CHAPTER 4- PHILIPPINE

MINING ACT OF 1995

AGUILAR, Krystalynne F.

2018890203
PHILIPPINE MINING ACT OF 1995

On March 3, 1995, Republic Act No. 7942 or

the “Philippine Mining Act of 1995” was
enacted, instituting a new system of
mineral resources exploration,
development, utilization, and conservation
in our country.
OWNERSHIP OF MINERAL RESOURCES

MINERAL PRODUCTION
Mineral Production is a major support of
the national economy, and therefore
the intensified discovery, exploration,
development and wise utilization of the
country’s mineral resources are urgently
needed for national development.
OWNERSHIP OF MINERAL RESOURCES

Section 2, Article XII of the Constitution,

provides:
“SEC. 2. All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the
State. With the exception of agricultural lands,
all other natural resources shall not be
alienated.
OWNERSHIP OF MINERAL RESOURCES

The exploration, development and utilization of

natural resources shall be under the full control
and supervision of the State. The State may
directly undertake such activities, or it may enter
into co-production, joint venture, or production-
sharing agreements with Filipino citizens at least
sixty per centum of whose capital is owned by
such citizens.
OWNERSHIP OF MINERAL RESOURCES

HISTORY!!

Jura Regalia was a Spanish feudal principle.

OWNERSHIP OF MINERAL RESOURCES

Regalian Doctrine
Regalian Doctrine is intended for the benefit
of the State, not of private persons. The rule
is simply it reserves to the State all minerals
that may be found in public and even private
land devoted to “agricultural, industrial,
commercial, residential or (for) any purpose
other than mining.
PHILIPPINE MINING ACT OF 1995

Jura Regalia
It reiterates that mineral resources are
owned by the State. The state can pursue
the constitutional policy of full control and
supervision of the exploration, development
and utilization of natural resources.
OWNERSHIP OF MINERAL RESOURCES

The right to possess or own the surface

ground is separate and distinct from the
mineral rights over the same land. And
the fact that the location of a mining
claim has been perfected does not bar
the government’s exercise of eminent
domain.
OWNERSHIP OF MINERAL RESOURCES

Section 5, Republic Act No. 7942

Specifically treats of the establishment of
mineral reservations only. Said provision
grants the President the power to proclaim
a mineral land as a mineral reservation,
regardless of whether such land is also an
existing forest reservation.
THE OLD SYSTEM OF EXPLORATION,
DEVELOPMENT AND UTILIZATION OF NATURAL
RESOURCES

PD No. 463, pertained to the old system of

exploration, development and utilization
of natural resources through licenses,
concessions or leases was enshrined in the
1935 and 1973 Constitution but omitted in
the Section 2 of Article XII of the 1987
Constitution.
PHILIPPINE MINING ACT OF 1995

Republic Act No. 7942, or the

Philippine Mining Act of 1995,
embodies the new constitutional
mandate. However, Section 2 of
Article XII of the 1987 Constitution
does not apply retroactively to a
“license, concession or lease” granted
by the government under the 1973
Constitution .
RIGHTS OF A LOCATOR TO A PERFECTED
MINING CLAIM
Mc-Daniel v. Apacible
It was held that a perfected valid appropriation
of public mineral lands operate as a withdrawal
of the tract from the body of the public domain
and so long as such appropriation remains valid
and subsisting, the land covered is deemed
private property. Discovery of minerals in the
ground by one who has a valid mineral location
perfects his claim and his location, not only
against third persons but also against the
government.
FIN.
 MINERAL
RESERVATIONS
The Philippine Mining Act of 1995
 Section 5. Mineral Reservations
“When the national interest so requires, such as when there is a need to
preserve strategic raw materials for industries critical to national development,
or certain minerals for scientific, cultural or ecological value, the President may
establish mineral reservations upon the recommendation of the Director through
the Secretary. Mining operations in existing mineral reservations and such other
reservations as may thereafter be established, shall be undertaken by the
Department or through a contractor: Provided, That a small scale-mining
cooperative covered by Republic Act No. 7076 shall be given preferential right
to apply for a small-scale mining agreement for a maximum aggregate area of
twenty-five percent (25%) of such mineral reservation, subject to valid existing
mining/quarrying rights as provided under Section 112 Chapter XX hereof. All
submerged lands within the contiguous zone and in the 9 exclusive economic
zone of the Philippines are hereby declared to be mineral reservations.”
 Section 5. Mineral Reservations

• The establishment of mineral reservations resides in the President.

