REPUBLIC OF THE PHILIPPINES

SANDIGANBAYAN
QUEZON CITY

PEOPLE OF THE PHILIPPINES, Criminal Case No. SB-II-CRM-0088

Plaintiff, For: Violation of Section 3(e),
Republic Act No. 3019

JOEL TOLENTINO REYES

ANDRONICO JARA BAGUYO, CABOTAJE-TANG,P.J.,
Accused. Chairperson
FERNANDEZ, SJ, J.,and
FERNANDEZ,B, J. *

Accused Joel Tolentino Reyes and Andronico Jara Baguyo are

charged for violation of Section 3(e) of Republic Act No. 3019,1 for
granting the application for renewal of Small Scale Mining Permit
(SSMP)PLW No. 37 of, and issuing SSMP PLW No. 37.1 in favor of
Olympic Mines and Development Corporation (OMDC) under the
following circumstances:

a. Prior to the expiration of SSMP PLW No. 37, thereby allowing

OMDC to mine and extract ore in excess of the allowable limit;
and,

b. Despite violation by OMDC of the terms of its mining permit,

i.e.:

i)
ii)
by overextracting ore; and,
by using heavy equipment in its mining operations.
i I
/7
I

* In view of the appointment of Justice Samuel Martires to the Supreme Court, 'JUS ice ernelito R. ~
Fernandez, as the regular member of the Third Division, took part in the decision of the instant case.
I Anti-Graft and Corrupt Practices Act
Decision
People vs. Reyes, et al.
Criminal Case No. SB-11-CRM-0088
x---------------------------------------x

The Information, docketed as Criminal Case No. SB-II-CRM-

0088, reads:

That on or about April 6, 2006, or sometime prior or

subsequent thereto, in Puerto Princesa City, Palawan, and within
the jurisdiction of this Honorable Court, accused JOEL T. REYES,
a high ranking public officer being Governor of the Province of
Palawan and accused ANDRONICOJ. BAGUYO,Mining Operations
Officer IV, Provincial Environment and Natural Resources Office
and concurrent Head of the Provincial Mining Regulatory Board
(PMRB)Technical Secretariat, taking advantage of their respective
positions and committing the offense in relation to office,
conspiring and confederating with each other, did then and there
willfully, knowingly and criminally, with manifest partiality, evident
bad faith or, at the very least, gross and inexcusable negligence,
grant and issue Small Scale Mining Permit Number SSM? ?L W No.
37-1 to Olympic Mines and Development Corporation (OMDC)for a
period of April 6, 2006 to April 5, 2008 as renewal of its previous
mining permit (SSMP PLW No. 37) despite the fact that said
previous mining permit is valid and subsisting up to November
3, 2006 and even as said OMDCalready mined and extracted
the annual maximum 50,000 dry metric tons (DMT) of ore set
forth in its previous permit (or 100,000 DMT for the two-year
period), allowing in the process OMDC to mine and extract ore
in excess of the allowable limit; and despite OMDC'sviolations
of its prior mining permit such as, but not limited to: (1) over-
extraction of ore and (2) the use of heavy equipment in its
mining operations which is prohibited by Republic Act 7076 and
Presidential Decree 1899, as amended, thereby giving unwarranted
benefits, preference and advantage to OMDC, to the damage and
prejudice of the government and People of Palawan.

When arraigned, accused Reyes, assisted by Atty. Ferdinand

S. Topacio and accused Baguyo, assisted by Atty. Carlo Gomez,
pleaded "Not Guilty" to the crime charged.3

During pre-trial, the parties stipulated:

1. Accused Joel T. Reyes occupied the position of Governor of

Palawan at the time material in this case; while accused
Andronico J. Baguyo was the Mining Operations Officer IV of
the Provincial Environment and Natural Resources Office
and Head of the Provincial Mining Regulatory Boa~s~~'RB)
Technical Secretariat at the time material in this ca~ l"
2 Information dated March 7, 2011, pp. 1-2; Record, Vol. I, pp. 1-2; Underscoring nd emphasis ~
supplied.
3 Certificates of Arraignment dated March 5, 2012; Record, Vol. I, p. 329-330 and Order dated March 5,
2012; Record, Vol. I, p. 332.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

2. Small Scale Mining Permit No. 37 was issued to Olympic

Mines Development Corp. on November 4, 2006 (sic) for the
period of November 4,2004 to November 3,2006.

3. Small Scale Mining Permit No. 37-1 was issued to Olympic

Mines and Development Corporation on April 6, 2006 for the
period of April 6, 2006 to April 5, 2008.4

Both accused admitted the existence of the following

prosecution exhibits:5

Exhibit Document
Small Scale Mining Permit (SSMP) PLW No. 37 issued on
Q Nov. 4, 2004 in favor of Olympic Mines and Development
Corp.

SSMP PLW No. 37.1 issued on April 6, 2006 In favor of

Q-1
Olympic Mines and Development Corp.

Order dated September 25,2006 signed by Sec. Angelo Reyes

S of the Department of Environment and Natural Resources.

Memorandum Circular No. 2007-07 Subject: Clarificatory

T Guidelines in the Implementation of the Small-Scale Mining
Laws

Letter dated July 30, 2007 signed by DOJ Sec. Raul

U
Gonzales addressed to Sec. Angelo T. Reyes

The prosecution presented the following witnesses:

6
1) Raymundo G. Padrones, Jr. 2) Corazon M. Camat,7 3) Betty C.
Ignacio,8 4) Joel B. Ocai,9 5) Mario W. Alban,lO and 6) Ligaya E.
Dionisio. 11

1. Raymundo G. Padrones, Jr., Local Assessment Officer III,

Assessor's Office, and Board Secretary, Provincial Mining
Regulatory Board (PMRB), testified to identify SSMP PLW No. 38
dated November 4, 2004.12 Accused Reyes and Bugayo stipulated
on the existence and genuineness of the followingdocumerzr [)

4 Pre-Trial Order dated June 21,2012,pp. 1-2;Record, Vol. I, pp. 377-378. ~

5 Pre-Trial Order dated June 21,2012,p. 3; Record, Vol. I, p. 379.
6 TSN dated September 10,2012and October 16,2012.
7 TSN dated October 16,2012.
8 TSN dated October 16,2012.
9 TSN dated February 18,2013.
10 TSN dated February 18,2013and TSN dated February 19,2013.
11 TSN dated March 13,2013.
12 Exhibit Q-2;TSN dated September 10,2012,p. 3 and TSN dated October 16,2012,
p. 5.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

Exhibit Documentary Evidence

BOre Transport Permit (OTP)No. 31.08 issued on April 3,
2006, with expiry date May 3,2006
C OTP No. 31.09 issued on June 2, 2006, with expiry date
June 25, 2006
D OTP No. 31.10 issued on June 28, 2006, with expiry date
July 18, 2006
E OTP No. 31.11 issued on June 28, 2006, with expiry date
July 18, 2006
F OTP No. No. 31.12 issued on June 28, 2006, with expiry
date July 18, 2006
G OTP No. 31.13 issued on June 28, 2006, with expiry date
July 18, 2006
H OTP No. 31.14 issued on June 28, 2006, with expiry date
July 18, 2006
I OTP No. 31.15 issued on July 4, 2006, with expiry date
July 31, 2006
Q and Q-1 Small Scale Mining Permits No. 37 and 37.1
X to X-6 Ore Transport Permit No. 31.01 to 31.0713

2. The testimony of Corazon M. Camat, Supervising

Administrative Officer of the Records Management and
Documentation Division, DENR Central Office, was dispensed with
after the parties stipulated on the authenticity, existence and
veracity of:

a. Exhibit S: Order dated September 25,2006 in DENR Case No. 82-53;

b. Exhibit T: Memorandum Circular No. 2007-07 dated July 5, 2007.14

Betty C. Ignacio, Punong Barangay

3. of Brgy. San Isidro,
Bato-bato, Narra, Palawan,15 testified:

a. She was the punong barangay of San Isidro, Bato-bato, Narra,

Palawan from 2002 until the time of her testimony. 16

1. Implementing resolutions and ordinances; and,

11. Monitoring of peace and order, and of environmental
health sanitation.

c. Her constituents earn their living from farming, fishing and

working in nickel ore mines.17

13
continued until 2006 ?2
d. Mining operations in th r barangay

Order dated September 10,20 ; c d, Vol ,p. 431and

started in 2004 and

TSN dated September 10,2012,pp. 5-8.

