order to secure the general comfort, health, and prosperity of the state. Thus, an ordinance prohibiting theaters from selling tickets in excess of their seating capacity (which would result in the diminution of profits of the theater-owners) was upheld valid as this would promote the comfort, convenience and safety of the customers.21 In U.S. v. Toribio,22 the court upheld the provisions of Act No. 1147, a statute regulating the slaughter of carabao for the purpose of conserving an adequate supply of draft animals, as a valid exercise of police power, notwithstanding the property rights impairment that the ordinance imposed on cattle owners. A zoning ordinance prohibiting the operation of a lumber yard within certain areas was assailed as unconstitutional in that it was an invasion of the property rights of the lumber yard owners in People v. de Guzman.23 The Court nonetheless ruled that the regulation was a valid exercise of police power. A similar ruling was arrived at in Seng Kee S Co. v. Earnshaw and Piatt24 where an ordinance divided the City of Manila into industrial and residential areas. A thorough scrutiny of the extant jurisprudence leads to a cogent deduction that where a property interest is merely restricted because the continued use thereof would be injurious to public welfare, or where property is destroyed because its continued existence would be injurious to public interest, there is no compensable taking.25However, when a property interest is appropriated and applied to some public purpose, there is compensable taking.26 According to noted constitutionalist, Fr. Joaquin Bernas, SJ, in the exercise of its police power regulation, the state restricts the use of private property, but none of the property interests in the bundle of rights which constitute ownership is appropriated for use by or for the benefit of the public.27 Use of the property by the owner was limited, but no aspect of the property is used by or for the public.28 The deprivation of use can in fact be total and it will not constitute compensable taking if nobody else acquires use of the property or any interest therein.29 If, however, in the regulation of the use of the property, somebody else acquires the use or interest thereof, such restriction constitutes compensable taking. Thus, in City Government of Quezon City v. Ericta,30 it was argued by the local government that an ordinance requiring private cemeteries to reserve 6% of their total areas for the burial of paupers was a valid exercise of the police power under the general welfare clause. This court did not agree in the contention, ruling that property taken under the police power is sought to be destroyed and not, as in this case, to be devoted to a public use. It further declared that the ordinance in question was actually a taking of private property without just compensation of a certain area from a private cemetery to benefit paupers who are charges of the local government. Being an exercise of eminent domain without provision for the payment of just compensation, the same was rendered invalid as it violated the principles governing eminent domain. In People v. Fajardo,31 the municipal mayor refused Fajardo permission to build a house on his own land on the ground that the proposed structure would destroy the view or beauty of the public plaza. The ordinance relied upon by the mayor prohibited the construction of any building that would destroy the view of the plaza from the highway. The court ruled that the municipal ordinance under the guise of police power permanently divest owners of the beneficial use of their property for the benefit of the public; hence, considered as a taking under the power of eminent domain that could not be countenanced without payment of just compensation to the affected owners. In this case, what the municipality wanted was to impose an easement on the property in order to preserve the view or beauty of the public plaza, which was a form of utilization of Fajardos property for public benefit.32 While the power of eminent domain often results in the appropriation of title to or possession of property, it need not always be the case. Taking may include trespass without actual eviction of the owner, material impairment of

the value of the property or prevention of the ordinary uses for which the property was intended such as the establishment of an easement.33 In Ayala de Roxas v. City of Manila,34 it was held that the imposition of burden over a private property through easement was considered taking; hence, payment of just compensation is required. The Court declared: And, considering that the easement intended to be established, whatever may be the object thereof, is not merely a real right that will encumber the property, but is one tending to prevent the exclusive use of one portion of the same, by expropriating it for public use which, be it what it may, can not be accomplished unless the owner of the property condemned or seized be previously and duly indemnified, it is proper to protect the appellant by means of the remedy employed in such cases, as it is only adequate remedy when no other legal action can be resorted to, against an intent which is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive power with which the same is invested. And in the case of National Power Corporation v. Gutierrez,35 despite the NPCs protestation that the owners were not totally deprived of the use of the land and could still plant the same crops as long as they did not come into contact with the wires, the Court nevertheless held that the easement of right-of-way was a taking under the power of eminent domain. The Court said: In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use. A case exemplifying an instance of compensable taking which does not entail transfer of title is Republic v. Philippine Long Distance Telephone Co.36 Here, the Bureau of Telecommunications, a government instrumentality, had contracted with the PLDT for the interconnection between the Government Telephone System and that of the PLDT, so that the former could make use of the lines and facilities of the PLDT. In its desire to expand services to government offices, the Bureau of Telecommunications demanded to expand its use of the PLDT lines. Disagreement ensued on the terms of the contract for the use of the PLDT facilities. The Court ruminated: Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of the condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement right of way.37 In Republic v. Castellvi,38 this Court had the occasion to spell out the requisites of taking in eminent domain, to wit: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period. (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. As shown by the foregoing jurisprudence, a regulation which substantially deprives the owner of his proprietary rights and restricts the beneficial use and enjoyment for public use amounts to compensable taking. In the case under consideration, the entry referred to in Section 76 and the easement rights under Section 75 of Rep. Act No. 7942 as well as the various rights to CAMC under its FTAA are no different from the deprivation of proprietary rights in the cases discussed which this Court considered as taking. Section 75 of the law in question reads: Easement Rights. - When mining areas are so situated that for purposes of more convenient mining operations it is necessary to build, construct or install on the mining areas or lands owned, occupied or leased by other persons, such infrastructure as roads, railroads, mills, waste dump sites, tailing ponds, warehouses, staging or

storage areas and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines, dams and their normal flood and catchment areas, sites for water wells, ditches, canals, new river beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the contractor, upon payment of just compensation, shall be entitled to enter and occupy said mining areas or lands. Section 76 provides: Entry into private lands and concession areas Subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and concession areas by surface owners, occupants, or concessionaires when conducting mining operations therein. The CAMC FTAA grants in favor of CAMC the right of possession of the Exploration Contract Area, the full right of ingress and egress and the right to occupy the same. It also bestows CAMC the right not to be prevented from entry into private lands by surface owners or occupants thereof when prospecting, exploring and exploiting minerals therein. The entry referred to in Section 76 is not just a simple right-of-way which is ordinarily allowed under the provisions of the Civil Code. Here, the holders of mining rights enter private lands for purposes of conducting mining activities such as exploration, extraction and processing of minerals. Mining right holders build mine infrastructure, dig mine shafts and connecting tunnels, prepare tailing ponds, storage areas and vehicle depots, install their machinery, equipment and sewer systems. On top of this, under Section 75, easement rights are accorded to them where they may build warehouses, port facilities, electric transmission, railroads and other infrastructures necessary for mining operations. All these will definitely oust the owners or occupants of the affected areas the beneficial ownership of their lands. Without a doubt, taking occurs once mining operations commence. Section 76 of Rep. Act No. 7942 is a Taking Provision Moreover, it would not be amiss to revisit the history of mining laws of this country which would help us understand Section 76 of Rep. Act No. 7942. This provision is first found in Section 27 of Commonwealth Act No. 137 which took effect on 7 November 1936, viz: Before entering private lands the prospector shall first apply in writing for written permission of the private owner, claimant, or holder thereof, and in case of refusal by such private owner, claimant, or holder to grant such permission, or in case of disagreement as to the amount of compensation to be paid for such privilege of prospecting therein, the amount of such compensation shall be fixed by agreement among the prospector, the Director of the Bureau of Mines and the surface owner, and in case of their failure to unanimously agree as to the amount of compensation, all questions at issue shall be determined by the Court of First Instance. Similarly, the pertinent provision of Presidential Decree No. 463, otherwise known as "The Mineral Resources Development Decree of 1974," provides: SECTION 12. Entry to Public and Private Lands. A person who desires to conduct prospecting or other mining operations within public lands covered by concessions or rights other than mining shall first obtain the written permission of the government official concerned before entering such lands. In the case of private lands, the written permission of the owner or possessor of the land must be obtained before entering such lands. In either case, if said permission is denied, the Director, at the request of the interested person may intercede with the owner or possessor of the land. If the intercession fails, the interested person may bring suit in the Court of First Instance of the province where the land is situated. If the court finds the request justified, it shall issue an order granting the permission after fixing the amount of compensation and/or rental due the owner or possessor: Provided, That pending final adjudication of such amount, the court shall upon recommendation of the Director permit the interested person to enter, prospect and/or undertake other mining operations on the disputed land upon posting by such interested person of a bond with the court which the latter shall consider adequate to answer for any damage to the owner or possessor of the land resulting from such entry, prospecting or any other mining operations. Hampered by the difficulties and delays in securing surface rights for the entry into private lands for purposes of mining operations, Presidential Decree No. 512 dated 19 July 1974 was passed into law in order to achieve full and accelerated mineral resources development. Thus, Presidential Decree No. 512 provides for a new system

