consticompileddigests.091207

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UTILIZATION OF NATURAL RESOURCES

Miners Association VS Factoran Jr.

FactsFulgencio Factoran Jr. is the Secretary of En iron!ent an"Natural Resources. #iners Association files this $etitionarguing that %ENR A"!inistrati e Or"er No. &' an" ()*contra enes +ith EO ),, an" )'-.

%ENR AO &' an" () i!$le!ents the $ro isions of EO ),, an")'-.

EO ),, $rescri es $roce"ures for $rocessing an" a$$ro inga$$lications for e/$loration* "e elo$!ent* an" utili0ation of!inerals accor"ing to the ,-(' Constitution. An" EO )'-$ro i"es the gui"elines for 1oint entures* co2$ro"uction* an"$ro"uction2sharing agree!ents for such e/$loration*"e elo$!ent* an" utili0ation of !ineral resources. These EOsreflect that change in ,-(' Constitution +hich ga e the Statehas full control an" su$er ision of e/$loration* "e elo$!ent*an" utili0ation an" !ineral resources* either directly orthrough joint ventures, co-prod, or prod-sharing agreements.3Unli4e $ast constitutions +hich allo+e" the license*concession* or lease of these natural resources5 the ,-('Consti is no+ stricter.6

AO &' $ro i"e" that all e/isting !ining leases or agree!entsgranted after effectivity of this Constitution * +ill e con erte"into $ro"uction2sharing agree!ents. AO () $ro i"es thatfailure to su !it letters of intent an" #7SAs 3#ineral7ro"uction Sharing Agree!ents6* +ill lea" to a an"on!ent ofthe !ining clai!s.

Issues%i" Factoran e/cee" his rule2!a4ing $o+er only ini!$le!enting AO &' an" () +hich is argue" to contra ene+ith EO ),, an" )'-* in that they allo+ i!$air!ent ofe/isting !ining contracts y 3a6 auto!atically con ertingthe! into $ro"uction2sharing agree!ents* an" 3 6 y causinga an"on!ent of !ining an" 8uarry clai!s "ue to failure tosu !it LOIs an" #7SAs9

HeldNo* %ENR Secretary Factoran "i" not e/cee" rule2!a4ing$o+er grante" to hi!* un"er EO )'- +hich authori0e" hi! to$ro!ulgate rules an" regulations necessary to i!$le!ent EO),, an" )'-.

AO &' an" () "o not contra ene EO ),, an" )'-.3a6 AO &' a$$lies only to e/isting !ining agree!ents

grante" after the effecti ity of this Constitution.Un"er EO ),, itself* it sai" that all e/isting !iningagree!ents grante" after ,-(' Consti are su 1ect toany !o"ifications or alterations +hich Congress !aya"o$t. AO &' !erely i!$le!ents EO ),,5 there is noauto!atic con ersion ecause #7SAs areagree!ents +hich nee"s negotiation. O iously*negotiation negates any issue on auto!ation.

3 6 AO () !erely su$$le!ents EO )'- in $ro i"inggui"elines for entering into 1oint enture* co2$ro"* or$ro"2sharing agree!ents.

Republic vs. Rosemoor

Facts: Four $etitioners 3%r. 7ascual* %r. 7. %e la Concha* %r.A. %e la Concha* an" #r. %e :u0!an2 they are no+ theres$on"ents6 after ha ing een grante" $er!ission to$ros$ect for !ar le "e$osits in the !ountains of ;ia42na2;ato* San #iguel* ;ulacan* succee"e" in "isco ering !ar le"e$osits. After the "isco ery they a$$lie" +ith the #ines an":eosciences ;ureau 3then ;ureau of #ines6* for the issuanceof a license to e/$loit the sai" !ar le "e$osits. Afterco!$liance +ith the re8uire" con"itions* License No. se$aratea$$lications of the $etitioners +as


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e/$loration* occu$ation an" $urchase of !ineral "e$osits notonly to Fili$ino citi0ens ut also to A!ericans. US consi"ere"!ineral lan" a source of +ealth an" allo+e" oth A!ericansan" Fili$inos to e/$loit !inerals in $u lic lan"s an" to grant$atents to $ri ate !ineral lan"s. 7erson +ho ac8uire"o+nershi$ o er $iece of !ineral lan" coul" e/clu"e other$ersons* e en the State fro! e/$loiting !inerals in his$ro$erty. The Regalian %octrine an" the A!erican syste!"iffere" in that in the R.%* !ineral rights are not inclu"e" inthe grant of lan" y the state. Sec. ), allo+e" BCONCESSIONS STE#D +herein concessionaire !a4es "irect e8uityin est!ent for the $ur$ose of e/$loiting a $articular natural

resource +ithin a gi en area. Concessionaire either $ays rentor royalty* +Gc is a fi/e" $ercentage of the gross $rocee"s.