14 TSN dated October 16,2012,pp. 7-10
15 TSN dated October 16,2012,pp. 11-12. ~
16 TSN dated October 16,2012,p. 12.
17 TSN dated October 16,2012,pp. 12-13.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

e. She is not certain if it was in the last quarter of 2006 when the
mining operations stopped. At the time of her testimony,
mining operations were ongoing in their barangay.18

f. When she visited the mining site, she saw dump trucks used to
carry nickel ores, bulldozers, pay loaders and back hoes.19

4. The testimony of Joel B. Ocai, Administrative Officer V,

Records Section, Department of Justice, was dispensed with after
the parties, without admitting its authenticity and execution,
stipulated on the existence of DOJ Opinion dated July 30, 200720 in
the files of the Department of Justice.21

5. Mario w. Alban, Mining Engineer, Mines and Geosciences

Bureau (MGB), Region IV-B,22 testified:

a. As a Mining Engineer at the MGB, his function is to implement

mining conservation in the country. His duties include:

i. Processing of mining permits;

ii. Investigating matters relating to mining permits; and,
iii. Processing other documents related to mining.23

b. The MGB Director, Region IV, who received from the Director of
the Environmental Management Bureau (EMB), Regional Office
IV, MIMAROPA,a copy of the complaint dated July 31, 2006
filed by Francisco Galman of Citinickel Mines and Development
Corporation, instructed them to conduct an investigation. The
Complaint was addressed to the Director, EMB, Region IV-B
(MIMAROPA).24

c. In the complaint, Citinickel Mines accused Platinum Group

Metals Corporation (Platinum Group) of over-extraction and
causing environmental damage to the farm land, among
others.25

d. The Small Scale Mining Permit was signed by accused Joel

Reyes, as the Governor of Palawan.26

e. The investigation that he, Ruben Magtibay and Elmer Crisologo

conducted ShOW~d:

"
19
TSNdat,d Octob" 16, 2012, p.
TSN dated October 16,2012,. 1 .
- 4. (7~
20 Exhibit U
21 Order dated February 18,2013;Record, Vol. II, p. 23and TSN dated February 18,2013,p. 3,5 & 16.
22 TSN dated February 18,2013,p. 7.
23 TSN dated February 18,2013,p. 8.
24 TSN dated February 18,2013,p. 14and TSN dated February 19,2013, p. 3.
25 TSN dated February 18,2013,p. 14andTSN dated February 19,2013,p. 3.
26 TSN dated February 18,2013,p. 15and SSMP PLW No. 37,Exhibit Q.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

1. Platinum Group was allowed to extract 100,000 DMT on

their first year of operation.27

11. The following year, after exhausting the allowed volume of

extraction, Platinum Group applied for renewal of its SSMP.
On said year, Platinum Group was allowed to extract and
ship four (4) more times by the Office of the Governor of
Palawan.28

iii. Platinum Group was non-compliant with Environmental

Compliance Certificate No. IVB-218-PA-2140-2004.29

f. Their findings are contained in their Field Investigation Report

dated August 29,2006.30

g. It was stated in the Report31 that, "On the second year of

operation, however, the early renewal of the mining permit
which was allegedly made in the exhaustion of its allowed
volume, the company was permitted to ship additional volume
of ores, thus exceeding the annual volume as stipulated in item
no. 8 of the ECC." Item No.8 of the ECC states that the allowed
volume of nickel extraction of the SSMP is only 50,000 DMTper
year.32

h. Nickel is different from nickel ore. Nickel refers to the metal

while nickel ore includes other impurities.33

1. The word "Nickel" in the ECC refers to nickel ore smce one
cannot extract 50,000 tons of pure Nickel meta1.34

6. The testimony of Ligaya E. Dionisio, Administrative

Assistant II, DENR,35 was dispensed with after the parties
stipulated on the documents to be presented by the witness namely:

a. Exhibit Y: DENR Memorandum dated October 17, 2007, from

the Undersecretary for Field Operations addressed to the
Director, Mines and Geosciences Bureau

b. Exhibit U: The letter dated July 30,2007, consisting of 6 pages,

from DOJ Secretary Raul M. Gonzales addressed to DENR
Secretary Angelo T. Reyes, is a certified copy of repro~

-27-T-S-N-d-a-te-d-F-e-b-ru-a-ry-1-8-,-2-0-'3,
28
pp. 14-15 and TSN dated Febmary 19,2013, p. 4.
TSN dated February 18, 2013, p. 15 and TSN dated February 19, 2013, p. 4.
/1
!"'~

I

29 Exhibit 11 for accused Reyes and TSN dated February 19, 2013, pp. 3-5. '" '\
30 TSN dated February 18, 2013, pp. 13-14.
31 The Report was marked as Exhibit W but was dispensed with and not formally offered in evidence;
Formal Offer of Exhibits dated April 26,2013, p. 5, Record, Vol. II, p. 48.
32 TSN dated February 19,2013, p. 4-5.
33 TSN dated February 19, 2013, pp. 6-7.
34 TSN dated February 19, 2013, p. 9.
35 TSN dated March 13,2013, p. 2.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

records available on file but IS not a certified copy of the

originals of the documents.36

This Court admitted the followingexhibits of the prosecution:37

Exhibit Document
Certified true copy of Ore Transport Permit (OTP)No. 31.08
B
issued on April 3, 2006 with expiry date May 3,2006.
Certified true copy of OTP No. 31.09 issued on June 2, 2006
C
with expiry date June 25, 2006.
Certified true copy of OTP No. 31.10 issued on June 28,
D
2006 with expiry date July 18,2006.
Certified true copy of OTP No. 31.11 issued on June 28,
E
2006 with expiry date July 18, 2006.
Certified true copy of OTP No. 31.12 issued on June 28,
F
2006 with expiry date July 18, 2006.
Certified true copy of OTP No. 31.13 issued on June 28,
G
2006 with expiry date July 18, 2006.
Certified true copy of OTP No. 31.14 issued on June 28,
H
2006 with expiry date July 18,2006.
Certified true copy of OTP No. 31.15 issued on July 4,2006
I
with expiry date July 31,2006.
Small Scale Mining Permit (SSMP) PLW No. 37 issued on
November 4, 2004 In favor of Olympic Mines and
Q
Development Corporation (OMDC)effective up to November
3,2006.
SSMP PLW No. 37.1 issued on April 6, 2006 in favor of
Q-1
OMDC effective up to April 5, 2008.
SSMP PLW No. 38 issued on November 4, 2004 in favor of
Q-2
OMDC effective up to November 3,2006.
Certified copy of Order dated September 25, 2006 signed by
S
Sec. Angelo Reyes of the DENR.
Certified copy of Memorandum Circular No. 2007-07 with
T subject: Clarificatory Guidelines in the Implementation of
the Small-Scale Mining Laws.
Certified copy of Letter dated July 30, 2007 signed by DOJ
U
Secretary Raul Gonzales addressed to Sec. Angelo Reyes.
Certified true copy of OTP No. 31.01 issued on May 30, 2005
X
with expiry date June 14,2005.
Certified true copy of OTP No. 31.02 issued on May 30, 2005
X-I
with expiry date June 14, 2005.
Certified true copy of OTP No. 31.03 issued on June 14,
X-2
2005 with expiry date June 30, 2005,., ./

36
)J
Order dated March 13""2013' Record Vol. II p . 35 and TSN date/
r /'/
bi
3.rch 13, 2013 , pp .2-4.
37 Resolution dated July 8,2013; Record, Vol. II, p. 123. In its Order dated August 16, 2013, this Court
granted accused Reyes' Motion for Correction of the Order dated July 29(sic), 2013, with respect to
the erroneous admission of Exhibit A. Said Exhibit had been dispensed with by the prosecution;
Record, Vol. II, p. 157.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

Certified true copy of OTPNo. 31.04 issued on July 25, 2005

X-3
with expiry date August 4, 2005.
Certified true copy of OTP No. 31.05 issued on October 7,
X-4
2005 with expiry date October 17, 2005.
OTP No. 31.06 issued on January 11, 2006 with expiry date
X-5
January 21,2006.
Certified true copy of OTP No. 31.07 issued on March 13,
X-6
2006 with expiry date April 12, 2006.

Accused Reyes38 and accused Baguyo39 filed their respective

Motions for Leave of Court to File Demurrer to Evidence. In its
Resolution dated August 30, 2013,40 this Court denied both
motions.

Accused Reyes presented 1) Samson A. Negosa;41 and 2)

Gemma O. Bendanillo,42 as his witnesses.

