didipio earthsavers’ multipurpose association,

7/9/2015 SUPREMECOURTREPORTSANNOTATEDVOLUME485

http://www.central.com.ph/sfsreader/session/0000014e71dce7b9cd162d19000a0094004f00ee/p/AKY874/?username=Guest 1/49

G.R. No. 157882. March 30, 2006.*

DIDIPIO EARTHSAVERS MULTIPURPOSEASSOCIATION, INCORPORATED (DESAMA), MANUELBUTIC, CESAR MARIANO, LAURO ABANCE, BENTAYABAN, ANTONIO DINGCOG, TEDDY B.KIMAYONG, ALONZO ANANAYO, ANTONIO MALANUYA, JOSE BAHAG, ANDRES INLAB, RUFINOLICYAYO, ALFREDO CULHI, CATALILNAINABYUHAN, GUAY DUMMANG, GINA PULIDO,EDWIN ANSIBEY, CORAZON SICUAN, LOPEZDUMULAG, FREDDIE AYDINON, VILMA JOSE,FLORENTINA MADDAWAT, LINDA DINGCOG, ELMERSICUAN, GARY ANSIBEY, JIMMY MADDAWAT, JIMMYGUAY,

_______________

* FIRST DIVISION.

587

VOL. 485, MARCH 30, 2006 587Didipio EarthSavers MultiPurpose Association,

Incorporated (DESAMA) vs. Gozun

ALFREDO CUTING, ANGELINA UDAN, OSCAR INLAB,JUANITA CUTING, ALBERT PINKIHAN, CECILIATAYABAN, CRISTA BINWAK, PEDRO DUGAY, SR.,EDUARDO ANANAYO, ROBIN INLAB, JR., LORENZOPULIDO, TOMAS BINWAG, EVELYN BUYA, JAIMEDINGCOG, DINAOAN CUTING, PEDRO DONATO,MYRNA GUAY, FLORA ANSIBEY, GRACE DINAMLING,EDUARDO MENCIAS, ROSENDA JACOB, SIONITADINGCOG, GLORIA JACOB, MAXIMA GUAY, RODRIGOPAGGADUT, MARINA ANSIBEY, TOLENTINO INLAB,RUBEN DULNUAN, GERONIMO LICYAYO, LEONCIO



CUMTI, MARY DULNUAN, FELISA BALANBAN,MYRNA DUYAN, MARY MALANUYA, PRUDENCIOANSIBEY, 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, ARTEMEOANANAYO, MARY BABLING, NORA ANSIBEY, DAVIDDULNUAN, AVELINO PUGUON, LUCAS GUMAWI,LUISA ABBAC, CATHRIN GUWAY, CLARITATAYABAN, FLORA JAVERA, RANDY SICOAN, FELIZAPUTAKI, CORAZON P. DULNUAN, NENA D. BULLONG,ERMELYN GUWAY, GILBERT BUTALE, JOSEPH B.BULLONG, FRANCISCO PATNAAN, JR., SHERWINDUGAY, TIRSO GULLINGAY, BENEDICT T. NABALLIN,RAMON PUNADWAN, ALFONSO DULNUAN, CARMEND. BUTALE, LOLITA ANSIBEY, ABRAHAM DULNUAN,ARLYNDA BUTALE, MODESTO A. ANSIBEY,EDUARDO LUGAY, ANTONIO HUMIWAT, ALFREDOPUMIHIC, MIKE TINO, TONY CABARROGUIS, BASILIOTAMLIWOK, JR., NESTOR TANGID, ALEJOTUGUINAY, BENITO LORENZO, RUDY BAHIWAG,ANALIZA BUTALE, NALLEM LUBYOC, JOSEPHDUHAYON, RAFAEL CAMPOL, MANUEL PUMALO,DELFIN AGALOOS, PABLO CAYANGA, PERFECTOSISON, ELIAS NATAMA, LITO PUMALO, SEVERINADUGAY, GABRIEL PAKAYAO, JEOFFREY SINDAP,FELIX TICUAN, MARIANO S.

588

588 SUPREME COURT REPORTS ANNOTATEDDidipio EarthSavers MultiPurpose Association,


MADDELA, MENZI TICAWA, DOMINGA DUGAY, JOEBOLINEY, JASON ASANG, TOMMY ATENYAYO, ALEJOAGMALIW, DIZON AGMALIW, EDDIE ATOS, FELIMONBLANCO, DARRIL DIGOY, LUCAS BUAY, ARTEMIOBRAZIL, NICANOR MODI, LUIS REDULFIN, NESTORJUSTINO, JAIME CUMILA, BENEDICT GUINID,EDITHA ANIN, INOHYABAN BANDAO, LUISBAYWONG, FELIPE DUHALNGON, PETER BENNEL,



JOSEPH T. BUNGGALAN, JIMMY B. KIMAYONG,HENRY PUGUON, PEDRO BUHONG, BUGANNADIAHAN, SR., MARIA EDEN ORLINO, SPC, PERLAVISSORO, and BISHOP RAMON VILLENA, petitioners,vs. ELISEA GOZUN, in her capacity as SECRETARY ofthe DEPARTMENT OF ENVIRONMENT and NATURALRESOURCES (DENR), HORACIO RAMOS, in his capacityas Director of the Mines and Geosciences Bureau (MGBDENR), ALBERTO ROMULO, in his capacity as theExecutive Secretary of the Office of the President,RICHARD N. FERRER, in his capacity as ActingUndersecretary of the Office of the President, IAN HEATHSANDERCOCK, in his capacity as President of CLIMAXARIMCO MINING CORPORATION, respondents.

Constitutional Law Justiciable Controversy, Defined Wordsand Phrases A justiciable controversy is defined as a definite andconcrete dispute touching on the legal relations of parties havingadverse legal interests which may be resolved by a court of lawthrough the application of a law.A justiciable controversy isdefined as a definite and concrete dispute touching on the legalrelations of parties having adverse legal interests which may beresolved by a court of law through the application of a law. Thus,courts have no judicial power to review cases involving politicalquestions and as a rule, will desist from taking cognizance ofspeculative or hypothetical cases, advisory opinions and casesthat have become moot.

Same Judicial Power Judicial power includes the duty of thecourts of justice to settle actual controversies involving rightswhich are legally demandable and enforceable Requisites of.TheConstitution is quite explicit on this matter. It provides thatjudicial power includes the duty of the courts of justice to settleactual controversies

589

VOL. 485, MARCH 30, 2006 589

Didipio EarthSavers MultiPurpose Association, Incorporated(DESAMA) vs. Gozun

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 disputesbetween conflicting parties through the application of law. For thecourts to exercise the power of judicial review, the following mustbe extant (1) there must be an actual case calling for the exerciseof judicial power (2) the question must be ripe for adjudicationand (3) the person challenging must have the standing.

Same Eminent Domain Taking under the concept ofeminent domain as entering upon private property for more than amomentary period, and, under the warrant or color of legalauthority devoting it to a public use.Republic v. Vda. deCastellvi, 58 SCRA 336, 350 (1974), defines taking under theconcept of eminent domain as entering upon private property formore than a momentary period, and, under the warrant or color oflegal authority, devoting it to a public use, or otherwise informallyappropriating or injuriously affecting it in such a way as tosubstantially oust the owner and deprive him of all beneficialenjoyment thereof.

Same Same Eminent Domain and Police PowerDistinguished.The power of eminent domain is the inherentright of the state (and of those entities to which the power hasbeen lawfully delegated) to condemn private property to publicuse upon payment of just compensation. On the other hand, policepower is the power of the state to promote public welfare byrestraining and regulating the use of liberty and property.Although both police power and the power of eminent domainhave the general welfare for their object, and recent trends show amingling of the two with the latter being used as an implement ofthe former, there are still traditional distinctions between thetwo.

Same Same When a property interest is appropriated andapplied to some public purpose, there is compensable taking.Athorough scrutiny of the extant jurisprudence leads to a cogentdeduction that where a property interest is merely restrictedbecause the continued use thereof would be injurious to publicwelfare, or where property is destroyed because its continuedexistence would be injurious to public interest, there is nocompensable taking. However, when a property interest isappropriated and applied to some public purpose, there iscompensable taking.