!"# Consti and the $aturali%ation of $atural Resources: Ty"ings #c%uffie La+ Fili$inos +ere authori0e" to

!a4e a Constitution. ,--D* e!$loye"concession syste! for e/$loitation of the nation s $etroleu!resources. Concessions !ay only e grante" to "uly 8ualifie"$ersons +ho ha e sufficient finances* organi0ation* resources*technical co!$etence an" necessary s4ills to con"ucto$erations to e un"erta4en. E/$loitation concessionaires+ere o lige" to $ay annual e/$loitation ta/* o 1ect +as toin"uce concessionaire to actually $ro"uce $etroleu!* ratherthan not "e elo$ an" e/$loit the lan".&.D (), *he !)" Consti and the Service Contract System:

7.% (' BOil E/$loration an" %e elo$!entAct of ,-')D $er!itte" the go t to e/$lore for an" $ro"ucein"igenous $etroleu! through Bser ice contractsD. Service%ontracts 2 contractual arrange!ent for engaging ine/$loitation an" "e elo$!ent of $etroleu!* !ineral* energy*lan" an" other natural resources y +Gc a go t or its agencyor a $ri ate $erson grante" a right or $ri ilege y the go tauthori0es the other $art 3ser ice contractor6 to engageG$artici$ates in the e/ercise of such right or en1oy!ent of the$ri ilege* in that the latter $ro i"es financial or technicalresources* un"erta4es e/$loitation or $ro"uction of a gi ensource or "irectly !anages the $ro"ucti e enter$rise*o$erations of the e/$loration an" e/$loitation of the resourcesr the "is$osition of !ar4eting or resources. Un"er 7% ('*ser ice an" technology are furnishe" y the ser ice

contractor for a sti$ulate" ser ice fee. Contractor !ust etechnically co!$etent an" financially ca$a le to un"erta4eo$eration re8uire" in contract.

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#7C to !anage an" o$erate e ery as$ect of the !iningacti ity. Full !anage!ent an" o$eration of !iningacti ities y foreign contractors* +hich is the $ri!aryfeature of ser ice contracts* is the $recise e il the ,-('Consti tries to era"icate.

#7C file" #anifestation that #C ha" sol" all itsshares in #7C to Sagittarius #ines* Inc.* a cor$orationorgani0e" un"er 7hil la+s. #7C +as rena!e"BTa!$a4an #ineral Resources Cor$orationD. #7Cclai!s that atleast =?K of Sagittarius if Fili$ino o+ne"*>?K y an Australian Co!$any. Clai!s that #7C hascease" to e connecte" +ith #C. %ENR Sec a$$ro e"

transfer of FTAA fro! #C to Sagittarius. This +asa$$eale" y Le$anto Consoli"ate" #ining Co. 3In short*Sagittarius an" Le$anto +ere fighting o er +ho right to$urchase foreign shares of #C This is still $en"ing* utregar"less +ho gets the right* #7C +oul" e Fili$ino2o+ne"* +hich +oul" sol e $ro le! of unconstitutionalitysince #C +as foreign2o+ne".6 Res$on"ents insist thatBagree!ents in ol ing technical or financial assistanceDis 1ust another ter! for ser ice contracts.ISS:

Gn RA '->) is constitutional as it authori0es Bser icecontractsD"#%ISI'$:

7etition is grante" an" the Court "eclare"unconstitutional and void certain provisions of RA7942, all provisions of DAO 96-40 which are not inconformit with the decision and the !"AA#etween the $hilippines and %&'$(RA!I':

Res$on"ents +ere +rong to assu!e thatBagree!ents in ol ing technical or financial assistanceDis 1ust another ter! for ser ice contracts. If it +as so*then the ConCo! +oul" ha e retaine" the ter! Bser icecontractD as in the ,-'< Consti. The FTAA et+een7hili$$ines an" #C7 treats these agree!ents as ser icecontracts that grant eneficial o+nershi$ to foreigncontractors* contrary to fun"a!ental la+.

LA B&(AL B LAA$ !RIBAL ASS'%IA!I'$ vs. "#$R 3Reconsideration)

Art ,) Sec )3=E6*+ilippine (eot+ermal Inc. vs. $ational *o,er%orporation:R No. ,>>


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registration un"er Section >(3 6 of the 7u lic Lan" Act.Po+e er* Teehan4ee ga e a strong* $ersuasi e "issent an"he cite" a long line of cases fro! ,-?- ,-(? to su$$ort hisstan".

In the %OL . ICA* it +as conclu"e" that the !a1ority ruling in#ERALCO !ust e reconsi"ere" an" no longer "ee!e" to ea in"ing $rece"ent. The correct rule is alienable land +eldb5 a possessor personall5 or t+oug+ +is predecessors7in7interest openl5 continuousl5 and e-clusivel5 0ort+e prescribed statutor5 period

The la+ itself !an"ates that the $ossessor shall econclusivel5 presumed to ha e $erfor!e" all the con"itionsessential to a :o ern!ent grant an" shall e entitle" to acertificate of title an" b5 legal 0iction the lan" has alrea"ycease" to e of the $u lic "o!ain an" has eco!e $ri ate$ro$erty. ;y o$eration of la+* a grant of the :o ern!ent +asalrea"y ac8uire" an" it is not necessary that a certificate oftitle shoul" e issue". The a$$lication for confir!ation is !erefor!ality* the lac4 of +hich "oes not affect the legalsufficiency of the title. The "ocu!ent only e i"enceso+nershi$ an" "oes not grant o+nershi$. 3:ist of Susi .Ra0on Perico . %ar6

Important:7 Once title to aliena le $u lic lan" $asses to a $ri atein"i i"ual* it is segregate" fro! lan"s of the $u lic "o!ainan" eco!es $ri ate lan" su 1ect to the rights of $ri ateo+nershi$.2 The ali"ity of ac8uisition is "eter!ine" y the Constitutionin effect as of the ti!e the lan" +as ac8uire".2 The $rohi ition on ac8uisition of $u lic lan"s also a$$lies tocor$orations sole.2 #ERALCO "i" not "eci"e a constitutional 8uestion.

Article VII* Section


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Section


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consticompileddigests.091207

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