1. Samson A. Negosa, a member of the PMRB of Palawan from

1993 to 2010,43 testified:

1. Atty. Romeo Seratubias, Provincial Legal Officer of the

Province of Palawan, and head of the PMRB;
11. Mark Concepcion, member of a non-government
organization;
111. Mr. Andraldo, Senior Officer of Narra; and,
IV. A representative of the DENR Regional Office.44

b. Part of his duties at the PMRB is to consult, on applications for

SSMP in Palawan, with the technical people from the DENR.45

c. He consulted Director Estadillo of the MGB46for Region IV and

Mr. Conrado of CENRO regarding the application of OMDC.47

d. Sometime in 2006, OMDC filed, with the PMRB, an application

for renewal of its SSMP. The PMRB requested the technical
team from DENR to validate the application of OMDC. The
PMRB also asked the Provincial Environment and Natural
Resources Office (PENRO)to submit its recommendati~

38
39
Record, Vol. II, pp. 138-147.
Record, Vol. II, pp. 159-166.
~ 0"/7
40 Record, Vol. II, p. 188.
41 TSN dated October 22,2013and TSN dated October 23,2013.
42 TSN dated February 11,2014. ~
43 TSN dated October 22,2013,p. 9.
44 TSN dated October 22,2013,pp. 9 & 21.
45 TSN dated October 22,2013,p. 21.
46 TSN dated October 23,2013,p. 17.
47 TSN dated October 22,2013,pp. 21-22.
48 TSN dated October 22,2013,p.10.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

e. After evaluating the recommendations of all concerned

agencies, the PMRB, in its Resolution No. 24-2006,49
recommended to the local government unit the approval of said
application. 50

f. Accused Reyes approved the application for renewal and issued

SSMP PLWNo. 37.1.51

g. Sometime in November or December of the year 2006, the

DENR Secretary issued an Order in DENR Case No. 8053
cancelling the SSMPs of OMDC. The PMRB was provided a
copy of said Order. 52

h. Pursuant to said Order, the PMRB suspended the permit of

OMDC. Afterwards, the PMRB requested OMDC's owner or
manager and a personnel from DENR, Narra, to attend a
meeting. During the meeting, the PMRB informed them of the
cancellation of OMDC's permit.53

1. Sometime in March or April, PMRB received an Order from the

Office of the President reversing the Order of the DENR
Secretary, and reinstating the permit issued to OMDC.54

J. The role of PMRB is only recommendatory. The PMRB's

recommendation is not automatically approved by the
Governor. The Governor issues the SSMP on the basis of the
PMRB's recommendation. The Governor has the prerogative to
review the recommendation of PMRB.55

k. He has no personal knowledge of the contents, veracity and

truthfulness of Ore Transport Permits (OTPs) issued before
2007 because the PMRB had no jurisdiction over OTPs prior to
2007.56

1. The OTP is a permit to transport ore that was stock-piled or

excavated. The OTP can only be granted to a company which
also possesses a SSMP. The OTP is an authority to transport all
materials extracted by the mining company. The Governor
issues the OTP upon the recommendation of the technical
people of the DENR.57

m. The ore excavated may be stock-piled wherever a particular

company desires, and may be co-mingled with the ores

49
excavated by another company under the same

Exhibit 1 for accused Reyes and Baguyo.

tran"J((J
50 TSN dated October 22,2013, p.1l.
51 TSNdated October 23,2013, pp. 4-5.
52 TSN dated October 22,2013, p.16.
53 TSN dated October 22,2013, p.17. ~
54 TSN dated October 22,2013, p.17.
55 TSN dated October 22,2013, p. 19,22.
56 TSN dated October 23,2013, pp. 12-14.
57 TSN dated October 23,2013, pp. 14-15.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

company.58 If the excavated ores of two companies are co-

mingled, the volume of ores excavated can only be determined
on the basis of the evaluation of the DENR personnel in the
area.59

n. The SSMP is issued individually (single company). The OTP can

be issued to two companies which may belong to a single "big"
company. The OTP can only be granted to a company which
also possesses a SSMP.60

o. Prior to 2007, the issuance of OTPs rested with the PENRO and
the Governor. The PMRB only approves the SSMP and informs
the provincial government that a particular company has
applied for an OTP. It was for the technical people to determine
whether the volume of ore to be sent out is adequate. However,
pursuant to the issuances of the DENR, the PMRB now
recommends, through a resolution, to the Governor the
issuance of an OTP.61

p. The OTP presented to him shows that the transporter is the

Platinum Group, and that said OTP covered minerals extracted
using permits of both OMDC and Platinum. 62

q. The SSMP is a permit to extract materials. The mayor issues

the SSMP upon the recommendation of the PMRB.63 The
volume or amount of material extracted is shown on the
production report of the technical people on the ground, i.e.,
personnel of DENR and of the company.64 .A company is
allowed to renew its SSMP even prior to the expiration thereof,
provided that certain qualifications are met. 65

r. The technical people of the DENR consist of Regional Director

Estabillo of the MGB and Mr. Conrado of the DENR-City
Environment and Natural Resources Office (CENRO). Mr.
Conrado is also a member of the PMRB. The Governor then was
accused Reyes.66
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

t. CENR Officer Aldrando, in an endorsement, allowed the PMRB

to do the same (renew application prior to the expiration of the
existing permit).68 The CENR Officer of Narra had a similar
advice based on MAONo. 41.69

u. Section 14 "Term of Permit" of MAO No. 41, allows the

application for renewal prior to expiration of existing permit. 70

v. The PMRB also based their recommendation for the renewal of

OMDC's permit on CENRO, Narra's production report of the
volume of extracted mineral under the existing permit.71

w. The PMRB relies on other government agencies, i.e., Bureau of

Mines and DENR, for technical information.72 The PMRB also
relies on the Bureau of Mines on questions of law. In the
present case, the PMRB heavily relied on the Bureau of Mines'
opinion and advice.73

x. When OMDC applied for the renewal of its permit, it had

exhausted its authority to extract the maximum amount under
its first permit.74

y. The second permit is effective immediately upon its issuance.

Since the volume allowed to be extracted under the first permit
has already been exhausted, the second permit supersedes the
first permit. 75

z. By virtue of the permits granted by the Governor, OMDC was

allowed to extract 200,000 DMT for the period November 2004
(effectivity of SSMP PLW No. 37) up to April 2008 (expiration of
SSMP PLW No. 37.1).76

2. The testimony of Gemma O. Bendanillo, Administrative

Aide II at the Presidential Legal Office of Puerto Princesa,77
Palawan, was dispensed with after the parties stipulated as follows:

a. The certified true copy of the Resolution No. 024-200678 is a

faithful reproduction of the original.

b. Resolution No. 024-2006 contains the following alterat~ (7

68 TSN dated October 23,2013, p. 18.
69 TSN dated October 23, 2013, p. 23.
70 TSN dated October 23,2013, p. 20.
71 TSN dated October 23,2013, p. 23.
72 TSN dated October 23, 2013, pp. 24-25.
73 TSN dated October 23,2013, pp. 18-19,24 & 32.
74 TSN dated October 23,2013, p. 28.
75 TSN dated October 23,2013, pp. 28-31.
76 TSN dated October 23,2013, p. 36.
77 TSN dated February 11,2014, p. 4.
78 Exhibit 1 for accused Reyes and Baguyo.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

i. The date 24 after March in the first sentence or the title

of the Resolution was placed by the witness on the same
date which is March 24; and

11. That the alteration of the name Mark Concepcion

appearing thrice in the original copy of the said
resolution was placed by the same witness on the same
day.

c. The witness certified to the correctness of all the contents of the

Resolution; and,

d. The signatures of Gemma Bendanillo, Atty. Romeo Seratubias,

Mr. Samson Negosa and Mark Concepcion appearing on the
lower portion of the resolution, are the signatures of said
persons and were affixed on the same date, March 24, 2006, as
identified by the witness.79

Accused Baguyo adopted the testimonies of accused Reyes'

witnesses as his own and presented Marianito Dimaandal80 as his
witness.

The testimony of Engr. Marianito Dimaandal, Director of

Malacanang Records Office,81 was dispensed with after the parties
stipulated on the due execution and authenticity of the copy of the
Decision in O.P. Case No. 06-L-433 (DENR Case No. 8253) entitled
In Re: Appeal on the Cancellation of Environmental Compliance
Certificate) Platinum Group Metals Corporation vs. Citinickel Mines
and Development Corporation. 82

Exhibit
Re es Ba
1 1 Certified true copy of the excerpts of the
Minutes of the Regular Meeting of the
Palawan Provincial Mining Regulatory Board
on March 24, 2006, which contain Resolution
No. 024-2006.
Notarized Affidavit of Desistance of
complainant Femando U. Santos dated July
14,2009.
Minutes of the Proceedings/Resolution dated
October 11, 2010 of the Sandiganbayan, Fifth
Division, in Case No. SB-08-CRM-26.

