FIRST DIVISION
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APEX MINING CO., INC., petitioner, - versus - southeast
mindanao gold mining corp., the mines adjudication board, provincial mining
regulatory board (PMRB-DAVAO), MONKAYO INTEGRATED SMALL SCALE MINERS
ASSOCIATION, INC., ROSENDO VILLAFLOR, BALITE COMMUNAL PORTAL MINING
COOPERATIVE, DAVAO UNITED MINERS COOPERATIVE, ANTONIO DACUDAO, PUTING-BATO
GOLD MINERS COOPERATIVE, ROMEO ALTAMERA, THELMA CATAPANG, LUIS GALANG, RENATO
BASMILLO, FRANCISCO YOBIDO, EDUARDO GLORIA, EDWIN ASION, MACARIO HERNANDEZ,
REYNALDO CARUBIO, ROBERTO BUNIALES, RUDY ESPORTONO, ROMEO CASTILLO, JOSE REA,
GIL GANADO, PRIMITIVA LICAYAN, LETICIA ALQUEZA and joel brillantes management mining
corporation, Respondents. x - - - - - - - - - - - - - - - - - - - - - - - - - x BALITE COMMUNAL PORTAL MINING COOPERATIVE, petitioner, - versus - southeast mindanao gold mining corp., APEX MINING CO., INC., the
mines adjudication board, provincial mining regulatory board (PMRB-DAVAO),
MONKAYO INTEGRATED SMALL SCALE MINERS ASSOCIATION, INC., ROSENDO VILLAFLOR,
DAVAO UNITED MINERS COOPERATIVE, ANTONIO DACUDAO, PUTING-BATO GOLD MINERS
COOPERATIVE, ROMEO ALTAMERA, THELMA CATAPANG, LUIS GALANG, RENATO BASMILLO, FRANCISCO
YOBIDO, EDUARDO GLORIA, EDWIN ASION, MACARIO HERNANDEZ, REYNALDO CARUBIO,
ROBERTO BUNIALES, RUDY ESPORTONO, ROMEO CASTILLO, JOSE REA, GIL GANADO,
PRIMITIVA LICAYAN, LETICIA ALQUEZA and
joel brillantes management mining corporation, Respondents. x - - - - - - - - - - - - - - - - - - - - - - - - x THE MINES ADJUDICATION BOARD AND ITS MEMBERS, THE HON.
VICTOR O. RAMOS (Chairman), UNDERSECRETARY VIRGILIO MARCELO (Member) and
DIRECTOR HORACIO RAMOS (Member),
petitioners, - versus - southeast
mindanao gold mining corporation, Respondent. |
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G.R. No. 152613 & No. 152628 G.R. No.
152619-20 G.R. No.
152870-71 Present: PANGANIBAN,
C.J. Chairperson, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ. Promulgated: June 23, 2006 |
x- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
CHICO-NAZARIO, J.:
On
The
disputed area, a rich tract of mineral land, is inside the forest reserve
located at Monkayo, Davao
del Norte, and Cateel, Davao
Oriental, consisting of 4,941.6759 hectares.[2] This mineral land is encompassed by
On
Camilo Banad and some other
natives pooled their skills and resources and organized the Balite
Communal Portal Mining Cooperative (Balite).[3]
On
From
November 1983 to February 1984, several individual applications for mining
locations over mineral land covering certain parts of the Diwalwal
gold rush area were filed with the Bureau of Mines and Geo-Sciences (BMG).
On
On
On
Discovering
the existence of several mining claims and the proliferation of small-scale
miners in the area covered by EP 133, MMC thus filed on 11 April 1986 before
the BMG a Petition for the Cancellation
of the Mining Claims of Apex and Small Scale Mining Permit Nos. (x-1)-04 and
(x-1)-05 which was docketed as MAC No. 1061. MMC alleged that the areas covered by its EP
133 and the mining claims of Apex were within an established and existing
forest reservation (Agusan-Davao-Surigao Forest
Reserve) under Proclamation No. 369 and that pursuant to Presidential Decree No.
463,[4]
acquisition of mining rights within a forest reserve is through the application
for a permit to prospect with the BFD and not through registration of a DOL
with the BMG.
On
On
MMC appealed the adverse order of BMG
to the Department of Environment and Natural Resources (DENR).
On 15 April 1987, after due hearing,
the DENR reversed the 9 December 1996 order of BMG and declared MMC’s EP 133 valid and subsisting.
Apex filed a Motion for Reconsideration
with the DENR which was subsequently denied. Apex then filed an appeal before
the Office of the President. On
Apex
filed a Petition for Certiorari before this Court. The Petition was docketed as G.R. No. 92605
entitled, “Apex Mining Co., Inc. v.
Garcia.”[6] On
On
As
DAO No. 66 declared a portion of the contested area open to small scale miners,
several mining entities filed applications for Mineral Production Sharing
Agreement (MPSA).