590

590 SUPREME COURT REPORTS ANNOTATED




Same Police Power In the exercise of its police powerregulation, the state restricts the use of private property, but noneof the property interests in the bundle of rights which constituteownership is appropriated for use by or for the benefit of thepublic.According to noted constitutionalist, Fr. Joaquin Bernas,SJ, in the exercise of its police power regulation, the staterestricts the use of private property, but none of the propertyinterests in the bundle of rights which constitute ownership isappropriated for use by or for the benefit of the public. Use of theproperty by the owner was limited, but no aspect of the propertyis used by or for the public. The deprivation of use can in fact betotal and it will not constitute compensable taking if nobody elseacquires use of the property or any interest therein.

Same Eminent Domain Taking may include trespass withoutactual eviction of the owner, material impairment of the value ofthe property or prevention of the ordinary uses for which theproperty was intended such as the establishment of an easement.While the power of eminent domain often results in theappropriation of title to or possession of property, it need notalways be the case. Taking may include trespass without actualeviction of the owner, material impairment of the value of theproperty or prevention of the ordinary uses for which the propertywas intended such as the establishment of an easement. In Ayalade Roxas v. City of Manila, 9 Phil. 215, 221 (1907), it was heldthat the imposition of burden over a private property througheasement was considered taking hence, payment of justcompensation is required.

Same Same Requisites of Taking in Eminent Domain.InRepublic v. Castellvi, 58 SCRA 336, 350352 (1974), this Courthad the occasion to spell out the requisites of taking in eminentdomain, to wit: (1) the expropriator must enter a private property(2) the entry must be for more than a momentary period (3) theentry must be under warrant or color of legal authority (4) theproperty must be devoted to public use or otherwise informallyappropriated or injuriously affected (5) the utilization of theproperty for public use must be in such a way as to oust the ownerand deprive him of beneficial enjoyment of the property.

Same Same Mines and Mining The holders of mining rightsenter private lands for purposes of conducting mining activitiessuch as exploration, extraction and processing of minerals.Theentry



591

VOL. 485, MARCH 30, 2006 591


referred to in Section 76 is not just a simple rightofway which isordinarily allowed under the provisions of the Civil Code. Here,the holders of mining rights enter private lands for purposes ofconducting mining activities such as exploration, extraction andprocessing of minerals. Mining right holders build mineinfrastructure, dig mine shafts and connecting tunnels, preparetailing ponds, storage areas and vehicle depots, install theirmachinery, equipment and sewer systems. On top of this, underSection 75, easement rights are accorded to them where they maybuild warehouses, port facilities, electric transmission, railroadsand other infrastructures necessary for mining operations. Allthese will definitely oust the owners or occupants of the affectedareas the beneficial ownership of their lands. Without a doubt,taking occurs once mining operations commence.

Statutory Construction In order that one law may operate torepeal another law, the two laws must be inconsistentthe formermust be so repugnant as to be irreconcilable with the latter actrepeals by implication are not favored, and will not be decreedunless it is manifest that the legislature so intended.It is anestablished rule in statutory construction that in order that onelaw may operate to repeal another law, the two laws must beinconsistent. The former must be so repugnant as to beirreconciliable with the latter act. Simply because a latterenactment may relate to the same subject matter as that of anearlier statute is not of itself sufficient to cause an implied repealof the latter, since the new law may be cumulative or acontinuation of the old one. As has been the ruled, repeals byimplication are not favored, and will not be decreed unless it ismanifest that the legislature so intended. As laws are presumedto be passed with deliberation and with full knowledge of allexisting ones on the subject, it is but reasonable to conclude thatin passing a statute it was not intended to interfere with orabrogate any former law relating to the same matter, unless therepugnancy between the two is not only irreconcilable, but alsoclear and convincing, and flowing necessarily from the languageused, unless the later act fully embraces the subject matter of the



earlier, or unless the reason for the earlier act is beyondperadventure removed. Hence, every effort must be used to makeall acts stand and if, by any reasonable construction, they can bereconciled, the latter act will not operate as a repeal of the earlier.

592



Constitutional Law Eminent Domain Mines and MiningPublic use as a requirement for the valid exercise of the power ofeminent domain is now synonymous with public interest, publicbenefit, public welfare and public convenienceit includes thebroader notion of indirect public benefit or advantagepublic useas traditionally understood as actual use by the public hasalready been abandonedmining industry plays a pivotal role inthe economic development of the country and is a vital tool in thegovernments thrust of accelerated recovery.The taking to bevalid must be for public use. Public use as a requirement for thevalid exercise of the power of eminent domain is now synonymouswith public interest, public benefit, public welfare and publicconvenience. It includes the broader notion of indirect publicbenefit or advantage. Public use as traditionally understood asactual use by the public has already been abandoned. Miningindustry plays a pivotal role in the economic development of thecountry and is a vital tool in the governments thrust ofaccelerated recovery. The importance of the mining industry fornational development is expressed in Presidential Decree No. 463:WHEREAS, mineral production is a major support of the nationaleconomy, and therefore the intensified discovery, exploration,development and wise utilization of the countrys mineralresources are urgently needed for national development.Irrefragably, mining is an industry which is of public benefit.

Same Same Same There is no basis for the claim that theMining Law and its implementing rules and regulations do notprovide for just compensation in expropriating private properties.There is also no basis for the claim that the Mining Law and itsimplementing rules and regulations do not provide for justcompensation in expropriating private properties. Section 76 ofRep. Act No. 7942 and Section 107 of DAO 9640 provide for thepayment of just compensation.



Same Same Same The determination of just compensationin eminent domain cases is a judicial function.The question onthe judicial determination of just compensation has been settledin the case of Export Processing Zone Authority v. Dulay, 149SCRA 305, 312 (1987), wherein the court declared that thedetermination of just compensation in eminent domain cases is ajudicial function. Even as the executive department or thelegislature may make the initial determinations, the same cannotprevail over the courts findings.

593

VOL. 485, MARCH 30, 2006 593


Same Congress The legislature, in enacting the mining act, ispresumed to have deliberated with full knowledge of all existinglaws and jurisprudence on the subject.The legislature, inenacting the mining act, is presumed to have deliberated with fullknowledge of all existing laws and jurisprudence on the subject.Thus, it is but reasonable to conclude that in passing such statuteit was in accord with the existing laws and jurisprudence on thejurisdiction of courts in the determination of just compensationand that it was not intended to interfere with or abrogate anyformer law relating to the same matter. Indeed, there is nothingin the provisions of the assailed law and its implementing rulesand regulations that exclude the courts from their jurisdiction todetermine just compensation in expropriation proceedingsinvolving mining operations. Although Section 105 confers uponthe Panel of Arbitrators the authority to decide cases wheresurface owners, occupants, concessionaires refuse permit holdersentry, thus, necessitating involuntary taking, this does not meanthat the determination of the just compensation by the Panel ofArbitrators or the Mines Adjudication Board is final andconclusive. The determination is only preliminary unless acceptedby all parties concerned. There is nothing wrong with the grant ofprimary jurisdiction by the Panel of Arbitrators or the MinesAdjudication Board to determine in a preliminary matter thereasonable compensation due the affected landowners oroccupants. The original and exclusive jurisdiction of the courts todecide determination of just compensation remains intact despitethe preliminary determination made by the administrativeagency.



Mines and Mining Statutes R.A. No. 7942 provides for thestates control and supervision over mining operations.Petitioners charge that Rep. Act No. 7942, as well as itsImplementing Rules and Regulations, makes it possible for FTAAcontracts to cede over to a fully foreignowned corporation fullcontrol and management of mining enterprises, with the resultthat the State is allegedly reduced to a passive regulatordependent on submitted plans and reports, with weak review andaudit powers. The State is not acting as the supposed owner of thenatural resources for and on behalf of the Filipino people itpractically has little effective say in the decisions made by theenterprise. In effect, petitioners asserted that the law, theimplementing regulations, and the CAMC FTAA cede beneficialownership of the mineral resources to the foreign contractor. Itmust be noted that this argument was already raised in LaBugal

594



BLaan Tribal Association, Inc. v. Ramos, 445 SCRA 1, 132137(2004), where the Court answered in the following manner: RA7942 provides for the states control and supervision over miningoperations.