79 Order dated February 11,2014; Record, Vol. II, p. 257.

80 Order dated March 9,2015; Record, Vol. II, p. 369and TSN dated April 23,2015.
81 TSN dated April 23,2015,p. 5.
82 Order dated April 23,2015,p. 1;Record, Vol. II, p. 384.
83 Resolution dated June 19,2015; Record, Vol. III, p. 6.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

7 6 Resolution dated August 17, 2010 of the

Sandiganbayan, First Division, in Case No.
SB-08-CRM-0027.
11 10 ECC No. 4B-218-PA-2140-2004 of OMDC
dated October 22, 2004 (as authenticated by
witness Engr. Ramon Alban in pages 3-11 of
the Transcript of Stenographic Notes dated
February 19,2013).
13 13 Mines Administrative Order No. MRD-41,
Series of 1984 (Rules and Regulations
Governing the Granting of Small Scale Mining
Permits Under Presidential Decree No. 1899),
particularly Sec. 14.
14 to 14-P 11 to 11-P Decision of the Office of the President dated
February 6, 2007 in O.P. Case No. 06-L-433
(DENRCase No. 8253).
15 to 15-K 12 to 12-K Original copy of the Decision of the Office of
the Ombudsman dated August 26, 2014 in
OMB-L-A-06-0642-H.

On rebuttal, the prosecution presented two witnesses:

1) Mervin Nagales;84and, 2) Engr. Elmer R. Crisologo.85

1. The testimony of Mervin Nagales, Community Development

Assistant, Mining Division, Environment and Natural Resources
Office, Palawan,86 was dispensed with after the parties stipulated
that:

b. He brought with him a photocopy of the Operating Agreement

dated July 18, 2003 between Platinum Group and OMDC.87

2. Engr. Elmer R. Crisologo testified as follows:

a. He held the position of Mining Engineer III, MGB, Regional

Office No. IV-B, MIMAROPA.88

b. The Regional Director instructed him to bring, pursuant to a

subpoena issued by the Court, the original copy of the
Operating Agreement between OMDC and Platinum Group
Metal Corporation. His authority to appear before the Court is
embodied in Special Order No. 526 dated November 10, 20 ~ ('?
84 TSN dated September 2,2015.
85 TSN dated November 11,2015.
86 TSN dated September 2,2015, p. 5.
87 Order dated September 2,2015, p. 1; Record, Vol. III, p. 23.
88 TSN dated November 11,2015, p. 5.
89 TSN dated November 11,2015, pp. 5-6.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

c. It is not part of his functions to safe keep and take custody of

the agency's official documents. The Mining Examiners are
responsible for said tasks.9o

d. He is not the custodian of the original Operating Agreement; it

is the Record Section of their Bureau which retains custody of
said document.91

This Court, over the objection of the defense, admitted as

additional evidence for the prosecution the Operating Agreement
between Olympic Mines and Platinum Group Metals Corporation
marked as Exhibits 2 to 2-8.92

Accused Reyes93 and the prosecution94 submitted their

respective memoranda. Accused Baguyo filed a Manifestation95
stating that he was adopting accused Reyes' Memorandum.96

Olympic Mines and Development Corporation (OMDC) was a

grantee of several mining lease contracts in Narra and Espaiiola,
Palawan.97

On July 18, 2003, OMDC and Platinum Group Metals

Corporation (Platinum Group) entered into an Operating Agreement,
effective for 25 years. Under the agreement, OMDC granted
Platinum Group the exclusive privilege to control, possess, manage
or operate, and conduct mining operations within the Toronto
Nickel Mine (768.00 Ha) in the Municipality of Narra; and, Pulot
Nickel Mine (2,176 Ha) in the Municipality of Espanola, covered by
the mining leases of OMDC. OMDC also authorized Platinum
Group to market or dispose minerals and mineral products
obtained from the areas.98

On January 21, 2004, OMDC and Platinum Group separately

filed two (2) applications each for Small Scale Mining Permit (SSM!y

90

91
TSN dated November 11, 2015, pp. 8-9.
TSN dated November 11, 2015, p. 9.
--'
~
I
92 Resolution dated February 5,2016; Record, Vol. III, p. 74.
93 Memorandum dated April 27, 2016; Record, Vol. III, pp. 100-134.
94 Memorandum for the Prosecution dated June 10,2016; Record, Vol. III, pp. 159-180.
95 Dated April 30, 2013; Record, Vol. III, pp. 136-141. _~
96 Resolution dated June 27,2016; Record, Vol. III, p. 186. '" ~
97 Enumerated in DENROrder dated September 25,2006, p.1, as follows: a) PLC-V-544;b) PLC-V-54S;c) PLC-
V-S50; d) MLC-MRD-127;e) MLC-MRD-128;1) MLC-MRD-129;and g) MLC-MRD-130;Exhibit S.
98 Operating Agreement dated July 18, 2003, Exhibits 2 to 2-8 and Olympic Mines Development Corp.
vs. Platinum Group Metals Corporation, 587 SCRA 624, 634.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

with the Provincial Mining Regulatory Board (PMRB). Said

applications were approved by accused Joel T. Reyes, then
Governor of the Province of Palawan. 99 He issued SSMP PLW No. 37
in favor of OMDC covering a 19.800 Ha area in San Isidro, Narra,
Palawan, valid for the period from November 4, 2004 to November
3, 2006. SSMP PLW No. 37 allowed OMDC to extract 50,000 Dry
Metric Tons (DMT) of laterite ore (nickel, chromite, etc.).100 The
SSMPs issued to Platinum Group similarly granted it the privilege
to extract 50,000 DMT of laterite ore, for the same duration (two
years from their issuance), in San Isidro, Narra and in Pulot,
Espanola. 101

On October 22, 2004, DENR issued the corresponding

Environmental Compliance Certificates (ECCs).l2 The ECCs
imposed a limit of 50,000 DMT of nickel ore/mineral to be extracted
per year. 103

Volume
Environmental
SSMP of Duration of
Compliance Applicant Area Date Issued
PLW No. Mineral Permit
Certificate No.
IDMTI
4B-218-PA-2140-2004 37 OMDC
San Isidro, 19.800Ha 50,000 Nov.4,2004 Nov.4, 2004to
Narra Nov.3 2006
4B-220-PA-2140-2004 OMDC Pu1ot, Nov.4, 2004to
38 Espanola 19.800Ha 50,000 Nov.4,2004 Nov.3,2006
4B-219-PA-2140-2004 39 Platinum San Isidro, 50,000
Group Narra
4B-221-PA-2140-2004 40 Platinum Pulot, 50,000
Group Espanola

From May 30, 2005 to April 3, 2006, Platinum Group

transported, for itself and on behalf of OMDC, a total of 203,399.135
DMT of nickel ore extracted under OMDC's SSMP PLW No. 37 and
Platinum Group's SSMP PLW No. 39. Thus:

Permit No.
Ore Small Scale Permittee Period Volume of Ore
Transport Mining Transported
31.01 37 OMDC May30-Jun. 14,2005 5,900.00
39 Platinum Group
31.02 37 OMDC Jun. I-Jun. 15, 2005 41,500.00
39 Platinum Group
31.03 37 OMDC
39 Platinum Group Jun. 2005 34,500.00
31.04 37
39
OMDC
Platinum Group Jul. 25-Aug.4, 2005 8,400.00 /'\,,1 /
99 DENR Order dated September 25, 2006, p. 2, Exhibit S and Officeof the President Order d~ed
A
February 6, 2007, p. 3, Exhibits 14 to14-P-Reyes;SSMPPLWNo.37, Exhibit Q; and SSMPPLWNo.
38, Exhibit Q-2.
100 Exhibit Q
101 DENROrder dated September 25, 2006, p. 2, Exhibit S and Officeof the President Order dated
February 6,2007, p. 3, Exhibit II-B.
102 DENROrder dated September 25, 2006, p. 2; Exhibit S and Officeof the President Order dated
February 6,2007, pp. 3-4, Exhibits 11-Btoll-C.
103 DENROrder dated September 25, 2006, p. 2, Exhibit S; Officeof the President Order dated February
6,2007, p. 3, Exhibit 14-B;and ECCNo.4B-218-PA-2140-2004,p. 1, Exhibit 11.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

31.05 37 OMDC Oct. 7-Oct. 17, 2005 18,200.00

39 Platinum Group
31.06 37 OMDC Jan. ll-Jan. 21, 2006 29,900.00
39 Platinum Group
31.07 37 OMDC Mar. 13-Apr.2, 2006 32,500.00
39 Platinum Group
31.08 37 OMDC Apr.3-May3, 2006 32,499.35
39 Platinum Group
Total: 203,399.135104

On March 10,2006, OMDC filed with the PMRB an application

for the renewal of SSMP PLW No. 37.105 At the time of its
application, OMDC had exhausted the limit of 50,000 DMT under
SSMP PLW No. 37 and 50,000 DMT per year or 100,000 DMT for
two years under ECC No. 4B-218-PA-2140-2004. 106 In its
Resolution No. 024-2006,107 the PMRB through three of its
members who were present, namely Chairperson Atty. Romeo M.
Serratubias, Samson A. Negosa and Mark Concepcion,
unanimously recommended to the then governor, accused Reyes,
the approval of said application for renewal.