On
On
On
On
On
On
a)
MAC Case No. 004 (XI) – JB Management Mining
Corporation;
b)
MAC Case No. 005(XI) –
c)
MAC Case No. 006(XI) – Balite
Integrated Small Scale Miner’s Cooperative;
d)
MAC Case No. 007(XI) – Monkayo Integrated Small Scale
Miner’s Association, Inc. (MISSMA);
e)
MAC Case No. 008(XI) – Paper Industries Corporation of
the
f)
MAC Case No. 009(XI) – Rosendo
Villafor, et al.;
g)
MAC Case No. 010(XI) – Antonio Dacudao;
h)
MAC Case No. 011(XI) – Atty. Jose T. Amacio;
i)
MAC Case No. 012(XI) – Puting-Bato
Gold Miners Cooperative;
j)
MAC Case No. 016(XI) – Balite
Communal Portal Mining Cooperative;
k) MAC Case No. 97-01(XI) – Romeo Altamera, et al.[8]
To
address the matter, the DENR constituted a Panel of Arbitrators (PA) to resolve
the following:
(a) The adverse claims on MPSAA No. 128; and
(b) The Petition to Cancel EP 133 filed by Rosendo Villaflor docketed as RED
Case No.
On
With respect to the adverse claims on
SEM’s MPSAA No. 128, the PA ruled that adverse
claimants’ petitions were not filed in accordance with the existing rules and
regulations governing adverse claims because the adverse claimants failed to
submit the sketch plan containing the technical description of their respective
claims, which was a mandatory requirement for an adverse claim that would allow
the PA to determine if indeed there is an overlapping of the area occupied by
them and the area applied for by SEM. It
added that the adverse claimants were not claim owners but mere occupants
conducting illegal mining activities at the contested area since only MMC or
its assignee SEM had valid mining claims over the area as enunciated in Apex Mining Co., Inc. v. Garcia.[11] Also, it maintained that the adverse
claimants were not qualified as small-scale miners under DENR Department
Administrative Order No. 34 (DAO No. 34),[12] or
the Implementing Rules and Regulation of Republic Act No. 7076 (otherwise known
as the “People’s Small-Scale Mining Act of 1991”), as they were not duly
licensed by the DENR to engage in the extraction or removal of minerals from
the ground, and that they were large-scale miners. The decretal
portion of the PA resolution pronounces:
VIEWED IN THE LIGHT OF THE FOREGOING, the validity of Expoloration Permit No. 133 is hereby reiterated and all the adverse claims against MPSAA No. 128 are DISMISSED.[13]
Undaunted by the PA ruling, the
adverse claimants appealed to the Mines Adjudication Board (MAB). In a Decision dated
WHEREFORE,
PREMISES CONSIDERED, the decision of the Panel of Arbitrators dated
1. SEM’s MPSA application is hereby given due course subject to the full and strict compliance of the provisions of the Mining Act and its Implementing Rules and Regulations;
2. The area covered by DAO 66, series of 1991, actually occupied and actively mined by the small-scale miners on or before August 1, 1987 as determined by the Provincial Mining Regulatory Board (PMRB), is hereby excluded from the area applied for by SEM;
3. A moratorium on all mining and mining-related activities, is hereby imposed until such time that all necessary procedures, licenses, permits, and other requisites as provided for by RA 7076, the Mining Act and its Implementing Rules and Regulations and all other pertinent laws, rules and regulations are complied with, and the appropriate environmental protection measures and safeguards have been effectively put in place;
4. Consistent with the spirit of RA 7076, the Board encourages SEM and all small-scale miners to continue to negotiate in good faith and arrive at an agreement beneficial to all. In the event of SEM’s strict and full compliance with all the requirements of the Mining Act and its Implementing Rules and Regulations, and the concurrence of the small-scale miners actually occupying and actively mining the area, SEM may apply for the inclusion of portions of the areas segregated under paragraph 2 hereof, to its MPSA application. In this light, subject to the preceding paragraph, the contract between JB [JB Management Mining Corporation] and SEM is hereby recognized.[14]
Dissatisfied,
the Villaflor group and Balite
appealed the decision to this Court. SEM,
aggrieved by the exclusion of 729 hectares from its MPSA application, likewise
appealed. Apex filed a Motion for Leave to Admit Petition for Intervention
predicated on its right to stake its claim over the Diwalwal
gold rush which was granted by the Court.
These cases, however, were remanded to the Court of Appeals for proper
disposition pursuant to Rule 43 of the 1997 Rules of Civil Procedure. The Court of Appeals consolidated the remanded
cases as CA-G.R. SP No. 61215 and No. 61216.