Same Constitutional Law The 1987 Constitution allows thecontinued use of service contracts with foreign corporations ascontractors who would invest in and operate and manageextractive enterprises, subject to the full control and supervision ofthe State.The mere fact that the term service contracts found inthe 1973 Constitution was not carried over to the presentconstitution, sans any categorical statement banning servicecontracts in mining activities, does not mean that servicecontracts as understood in the 1973 Constitution was eradicatedin the 1987 Constitution. The 1987 Constitution allows thecontinued use of service contracts with foreign corporations ascontractors who would invest in and operate and manageextractive enterprises, subject to the full control and supervisionof the State this time, however, safety measures were put inplace to prevent abuses of the past regime.



SPECIAL CIVIL ACTION in the Supreme Court.Prohibition and Mandamus.

The facts are stated in the opinion of the Court.Melizel F. Asuncion for petitioners. Francis Joseph G. Ballesteros collaborating counsel

for petitioners. Roberto C. San Juan for respondent ClimaxArimco

Mining Corporation.The Solicitor General for public respondents.

CHICONAZARIO, J.:

This petition for prohibition and mandamus under Rule 65of the Rules of Court assails the constitutionality ofRepublic Act No. 7942 otherwise known as the PhilippineMining Act of 1995, together with the Implementing Rulesand Regulations issued pursuant thereto, Department ofEnvironment and

595



Natural Resources (DENR) Administrative Order No. 9640, s. 1996 (DAO 9640) and of the Financial and TechnicalAssistance Agreement (FTAA) entered into on 20 June1994 by the Republic of the Philippines and Arimco MiningCorporation (AMC), a corporation established under thelaws of Australia and owned by its nationals.

On 25 July 1987, then President Corazon C. Aquinopromulgated Executive Order No. 279 which authorizedthe DENR Secretary to accept, consider and evaluateproposals from foreignowned corporations or foreigninvestors for contracts of agreements involving eithertechnical or financial assistance for largescale exploration,development, and utilization of minerals, which, uponappropriate recommendation of the Secretary, thePresident may execute with the foreign proponent.

On 3 March 1995, then President Fidel V. Ramos signedinto law Rep. Act No. 7942 entitled, An Act Instituting ANew 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 ofRep. Act No. 7942. This was soon superseded by DAO No.9640, s. 1996, which took effect on 23 January 1997 afterdue publication.

Previously, however, or specifically on 20 June 1994,President Ramos executed an FTAA with AMC over a totalland area of 37,000 hectares covering the provinces ofNueva Vizcaya and Quirino. Included in this area isBarangay Dipidio, Kasibu, Nueva Vizcaya.

Subsequently, AMC consolidated with Climax MiningLimited to form a single company that now goes under thenew name of ClimaxArimco Mining Corporation (CAMC),the controlling 99% of stockholders of which are Australiannationals.

596



On 7 September 2001, counsels for petitioners filed ademand letter addressed to then DENR SecretaryHeherson Alvarez, for the cancellation of the CAMC FTAAfor the primary reason that Rep. Act No. 7942 and itsImplementing Rules and Regulations DAO 9640 areunconstitutional. The Office of the Executive Secretary wasalso furnished a copy of the said letter. There being noresponse to both letters, another letter of the same contentdated 17 June 2002 was sent to President GloriaMacapagal Arroyo. This letter was indorsed to the DENRSecretary and eventually referred to the Panel ofArbitrators of the Mines and Geosciences Bureau (MGB),Regional Office No. 02, Tuguegarao, Cagayan, for furtheraction.

On 12 November 2002, counsels for petitioners receiveda letter from the Panel of Arbitrators of the MGB requiringthe petitioners to comply with the Rules of the Panel ofArbitrators before the letter may be acted upon.

Yet again, counsels for petitioners sent President Arroyoanother demand letter dated 8 November 2002. Said letterwas again forwarded to the DENR Secretary who referred



1.

2.

3.

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 cancellationof the CAMC FTAA.

Petitioners thus filed the present petition for prohibitionand mandamus, with a prayer for a temporary restrainingorder. They pray that the Court issue an order:

enjoining public respondents from acting on anyapplication for FTAAdeclaring unconstitutional the Philippine MiningAct of 1995 and its Implementing Rules andRegulationscanceling the FTAA issued to CAMC.

In their memorandum petitioners pose the following issues:

597



I

WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THECAMC FTAA ARE VOID BECAUSE THEY ALLOW THEUNJUST AND UNLAWFUL TAKING OF PROPERTYWITHOUT PAYMENT OF JUST COMPENSATION, INVIOLATION OF SECTION 9, ARTICLE III OF THECONSTITUTION.

II

WHETHER OR NOT THE MINING ACT AND ITSIMPLEMENTING RULES AND REGULATIONS ARE VOIDAND UNCONSTITUTIONAL FOR SANCTIONING ANUNCONSTITUTIONAL ADMINISTRATIVE PROCESS OFDETERMINING JUST COMPENSATION.

III

WHETHER OR NOT THE STATE, THROUGH REPUBLICACT NO. 7942 AND THE CAMC FTAA, ABDICATED ITSPRIMARY RESPONSIBILITY TO THE FULL CONTROL ANDSUPERVISION OVER NATURAL RESOURCES.



IV

WHETHER OR NOT THE RESPONDENTSINTERPRETATION OF THE ROLE OF WHOLLY FOREIGNAND FOREIGNOWNED CORPORATIONS IN THEIRINVOLVEMENT IN MINING ENTERPRISES, VIOLATESPARAGRAPH 4, SECTION 2, ARTICLE XII OF THECONSTITUTION.

V

WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITSSERVICE CONTRACTS.

1

Before going to the substantive issues, the proceduralquestion raised by public respondents shall first be dealtwith. Public respondents are of the view that petitionerseminent domain claim is not ripe for adjudication as theyfail to allege that CAMC has actually taken theirproperties nor do they allege that their property rightshave been endangered or are in danger on account ofCAMCs FTAA. In effect, public respondents insist that theissue of eminent domain is not a justiciable controversywhich this Court can take cognizance of.

_______________

1 Rollo, pp. 595596.

598



A justiciable controversy is defined as a definite andconcrete dispute touching on the legal relations of partieshaving adverse legal interests which may be resolved by acourt of law through the application of a law.

2 Thus, courts

have no judicial power to review cases involving politicalquestions and as a rule, will desist from taking cognizanceof speculative or hypothetical cases, advisory opinions andcases 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 actualcontroversies involving rights which are legally



demandable and enforceable. Pursuant to thisconstitutional mandate, courts, through the power ofjudicial review, are to entertain only real disputes betweenconflicting parties through the application of law. For thecourts to exercise the power of judicial review, the followingmust be extant (1) there must be an actual case calling forthe exercise of judicial power (2) the question must be ripefor adjudication and (3) the person challenging must havethe standing.

5

An actual case or controversy involves a conflict of legalrights, an assertion of opposite legal claims, susceptible ofjudicial resolution as distinguished from a hypothetical orabstract difference or dispute.

6 There must be a contrariety

of

_______________

2 Velarde v. Social Justice Society, G.R. No. 159357, 28 April 2004, 428SCRA 283, 291.

3 PHILIPPINE POLITICAL LAW, Isagani Cruz, p. 23 (1995 ed.).4 Article VIII, Section 1. x x x Judicial power includes the duty of the

courts of justice to settle actual controversies involving rights which arelegally demandable and enforceable, and to determine whether or notthere has been a grave abuse of discretion amounting to lack or excess ofjurisdiction on the part of any branch or instrumentality of theGovernment.

5 Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 425 292 SCRA 402,412413 (1998).

