Digest- La Bugal and Estrada-nia

8/13/2019 Digest- La Bugal and Estrada-nia

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Whether or not Republic Act No. 7942 is unconstitutional.

Ruling :The Court finds the following provisions of R.A. No. 7942 to be violative ofSection 2, Article XII of the Constitution and hereby declaresunconstitutional and void:

(1) The proviso in Section 3 (aq), which defines "qualified person," to wit:Provided, That a legally organized foreign-owned corporation shall bedeemed a qualified person for purposes of granting an exploration permit,financial or technical assistance agreement or mineral processing permit.

(2) Section 23, which specifies the rights and obligations of an explorationpermittee, insofar as said section applies to a financial or technicalassistance agreement,

(3) Section 33, which prescribes the eligibility of a contractor in a financialor technical assistance agreement;

(4) Section 35, which enumerates the terms and conditions for everyfinancial or technical assistance agreement;

(5) Section 39, which allows the contractor in a financial and technicalassistance agreement to convert the same into a mineral production-sharing agreement;

(6) Section 56, which authorizes the issuance of a mineral processingpermit to a contractor in a financial and technical assistance agreement;The following provisions of the same Act are likewise void as they aredependent on the foregoing provisions and cannot stand on their own:

(1) Section 3 (g), which defines the term "contractor," insofar as it appliesto a financial or technical assistance agreement.

Section 34, which prescribes the maximum contract area in a financial ortechnical assistance agreements;

Section 36, which allows negotiations for financial or technical assistanceagreements;

Section 37, which prescribes the procedure for filing and evaluation offinancial or technical assistance agreement proposals;

Section 38, which limits the term of financial or technical assistanceagreements;

Section 40, which allows the assignment or transfer of financial ortechnical assistance agreements;

Section 41, which allows the withdrawal of the contractor in an FTAA;The second and third paragraphs of Section 81, which provide for theGovernment's share in a financial and technical assistance agreement; and

Section 90, which provides for incentives to contractors in FTAAs insofar asit applies to said contractors;

When the parts of the statute are so mutually dependent and connected asconditions, considerations, inducements, or compensations for each other,as to warrant a belief that the legislature intended them as a whole, andthat if all could not be carried into effect, the legislature would not passthe residue independently, then, if some parts are unconstitutional, all theprovisions which are thus dependent, conditional, or connected, must fallwith them.

WHEREFORE, the petition is GRANTED.

LA BUGAL BLAAN TRIBAL ASSOCIATION INC., et. al. v. V. O.

RAMOS, Secretary Department of Environment and NaturalResources; H. RAMOS, Director, Mines and Geosciences Bureau(MGB-DENR); R. TORRES, Executive Secretary; and WMC(PHILIPPINES) INC.

The constitutional provision allowing the President to enter into FTAA is aexception to the rule that participation in the nations natural resources isreserved exclusively to Filipinos. Provision must be construed strictlyagainst their enjoyment by non-Filipinos.RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Beforethe effectivity of RA 7942, or on March 30, 1995, the President signed aFinancial and Technical Assistance Agreement (FTAA) with WMCP, acorporation organized under Philippine laws, covering close to 100,000hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur andNorth Cotabato. On August 15, 1995, the Environment Secretary VictorRamos issued DENR Administrative Order 95-23, which was later repealedby 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 onground that they allow fully foreign owned corporations like WMCP toexploit, explore and develop Philippine mineral resources in contraventionof Article XII Section 2 paragraphs 2 and 4 of the Charter.In January 2001, WMC a publicly listed Australian mining and explorationcompany sold its whole stake in WMCP to Sagittarius Mines, 60% ofwhich is owned by Filipinos while 40% of which is owned by IndophilResources, an Australian company. DENR approved the transfer andregistration of the FTAA in Sagittarius name but Lepanto Consolidatedassailed the same. The latter case is still pending before the Court ofAppeals.EO 279, issued by former President Aquino on July 25, 1987, authorizesthe DENR to accept, consider and evaluate proposals from foreign ownedcorporations or foreign investors for contracts or agreements involvingwither technical or financial assistance for large scale exploration,development and utilization of minerals which upon appropriaterecommendation of the (DENR) Secretary, the President may execute withthe foreign proponent. WMCP likewise contended that the annulment of theFTAA would violate a treaty between the Philippines and Australia whichprovides for the protection of Australian investments.