In
the assailed Decision[15]
dated
The Court of Appeals, banking on the
premise that the SEM is the agent of MMC by virtue of its assignment of EP 133
in favor of SEM and the purported fact that SEM is a 100% subsidiary of MMC, ruled
that the transfer of EP 133 was valid. It
argued that since SEM is an agent of MMC, the assignment of EP 133 did not
violate the condition therein prohibiting its transfer except to MMC’s duly designated agent. Thus, despite the non-renewal of EP 133 on
The Court of Appeals also ruled that MMC’s right to explore under EP 133 is a property right
which the 1987 Constitution protects and which cannot be divested without the
holder’s consent. It stressed that MMC’s failure to proceed with the extraction and
utilization of minerals did not diminish its vested right to explore because
its failure was not attributable to it.
Reading Proclamation No. 369, Section
11 of Commonwealth Act 137, and Sections 6, 7, and 8 of Presidential Decree No.
463, the Court of Appeals concluded that the issuance of DAO No. 66 was done by
the DENR Secretary beyond his power for it is the President who has the sole
power to withdraw from the forest reserve established under Proclamation No. 369
as non-forest land for mining purposes. Accordingly,
the segregation of 729 hectares of mining areas from the coverage of EP 133 by
the MAB was unfounded.
The Court of Appeals also faulted the
DENR Secretary in implementing DAO No. 66 when he awarded the 729 hectares
segregated from the coverage area of EP 133 to other corporations who were not
qualified as small-scale miners under Republic Act No. 7076.
As to the petitions of Villaflor and company, the Court of Appeals argued that
their failure to submit the sketch plan to the PA, which is a jurisdictional
requirement, was fatal to their appeal. It
likewise stated the Villaflor and company’s mining claims,
which were based on their alleged rights under DAO No. 66, cannot stand as DAO No.
66 was null and void. The dispositive portion of the Decision
decreed:
WHEREFORE,
premises considered, the Petition of Southeast Mindanao Gold Mining Corporation
is GRANTED while the Petition of Rosendo Villaflor, et al., is DENIED for lack of merit. The Decision of the Panel of Arbitrators
dated
Hence,
the instant Petitions for Review on Certiorari
under Rule 45 of the Rules of Court filed by Apex, Balite
and MAB.
During
the pendency of these Petitions, President Gloria Macapagal-Arroyo issued Proclamation No. 297 dated
In
G.R. No. 152613 and No. 152628, Apex raises the following issues:
I
WHETHER OR NOT
II
WHETHER OR NOT APEX
HAS A
In
G.R. No. 152619-20, Balite anchors its petition on
the following grounds:
I
WHETHER OR NOT THE
MPSA OF SEM WHICH WAS FILED NINE (9) DAYS LATE (JUNE 23, 1994) FROM THE FILING
OF THE MPSA OF BALITE WHICH WAS FILED ON
II
WHETHER OR NOT THE
DISMISSAL BY THE PANEL OF ARBITRATORS OF THE ADVERSE CLAIM OF
III
WHETHER OR NOT THE ACTUAL OCCUPATION AND SMALL-MINING OPERATIONS OF BALITE PURSUANT TO DAO 66 IN THE 729 HECTARES WHICH WAS PART OF THE 4,941.6759 HECTARES COVERED BY ITS MPSA WHICH WAS REJECTED BY THE BUREAU OF MINES AND GEOSCIENCES WAS ILLEGAL.[18]
In
G.R. No. 152870-71, the MAB submits two issues, to wit:
I
WHETHER OR NOT EP NO. 133 IS STILL VALID AND SUBSISTING.
II
WHETHER OR NOT THE SUBSEQUENT ACTS OF THE GOVERNMENT SUCH AS THE ISSUANCE OF DAO NO. 66, PROCLAMATION NO. 297, AND EXECUTIVE ORDER 217 CAN OUTWEIGH EP NO. 133 AS WELL AS OTHER ADVERSE CLAIMS OVER THE DIWALWAL GOLD RUSH AREA.[19]
The
common issues raised by petitioners may be summarized as follows:
I. Whether or not the Court of Appeals erred in upholding the validity and continuous existence of EP 133 as well as its transfer to SEM;
II. Whether or not the Court of Appeals erred in declaring that the DENR Secretary has no authority to issue DAO No. 66; and
III. Whether or not the subsequent acts of the executive department such as the issuance of Proclamation No. 297, and DAO No. 2002-18 can outweigh Apex and Balite’s claims over the Diwalwal Gold Rush Area.
On the first issue, Apex takes
exception to the Court of Appeals’ ruling upholding the validity of MMC’s EP 133 and its subsequent transfer to SEM asserting
that MMC failed to comply with the terms and conditions in its exploration
permit, thus, MMC and its successor-in-interest SEM lost their rights in the Diwalwal Gold Rush Area. Apex pointed out that MMC violated four
conditions in its permit. First, MMC
failed to comply with the mandatory work program, to complete exploration work,
and to declare a mining feasibility.
Second, it reneged on its duty to submit an Environmental Compliance
Certificate. Third, it failed to comply
with the reportorial requirements. Fourth, it violated the terms of EP 133 when
it assigned said permit to SEM despite the explicit proscription against its
transfer.