6 Board of Optometry v. Hon. Colet, 328 Phil. 1187, 1206 260 SCRA 88,104 (1996).

599



legal rights that can be interpreted and enforced on thebasis of existing law and jurisprudence.

Closely related to the second requisite is that thequestion must be ripe for adjudication. A question isconsidered ripe for adjudication when the act beingchallenged has had a direct adverse effect on the individualchallenging it.

7

The third requisite is legal standing or locus standi. It is



defined as a personal or substantial interest in the casesuch that the party has sustained or will sustain directinjury as a result of the governmental act that is beingchallenged, alleging more than a generalized grievance.

8

The gist of the question of standing is whether a partyalleges such personal stake in the outcome of thecontroversy as to assure that concrete adverseness whichsharpens the presentation of issues upon which the courtdepends for illumination of difficult constitutionalquestions.

9 Unless a person is injuriously affected in any of

his constitutional rights by the operation of statute orordinance, he has no standing.

10

In the instant case, there exists a live controversyinvolving a clash of legal rights as Rep. Act No. 7942 hasbeen enacted, DAO 9640 has been approved and an FTAAshave been entered into. The FTAA holders have alreadybeen operating in various provinces of the country. Amongthem is CAMC which operates in the provinces of NuevaVizcaya and Quirino where numerous individuals includingthe petitioners are imperiled of being ousted from theirlandholdings in view of the CAMC FTAA. In light of this,the court cannot await the adverse consequences of the lawin order to consider the con

_______________

7 Integrated Bar of the Philippines v. Zamora, 392 Phil. 618, 632633338 SCRA 81 (2000).

8 Dumlao v. Commission on Elections, G.R. No. L52245, 22 January1980, 95 SCRA 392, 402.

9 Integrated Bar of the Philippines v. Zamora, supra note 7, p. 633.10 ErmitaMalate Hotel and Motel Operators Association, Inc. v. City

Mayor of Manila, 128 Phil. 473, 480481 20 SCRA 849 (1967).

600



troversy actual and ripe for judicial intervention.11 Actual

eviction of the land owners and occupants need not happenfor this Court to intervene. As held in Pimentel, Jr. v. Hon.Aguirre:

12



By the mere enactment of the questioned law or the approval ofthe challenged act, the dispute is said to have ripened into ajudicial controversy even without any other overt act. Indeed,even a singular violation of the Constitution and/or the law isenough to awaken judicial duty.

13

Petitioners embrace various segments of the society. Theseinclude Didipio EarthSavers MultiPurpose Association,Inc., an organization of farmers and indigenous peoplesorganized under Philippine laws, representing acommunity actually affected by the mining activities ofCAMC, as well as other residents of areas affected by themining activities of CAMC. These petitioners have thestanding to raise the constitutionality of the questionedFTAA as they allege a personal and substantial injury.

14

They assert that they are affected by the mining activitiesof CAMC. Likewise, they are under imminent threat ofbeing displaced from their landholdings as a result of theimplementation of the questioned FTAA. They thus meetthe appropriate case requirement as they assert an interestadverse to that of respondents who, on the other hand,claim the validity of the assailed statute and the FTAA ofCAMC.

Besides, the transcendental importance of the issuesraised and the magnitude of the public interest involvedwill have a bearing on the countrys economy which is to agreater extent dependent upon the mining industry. Alsoaffected by the

_______________

11 Cruz v. Secretary of Environment & Natural Resources, G.R. No.135385, 6 December 2000, 347 SCRA 128, 256.

12 391 Phil. 84 336 SCRA 201 (2000).13 Id., p. 107 p. 222.14 La BugalBLaan Tribal Association, Inc. v. Ramos, G.R. No. 127882,

27 January 2004, 421 SCRA 148, 179.

601



resolution of this case are the proprietary rights of



numerous residents in the mining contract areas as well asthe social existence of indigenous peoples which arethreatened. Based on these considerations, this Courtdeems it proper to take cognizance of the instant petition.

Having resolved the procedural question, theconstitutionality of the law under attack must be addressedsquarely.

First Substantive Issue: Validity of Section 76 of Rep.Act No. 7942 and DAO 9640

In seeking to nullify Rep. Act No. 7942 and itsimplementing rules DAO 9640 as unconstitutional,petitioners set their sight on Section 76 of Rep. Act No.7942 and Section 107 of DAO 9640 which they claim allowthe unlawful and unjust taking of private property forprivate purpose in contradiction with Section 9, Article IIIof the 1987 Constitution mandating that private propertyshall not be taken except for public use and thecorresponding payment of just compensation. They assertthat public respondent DENR, through the Mining Act andits Implementing Rules and Regulations, cannot, on itsown, permit entry into a private property and allow takingof land without payment of just compensation.

Interpreting Section 76 of Rep. Act No. 7942 and Section107 of DAO 9640, juxtaposed with the concept of taking ofproperty for purposes of eminent domain in the case ofRepublic v. Vda. de Castellvi,

15 petitioners assert that there

is indeed a taking upon entry into private lands andconcession areas.

_______________

15 157 Phil. 329, 344 58 SCRA 336, 350 (1974). It defines takingunder the concept of eminent domain as entering upon private propertyfor more than a momentary period, and, under the warrant or color oflegal authority, devoting it to a public use, or otherwise informallyappropriating or injuriously affecting it in such a way as substantially tooust the owner and deprive him of all beneficial enjoyment thereof.

602





Republic v. Vda. de Castellvi defines taking under theconcept of eminent domain as entering upon privateproperty for more than a momentary period, and, under thewarrant or color of legal authority, devoting it to a publicuse, or otherwise informally appropriating or injuriouslyaffecting it in such a way as to substantially oust the ownerand deprive him of all beneficial enjoyment thereof.

From the criteria set forth in the cited case, petitionersclaim that the entry into a private property by CAMC,pursuant to its FTAA, is for more than a momentaryperiod, i.e., for 25 years, and renewable for another 25years that the entry into the property is under the warrantor color of legal authority pursuant to the FTAA executedbetween the government and CAMC and that the entrysubstantially ousts the owner or possessor and depriveshim 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 eminentdomain as unwarranted because respondents failed toprove that the entry into private property is devoted forpublic use.

Petitioners also stress that even without the doctrine inthe Castellvi case, the nature of the mining activity, theextent of the land area covered by the CAMC FTAA andthe various rights granted to the proponent or the FTAAholder, such as (a) the right of possession of theExploration Contract Area, with full right of ingress andegress and the right to occupy the same (b) the right not tobe prevented from entry into private lands by surfaceowners and/or occupants thereof when prospecting,exploring and exploiting for minerals therein (c) the rightto enjoy easement rights, the use of timber, water andother natural resources in the Exploration Contract Area(d) the right of possession of the Mining Area, with fullright of ingress and egress and the right to occupy thesame and (e) the right to enjoy easement rights, water andother natural resources in the Mining Area, result in ataking of private property.

603





Petitioners quickly add that even assuming arguendo thatthere is no absolute, physical taking, at the very least,Section 76 establishes a legal easement upon the surfaceowners, occupants and concessionaires of a mining contractarea sufficient to deprive them of enjoyment and use of theproperty and that such burden imposed by the legaleasement falls within the purview of eminent domain.

To further bolster their claim that the legal easementestablished is equivalent to taking, petitioners cite the caseof National Power Corporation v. Gutierrez

16 holding that

the easement of rightofway imposed against the use of theland for an indefinite period is a taking under the power ofeminent domain.

Traversing petitioners assertion, public respondentsargue that Section 76 is not a taking provision but a validexercise of the police power and by virtue of which, thestate may prescribe regulations to promote the health,morals, peace, education, good order, safety and generalwelfare of the people. This government regulation involvesthe adjustment of rights for the public good and that thisadjustment curtails some potential for the use or economicexploitation of private property. Public respondentsconcluded that to require compensation in all suchcircumstances would compel the government to regulate bypurchase.

Public respondents are inclined to believe that byentering private lands and concession areas, FTAA holdersdo not oust the owners thereof nor deprive them of allbeneficial enjoyment of their properties as the said entrymerely establishes a legal easement upon surface owners,occupants and concessionaires of a mining contract area.

