ISAGANI CRUZ & CESAR EUROPA V.

SECRETARY OF therein, thereby violating the Regalian Doctrine

ENVIRONMENT AND NATURAL RESOURCES enshrined in Section 2, Article XII of the Constitution?
G.R. No. 135385, December 6, 2000
After deliberating on the petition, seven judges of the
Supreme Court voted to dismiss the petition,
sustaining the validity of the challenged provisions or
Facts: The petitioners brought this suit as citizens and
a part of them. Seven other members of the Court
taxpayers, assailing the constitutionality of certain
voted to grant the petition. As the votes were equally
provisions of RA 8371, or the Indigenous Peoples
divided and the necessary majority was not obtained,
Rights Act of 1997 (IPRA).
the case was redeliberated upon. However, after re-
They complained, among others, that the provisions deliberation, the voting remained the same.
amounted to an unlawful deprivation of the State’s
Therefore, the petition was dismissed. In a separate
ownership over lands of the public domain, as well as
opinion, Judge Puno analyzed the development of the
minerals and other natural resources therein, and
Regalian Doctrine in the Philippine Legal System, and
that they granted ownership over these natural
argued that the provisions of the IPRA did not
resources to indigenous peoples. Thus, they were
contravene the constitution, as ancestral domains
unconstitutional.
and ancestral lands were the private property of
The provisions provided, inter alia, that ancestral indigenous peoples and did not constitute part of the
domains including inalienable public lands, bodies of land of the public domain.
water, mineral and other resources found within
Held: In general, the provisions of the IPRA do not
ancestral domains were private but are considered
contravene the Constitution. Examining such, there is
community property of the indigenous peoples and
nothing in said law that grants to the ICCs/IPs
gave the indigenous peoples the responsibility to
ownership over the natural resources within their
maintain, develop, protect and conserve the ancestral
ancestral domain. Ownership over the natural
domains and portions thereof, which were found to
resources in the ancestral domains merely gives
be necessary for critical watersheds, mangroves,
them, as owners and occupants of the land on which
wildlife sanctuaries, wilderness, protected areas,
the resources are found, the right to the small-scale
forest cover or reforestation.
utilization of these resources, and at the same time, a
The petitioners also contended that, by providing for priority in their large-scale development and
an all-encompassing definition of “ancestral lands” exploitation.
which might even include private lands found within
Additionally, ancestral lands and ancestral domains
said areas, the provisions violated the rights of private
are not part of the lands of the public domain. They
landowners. In addition, the petitioners questioned
are private lands and belong solely to the ICCs/IPs by
the provisions of the IPRA making customary law
native title, which is a concept of private land title that
applicable to the settlement of disputes involving
existed irrespective of any royal grant from the State.
ancestral domains and ancestral lands.
However, the right of ownership and possession by
They also prayed for the issuance of a writ of the ICCs/IPs of their ancestral domains is a limited
mandamus commanding the Secretary of form of ownership and does not include the right to
Environment and Natural Resources to comply with alienate the same.
his duty to control and supervise the exploration,
Specific Opinions
development, utilization and conservation of
Philippine natural resources. Judge Katipunan: NO