Apex likewise emphasizes that MMC
failed to file its MPSA application required under DAO No. 82[20]
which caused its exploration permit to lapse because DAO No. 82 mandates
holders of exploration permits to file a Letter of Intent and a MPSA
application not later than
As regards the Court of Appeals
recognition of SEM’s vested right over the disputed
area, Apex bewails the same to be lacking in statutory bases. According to Apex, Presidential Decree No. 463
and Republic Act No. 7942 impose upon the claimant the obligation of actually
undertaking exploration work within the reserved lands in order to acquire
priority right over the area. MMC, Apex
claims, failed to conduct the necessary exploration work, thus, MMC and its
successor-in-interest SEM lost any right over the area.
In its Memorandum, Balite maintains that EP 133 of MMC,
predecessor-in-interest of SEM, is an expired and void permit which cannot be
made the basis of SEM’s MPSA application.
Similarly, the MAB underscores that
SEM did not acquire any right from MMC by virtue of the transfer of EP 133
because the transfer directly violates the express condition of the exploration
permit stating that “it shall be for the exclusive use and benefit of the
permittee or his duly authorized agents.”
It added that while MMC is the permittee, SEM cannot be considered as MMC’s duly designated agent as there is no proof on record
authorizing SEM to represent MMC in its business dealings or undertakings, and
neither did SEM pursue its interest in the permit as an agent of MMC. According to the MAB, the assignment by MMC of
EP 133 in favor of SEM did not make the latter the duly authorized agent of MMC
since the concept of an agent under EP 133 is not equivalent to the concept of
assignee. It finds fault in the
assignment of EP 133 which lacked the approval of the DENR Secretary in
contravention of Section 25 of Republic Act No. 7942[21] requiring
his approval for a valid assignment or transfer of exploration permit to be
valid.
SEM, on the other hand, counters that
the errors raised by petitioners Apex, Balite and the
MAB relate to factual and evidentiary matters which this Court cannot inquire
into in an appeal by certiorari.
The established rule is that in the
exercise of the Supreme Court’s power of review, the Court not being a trier of facts, does not normally embark on a re-examination
of the evidence presented by the contending parties during the trial of the
case considering that the findings of facts of the Court of Appeals are
conclusive and binding on the Court.[22] This rule, however, admits of exceptions as
recognized by jurisprudence, to wit:
(1) [w]hen the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.[23]
Also, in the case of Manila Electric Company v. Benamira,[24]
the Court in a Petition for Review on Certiorari,
deemed it proper to look deeper into the factual circumstances of the case since
the Court of Appeal’s findings are at odds to those of the National Labor
Relations Commission (NLRC). Just like
in the foregoing case, it is this Court’s considered view that a re-evaluation
of the attendant facts surrounding the present case is appropriate considering
that the findings of the MAB are in conflict with that of the Court of Appeals.
I
At the threshold, it is an undisputed
fact that MMC assigned to SEM all its rights under EP 133 pursuant to a Deed of
Assignment dated
EP 133 is subject to the following
terms and conditions[26]:
1.
That the permittee shall abide by the work program submitted with the
application or statements made later in support thereof, and which shall be
considered as conditions and essential parts of this permit;
2. That permittee shall maintain a complete
record of all activities and accounting of all expenditures incurred therein
subject to periodic inspection and verification at reasonable intervals by the
Bureau of Mines at the expense of the applicant;
3. That the permittee shall submit to the
Director of Mines within 15 days after the end of each calendar quarter a
report under oath of a full and complete statement of the work done in the area
covered by the permit;
4. That the term of this permit shall be for two
(2) years to be effective from this date, renewable for the same period at the
discretion of the Director of Mines and upon request of the applicant;
5. That the Director of Mines may at any time
cancel this permit for violation of its provision or in case of trouble or
breach of peace arising in the area subject hereof by reason of conflicting
interests without any responsibility on the part of the government as to
expenditures for exploration that might have been incurred, or as to other
damages that might have been suffered by the permittee;
and
6. That this permit shall be for the exclusive use and benefit of the permittee or his duly authorized agents and shall be used for mineral exploration purposes only and for no other purpose.
Under Section 90[27]
of Presidential Decree No. 463, the applicable statute during the issuance of
EP 133, the DENR Secretary, through Director of BMG, is charged with carrying
out the said law. Also, under Commonwealth Act No. 136, also known as “An Act
Creating The Bureau of Mines,” which was approved on
Condition number 6 categorically
states that the permit shall be for the exclusive use and benefit of MMC or its
duly authorized agents. While it may be
true that SEM, the assignee of EP 133, is a 100% subsidiary corporation of MMC,
records are bereft of any evidence showing that the former is the duly
authorized agent of the latter. For a
contract of agency to exist, it is essential that the principal consents that
the other party, the agent, shall act on its behalf, and the agent consents so
as to act.[29] In the case of Yu Eng Cho v. Pan American World Airways, Inc.,[30]
this Court had the occasion to set forth the elements of agency, viz:
(1) consent, express or implied, of the parties to establish the relationship;
(2) the object is the execution of a juridical act in relation to a third person;
(3) the agent acts as a representative and not for himself;
(4) the agent acts within the scope of his authority.