_______________

16 G.R. No. 60077, 18 January 1991, 193 SCRA 1, 7.

604





Taking in Eminent Domain Distinguished fromRegulation in Police Power

The power of eminent domain is the inherent right of thestate (and of those entities to which the power has beenlawfully delegated) to condemn private property to publicuse upon payment of just compensation.

17 On the other

hand, police power is the power of the state to promotepublic welfare by restraining and regulating the use ofliberty and property.

18 Although both police power and the

power of eminent domain have the general welfare for theirobject, and recent trends show a mingling

19 of the two with

the latter being used as an implement of the former, thereare still traditional distinctions between the two.

Property condemned under police power is usuallynoxious or intended for a noxious purpose hence, nocompensation shall be paid.

20 Likewise, in the exercise of

police power, property rights of private individuals aresubjected to restraints and burdens in order to secure thegeneral comfort, health, and prosperity of the state. Thus,an ordinance prohibiting theaters from selling tickets inexcess of their seating capacity (which would result in thediminution of profits of the theaterowners) was upheldvalid as this would promote the comfort, convenience andsafety of the customers.

21 In U.S. v. Toribio,

22 the court

upheld the provisions of Act No. 1147, a statute regulatingthe slaughter of carabao for the purpose of conserving anadequate supply of draft animals, as a valid

_______________

17 Robern Development Corporation v. Quitain, 373 Phil. 773, 792793315 SCRA 150, 165 (1999).

18 U.S. v. Toribio, 15 Phil. 85, 93 (1910) Rubi v. The Provincial Boardof Mindoro, 39 Phil. 660, 708 (1919).

19 Association of Small Landowners of the Philippines, Inc. v. Secretaryof Agrarian Reform, G.R. No. 78742, 14 July 1989, 175 SCRA 343, 371.

20 U.S. v. Toribio, supra note 18, p. 370.21 People v. Chan, 65 Phil. 611 (1938).22 Supra note 18, p. 97.

605

VOL. 485, MARCH 30, 2006 605



Didipio EarthSavers MultiPurpose Association,Incorporated (DESAMA) vs. Gozun

exercise of police power, notwithstanding the propertyrights impairment that the ordinance imposed on cattleowners. A zoning ordinance prohibiting the operation of alumber yard within certain areas was assailed asunconstitutional in that it was an invasion of the propertyrights of the lumber yard owners in People v. De Guzman.

23

The Court nonetheless ruled that the regulation was avalid exercise of police power. A similar ruling was arrivedat in Seng Kee S Co. v. Earnshaw and Piatt

24 where an

ordinance divided the City of Manila into industrial andresidential areas.

A thorough scrutiny of the extant jurisprudence leads toa cogent deduction that where a property interest is merelyrestricted because the continued use thereof would beinjurious to public welfare, or where property is destroyedbecause its continued existence would be injurious to publicinterest, there is no compensable taking.

25 However, when a

property interest is appropriated and applied to somepublic purpose, there is compensable taking.

26

According to noted constitutionalist, Fr. Joaquin Bernas,SJ, in the exercise of its police power regulation, the staterestricts the use of private property, but none of theproperty interests in the bundle of rights which constituteownership is appropriated for use by or for the benefit ofthe 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 notconstitute compensable taking if nobody else acquires useof the property or any interest therein.

29

_______________

23 90 Phil. 132 (1951).24 56 Phil. 204 (1931).25 THE 1987 CONSTITUTION OF THE REPUBLIC OF THE

PHILIPPINES: A COMMENTARY, Bernas, p. 420.26 Id.27 Id., p. 421.28 Id.29 Id.

606





If, however, in the regulation of the use of the property,somebody else acquires the use or interest thereof, suchrestriction constitutes compensable taking. Thus, in CityGovernment of Quezon City v. Ericta,

30 it was argued by the

local government that an ordinance requiring privatecemeteries to reserve 6% of their total areas for the burialof paupers was a valid exercise of the police power underthe general welfare clause. This court did not agree in thecontention, ruling that property taken under the policepower is sought to be destroyed and not, as in this case, tobe devoted to a public use. It further declared that theordinance in question was actually a taking of privateproperty without just compensation of a certain area from aprivate cemetery to benefit paupers who are charges of thelocal government. Being an exercise of eminent domainwithout provision for the payment of just compensation,the same was rendered invalid as it violated the principlesgoverning eminent domain.

In People v. Fajardo,31 the municipal mayor refused

Fajardo permission to build a house on his own land on theground that the proposed structure would destroy the viewor beauty of the public plaza. The ordinance relied upon bythe mayor prohibited the construction of any building thatwould destroy the view of the plaza from the highway. Thecourt ruled that the municipal ordinance under the guise ofpolice power permanently divest owners of the beneficialuse of their property for the benefit of the public hence,considered as a taking under the power of eminent domainthat could not be countenanced without payment of justcompensation to the affected owners. In this case, what themunicipality wanted was to impose an easement on theproperty in order to preserve the view or beauty of thepublic plaza, which was a form of utilization of Fajardosproperty for public benefit.

32

_______________

30 207 Phil. 648 122 SCRA 759 (1983).31 104 Phil. 443 (1958).32 THE 1987 CONSTITUTION OF THE REPUBLIC OF THE

PHILIPPINES, supra note 25, p. 422.



607



While the power of eminent domain often results in theappropriation of title to or possession of property, it neednot always be the case. Taking may include trespasswithout actual eviction of the owner, material impairmentof the value of the property or prevention of the ordinaryuses for which the property was intended such as theestablishment 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 takinghence, payment of just compensation is required. The Courtdeclared:

And, considering that the easement intended to be established,whatever may be the object thereof, is not merely a real right thatwill encumber the property, but is one tending to prevent theexclusive use of one portion of the same, by expropriating it forpublic use which, be it what it may, can not be accomplishedunless the owner of the property condemned or seized bepreviously and duly indemnified, it is proper to protect theappellant by means of the remedy employed in such cases, as it isonly adequate remedy when no other legal action can be resortedto, against an intent which is nothing short of an arbitraryrestriction imposed by the city by virtue of the coercive powerwith 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 couldstill plant the same crops as long as they did not come intocontact with the wires, the Court nevertheless held thatthe easement of rightofway was a taking under the powerof eminent domain. The Court said:

In the case at bar, the easement of rightofway is definitely ataking under the power of eminent domain. Considering thenature and effect of the installation of 230 KV MexicoLimaytransmission lines, the limitation imposed by NPC against theuse of the land for



(1)(2)

(3)

(4)

_______________

33 CONSTITUTIONAL LAW, Cruz, p. 66 (1995 ed.).34 9 Phil. 215, 221 (1907).35 Supra note 16.

608



an indefinite period deprives private respondents of its ordinaryuse.

A case exemplifying an instance of compensable takingwhich does not entail transfer of title is Republic v.Philippine Long Distance Telephone Co.

36 Here, the Bureau

of Telecommunications, a government instrumentality, hadcontracted with the PLDT for the interconnection betweenthe Government Telephone System and that of the PLDT,so that the former could make use of the lines and facilitiesof the PLDT. In its desire to expand services to governmentoffices, the Bureau of Telecommunications demanded toexpand its use of the PLDT lines. Disagreement ensued onthe terms of the contract for the use of the PLDT facilities.The Court ruminated:

Normally, of course, the power of eminent domain results in thetaking or appropriation of title to, and possession of, theexpropriated property but no cogent reason appears why saidpower may not be availed of to impose only a burden upon theowner of the condemned property, without loss of title andpossession. It is unquestionable that real property may, throughexpropriation, 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:

the expropriator must enter a private propertythe entry must be for more than a momentaryperiodthe entry must be under warrant or color of legalauthoritythe property must be devoted to public use or



(5)

otherwise informally appropriated or injuriouslyaffected

_______________

36 136 Phil. 20 26 SCRA 620 (1969).37 Id., pp. 2930 p. 628.38 Supra note 15, pp. 345347.

609



the utilization of the property for public use mustbe in such a way as to oust the owner and deprivehim of beneficial enjoyment of the property.