On April 6, 2006, accused Reyes issued SSMP PLW No.

37.1,108 valid from April 6, 2006 to April 5, 2008, granting OMDC
the right to extract 50,000 DMT of laterite ore (nickel, chromite,
etc.) per.year within the same area covered by SSMP PLW No. 37.

From June 2, 2006 to July 31, 2006, Platinum Group

transported, on behalf of OMDC and its own behalf, 79,330 DMT of
nickel ore extracted under SSMP PLW No. 37.1 and SSMP PLW No.
39.1.

Permit No.
Ore Small Permittee Period Volume
Transport Scale
Mining
31.09 37.1 OMDC June 2-June 25, 2006 40,200.00
39.1 PlatinumGroup
31.10 37.1 OMDC June 28-July18,2006 665.00
39.1 PlatinumGroup
31.11 37.1 OMDC June 28-July18,2006 350.00
39.1 PlatinumGroup
31.12 37.1 OMDC June 28-July18,2006 700.00
39.1 PlatinumGroup
31.13 37.1 OMDC June 28-July18,2006 665.00
39.1 PlatinumGroup
31.14 37.1 OMDC June 28-July18,2006 350.00
39.1 PlatinumGroup
31.15 37.1 OMDC July 4-July31, 2006 36,400.00
39-1 PlatinumGroup
Total: 79,330.00 109/

104 Exhibits B & X to X-6. ~

105 SSMPPLWNo.37.1, p. 1, ExhibitQ-1.
106 TSNdated February 18,2013, pp. 14-15and TSNdated February 19, 2013, p. 4.
107 Exhibit 1 for accused Reyesand accused Baguyo.
108 ExhibitQ-1
109 ExhibitsC to I
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

In an Order dated September 25, 2006,110 then DENR

Secretary Angelo Reyes, acting on the complaint of Citinickel Mines,
cancelled, among others, OMDC's ECC No. 4B-218-PA-2140 for
SSMP PLWNo. 37, on the ground of over-extraction of minerals. 111

On appeal, the Office of the President (OP)reversed said DENR

Order dated September 25, 2006 and reinstated the cancelled
ECCs. The OP Decision cited three main reasons: First, RA 7076
has repealed the 50,000 DMT cap on ore under P.D. No. 1899;
Second, Condition No.8 in the ECC refers to nickel and not to
nickel ore; and, Third, there is no proof on the amount of nickel
extracted by the Platinum Group; the DENR Secretary's conclusion
that there was over extraction of nickel is speculative because the
extraction of nickel from the nickel ore and its laboratory analysis
require technical expertise that the Philippine Ports Authority does
not have. 112

Betty C. Ignacio, during her incumbency as Punong Barangay

of San Isidro, Bato-bato, Narra, Palawan from 2002-2012, saw
dump trucks, bulldozers, pay loaders and a back hoe at the mining
site in Narra, Palawan.113

Accused Joel T. Reyes and Andronico J. Baguyo are accused of

giving unwarranted benefits, preference and advantage to OMDC by
granting its application for renewal of SSMP PLW No. 37 and
issuing SSMP PLW No. 37.1 valid for the period April 6, 2006 to
April 5, 2008:

a. Despite the fact that SSMP PLW No. 37, remains valid until
November 3, 2006, thereby allowing OMDCto mine and extract
ore in excess of the allowable limit; and,

b. Despite OMDC's violations of the conditions of its ECC under

SSMP PLW No. 37 when it (1) over-extracte ore and (2) used
heavy equipment in its mining operations. 114

110 Exhibit S
111 DENR Order dated September 25,2006, p. 4,Exhibit S.
112 Office of the President Order dated February 6,2007, pp. 11-13,
Exhibits 14-Jto 14-L.
113 TSN dated October 16,2012, pp. 13-14.
114 Information dated May 28,2004; Record, Vol. I, pp. 1-3.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

Accused Reyes contends that no criminal intent or negligence

can be attributed to him since he signed and approved SSMP PLW
No. 37.1 on the basis of the recommendation of the PMRB, and, the
confirmation by the DENR and the Provincial Environment and
Natural Resources Office (PENRO). He claims that his reliance on
the foregoing agencies' favorable recommendation negates manifest
partiality, evident. bad faith or gross inexcusable negligence in the
performance of his duties. 115

Accused Reyes also contends that the prosecution failed to

establish the alleged over-extraction by OMDC since: (1) the Ore
Transport Permits only prove transport, not extraction of minerals;
and, (2) the OTPs presented by the prosecution refer to the co-
mingled or combined volume of ore extracted under the SSMPs in
the name of OMDC and Platinum Group.116

Section 3(e), Republic Act No. 3019 reads:

Section 3. Corrupt practices of public officers. In addition to

acts or omissions of public officers already penalized by existing
law, the following shall constitute corrupt practices of any public
officer and are hereby declared to be unlawful:

(e) Causing any undue' injury to any party, including

the Government, or giving any private party any unwarranted
benefits, advantage or preference in the discharge of his
official administrative or judicial functions through manifest
partiality, evident bad faith or gross inexcusable negligence.
This provision shall apply to officers and employees of offices
or government corporations charged with the grant of licenses
or permits or other concessions.

2. The act was done in the discharge of the public officer's

official, administrative or judicial functions;

a:tt' (J ~
3. The act was done through manifest p.~~Jty,
faith, or gross inexcusable negligence;
evident bad

115 Memorandum
foraccusedReyesdatedApril27,2016,pp.13-16,Record,
Vol.Ill, pp.112-115.
116 Memorandum
foraccused
ReyesdatedApri127,2016,pp.19,23-24;
Record,
Vol.III, pp.118,122-123.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

4. The public officer caused any undue injury to any party,

including the Government, or gave any unwarranted
benefits, advantage or preference.117

All the elements are present as to accused Joel T. Reyes.

The offender is a public officer

The parties stipulated during pre-trial that "(A)ccused Joel T.

Reyes occupied the position of Governor of Palawan at the time
material in this case."118

The act was done in the discharge of the public officer's official,
administrative or judicial functions

DENR A.a. No. 96-40 dated December 19, 1996,119expressly

authorizes Local Government Units to approve applications for
small-scale mining, viz:

Subject to Section 8 of the Act and pursuant to the Local

Government Code and other pertinent laws, the Local
Government Units (LGUs) shall have the following roles in
mining projects within their respective jurisdictions:

b. In coordination with the Bureau/Regional Office(s)

and subject to valid and existing mining rights, to
approve applications for small scale mining, sand and
gravel, quarry, guano, gemstone gathering and
gratuitous permits and for industrial sand and gravel
permits not exceeding five (5) hectares;

Accused Reyes' issuance of SSMP PLW No. 37.1 was done in I

the performance of his official functions as Chief Executive of t~ /J

117

118
Zapanta vs. People, 757SeRA 172,189[20151.
Pre-Trial Order dated June 21,2012,
p. 1,Record, Vol. I, p. 377.
r..l J I/
119 Revised Implementing Rules and Regulations of Republic Act No. 7942, otherwise known as the
Philippine Mining Act of 1 995
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

Province of Palawan. Accused Reyes admits that he approved and

issued SSMP PLW No. 37 and SSMP PLW No. 37.1 in his capacity
as Governor of Palawan.120

The act was done through manifest partiality, evident bad faith, or
gross inexcusable negligence

In Albert us. Sandiganbayan,121 the Supreme Court explained

the three modes, i.e., manifest partiality, evident bad faith and
gross inexcusable negligence, through which violation of Section
3(e), R.A. No. 3019 may be committed:

The second element provides the different modes by which

the crime may be committed, that is, through "manifest partiality,"
"evident bad faith," or "gross inexcusable negligence." In Uriarte v.
People, this Court explained that Section 3(e) of RA 3019 may be
committed either by dolo, as when the accused acted with evident
bad faith or manifest partiality, or by culpa, as when the accused
committed gross inexcusable negligence. There is "manifest
partiality" when there is a clear, notorious, or plain inclination or
predilection to favor one side or person rather than another.
"Evident bad faith" connotes not only bad judgment but also
palpably and patently fraudulent and dishonest purpose to do
moral obliquity or conscious wrongdoing for some perverse motive
or ill will. "Evident bad faith" contemplates a state of mind
affirmatively operating with furtive design or with some motive or
self-interest or ill will or for ulterior purposes. "Gross inexcusable
negligence" refers to negligence characterized by the want of even
the slightest 'care, acting or omitting to act in a situation where
there is a duty to act, not inadvertently but willfully and
intentionally, with conscious indifference to consequence's insofar
as other persons may be affected. 122

Proof of any of the three modes IS sufficient to sustain a

conviction. 123

Here, accused is charged for the issuance of SSMP PLW No.