Issue: Are Sections 3(a) and (b), 5, 6, 7, 8, 57, and 58 of
the IPRA and its IRR unconstitutional for unlawfully
depriving the State of its ownership over lands of the
public domain, minerals, and other natural resources
 Said provisions affirming the ownership by
indigenous peoples of their ancestral lands
and domains by virtue of native title do not
diminish the State’s ownership of the lands
within public domain, because said ancestral
 lands and domains are considered private resources” enumerated in Section 2, Article XII
land, and never to have been part of the of the Constitution. Ownership therefore of
public domain, following the doctrine laid natural resources remain with the State.
down in Cariño v. Insular Government.  Small-scale utilization of resources in Section
 Section 3(a) does not confer or recognize any 7(b) is also allowed under paragraph 3,
right of ownership over the natural resources Section 2, Article XII of the Constitution.
to the ICCs/IPs. Its purpose is definitional and  Finally, the large-scale utilization of natural
not declarative of a right or title. resources in Section 57 of RA 8371 is allowed
 Section 57 only grants “priority rights” to under par. 1 and 4, Sec. 2, Art. XII of the
ICCs/IPs in the utilization of natural resources Constitution since only “priority rights” (which
and not absolute ownership thereof. The State does not necessarily mean ownership rights)
retains full control over the exploration, are given to ICCs/IPs.
development, and utilization of natural  However, by including “natural resources,”
resources under existing laws, such as the Sec. 1, Part II, Rule III of the IRR goes beyond
Small-Scale Mining Act of 1991 and the Sec. 7(a) and therefore unconstitutional.
Philippine Mining Act of 1995. Neither does
Justice Panganiban: YES
the grant of said rights exclude non-
indigenous peoples from undertaking the  Section 3(a), whose definition of ancestral
same activities within the ancestral domains domain encompasses natural resources found
upon authority granted by the proper therein, and 3(b), which defines ancestral
governmental agency. lands as those possessed by ICCs/IPs since
time immemorial, contravene Sec. 2, Article
Justice Puno: NO
XII of the Constitution.
 Ancestral lands and ancestral domains are not  The IPRA does not specify limits to ancestral
part of the lands of the public domain. They lands and domains. It relinquishes the State’s
are private and belong to the ICCs/IPs. The power under Sec. 2, Art. XII of the Constitution
classification of lands in the public domain of full control of natural resources in ancestral
under Section 3, Article XII of the Constitution lands and ancestral domains in favor of
does not include ancestral lands nor ancestral ICCs/IPs, who may exercise these rights
domains. without any time limit. In addition, they are
 The rights of ICCs/IPs to their ancestral also given the right to negotiate directly the
domains and ancestral lands may be acquired terms and conditions for the exploration of
in two modes: 1) by native title over both natural resources under Section 7(b), a right
ancestral lands and domains; or 2) by Torrens vested by the Constitution only to the State.
title under the Public Land Act and the Land
Justice Vitug: YES
Registration Act with respect to ancestral
lands only. Both modes presume or recognize  Sec. 7 and 57 go beyond the context of the
the land as private and not public. fundamental law and virtually amount to
 The right of ownership to ancestral domain undue delegation, if not an unacceptable
under Section 7(a) involves “lands, bodies of abdication, of State authority over a
water traditionally and actually occupied by significant area of the country and its
ICCs/IPs, sacred places, traditional hunting patrimony.
and fishing grounds, and all improvements
Another issue: Do Sections 51 to 53, 59, 52(i), 63, 65,
made by them at any time within the
and 66 of the IPRA, defining the powers and
domains,” not “waters, minerals, coal,
jurisdiction of the NCIP and making customary law
petroleum, and other mineral oils, all forces of
applicable to the settlement of the disputes involving
potential energy, fisheries, forests or timber,
ancestral domains and ancestral lands, violate the
wildlife, flora and fauna, and other natural
due process clause of the Constitution?
Justice Katipunan: NO Justice Vitug: No discussion

 The fact that the NCIP is composed wholly of

indigenous peoples does not mean that it is
incapable of being impartial. Moreover, the
use of customary laws is sanctioned by par. 2,
Sec. 5, Article XII of the Constitution.

Justice Puno: No discussion

Justice Panganiban: No discussion. It is best to

await specific cases filed by those whose rights may
have been injured by these provisions.

Justice Vitug: YES

 But only on making customary laws applicable

to the settlement disputes involving ancestral
domains and lands. The second par. of Sec. 5
of Art. XII of the 1987 Constitution allows
Congress to provide for the applicability of
customary laws governing property rights or
relations in determining the ownership and
extent of ancestral domains.
 No discussion on the powers and jurisdiction
of the NCIP

Another issue: Does Rule VII, Part II, Sec. 1 of the

NCIP Admin Order No. 1, series of 1998, which
provides that the administrative relationship of the
NCIP to the Office of the President is characterized as
a lateral but autonomous relationship for purposes of
policy and program coordination, infringe upon the
President’s power of control over executive
departments under Sec. 17, Art. VII of the
Constitution?

Justice Katipunan: No

 Since said provision, as well as Sec. 40 of the

IPRA, expressly places the NCIP under the
Office of the President, and therefore under
the President’s control and supervision with
respect to its administrative functions.
However, insofar as the decisions of the NCIP
in the exercise of its quasi-judicial powers are
concerned, the same are reviewable by the
Court of Appeals, like those of the NLRC and
SEC.