ISSUES:

1. Whether or not the Philippine Mining Act is unconstitutional for allowingfully foreign-owned corporations to exploit the Philippine mineralresources. 2. Whether or not the FTAA between the government andWMCP is a service contract that permits fully foreign owned companiesto exploit the Philippine mineral resources.

HELD:

First Issue: RA 7942 is UnconstitutionalRA 7942 or the Philippine Mining Act of 1995 is unconstitutional forpermitting fully foreign owned corporations to exploit the Philippine naturalresources.Article XII Section 2 of the 1987 Constitution retained the RegalianDoctrine which states that All lands of the public domain, waters,minerals, coal, petroleum, and other minerals, coal, petroleum, and othermineral oils, all forces of potential energy, fisheries, forests or timber,wildlife, flora and fauna, and other natural resources are owned by theState. The same section also states that, the exploration anddevelopment and utilization of natural resources shall be under the fullcontrol and supervision of the State.Conspicuously absent in Section 2 is the provision in the 1935 and 1973Constitution authorizing the State to grant licenses, concessions, or leasesfor the exploration, exploitation, development, or utilization of naturalresources. By such omission, the utilization of inalienable lands of thepublic domain through license, concession or lease is no longer allowed

under the 1987 Constitution.Under the concession system, the concessionaire makes a direct equityinvestment for the purpose of exploiting a particular natural resourcewithin a given area. The concession amounts to complete control by theconcessionaire over the countrys natural resource, for it is given exclusiveand plenary rights to exploit a particular resource at the point ofextraction.The 1987 Constitut ion, moreover, has deleted the phrase managementor other forms of assistance in the 1973 Charter. The present Constitutionnow allows only technical and financial assistance. The management andthe operation of the mining activities by foreign contractors, the primaryfeature of the service contracts was precisely the evil the drafters of the1987 Constitution sought to avoid.The constitutional provision allowing the President to enter into FTAAs isan exception to the rule that participation in the nat ions natural resourcesis reserved exclusively to Filipinos. Accordingly, such provision must beconstrued strictly against their enjoyment by non-Filipinos. Therefore, RA7942 is invalid insofar as the said act authorizes service contracts.

Although the statute employs the phrase financial and technicalagreements in accordance with the 1987 Constitution, its pertinentprovisions actually treat these agreements as service contracts that grantbeneficial ownership to foreign contractors contrary to the fundamentallaw.The underlying assumption in the provisions of the law is that the foreigncontractor manages the mineral resources just like the foreign contractorin a service contract. By allowing foreign contractors to manage or operateall the aspects of the mining operation, RA 7942 has, in effect, conveyedbeneficial ownership over the nations mineral resources to thesecontractors, leaving the State with nothing but bare title thereto.The same provisions, whether by design or inadvertence, permit acircumvention of the constitutionally ordained 60-40% capitalizationrequirement 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 asconditions, considerations, inducements or compensations for each otheras to warrant a belief that the legislature intended them as a whole, then if

some parts are unconstitutional, all provisions that are thus dependent,


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conditional or connected, must fail with them.Under Article XII Section 2 of the 1987 Charter, foreign ownedcorporations are limited only to merely technical or financial assistance tothe State for large scale exploration, development and utilization ofminerals, petroleum and other mineral oils.Second Issue: RP Government-WMCP FTAA is a Service ContractThe FTAA between he WMCP and the Philippine government is likewiseunconstitutional 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 mineralsand by-products that may be produced from the contract area. Section 1.2of the same agreement provides that EMCP shall provide all financing,technology, management, and personnel necessary for the MiningOperations.These contractual stipulations and related provisions in the FTAA takentogether, grant WMCP beneficial ownership over natural resources thatproperly belong to the State and are intended for the benefit of its citizens.These stipulations are abhorrent to the 1987 Constitution. They areprecisely the vices that the fundamental law seeks to avoid, the evils thatit aims to suppress. Consequently, the contract from which they springmust be struck down.