• DENR secretary have no power to withdraw lands from forest
reserves and to declare it as an area open for mining.
• Forest reserve are not open to mining location.
Diwalwal Mineral Reservation
 Section 6. Other Reservations
“Mining operations in reserved lands other than mineral reservations may be undertaken
by the Department, subject to limitations as herein provided. In the event that the
Department cannot undertake such activities, they may be undertaken by a qualified
person in accordance with the rules and regulations promulgated by the Secretary. The
right to develop and utilize the minerals found therein shall be awarded by the President
under such terms and conditions as recommended by the Director and approved by the
Secretary:
Provided, That the party who undertook the exploration of said reservation shall be given
priority. The mineral land so awarded shall be automatically excluded from the
reservation during the term of the agreement:
Provided, further, That the right of the lessee of a valid mining contract existing within the
reservation at the time of its establishment shall not be prejudiced or impaired.”
 Section 6. Other Reservations
• Section 6 of R.A. No. 7942 provides that mining operations in reserved lands
other than mineral reservations may be undertaken by the Department of
Environment and Natural Resources but subject to limitations.

• R.A. No. 7942 does not disallow mining applications in all forest reserves but
only those specifically declared closed to mining applications under Section
19.
• Such as: (a) military and governmental reservations (b) areas expressly
prohibited by law (c) in old growth or virgin forest.
 DEPARTMENT OF
ENVIRONMENT AND
NATURAL RESOURCES
The Philippine Mining Act of 1995
 Mandate of DENR:
• The Department is the primary agency responsible for the conservation, management,
development, and proper use of the country’s environment and natural resources,
specifically forest and grazing lands, mineral resources, including those in reservation
and watershed areas, and lands of the public domain, as well as the licensing and
regulation of all natural resources as may be provided for by law in order to ensure
equitable sharing of the benefits derived therefrom for the welfare of the present and
future generations of Filipinos.
 Section 8. Authority of the Department

The Department shall be the primary agency responsible for the conservation,
management, development, and proper use of the State's mineral resources including
those in reservations, watershed areas, and lands of the public domain. The Secretary
shall have the authority to enter into mineral agreements on behalf of the Government
upon the recommendation of the Director, promulgate such rules and regulations as
may be necessary to implement the intent and provisions of this Act.
 Authority of the Department
• The Department is the primary agency responsible for the conservation,
management, development and proper use of the State’s mineral resources
including those in reservation, watershed areas, and lands of public domain.

• The Secretary shall have the authority to enter into mineral agreements on
behalf of the government.
• To promulgate rules and regulations
• as may be necessary to implement the intent and provisions of the Act.
• Sources:

• Agcaoili, J. O. (2012). Law on Natural

Resources and Environmental Law
Development. Rex Book Store.

• The LawPhil Project. (n.d.). AN ACT

INSTITUTING A NEW SYSTEM OF MINERAL
RESOURCES EXPLORATION,
DEVELOPMENT, UTILIZATION, AND
CONSERVATION . Retrieved from The
LawPhil Project:
https://www.lawphil.net/statutes/repac
ts/ra1995/ra_7942_1995.html
Role of Local
Governments
 Section 8 of RA No. 7942
• To ensure that relevant laws on public notice, public
consultation and public participation are complied with;
• To approve applications for small-scale mining, sand and
gravel, quarry, guano, gemstone gathering and gratuitous
permits and for industrial sand and gravel permits;
• To receive their share as provided for by law in the wealth
generated from the utilization of mineral resources;
• To facilitate the process by which the community shall reach an
informed decision on the social acceptability of a mining
project;
• To participate in the monitoring of any mining activity as a
member of the Multipartite Monitoring Team;
• To participate as a member of the Mine Rehabilitation Fund
Committee;
• To be the recipient of social infrastructure and community
development projects for the utilization of the host and
neighboring communities;
• To act as mediator between the indigenous cultural
communities and the contractors as may be requested;