of surface rights acquisition by mining prospectors and claimants. Whereas in Commonwealth Act No. 137 and Presidential Decree No. 463 eminent domain may only be exercised in order that the mining claimants can build, construct or install roads, railroads, mills, warehouses and other facilities, this time, the power of eminent domain may now be invoked by mining operators for the entry, acquisition and use of private lands, viz: SECTION 1. Mineral prospecting, location, exploration, development and exploitation is hereby declared of public use and benefit, and for which the power of eminent domain may be invoked and exercised for the entry, acquisition and use of private lands. x x x. The evolution of mining laws gives positive indication that mining operators who are qualified to own lands were granted the authority to exercise eminent domain for the entry, acquisition, and use of private lands in areas open for mining operations. This grant of authority extant in Section 1 of Presidential Decree No. 512 is not expressly repealed by Section 76 of Rep. Act No. 7942; and neither are the former statutes impliedly repealed by the former. These two provisions can stand together even if Section 76 of Rep. Act No. 7942 does not spell out the grant of the privilege to exercise eminent domain which was present in the old law. It is an established rule in statutory construction that in order that one law may operate to repeal another law, the two laws must be inconsistent.39 The former must be so repugnant as to be irreconciliable with the latter act. Simply because a latter enactment may relate to the same subject matter as that of an earlier statute is not of itself sufficient to cause an implied repeal of the latter, since the new law may be cumulative or a continuation of the old one. As has been the ruled, repeals by implication are not favored, and will not be decreed unless it is manifest that the legislature so intended.40 As laws are presumed to be passed with deliberation and with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing a statute it was not intended to interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or unless the reason for the earlier act is beyond peradventure removed.41 Hence, every effort must be used to make all acts stand and if, by any reasonable construction, they can be reconciled, the latter act will not operate as a repeal of the earlier. Considering that Section 1 of Presidential Decree No. 512 granted the qualified mining operators the authority to exercise eminent domain and since this grant of authority is deemed incorporated in Section 76 of Rep. Act No. 7942, the inescapable conclusion is that the latter provision is a taking provision. While this Court declares that the assailed provision 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 taking to be valid must be for public use.42 Public use as a requirement for the valid exercise of the power of eminent domain is now synonymous with public interest, public benefit, public welfare and public convenience.43 It includes the broader notion of indirect public benefit or advantage. Public use as traditionally understood as "actual use by the public" has already been abandoned.44 Mining industry plays a pivotal role in the economic development of the country and is a vital tool in the governments thrust of accelerated recovery.45 The importance of the mining industry for national development is expressed in Presidential Decree No. 463: WHEREAS, mineral production is a major support of the national economy, and therefore the intensified discovery, exploration, development and wise utilization of the countrys mineral resources are urgently needed for national development. Irrefragably, mining is an industry which is of public benefit. That public use is negated by the fact that the state would be taking private properties for the benefit of private mining firms or mining contractors is not at all true. In Heirs of Juancho Ardona v. Reyes,46 petitioners therein contended that the promotion of tourism is not for public use because private concessionaires would be allowed to maintain various facilities such as restaurants, hotels, stores, etc., inside the tourist area. The Court thus contemplated: The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of deference to legislative policy even if such policy might mean taking from one private person and conferring on another private person applies as well in the Philippines.

". . . Once the object is within the authority of Congress, the means by which it will be attained is also for Congress to determine. Here one of the means chosen is the use of private enterprise for redevelopment of the area. Appellants argue that this makes the project a taking from one businessman for the benefit of another businessman. But the means of executing the project are for Congress and Congress alone to determine, once the public purpose has been established. x x x"47 Petitioners further maintain that the states discretion to decide when to take private property is reduced contractually by Section 13.5 of the CAMC FTAA, which reads: If the CONTRACTOR so requests at its option, the GOVERNMENT shall use its offices and legal powers to assist in the acquisition at reasonable cost of any surface areas or rights required by the CONTRACTOR at the CONTRACTORs cost to carry out the Mineral Exploration and the Mining Operations herein. All obligations, payments and expenses arising from, or incident to, such agreements or acquisition of right shall be for the account of the CONTRACTOR and shall be recoverable as Operating Expense. According to petitioners, the government is reduced to a sub-contractor upon the request of the private respondent, and on account of the foregoing provision, the contractor can compel the government to exercise its power of eminent domain thereby derogating the latters power to expropriate property. The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own land, identifies to the government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure.48 The government then acquires ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable the latter to proceed to fully implement the FTAA. Eminent domain is not yet called for at this stage since there are still various avenues by which surface rights can be acquired other than expropriation. The FTAA provision under attack merely facilitates the implementation of the FTAA given to CAMC and shields it from violating the Anti-Dummy Law. Hence, when confronted with the same question in La Bugal-BLaan Tribal Association, Inc. v. Ramos,49 the Court answered: Clearly, petitioners have needlessly jumped to unwarranted conclusions, without being aware of the rationale for the said provision. That provision does not call for the exercise of the power of eminent domain -- and determination of just compensation is not an issue -- as much as it calls for a qualified party to acquire the surface rights on behalf of a foreign-owned contractor. Rather than having the foreign contractor act through a dummy corporation, having the State do the purchasing is a better alternative. This will at least cause the government to be aware of such transaction/s and foster transparency in the contractors dealings with the local property owners. The government, then, will not act as a subcontractor of the contractor; rather, it will facilitate the transaction and enable the parties to avoid a technical violation of the Anti-Dummy Law. There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just compensation in expropriating private properties. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of just compensation: Section 76. xxx Provided, that any damage to the property of the surface owner, occupant, or concessionaire as a consequence of such operations shall be properly compensated as may be provided for in the implementing rules and regulations. Section 107. Compensation of the Surface Owner and Occupant- Any damage done to the property of the surface owners, occupant, or concessionaire thereof as a consequence of the mining operations or as a result of the construction or installation of the infrastructure mentioned in 104 above shall be properly and justly compensated. Such compensation shall be based on the agreement entered into between the holder of mining rights and the surface owner, occupant or concessionaire thereof, where appropriate, in accordance with P.D. No. 512. (Emphasis supplied.) Second Substantive Issue: Power of Courts to Determine Just Compensation Closely-knit to the issue of taking is the determination of just compensation. It is contended that Rep. Act No. 7942 and Section 107 of DAO 96-40 encroach on the power of the trial courts to determine just compensation in

eminent domain cases inasmuch as the same determination of proper compensation are cognizable only by the Panel of Arbitrators. The question on the judicial determination of just compensation has been settled in the case of Export Processing Zone Authority v. Dulay50 wherein the court declared that the determination of just compensation in eminent domain cases is a judicial function. Even as the executive department or the legislature may make the initial determinations, the same cannot prevail over the courts findings. Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO 96-40 states that holder(s) of mining right(s) shall not be prevented from entry into its/their contract/mining areas for the purpose of exploration, development, and/or utilization. That in cases where surface owners of the lands, occupants or concessionaires refuse to allow the permit holder or contractor entry, the latter shall bring the matter before the Panel of Arbitrators for proper disposition. Section 106 states that voluntary agreements between the two parties permitting the mining right holders to enter and use the surface owners lands shall be registered with the Regional Office of the MGB. In connection with Section 106, Section 107 provides that the compensation for the damage done to the surface owner, occupant or concessionaire as a consequence of mining operations or as a result of the construction or installation of the infrastructure shall be properly and justly compensated and that such compensation shall be based on the agreement between the holder of mining rights and surface owner, occupant or concessionaire, or where appropriate, in accordance with Presidential Decree No. 512. In cases where there is disagreement to the compensation or where there is no agreement, the matter shall be brought before the Panel of Arbitrators. Section 206 of the implementing rules and regulations provides an aggrieved party the remedy to appeal the decision of the Panel of Arbitrators to the Mines Adjudication Board, and the latters decision may be reviewed by the Supreme Court by filing a petition for review on certiorari.51 An examination of the foregoing provisions gives no indication that the courts are excluded from taking cognizance of expropriation cases under the mining law. The disagreement referred to in Section 107 does not involve the exercise of eminent domain, rather it contemplates of a situation wherein the permit holders are allowed by the surface owners entry into the latters lands and disagreement ensues as regarding the proper compensation for the allowed entry and use of the private lands. Noticeably, the provision points to a voluntary sale or transaction, but not to an involuntary sale. The legislature, in enacting the mining act, is presumed to have deliberated with full knowledge of all existing laws and jurisprudence on the subject. Thus, it is but reasonable to conclude that in passing such statute it was in accord with the existing laws and jurisprudence on the jurisdiction of courts in the determination of just compensation and that it was not intended to interfere with or abrogate any former law relating to the same matter. Indeed, there is nothing in the provisions of the assailed law and its implementing rules and regulations that exclude the courts from their jurisdiction to determine just compensation in expropriation proceedings involving mining operations. Although Section 105 confers upon the Panel of Arbitrators the authority to decide cases where surface owners, occupants, concessionaires refuse permit holders entry, thus, necessitating involuntary taking, this does not mean that the determination of the just compensation by the Panel of Arbitrators or the Mines Adjudication Board is final and conclusive. The determination is only preliminary unless accepted by all parties concerned. There is nothing wrong with the grant of primary jurisdiction by the Panel of Arbitrators or the Mines Adjudication Board to determine in a preliminary matter the reasonable compensation due the affected landowners or occupants.52 The original and exclusive jurisdiction of the courts to decide determination of just compensation remains intact despite the preliminary determination made by the administrative agency. As held in Philippine Veterans Bank v. Court of Appeals53: The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question is first passed upon by the DAR, as the judicial proceedings are not a continuation of the administrative determination. Third Substantive Issue: Sufficient Control by the State Over Mining Operations Anent the third issue, petitioners charge that Rep. Act No. 7942, as well as its Implementing Rules and Regulations, makes it possible for FTAA contracts to cede over to a fully foreign-owned corporation full control and management of mining enterprises, with the result that the State is allegedly reduced to a passive regulator dependent on submitted plans and reports, with weak review and audit powers. The State is not acting as the supposed owner of the natural resources for and on behalf of the Filipino people; it practically has little effective say in the decisions made by the enterprise. In effect, petitioners asserted that the law, the implementing regulations, and the CAMC FTAA cede beneficial ownership of the mineral resources to the foreign contractor. It must be noted that this argument was already raised in La Bugal-BLaan Tribal Association, Inc. v. Ramos,54where the Court answered in the following manner:

RA 7942 provides for the states control and supervision over mining operations. The following provisions thereof establish the mechanism of inspection and visitorial rights over mining operations and institute reportorial requirements in this manner: 1. Sec. 8 which provides for the DENRs power of over-all supervision and periodic review for "the conservation, management, development and proper use of the States mineral resources"; 2. Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB) under the DENR to exercise "direct charge in the administration and disposition of mineral resources", and empowers the MGB to "monitor the compliance by the contractor of the terms and conditions of the mineral agreements", "confiscate surety and performance bonds", and deputize whenever necessary any member or unit of the Phil. National Police, barangay, duly registered non-governmental organization (NGO) or any qualified person to police mining activities; 3. Sec. 66 which vests in the Regional Director "exclusive jurisdiction over safety inspections of all installations, whether surface or underground", utilized in mining operations. 4. Sec. 35, which incorporates into all FTAAs the following terms, conditions and warranties: "(g) Mining operations shall be conducted in accordance with the provisions of the Act and its IRR. "(h) Work programs and minimum expenditures commitments. xxxx "(k) Requiring proponent to effectively use appropriate anti-pollution technology and facilities to protect the environment and restore or rehabilitate mined-out areas. "(l) The contractors shall furnish the Government records of geologic, accounting and other relevant data for its mining operation, and that books of accounts and records shall be open for inspection by the government. x x x. "(m) Requiring the proponent to dispose of the minerals at the highest price and more advantageous terms and conditions. xxxx "(o) Such other terms and conditions consistent with the Constitution and with this Act as the Secretary may deem to be for the best interest of the State and the welfare of the Filipino people." The foregoing provisions of Section 35 of RA 7942 are also reflected and implemented in Section 56 (g), (h), (l), (m) and (n) of the Implementing Rules, DAO 96-40. Moreover, RA 7942 and DAO 96-40 also provide various stipulations confirming the governments control over mining enterprises:
o

o o o o o

The contractor is to relinquish to the government those portions of the contract area not needed for mining operations and not covered by any declaration of mining feasibility (Section 35-e, RA 7942; Section 60, DAO 96-40). The contractor must comply with the provisions pertaining to mine safety, health and environmental protection (Chapter XI, RA 7942; Chapters XV and XVI, DAO 96-40). For violation of any of its terms and conditions, government may cancel an FTAA. (Chapter XVII, RA 7942; Chapter XXIV, DAO 96-40). An FTAA contractor is obliged to open its books of accounts and records for 0inspection by the government (Section 56-m, DAO 96-40). An FTAA contractor has to dispose of the minerals and by-products at the highest market price and register with the MGB a copy of the sales agreement (Section 56-n, DAO 96-40). MGB is mandated to monitor the contractors compliance with the terms and conditions of the FTAA; and to deputize, when necessary, any member or unit of the Philippine National Police, the barangay or a DENR-accredited nongovernmental organization to police mining activities (Section 7-d and -f, DAO 9640).

o o

An FTAA cannot be transferred or assigned without prior approval by the President (Section 40, RA 7942; Section 66, DAO 96-40). A mining project under an FTAA cannot proceed to the construction/development/utilization stage, unless its Declaration of Mining Project Feasibility has been approved by government (Section 24, RA 7942). The Declaration of Mining Project Feasibility filed by the contractor cannot be approved without submission of the following documents: 1. Approved mining project feasibility study (Section 53-d, DAO 96-40) 2. Approved three-year work program (Section 53-a-4, DAO 96-40) 3. Environmental compliance certificate (Section 70, RA 7942) 4. Approved environmental protection and enhancement program (Section 69, RA 7942) 5. Approval by the Sangguniang Panlalawigan/Bayan/Barangay (Section 70, RA 7942; Section 27, RA 7160) 6. Free and prior informed consent by the indigenous peoples concerned, including payment of royalties through a Memorandum of Agreement (Section 16, RA 7942; Section 59, RA 8371)

The FTAA contractor is obliged to assist in the development of its mining community, promotion of the general welfare of its inhabitants, and development of science and mining technology (Section 57, RA 7942). The FTAA contractor is obliged to submit reports (on quarterly, semi-annual or annual basis as the case may be; per Section 270, DAO 96-40), pertaining to the following: 1. Exploration 2. Drilling 3. Mineral resources and reserves 4. Energy consumption 5. Production 6. Sales and marketing 7. Employment 8. Payment of taxes, royalties, fees and other Government Shares 9. Mine safety, health and environment 10. Land use 11. Social development 12. Explosives consumption

o o

An FTAA pertaining to areas within government reservations cannot be granted without a written clearance from the government agencies concerned (Section 19, RA 7942; Section 54, DAO 96-40). An FTAA contractor is required to post a financial guarantee bond in favor of the government in an amount equivalent to its expenditures obligations for any particular year. This requirement is apart from the representations and warranties of the contractor that it has access to all the financing, managerial and technical expertise and technology necessary to carry out the objectives of the FTAA (Section 35-b, -e, and -f, RA 7942).

Other reports to be submitted by the contractor, as required under DAO 96-40, are as follows: an environmental report on the rehabilitation of the mined-out area and/or mine waste/tailing covered area, and anti-pollution measures undertaken (Section 35-a-2); annual reports of the mining operations and records of geologic accounting (Section 56-m); annual progress reports and final report of exploration activities (Section 56-2). Other programs required to be submitted by the contractor, pursuant to DAO 96-40, are the following: a safety and health program (Section 144); an environmental work program (Section 168); an annual environmental protection and enhancement program (Section 171).

The foregoing gamut of requirements, regulations, restrictions and limitations imposed upon the FTAA contractor by the statute and regulations easily overturns petitioners contention. The setup under RA 7942 and DAO 96-40 hardly relegates the State to the role of a "passive regulator" dependent on submitted plans and reports. On the contrary, the government agencies concerned are empowered to approve or disapprove -- hence, to influence, direct and change -- the various work programs and the corresponding minimum expenditure commitments for each of the exploration, development and utilization phases of the mining enterprise. Once these plans and reports are approved, the contractor is bound to comply with its commitments therein. Figures for mineral production and sales are regularly monitored and subjected to government review, in order to ensure that the products and by-products are disposed of at the best prices possible; even copies of sales agreements have to be submitted to and registered with MGB. And the contractor is mandated to open its books of accounts and records for scrutiny, so as to enable the State to determine if the government share has been fully paid. The State may likewise compel the contractors compliance with mandatory requirements on mine safety, health and environmental protection, and the use of anti-pollution technology and facilities. Moreover, the contractor is also obligated to assist in the development of the mining community and to pay royalties to the indigenous peoples concerned. Cancellation of the FTAA may be the penalty for violation of any of its terms and conditions and/or noncompliance with statutes or regulations. This general, all-around, multipurpose sanction is no trifling matter, especially to a contractor who may have yet to recover the tens or hundreds of millions of dollars sunk into a mining project. Overall, considering the provisions of the statute and the regulations just discussed, we believe that the State definitely possesses the means by which it can have the ultimate word in the operation of the enterprise, set directions and objectives, and detect deviations and noncompliance by the contractor; likewise, it has the capability to enforce compliance and to impose sanctions, should the occasion therefor arise. In other words, the FTAA contractor is not free to do whatever it pleases and get away with it; on the contrary, it will have to follow the government line if it wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-40 vest in the government more than a sufficient degree of control and supervision over the conduct of mining operations. Fourth Substantive Issue: The Proper Interpretation of the Constitutional Phrase "Agreements Involving Either Technical or Financial Assistance In interpreting the first and fourth paragraphs of Section 2, Article XII of the Constitution, petitioners set forth the argument that foreign corporations are barred from making decisions on the conduct of operations and the management of the mining project. The first paragraph of Section 2, Article XII reads: x x x The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production sharing agreements with Filipino citizens, or corporations or associations at least sixty percentum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty five years, renewable for not more than twenty five years, and under such terms and conditions as may be provided by law x x x. The fourth paragraph of Section 2, Article XII provides: The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large scale exploration, development, and utilization of minerals, petroleum, and other mineral oils

according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country x x x. Petitioners maintain that the first paragraph bars aliens and foreign-owned corporations from entering into any direct arrangement with the government including those which involve co-production, joint venture or production sharing agreements. They likewise insist that the fourth paragraph allows foreign-owned corporations to participate in the large-scale exploration, development and utilization of natural resources, but such participation, however, is merely limited to an agreement for either financial or technical assistance only. Again, this issue has already been succinctly passed upon by this Court in La Bugal-BLaan Tribal Association, Inc. v. Ramos.55 In discrediting such argument, the Court ratiocinated: Petitioners claim that the phrase "agreements x x x involving either technical or financial assistance" simply meanstechnical assistance or financial assistance agreements, nothing more and nothing else. They insist that there is no ambiguity in the phrase, and that a plain reading of paragraph 4 quoted above leads to the inescapable conclusion that what a foreign-owned corporation may enter into with the government is merely an agreement foreither financial or technical assistance only, for the large-scale exploration, development and utilization of minerals, petroleum and other mineral oils; such a limitation, they argue, excludes foreign management and operation of a mining enterprise. This restrictive interpretation, petitioners believe, is in line with the general policy enunciated by the Constitution reserving to Filipino citizens and corporations the use and enjoyment of the countrys natural resources. They maintain that this Courts Decision of January 27, 2004 correctly declared the WMCP FTAA, along with pertinent provisions of RA 7942, void for allowing a foreign contractor to have direct and exclusive management of a mining enterprise. Allowing such a privilege not only runs counter to the "full control and supervision" that the State is constitutionally mandated to exercise over the exploration, development and utilization of the countrys natural resources; doing so also vests in the foreign company "beneficial ownership" of our mineral resources. It will be recalled that the Decision of January 27, 2004 zeroed in on "management or other forms of assistance" or other activities associated with the "service contracts" of the martial law regime, since "the management or operation of mining activities by foreign contractors, which is the primary feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution sought to eradicate." xxxx We do not see how applying a strictly literal or verba legis interpretation of paragraph 4 could inexorably lead to the conclusions arrived at in the ponencia. First, the drafters choice of words -- their use of the phraseagreements x x x involving either technical or financial assistance -- does not indicate the intent to exclude other modes of assistance. The drafters opted to use involving when they could have simply said agreements forfinancial or technical assistance, if that was their intention to begin with. In this case, the limitation would be very clear and no further debate would ensue. In contrast, the use of the word "involving" signifies the possibility of the inclusion of other forms of assistance or activities having to do with, otherwise related to or compatible with financial or technical assistance. The word "involving" as used in this context has three connotations that can be differentiated thus:one, the sense of "concerning," "having to do with," or "affecting"; two, "entailing," "requiring," "implying" or "necessitating"; and three, "including," "containing" or "comprising." Plainly, none of the three connotations convey a sense of exclusivity. Moreover, the word "involving," when understood in the sense of "including," as in including technical or financial assistance, necessarily implies that there are activities other than those that are being included. In other words, if an agreement includes technical or financial assistance, there is apart from such assistance -- something else already in, and covered or may be covered by, the said agreement. In short, it allows for the possibility that matters, other than those explicitly mentioned, could be made part of the agreement. Thus, we are now led to the conclusion that the use of the word "involving" implies that these agreements with foreign corporations are not limited to mere financial or technical assistance. The difference in sense becomes very apparent when we juxtapose "agreements for technical or financial assistance" against "agreements including technical or financial assistance." This much is unalterably clear in a verba legis approach. Second, if the real intention of the drafters was to confine foreign corporations to financial or technical assistance and nothing more, their language would have certainly been so unmistakably restrictive and stringent as to leave

