LALICAN v. HON. VERGARA, et al.

G.R. No. 155634, April 27, 2000

FACTS

Lalican was charged with violating Section 68 of PD 705 for possessing without lawful authority of permit, 1,800
board feet of assorted species and dimensions of LUMBER on 2 passenger jeeps with a value of P14,000. Lalican
claimed that the law is vague and standardless as it does not specify the authority or the legal documents
required by existing forest laws and regulations. Hence, the information should be quashed as it violated his
constitutional rights to due process and equal protection of the law.

ISSUE

whether a charge of illegal possession of lumber is excluded from the crime of illegal possession of timber as
defined in Sec. 68 of Presidential Decree No. 705 to warrant the quashal of an information charging the former
offense or a nonexistent crime.
RULING

No, to exclude possession of lumber from the acts penalized in Sec. 68 would certainly emasculate the law itself.
A law should not be so construed as to allow the doing of an act which is prohibited by law, nor so interpreted as to
afford an opportunity to defeat compliance with its terms, create an inconsistency, or contravene the plain words
of the law. The phrase forest products is broad enough to encompass lumber which, to reiterate, is manufactured
timber.

G.R. No. 79732 November 8, 1993

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, HENRICO UVERO, ET AL., respondents.

The Solicitor General for petitioner.

Raymundo T. Nagrampa for private respondents.

VITUG, J.:

The Republic of the Philippines has sought the expropriation of certain portions of land owned by the private respondents for the widening and
concreting of the Nabua-Bato-Agos Section, Philippine-Japan Highway Loan (PJHL) road. While the right of the Republic is not now disputed,
the private respondents, however, demand that the just compensation for the property should be based on fair market value and not that set by
Presidential Decree No. 76, as amended, which fixes payment on the basis of the assessment by the assessor or the declared valuation by the
owner, whichever is lower. The Regional, Trial Court ruled for the private respondents. When elevated to it, the Court of Appeals affirmed the
trial court's decision.

Hence, the instant petition by the Republic.

In Export Processing Zone Authority ("EPZA") vs. Dulay, etc. et al., 1 this Court held the determination of just compensation in eminent domain to be a
judicial function and it thereby declared Presidential Decree No. 76, as well as related decrees, including Presidential Decree No. 1533, to the contrary extent,
as unconstitutional and as an impermissible encroachment of judicial prerogatives. The ruling, now conceded by the Republic was reiterated in subsequent
cases. 2

The petition for review, despite the aforesaid pronouncement by this Court, has been given due course upon the pleas of the Solicitor General to
have us address the following concerns:

EFFECT OF JUDICIAL DECLARATION OF PD 1533 AS UNCONSTITUTIONAL AND VOID; UP TO WHEN RETROACTIVELY;

EFFECT ON A PENDING APPEALED CASE WHERE CONSTITUTIONALITY OF PD 1533 NOT ASSAILED BEFORE COURT A QUO.

II
WHETHER OR NOT THE DECISION OF THIS HONORABLE COURT IN EPZA VS. HON. DULAY, ETC., ET AL. (G.R. NO. 59603, APRIL
29, 1987) DECLARING PD 1533 UNCONSTITUTIONAL AND VOID, BE APPLIED IN THIS CASE.

III

WHETHER OR NOT VALUATION OF LAND SOUGHT FOR EXPROPRIATION AS APPEARING ON THE TAX DECLARATION BE
USED AS PRELIMINARY BASIS FOR THE TEN PER CENT (10%) DEPOSIT REQUIRED UNDER RULE 67 OF THE REVISED RULES
OF COURT, AS AMENDED BEFORE PLAINTIFF IS PERMITTED ENTRY THEREON.

The last item is not an issue; being merely provisional in character, the matter has not been questioned by the private respondents. 3 We will thus
limit ourselves to the first two issues which, in turn, really boil down to whether the declaration of nullity of the law in question should have prospective, not
retroactive, application. The petitioner proposes the affirmative.

Instruction is the brief treatise made by Mr. Justice Isagani A. Cruz, whose words we quote

There are two views on the effects of a declaration of the unconstitutionality of a statute.

The first is the orthodox view. Under this rule, as announced in Norton v. Shelby, an unconstitutional act is not a law; it confers no right; it
imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, inoperative, as if it had not been passed. It is
therefore stricken from the statute books and considered never to have existed at all. Not only the parties but all persons are bound by the
declaration of unconstitutionality, which means that no one may thereafter invoke it nor may the courts be permitted to apply it in subsequent
cases. It is, in other words, a total nullity.