• To coordinate with the Department and Bureau in the

implementation of the Act and the implementing rules and
regulations in their respective jurisdictions;

• And, to perform such other powers and functions as may be

provided for by applicable laws, rules and regulations.
 The Mines and
Geosciences Bureau
• The Bureau shall have direct charge in the administration and
disposition of mineral lands and mineral resources;

• It shall undertake geological, mining, metallurgical, chemical,

and other researches as well as geological and mineral surveys;

• It shall recommend to the Secretary the granting of mineral

agreements to duly qualified persons and shall monitor the
compliance by the contractor of the terms and conditions of
the mineral agreements;
• The Bureau may confiscate surety, performance and guaranty
bonds posted through an order to be promulgated by the
Director;

• To cancel or recommend cancellation, after due process,

mining rights, mining applications and mining claims for non-
compliance with pertinent laws, rules, and regulations;
• To deputize, when necessary, any member or unit of the PNP,
barangay, duly registered NGO, or any qualified person to police
all mining activities;

• To assist Environmental Management Bureau in the processing or

conduct of environmental impact assessment in mining projects;

• And, to exercise such authority vested by the Act and as provided

for in these implementing rules and regulations.
 SECTION 18
AREAS OPEN TO MINING
OPERATIONS
 AREAS OPEN TO MINING OPERATIONS

All mineral  PUBLIC LANDS  INCLUDING: TIMBER OR

FORESTLANDS
resources in:  PRIVATE LANDS

• subject to any existing rights or • It shall be open to MINERAL

reservations
NOTE: Subject to anyand prior or reservations
existing rights agreements
and priororagreements
FINANCIAL
of all or
parties and shall
agreements beparties
of all open to MINERAL or FINANCIAL or TECHNICAL agreement
TECHNICAL agreement
applications
applications
 SECTION 19
AREAS CLOSED TO MINING
OPERATIONS
 AREAS CLOSED TO MINING
OPERATIONS

• In military and other • In areas covered by small-

government reservations scale miners

EXCEPT: upon prior clearance EXCEPT: Prior consent of small-

by the government agency scale miners, in which a
concerned ROYALTY PAYMENT shall be
agreed upon
 AREAS CLOSED TO MINING
OPERATIONS

• In areas near or under public

or private buildings,
INCLUDING: plantations, valuable
cemeteries, archeological
crops
and historic sites, bridges, EXCEPT: Upon written consent of
highways, waterways, government agency or private entity
railroads, reservois, dams concerned
and other infrastructure
projects, public or private
works
 AREAS CLOSED TO MINING
OPERATIONS

• In areas covered by valid and • Old growth or virgin forests,

existing rights proclaimed watershed forest
reserves, wilderness areas,
mangrove forests, mossy forests,
• In areas expressedly national parks, greenbelts, game
prohibited by law refuge and bird sanctuaries as
defined by law and expressly
prohibited under RA No. 7586 &
DAO No. 25 series of 1992
 SECTION 20
EXPLORATION PERMIT
 EXPLORATION PERMIT

WHAT IS AN EXPLORATION WHO ISSUES SUCH PERMIT?

PERMIT?

 A permit that grants the  Mines and Geosciences

right to conduct Bureau
exploration for all mineral
in specified areas
 SECTION 22
TERMS AND CONDITIONS OF
EXPLORATION PERMIT
 TERMS AND CONDITIONS

Valid for a period of TWO  Renewable for like period, but

YEARS not to exceed:
4 YEARS – Non-metallic
mineral
6 YEARS – Metallic mineral
NO RENEWAL of permit shall  The permittee has complied with
be allowed unless: the terms and conditions
 Has not been found guilty of
violation of any provision of this
act
 TERMS AND CONDITIONS
• The right to explore shall be
subject to valid, and existing
rights of any party within the
area;
• The permit shall be for the
exclusive use and benefit of
the permittee or its
authorized representative.
• Permittee shall submit to the
bureau/regional office a
report of the exploration work
program within 30 calendar
days after the end of each
semester.
• The secretary or his
authorized representative
shall annually review the
performance of the permittee
 TERMS AND CONDITIONS