no doubt in anyones mind about their true intent. For example, they would have used the sentence foreign corporations are absolutely prohibited from involvement in the management or operation of mining or similar ventures or words of similar import. A search for such stringent wording yields negative results. Thus, we come to the inevitable conclusion that there was a conscious and deliberate decision to avoid the use of restrictive wording that bespeaks an intent not to use the expression "agreements x x x involving either technical or financial assistance" in an exclusionary and limiting manner. Fifth Substantive Issue: Service Contracts Not Deconstitutionalized Lastly, petitioners stress that the service contract regime under the 1973 Constitution is expressly prohibited under the 1987 Constitution as the term service contracts found in the former was deleted in the latter to avoid the circumvention of constitutional prohibitions that were prevalent in the 1987 Constitution. According to them, the framers of the 1987 Constitution only intended for foreign-owned corporations to provide either technical assistance or financial assistance. Upon perusal of the CAMC FTAA, petitioners are of the opinion that the same is a replica of the service contract agreements that the present constitution allegedly prohibit. Again, this contention is not well-taken. The mere fact that the term service contracts found in the 1973 Constitution was not carried over to the present constitution, sans any categorical statement banning service contracts in mining activities, does not mean that service contracts as understood in the 1973 Constitution was eradicated in the 1987 Constitution.56 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; this time, however, safety measures were put in place to prevent abuses of the past regime.57 We ruled, thus: To our mind, however, such intent cannot be definitively and conclusively established from the mere failure to carry the same expression or term over to the new Constitution, absent a more specific, explicit and unequivocal statement to that effect. What petitioners seek (a complete ban on foreign participation in the management of mining operations, as previously allowed by the earlier Constitutions) is nothing short of bringing about a momentous sea change in the economic and developmental policies; and the fundamentally capitalist, freeenterprise philosophy of our government. We cannot imagine such a radical shift being undertaken by our government, to the great prejudice of the mining sector in particular and our economy in general, merely on the basis of the omission of the terms service contract from or the failure to carry them over to the new Constitution. There has to be a much more definite and even unarguable basis for such a drastic reversal of policies. xxxx The foregoing are mere fragments of the framers lengthy discussions of the provision dealing with agreements x x x involving either technical or financial assistance, which ultimately became paragraph 4 of Section 2 of Article XII of the Constitution. Beyond any doubt, the members of the ConCom were actually debating about the martial-law-era service contracts for which they were crafting appropriate safeguards. In the voting that led to the approval of Article XII by the ConCom, the explanations given by Commissioners Gascon, Garcia and Tadeo indicated that they had voted to reject this provision on account of their objections to the "constitutionalization" of the "service contract" concept. Mr. Gascon said, "I felt that if we would constitutionalize any provision on service contracts, this should always be with the concurrence of Congress and not guided only by a general law to be promulgated by Congress." Mr. Garcia explained, "Service contracts are given constitutional legitimization in Sec. 3, even when they have been proven to be inimical to the interests of the nation, providing, as they do, the legal loophole for the exploitation of our natural resources for the benefit of foreign interests." Likewise, Mr. Tadeo cited inter alia the fact that service contracts continued to subsist, enabling foreign interests to benefit from our natural resources. It was hardly likely that these gentlemen would have objected so strenuously, had the provision called for mere technical or financial assistance and nothing more. The deliberations of the ConCom and some commissioners explanation of their votes leave no room for doubt that the service contract concept precisely underpinned the commissioners understanding of the "agreements involving either technical or financial assistance." xxxx

From the foregoing, we are impelled to conclude that the phrase agreements involving either technical or financial assistance, referred to in paragraph 4, are in fact service contracts. But unlike those of the 1973 variety, the new ones are between foreign corporations acting as contractors on the one hand; and on the other, the government as principal or "owner" of the works. In the new service contracts, the foreign contractors provide capital, technology and technical know-how, and managerial expertise in the creation and operation of largescale mining/extractive enterprises; and the government, through its agencies (DENR, MGB), actively exercises control and supervision over the entire operation. xxxx It is therefore reasonable and unavoidable to make the following conclusion, based on the above arguments. As written by the framers and ratified and adopted by the people, the 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 -- sans the abuses of the past regime. The purpose is clear: to develop and utilize our mineral, petroleum and other resources on a large scale for the immediate and tangible benefit of the Filipino people.58 WHEREFORE, the instant petition for prohibition and mandamus is hereby DISMISSED. Section 76 of Republic Act No. 7942 and Section 107 of DAO 96-40; Republic Act No. 7942 and its Implementing Rules and Regulations contained in DAO 96-40 insofar as they relate to financial and technical assistance agreements referred to in paragraph 4 of Section 2 of Article XII of the Constitution are NOT UNCONSTITUTIONAL. SO ORDERED.

G.R. No. 149927

March 30, 2004

REPUBLIC OF THE PHILIPPINES, Represented by the Department of Environment and Natural Resources (DENR) Under then Minister ERNESTO R. MACEDA; and Former Government Officials CATALINO MACARAIG, FULGENCIO S. FACTORAN, ANGEL C. ALCALA, BEN MALAYANG, ROBERTO PAGDANGANAN, MARIANO Z. VALERA and ROMULO SAN JUAN, petitioners, vs. ROSEMOOR MINING AND DEVELOPMENT CORPORATION, PEDRO DEL CONCHA, and ALEJANDRO and RUFO DE GUZMAN, respondents. DECISION PANGANIBAN, J.: A mining license that contravenes a mandatory provision of the law under which it is granted is void. Being a mere privilege, a license does not vest absolute rights in the holder. Thus, without offending the due process and the non-impairment clauses of the Constitution, it can be revoked by the State in the public interest. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to nullify the May 29, 2001 Decision2 and the September 6, 2001 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 46878. The CA disposed as follows: "WHEREFORE, premises considered, the appealed Decision is hereby AFFIRMED in toto."4 The questioned Resolution denied petitioners Motion for Reconsideration. On the other hand, trial courts Decision, which was affirmed by the CA, had disposed as follows: "WHEREFORE, judgment is hereby rendered as follows: 1. Declaring that the cancellation of License No. 33 was done without jurisdiction and in gross violation of the Constitutional right of the petitioners against deprivation of their property rights without due process of law and is hereby set aside. 2. Declaring that the petitioners right to continue the exploitation of the marble deposits in the area covered by License No. 33 is maintained for the duration of the period of its life of twenty-five (25) years, less three (3) years of continuous operation before License No. 33 was cancelled, unless sooner terminated for violation of any of the conditions specified therein, with due process. 3. Making the Writ of preliminary injunction and the Writ of Preliminary Mandatory Injunction issued as permanent. 4. Ordering the cancellation of the bond filed by the Petitioners in the sum of 1 Million. 5. Allowing the petitioners to present evidence in support of the damages they claim to have suffered from, as a consequence of the summary cancellation of License No. 33 pursuant to the agreement of the parties on such dates as maybe set by the Court; and 6. Denying for lack of merit the motions for contempt, it appearing that actuations of the respondents were not contumacious and intended to delay the proceedings or undermine the integrity of the Court. No pronouncement yet as to costs."5 The Facts The CA narrated the facts as follows:

"The four (4) petitioners, namely, Dr. Lourdes S. Pascual, Dr. Pedro De la Concha, Alejandro De La Concha, and Rufo De Guzman, after having been granted permission to prospect for marble deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded in discovering marble deposits of high quality and in commercial quantities in Mount Mabio which forms part of the Biak-na-Bato mountain range. "Having succeeded in discovering said marble deposits, and as a result of their tedious efforts and substantial expenses, the petitioners applied with the Bureau of Mines, now Mines and Geosciences Bureau, for the issuance of the corresponding license to exploit said marble deposits. xxxxxxxxx "After compliance with numerous required conditions, License No. 33 was issued by the Bureau of Mines in favor of the herein petitioners. xxxxxxxxx "Shortly after Respondent Ernesto R. Maceda was appointed Minister of the Department of Energy and Natural Resources (DENR), petitioners License No. 33 was cancelled by him through his letter to ROSEMOOR MINING AND DEVELOPMENT CORPORATION dated September 6, 1986 for the reasons stated therein. Because of the aforesaid cancellation, the original petition was filed and later substituted by the petitioners AMENDED PETITION dated August 21, 1991 to assail the same. "Also after due hearing, the prayer for injunctive relief was granted in the Order of this Court dated February 28, 1992. Accordingly, the corresponding preliminary writs were issued after the petitioners filed their injunction bond in the amount of ONE MILLION PESOS (P1,000,000.00). xxxxxxxxx "On September 27, 1996, the trial court rendered the herein questioned decision."6 The trial court ruled that the privilege granted under respondents license had already ripened into a property right, which was protected under the due process clause of the Constitution. Such right was supposedly violated when the license was cancelled without notice and hearing. The cancellation was said to be unjustified, because the area that could be covered by the four separate applications of respondents was 400 hectares. Finally, according to the RTC, Proclamation No. 84, which confirmed the cancellation of the license, was an ex post facto law; as such, it violated Section 3 of Article XVIII of the 1987 Constitution. On appeal to the Court of Appeals, herein petitioners asked whether PD 463 or the Mineral Resources Development Decree of 1974 had been violated by the award of the 330.3062 hectares to respondents in accordance with Proclamation No. 2204. They also questioned the validity of the cancellation of respondents Quarry License/Permit (QLP) No. 33. Ruling of the Court of Appeals Sustaining the trial court in toto, the CA held that the grant of the quarry license covering 330.3062 hectares to respondents was authorized by law, because the license was embraced by four (4) separate applications -- each for an area of 81 hectares. Moreover, it held that the limitation under Presidential Decree No. 463 -- that a quarry license should cover not more than 100 hectares in any given province -- was supplanted by Republic Act No. 7942,7 which increased the mining areas allowed under PD 463. It also ruled that the cancellation of respondents license without notice and hearing was tantamount to a deprivation of property without due process of law. It added that under the clause in the Constitution dealing with the non-impairment of obligations and contracts, respondents license must be respected by the State. Hence, this Petition.8 Issues Petitioners submit the following issues for the Courts consideration:

"(1) [W]hether or not QLP No. 33 was issued in blatant contravention of Section 69, P.D. No. 463; and (2) whether or not Proclamation No. 84 issued by then President Corazon Aquino is valid. The corollary issue is whether or not the Constitutional prohibition against ex post facto law applies to Proclamation No. 84"9 The Courts Ruling The Petition has merit. First Issue: Validity of License Respondents contend that the Petition has no legal basis, because PD 463 has already been repealed.10 In effect, they ask for the dismissal of the Petition on the ground of mootness. PD 463, as amended, pertained to the old system of exploration, development and utilization of natural resources through licenses, concessions or leases.11 While these arrangements were provided under the 193512 and the 197313 Constitutions, they have been omitted by Section 2 of Article XII of the 1987 Constitution.14 With the shift of constitutional policy toward "full control and supervision of the State" over natural resources, the Court in Miners Association of the Philippines v. Factoran Jr. 15 declared the provisions of PD 463 as contrary to or violative of the express mandate of the 1987 Constitution. The said provisions dealt with the lease of mining claims; quarry permits or licenses covering privately owned or public lands; and other related provisions on lease, licenses and permits. RA 7942 or the Philippine Mining Act of 1995 embodies the new constitutional mandate. It has repealed or amended all laws, executive orders, presidential decrees, rules and regulations -- or parts thereof -- that are inconsistent with any of its provisions.16 It is relevant to state, however, that Section 2 of Article XII of the 1987 Constitution does not apply retroactively to a "license, concession or lease" granted by the government under the 1973 Constitution or before the effectivity of the 1987 Constitution on February 2, 1987.17 As noted in Miners Association of the Philippines v. Factoran Jr., the deliberations of the Constitutional Commission18 emphasized the intent to apply the said constitutional provision prospectively. While RA 7942 has expressly repealed provisions of mining laws that are inconsistent with its own, it nonetheless respects previously issued valid and existing licenses, as follows: "SECTION 5. Mineral Reservations. When the national interest so requires, such as when there is a need to preserve strategic raw materials for industries critical to national development, or certain minerals for scientific, cultural or ecological value, the President may establish mineral reservations upon the recommendation of the Director through the Secretary. Mining operations in existing mineral reservations and such other reservations as may thereafter be established, shall be undertaken by the Department or through a contractor: Provided, That a small scale-mining cooperative covered by Republic Act No. 7076 shall be given preferential right to apply for a small-scale mining agreement for a maximum aggregate area of twenty-five percent (25%) of such mineral reservation, subject to valid existing mining/quarrying rights as provided under Section 112 Chapter XX hereof. All submerged lands within the contiguous zone and in the exclusive economic zone of the Philippines are hereby declared to be mineral reservations. "x x x x x x x x x "SECTION 7. Periodic Review of Existing Mineral Reservations. The Secretary shall periodically review existing mineral reservations for the purpose of determining whether their continued existence is consistent with the national interest, and upon his recommendation, the President may, by proclamation, alter or modify the boundaries thereof or revert the same to the public domain without prejudice to prior existing rights." "SECTION 18. Areas Open to Mining Operations. Subject to any existing rights or reservations and prior agreements of all parties, all mineral resources in public or private lands, including timber or forestlands as defined in existing laws, shall be open to mineral agreements or financial or technical

assistance agreement applications. Any conflict that may arise under this provision shall be heard and resolved by the panel of arbitrators." "SECTION 19. Areas Closed to Mining Applications. -- Mineral agreement or financial or technical assistance agreement applications shall not be allowed: (a) In military and other government reservations, except upon prior written clearance by the government agency concerned; (b) Near or under public or private buildings, cemeteries, archeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or private entity concerned; (c) In areas covered by valid and existing mining rights; (d) In areas expressly prohibited by law; (e) In areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners, in which case a royalty payment upon the utilization of minerals shall be agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development of the community concerned; and (f) Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks, provincial/municipal forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law and in areas expressly prohibited under the National Integrated Protected Areas System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws." "SECTION 112. Non-impairment of Existing Mining/ Quarrying Rights. All valid and existing mining lease contracts, permits/licenses, leases pending renewal, mineral production-sharing agreements granted under Executive Order No. 279, at the date of effectivity of this Act, shall remain valid, shall not be impaired, and shall be recognized by the Government: Provided, That the provisions of Chapter XIV on government share in mineral production-sharing agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply to a mining lessee or contractor unless the mining lessee or contractor indicates his intention to the secretary, in writing, not to avail of said provisions: Provided, further, That no renewal of mining lease contracts shall be made after the expiration of its term: Provided, finally, That such leases, production-sharing agreements, financial or technical assistance agreements shall comply with the applicable provisions of this Act and its implementing rules and regulations. "SECTION 113. Recognition of Valid and Existing Mining Claims and Lease/Quarry Application. Holders of valid and existing mining claims, lease/quarry applications shall be given preferential rights to enter into any mode of mineral agreement with the government within two (2) years from the promulgation of the rules and regulations implementing this Act." (Underscoring supplied) Section 3(p) of RA 7942 defines an existing mining/quarrying right as "a valid and subsisting mining claim or permit or quarry permit or any mining lease contract or agreement covering a mineralized area granted/issued under pertinent mining laws." Consequently, determining whether the license of respondents falls under this definition would be relevant to fixing their entitlement to the rights and/or preferences under RA 7942. Hence, the present Petition has not been mooted. Petitioners submit that the license clearly contravenes Section 69 of PD 463, because it exceeds the maximum area that may be granted. This incipient violation, according to them, renders the license void ab initio. Respondents, on the other hand, argue that the license was validly granted, because it was covered by four separate applications for areas of 81 hectares each. The license in question, QLP No. 33,19 is dated August 3, 1982, and it was issued in the name of Rosemoor Mining Development Corporation. The terms of the license allowed the corporation to extract and dispose of marbleized limestone from a 330.3062-hectare land in San Miguel, Bulacan. The license is, however, subject to

the terms and conditions of PD 463, the governing law at the time it was granted; as well as to the rules and regulations promulgated thereunder.20 By the same token, Proclamation No. 2204 -- which awarded to Rosemoor the right of development, exploitation, and utilization of the mineral site -- expressly cautioned that the grant was subject to "existing policies, laws, rules and regulations."21 The license was thus subject to Section 69 of PD 463, which reads: "Section 69. Maximum Area of Quarry License Notwithstanding the provisions of Section 14 hereof, a quarry license shall cover an area of not more than one hundred (100) hectares in any one province and not more than one thousand (1,000) hectares in the entire Philippines." (Italics supplied) The language of PD 463 is clear. It states in categorical and mandatory terms that a quarry license, like that of respondents, should cover a maximum of 100 hectares in any given province. This law neither provides any exception nor makes any reference to the number of applications for a license. Section 69 of PD 463 must be taken to mean exactly what it says. Where the law is clear, plain, and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.22 Moreover, the lower courts ruling is evidently inconsistent with the fact that QLP No. 33 was issued solely in the name of Rosemoor Mining and Development Corporation, rather than in the names of the four individual stockholders who are respondents herein. It likewise brushes aside a basic postulate that a corporation has a separate personality from that of its stockholders.23 The interpretation adopted by the lower courts is contrary to the purpose of Section 69 of PD 463. Such intent to limit, without qualification, the area of a quarry license strictly to 100 hectares in any one province is shown by the opening proviso that reads: "Notwithstanding the provisions of Section 14 hereof x x x." The mandatory nature of the provision is also underscored by the use of the word shall. Hence, in the application of the 100hectare-per-province limit, no regard is given to the size or the number of mining claims under Section 14, which we quote: "SECTION 14. Size of Mining Claim. -- For purposes of registration of a mining claim under this Decree, the Philippine territory and its shelf are hereby divided into meridional blocks or quadrangles of one-half minute (1/2) of latitude and longitude, each block or quadrangle containing area of eighty-one (81) hectares, more or less. "A mining claim shall cover one such block although a lesser area may be allowed if warranted by attendant circumstances, such as geographical and other justifiable considerations as may be determined by the Director: Provided, That in no case shall the locator be allowed to register twice the area allowed for lease under Section 43 hereof." (Italics supplied) Clearly, the intent of the law would be brazenly circumvented by ruling that a license may cover an area exceeding the maximum by the mere expediency of filing several applications. Such ruling would indirectly permit an act that is directly prohibited by the law. Second Issue: Validity of Proclamation No. 84 Petitioners also argue that the license was validly declared a nullity and consequently withdrawn or terminated. In a letter dated September 15, 1986, respondents were informed by then Minister Ernesto M. Maceda that their license had illegally been issued, because it violated Section 69 of PD 463; and that there was no more public interest served by the continued existence or renewal of the license. The latter reason, they added, was confirmed by the language of Proclamation No. 84. According to this law, public interest would be served by reverting the parcel of land that was excluded by Proclamation No. 2204 to the former status of that land as part of the Biak-na-Bato national park. They also contend that Section 74 of PD 463 would not apply, because Minister Macedas letter did not cancel or revoke QLP No. 33, but merely declared the latters nullity. They further argue that respondents waived notice and hearing in their application for the license. On the other hand, respondents submit that, as provided for in Section 74 of PD 463, their right to due process was violated when their license was cancelled without notice and hearing. They likewise contend that Proclamation No. 84 is not valid for the following reasons: 1) it violates the clause on the non-impairment of

