LEAGUE OF PROVINCES OF THE PHILIPPINES v.

DENR and Secretary

GR. No. 175368
April 11, 2013

FACTS

Golden Falcon applied for Financial and Technical Assistance Agreement (FTAA) before the Mines and
Geosciences Bureau Regional Office (MGB-RO) . On April 29, 1998 -MGB-RO denied Golden Falcon’s
application for FTAA on for failure to secure the required area clearances from the Forest Management Sector
and Lands Management Sector of the DENR-RO. Golden Falcon appealed the denial with the Mines and
Geosciences Bureau-Central Office (MGB-CO)

On February 10, 2004 - pending Golden Falcon's appeal to the MGB-CO, MCCS filed with the PENRO of
Bulacan their applications for quarry permit covering the same area subject of Golden Falcon's FTAA
application. July 16, 2004 – MGB-CO finally denied Golden Falcon’s appeal

On September 13, 2004 - Atlantic Mines and Trading Corporation (AMTC) filed with the PENRO of Bulacan
an application for exploration permit covering the same subject area.

Confusion of rights resulted from the overlapping applications of AMTC and the persons applying for quarry
permits – the contention was the date the area of Golden Falcon’s application became open to other permit
applications from other parties

October 19, 2004 - upon query by MGB-RO Director Cabantog, DENR-MGB Director Ramos stated that the
denial of Golden Falcon’s application became final on August 11, 2004, or fifteen days after Golden Falcon
received the order of denial of its application. Hence, the area of Golden Falcon’s application became open
to permit applications only on that date.

Subsequently, the Provincial Legal Officer of Bulacan issued a legal opinion on the issue, stating that the
subject area became open for new applications on the date of the first denial on April 29, 1998 (MGB-
RO’s order of denial), as MGB-CO’s order of denial on July 16, 2004 was a mere reaffirmation of the MGB-
RO’s April 29 order; hence, the reckoning period should be April 29.

Based on this legal opinion, MGB-RO Director Cabantog endorsed the applications for quarry permit, now
apparently converted to applications for small-scale mining permit, to the Governor of Bulacan.

PENRO of Bulacan recommended to the Governor the approval of said applications. Eventually, the Governor
issued the small-scale mining permits. AMTC appealed to the DENR Secretary

The DENR Secretary decided in favor of the AMTC and nullified and cancelled the governor’s issuance of small-
scale mining permits. It agreed with DENR-MGB Director Ramos that the area was open to mining location only
on August 11, 2004 (15 days after the MGB-CO denial). Hence, the applications for quarry permit filed on
February 10, 2004 were null as these were filed when the area was still closed to mining location. On the other
hand, AMTC filed its application when the area was already open to other mining applicants, hence, its
application was valid. The small-scale mining permits were also issued in violation of Section 4 of R.A. No. 7076
and beyond the authority of the Governor pursuant to Sec. 43 of RA 7942 because the area was never
proclaimed to be under the small-scale mining program.

ISSUES
1. Whether DENR’s act of nullifying the small-scale mining permits amounts to executive control, not merely
supervision and usurps the devolved powers of all provinces, as the DENR Secretary substituted the judgment
of the Provincial Governor of Bulacan.
2. Whether or not Section 17, b(3)(III) of the Local Government Code and Section 24 of the Small-Scale Mining
Act, which confer upon DENR and the DENR Secretary the power of control are unconstitutional, as the
Constitution states that the President (and Exec Depts) has the power of supervision only, not control over acts
of LGUs
RULING

DENR Sec’s act was valid and authorized pursuant to its power of review under the RA 7076 and its IRR;
Assailed statutes did not overcome the presumption of constitutionality, hence, are not unconstitutional.