• The permittee shall comply • The permittee in the case of

with the pertinent provisions juridical entity shall annually
of the act and these submit a copy of its Securities
implementing rules and and Exchange Commission
reguations general information sheet
 SECTION 23
RIGHTS AND OBLIGATIONS OF THE
PERMITTEE
 RIGHTS AND OBLIGATIONS
OF PERMITTEE

• Right to enter, occupy and • Permittee may also apply for a

explore the area mineral production sharing
agreement, joint venture
PROVIDED: if PRIVATE or OTHER agreement, co-production
PARTIES are affected, the permittee agreement or financial or
shall talk to the parties affected
about the manner of his exploration technical assistance agreement
over the permit area
In case of disagreement: A panel of
arbitrators shall resolve PROVIDED: exploration period covered by the
permit shall be included as part of the
exploration period of the agreement
RIGHTS AND OBLIGATIONS
OF PERMITTEE

• Any expenditure in excess of

the yearly budget may be
carried forward and credited
to the succeeding years
covering the duration of the
permit.
Philippine Mining Act of 1995
Chapter V – Mineral Agreements
What is a Mineral
Agreement?
A Mineral Agreement is an
agreement between a
Contractor and the
Government wherein the
Government grants to the
Contractor the exclusive
right to conduct mining
operations within, but not
title over, the contract area.
 Modes of Mineral
Agreement
MINERAL
PRODUCTION CO-PRODUCTION
SHARING AGREEMENT
AGREEMENT

JOINT-VENTURE
AGREEMENT
MINERAL PRODUCTION SHARING AGREEMENT
Sec. 26(a) of RA No. 7942

“an agreement where the Government grants to the contractor the

exclusive right to conduct mining operations within a contract area
and shares in the gross output. The contractor shall provide the
financing, technology, management and personnel necessary for
the implementation of this agreement.”
 CO-PRODUCTION AGREEMENT
Sec. 26(b) of RA No. 7942

“an agreement between the Government and the contractor

wherein the Government shall provide inputs to the mining
operations other than the mineral resource.”
 JOINT-VENTURE AGREEMENT
Sec. 26(c) of RA No. 7942

“an agreement where a joint-venture company is organized by the

Government and the contractor with both parties having equity
shares. Aside from earnings in equity, the Government shall be
entitled to a share in the gross output.”
FILING AND APPROVAL OF MINERAL
AGREEMENTS (Sec. 29 of RA No. 7942)
“Section 29. Filing and Approval of Mineral Agreements. – All proposed mineral
agreements shall be filed in the region where the areas of interest are located,
except in mineral reservations which shall be filed with the Bureau.
The filing of a proposal for a mineral agreement shall give the proponent the
prior right to areas covered by the same. The proposed mineral agreement will
be approved by the Secretary and copies thereof shall be submitted to the
President. Thereafter, the President shall provide a list to Congress of every
approved mineral agreement within thirty (30) days from its approval by the
Secretary.”
ISSUANCE OF SPECIAL MINES PERMIT
An applicant for mineral agreement whose application is valid and
existing, has been granted an area status and clearance, NCIP precondition
certification and endorsement from the concerned Sanggunian, and has no
pending mining dispute/conflict as certified by the concerned Panel of
Arbitrators/Mines Adjudication Board, may file an application for special
mines permit (SMP) with the Bureau/Regional Office Concerned.
A SMP may be issued by the Director upon clearance by the Secretary.
The SMP shall be for a period of one year renewable once: Provided, that
SMP may be further renewed depending upon the nature of the deposit, the
propriety of the mining operation, the environmental and community
relations track record of the applicant, faithful compliance with the terms
and conditions of the SMP and diligence of the applicant in pursuing the
mineral agreement application, subject to the approval of the Secretary.
 ISSUANCE OF SPECIAL MINES PERMIT
Application for Special Mines Permit (SMP)
Requirement Checklist
1. Application Letter.
2. Filing Fee (PhP20.00/ha. but not less than PhP50,000.00).
3. MPSA Application.
4. For corporation/partnership/association/ cooperative: SEC/CDA-certified Certificate of
Registration, Articles of Incorporation/ Partnership/Association and By-Laws; or a Certification
from MGB CO/RO concerned that such documents are duly registered in that Office. (note:
with minimum authorized capital of P10M and paid-up capital of P2.5M).
5. Location Map/Sketch Plan (1:50,000 NAMRIA topographic map) showing
coordinates/boundaries (in tabulated form) with major environmental features/other projects
(prepared, sealed and signed by a deputized Geodetic Engineer).
6. Proof of technical competence in the form of:
1. Bio-data and track records in mining operations/ environmental management.
2. Sworn commitment of the technical person(s) who will undertake the implementation of the Work Programs
 ISSUANCE OF SPECIAL MINES PERMIT
Application for Special Mines Permit (SMP)
Requirement Checklist
• Proof of financial capability in the form of:
• For Individuals:
• Statement of assets & liabilities duly sworn in accordance with existing laws.
• Latest Income Tax Return.
• Credit lines/bank guarantees/ deposits of at least P2.5M.
• For corp./partnership/association/ cooperative:
• Latest audited Financial Statements.
• Annual Report for the preceding year.
• Credit lines/bank guarantees/ deposits

