La Bugal-BLaan v.

Ramos
G.R. No. 127882.
December 1, 2004
Facts:
The Petition for Prohibition and Mandamus before the Court challenges the
constitutionality of (1) Republic Act 7942 (The Philippine Mining Act of 1995); (2) its
Implementing Rules and Regulations (DENR Administrative Order [DAO] 96-40); and (3)
the Financial and Technical Assistance Agreement (FTAA) dated 30 March 1995,
executed by the government with Western Mining Corporation (Philippines), Inc.
(WMCP).
On 27 January 2004, the Court en banc promulgated its Decision, granting the Petition
and declaring the unconstitutionality of certain provisions of RA 7942, DAO 96-40, as
well as of the entire FTAA executed between the government and WMCP, mainly on the
finding that FTAAs are service contracts prohibited by the 1987 Constitution. The
Decision struck down the subject FTAA for being similar to service contracts,[9] 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.
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, expansion and development; nearly unfettered control
over the disposition and sale of the products discovered/extracted; effective ownership
of the natural resource at the point of extraction; and beneficial ownership of our
economic resources. According to the Decision, the 1987 Constitution (Section 2 of
Article XII) effectively banned such service contracts. Subsequently, 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 the WMC (Philippines) Inc. filed separate Motions for
Reconsideration.
Issue:
Whether or not the Court has a role in the exercise of the power of control over the EDU
of our natural resources?
Held:
The Chief Executive is the official constitutionally mandated to enter into agreements
with foreign owned corporations. On the other hand, Congress may review the action of
the President once it is notified of every contract entered into in accordance with this
[constitutional] provision within thirty days from its execution. In contrast to this express
mandate of the President and Congress in the exploration, development and utilization
(EDU) of natural resources, Article XII of the Constitution is silent on the role of the
judiciary. However, should the President and/or Congress gravely abuse their discretion

in this regard, the courts may -- in a proper case -- exercise their residual duty under
Article VIII. Clearly then, the judiciary should not inordinately interfere in the exercise of
this presidential power of control over the EDU of our natural resources.
Under the doctrine of separation of powers and due respect for co-equal and coordinate
branches of government, the Court must restrain itself from intruding into policy matters
and must allow the President and Congress maximum discretion in using the resources
of our country and in securing the assistance of foreign groups to eradicate the grinding
poverty of our people and answer their cry for viable employment opportunities in the
country. The judiciary is loath to interfere with the due exercise by coequal branches of
government of their official functions. As aptly spelled out seven decades ago by Justice
George Malcolm, Just as the Supreme Court, as the guardian of constitutional rights,
should not sanction usurpations by any other department of government, so should it as
strictly confine its own sphere of influence to the powers expressly or by implication
conferred on it by the Organic Act. Let the development of the mining industry be the
responsibility of the political branches of government. And let not the Court interfere
inordinately and unnecessarily. The Constitution of the Philippines is the supreme law of
the land. It is the repository of all the aspirations and hopes of all the people.
The Constitution should be read in broad, life-giving strokes. It should not be used to
strangulate economic growth or to serve narrow, parochial interests. Rather, it should be
construed to grant the President and Congress sufficient discretion and reasonable
leeway to enable them to attract foreign investments and expertise, as well as to secure
for our people and our posterity the blessings of prosperity and peace. The Court fully
sympathize with the plight of La Bugal Blaan and other tribal groups, and commend their
efforts to uplift their communities. However, the Court cannot justify the invalidation of an
otherwise constitutional statute along with its implementing rules, or the nullification of an
otherwise legal and binding FTAA contract. The Court believes that it is not
unconstitutional to allow a wide degree of discretion to the Chief Executive, given the
nature and complexity of such agreements, the humongous amounts of capital and
financing required for large-scale mining operations, the complicated technology
needed, and the intricacies of international trade, coupled with the States need to
maintain flexibility in its dealings, in order to preserve and enhance our countrys
competitiveness in world markets. On the basis of this control standard, the Court
upholds the constitutionality of the Philippine Mining Law, its Implementing Rules and
Regulations - insofar as they relate to financial and technical agreements - as well as the
subject Financial and Technical Assistance Agreement (FTAA).