The
existence of the elements of agency is a factual matter that needs to be
established or proven by evidence. The burden of proving that agency is extant
in a certain case rests in the party who sets forth such allegation. This is based on the principle that he who
alleges a fact has the burden of proving it.[31] It must likewise be emphasized that the
evidence to prove this fact must be clear, positive and convincing.[32]
In the instant Petitions, it is
incumbent upon either MMC or SEM to prove that a contract of agency actually
exists between them so as to allow SEM to use and benefit from EP 133 as the
agent of MMC. SEM did not claim nor submit proof that it is the designated
agent of MMC to represent the latter in its business dealings or undertakings. SEM
cannot, therefore, be considered as an agent of MMC which can use EP 133 and
benefit from it. Since SEM is not an
authorized agent of MMC, it goes without saying that the assignment or transfer
of the permit in favor of SEM is null and void as it directly contravenes the
terms and conditions of the grant of EP 133.
Furthermore,
the concept of agency is distinct from assignment. In agency, the agent acts
not on his own behalf but on behalf of his principal.[33]
While in assignment, there is total transfer or relinquishment of right by the
assignor to the assignee.[34] The assignee takes the place of the assignor
and is no longer bound to the latter.
The deed of assignment clearly stipulates:
1.
That for ONE PESO (P1.00) and other valuable consideration
received by the ASSIGNOR from the ASSIGNEE, the ASSIGNOR hereby ASSIGNS,
TRANSFERS and CONVEYS unto the ASSIGNEE whatever rights or interest the
ASSIGNOR may have in the area situated in Monkayo, Davao del Norte and Cateel, Davao Oriental, identified as Exploration Permit No. 133
and Application for a Permit to Prospect in Bunawan, Agusan del Sur respectively.[35]
Bearing in mind the just articulated distinctions
and the language of the Deed of Assignment, it is readily obvious that the
assignment by MMC of EP 133 in favor of SEM did not make the latter the former’s agent. Such assignment involved actual transfer of
all rights and obligations MMC have under the permit in favor of SEM, thus, making
SEM the permittee. It is not a mere grant of
authority to SEM, as an agent of MMC, to use the permit. It is a total abdication of MMC’s rights over the permit. Hence, the assignment in question did not
make SEM the authorized agent of MMC to make use and benefit from EP 133.
The
condition stipulating that the permit is for the exclusive use of the permittee
or its duly authorized agent is not without any reason. Exploration permits are strictly granted to
entities or individuals possessing the resources and capability to undertake
mining operations. Without such a condition, non-qualified entities or
individuals could circumvent the strict requirements under the law by the
simple expediency acquiring the permit from the original permittee.
We
cannot lend recognition to the Court of Appeals’ theory that SEM, being a 100%
subsidiary of MMC, is automatically an agent of MMC.
A corporation is an artificial being
created by operation of law, having the right of succession and the powers,
attributes, and properties expressly authorized by law or incident to its
existence.[36] It is an artificial being invested by law
with a personality separate and distinct from those of the persons composing it
as well as from that of any other legal entity to which it may be related.[37] Resultantly, absent any clear proof to the
contrary, SEM is a separate and distinct entity from MMC.
The Court of Appeals pathetically invokes
the doctrine of piercing the corporate veil to legitimize the prohibited transfer
or assignment of EP 133. It stresses
that SEM is just a business conduit of MMC, hence, the distinct legal
personalities of the two entities should not be recognized. True, the corporate mask may be removed when
the corporation is just an alter ego or a mere conduit of a person or of
another corporation.[38] For reasons of public policy and in the
interest of justice, the corporate veil will justifiably be impaled only when
it becomes a shield for fraud, illegality or inequity committed against a third
person.[39] However, this Court has made a caveat in the
application of the doctrine of piercing the corporate veil. Courts should be mindful of the milieu where
it is to be applied. Only in cases where
the corporate fiction was misused to such an extent that injustice, fraud or
crime was committed against another, in disregard of its rights may the veil be
pierced and removed. Thus, a subsidiary
corporation may be made to answer for the liabilities and/or illegalities done
by the parent corporation if the former was organized for the purpose of
evading obligations that the latter may have entered into. In other words, this
doctrine is in place in order to expose and hold liable a corporation which
commits illegal acts and use the corporate fiction to avoid liability from the
said acts. The doctrine of piercing the
corporate veil cannot therefore be used as a vehicle to commit prohibited acts
because these acts are the ones which the doctrine seeks to prevent.