contracts; 2) it is an ex post facto law and/or a bill of attainder; and 3) it was issued by the President after the effectivity of the 1987 Constitution. This Court ruled on the nature of a natural resource exploration permit, which was akin to the present respondents license, in Southeast Mindanao Gold Mining Corporation v. Balite Portal Mining Cooperative,24 which held: "x x x. As correctly held by the Court of Appeals in its challenged decision, EP No. 133 merely evidences a privilege granted by the State, which may be amended, modified or rescinded when the national interest so requires. This is necessarily so since the exploration, development and utilization of the countrys natural mineral resources are matters impressed with great public interest. Like timber permits, mining exploration permits do not vest in the grantee any permanent or irrevocable right within the purview of the non-impairment of contract and due process clauses of the Constitution, since the State, under its all-encompassing police power, may alter, modify or amend the same, in accordance with the demands of the general welfare."25 This same ruling had been made earlier in Tan v. Director of Forestry26 with regard to a timber license, a pronouncement that was reiterated in Ysmael v. Deputy Executive Secretary,27 the pertinent portion of which reads: "x x x. Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302]."28 (Italics supplied) In line with the foregoing jurisprudence, respondents license may be revoked or rescinded by executive action when the national interest so requires, because it is not a contract, property or a property right protected by the due process clause of the Constitution.29 Respondents themselves acknowledge this condition of the grant under paragraph 7 of QLP No. 33, which we quote: "7. This permit/license may be revoked or cancelled at any time by the Director of Mines and GeoSciences when, in his opinion public interests so require or, upon failure of the permittee/licensee to comply with the provisions of Presidential Decree No. 463, as amended, and the rules and regulations promulgated thereunder, as well as with the terms and conditions specified herein; Provided, That if a permit/license is cancelled, or otherwise terminated, the permittee/licensee shall be liable for all unpaid rentals and royalties due up to the time of the termination or cancellation of the permit/license[.]"30 (Italics supplied) The determination of what is in the public interest is necessarily vested in the State as owner of all mineral resources. That determination was based on policy considerations formally enunciated in the letter dated September 15, 1986, issued by then Minister Maceda and, subsequently, by the President through Proclamation No. 84. As to the exercise of prerogative by Maceda, suffice it to say that while the cancellation or revocation of the license is vested in the director of mines and geo-sciences, the latter is subject to the formers control as the department head. We also stress the clear prerogative of the Executive Department in the evaluation and the consequent cancellation of licenses in the process of its formulation of policies with regard to their utilization. Courts will not interfere with the exercise of that discretion without any clear showing of grave abuse of discretion.31 Moreover, granting that respondents license is valid, it can still be validly revoked by the State in the exercise of police power.32 The exercise of such power through Proclamation No. 84 is clearly in accord with jura regalia, which reserves to the State ownership of all natural resources.33 This Regalian doctrine is an exercise of its sovereign power as owner of lands of the public domain and of the patrimony of the nation, the mineral deposits of which are a valuable asset.34 Proclamation No. 84 cannot be stigmatized as a violation of the non-impairment clause. As pointed out earlier, respondents license is not a contract to which the protection accorded by the non-impairment clause may extend.35 Even if the license were, it is settled that provisions of existing laws and a reservation of police power

are deemed read into it, because it concerns a subject impressed with public welfare.36 As it is, the nonimpairment clause must yield to the police power of the state.37 We cannot sustain the argument that Proclamation No. 84 is a bill of attainder; that is, a "legislative act which inflicts punishment without judicial trial."38 Its declaration that QLP No. 33 is a patent nullity39 is certainly not a declaration of guilt. Neither is the cancellation of the license a punishment within the purview of the constitutional proscription against bills of attainder. Too, there is no merit in the argument that the proclamation is an ex post facto law. There are six recognized instances when a law is considered as such: 1) it criminalizes and punishes an action that was done before the passing of the law and that was innocent when it was done; 2) it aggravates a crime or makes it greater than it was when it was committed; 3) it changes the punishment and inflicts one that is greater than that imposed by the law annexed to the crime when it was committed; 4) it alters the legal rules of evidence and authorizes conviction upon a less or different testimony than that required by the law at the time of the commission of the offense; 5) it assumes the regulation of civil rights and remedies only, but in effect imposes a penalty or a deprivation of a right as a consequence of something that was considered lawful when it was done; and 6) it deprives a person accused of a crime of some lawful protection to which he or she become entitled, such as the protection of a former conviction or an acquittal or the proclamation of an amnesty.40 Proclamation No. 84 does not fall under any of the enumerated categories; hence, it is not an ex post facto law. It is settled that an ex post facto law is limited in its scope only to matters criminal in nature.41 Proclamation 84, which merely restored the area excluded from the Biak-na-Bato national park by canceling respondents license, is clearly not penal in character. Finally, it is stressed that at the time President Aquino issued Proclamation No. 84 on March 9, 1987, she was still validly exercising legislative powers under the Provisional Constitution of 1986.42 Section 1 of Article II of Proclamation No. 3, which promulgated the Provisional Constitution, granted her legislative power "until a legislature is elected and convened under a new Constitution." The grant of such power is also explicitly recognized and provided for in Section 6 of Article XVII of the 1987 Constitution.43 WHEREFORE, this Petition is hereby GRANTED and the appealed Decision of the Court of Appeals SET ASIDE. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

G.R. No. 162331

November 20, 2006

LEPANTO CONSOLIDATED MINING CO., Petitioner, vs. WMC RESOURCES INTL. PTY. LTD., WMC PHILIPPINES, INC. and SAGITTARIUS MINES, INC., Respondents. DECISION CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Decision1 of the Court of Appeals in CA-G.R. SP No. 74161, dated 21 November 2003, which dismissed herein petitioners Petition for Review of the Decision2 of the Office of the President dated 23 July 2002 affirming in totothe Order3 of the Secretary of the Department of Environment and Natural Resources (DENR) dated 18 December 2001 approving the application for and the consequent registration of FTAA No. 02-95-XI from WMC Philippines to Sagittarius Mines, Inc. On 22 March 1995, the Philippine Government and WMC Philippines, the local wholly-owned subsidiary of WMC Resources International Pty. Ltd. (WMC Resources) executed a Financial and Technical Assistance Agreement, denominated as the Columbio FTAA No. 02-95-XI (Columbio FTAA) for the purpose of large scale exploration, development, and commercial exploration of possible mineral resources in an initial contract area of 99,387 hectares located in the provinces of South Cotabato, Sultan Kudarat, Davao del Sur, and North Cotabato in accordance with Executive Order No. 279 and Department Administrative Order No. 63, Series of 1991. The Columbio FTAA is covered in part by 156 mining claims held under various Mineral Production Sharing Agreements (MPSA) by Southcot Mining Corporation, Tampakan Mining Corporation, and Sagittarius Mines, Inc. (collectively called the Tampakan Companies), in accordance with the Tampakan Option Agreement entered into by WMC Philippines and the Tampakan Companies on 25 April 1991, as amended by Amendatory Agreement dated 15 July 1994, for purposes of exploration of the mining claims in Tampakan, South Cotabato. The Option Agreement, among other things, provides for the grant of the right of first refusal to the Tampakan Companies in case WMC Philippines desires to dispose of its rights and interests in the mining claims covering the area subject of the agreement. WMC Resources subsequently divested itself of its rights and interests in the Columbio FTAA, and on 12 July 2000 executed a Sale and Purchase Agreement with petitioner Lepanto over its entire shareholdings in WMC Philippines, subject to the exercise of the Tampakan Companies exercise of their right of first refusal to purchase the subject shares. On 28 August 2000, petitioner sought the approval of the 12 July 2000 Agreement from the DENR Secretary. In an Agreement dated 6 October 2000, however, the Tampakan Companies sought to exercise its right of first refusal. Thus, in a letter dated 13 October 2000, petitioner assailed the Tampakan Companies exercise of its right of first refusal, alleging that the Tampakan Companies failed to match the terms and conditions set forth in the 12 July 2000 Agreement. Thereafter, petitioner filed a case4 for Injunction, Specific Performance, Annulment of Contracts and Contractual Interference with the Regional Trial Court of Makati, Branch 135, against WMC Resources, WMC Philippines, and the Tampakan Companies. WMC Philippines and the Tampakan Companies moved for the dismissal of said case. Said Motion to Dismiss having been denied, WMC Philippines challenged the order dismissing the Motion on appeal5 before the Court of Appeals which subsequently ordered the dismissal of the case on the ground of forum shopping in this wise: Nevertheless, the Court finds that private respondent is guilty of forum-shopping. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in courts but also in connection with litigation commenced in the courts while an administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling.

In this case, petitioners argue that private respondent is guilty of forum shopping for having lodged the complain before respondent Court pending action by the Secretary of the DENR through the Mines and Geo-Sciences Bureau (MGB) on its approval of the Sale and Purchase Agreement dated July 12, 2000. Private respondent on the other hand, opposes the foregoing contention arguing that the MGB will be merely exercising its administrative not quasi-judicial power. The action before respondent court was filed by private respondent to compel petitioner WMC Resources to convey its equity in WMC Phils. and Hillcrest to the former. Meanwhile, in the case before the MGB, private respondent sought the approval of Sale and that the MGBs authority over the case is purely administrative, but further review shows that private respondent raised contentious issues which need resolution by the MGB before it can recommend any approval to the Secretary of the DENR. Particularly, in its letter dated October 13, 2000 to the Secretary of the DENR, private respondent posed its objection to the approval of the Sales and Purchase agreements between WMC Resources and the Tampakan Companies, asserting that the latter failed to validly exercise its right of first refusal. Also, in its letter to the Director of the MGB dated December 8, 2000, private respondent spelled out in detail its reasons for objecting to the agreement between WMC Resources and the Tampakan Companies, and in the same breath, argued for the approval of its own contract. And because of the opposing claims posited by private respondent and petitioners, the MGB was constrained to require the parties to submit their respective comments. At the juncture, the MGBs authority ceased to be administrative. Evidently, the MGB has to review all these opposing contentions and resolve the same. A resolution of the MGB on which contract to recommend or endorse to the Secretary of the DENR for approval will necessarily include a declaration on the validity of the different Sale and Purchase Agreements executed between the disagreeing parties, as well as on the exercise of the Tampakan Companies exercise of its right of first refusal and its qualification as a contractor under the FTAA. Even the MGB is aware that the dispute revolves around these sales and purchase agreements. Hence, it cannot be gainsaid that the MGB will be exercising its quasi-judicial powers in resolving the conflict before it. Whether the MGB can validly exercise such jurisdiction over the controversy is another issue but nonetheless immaterial in determining whether private respondent is guilty of forum-shopping. What is determinative is the filing of two (2) separate actions in different for a based principally on the same cause on the supposition that one or the other court would make a favorable disposition. Thus, it is not highly unlikely that respondent Court and MGB will come up with conflicting pronouncements on the dispute, thereby creating a quandary as to which one will prevail. Private respondents act undisputably constitutes a clear case of forum-shopping, a ground for summary dismissal with prejudice of the action. The respondent court committed grave abuse of discretion in refusing to dismiss Civil Case No. 01-087 on ground of forum-shopping.6 With the denial of petitioners Motion for Reconsideration, the case7 was elevated to this Court. In a Decision dated 24 September 2003, the Court affirmed the Decision of the appellate court and dismissed the petition. In said Decision, the Court elucidated that: True, the questioned agreements of sale between petitioner and WMC on one hand and between WMC and the Tampakan Companies on the other pertain to transfer of shares of stock from one entity to another. But said shares of stock represent ownership of mining rights or interest in mining agreements. Hence, the power of the MGB to rule on the validity of the questioned agreements of sale, which was raised by petitioner before the DENR, is inextricably linked to the very nature of such agreements over which the MGB has jurisdiction under the law. Unavoidably, there is identity of reliefs that petitioner seeks from both the MGB and the RTC. Forum shopping exists when both actions involve the same transactions, same essential facts and circumstances and raise identical causes of actions, subject matter, and issues. Such elements are evidently present in both the proceedings before the MGB and before the trial court. The case instituted with the RTC was thus correctly ordered dismissed by the appellate court on the ground of forum shopping. Besides, not only did petitioner commit forum shopping but it also failed to exhaust administrative remedies by opting to go ahead in seeking reliefs from the court even while those same reliefs were appropriately awaiting resolution by the MGB.8 In the interim, on 10 January 2001, contending that the 12 July Agreement between petitioner and WMC Philippines had expired due to failure to meet the necessary preconditions for its validity, WMC Resources and the Tampakan Companies executed another Sale and Purchase Agreement, where Sagittarius Mines, Inc. was designated assignee and corporate vehicle which would acquire the shareholdings and undertake the Columbio FTAA activities. On 15 January 2001, Sagittarius Mines, Inc. increased its authorized capitalization to P250 million. Subsequently, WMC Resources and Sagittarius Mines, Inc. executed a Deed of Absolute Sale of Shares of Stocks on 23 January 2001. After due consideration and evaluation of the financial and technical qualifications of Sagittarius Mines, Inc., the DENR Secretary approved the transfer of the Columbio FTAA from WMC Philippines to Sagittarius Mines, Inc. in the assailed Order. According to said Order, pursuant to Section 66 of Department Administrative Order No. 96-