37.1 in favor of OMDCunder the following circumstances:

1. Before the expiration of SSMP PLW No. 37, thus

allowing OMDC to over-extract are; ~ ~~

120 Memorandum for accused Reyes dated April 27, 2016, pp. 16-17, Record, Vol. III, pp. 115-116.
121 580 SCRA279 [2009].
122 At p. 290.
123 Sison vs. People, 614 SCRA670,679 [2010J.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

2. Despite OMDC's violations of the terms of SSMP PLW

No. 37, i.e., over-extraction and use of heavy equipment.

Manifest Partiality

The records do not show that the approval of the application

for renewal of SSMP PLW No. 37 before its expiration and despite
the alleged violations of the terms of said SSMP was exclusively
granted in favor of or to favor OMDC, and not other applicants.
Hence, manifest partiality is not present.

Evident bad faith on the part of accused Reyes when he issued

SSMP PLW No. 37.1 during the validity of SSMP PLW No. 37 was
likewise not established.

Presidential Decree No. 1899 and Mines Administrative Order

No. MRD-41, Series of 1984,124the laws applicable at the time of
the issuance of SSMP PLW No. 37.1, did not expressly prohibit the
renewal of the SSMP prior to its expiration. But MAONo. MRD-41,
Series of 1984 clearly required the application for renewal prior to
the expiration of the SSMP. Notably, P.D. No. 1899 and MAO No.
MRD-41 did not specifY the periods to grant the application for
renewal of anSSMP. The relevant provisions of the law and its IRR
read:

SECTION 2. The holders of mmmg rights meeting the

conditions of the preceding section may apply at any time as small-
scale mining permittee/licensee, provided they are holders of valid
and existing mining rights, who have subsequently complied with
existing mining laws, rules and regulations before the
promulgation of this Decree. A permit or license issued for this
purpose shall be valid for two (2) years renewable for another like
period.

SECTION 14. Term of Permit - The term of this permit shall

be for a period of two (2) years from the issuance thereof,
renewable onl once for a like eriod u on com liance with th

124 Rules and Regulations Governing the Granting of Small Scale Mining Permits Under Presidenti
No. 1899. Emphasis and underscoring supplied.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

terms and conditions of the permit, and upon filing of the

application before the expiry thereof. Provided, That in case of
new areas not covered by existing reservation, the permittee shall
within a period of two (2) years from the grant of the permit have
the option to locate the same and its immediate vicinity not
exceeding one meridional block under Presidential Decree No. 463,
as amended; Provided, Further, That upon expiration of permits, or
its renewal, if any, covering valid and existing mining claims the
provisions of Presidential Decree No. 463, as amended, and its
implementing Rules and regulations shall thereafter be
reinforced. 125

The prosecution presented DENR Memorandum Circular No.

2007 -07 or the Clarificatoru Guidelines in the Implementation of the
Small-Scale Mining Laws to establish that it is prohibited to renew
an SSMP before its expiration. Indeed, said Clarificatory Guidelines
expressly and specifically provided that no SSMP shall be renewed
unless its two (2)-year term is fully consumed.126 However, said
Clarificatory Guidelines was issued on July 5,2007, after the fact.

An erroneous interpretation of a provision of law, absent any

showing of some dishonest or wrongful purpose, does not constitute
and does not necessarily amount to bad faith.127

Hence, accused Reyes cannot be said to have intentionally

violated the same and to have acted with evident bad faith when he
issued SSMP PLWNo. 37.1 despite the fact that SSMP PLWNo. 37
is still valid and despite the alleged violation of the terms of SSMP
PLWNo. 37.

Gross Inexcusable Negligence

In Jaca us. People,128 the Supreme Court emphasized that

gross inexcusable negligence takes place when breach of duty by a
public official is flagrant and devious. The Supreme Court added
that neglect or disregard of duty must be willful and intentional in
order for a violation to exist, ~ ~

~
125 Underscoring and emphasis supplied.
126 III. Term of a Small-Scale Mining Permit or Contract
The two (2)-year term of an SSMP is renewable only once; Provided, That the pertinent
application shall be filed prior to the expiration thereof, among other requirements. No
SSMP shall be renewed unless the two (21-yearterm is fully consumed. xxx
127 Ysidoro vs. Leonardo-De Castro, 665 SCRA 1,19 [2012].
128 689 SCRA270 [2013].
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

Gross inexcusable negligence is negligence characterized by

the want of even slight care; acting or omitting to act in a situation
where there is a duty to act, not inadvertently but willfully and
intentionally, with a conscious indifference to consequences in so
far as other persons may be affected. It is the omission of that care
which even inattentive and thoughtless men never fail to take on
their own property; in cases involving public officials, it takes place
only when breach of duty is flagrant and devious.

Considering the countless scenarios that may fall under the

provisions of Section 3 of RA No. 3019, particularly paragraph e,
and the avowed purpose of the law to repress certain acts of public
officers constituting graft or corrupt practices or leading
thereto, the law considers the gravity of the bad faith (or partiality)
or negligent act or omission as a mode to commit the violation of
Section 3(e) of RA No. 3019. In requiring the negligence to be both
gross and inexcusable, the law demands the neglect or disregard of
duty to be willful and intentional in order for a violation to exist,
although it may fall short of the required degree of bad faith, which
must be evident, or of partiality, which must be manifest. 129

Accused Reyes acted with gross inexcusable negligence when

he renewed SSMP PLW No. 37.1 during the validity of SSMP PLW
No. 37, thereby allowing OPMC to extract ore beyond the limits
allowed by law.

P.D. No. 1899 limits the annual production of small scale

mines to 50,000 DMTof ore, viz:

Section 1. Small-scale mining refers to any single unit

mining operation having an annual production of not more than
50,000 metric tons of ore and satisfying the followingrequisites:

1. The working is artisanal, whether open cast or shallow

underground mining, without the use of sophisticated
mining equipment;

2. Minimal investment on infrastructures and processing

plant;

4. Owned, managed or controlled by an individual or

entity qualified under existing mining laws, rules and
regulatiO~ (J

kb
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

The Supreme Court in SR Metals, Inc. et al. us. Reues,130

clarified that the 50,000 DMT limit provided under P.D. No. 1866
was not repealed by R.A. No. 7076. The Supreme Court explained
that the annual production limit of 50,000 DMT imposed upon
SSMPs issued under P.D. No. 1899 and R.A. No. 7076 includes
other materials lumped with the sought-after mineral; the law refers
to ore in its unprocessed form, that is, before the valuable mineral
is separated from the ore itself, uiz:

MAO No MRD-41 specifies measuring the 'run-of-mine ore,'

meaning the ore as it emerges from the mine, i.e., before treatment.
As explained by the DENR-MGBDirector, the ore is weighed only
in DMT, excluding the water or moisture content. Simply stated,
included in the measurement are other materials lumped with the
sought-after mineral.

This definition is congruent with RA 7942 or The Philippine

Mining Act of 1995. Said law defines "ore" as "naturally occurring
substance or material from which a mineral or element can be
mined and/ or processed for profit." Clearly, the law refers to ore in
its unprocessed form, i.e., before the valuable mineral is separated
from the ore itself.

Also in Section V of the earlier mentioned DMC-2007-07, the

DENR clarified the 50,000-MT limit by differentiating the
measurement of metallic minerals from nonmetallic ones.
Noticeably, the metallic minerals are conservatively measured
compared to nonmetallic or industrial minerals for a reason.
Compared to metallic minerals, nonmetals are easily available
when mined in their raw/natural state, like limestone. As
nonmetallics are produced from natural aggregates, the production
limit of 50,000 DMTs will be easily met. On the other hand,
metallic minerals, like Ni-Co are not easily available in their pure
form since they are sourced from ores which are mined. To extract
these metals of economic value, the gangue lumped with them
have to be removed by metallurgy. And in order to produce a ton of
a metallic mineral sought for, big volumes of gangue will have to be
removed. xxx131

The caps were set in the Mining Laws to ensure the

sustainable use of our natural resources. The role of the LGU,
through its Chief Executive, is to safeguard and conserve our
natural resources. Section 465 of the LGC ProVi)uY' /7
130 724 seRA 535 [2014].
131 At pp. 549-550.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

Section 465. The Chief Executive: Powers, Duties,

Functions, and Compensation.