The second or modern view is less stringent. Under this view, the court in passing upon the question of constitutionality does not annul or repeal
the statute if it finds it in conflict with the Constitution. It simply refuses to recognize it and determines the rights of the parties just as if such
statute had no existence. The court may give its reasons for ignoring or disregarding the law, but the decision affects the parties only and there is
no judgment against the statute. The opinion or reasons of the court may operate as a precedent for the determination of other similar cases, but it
does not strike the statute from the statute books; it does not repeal, supersede, revoke, or annul the statute. The parties to the suit are concluded
by the judgment, but no one else is bound.

The orthodox view is expressed in Article 7 of the Civil Code, providing that "when the courts declare a law to be inconsistent with the
Constitution, the former shall be void and the latter shall govern. . . . 4

The strict view considers a legislative enactment which is declared unconstitutional as being, for all legal intents and purposes, a total nullity,
and it is deemed as if had never existed. Here, of course, we refer to the law itself being per se repugnant to the Constitution. It is not always the
case, however, that a law is constitutionally faulty per se. Thus, it may well be valid in its general import. but invalid in its application to certain
factual situations. To exemplify, an otherwise valid law may be held unconstitutional only insofar as it is allowed to operate retrospectively such
as, in pertinent cases, when it vitiates contractually vested rights. To that extent, its retroactive application may be so declared invalid as
impairing the obligations of contracts. 5

A judicial declaration of invalidity, it is also true, may not necessarily obliterate all the effects and consequences of a void act occurring prior to
such a declaration. Thus, in our decisions on the moratorium laws, 6 we have been constrained to recognize the interim effects of said laws prior to their
declaration of unconstitutionality, but there we have likewise been unable to simply ignore strong considerations of equity and fair play. So also, even as a
practical matter, a situation that may aptly be described as fait accompli may no longer be open for further inquiry, let alone to be unsettled by a subsequent
declaration of nullity of a governing statute.

The instant controversy, however, is too far distant away from any of the above exceptional cases. To this day, the controversy between the
petitioner and the private respondents on the issue of just compensation is still unresolved, partly attributable to the instant petition that has
prevented the finality of the decision appealed from. The fact of the matter is that the expropriation cases, involved in this instance, were still
pending appeal when the EPZA ruling was rendered and forthwith invoked by said parties.

In fine, we hold that the appellate court in this particular case committed no error in its appealed decision.

WHEREFORE, the instant petition is dismissed. No costs.

SO ORDERED.

People vs Que Po Lay

TITLE: People of the Phils v Que Po Lay

CITATION: 94 Phil 640 | GR No. 6791, March 29, 1954

FACTS:

The appellant was in possession of foreign exchange consisting of US dollars, US checks and US money orders amounting to about $7000
but failed to sell the same to the Central Bank as required under Circular No. 20.

Circular No. 20 was issued in the year 1949 but was published in the Official Gazette only on Nov. 1951 after the act or omission
imputed to Que Po Lay.
Que Po Lay appealed from the decision of the lower court finding him guilty of violating Central Bank Circular No. 20 in connection
with Sec 34 of RA 265 sentencing him to suffer 6 months imprisonment, pay fine of P1,000 with subsidiary imprisonment in case of
insolvency, and to pay the costs.

ISSUE: Whether or not publication of Circular 20 in the Official Gazette is needed for it to become effective and subject violators
to corresponding penalties.

HELD:

It was held by the Supreme Court, in an en banc decision, that as a rule, circular and regulations of the Central Bank in question
prescribing a penalty for its violation should be published before becoming effective. This is based on the theory that before the
public is bound by its contents especially its penal provisions, a law, regulation or circular must first be published for the people
to be officially and specifically informed of such contents including its penalties.

Miners Association of the Philippines v. Factoran, Case Digest

G.R. No. 98332 January 16, 1995

Facts :

Former President Corazon Aquino issued Executive Order Nos 211 and 279 in the exercise of her legislative powers. EO No. 211 prescribes the interim procedures in the
processing and approval of applications for the exploration, development and utilization of minerals pursuant to Section 2, Article XII of the 1987 Constitution. EO No.
279 authorizes the DENR Secretary to negotiate and conclude joint-venture, co-production, or production- sharing agreements for the exploration, development, and
utilization of mineral resources.