Justice Puno: No discussion

Justice Panganiban: No discussion

CHAVEZ v. PEA & AMARI The ownership of lands reclaimed from foreshore and
G.R. No. 133250, July 9, 2002 submerged areas is rooted in the Regalian Doctrine,
which holds that the State owns all lands and waters
of the public domain.
Facts: President Marcos, through a presidential
The 1987 Constitution recognizes the Regalian
decree, created the Public Estates Authority, or PEA,
doctrine. It declares that all natural resources are
which was tasked with the development,
owned by the State and except for alienable
improvement, acquisition, lease, and sale of all kinds
agricultural lands of the public domain, natural
of lands. It also transferred to PEA the foreshore and
resources cannot be alienated.
offshore lands of Manila Bay under the Manila-Cavite
Coastal Road and Reclamation Project. The Amended JVA covers a reclamation area of 750
hectares. Only 157.84 hectares of the 750-hectare
Thereafter, PEA was granted patent to the reclaimed
reclamation project have been reclaimed, and are
areas of lands, and years later, PEA entered into a
considered as alienable lands of the public domain.
joint venture agreement (JVA) with AMARI, a Thai-
PEA may only sell these lands to Philippine citizens,
Philippine corporation, for the development of the
subject to the ownership limitations in the 1987
Freedom Islands. Under the JVA, several (250)
Constitution and existing laws. PEA may lease these
hectares of reclaimed lands comprising the Freedom
lands to private corporations but may not sell or
Islands and several portions of submerged areas of
transfer ownership thereto to such.
Manila Bay were going to be transferred to AMARI.
The remaining 592.15 hectares of submerged areas
Later, a privilege speech was given by Senator
still form part of Manila Bay and continue to be
President Maceda, denouncing the JVA as the
inalienable until classified as alienable or disposable
grandmother of all scams and claiming that such
lands open to disposition and declared no longer
lands were part of public domain.
needed for public service. The government can make
An investigation was conducted and it was concluded such classification and declaration only after PEA has
that the lands PEA was conveying to AMARI were reclaimed these submerged areas.
lands of the public domain; the certificates of title
Since the Amended JVA seeks to transfer to AMARI, a
over the Freedom Islands were void; and that the JVA
private corporation ownership of 77.34 hectares of
itself was illegal. This prompted Ramos to form an
the Freedom Islands, such transfer is void for being
investigatory committee on the legality of the JVA.
contrary to Sec. 3, Article XII of the 1987 Constitution,
Petitioner Chavez filed a case as a taxpayer, praying which prohibits private corporations from acquiring
for mandamus, a writ of preliminary injunction and a any kind of alienable land of the public domain.
TRO against the sale of reclaimed lands by PEA to
Moreover, since the Amended JVA also seeks to
AMARI and from implementing the JVA. He claims that
transfer to AMARI ownership of 290.156 hectares of
the contract is null and void and contends that the
still submerged areas of Manila Bay, such transfer is
government stands to lose billions by the conveyance
void for being contrary to Sec. 2, Art. XII of the 1987
or sale of the reclaimed areas to AMARI. He also
Constitution, which prohibits the alienation of natural
asked for the full disclosure of the renegotiations
resources other than agricultural lands of the public
happening between the parties.
domain.
Issue: Do the stipulations in the amended JVA for the
The mere reclamation of these areas by the PEA does
transfer to AMARI of the lands, reclaimed or to be
not convert these inalienable natural resources of the
reclaimed, violate Sec. 3, Art. XII of the 1987
State into alienable and disposable lands of the public
Constitution?
domain. There must first be a law or presidential
Held: Under the Public Land Act (CA 141, as proclamation officially classifying these reclaimed
amended), reclaimed lands are classified as alienable lands as alienable and disposable if the law has
and disposable lands of the public domain. reserved them for some public or quasi-public use.
LA BUGAL B’LAAN TRIBAL ASSOCIATION, INC, ET.
AL. V. V. O. RAMOS, SECRETARY OF ENVIRONMENT
AND NATURAL RESOURCES (Resolution)
G.R. No. 127882, January 27, 2004
of the (DENR) Secretary, the President may execute
with the foreign proponent. WMCP likewise
contended that the annulment of the FTAA would
violate a treaty between the Philippines and Australia
which provides for the protection of Australian
investments.