To our mind, the application of the foregoing doctrine is unwarranted. The assignment of the permit in favor of SEM is
utilized to circumvent the condition of non-transferability of the exploration
permit. To allow SEM to avail itself of
this doctrine and to approve the validity of the assignment is tantamount to
sanctioning illegal act which is what the doctrine precisely seeks to
forestall.
Quite apart from the above, a cursory
consideration of the mining law pertinent to the case, will, indeed, demonstrate
the infraction committed by MMC in its assignment of EP 133 to SEM.
Presidential Decree No. 463, enacted
on
SEC. 97. Assignment of Mining Rights. – A mining lease contract or any interest therein shall not be transferred, assigned, or subleased without the prior approval of the Secretary: Provided, That such transfer, assignment or sublease may be made only to a qualified person possessing the resources and capability to continue the mining operations of the lessee and that the assignor has complied with all the obligations of the lease: Provided, further, That such transfer or assignment shall be duly registered with the office of the mining recorder concerned. (Emphasis supplied.)
The same provision is reflected in Republic
Act No. 7942, otherwise known as the Philippine Mining Act of 1995, which is
the new law governing the exploration, development and utilization of the
natural resources, which provides:
SEC. 25. Transfer or Assignment. - An exploration permit may be transferred or assigned to a qualified person subject to the approval of the Secretary upon the recommendation of the Director.
The records are bereft of any
indication that the assignment bears the imprimatur
of the Secretary of the DENR.
Presidential Decree No. 463, which is the governing law when the
assignment was executed, explicitly requires that the transfer or assignment of
mining rights, including the right to explore a mining area, must be with the
prior approval of the Secretary of DENR.
Quite conspicuously, SEM did not dispute the allegation that the Deed of
Assignment was made without the prior approval of the Secretary of DENR. Absent
the prior approval of the Secretary of DENR, the assignment of EP 133, was,
therefore, without legal effect for violating the mandatory provision of Presidential
Decree No. 463.
An added significant omission proved
fatal to MMC/SEM’s cause. While it is true that the case of Apex Mining Co., Inc. v. Garcia[40] settled
the issue of which between Apex and MMC validly acquired mining rights over the
disputed area, such rights, though, had been extinguished by subsequent events.
Records indicate that on
With the expiration of EP 133 on
II
The Court of Appeals theorizes that DAO
No. 66 was issued beyond the power of the DENR Secretary since the power to
withdraw lands from forest reserves and to declare the same as an area open for
mining operation resides in the President.
Under Proclamation No. 369 dated
From this reserve shall be considered automatically excluded all areas which had already been certified and which in the future may be proclaimed as classified and certified lands and approved by the Secretary of Agriculture and Natural Resources.[42]
However, a subsequent law,
Commonwealth Act No. 137, otherwise known as “The Mining Act” which was
approved on
Sec. 14. Lands within reservations for purposes other than mining, which, after such reservation is made, are found to be more valuable for their mineral contents than for the purpose for which the reservation was made, may be withdrawn from such reservations by the President with the concurrence of the National Assembly, and thereupon such lands shall revert to the public domain and be subject to disposition under the provisions of this Act.
Unlike Proclamation No. 369,
Commonwealth Act No. 137 vests solely in the President, with the concurrence of
the National Assembly, the power to withdraw forest reserves found to be more
valuable for their mineral contents than for the purpose for which the
reservation was made and convert the same into non-forest reserves. A similar provision can also be found in Presidential
Decree No. 463 dated
SEC. 8. Exploration and Exploitation of Reserved Lands. – When lands within reservations, which have been established for purposes other than mining, are found to be more valuable for their mineral contents, they may, upon recommendation of the Secretary be withdrawn from such reservation by the President and established as a mineral reservation.
Against the backdrop of the
applicable statutes which govern the issuance of DAO No. 66, this Court is constrained to rule that said
administrative order was issued not in accordance with the laws. Inescapably, DAO No. 66, declaring 729
hectares of the areas covered by the Agusan-Davao-Surigao
Forest Reserve as non-forest land open to small-scale mining operations, is null
and void as, verily, the DENR Secretary has no power to convert forest reserves
into non-forest reserves.
III
It is the contention of Apex that its
right over the Diwalwal gold rush area is superior to
that of MMC or that of SEM because it was the first one to occupy and take
possession of the area and the first to record its mining claims over the area.
For its part, Balite
argues that with the issuance of DAO No. 66, its occupation in the contested
area, particularly in the 729 hectares small-scale mining area, has entitled it
to file its MPSA. Balite claims that its MPSA
application should have been given preference over that of SEM because it was filed
ahead.