(b) For efficient, effective and economical governance

the purpose of which is the general welfare of the province
and its inhabitants pursuant to Section 16 of this Code, the
provincial governor shall:

(3) Initiate and maximize the generation of

resources and revenues, and apply the same to the
implementation of development plans, program
objectives, and priorities as provided for under Section
18 of this Code, particularly those resources and
revenues programmed for agro-industrial development
and industrial development and countrywide growth
and progress and, relative thereto, shall:

(iv) Issue licenses and permits and suspend

or revoke the same for any violation of the
conditions upon which said licenses or permits
had been issued, pursuant to law or ordinance;

(v) Adopt adequate measures to safeguard

and conserve land, mineral, marine. forest and
other resources of the province, in coordination
with the mayors of component cities and
municipalities; provide efficient and effective
property and supply management in the
province; and protect the funds, credits, rights
and other properties of the province;

A.O. No. 30, June 30, 1992, or the Guidelines for the Transfer
and Implementation of DENR Functions Devolved to the Local
Government Units, mandates LGUs to share with the national
government, particularly the DENR, the responsibility in the
sustainable management and development of the environment and
natural resources within their territorial jurisdiction, viz:

Sec. 1 Policies Governing the Devolution of Functions -

The transfer and implementation of certain DENR functions

Code, begovernedb:e f:Wi;Jie(7

devolved to the LGUs, as enumerated under Section 17 of the
shall

~
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

1.2 The LGUs shall share with the national

government, particularly the DENR the responsibility
in the sustainable management and development of
the environment and natural resources within their
territorial jurisdiction;

Both SSMP PLW No. 37 and ECC No. 4B-218-PA-2140-2004

reflect the cap set forth in P.D. No. 1899, i.e., the extraction of ore
at 50,000 DMT for SSMP PLW No. 37 and 50,000 DMT per year for
the lifetime of the permit for ECC No.4 B-218- PA-2140-2004.132

Here, by renewing the SSMP before the expiration of the SSMP

PLW No. 37, accused Reyes allowed OMDC to extract nickel ore
after it has exhausted its privilege for the period. It allowed OMDC,
through Platinum Group, to do an act which OMDC otherwise
would have been unquestionably prohibited from doing so. The
evidence supports a conclusion that OMDC has exhausted the
limits allowed by law, and that OMDC extracted nickel ore soon
after SSMP PLW No. 37.1 was issued.

First, PMRB member Samson Negosa testified that OMDC had

exhausted the limits set by SSMP PLW No. 37 when it applied for a
renewal. 133

Second, the OTPs No. 31.01 to 31.08 show that the Platinum
Group was able to transport a total of 203,399.135 DMT of nickel
ore for the period May 30, 2005 to April 3, 2006, for itself and on
behalf of OMDC, under ODMC's SSMP PLW No. 37 and its own
SSMP PLW No. 39.134 This is 103,399.135 DMT in excess of the
total volume allowed for the two entities under their SSMP PLW
Nos. 37 and 39, or 3,399.135 DMT under their respective ECCs,
and under the law.

Third, OTP No. 31.09 to 31.15 show that Platinum Group was
able to transport a total of 79,330 DMT nickel ore for the period
June 2, 2006 to July 31, 2006,135 for itself and on behalf of OMDC,
under SSMP PLW No. 37.1 and SSMP PLW No. 39.1. Since OMDC
and the Platinum Group had already exhausted the maximum
allowable volume of nickel ore under SSMP PLW Nos. 37 and 39,
all of the extractions under its new permit, i.e., SSMP PLW No. 37.

132 Paragraph
1ofSSMP PLW No.37andParagraph
8ofECC
No.4B-218-PA-2140-2004.
133 TSNdatedOctober 23,2013,p. 32.
134 Exhibits
X, X-I toX-6, andB.
135 Exhibits
C,D, E,F, G, H andI.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

is considered in excess of the 50,000 DMT cap on nickel ore per

annum.

Accused Reyes cannot feign ignorance of the exhaustion of its

privilege by OMDC. He was the signatoJ:Y of all the OTPs of
Platinum Group that transported the nickel ore on behalf of OMDC
and Platinum Group. As Governor of Palawan, his authority to
approve small mining permits calls for the dual role of allowing the
exploration and exploitation of, and conserving and preserving the
natural resources within the provinces' territorial jurisdiction. He
chose to intentionally and willfully ignore his responsibilities and
conveniently relied only on the recommendation of the PMRB.

Accused Reyes also acted with gross inexcusable negligence

when he renewed SSMP PLW No. 37 despite ODMC's violations of
the terms of said small scale mining permit. In Sison us. People,136
the Supreme Court found the accused mayor guilty of gross
negligence under Section 3(e), R.A. No. 3019 when he did not follow
the requirements set by law on the proper manner of procurement
of goods. The Supreme Court held:

xxx Petitioner also admitted that he knew the provisions of

RA7160 on personal canvass but he did not followthe law because
he was merely following the practice of his predecessors. This was
an admission of a mindless disregard for the law in a tradition of
illegality. This is totally unacceptable, considering that as
municipal mayor, petitioner ought to implement the law to the
letter. As local chief executive, he should have been the first to
followthe law and see to it that it was followedby his constituency.
Sadly, however, he was the first to break it. 137

MAO No. MRD-41, Series of 1984, sets as a condition

precedent to the approval of renewal, the applicant's compliance
with the terms and conditions of the permit, uiz:

SECTION 14. Term of Permit - The term of this permit shall

be for a period of two (2) years from the issuance thereof,
renewable only once for a like period upon compliance with the
terms and conditions of the permit, and upon filing of the
application before the expiry thereof. xxx

Hence, the Local Chief Executive must ensure that the terms
and conditions of the permit were complied with. Inde~(J.

136 Supra /0 ~,
137 At p. 680.

ft
Decision
People vs. Reyes, et al.
Criminal Case No. SB-ll-CRM-0088
x---------------------------------------x

Paragraph 10 of SSMP PLW No. 37138 informs the grantee that its
mining operations shall be subject to close monitoring by the Office
of the Governor to ensure compliance with the provisions of P.D.
No. 1899 and its IRR. Accused Reyes cannot rely on the PMRB's
recommendation to negate his liability. Noticeably, the PMRB
Resolution, presented to this Court sans any supporting
documents, was silent on OMDC's compliance with the terms and
conditions of SSMP PLW No. 37. The first whereas clause of the
resolution reads:

WHEREAS, the PMRB, after a thorough evaluation of the

folder/ carpeta of applicant Olympic Mines and Development
Corporation noted all of the pertinent requirements for the
issuance of the permit such as ECC, PCSD Clearance, payments of
the required fees, performance bond, etc.

Had accused Reyes looked beyond the Resolution, he would

have easily gathered information that OMDC violated the terms of
SSMP PLW No. 37 by over-extraction of ore and, as will be
discussed later, by using heavy equipment in its operations.

Such failure by accused Reyes to comply with the

requirements of the law amounts to gross inexcusable negligence.

Accused Reyes also acted with gross negligence when he

issued SSMP PLW No. 37.1 despite OMDC's violations of the terms
of SSMP PLW No. 37 when it, through its agent Platinum Group,
used heavy equipment in its operations.

SSMP PLW No. 37 requires strict compliance with the

provisions of the Decree on Small Scale Mining (PD 1899) and its
implementing rules and regulations,139 while ECC No. 4B-218-PA-
2140-2004 expressly limits the validity of the ECC "ONLY for the
Small-Scale Nickel Mining ... "140 Small scale mining by its definition
does not allow the use of sophisticated mining equipment.141

The prosecution established, through the testimony of Betty

Ignacio, the Punonq Baranqau of San Isidro, Narra, Palawan from
2002 to 2012, the use by OMDC of heavy equipment. Ms. Ign~

138 10.Theminingoperation ofthepermittee pursuanttothispermitshallbe subjecttoclose V /)

monitoringbythisOfficewithoutpriornoticepurposely to determinewhetheror notthe / /
permittee
is strictlycomplying
withtheprovisionsoftheDecreeonSmallScaleMining(PO
1899)anditsimplementing rulesandregulations.
139 Paragraph10,SSMP PLWNo.37.
140 Paragraph2, ECC No.4B-218-PA-2140-2004.
141 See Section1 ofMAO No.MRD-41, Seriesof1984.
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

testified that she saw dump trucks, bulldozers, pay loaders and a
back hoe at the mining site in their barangay.142

OMDC and Platinum Group were granted SSMPs to conduct

small mining operations in Brgy. San Isidro, Narra, Palawan.
Platinum Group, by virtue of their Operations Agreement, is
considered an agent of OMDC for the purpose of extracting and
transporting minerals and mineral resources under OMDC's
licenses. OMDC was granted the right over 19.800 hectares in
Brgy. San Isidro. Platinum Group was also granted mining rights
within the same barangay. The heavy equipment were being used
in the mining sites within the barangay.