Facts: The constitutional provision allowing the Issue: Is the Philippine Mining Act unconstitutional
President to enter into FTAA is an exception to the for allowing fully-foreign owned corporations to
rule that participation in the nation’s natural exploit the Philippine mineral resources?
resources is reserved exclusively to Filipinos.
Sub-issue: Is the FTAA between the government and
Provision must be construed strictly against their
WMCP a service contract that permits fully-foreign
enjoyment by non-Filipinos.
owned companies to exploit the Philippine mineral
RA 7942 (The Philippine Mining Act) took effect on resources?
April 9, 1995. Before the effectivity of RA 7942, or on
Held:
March 30, 1995, the President signed a Financial and
Technical Assistance Agreement (FTAA) with WMCP, a Unconstitutionality of RA 7942
corporation organized under Philippine laws, covering
RA 7942 or the Philippine Mining Act of 1995 is
close to 100,000 hectares of land in South Cotabato,
unconstitutional for permitting fully foreign owned
Sultan Kudarat, Davao del Sur and North Cotabato.
corporations to exploit the Philippine natural
On August 15, 1995, the Environment Secretary Victor
resources.
Ramos issued DENR Administrative Order 95-23,
which was later repealed by DENR Administrative Article XII Section 2 of the 1987 Constitution retained
Order 96-40, adopted on December 20, 1996. the Regalian Doctrine which states that ―All lands of
the public domain, waters, minerals, coal, petroleum,
Petitioners prayed that RA 7942, its implementing
and other minerals, coal, petroleum, and other
rules, and the FTAA between the government and
mineral oils, all forces of potential energy, fisheries,
WMCP be declared unconstitutional on ground that
forests or timber, wildlife, flora and fauna, and other
they allow fully foreign owned corporations like
natural resources are owned by the State. The same
WMCP to exploit, explore and develop Philippine
section also states that, ―the exploration and
mineral resources in contravention of Article XII
development and utilization of natural resources shall
Section 2 paragraphs 2 and 4 of the Charter.
be under the full control and supervision of the State.
In January 2001, WMC – a publicly listed Australian
Conspicuously absent in Section 2 is the provision in
mining and exploration company – sold its whole
the 1935 and 1973 Constitution authorizing the State
stake in WMCP to Sagittarius Mines, 60% of which is
to grant licenses, concessions, or leases for the
owned by Filipinos while 40% of which is owned by
exploration, exploitation, development, or utilization
Indophil Resources, an Australian company. DENR
of natural resources. By such omission, the utilization
approved the transfer and registration of the FTAA in
of inalienable lands of the public domain through
Sagittarius’ name but Lepanto Consolidated assailed
license, concession or lease is no longer allowed
the same. The latter case is still pending before the
under the 1987 Constitution.
Court of Appeals.
Under the concession system, the concessionaire
EO 279, issued by former President Aquino on July 25,
makes a direct equity investment for the purpose of
1987, authorizes the DENR to accept, consider and
exploiting a particular natural resource within a given
evaluate proposals from foreign owned corporations
area. The concession amounts to complete control by
or foreign investors for contracts or agreements
the concessionaire over the country’s natural
involving wither technical or financial assistance for
resource, for it is given exclusive and plenary rights to
large scale exploration, development and utilization
exploit a particular resource at the point of extraction.
of minerals which upon appropriate recommendation
The 1987 Constitution, moreover, has deleted the
phrase ―management or other forms of assistance in
the 1973 Charter. The present Constitution now
allows only ―technical and financial assistance. The
management and the operation of the mining
activities by foreign contractors, the primary feature
of the service contracts was precisely the evil the
drafters of the 1987 Constitution sought to avoid.
The constitutional provision allowing the President to
enter into FTAAs is an exception to the rule that
participation in the nation‘s natural resources is
reserved exclusively to Filipinos. Accordingly, such
provision must be construed strictly against their
enjoyment by non-Filipinos. Therefore, RA 7942 is
invalid insofar as the said act authorizes service
contracts. Although the statute employs the phrase
―financial and technical agreements in accordance
with the 1987 Constitution, its pertinent provisions
actually treat these agreements as service contracts
that grant beneficial ownership to foreign contractors’
contrary to the fundamental law.
The underlying assumption in the provisions of the
law is that the foreign contractor manages the
mineral resources just like the foreign contractor in a
service contract. By allowing foreign contractors to
manage or operate all the aspects of the mining
operation, RA 7942 has, in effect, conveyed beneficial
ownership over the nation‘s mineral resources to
these contractors, leaving the State with nothing but
bare title thereto.
scale exploration, development and utilization of
minerals, petroleum and other mineral oils.
FTAA as a Service Contract
The FTAA between he WMCP and the Philippine
government is likewise unconstitutional since the
agreement itself is a service contract.
Section 1.3 of the FTAA grants WMCP a fully foreign
owned corporation, the exclusive right to explore,
exploit, utilize and dispose of all minerals and by-
products that may be produced from the contract
area. Section 1.2 of the same agreement provides that
EMCP shall provide all financing, technology,
management, and personnel necessary for the
Mining Operations.
These contractual stipulations and related provisions
in the FTAA taken together, grant WMCP beneficial
ownership over natural resources that properly
belong to the State and are intended for the benefit
of its citizens. These stipulations are abhorrent to the
1987 Constitution. They are precisely the vices that
the fundamental law seeks to avoid, the evils that it
aims to suppress. Consequently, the contract from
which they spring must be struck down.

The same provisions, whether by design or

inadvertence, permit a circumvention of the
constitutionally ordained 60-40% capitalization
requirement for corporations or associations
engaged in the exploitation, development and
utilization of Philippine natural resources.