The MAB, on the other hand, insists
that the issue on who has superior right over the disputed area has become moot
and academic by the supervening events. By virtue of Proclamation No. 297 dated
Proclamation No. 297 excluded an area
of 8,100 hectares located in Monkayo, Compostela Valley, and proclaimed the
same as mineral reservation and as environmentally critical area, viz:
WHEREAS, by virtue of Proclamation No. 369, series of 1931, certain tracts of public land situated in the then provinces of Davao, Agusan and Surigao, with an area of approximately 1,927,400 hectares, were withdrawn from settlement and disposition, excluding, however, those portions which had been certified and/or shall be classified and certified as non-forest lands;
WHEREAS, gold deposits have been found within the area covered by Proclamation No. 369, in the Municipality of Monkayo, Compostela Valley Province, and unregulated small to medium-scale mining operations have, since 1983, been undertaken therein, causing in the process serious environmental, health, and peace and order problems in the area;
WHEREAS, it is in the national interest to prevent the further degradation of the environment and to resolve the health and peace and order problems spawned by the unregulated mining operations in the said area;
WHEREAS, these problems may be effectively addressed by rationalizing mining operations in the area through the establishment of a mineral reservation;
WHEREAS, after giving due notice, the Director of Mines and Geoxciences conducted public hearings on September 6, 9 and 11, 2002 to allow the concerned sectors and communities to air their views regarding the establishment of a mineral reservation in the place in question;
WHEREAS, pursuant to the Philippine Mining Act of 1995 (RA 7942), the President may, upon the recommendation of the Director of Mines and Geosciences, through the Secretary of Environment and Natural Resources, and when the national interest so requires, establish mineral reservations where mining operations shall be undertaken by the Department directly or thru a contractor;
WHEREAS, as a measure to attain and maintain a rational and orderly balance between socio-economic growth and environmental protection, the President may, pursuant to Presidential Decree No. 1586, as amended, proclaim and declare certain areas in the country as environmentally critical;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, upon recommendation of the Secretary of the Department of Environment and Natural Resources (DENR), and by virtue of the powers vested in me by law, do hereby exclude certain parcel of land located in Monkayo, Compostela Valley, and proclaim the same as mineral reservation and as environmentally critical area, with metes and bound as defined by the following geographical coordinates;
x x x x
with an area of Eight Thousand One Hundred (8,100) hectares, more or less. Mining operations in the area may be undertaken either by the DENR directly, subject to payment of just compensation that may be due to legitimate and existing claimants, or thru a qualified contractor, subject to existing rights, if any.
The DENR shall formulate and issue the appropriate guidelines, including the establishment of an environmental and social fund, to implement the intent and provisions of this Proclamation.
Upon
the effectivity of the 1987 Constitution, the State
assumed a more dynamic role in the exploration, development and utilization of
the natural resources of the country.[43] With this policy, the State may pursue full
control and supervision of the exploration, development and utilization of the
country’s natural mineral resources. The
options open to the State are through direct undertaking or by entering into
co-production, joint venture, or production-sharing agreements, or by entering
into agreement with foreign-owned corporations for large-scale exploration,
development and utilization.[44] Thus, Article XII, Section 2, of the 1987
Constitution, specifically states:
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. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. x x x
x x x x
The President may enter into
agreements with foreign-owned corporations involving either technical or
financial assistance for large-scale exploration, development, and utilization
of minerals, petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to the economic
growth and general welfare of the country. x x x (Underscoring
supplied.)
Recognizing the importance of the
country’s natural resources, not only for national economic development, but
also for its security and national defense, Section 5 of Republic Act No. 7942
empowers the President, when the national interest so requires, to establish
mineral reservations where mining operations shall be undertaken directly by
the State or through a contractor.
To
implement the intent and provisions of Proclamation No. 297, the DENR Secretary
issued DAO No. 2002-18 dated 12 August 2002 declaring an emergency situation in
the Diwalwal Gold Rush Area and ordering the stoppage
of all mining operations therein.
The
issue on who has priority right over the disputed area is deemed overtaken by the
above subsequent developments particularly with the issuance of Proclamation
297 and DAO No. 2002-18, both being constitutionally-sanctioned acts of the Executive
Branch. Mining operations in the Diwalwal Mineral
Reservation are now, therefore, within the full control of the State through
the executive branch. Pursuant to
Section 5 of Republic Act No. 7942, the State can either directly undertake the
exploration, development and utilization of the area or it can enter into
agreements with qualified entities, viz:
SEC 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 x x x .
It is now up to the Executive Department
whether to take the first option, i.e.,
to undertake directly the mining operations of the Diwalwal
Gold Rush Area. As already ruled, the
State may not be precluded from considering a direct takeover of the mines, if
it is the only plausible remedy in sight to the gnawing complexities generated
by the gold rush. The State need be
guided only by the demands of public interest in settling on this option, as
well as its material and logistic feasibility.[45] The State can also opt to award mining
operations in the mineral reservation to private entities including petitioners
Apex and Balite, if it wishes. The exercise of this prerogative lies with
the Executive Department over which courts will not interfere.
