La Bugal-B’laan Tribal Association, Inc. et al. v. Ramos et al.

27 January 2004

Parties
Petitioners: LA BUGAL-B’LAAN TRIBAL ASSOCIATION, INC., represented by its Chairman F’LONG
MIGUEL M. LUMAYONG, WIGBERTO E. TAÑADA, PONCIANO BENNAGEN, JAIME TADEO, RENATO R.
CONSTANTINO, JR., F’LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM L. DABIE, SIMEON H.
DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN, MARCELO L. GUSANAN, QUINTOL A. LABUAYAN,
LOMINGGES D. LAWAY, BENITA P. TACUAYAN, minors JOLY L. BUGOY, represented by his father
UNDERO D. BUGOY, ROGER M. DADING, represented by his father ANTONIO L. DADING, ROMY M.
LAGARO, represented by his father TOTING A. LAGARO, MIKENY JONG B. LUMAYONG, represented by his
father MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by his mother EDITHA T. MIGUEL,
ALDEMAR L. SAL, represented by his father DANNY M. SAL, DAISY RECARSE, represented by her mother
LYDIA S. SANTOS, EDWARD M. EMUY, ALAN P. MAMPARAIR, MARIO L. MANGCAL, ALDEN S. TUSAN,
AMPARO S. YAP, VIRGILIO CULAR, MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN CARLO
CULAR, VIRGILIO CULAR, JR., represented by their father VIRGILIO CULAR, PAUL ANTONIO P.
VILLAMOR, represented by his parents JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR, ANA GININA R.
TALJA, represented by her father MARIO JOSE B. TALJA, SHARMAINE R. CUNANAN, represented by her
father ALFREDO M. CUNANAN, ANTONIO JOSE A. VITUG III, represented by his mother ANNALIZA A.
VITUG, LEAN D. NARVADEZ, represented by his father MANUEL E. NARVADEZ, JR., ROSERIO MARALAG
LINGATING, represented by her father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E. DE
VERA, MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO, OND, LOLITA G. DEMONTEVERDE,
BENJIE L. NEQUINTO, ROSE LILIA S. ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C.
REYES, LEAN LOUEL A. PERIA, represented by his father ELPIDIO V. PERIA, GREEN FORUM
PHILIPPINES, GREEN FORUM WESTERN VISAYAS, (GF-WV), ENVIRONMETAL LEGAL ASSISTANCE
CENTER (ELAC), PHILIPPINE KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG
PANSAKAHAN (KAISAHAN), KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG
PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR AGRARIAN REFORM and RURAL DEVELOPMENT
SERVICES, INC. (PARRDS), PHILIPPINE PART`NERSHIP FOR THE DEVELOPMENT OF HUMAN
RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA), WOMEN’S LEGAL BUREAU (WLB), CENTER
FOR ALTERNATIVE DEVELOPMENT INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT INSTITUTE
(UDI), KINAIYAHAN FOUNDATION, INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL (SALIGAN),
LEGAL RIGHTS AND NATURAL RESOURCES CENTER, INC. (LRC)

Respondents: VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT AND NATURAL

RESOURCES (DENR), HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES BUREAU (MGB-
DENR), RUBEN TORRES, EXECUTIVE SECRETARY, and WMC (PHILIPPINES) , INC.

Ponente: Carpio-Morales, J.

Background:
Nature and Case History
25 July 1987 – EO 279 authorized DENR to accept, consider and evaluate proposals from foreign-owned
corporations or foreign investors for contracts or agreements involving either technical or financial assistance
for large-scale exploration, development, and utilization of minerals, which, upon appropriate recommendation
of the Secretary, the President may execute with the foreign proponent. In entering into such proposals, the
President shall consider the real contributions to the economic growth and general welfare of the country that
will be realized, as well as the development and use of local scientific and technical resources that will be
promoted by the proposed contract or agreement. Until Congress shall determine otherwise, large-scale
mining, for purpose of this Section, shall mean those proposals for contracts or agreements for mineral
resources exploration, development, and utilization involving a committed capital investment in a single mining
unit project of at least Fifty Million Dollars in United States Currency (US $50,000,000. 00)

3 March 1995 – RA 7942 signed into law

30 March 1995 – Government entered FTAA with WMCP 99,387 hectares of land in South Cotabato, Sultan
Kudarat, Davao del Sur and North Cotabato .