The issuance and the impeding implementation by the DENR of Administrative Order Nos. 57 which declares that all existing mining leases or agreements which were
granted after the effectivity of the 1987 Constitutionshall be converted into production-sharing agreements within one (1) year from the effectivity of these
guidelines. and Administrative Order No. 82 which provides that a failure to submit Letter of Intent and Mineral Production-Sharing Agreement within 2 years from
the effectivity of the Department Administrative Order No. 57 shall cause the abandonment of the mining, quarry, and sand and gravel claims, after their respective
effectivity dates compelled the Miners Association of the Philippines, Inc., an organization composed of mining prospectors and claim owners and claim holders, to file
the instant petition assailing their validity and constitutionality before this Court.

Issue :
Are the two Department Administrative Orders valid?

Ruling :

Yes. Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the governing law on the acceptance and approval of declarations of
location and all other kinds of applications for the exploration, development, and utilization of mineral resources pursuant to Executive Order No. 211, is erroneous.
Presidential Decree No. 463, as amended, pertains to the old system of exploration, development and utilization of natural resources through "license, concession or
lease" which, however, has been disallowed by Article XII, Section 2 of the 1987 Constitution. By virtue of the said constitutional mandate and its implementing law,
Executive Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license, concession or lease" of mineral resources under Presidential
Decree No. 463, as amended, and other existing mining laws are deemed repealed and, therefore, ceased to operate as the governing law. In other words, in all other
areas of administration and management of mineral lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining laws, still govern.
Section 7 of Executive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations, or parts thereof, which are
not inconsistent with the provisions of this Executive Order, shall continue in force and effect.

Well -settled is the rule, however, that regardless of the reservation clause, mining leases or agreements granted by the State, such as those granted pursuant to
Executive Order No. 211 referred to this petition, are subject to alterations through a reasonable exercise of the police power of the State.
Accordingly, the State, in the exercise of its police power in this regard, may not be precluded by the constitutional restriction on non-impairment of contract from
altering, modifying and amending the mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant to Executive Order No. 211.
Police Power, being co-extensive with the necessities of the case and the demands of public interest; extends to all the vital public needs. The passage of Executive Order
No. 279 which superseded Executive Order No. 211 provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII, Section 2 of the 1987
Constitution.

Didipio v Gozun (Natural resources)

DIDIPIO v GOZUN

GR No. 157882

March 30, 2006

FACTS:
This petition for prohibition and mandamus under Rule 65 of the Rules of Court assails the constitutionality of Republic Act No. 7942 otherwise known
as the Philippine Mining Act of 1995, together with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment
and Natural Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the Financial and Technical Assistance Agreement (FTAA)
entered into on 20 June 1994 by the Republic of the Philippines and Arimco Mining Corporation (AMC), a corporation established under the laws of
Australia and owned by its nationals.

Subsequently, AMC consolidated with Climax Mining Limited to form a single company that now goes under the new name of Climax-Arimco Mining
Corporation (CAMC), the controlling 99% of stockholders of which are Australian nationals.

on 20 June 1994, President Ramos executed an FTAA with AMC over a total land area of 37,000 hectares covering the provinces of Nueva Vizcaya
and Quirino. Included in this area is Barangay Dipidio, Kasibu, Nueva Vizcaya.

The CAMC FTAA grants in favor of CAMC the right of possession of the Exploration Contract Area, the full right of ingress and egress and the right
to occupy the same. It also bestows CAMC the right not to be prevented from entry into private lands by surface owners or occupants thereof when
prospecting, exploring and exploiting minerals therein.

Didipio Earth-Savers' Multi-Purpose Association, Inc., an organization of farmers and indigenous peoples organized under Philippine laws,
representing a community actually affected by the mining activities of CAMC, as well as other residents of areas affected by the mining activities of
CAMC.

ISSUES & RULINGS:

I
WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THE CAMC FTAA ARE VOID BECAUSE THEY ALLOW THE UNJUST AND UNLAWFUL TAKING OF
PROPERTY WITHOUT PAYMENT OF JUST COMPENSATION , IN VIOLATION OF SECTION 9, ARTICLE III OF THE CONSTITUTION.

NO.