WHEREFORE, premises considered, the Petitions
of Apex, Balite and the MAB are PARTIALLY GRANTED,
thus:
1. We hereby REVERSE and SET ASIDE
the Decision of the Court of Appeals, dated
2. We AFFIRM the finding of the Court
of Appeals in the same Decision declaring DAO No. 66 illegal for having been issued in excess of the DENR
Secretary’s authority.
Consequently, the State, should it so
desire, may now award mining operations in the disputed area to any qualified
entity it may determine. No costs.
SO ORDERED.
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MINITA
V. CHICO-NAZARIO
Associate Justice |
WE CONCUR:
Chief Justice
Chairperson
Associate
Justice
Associate Justice
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ROMEO J.
CALLEJO, SR. Associate Justice |
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Pursuant to Article VIII, Section 13
of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
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ARTEMIO V.
PANGANIBAN Chief Justice |
[1] Records, Vol. 2, pp. 7-11.
[2]
[3] Rollo of G.R. No. 152619-20, p. 68.
[4] Sec. 13. Areas Closed to Mining Location. - No prospecting and exploration shall be allowed:
a) In military, or other Government reservations except when authorized by the proper Government agency concerned; x x x. (Apex Mining Co., Inc. v. Garcia, G.R. No. 92605, 16 July 1991, 199 SCRA 278, 284.)
[5] Now Associate Justice of the Supreme Court.
[6] Supra note 4.
[7] It provides for the procedural guidelines on the award of MPSA through negotiation. It further sets forth the requirements that applicants for MPSA applications shall comply and submit before the proper authority.
[8] Rollo of G.R. No. 152870-71, pp.
144-146.
[9]
[10] Supra note 4.
[11]
[12] DAO No. 34 defines small-scale miners as “Filipino citizens who individually or in the company of other Filipino citizens, voluntarily form a cooperative duly licensed by the DENR to engage, under the terms and conditions of a contract/license in the extraction or removal of minerals or ore-bearing materials from the ground.”
[13] Rollo of G.R. No. 152870-71, p.
161.
[14] Rollo of G.R. No. 152870-71, pp.
141-142.
[15] Penned by Associate Justice Alicia
L.
[16] Rollo of G.R. No. 152619-20, p.
55.
[17] Rollo of G.R. No. 152613 and No.
152628, p. 731.
[18]
[19] Rollo of G.R. No. 152870-71, p.
916.
[20] Otherwise known as the Procedural Guidelines On the Award Of Mineral Production Sharing Agreement (MPSA) Through Negotiation provides:
Section 3. Submission of Letter of Intent (LOIs) and MPSAs.
The following shall submit their LOIs and MPSAs within two (2) years from the effectivity
of DENR A.O. 57 or until
1. Declaration of Location (DOL) holders, mining lease applicants, exploration permitees, quarry applicants and other mining applicants whose mining/quarry applications have not been perfected prior to the effectivity of DENR Administrative Order No. 57.
2. All holders of DOL acquired after the effectivity of DENR A.O. No. 57.
x x x x
Failure to submit letters of intent and MPSA applications/proposals within the prescribed period shall cause the abandonment of mining, quarry and sand and gravel claims.
[21] Republic Act No. 7942 is also known as the “Philippine Mining Act of 1995.”
[22] New City Builders, Inc. v. National Labor Relations Commission, G.R. No. 149281, 15 June 2005, 460 SCRA 220, 227.
[23] The Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, 28 April 2004, 428 SCRA 79, 86; Manila Electric Company v. Benamira, G.R. No. 145271, 14 July 2005, 463 SCRA 331, 347-348; Aguirre v. Court of Appeals, G.R. No. 122249, 29 January 2004, 421 SCRA 310, 319.
[24] Manila Electric Company v. Benamira, id.
[25] Records, Vol. 2, pp. 351-353.
[26]
[27] Executive Officer.- The Secretary, through the Director, shall be the Executive Officer charged with carrying out the provisions of this Decree. x x x.
[28] Commonwealth Act No. 136, Section 3.
[29] People
v. Yabut, G.R. No. L-42902,
[30] G.R. No. 123560,
[31] Asia Traders Insurance Corporation v. Court of Appeals, G.R. No. 152537, 16 February 2004, 423 SCRA 114, 120.
[32]
[33] Yu Eng Cho v. Pan American World Airways, Inc., supra note 30.
[34] Philippine National Bank v. Court of Appeals, 338 Phil. 795, 817-818 (1997).
[35] Records, Vol. 2, p. 352.
[36] Corporation Code, Section 2.
[37] Yu v. National Labor Relations Commission, 315 Phil. 107, 123 (1995).
[38] Lim v. Court of Appeals, 380 Phil. 60, 76 (2000).
[39] Philippine National Bank v. Andrada Electric & Engineering Company, 430 Phil. 882, 894 (2002).
[40] Supra note 4.
[41] Records, Vol. 2, p. 255.
[42]
[43] Miners Association of the Philippines, Inc. v. Hon. Factoran, Jr., 310 Phil. 113, 130-131 (1995).
[44]
[45]