Control of the DENR/DENR Secretary over small-scale mining in the provinces is granted by three statutes: (1)
R.A. 7061 or The Local Government Code of 1991; (2) R.A. 7076 or the People's Small Scale Mining Act of
1991; and (3) R.A. No. 7942 or the Philippine Mining Act of 1995.
“Control” - the power of an officer to alter or modify or set aside what a subordinate officer had done in the
performance of his/her duties and to substitute the judgment of the former for the latter
“Supervision” - the power of a superior officer to see to it that lower officers perform their function in accordance
with law.
The Constitutional guarantee of local autonomy in the Article X, Sec. 2 of the Constitution refers to the
administrative autonomy of the LGUs or the decentralization of government authority. It does not make local
governments within the State. Administrative autonomy may involve devolution of powers, but it is still subject to
limitations, like following national policies or standards and those provided by the Local Government Code, as
the structuring of LGUs and the allocation of powers/responsibilities/resources among the LGUs and local
officials are placed by the Constitution to Congress under Article X Section 3.
 It is the DENR which is incharge of carrying out the State’s constitutional mandate to control and supervise
the exploration, development and autilization of the countrry’s natural resources, pursuant to the provisions
of Section 17, b(3)(III) of the LGC. Hence, the enforcement of the small-scale mining law by the
provincial government is subject to the supervision, control and review of the DENR. The LGC did
not fully devolve to the provincial government the enforcement of the small-scale mining law.
 RA 7076 or the People’s Small-Scale Mining program was established to be implemented by the DENR
Secretary in coordination with other government agencies (Section 4, RA 7076). Section 24 of the law
makes the Provincial/ Mining Regulatory Board under the direct supervision and control of the
Secretary, its powers and functions subject to review by the same.
 Under Section 123 of DENR AO No. 23, small-scale mining applications should be filed with the PMRB and
the permits shall be issued by the provincial governor, for applications outside the mineral reservations.
 DENR Administrative Order No. 34 (1992) which contains the IRR of RA 7076 likewise provides that the
DENR Secretary shall exercise direct supervision and control over the People’s Small-Scale Mining
Program, and that the Provincial/City Mining Regulatory Board’s (PMRB) powers and functions shall be
subject to review by the DENR Secretary. DENR Administrative Order No. 96-40 or the Revised IRR of the
Philippine Mining Act of 1995 provides that applications for Small-Scale Mining Permits shall be filed with the
Provincial Governor/City Mayor through their respective Mining Regulatory Boards for areas outside the
Mineral Reservations, and further, that the LGUs in coordination with the Bureau/Regional Offices shall
approve applications for small-scale mining, sand and gravel, quarry xxx and gravel permits not exceeding 5
hectares.

 Petitioner’s contention that the aforementioned laws and rules did not confer upon DENR and DENR
Secretary the power to reverse, abrogate, nullify, void, cancel the permits issued by the Provincial Governor
or small-scale mining contracts entered into by the Board are without merit because the DENR Secretary
was granted the power of review in the PMRB’s resolution of disputes under Sec. 24 of RA 7076 and
Section 22 of its IRR. The decision of the DENR Secretary to nullify and cancel the Governor’s
issuance of permits emanated from its power of review under RA 7076 ad its IRR. Its power to review
and decide on the validity of the issuance of the Small-Scale Mining Permits by the Provincial Governor is a
quasi-judicial function which involves the determination of what the law is and what the legal rights of the
contending parties are, with respect to the matter in controversy and on the basis thereof and the facts
obtaining, the adjudication of their respective rights.
 The DENR Secretary exercises quasi-judicial function under RA 7076 and its IRR to the extent
necessary in settling disputes, conflicts, or litigations over conflicting claims. This quasi-judicial
power of the DENR can neither be equated with “substitution of judgment” of the Provincial
Governor in issuing Small-Scale Mining Permits nor “control” over the said act of the Provincial
Governor as it is a determination of the rights of the AMTC over conflicting claims based on the law.
 In Beltran v. Secretary of Health, the Court held that every law has in its .3favor the presumption of
constitutionality. For a law to be nullified, it must be shown that there is a clear and unequivocal breach of
the Constitution. The ground for nullity must be clear and beyond reasonable doubt. In this case, the
grounds raised by the petitioner to challenge the constitutionality of Sec. 17 b(3)(iii) of the LGC and Section
24 of RA 7076 has failed to overcome the constitutionality of the said provisions of the law.