40, as amended, Sagittarius Mines, Inc. meets the qualification requirements as Contractor-Transferee of FTAA No. 02-95-XI, and that the application for transfer of said FTAA went thru the procedure and other requirements set forth under the law. Aggrieved by the transfer of the Columbio FTAA in favor of Sagittarius Mines, Inc., petitioner filed a Petition for Review of the Order of the DENR Secretary with the Office of the President. Petitioner assails the validity of the 18 December 2001 Order on the ground that: 1) it violates the constitutional right of Lepanto to due process; 2) it preempts the resolution of very crucial legal issues pending with the regular courts; and 3) it blatantly violates Section 40 of the Mining Act. In a Decision dated 23 July 2002, the Office of the President dismissed the petition in this wise: At the outset, it bears emphasis that quite contrary to the argument of petitioner Lepanto, the above Order of the DENR Secretary is not violative of the Mining Law. Since the subject Columbio FTAA was granted in accordance with the pertinent provisions of Executive Order No. 279 and Department Administrative Order No. 63 on 22 March 1995, or prior to the effectivity of the Philippine Mining Act of 1995, especially as it highlights the nonimpairment of existing mining and/or quarrying rights, under Section 14.1 (b) thereof, only the consent of DENR Secretary is required. To hold otherwise would be to unduly impose a burden on transferor WMC and thereby restrict its freedom to dispose of or alienate this property right without due process. Thus, under the Revised Implementing Rules and Regulations of the Philippine Mining Act of 1995, Chapter XXX thereof expressly echoes the guaranty: "Section 272. Non-Impairment of Existing Mining/Quarrying Rights.- All valid and existing mining lease contracts, permits/licenses, leases pending renewal, Mineral Production Sharing Agreements, FTAA granted under Executive Order No. 279, at the date of the Act shall remain valid, shall not be impaired and shall be recognized by the Government x x x. x x x Provided, finally, That this provision is applicable only to all FTAA/MPSA applications filed under Department Administrative Order No. 63 prior to the effectivity of the act and these implementing rules and regulations." As correctly stated by the MGB Director and affirmed by the DENR Secretary, Section 14.1 of the Columbio FTAA provides that the FTAA may be transferred provided that the Secretary consents to the same. Pursuant to Section 112 of the Mining Act and Section 272 of DAO No. 96-40, as amended, on non-impairment of existing mining rights, the subject application for transfer of the Columbio FTAA to Sagittarius requires only the approval of the DENR Secretary. Moreover, there is no merit in petitioner Lepantos argument that the DENR Secretary and consequently, this Office, has no jurisdiction over the subject matter in issue. The assailed Order of the DENR Secretary was pursuant to the latters exercise of the well-entrenched doctrine of primary jurisdiction of administrative agencies. By virtue of the operation of the doctrine of primary jurisdiction, "courts cannot and will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the tribunal to determine technical and intricate matters of fact and where a uniformity of ruling is essential to comply with the purposes regulatory statute administered." (Province of Zamboanga del Norte v. Court of Appeals, 342 SCRA 549 [2000]; Factoran v. Court of Appeals, 320 SCRA 530 [1999]; Brett v. Intermediate Appellate Court, 191 SCRA 687 [1990]; Qualitrans Limousine Service, Inc. v. Royal Class Limousine Service, 179 SCRA 569 [1989]). Thus, even though an action may be lodged in court that is ostensibly for annulment or "rescission of what appears to be an ordinary civil contract cognizable by a civil court," the doctrine of primary jurisdiction still applies. (Industrial Enterprises, Inc. v. Court of Appeals, 184 SCRA 426 [1990]). Section 4, Chapter 1, Title XIV, Book IV of the Administrative Code of 1987 specifies the powers and functions of the DENR. Also, the Philippine Mining Act of 1995 provides that the DENR "shall be the primary government agency responsible for the conservation, management, development, and proper use of the States mineral resources including those in reservations, watershed areas, and lands of the public domain. The Secretary shall have the authority to enter into mineral agreements on behalf of the Government upon the recommendation of the Director, promulgate such rules and regulations as may be necessary to implement the intent and provisions of this Act." (Chapter II, Section 8). Since an FTAA is "a contract involving financial or technical assistance for large-scale exploration, development and utilization of mineral resources" (Ibid., Chapter 1, Section 3 [r]), any

issue affecting the same is indubitably within the primary jurisdiction of the DENR, as in fact, the government enters into FTAAs through the DENR (Ibid., Chapter VI, Section 33). There is no dispute that the instant case involves and requires the special technical knowledge and expertise of the DENR. In the determination by the DENR of a "qualified person" pursuant to the Philippine Mining Act of 1995, such person must possess the technical and financial capability to undertake mineral resources development". (Chapter I, Section 3 [aq]) Obviously, this determination peculiarly lies within the expertise of the DENR. The validity of the successive transfers is not a civil issue, contrary to the allegation of petitioner Lepanto, because validity of transfer depends on technical qualifications of the transferee and compliance with the DENR requirements on qualifications, all of which require administrative expertise. Notably, petitioner Lepanto is estopped from assailing the primary jurisdiction of the DENR since petitioner Lepanto itself anchored its Petition (cf. pp. 4-5) on the contention that, allegedly, "the Tampakan Companies failed to match the terms and conditions of the July 12 Agreement with petitioner Lepanto in that they did not possess the financial and technical qualifications under the Mining Act and its Implementing Rules". Petitioner Lepantos objections therefore go into the very qualifications of a transferee which is a technical issue. This contention is a recognition by petitioner Lepanto itself of the fact that the crucial and determinative issue in the instant case is grounded on the financial and technical qualifications of a transferee, which issue, indisputably, is within the exclusive domain and expertise of the DENR and not of the courts. xxxx Moreover, petitioner Lepanto, by its conduct, is again estopped from assailing the DENRs jurisdiction after actively participating in the proceedings therein and seeking affirmative relief. A party who invoked the jurisdiction [of] a tribunal and actively participated in the proceedings therein cannot impugn such jurisdiction when faced with an adverse decision. (cf. Briad Agro Development Corporation v. dela Serna, 174 SCRA 524 [1989]).9 [Emphasis ours] With the denial of its Motion for Reconsideration, petitioner lodged an appeal before the Court of Appeals which was consequently dismissed by the appellate court in the herein assailed Decision. According to the Court of Appeals: Petitioner forcefully argues that the DENR Secretary had usurped the power of the President of the Philippines to approve the transfer of FTAA, as under the provision of Section 40 of the Philippine Mining Act of 1995, any transfer or assignment of an FTAA has to be approved not by the DENR Secretary but by the President. The argument does not wash. The issue hinges on the applicability of Section 40 of RA 7942 or the Philippine Mining Act of 1995, which took force on 14 April 1995, on the transfer of FTAA from WMC to the Tampakan Companies, particularly the Sagittarius Mines, Inc. The said law provides: "Sec. 40. Assignment/Transfer A financial or technical assistance agreement may be assigned or transferred, in whole or in part, to a qualified person subject to the prior approval of the President: Provided, that the President shall notify Congress of every financial or technical assistance agreement assigned or converted in accordance with this provision within thirty (30) days from the date of approval." However, the above provision does not apply to the Columbio FTAA which was entered into by and between the Philippine Government and WMCP on 22 March 1995, or prior to the effectivity of RA No. 7942. Section 14.1 of the Columbio FTAA, under which the Tampakan Companies claim their rights to first refusal, reads: "14.1 Assignment "The Contractor may assign, transfer, convey or otherwise dispose of all or any part of its interest in the Agreement provided that such assignment, transfer, conveyance or disposition does not infringe any Philippine law applicable to foreign ownership:

(a) to an Affiliate provided that it gives notice of such assignment to the Secretary within 30 days after such assignment; or (b) to any third party provided that the Secretary consents to the same, which consent shall not be unreasonably withheld." Section 10, Article III of the Philippine Constitution enjoins Congress from passing a law impairing the obligation of contracts. It is axiomatic that a law that impairs an obligation of contract also violates the due process clause. The obligation of an existing contract is impaired when its terms and conditions are changed by law, ordinance, or any issuance having the force of law, thereby weakening the position or diminishing the rights of a party to the contract. The extent of the change is not material. It is not a question of degree or manner or cause, but of encroaching in any respect on its obligations or dispensing with any part of its force. Impairment has also been predicated on laws which, without destroying contracts, derogate from substantial contractual rights. The condition of RA No. 7942 requiring the further approval of the President, if made to apply retroactively to the Columbio FTAA, would impair the obligation of contracts simply because it constitutes a restriction on the right of the contractor to assign or transfer its interest in an FTAA. In other words, it diminished the vested rights of the contractor to assign or transfer its interests on mere approval of the DENR Secretary. The restriction is therefore substantive, and not merely procedural, contrary to the contention of petitioner. xxxx Likewise militating against the petitioners side is the doctrine that statutes are to be construed as having only a prospective operation unless the purpose and intention of the Legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In case of doubt, the doubt must be resolved against the retrospective effect. At any rate, even if RA No. 7942 be accorded a retroactive effect, this does notipso facto permit the application of the requirement of securing a prior presidential consent to the transfer of FTAA, for, to iterate, this would impair the obligation of contract. In such a case, the correct application of RA No. 7942 is for the provisions to [be] made to apply on existing FTAAs only if the same would not result in impairment of obligation of contracts. This is as it should be. To hold otherwise would be to unduly impose a burden on transferor WMC and thereby restrict its freedom to dispose of or alienate its property right without due process. It constitutes impairment of obligation of contracts, which the Fundamental Law enjoins, and contravenes the doctrine of prospective application of laws.10 Hence, the instant Petition. The pivotal issue to be resolved herein involves the propriety of the application to the Columbio FTAA of Republic Act No. 7942 or the Philippine Mining Act of 1995, particularly Section 40 thereof requiring the approval of the President of the assignment or transfer of financial or technical assistance agreements. Petitioner maintains that respondents failed to comprehend the express language of Section 40 of the Philippine Mining Act of 1995 requiring the approval of the President on the transfer or assignment of a financial or technical assistance agreement. To resolve this matter, it is imperative at this point to stress the fact that the Columbio FTAA was entered into by the Philippine Government and WMC Philippines on 22 March 1995, undoubtedly before the Philippine Mining Act of 1995 took effect on 14 April 1995. Furthermore, it is undisputed that said FTAA was granted in accordance with Executive Order No. 279 and Department Administrative Order No. 63, Series of 1991, which does not contain any similar condition on the transfer or assignment of financial or technical assistance agreements. Thus, it would seem that what petitioner would want this Court to espouse is the retroactive application of the Philippine Mining Act of 1995 to the Columbio FTAA, a valid agreement concluded prior to the naissance of said piece of legislation. This posture of petitioner would clearly contradict the established legal doctrine that statutes are to be construed as having only a prospective operation unless the contrary is expressly stated or necessarily implied from the language used in the law. As reiterated in the case of Segovia v. Noel,11 a sound cannon of statutory construction is that a statute operates prospectively only and never retroactively, unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication.

Article 4 of the Civil Code provides that: "Laws shall not have a retroactive effect unless therein otherwise provided." According to this provision of law, in order that a law may have retroactive effect it is necessary that an express provision to this effect be made in the law, otherwise nothing should be understood which is not embodied in the law.12 Furthermore, it must be borne in mind that a law is a rule established to guide our actions without no binding effect until it is enacted, wherefore, it has no application to past times but only to future time, and that is why it is said that the law looks to the future only and has no retroactive effect unless the legislator may have formally given that effect to some legal provisions.13 In the case at bar, there is an absence of either an express declaration or an implication in the Philippine Mining Act of 1995 that the provisions of said law shall be made to apply retroactively, therefore, any section of said law must be made to apply only prospectively, in view of the rule that a statute ought not to receive a construction making it act retroactively, unless the words used are so clear, strong, and imperative that no other meaning can be annexed to them, or unless the intention of the legislature cannot be otherwise satisfied.14 Be that as it may, assuming for the sake of argument that We are to apply the Philippine Mining Act of 1995 retrospectively to the Columbio FTAA, the lack of presidential approval will not be fatal as to render the transfer illegal, especially since, as in the instant case, the alleged lack of presidential approval has been remedied when petitioner appealed the matter to the Office of the President which approved the Order of the DENR Secretary granting the application for transfer of the Columbio FTAA to Sagittarius Mines, Inc. As expounded by the Court in the Resolution of the Motion for Reconsideration in the La Bugal-BLaan Tribal Association, Inc. v. Ramos[15]case, involving the same FTAA subject of the instant case: x x x Moreover, when the transferee of an FTAA is another foreign corporation, there is a logical application of the requirement of prior approval by the President of the Republic and notification to Congress in the event of assignment or transfer of an FTAA. In this situation, such approval and notification are appropriate safeguards, considering that the new contractor is the subject of a foreign government.
1wphi1

On the other hand, when the transferee of the FTAA happens to be a Filipino corporation, the need for such safeguard is not critical; hence, the lack of prior approval and notification may not be deemed fatal as to render the transfer invalid. Besides, it is not as if approval by the President is entirely absent in this instance. x x x That case involved the review of the Decision of the Court of Appeals dated November 21, 2003 in CA G.R. SP No. 74161, which affirmed the DENR Order dated December 31, 2001 and the Decision of the Office of the President dated July 23, 2002, both approving the assignment of the WMCP FTAA to Sagittarius.16 (Emphasis ours.) Furthermore, if petitioner was indeed of the mind that Section 40 of the Philippine Mining Act of 1995 is applicable to the Columbio FTAA, thus necessitating the approval of the President for the validity of its transfer or assignment, it would seem contradictory that petitioner sought the approval of the DENR Secretary, and not that of the President, of its 12 July 2000 Sale and Purchase Agreement with WMC Resources. Hence, it may be glimpsed from the very act of petitioner that it recognized that the provision of the Columbio FTAA regarding the consent of the DENR Secretary with respect to the transfer of said FTAA must be upheld. It is engrained in jurisprudence that the constitutional prohibition on the impairment of the obligation of contract does not prohibit every change in existing laws,17 and to fall within the prohibition, the change must not only impair the obligation of the existing contract, but the impairment must be substantial.18 Substantial impairment as conceived in relation to impairment of contracts has been explained in the case of Clemons v. Nolting,19 which stated that: a law which changes the terms of a legal contract between parties, either in the time or mode of performance, or imposes new conditions, or dispenses with those expressed, or authorizes for its satisfaction something different from that provided in its terms, is law which impairs the obligation of a contract and is
therefore null and void. Section 40 of the Philippine Mining Act of 1995 requiring the approval of the President with respect to assignment or transfer of FTAAs, if made applicable retroactively to the Columbio FTAA, would be tantamount to an impairment of the obligations under said contract as it would effectively restrict the right of the parties thereto to assign or transfer their interests in the said FTAA. By imposing a new condition apart from those already contained in the agreement, before the parties to the Columbio FTAA may assign or transfer its rights and interest in the said agreement, Section 40 of the Philippine Mining Act of 1995, if made to apply to the Columbio FTAA, will effectively modify the terms of the original contract and thus impair the obligations of the parties thereto and restrict the exercise of their vested rights under the original agreement. Such modification to the Columbio FTAA, particularly in the conditions imposed for its valid transfer is equivalent to an impairment of said contract violative of the Constitution. WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision of the Court of Appeals in CA G.R. SP No. 74161 dated 21 November 2003 is hereby AFFIRMED. Costs against petitione

[G.R. Nos. 181702 & 181703 : February 15, 2011] REP. ANA THERESIA HONTIVEROS-BARAQUEL OF THE PARTY LIST AKBAYAN, ET AL. V. SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR), ET AL. Sirs/Mesdames: Please take notice that the Court en banc issued a Resolution dated February 15, 2011 which reads as follows: "G.R. Nos. 181702 & 181703 - Rep. Ana Theresia Hontiveros-Baraquel of the Party List AKBAYAN, et al. v. Secretary of the Department of Environment and Natural Resources (DENR), et al. RESOLUTION To aid the Court in the resolution of these petitions, the parties are hereby required to submit their respective memoranda. The respondent mining companies are further required to submit the following documents: 1) In accordance with Section 4, paragraph (b) of DENR Administrative Order No. 2007-12, its proof of payment for the years 2005 to 2009 of the following: (a) Contractor's income tax (b) Customs duties and fees on imported capital equipment (c) Value-added tax on imported goods and services (d) Withholding tax on interest payments on foreign loans (e) Withholding tax on dividends to foreign stockholders (f) Documentary stamps taxes (g) Capital gains tax (h) Excise tax on minerals (i) Royalties for Mineral Reservations and to Indigenous Peoples, if applicable (j) Local business tax (k) Real property tax (1) Community tax (m) Occupation fees (n) Registration and permit fees and (o) All other national and local Government taxes, royalties and fees as of the effective date of the FTAA 2) Marketing contracts and sales agreements involving commercial disposition of minerals and by-products approved by the Secretary upon recommendation of the Director pursuant to Section 5 (a) of DENR Administrative Order No. 2007-12 3) Proof of any and all payments made to the Government as referred to in Section 6 paragraphs (a), (b) and (c), if any, of DENR Administrative Order No. 2007-12 4) Statement of all incentives availed of from the Government pursuant to Section 10 of DENR Administrative Order No. 2007-12 5) Actual expenses and capital expenditures as referred to in Section 7 (b) of DENR Administrative Order No. 2007-12 The Public Respondent Department of Environment and Natural Resources Secretary is ordered to submit the following: 1) Copies of all approved and existing FTAAs and MPSAs 2) Any and all government incentives accorded to mining companies, and assessments on mining companies or miningrelated activities 3) Rehabilitation programs as mentioned in the FTAA 4) Assessment on the compliance to the rehabilitation programs of the mining companies and 5) A comprehensive analysis on the compliance by the mining companies with regard the documents enumerated in item 1 of this Resolution. The parties are enjoined to comply with all of the above instructions within thirty (30) days from receipt of this resolution." Bersamin, J., on leave. Abad, J., no part. Very truly yours,

(Sgd.) ENRIQUETA E. VIDAL Clerk of Court