As shown by the foregoing jurisprudence, a regulationwhich substantially deprives the owner of his proprietaryrights and restricts the beneficial use and enjoyment forpublic use amounts to compensable taking. In the caseunder consideration, the entry referred to in Section 76 andthe easement rights under Section 75 of Rep. Act No. 7942as well as the various rights to CAMC under its FTAA areno different from the deprivation of proprietary rights inthe 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 forpurposes of more convenient mining operations it is necessary tobuild, 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, damsand 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 justcompensation, shall be entitled to enter and occupy said miningareas or lands.

Section 76 provides:



Entry into private lands and concession areasSubject to priornotification, holders of mining rights shall not be prevented fromentry into private lands and concession areas by surface owners,occupants, or concessionaires when conducting mining operationstherein.

The CAMC FTAA grants in favor of CAMC the right ofpossession of the Exploration Contract Area, the full rightof ingress and egress and the right to occupy the same. Italso bestows CAMC the right not to be prevented fromentry into

610



private lands by surface owners or occupants thereof whenprospecting, exploring and exploiting minerals therein.

The entry referred to in Section 76 is not just a simplerightofway which is ordinarily allowed under theprovisions of the Civil Code. Here, the holders of miningrights enter private lands for purposes of conductingmining activities such as exploration, extraction andprocessing of minerals. Mining right holders build mineinfrastructure, dig mine shafts and connecting tunnels,prepare tailing ponds, storage areas and vehicle depots,install their machinery, equipment and sewer systems. Ontop of this, under Section 75, easement rights are accordedto them where they may build warehouses, port facilities,electric transmission, railroads and other infrastructuresnecessary for mining operations. All these will definitelyoust the owners or occupants of the affected areas thebeneficial ownership of their lands. Without a doubt, takingoccurs 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 ofmining laws of this country which would help usunderstand Section 76 of Rep. Act No. 7942.

This provision is first found in Section 27 ofCommonwealth Act No. 137 which took effect on 7November 1936, viz.:



Before entering private lands the prospector shall first apply inwriting for written permission of the private owner, claimant, orholder thereof, and in case of refusal by such private owner,claimant, or holder to grant such permission, or in case ofdisagreement as to the amount of compensation to be paid forsuch privilege of prospecting therein, the amount of suchcompensation shall be fixed by agreement among the prospector,the Director of the Bureau of Mines and the surface owner, and incase of their failure to unanimously agree as to the amount ofcompensation, all questions at issue shall be determined by theCourt of First Instance.

611



Similarly, the pertinent provision of Presidential DecreeNo. 463, otherwise known as The Mineral ResourcesDevelopment Decree of 1974, provides:

SECTION 12. Entry to Public and Private Lands.A person whodesires to conduct prospecting or other mining operations withinpublic lands covered by concessions or rights other than miningshall first obtain the written permission of the government officialconcerned before entering such lands. In the case of private lands,the written permission of the owner or possessor of the land mustbe obtained before entering such lands. In either case, if saidpermission is denied, the Director, at the request of the interestedperson may intercede with the owner or possessor of the land. Ifthe intercession fails, the interested person may bring suit in theCourt of First Instance of the province where the land is situated.If the court finds the request justified, it shall issue an ordergranting the permission after fixing the amount of compensationand/or rental due the owner or possessor: Provided, That pendingfinal adjudication of such amount, the court shall uponrecommendation of the Director permit the interested person toenter, prospect and/or undertake other mining operations on thedisputed land upon posting by such interested person of a bondwith the court which the latter shall consider adequate to answerfor any damage to the owner or possessor of the land resultingfrom 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 ofmining operations, Presidential Decree No. 512 dated 19July 1974 was passed into law in order to achieve full andaccelerated mineral resources development. Thus,Presidential Decree No. 512 provides for a new system ofsurface rights acquisition by mining prospectors andclaimants. Whereas in Commonwealth Act No. 137 andPresidential Decree No. 463 eminent domain may only beexercised in order that the mining claimants can build,construct or install roads, railroads, mills, warehouses andother facilities, this time, the power of eminent domainmay now be invoked by mining operators for the entry,acquisition and use of private lands, viz.:

612



SECTION 1. Mineral prospecting, location, exploration,development and exploitation is hereby declared of public use andbenefit, and for which the power of eminent domain may beinvoked and exercised for the entry, acquisition and use of privatelands. x x x.

The evolution of mining laws gives positive indication thatmining operators who are qualified to own lands weregranted the authority to exercise eminent domain for theentry, acquisition, and use of private lands in areas openfor mining operations. This grant of authority extant inSection 1 of Presidential Decree No. 512 is not expresslyrepealed by Section 76 of Rep. Act No. 7942 and neitherare the former statutes impliedly repealed by the former.These two provisions can stand together even if Section 76of Rep. Act No. 7942 does not spell out the grant of theprivilege to exercise eminent domain which was present inthe old law.

It is an established rule in statutory construction that inorder that one law may operate to repeal another law, thetwo 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 samesubject matter as that of an earlier statute is not of itselfsufficient to cause an implied repeal of the latter, since the



new law may be cumulative or a continuation of the oldone. As has been the ruled, repeals by implication are notfavored, and will not be decreed unless it is manifest thatthe legislature so intended.

40 As laws are presumed to be

passed with deliberation and with full knowledge of allexisting ones on the subject, it is but reasonable to concludethat in passing a statute it was not intended to interferewith or abrogate any former law relating to the samematter, unless the repugnancy between the two is not onlyirreconcilable, but also clear and convincing, and flowingnecessarily from the language used, unless the later

_______________

39 Valera v. Tuason, Jr., 80 Phil. 823, 827 (1948).40 United States v. Palacio, 33 Phil. 208, 216 (1916).

613



act fully embraces the subject matter of the earlier, orunless the reason for the earlier act is beyond peradventureremoved.

41 Hence, every effort must be used to make all

acts stand and if, by any reasonable construction, they canbe reconciled, the latter act will not operate as a repeal ofthe earlier.

Considering that Section 1 of Presidential Decree No.512 granted the qualified mining operators the authority toexercise eminent domain and since this grant of authorityis deemed incorporated in Section 76 of Rep. Act No. 7942,the inescapable conclusion is that the latter provision is ataking provision.

While this Court declares that the assailed provision is ataking provision, this does not mean that it isunconstitutional on the ground that it allows taking ofprivate property without the determination of public useand 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 ofeminent 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 asactual use by the public has already been abandoned.

44

Mining industry plays a pivotal role in the economicdevelopment of the country and is a vital tool in thegovernments thrust of accelerated recovery.

45 The

importance of the mining industry for nationaldevelopment is expressed in Presidential Decree No. 463:

_______________

41 Id.42 Heirs of Juancho Ardona v. Reyes, 210 Phil. 187, 197 125 SCRA 220

(1983).43 Id.44 Id., p. 198 p. 233.45 Executive Order No. 211.

614



WHEREAS, mineral production is a major support of thenational economy, and therefore the intensified discovery,exploration, development and wise utilization of the countrysmineral resources are urgently needed for national development.

Irrefragably, mining is an industry which is of publicbenefit.

That public use is negated by the fact that the statewould be taking private properties for the benefit of privatemining firms or mining contractors is not at all true. InHeirs of Juancho Ardona v. Reyes,

46 petitioners therein

contended that the promotion of tourism is not for publicuse because private concessionaires would be allowed tomaintain various facilities such as restaurants, hotels,stores, etc., inside the tourist area. The Court thuscontemplated:

The rule in Berman v. Parker [348 U.S. 25 99 L. ed. 27] ofdeference to legislative policy even if such policy might meantaking from one private person and conferring on another privateperson 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 ofthe means chosen is the use of private enterprise for redevelopment ofthe area. Appellants argue that this makes the project a taking from onebusinessman for the benefit of another businessman. But the means ofexecuting 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 todecide when to take private property is reducedcontractually by Section 13.5 of the CAMC FTAA, whichreads:

If the CONTRACTOR so requests at its option, theGOVERNMENT shall use its offices and legal powers to assist inthe acquisition at reasonable cost of any surface areas or rightsrequired by the

_______________

46 Supra note 42.47 Id., p. 201.

615



CONTRACTOR at the CONTRACTORs cost to carry out theMineral Exploration and the Mining Operations herein.