• Verification of ore reserve.

• One (1) Year Work Program.
• Environmental Protection and Enhancement Program.
 ISSUANCE OF SPECIAL MINES PERMIT
Application for Special Mines Permit (SMP)
Requirement Checklist
• Social Development and Management Program.
• Environmental Compliance Certificate (ECC).
• Certificate of Satisfactory Environmental Management and Community Relations Record.
• Area Status and Clearance.
• Certification from the Panel of Arbitrators concerned/MAB.
• NCIP Certification Precondition.
• Endorsement of the Sanggunian concerned.
• MGB-registered Secretary’s Certificate attesting to a Board Resolution authorizing the
President to sign and execute documents in connection with the MPSA/SMP application.
• Other document(s) that may be required.
ATOK BIG-WEDGE MINING COMPANY,
PETITIONER, VS. HON. INTERMEDIATE
APPELLATE COURT AND TUKTUKAN
SAINGAN, RESPONDENTS.
 • Subject Land-41,296 square meters situated in the
barrio of Lucnab, Itogon, Benguet.
• Parties:
FACTS: • A. ATOK BIG-WEDGE MINING COMPANY (claiming
that the said parcel of land is a mineral land.)
• B. TUKTUKAN SAINGAN (claiming that the said
parcel of land is agricultural.)
 • ATOK – they contended that the said parcel of land
was being registered in the office of Mining Recorder in
1921 and 1931 pursuant to Philippine Bill of 1902. It is
about sixteen years before TUKTUKAN declared the
CONTENTIONS: land in question for taxation purposes and thirty four
(34) years before private respondent filed the land
registration proceedings in 1965. They also showed the
payment of annual assessment fees for the said land
since 1931.
 • TUKTUKAN – who was 70 years old at the time he
testified shows that he acquired the land from his
father-in-law, Dongail, when he married his daughter;
that he was then 18 years old; that at the time of his
acquisition, it was planted with camotes, casava,
langka, gabi, coffee and avocados; that he lived on the
CONTENTIONS: land since his marriage up to the present; that he has
been paying the taxes during the Japanese occupation
and even before it; that he was never disturbed in his
possession. Supporting his oral testimony, applicant
[Tuktukan] submitted tax declarations x x x both dated
March 20, 1948, the former for a rural land and the
latter for urban land and improvement therein.
 • WHETHER OR NOT THE SAID PARCEL OF LAND IS A
ISSUE: MINERAL LAND OR AN AGRICULTURAL LAND.
History of the Mining Act:
• 1. Spanish Mining Law of 1867
• 2. Philippine Bill Of 1902 (American time) when the subject land had been
registered
• 3. Commonwealth Act No. 137 (under the 1935 Constitution)
• 4. Executive Order 141 (Pres. Marcos 1968)
• 5. President Decree No. 1214 (1977)
 • All of the mining acts have a common provision which
NOTE: is the annual performance of labor or undertaking of
improvements on the mine.
 • The SC ruled in favor of the Tuktukan in the reasons
that:
• A. Tuktukan have proven that he had in possession of
the said land in a concept of an owner, continuously,
open and uninterrupted for a period of more than 30
RULING: years.
• B. He had improve almost 90% of the said parcel of
land.
• C. He had paid tax declaration of the said land since
1948 up to present.
 • It is evident that Atok had registered the land prior
than Tuktukan but still the SC ruled in favor of
Tuktukan for the reasons:
• A. Payment of annual assessment fee is not enough
proof. There must be an annual performance of labor
RULING: or undertaking of improvements in the mine.
• B. When an ocular survey was made, it was evident
that there was NO IMPROVEMENTS being made in the
said land and there is any sign of mining had happened
in the land. Hence, the petition is DENIED.
LA BUGAL-B’LAAN TRIBAL ASSOCIATION INC.
VS.
VICTOR O. RAMOS