9 April 1995 – 30 days after publication on 10 March 1995, RA 7942 took effect

20 December 1996 – DENR Secretary Victor Ramos issued DAO 96-40

10 January 1997 – counsels for petitioner sent letter to Ramos demanding DENR to stop implementing RA
7942 and DAO 96-40.

No response, thus this petition for Mandamus and Prohibition with prayer of TRO and preliminary injunction
(denied) claiming that petitioner Ramos acted without or in excess of jurisdiction in implementing the assailed
Constitutionality of RA 7942 [1], of DENR Administrative Order 96-40 [2], and of the Financial and Technical
Assistance Agreement entered into on 30 March 1995 between the Republic of the Philippines and WMC
(Philippines) , Inc..

23 January 2001 – Manifestation of respondents that WMCP is no longer foreign-owned as WMC has sold
100% of its equity to Filipino company Sagittarius Mines, Inc. which is 60% owned by Filipinos or Filipino-
owned corporations. WMCP is renamed as Tampakan Mineral Resources Corporation.

18 December 2001 – DENR approved the transfer and registration of FTAA to Sagittarius from WMCP.

Supreme Court said that this manifestation and transfer does not render the issue moot since the question of
validity of the FTAA will affect even that held by Sagittarius.

Facts of the Case

-Stated in case history-

Issue/s
Preliminary Issue: Standing of Petitioners

1WON EO 279 is an invalid law having been issued two days before President Aquino’s legislative powers
expired with the convening of Regular Congress and having thus took effect after which.

2WON RA 7942 and DAO 96-40 are unconstitutional and consequently the FTAA entered pursuant to above
stated laws is invalid

Ratio Decidendi
Preliminary Issue: Petitioners have standing since they are residents of the land covered by the FTAA. Since
the petition if for mandamus and prohibition and the issue is of constitutionality of a statute, the Supreme is no
longer concerned whether or not petitioners are real parties of interest to the contract/agreement.

1NO. EO 279 is valid and whether or not the law’s effectivity date lies beyond the expiration of the President’s
legislative power is irrelevant since it was still enacted when the president held such power. It does not run
counter to EO 200 requiring laws to have 15 days after publication requirement before its effectivity since EO
200 also provides “unless it is otherwise provided,” EO 279 having stated its own effectivity as “shall take effect
immediately.” In addition, the 15-day post-publication requirement was for the information of the public and
does not in any way affect the date of enactment and is not a ground for invalidation. EO 279 nonetheless was
published on the Official Gazette on 3 August 1987.

2Yes. The 1987 Constitution provides “The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for large-scale exploration, development, or
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.”[3]

The Constitution provides for four modes by which the States may explore, develop, and Utilize Natural
Resources
(1) State may directly undertake such activities
(2) State may enter into co-production, joint-venture or production-sharing agreements with Filipino citizens or
qualified corporations (60% Filipino owned)
(3) Congress may allow small-scale utilization of natural resources by Filipino citizens
(4) For the large-scale exploration, development, or utilization of minerals, petroleum, and other mineral oils,
the President may enter into agreements with foreign-owned corporation for technical or financial assistance.

The framers of this Constitution expressly omitted the phrase “service contracts” that was provided for in the
1973 Constitution which allowed foreign companies to “manage and operate” mining activities and replaced it
with “technical or financial assistance” only.”

RA 7942, DAO 96-40, and the FTAA between the government and WMCP allows for the management and
operation of the foreign-owned corporation for the large-scale exploration, development, or utilization of
minerals, petroleum, and other mineral oils. Although counsel for respondents claim that “technical” is a very
broad term that may cover the “management and operation” of such activities, it is still clear from the
deliberation of the Constitutional Commission that they intended to limit the utilization of the natural resources
for the sole enjoyment of the Filipinos.

Decision
Petition Granted. Certain provisions of RA 7942 are declared null and void. So are all provisions of Department
of Environment and Natural Resources Administrative Order 96-40, s. 1996 which are not in conformity with
this Decision, and the Financial and Technical Assistance Agreement between the Government of the Republic
of the Philippines and WMC Philippines, Inc.

Appendix:
[1] Philippine Mining Act of 1995
[2] Implementing Rules and Regulations pursuant to RA 7942 issued by the DENR
[3] Cont. Art. XII, Sec. 2, par. 4

Const. Art. XII 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. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be the measure and limit of the grant.

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and
lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical of 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.

The President shall notify the Congress of every contract entered into in accordance with this provision, within
thirty days from its execution.