The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own land, identifies to
the government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure. The government then acquires
ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable the latter to proceed to fully
implement the FTAA. Eminent domain is not yet called for at this stage since there are still various avenues by which surface rights can be acquired
other than expropriation. The FTAA provision under attack merely facilitates the implementation of the FTAA given to CAMC and shields it from
violating the Anti-Dummy Law.

There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just compensation in
expropriating private properties. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of just compensation.

II

WHETHER OR NOT THE MINING ACT AND ITS IMPLEMENTING RULES AND REGULATIONS ARE VOID AND UNCONSTITUTIONAL FOR SANCTIONING
AN UNCONSTITUTIONAL ADMINISTRATIVE PROCESS OF DETERMINING JUST COMPENSATION.

NO.

there is nothing in the provisions of the assailed law and its implementing rules and regulations that exclude the courts from their jurisdiction to
determine just compensation in expropriation proceedings involving mining operations.
Although Section 105 confers upon the Panel of Arbitrators the authority to decide cases where surface owners, occupants, concessionaires refuse
permit holders entry, thus, necessitating involuntary taking, this does not mean that the determination of the just compensation by the Panel of
Arbitrators or the Mines Adjudication Board is final and conclusive. The determination is only preliminary unless accepted by all parties concerned.
There is nothing wrong with the grant of primary jurisdiction by the Panel of Arbitrators or the Mines Adjudication Board to determine in a preliminary
matter the reasonable compensation due the affected landowners or occupants. The original and exclusive jurisdiction of the courts to decide
determination of just compensation remains intact despite the preliminary determination made by the administrative agency.

III

WHETHER OR NOT THE STATE, THROUGH REPUBLIC ACT NO. 7942 AND THE CAMC FTAA, ABDICATED ITS PRIMARY RESPONSIBILITY TO THE FULL
CONTROL AND SUPERVISION OVER NATURAL RESOURCES.

RA 7942 provides for the state's control and supervision over mining operations. The following provisions thereof establish the mechanism of
inspection and visitorial rights over mining operations and institute reportorial requirements.

The setup under RA 7942 and DAO 96-40 hardly relegates the State to the role of a passive regulator dependent on submitted plans and
reports. On the contrary, the government agencies concerned are empowered to approve or disapprove -- hence, to influence, direct and change
-- the various work programs and the corresponding minimum expenditure commitments for each of the exploration, development and utilization
phases of the mining enterprise.

IV

WHETHER OR NOT THE RESPONDENTS' INTERPRETATION OF THE ROLE OF WHOLLY FOREIGN AND FOREIGN-OWNED CORPORATIONS IN THEIR
INVOLVEMENT IN MINING ENTERPRISES, VIOLATES PARAGRAPH 4, SECTION 2, ARTICLE XII OF THE CONSTITUTION.
the use of the word involving signifies the possibility of the inclusion of other forms of assistance or activities having to do with, otherwise related
to or compatible with financial or technical assistance.

Thus, we come to the inevitable conclusion that there was a conscious and deliberate decision to avoid the use of restrictive wording that bespeaks
an intent not to use the expression agreements x x x involving either technical or financial assistance in an exclusionary and limiting manner.

WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS

NO. The mere fact that the term service contracts found in the 1973 Constitution was not carried over to the present constitution, sans any
categorical statement banning service contracts in mining activities, does not mean that service contracts as understood in the 1973 Constitution
was eradicated in the 1987 Constitution.

The 1987 Constitution allows the continued use of service contracts with foreign corporations as contractors who would invest in and operate and
manage extractive enterprises, subject to the full control and supervision of the State; this time, however, safety measures were put in place to
prevent abuses of the past regime.

the phrase agreements involving either technical or financial assistance, referred to in paragraph 4, are in fact service contracts. But unlike those
of the 1973 variety, the new ones are between foreign corporations acting as contractors on the one hand; and on the other, the government as
principal or owner of the works. In the new service contracts, the foreign contractors provide capital, technology and technical know-how, and
managerial expertise in the creation and operation of large-scale mining/extractive enterprises; and the government, through its agencies (DENR,
MGB), actively exercises control and supervision over the entire operation.
OBITER DICTA: ! justiciable controversy: definite and concrete dispute touching on the legal relations of parties having adverse legal interests which
may be resolved by a court of law through the application of a law. ! to exercise the power of judicial review, the following must be extant (1) there
must be an actual case calling for the exercise of judicial power; - involves a conflict of legal rights, an assertion of opposite legal claims, susceptible
of judicial resolution as distinguished from a hypothetical or abstract difference or dispute.