GR No. 127882
January 27, 2004 and December 1, 2004
 FACTS

The present Petition for Mandamus and Prohibition

assails the constitutionality of R.A. 7942, also known as
the Philippine Mining Act of 1995, along with the
Implementing Rules and Regulations issued pursuant
thereto, DAO 96-40, and of the FTAA entered into on
March 30, 1995 by the Republic of the Philippines and
WMCP.
 FACTS

• On July 25, 1987, then President Cory Aquino issued EO No. 279
authorizing the DENR Secretary to accept, consider, and evaluate
proposals from foreign-owned corporations or foreign investors.
• On March 3, 1995, then President Fidel Ramos approved R.A. 7942 to
“govern the exploration, development, utilization and processing of all
mineral resources.”
• On April 9, 1995, 30 days following its publication on March 20, 1995 in
Malaya and Manila Times, two newspapers of general circulation, R.A 7942
took effect.
• On March 30, 1995, the President entered into an FTAA with WCMP
covering 99, 837 hectares of land in South Cotabato, Sultan Kudarat,
Davao Del Sur and North Cotabato.
 FACTS

• On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR
Administrative Order No. 95-23, also known as the Implementing Rules
and Regulations of R.A. No. 7942. This was repealed by DAO No. 96-40
which was adopted on December 20, 1996.
• On January 10, 1997, counsels for petitioners sent a letter to the DENR
Secretary demanding that the DENR stop the implementation of R.A.
7942 and DAO 96-40.
 FACTS

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:
• in signing and promulgating DAO No. 96-40 implementing R.A. No. 7942, the latter being
unconstitutional in:
- that it allows fully foreign owned corporations to explore, develop, utilize and
exploit mineral resources in a manner contrary to Section 2, paragraph 4, Article XII of
the Constitution;
- that it allows the taking of private property without the determination of public use
and for just compensation;
- that it violates Sec. 1, Art. III of the Constitution;
- that it allows enjoyment by foreign citizens as well as fully foreign owned
corporations of the nation's marine wealth contrary to Section 2, paragraph 2 of Article
XII of the Constitution;
 FACTS

- that it allows priority to foreign and fully foreign owned corporations in the
exploration, development and utilization of mineral resources contrary to Article XII of
the Constitution;
- that it allows the inequitable sharing of wealth contrary to Sections 1, paragraph 1,
and Section 2, paragraph 4[,] [Article XII] of the Constitution;
• in recommending approval of and implementing the Financial and Technical Assistance
Agreement between the President of the Republic of the Philippines and Western Mining
Corporation Philippines Inc. because the same is illegal and unconstitutional.
 FACTS

• On January 27, 2004, the court en banc promulgated its Decision, granting
the Petition for Prohibition and Mandamus and declaring the
unconstitutionality of certain provisions of RA 7942, DAO 96-40 and the
entire FTAA executed between the government with WMCP.
• 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.
 FACTS

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.
According to the Decision, the 1987 Constitution (Section 2 of
Article XII) effectively banned such service contracts.
 FACTS

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.
 FACTS

The Court required the parties to submit their

respective Memoranda in amplification of their
arguments. In a Resolution issued later the same day,
June 29, 2004, the Court noted, inter alia, the
Manifestation and Motion (in lieu of comment) filed by
the Office of the Solicitor General (OSG) on behalf of
public respondents.
 FACTS

Memoranda were accordingly filed by the intervenor

as well as by petitioners, public respondents, and
private respondent, dwelling at length on the three
issues. Later, WMCP submitted its Reply Memorandum,
while the OSG filed a Compliance submitting copies of
more FTAAs entered into by the government.
 ISSUES