All obligations, payments and expenses arising from, orincident to, such agreements or acquisition of right shall be forthe account of the CONTRACTOR and shall be recoverable asOperating Expense.

According to petitioners, the government is reduced to asubcontractor upon the request of the private respondent,and on account of the foregoing provision, the contractorcan compel the government to exercise its power of eminentdomain thereby derogating the latters power toexpropriate property.

The provision of the FTAA in question lays down theways and means by which the foreignowned contractor,disqualified to own land, identifies to the government thespecific surface areas within the FTAA contract area to beacquired for the mine infrastructure.

48 The government



then acquires ownership of the surface land areas on behalfof the contractor, through a voluntary transaction in orderto enable the latter to proceed to fully implement theFTAA. Eminent domain is not yet called for at this stagesince there are still various avenues by which surfacerights can be acquired other than expropriation. The FTAAprovision under attack merely facilitates theimplementation of the FTAA given to CAMC and shields itfrom violating the AntiDummy Law. Hence, whenconfronted with the same question in La BugalBLaanTribal Association, Inc. v. Ramos,

49 the Court answered:

Clearly, petitioners have needlessly jumped to unwarrantedconclusions, without being aware of the rationale for the saidprovision. That provision does not call for the exercise of thepower of eminent domainand determination of justcompensation is not an

_______________

48 La BugalBLaan Tribal Association, Inc. v. Ramos, G.R. No. 127882,1 December 2004, 445 SCRA 1, 228.

49 Id., p. 150.

616



issueas much as it calls for a qualified party to acquire thesurface rights on behalf of a foreignowned contractor.

Rather than having the foreign contractor act through adummy corporation, having the State do the purchasing is abetter alternative. This will at least cause the government to beaware of such transaction/s and foster transparency in thecontractors dealings with the local property owners. Thegovernment, then, will not act as a subcontractor of thecontractor rather, it will facilitate the transaction and enable theparties to avoid a technical violation of the AntiDummy Law.

There is also no basis for the claim that the Mining Lawand its implementing rules and regulations do not providefor 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. x x x Provided, that any damage to the property of thesurface owner, occupant, or concessionaire as a consequence ofsuch operations shall be properly compensated as may be providedfor 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 themining operations or as a result of the construction or installationof the infrastructure mentioned in 104 above shall be properlyand justly compensated.

Such compensation shall be based on the agreement enteredinto between the holder of mining rights and the surface owner,occupant or concessionaire thereof, where appropriate, inaccordance with P.D. No. 512. (Emphasis supplied.)

Second Substantive Issue: Power of Courts toDetermine Just Compensation

Closelyknit to the issue of taking is the determination ofjust compensation. It is contended that Rep. Act No. 7942and Section 107 of DAO 9640 encroach on the power of thetrial courts to determine just compensation in eminentdomain

617



cases inasmuch as the same determination of propercompensation are cognizable only by the Panel ofArbitrators.

The question on the judicial determination of justcompensation has been settled in the case of ExportProcessing Zone Authority v. Dulay

50 wherein the court

declared that the determination of just compensation ineminent domain cases is a judicial function. Even as theexecutive department or the legislature may make theinitial determinations, the same cannot prevail over thecourts findings.

Implementing Section 76 of Rep. Act No. 7942, Section



105 of DAO 9640 states that holder(s) of mining right(s)shall not be prevented from entry into its/theircontract/mining areas for the purpose of exploration,development, and/or utilization. That in cases wheresurface owners of the lands, occupants or concessionairesrefuse to allow the permit holder or contractor entry, thelatter shall bring the matter before the Panel of Arbitratorsfor proper disposition. Section 106 states that voluntaryagreements between the two parties permitting the miningright holders to enter and use the surface owners landsshall be registered with the Regional Office of the MGB. Inconnection with Section 106, Section 107 provides that thecompensation for the damage done to the surface owner,occupant or concessionaire as a consequence of miningoperations or as a result of the construction or installationof the infrastructure shall be properly and justlycompensated and that such compensation shall be based onthe agreement between the holder of mining rights andsurface owner, occupant or concessionaire, or whereappropriate, in accordance with Presidential Decree No.512. In cases where there is disagreement to thecompensation or where there is no agreement, the mattershall be brought before the Panel of Arbitrators. Section206 of the implementing rules and regulations provides anaggrieved party the remedy to appeal the decision of thePanel of Arbitrators to the Mines Adjudication

_______________

50 G.R. No. L59603, 29 April 1987, 149 SCRA 305, 312.

618



Board, and the latters decision may be reviewed by theSupreme Court by filing a petition for review on certiorari.

51

An examination of the foregoing provisions gives noindication that the courts are excluded from takingcognizance of expropriation cases under the mining law.The disagreement referred to in Section 107 does notinvolve the exercise of eminent domain, rather itcontemplates of a situation wherein the permit holders are



allowed by the surface owners entry into the latters landsand disagreement ensues as regarding the propercompensation for the allowed entry and use of the privatelands. Noticeably, the provision points to a voluntary saleor transaction, but not to an involuntary sale.

The legislature, in enacting the mining act, is presumedto have deliberated with full knowledge of all existing lawsand jurisprudence on the subject. Thus, it is but reasonableto conclude that in passing such statute it was in accordwith the existing laws and jurisprudence on the jurisdictionof courts in the determination of just compensation andthat it was not intended to interfere with or abrogate anyformer law relating to the same matter. Indeed, there isnothing in the provisions of the assailed law and itsimplementing rules and regulations that exclude the courtsfrom their jurisdiction to determine just compensation inexpropriation proceedings involving mining operations.Although Section 105 confers upon the Panel of Arbitratorsthe authority to decide cases where surface owners,occupants, concessionaires refuse permit holders entry,thus, necessitating involuntary taking, this does not meanthat the determination of the just compensation by thePanel of Arbitrators or the Mines Adjudication Board isfinal and conclusive. The determination is only preliminaryunless accepted by all parties concerned. There is nothingwrong with the grant of primary jurisdiction by the

_______________

51 Section 211 of DAO 9640 provides: The decision of the Board may bereviewed by filing a petition for review with the Supreme Court withinthirty (30) days from receipt of the order or decision of the Board.

619



Panel of Arbitrators or the Mines Adjudication Board todetermine in a preliminary matter the reasonablecompensation due the affected landowners or occupants.

52

The original and exclusive jurisdiction of the courts todecide determination of just compensation remains intactdespite the preliminary determination made by the



administrative agency. As held in Philippine VeteransBank v. Court of Appeals:

53 The jurisdiction of the Regional

Trial Courts is not any less original and exclusive becausethe question is first passed upon by the DAR, as thejudicial proceedings are not a continuation of theadministrative determination.

Third Substantive Issue: Sufficient Control by theState 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 fullyforeignowned corporation full control and management ofmining enterprises, with the result that the State isallegedly reduced to a passive regulator dependent onsubmitted plans and reports, with weak review and auditpowers. The State is not acting as the supposed owner ofthe natural resources for and on behalf of the Filipinopeople it practically has little effective say in the decisionsmade by the enterprise. In effect, petitioners asserted thatthe law, the implementing regulations, and the CAMCFTAA cede beneficial ownership of the mineral resources tothe foreign contractor.

It must be noted that this argument was already raisedin La BugalBLaan Tribal Association, Inc. v. Ramos,

54

where the Court answered in the following manner:

_______________

52 Philippine Veterans Bank v. Court of Appeals, 379 Phil. 141, 147 322SCRA 139, 145 (2000).

53 Id., p. 149 p. 147.54 Supra note 48, pp. 132137.

620



RA 7942 provides for the states control and supervision overmining operations. The following provisions thereof establish themechanism of inspection and visitorial rights over mining



1.

2.

3.

4.