La Bugal- BLaan v. RamosG.R. No. 127882.December 1, 2004

Facts:

The Petition for Prohibition and Mandamus before the Courtchallenges the constitutionality of (1) Republic Act 7942 (ThePhilippine Mining Act of 1995); (2) its Implementing Rules andRegulations (DENR Administrative Order [DAO] 96-40); and (3)the Financial and Technical Assistance Agreement (FTAA) dated30 March 1995, executed by the government with WesternMining Corporation (Philippines), Inc. (WMCP).

On 27 January 2004, the Court en banc promulgated its Decision,granting the Petition and declaring the unconstitutionality ofcertain provisions of RA 7942, DAO 96-40, as well as of the entireFTAA executed between the government and WMCP, mainly onthe finding that FTAAs are service contracts prohibited by the1987 Constitution. The Decision struck down the subject FTAA forbeing similar to service contracts,[9] which, though permittedunder the 1973 Constitution, were subsequently denounced for

being antithetical to the principle of sovereignty over our naturalresources, because they allowed foreign control over theexploitation of our natural resources, to the prejudice of theFilipino nation.

The Decision quoted several legal scholars and authors who hadcriticized service contracts for, inter alia, vesting in the foreigncontractor exclusive management and control of the enterprise,including operation of the field in the event petroleum wasdiscovered; control of production, expansion and development;nearly unfettered control over the disposition and sale of theproducts discovered/extracted; effective ownership of the naturalresource at the point of extraction; and beneficial ownership ofour economic resources. According to the Decision, the 1987Constitution (Section 2 of Article XII) effectively banned suchservice contracts. Subsequently, Victor O. Ramos (Secretary,Department of Environment and Natural Resources [DENR]),Horacio Ramos (Director, Mines and Geosciences Bureau [MGB-DENR]), Ruben Torres (Executive Secretary), and the WMC(Philippines) Inc. filed separate Motions for Reconsideration.

Issue:

Whether or not the Court has a role in the exercise of the powerof control over the EDU of our natural resources?

Held:

The Chief Executive is the official constitutionally mandated to enter into agreements with foreign owned corporations. On theother hand, Congress may review the action of the Presidentonce it is notified of every contract entered into in accordancewith this [constitutional] provision within thirty days from itsexecution. In contrast to this express mandate of the Presidentand Congress in the exploration, development and utilization(EDU) of natural resources, Article XII of the Constitution is silenton the role of the judiciary. However, should the President and/orCongress gravely abuse their discretion in this regard, the courtsmay -- in a proper case -- exercise their residual duty under

Article VIII. Clearly then, the judiciary should not inordinatelyinterfere in the exercise of this presidential power of control overthe EDU of our natural resources.

Under the doctrine of separation of powers and due respect forco-equal and coordinate branches of government, the Court mustrestrain itself from intruding into policy matters and must allowthe President and Congress maximum discretion in using theresources of our country and in securing the assistance of foreigngroups to eradicate the grinding poverty of our people andanswer their cry for viable employment opportunities in thecountry. The judiciary is loath to interfere with the due exerciseby coequal branches of government of their official functions. Asaptly spelled out seven decades ago by Justice George Malcolm,

Just as the Supreme Court, as the guardian of constitutionarights, should not sanction usurpations by any other departmentof government, so should it as strictly confine its own sphere ofinfluence to the powers expressly or by implication conferred onit by the Organic Act. Let the development of the mininindustry be the responsibility of the political branches ofgovernment. And let not the Court interfere inordinately andunnecessarily. The Constitution of the Philippines is the supremelaw of the land. It is the repository of all the aspirations andhopes of all the people.