In the instant case, there exists a live controversy involving a clash of legal rights as Rep. Act No. 7942 has been enacted, DAO 96-40 has been
approved and an FTAAs have been entered into. The FTAA holders have already been operating in various provinces of the country.

(2) the question must be ripe for adjudication; and - A question is considered ripe for adjudication when the act being challenged has had a direct
adverse effect on the individual challenging it. (3) the person challenging must have the standing" - personal or substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging more than a generalized
grievance.

By the mere enactment of the questioned law or the approval of the challenged act, the dispute is said to have ripened into a judicial controversy
even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty.

! taking under the concept of eminent domain as entering upon private property for more than a momentary period, and, under the warrant or
color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as to substantially
oust the owner and deprive him of all beneficial enjoyment thereof.

requisites of taking in eminent domain, to wit:

(1) the expropriator must enter a private property;

(2) the entry must be for more than a momentary period.

(3) the entry must be under warrant or color of legal authority;

(4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected;

(5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of
the property.

! Taking in Eminent Domain Distinguished from Regulation in Police Power

The power of eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully delegated) to condemn
private property to public use upon payment of just compensation.On the other hand, police power is the power of the state to promote public
welfare by restraining and regulating the use of liberty and property.

Although both police power and the power of eminent domain have the general welfare for their object, and recent trends show a mingling of the two
with the latter being used as an implement of the former, there are still traditional distinctions between the two.

Property condemned under police power is usually noxious or intended for a noxious purpose; hence, no compensation shall be paid. Likewise, in
the exercise of police power, property rights of private individuals are subjected to restraints and burdens in order to secure the general comfort,
health, and prosperity of the state. Thus, an ordinance prohibiting theaters from selling tickets in excess of their seating capacity (which would
result in the diminution of profits of the theater-owners) was upheld valid as this would promote the comfort, convenience and safety of the
customers.

where a property interest is merely restricted because the continued use thereof would be injurious to public welfare, or where property is destroyed
because its continued existence would be injurious to public interest, there is no compensable taking. However, when a property interest is
appropriated and applied to some public purpose, there is compensable taking.

! On different roles and responsibilities:

* DENR Secretary : accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts of 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. (Executive Order No. 279, 1987)

! in re: easements and taking

In Ayala de Roxas v. City of Manila, it was held that the imposition of burden over a private property through easement was considered taking; hence,
payment of just compensation is required. The Court declared:

And, considering that the easement intended to be established, whatever may be the object thereof, is not merely a real right that will encumber the
property, but is one tending to prevent the exclusive use of one portion of the same, by expropriating it for public use which, be it what it may, can
not be accomplished unless the owner of the property condemned or seized be previously and duly indemnified, it is proper to protect the appellant
by means of the remedy employed in such cases, as it is only adequate remedy when no other legal action can be resorted to, against an intent which
is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive power with which the same is invested.
! in order that one law may operate to repeal another law, the two laws must be inconsistent.The former must be so repugnant as to be irreconciliable
with the latter act.

LA BUGAL BLAAN TRIBAL ASSOCIATION INC vs RAMOS Case Digest

LA BUGAL BLAAN TRIBAL ASSOCIATION INC., et. al. v. VICTOR O. RAMOS, Secretary Department of Environment and Natural Resources;
HORACIO RAMOS, Director, Mines and Geosciences Bureau (MGB-DENR); RUBEN TORRES, Executive Secretary; and WMC (PHILIPPINES) INC.
G.R. No. 127882, 27 January 2004, En Banc (Carpio-Morales, J.)

The constitutional provision allowing the President to enter into FTAA is a exception to the rule that participation in the n ations natural resources
is reserved exclusively to Filipinos. Provision must be construed strictly against their enjoyment by non-Filipinos.

FACTS: RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of RA 7942, or on March 30, 1995, the President signed a
Financial and Technical Assistance Agreement (FTAA) with WMCP, a corporation organized under Philippine laws, covering close to 100,000
hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, the Environment Secretary Victor
Ramos issued DENR Administrative Order 95-23, which was later repealed by DENR Administrative Order 96-40, adopted on December 20, 1996.

Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government and WMCP be declared unconstitutional on ground
that they allow fully foreign owned corporations like WMCP to exploit, explore and develop Philippine mineral resources in contravention of Article
XII Section 2 paragraphs 2 and 4 of the Charter.