(g)

(h)

(k)

(l)

(m)

operations and institute reportorial requirements in this manner:

Sec. 8 which provides for the DENRs power of overallsupervision and periodic review for the conservation,management, development and proper use of the Statesmineral resourcesSec. 9 which authorizes the Mines and GeosciencesBureau (MGB) under the DENR to exercise direct chargein the administration and disposition of mineralresources, and empowers the MGB to monitor thecompliance by the contractor of the terms and conditionsof the mineral agreements, confiscate surety andperformance bonds, and deputize whenever necessaryany member or unit of the Phil. National Police, barangay,duly registered nongovernmental organization (NGO) orany qualified person to police mining activitiesSec. 66 which vests in the Regional Director exclusivejurisdiction over safety inspections of all installations,whether surface or underground, utilized in miningoperations.Sec. 35, which incorporates into all FTAAs the followingterms, conditions and warranties:

Mining operations shall be conducted in accordance withthe provisions of the Act and its IRR.Work programs and minimum expenditures commitments.x x x xRequiring proponent to effectively use appropriate antipollution technology and facilities to protect theenvironment and restore or rehabilitate minedout areas.The contractors shall furnish the Government records ofgeologic, accounting and other relevant data for its miningoperation, and that books of accounts and records shall beopen for inspection by the government. x x x.

621



Requiring the proponent to dispose of the minerals at thehighest price and more advantageous terms andconditions.



(o)x x x xSuch other terms and conditions consistent with theConstitution and with this Act as the Secretary may deemto be for the best interest of the State and the welfare ofthe Filipino people.

The foregoing provisions of Section 35 of RA 7942 are alsoreflected and implemented in Section 56 (g), (h), (l), (m) and (n) ofthe Implementing Rules, DAO 9640.

Moreover, RA 7942 and DAO 9640 also provide variousstipulations confirming the governments control over miningenterprises:

The contractor is to relinquish to the government thoseportions of the contract area not needed for mining operationsand not covered by any declaration of mining feasibility (Section35e, RA 7942 Section 60, DAO 9640). The contractor must comply with the provisions pertaining tomine safety, health and environmental protection (Chapter XI,RA 7942 Chapters XV and XVI, DAO 9640). For violation of any of its terms and conditions, governmentmay cancel an FTAA. (Chapter XVII, RA 7942 Chapter XXIV,DAO 9640). An FTAA contractor is obliged to open its books of accountsand records for inspection by the government (Section 56m,DAO 9640). An FTAA contractor has to dispose of the minerals and byproducts at the highest market price and register with the MGBa copy of the sales agreement (Section 56n, DAO 9640). MGB is mandated to monitor the contractors compliance withthe terms and conditions of the FTAA and to deputize, whennecessary, any member or unit of the Philippine NationalPolice, the barangay or a DENRaccredited nongovernmentalorganization to police mining activities (Section 7d and f, DAO9640).

622



An FTAA cannot be transferred or assigned withoutprior approval by the President (Section 40, RA 7942



1.

2.

3.

4.

5.

6.

1.2.3.4.5.

Section 66, DAO 9640). A mining project under an FTAA cannot proceed to theconstruction/development/utilization stage, unless itsDeclaration of Mining Project Feasibility has beenapproved by government (Section 24, RA 7942). The Declaration of Mining Project Feasibility filed bythe contractor cannot be approved without submission ofthe following documents:

Approved mining project feasibility study (Section53d, DAO 9640)Approved threeyear work program (Section 53a4,DAO 9640)Environmental compliance certificate (Section 70,RA 7942)Approved environmental protection andenhancement program (Section 69, RA 7942)Approval by the Sangguniang Panlalawigan/Bayan/Barangay (Section 70, RA 7942 Section 27, RA7160)Free and prior informed consent by the indigenouspeoples concerned, including payment of royaltiesthrough a Memorandum of Agreement (Section 16,RA 7942 Section 59, RA 8371)

The FTAA contractor is obliged to assist in thedevelopment of its mining community, promotion of thegeneral welfare of its inhabitants, and development ofscience and mining technology (Section 57, RA 7942). The FTAA contractor is obliged to submit reports (onquarterly, semiannual or annual basis as the case maybe per Section 270, DAO 9640), pertaining to thefollowing:

ExplorationDrillingMineral resources and reservesEnergy consumptionProduction

623

VOL. 485, MARCH 30, 2006 623



6.7.8.

9.10.11.12.

Didipio EarthSavers MultiPurpose Association,Incorporated (DESAMA) vs. Gozun

Sales and marketingEmploymentPayment of taxes, royalties, fees and other GovernmentSharesMine safety, health and environmentLand useSocial developmentExplosives consumption

An FTAA pertaining to areas within government reservationscannot be granted without a written clearance from thegovernment agencies concerned (Section 19, RA 7942 Section54, DAO 9640). An FTAA contractor is required to post a financial guaranteebond in favor of the government in an amount equivalent to itsexpenditures obligations for any particular year. Thisrequirement is apart from the representations and warrantiesof the contractor that it has access to all the financing,managerial and technical expertise and technology necessary tocarry out the objectives of the FTAA (Section 35b, e, and f, RA7942). Other reports to be submitted by the contractor, as requiredunder DAO 9640, are as follows: an environmental report onthe rehabilitation of the minedout area and/or minewaste/tailing covered area, and antipollution measuresundertaken (Section 35a2) annual reports of the miningoperations and records of geologic accounting (Section 56m)annual progress reports and final report of explorationactivities (Section 562). Other programs required to be submitted by the contractor,pursuant to DAO 9640, are the following: a safety and healthprogram (Section 144) an environmental work program(Section 168) an annual environmental protection andenhancement program (Section 171).

The foregoing gamut of requirements, regulations, restrictionsand limitations imposed upon the FTAA contractor by the statuteand regulations easily overturns petitioners contention. Thesetup under RA 7942 and DAO 9640 hardly relegates the State tothe role of a passive regulator dependent on submitted plans



and reports.

624



On the contrary, the government agencies concerned areempowered to approve or disapprovehence, to influence, directand changethe various work programs and the correspondingminimum expenditure commitments for each of the exploration,development and utilization phases of the mining enterprise.

Once these plans and reports are approved, the contractor isbound to comply with its commitments therein. Figures formineral production and sales are regularly monitored andsubjected to government review, in order to ensure that theproducts and byproducts are disposed of at the best pricespossible even copies of sales agreements have to be submitted toand registered with MGB. And the contractor is mandated to openits books of accounts and records for scrutiny, so as to enable theState to determine if the government share has been fully paid.

The State may likewise compel the contractors compliancewith mandatory requirements on mine safety, health andenvironmental protection, and the use of antipollution technologyand facilities. Moreover, the contractor is also obligated to assistin the development of the mining community and to pay royaltiesto the indigenous peoples concerned.

Cancellation of the FTAA may be the penalty for violation ofany of its terms and conditions and/or noncompliance withstatutes or regulations. This general, allaround, multipurposesanction is no trifling matter, especially to a contractor who mayhave yet to recover the tens or hundreds of millions of dollarssunk into a mining project.

Overall, considering the provisions of the statute and theregulations just discussed, we believe that the State definitelypossesses the means by which it can have the ultimate word inthe operation of the enterprise, set directions and objectives, anddetect deviations and noncompliance by the contractor likewise,it has the capability to enforce compliance and to imposesanctions, should the occasion therefor arise.

In other words, the FTAA contractor is not free to do whateverit pleases and get away with it on the contrary, it will have tofollow the government line if it wants to stay in the enterprise.Ineluctably then, RA 7942 and DAO 9640 vest in the government



more than a sufficient degree of control and supervision over theconduct of mining operations.

625



Fourth Substantive Issue: The Proper Interpretationof the Constitutional Phrase Agreements InvolvingEither Technical or Financial Assistance

In interpreting the first and fourth paragraphs of Section 2,Article XII of the Constitution, petitioners set forth theargument that foreign corporations are barred frommaking decisions on the conduct of operations and themanagement of the mining project. The first paragraph ofSection 2, Article XII reads:

x x x The

didipio earthsavers’ multipurpose association,

Documents