The Constitution should be read in broad, life-giving strokes. Itshould not be used to strangulate economic growth or to servenarrow, parochial interests. Rather, it should be construed togrant the President and Congress sufficient discretion andreasonable leeway to enable them to attract foreign investmentsand expertise, as well as to secure for our people and ourposterity the blessings of prosperity and peace. The Court fullysympathize with the plight of La Bug al Blaan and other tribalgroups, and commend their efforts to uplift their communities.However, the Court cannot justify the invalidation of an otherwiseconstitutional statute along with its implementing rules, or thenullification of an otherwise legal and binding FTAA contract. TheCourt believes that it is not unconstitutional to allow a widedegree of discretion to the Chief Executive, given the nature andcomplexity of such agreements, the humongous amounts ofcapital and financing required for large-scale mining operations,

the complicated technology needed, and the intricacies ofinternational trade, coupled with the States need to maintainflexibility in its dealings, in order to preserve and enhance ourcountrys competitiveness in world market s. On the basis of thiscontrol standard, the Court upholds the constitutionality of thePhilippine Mining Law, its Implementing Rules and Regulations -insofar as they relate to financial and technical agreements - aswell as the subject Financial and Technical Assistance Agreement(FTAA).


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effect, no impeachment case pending against the petitioner whenhe resigned. Case Digest of Estrada vs. Desierto (March 2, 2001)Petitioner: Joseph E. EstradaRespondents: Aniano Desierto (GR#146710-15) et al. and GloriaMacapagal-Arroyo (GR#146738)Nature: Petition to question the legitimacy of the assumption as Presidentof the Republic of the Philippines by Gloria Macapagal-Arroyo.Ponente: Justice PunoFacts:The court looked at the events that occurred prior and immediately afterthe oath-taking of respondent Gloria Macapagal-Arroyo (to be referred toin the rest of the digest as GMA) as president of the Republic of thePhilippines (RP).On 11 May 1998, petitioner Joseph E. Estrada (will subsequently bereferred to as Erap) was elected as President of RP with GMA as his vice-President. By the late 2000, word spread of Eraps alleged involvement inueteng and his receiving jueteng money as Jose Pidal. Erap quickly losespopularity among different social groups and public officials, even highranking members of the Armed Forces of the Philippines (AFP) and thePhilippine National Police (PNP), started defecting from his agendas. Andbecause of the jueteng scandal, an impeachment proceeding started on 7December 2000. Upon its resumption in January, however, a vote of 11-10against the opening of the second envelope which allegedly containedevidence showing Erap as Jose Velarde with P3.3billion in secret bankaccount cut short the impeachment trial as prosecutors walked out andoined the rallying of people in the streets of Manila.Amidst the pressure, Erap proposed snap elections, which he is not to runas candidate, to regain stability in the country but such a move did little to

quell the wave against him. Two rounds of negotiations were heldbetween Eraps camp and that of GMA in the early hours of 20 January2001 and at 12nn of the same day, GMA took her oath as RP president.Both houses of Congress acknowledged her presidency, as well as theinternational community. Erap, on the other hand, left Malacanang and isnow faced with legal action against him by the Office of the Ombudsmanamong other things.

Issues:1) Whether the petitions present a justiciable controversy2) Whether petitioner Estrada resigned as President3) If the petitions are justiciable, whether petitioner Estrada is a Presidenton leave while respondent Arroyo is an acting President4) Whether conviction in the impeachment proceedings is a conditionprecedent for the criminal prosecution of petitioner Estrada5) Whether petioners prosecution should be enjoined on the ground of

prejudicial publicity

Held:1) Yes2) Yes, impliedly3) No4) No5) No

Ratio Decidendi:1) While the 1987 EDSA People Power Movement is considered by theCourt as a non-justiciable event, EDSA 2, as it has come to be known, isvery much different from the 1987 EDSA People Power Movement (EDSA1). EDSA 1 is extra-constitutional, hence, there would be no legal basis ifsuch an event was put to the courts. EDSA 2, on the other hand, is intra-constitutional as it is based on the constitutionally protected rights offreedom of speech and assembly. Even in GMAs oath -taking ceremony,she categorically swore to preserve and defend the 1987 Constitution.2) The Court used a Totality Test as an authoritative window toascertain petitioner Estradas state of mind on this issue. On reading thethen Executive Secretary Angaras diary published in the Philippine DailyInquirer, the Court held that petitioner impliedly resigned because 1) hedid not want to be a candidate in the proposed snap elections, 2) he didnot object to Senator Pimentels dignified exit proposal, and 3) on Erapsaying that he only had 5 days to a week left to stay in the Palace. Also,from what the court eventually calls his resignation letter, Erap 1)acknowledged GMAs oath -taking as President, 2) he did not mention anyintent on re-assuming his position as President, and 3) his gratitude in theletter is on a past opportunity he served as President.On his defense, Erap cites sec. 12 of Republic Act 3019 which states that apublic officer cannot resign pending legal action, in this case the