In January 2001, WMC - a publicly listed Australian mining and exploration company - sold its whole stake in WMCP to Sagittarius Mines, 60% of which is
owned by Filipinos while 40% of which is owned by Indophil Resources, an Australian company. DENR approved the transfer and registration of the FTAA in
Sagittarius name but Lepanto Consolidated assailed the same. The latter case is still pending before the Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept, consider and evaluate proposals from foreign owned
corporations or foreign investors for contracts or agreements involving wither technical or financial assistance for large scale exploration,
development and utilization of minerals which upon appropriate recommendation of the (DENR) Secretary, the President may execute with the
foreign proponent. WMCP likewise contended that the annulment of the FTAA would violate a treaty between the Philippines and Australia which
provides for the protection of Australian investments.

ISSUES:

1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned corporations to exploit the Philippine mineral
resources.
2. Whether or not the FTAA between the government and WMCP is a service contract that permits fully foreign owned companies to exploit the
Philippine mineral resources.
HELD:

First Issue: RA 7942 is Unconstitutional

RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned corporations to exploit t he Philippine natural
resources.

Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that All lands of the public domain, waters, minerals,
coal, petroleum, and other 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. The same section also states that, the exploration and development and
utilization of natural resources shall be under the full control and supervision of the State.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution authorizing the State to grant licenses, concessions, or leases for the
exploration, exploitation, development, or utilization of natural resources. By such omission, the utilization of inalienable lands of the public domain through
license, concession or lease is no longer allowed under the 1987 Constitution.

Under the concession system, the concessionaire makes a direct equity investment for the purpose of exploiting a particular natural resource within a given
area. The concession amounts to complete control by the concessionaire over the countrys natural resource, for it is given exclusive and plenary rights to
exploit a particular resource at the point of extraction.

The 1987 Constitution, moreover, has deleted the phrase management or other forms of assistance in the 1973 Charter. The present Constitution now
allows only technical and financial assistance. The management and the operation of the mining activities by foreign contractors, the primary feature of the
service contracts was precisely the evil the drafters of the 1987 Constitution sought to avoid.

The constitutional provision allowing the President to enter into FTAAs is an exception to the rule that participation in the nations natural resources is reserved
exclusively to Filipinos. Accordingly, such provision must be construed strictly against their enjoyment by non-Filipinos. Therefore, RA 7942 is invalid insofar as
the said act authorizes service contracts. Although the statute employs the phrase financial and technical agreements in accordance with the 1987
Constitution, its pertinent provisions actually treat these agreements as service contracts that grant beneficial ownership to foreign contractors contrary to the
fundamental law.

The underlying assumption in the provisions of the law is that the foreign contractor manages the mineral resources just like the foreign contractor in a service
contract. By allowing foreign contractors to manage or operate all the aspects of the mining operation, RA 7942 has, in effect, conveyed beneficial ownership
over the nations mineral resources to these contractors, leaving the State with nothing but bare title thereto.

The same provisions, whether by design or inadvertence, permit a circumvention of the constitutionally ordained 60-40% capitalization requirement for
corporations or associations engaged in the exploitation, development and utilization of Philippine natural resources.
When parts of a statute are so mutually dependent and connected as conditions, considerations, inducements or compensations for each other as
to warrant a belief that the legislature intended them as a whole, then if some parts are unconstitutional, all provisions that are thus dependent,
conditional or connected, must fail with them.

Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to merely technical or financial assistance to the State for large
scale exploration, development and utilization of minerals, petroleum and other mineral oils.

Second Issue: RP Government-WMCP FTAA is a Service Contract

The FTAA between he WMCP and the Philippine government is likewise unconstitutional since the agreement itself is a service contract.

Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive right to explore, exploit, utilize and dispose of all minerals and
by-products that may be produced from the contract area. Section 1.2 of the same agreement provides that EMCP shall provide all financing, technology,
management, and personnel necessary for the Mining Operations.

These contractual stipulations and related provisions in the FTAA taken together, grant WMCP beneficial ownership over natural resources that properly
belong to the State and are intended for the benefit of its citizens. These stipulations are abhorrent to the 1987 Constitution. They are precisely the vices that
the fundamental law seeks to avoid, the evils that it aims to suppress. Consequently, the contract from which they spring must be struck down.
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