It may be argued that the statements of Ignacio do not rule out

the possibility that said heavy equipment were being utilized by
other mining companies operating in Brgy. San Isidro, Narra,
Palawan. However, the records do not show that there are other
mining companies operating within the barangay. Accused Reyes
did not present any evidence that there are other mining companies
operating within the barangay. Proof beyond reasonable doubt in
criminal law does not mean such a degree of proof as to exclude the
possibility of error and produce absolute certainty. Only moral
certainty is required or that degree of proof which produces
conviction in an unprejudiced mind. 143

Giving any private party unwarranted benefits, advantage or

preference

The word "unwarranted" means lacking adequate or official

support; unjustified; unauthorized or without justification or
adequate reason. "Advantage" means a more favorable or improved
position or condition; benefit, profit or gain of any kind; benefit from
some course of action. "Preference" signifies priority or higher
evaluation or desirability; choice or estimation above another.144

Here, accused Reyes gave OMDCunwarranted benefit when he

renewed SSMP PLW No. 37, thereby allowing OMDC to extract
nickel ore beyond the limits allowed by law for the period. Accused
Reyes also gave unwarranted benefit to OMDC when, instead of
imposing sanctions for its violation of the terms of SSMP PLW NuO.
37, and of the provisions of P.D. 1899 and MAO No. MRD-41, he

142

143

144
TSN dated October 16,2012, p. 13.
People vs. Marlon Manson, G.R. No. 215341,
Rivera vs. People, 743SeRA 476,498
November
[20141.
28,2016. y;
Decision
People vs. Reyes, et al.
Criminal Case No. SB-11-CRM-0088
x---------------------------------------x

renewed OMDC's SSMP PLW No. 37 and issued SSMP PLW No.
37.1.

Causing any undue injury to any party, including the Government

In Llorente us. Sandiganbauan,145 the Supreme Court said that

undue injury is consistently interpreted as "actual damage"; akin to
that in civil law. The Court explained, "rUlndue has been defined as
"more than necessary, not proper, rorl illegal;" and injury as "any
wrong or damage done to another, either in his person, rights,
reputation or property r; that is, thel invasion of any legally
protected interest of another." Actual damage, in the context of
these definitions, is akin to that in civil law."

Accused Reyes' approval of SSMP PLW No. 37.1 in favor of

OMDC while a prior existing permit was still valid caused undue
injury to the Government of Palawan. Under said permit, OMDC
was able to extract nickel ore exceeding the allowable 50,000 DMT
per annum or 100,000 DMT for the two-year life of the SSMP under
PD 1899.

That the accused is a public official.

The parties stipulated during pre-trial that "accused

Andronico J. Baguyo was the Mining Operations Officer IV of the
Provincial Environment and Natural Resources Office and Head of
the Provincial Mining Regulatory Board (PMRB) Technical
Secretariat at the time material in this case."146

That the acts were committed In the performance of his

administrative or judicial functions.

That the acts were done with manifest partiality, evident bad faith
or gross inexcusable negligence.

The evidence shows that accused Baguyo was a Mining

Operations Officer IV and Head of the Provincial Mining Regul7taory

145

'"
287 seRA 382,399 [19981.
p,,-Trial Oedee dated June 21,2012, pp. 1-2; Recoed, VoL 1, pp. 377-378. ~ r
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

Board Technical Secretariat at the Provincial Environment and

Natural Resources Officeduring the time relevant to this case.

The evidence does not indicate the functions of a Mining

Operations Officer IV.

There is nothing in the testimony of the witnesses that would

indicate or even hint of accused Baguyo's participation in the
processing and approval of SSMP PLWNo. 37.1.

The Court scoured through the records but saw no evidence,

other than the Ombudsman Decision, that would show that the
matter was referred to the Technical Secretariat, or of the reports
duly signed by accused Baguyo as head of the Technical Secretariat
to the PMRB or to the Governor. Accused Baguyo's name and
signature appeared on SSMP PLWNo. 37.1, presented as Exhibit Q-
1. However, his name and signature thereon appears above the
words "Certified Machine Copy." There is no indication that he
participated in the preparation and issuance of the SSMP.

The only document that shows the participation of accused

Baguyo is the Decision dated August 16, 2014 of the Office of the
Ombudsman in Case No. OMB-L-A-06-0642-H. Contained therein
are the summaries of the arguments of the respondents, among
which are: a) the allegation of accused Reyes that "per Report of
August 22, 2006 of respondent Baguyo, the aggregate 'volume
shipped and loaded for the original permits was within the allowable
volume for which reason he granted the application for the renewal
of the SSMPs;" and b) Baguyo's admission in his Counter-Affidavit
dated June 8, 2012 that "he was the one responsible for'accepting,
verifying and processing permit applications for small scale mining
including sand and gravel and other quarry permit applications
before the Provincial Mining Division prior to the issuance of a
permit, he being the Mining Operations IV and the Acting Technical
Secretariat Head of the PMRB."147 However, the documents
supporting said summaries were not offered in evidence. The
Decision of the Ombudsman does not bind this Court and cannot
be considered as evidence against accused Baguyo. Ultimately, it is
the Courts that pass judgement on the accused,148 on t e basis of
its own assessment of the evidence presented before it.

147 Exhibit 15-F to 15-G for accused Reyes and Exhibit 12-F
to 12-G
for accused Baguyo.
148 Bautista VS. Court of Appeals, 360 SCRA 618,623 [2001].
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

Clearly, the prosecution failed to show that accused Baguyo

committed an overt act in relation to the issuance of SSMP PLWNo.
37.1.

Without proof of any overt act on his part, the Court cannot
conclude that accused Baguyo acted with manifest partiality,
evident bad faith, and/ or gross negligence in the performance of his
functions as the Head of the Technical Secretariat of the PMRB.

Having found that there is no proof of the action taken by

accused Bugayo, there is no need to discuss the 4th element of the
cnme.

To hold an accused guilty of conspiracy, he must have

participated in the transaction with a view to the furtherance of the
common design and purpose; he must be shown to have performed
an overt act in pursuance or furtherance of the complicity. The
Supreme Court ruled:

xxx in order to hold an accused guilty as a co-principal by

reason of conspiracy, h~ must be shown to have performed an
overt act in pursuance or furtherance of the complicity.
Conspiracy can be inferred from, and established by, the acts of
the accused themselves when said acts point to a joint purpose
and design, concerted action and community of interests. What is
determinative is proof establishing that the accused were animated
by one and the same purpose. There must be intentional
participation in the transaction with a view to the furtherance of
the common design and purpose. Conspiracy must, like the crime
itself, be proven beyond reasonable doubt for it is a facile device by
which an accused may be ensnared and kept within the penal fold.
Suppositions based on mere presumptions and not on solid facts
do not constitute proof beyond reasonable doubt. 149

As above discussed, the prosecution did not present any

evidence to establish accused Baguyo's participation in the
processing and approval of SSMP PLWNo. 37.1. Without proof of
any overt act on the part of accused Baguyo, the Court cannot
conclude that he and accused Re~_ es a ted in conspiracy. Accused
I

Baguyo's acquittal is, thus, in order.

/?
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Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

WHEREFORE, accused JOEL TOLENTINOREYES is found

GUILTY beyond reasonable doubt of violation of Section 3(e) of
Republic Act No. 3019, and is sentenced to an indeterminate
penalty of imprisonment of six (6) years and one (1) month, as
minimum, to eight (8) years, as maximum, with perpetual
disqualification from holding public office.

Accused ANDRONICOJARA BAGUYOis ACQUITTED of the

crime charged for failure of the prosecution to establish his guilt
beyond reasonable doubt.

JANE T. FE ANDEZ
Associate Justice
Decision
People vs. Reyes, et al.
Criminal Case No. SB-II-CRM-0088
x---------------------------------------x

I attest 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.

Pursuant to Article VIII, Section 13, of the Constitution, and

the Division Chairperson's Attestation, it is here by 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.