impeachment trial. A reading of history tells the Court that the intention of

Congress in passing such provision is merely to prevent public officialsfrom escaping liability to stop pending investigation. It does not apply topetitioner.3) The law states that Congress has the sole authority to say whether aPresident is incapable of performing the duties required of him of hisoffice. Given the resolutions passed by Congress immediately after GMAsoath-taking and the fact that both houses filed bills signed by GMA intolaw, the Court recognizes that petitioners inability to perform waspermanent and also, the Court would have no jurisdiction to change thedecision already done by Congress on his capacity as President.4) Regarding immunity from suit, history shows us that the framers of the1987 Constitution did not retain the 1973 Constitution provision onexecutive immunity. Also, the Impeachment court has become functus

officio. It is, then, untenable for petitioner to demand that he should firstbe impeached and then convicted before he can be prosecuted.5) As for a prejudicial publicity, this would not apply to the present case.Case law will tell us that a right to a fair trial and the free press areincompatible. Theyre essentially unrelated. Also, since our justice systemdoes not use the jury system, the judge, who is a learned and legallyenlightened individual, cannot be easily manipulated by mere publicity.The Court also said that petitioner did not present enough evidence toshow that the publicity given the trial has influenced the judge so as torender the judge unable to perform. Finally, the Court said that the casesagainst petitioner were still undergoing preliminary investigation, so thepublicity of the case would really have no permanent effect on the judgeand that the prosecutor should be more concerned with justice and lesswith prosecutuion.

Case Digest: Joseph Estrada vs. Aniano Disierto

G.R. No. 146710-15 02 March 2001

FACTS:

After the sharp descent from power of Chavit Singson, he went on air andaccused the petitioner of receiving millions of pesos from jueteng lords.Calls for resignation filled the air and former allies and members of thePresidents administration started resigning one by one. In a session oNovember 13, House Speaker Villar transmitted the Articles ofImpeachment signed by 115 representatives or more than 1/3 of all themembers of the House to the Senate. The impeachment trial formallyopened which is the start of the dramatic fall from power of the President,which is most evident in the EDSA Dos rally. On January 20, the Presidentsubmitted two letters one signifying his leave from the Palace and other signifying his inability to exercise his powers pursuant to Section11, Article VII of the Constitution. Thereafter, Arroyo took oath asPresident of the Philippines.

ISSUES:

1. Whether the petitioner resigned as President; and2. Whether the impeachment proceedings bar the petitioner from

resigning

RULING:

1. For a resignation to be legally valid, there must be an intent to resignand the intent must be coupled by acts of relinquishment which maybe oral or written, express or implied, for as long as the resignation isclear. In the press release containing his final statement, heacknowledged the oath-taking of Arroyo as President; he emphasizedhe was leaving the Palace without the mention of any inability andintent of reassumption; he expressed his gratitude to the people; heassured will not shirk from any future challenge that may come aheadin the same service of the country. This is of high grade evidence ofhis intent to resign.

2. Petitioners contention that the impeachment proceeding is anadministrative investigation that, under section 12 of RA 3019, barshim from resigning is not affirmed by the Court. The exact nature ofan impeachment proceeding is debatable. But even assumingarguendo that it is an administrative proceeding, it cannot beconsidered pending at the time petitioner resigned because theprocess already broke down when a majority of the senator-judgesvoted against the opening of the second envelope, the public andprivate prosecutors walked out, the public prosecutors filed theirManifestation of Withdrawal of Appearance, and the proceedings were

postponed indefinitely. There was, in

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Digest- La Bugal and Estrada-nia