During the Oral Argument, the Court identified the three issues
to be resolved in the present controversy, as follows:
• Mootness
• Whether the Court can still decide the case, even assuming is
moot
• The proper interpretation of the Constitutional phrase
Agreements Involving Either Technical or Financial Assistance
contained in paragraph 4 of Section 2 of Article XII of the
Constitution
 RULING (FIRST ISSUE)

The present Petition has been filed, precisely because the grantee
of the FTAA was a wholly owned subsidiary of a foreign
corporation. It cannot be gainsaid that anyone would have
asserted that the same FTAA was void if it had at the outset
been issued to a Filipino corporation. The FTAA, therefore, is not
per se defective or unconstitutional. It was questioned only
because it had been issued to an allegedly non-qualified, foreign-
owned corporation.
 RULING (FIRST ISSUE)

This case is analogous to Halili. Paraphrasing Halili, the same

rationale applies to the instant case: assuming arguendo the
invalidity of its prior grant to a foreign corporation, the
disputed FTAA being now held by a Filipino corporation can no
longer be assailed; the objective of the constitutional provision
to keep the exploration, development and utilization of our
natural resources in Filipino hands has been served.
 RULING (FIRST ISSUE)

The Court find completely outlandish petitioners contention

that an FTAA could be entered into by the government only with
a foreign corporation, never with a Filipino enterprise. How
petitioners can now argue that foreigners have the exclusive
right to FTAAs totally overturns the entire basis of the Petition -
- preference for the Filipino in the exploration, development and
utilization of our natural resources.
 RULING (SECOND ISSUE)

All the protagonists are in agreement that the Court has

jurisdiction to decide this controversy, even assuming it to be
moot. They also recall Salonga v. Cruz Pao, in which this Court
declared that the Court also has the duty to formulate guiding and
controlling constitutional principles, precepts, doctrines or rules. It has
the symbolic function of educating the bench and bar on the extent of
protection given by constitutional guarantees.
 RULING (SECOND ISSUE)

By the mere enactment of the questioned law or the approval of the challenged action, the
dispute is said to have ripened into a judicial controversy even without any other overt act.
This ruling can be traced from Taada v.Angara, in which the Court said:
“In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a justiciable controversy. Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the right
but in fact the duty of the judiciary to settle the dispute.
As this Court has repeatedly and firmly emphasized in many cases, it will not shirk, digress from or
abandon its sacred duty and authority to uphold the Constitution in matters that involve grave abuse
of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality
or department of the government.”
 RULING (THIRD ISSUE)

Paragraph 4 of Section 2 of Article XII of the 1987 Constitution

states that:
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for large-
scale exploration, development, and utilization of minerals, petroleum,
and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the State shall
promote the development and use of local scientific and technical
resources.
 RULING (THIRD ISSUE)

The drafters choice of words, their use of the phrase agreements

involving either technical or financial assistance does not indicate
the intent to exclude other modes of assistance. The drafters
opted to use involving when they could have simply said
agreements for financial or technical assistance, if that was their
intention to begin with. In this case, the limitation would be very
clear and no further debate would ensue.
 RULING (THIRD ISSUE)

If the real intention of the drafters was to confine foreign

corporations to financial or technical assistance and nothing
more, their language would have certainly been
so unmistakably restrictive and stringent as to leave no
doubt in anyone’s mind about their true intent.
It is inconceivable that the drafters of the Constitution would
leave such an important matter -- an expression of sovereignty
as it were indefinitely hanging in the air in a formless and
ineffective state.
 RULING (THIRD ISSUE)

The logical inconsistencies resulting from

petitioners literal and purely verba legis approach
to paragraph 4 of Section 2 of Article XII compel a
resort to other aids to interpretation.
 RULING (THIRD ISSUE)