When parts of a statute are so mutually dependent

and connected as conditions, considerations,
inducements or compensations for each other as to
warrant a belief that the legislature intended them as
a whole, then if some parts are unconstitutional, all
provisions that are thus dependent, conditional or
connected, must fail with them.

Under Article XII Section 2 of the 1987 Charter,

foreign owned corporations are limited only to merely
technical or financial assistance to the State for large
LA BUGAL-B’LAAN TRIBAL ASSOCIATION INC. VS
RAMOS (Decision)
GR No. 127882 December 1, 2004
Facts: The Petition for Prohibition and Mandamus
before the Court challenges the constitutionality of (1)
Republic Act No. [RA] 7942 (The Philippine Mining Act
of 1995); (2) its Implementing Rules and Regulations
(DENR Administrative Order No. [DAO] 96-40); and (3)
the FTAA dated March 30, 1995,6 executed by the
government with Western Mining Corporation
(Philippines), Inc. (WMCP).
On January 27, 2004, the Court en banc promulgated
its Decision granting the Petition and declaring the
unconstitutionality of certain provisions of RA 7942,
DAO 96-40, as well as of the entire FTAA executed
between the government and WMCP, mainly on the
finding that FTAAs are service contracts prohibited by
the 1987 Constitution. The Decision struck down the
subject FTAA for being similar to service contracts,
which, though permitted under the 1973 Constitution,
were subsequently denounced for being antithetical
to the principle of sovereignty over our natural
resources, because they allowed foreign control over
the exploitation of our natural resources, to the
prejudice of the Filipino nation. Moreover, the
Decision quoted several legal scholars and authors
who had criticized service contracts for, inter alia,
vesting in the foreign contractor exclusive
management and control of the enterprise, including
operation of the field in the event petroleum was
discovered; control of production, expansion and
development; nearly unfettered control over the
disposition and sale of the products
discovered/extracted; effective ownership of the
natural resource at the point of extraction; and
beneficial ownership of our economic resources.
According to the Decision, the 1987 Constitution
(Section 2 of Article XII) effectively banned such
service contracts.
Subsequently, respondents filed separate Motions for
Reconsideration. In a Resolution dated March 9, 2004,
the Court required petitioners to comment thereon.
In the Resolution of June 8, 2004, it set the case for
Oral Argument on June 29, 2004.
Issue: Were the issuances of FTTA valid?
Held: Yes. The notion that the deliberations reflect
only the views of those members who spoke out and
not the views of the majority who remained silent
should be clarified. We must never forget that those
who spoke out were heard by those who remained
silent and did not react. If the latter were silent
because they happened not to be present at the time,
they are presumed to have read the minutes and kept
abreast of the deliberations. By remaining silent, they
are deemed to have signified their assent to and/or
conformity with at least some of the views
propounded or their lack of objections thereto. It was
incumbent upon them, as representatives of the
entire Filipino people, to follow the deliberations
closely and to speak their minds on the matter if they
did not see eye to eye with the proponents of the
draft provisions.
In any event, each and every one of the
commissioners had the opportunity to speak out and
to vote on the matter. Moreover, the individual
explanations of votes are on record, and they show
where each delegate stood on the issues. In sum, we
cannot completely denigrate the value or usefulness
of the record of the Consultative Committee
(ConCom), simply because certain members chose not
to speak out.
However, it is of common knowledge, and of judicial
notice as well, that the government is and has for
many years been financially strapped, to the point
that even the most essential services have suffered
serious curtailments — education and health care, for
instance, not to mention judicial services — have had
to make do with inadequate budgetary allocations.
Thus, government has had to resort to build-operate-
transfer and similar arrangements with the private
sector, in order to get vital infrastructure projects
built without any governmental outlay.
The drafters — whose ranks included many
academicians, economists, businessmen, lawyers,
politicians and government officials — were not
unfamiliar with the practices of foreign corporations
and multinationals.
Neither were they so naïve as to believe that these
entities would provide “assistance” without
conditionalities or some quid pro quo. Definitely, as
business persons well know and as a matter of judicial
notice, this matter is not just a question of signing a
promissory note or executing a technology transfer
agreement. Foreign corporations usually require that
they be given a say in the management, for instance,
of day-to-day operations of the joint venture. They
would demand the appointment of their own men as,
for example, operations managers, technical experts,
quality control heads, internal auditors or
comptrollers. Furthermore, they would probably
require seats on the Board of Directors — all these to
ensure the success of the enterprise and the
repayment of the loans and other financial assistance
and to make certain that the funding and the
technology they supply would not go to waste.
Ultimately, they would also want to protect their
business reputation and bottom lines.