The Court RESOLVES to GRANT the respondents and the intervenors

Motions for Reconsideration; to REVERSE and SET ASIDE this Courts
January 27, 2004 Decision; to DISMISS the Petition; and to issue this new
judgment declaring CONSTITUTIONAL (1) Republic Act No. 7942 (the
Philippine Mining Law), (2) its Implementing Rules and Regulations
contained in DENR Administrative Order (DAO) No. 9640 (3) the
Financial and Technical Assistance Agreement (FTAA) dated March 30,
1995 executed by the government and Western Mining Corporation
Philippines Inc. (WMCP), except Sections 7.8 and 7.9 of the subject
FTAA which are hereby INVALIDATED for being contrary to public
policy and for being grossly disadvantageous to the government.
- END -
 Miners Association of the
Philippines v. Hon. Fulgencio
Factoran Jr.
G.R. No. 98332
January 16, 1995
Facts

On July 10, 1987, President Corazon C. Aquino, in the exercise of her then legislative
powers under Article II, Section 1 of the Provisional Constitution and Article XIII,
Section 6 of the 1987 Constitution, promulgated Executive Order No. 211 prescribing
the interim procedures in the processing and approval of applications for the
exploration, development and utilization of minerals pursuant to the 1987
Constitution and on July 25, 1987, President Aquino likewise promulgated Executive
Order No. 279 authorizing the DENR Secretary to negotiate and conclude joint
venture, co-production, or production-sharing agreements for the exploration,
development and utilization of mineral resources, and prescribing the guidelines for
such agreements and those agreements involving technical or financial assistance
by foreign-owned corporations for large-scale exploration, development, and
utilization of minerals.
 Facts

Pursuant to Executive Order No. 279, the DENR Secretary issued Administrative Order No.
57, series of 1989, captioned "Guidelines of Mineral Production Sharing Agreement under
Executive Order No. 279." Under Administrative Order No. 57, all existing mining leases or
agreements which were granted after the effectivity of the 1987 Constitution pursuant to
Executive Order No. 211, shall be converted into production-sharing agreements within
one (1) year from the effectivity of these guidelines.
Facts

The secretary of the DENR also issued Administrative Order No. 82, series of 1990, laying
down the "Procedural Guidelines on the Award of Mineral Production Sharing
Agreement (MPSA) through Negotiation.” This Administrative Order enumerates the
persons or entities required to submit Letter of Intent (LOIs) and Mineral Production
Sharing Agreement (MPSAs) within two (2) years from the effectivity of DENR
Administrative Order No. 57 or until July 17, 1991. Failure to do so within the prescribed
period shall cause the abandonment of mining, quarry and sand and gravel claims.
Issues

Whether or not Administrative Order Nos. 57 and 82 are valid

Whether or not PD 436 is the governing law
Ruling

Administrative Order Nos. 57 and 82 are valid. Upon the effectivity of the 1987
Constitution on February 2, 1987, 18 the State assumed a more dynamic role in the
exploration, development and utilization of the natural resources of the country.
Article XII, Section 2 of the said Charter explicitly ordains that the exploration,
development and utilization of natural resources shall be under the full control and
supervision of the State. Consonant therewith, the exploration, development and
utilization of natural resources may be undertaken by means of direct act of the
State, or it may opt to enter into co-production, joint venture, or production-sharing
agreements, or it may enter into agreements with foreign-owned corporations
Ruling

 Given these considerations the Secretary of the DENR did not commit grave abuse of
discretion and validly issued Administrative Order Nos. 57 and 82 which were pursuant to
EO 279 which was specifically issued to carry out the mandate of Article XII, Sec. 2 of the
1987 Constitution.
Ruling

PD 436 is not the governing law. Petitioner's insistence on the application of Presidential
Decree No. 463, as amended, as the governing law on the acceptance and approval of
declarations of location and all other kinds of applications for the exploration, development,
and utilization of mineral resources pursuant to Executive Order No. 211, is erroneous.
Ruling

Presidential Decree No. 463, as amended, pertains to the old system of exploration,
development and utilization of natural resources through "license, concession or lease" which,
however, has been disallowed by Article XII, Section 2 of the 1987 Constitution. By virtue of
the said constitutional mandate and its implementing law, Executive Order No. 279 which
superseded Executive Order No. 211, the provisions dealing on "license, concession or lease"
of mineral resources under Presidential Decree No. 463, as amended, and other existing
mining laws are deemed repealed and, therefore, ceased to operate as the governing law.
However, provisions of PD 436 and other mining laws which are not inconsistent with the
provisions of EO 279 remain in effect.