[G.R. No. 137174. July 10, 2000]

REPUBLIC OF THE PHILIPPINES, Represented by the POLLUTION ADJUDICATION BOARD (DENR), petitioner, vs. MARCOPPER MINING CORPORATION, respondent.

D E C I S I O N

GONZAGA-REYES, J.:

In this petition for review on certiorari, petitioner REPUBLIC OF THE PHILIPPINES through the Pollution Adjudication Board of the Department of Environment and Natural Resources seeks to annul the Decision

[1] of the Court of Appeals

[2] in CA-G.R. SP

No. 44656 setting aside the Order[3]

of the Pollution Adjudication Board

[4] in DENR-PAB Case No. 04-00597-96; as well as the

Resolution[5]

denying reconsideration of said Decision.

The following antecedent facts are undisputed:

Respondent Marcopper Mining Corporation (MMC) was issued a temporary permit to operate a tailings

[6] sea disposal system

under TPO No. POW-85-454-EJ for the period October 31, 1985 to October 21, 1986. Before it expired, MMC filed an application for the renewal thereof with the National Pollution Control Commission (NPCC). On September 20, 1986, MMC received a telegraphic order from the NPCC directing the former to (i)mmediately cease and desist from discharging mine tailings into Calancan Bay. The directive was brought about through the efforts of certain religious groups which had been protesting MMCs tailings sea disposal system. MMC requested the NPCC to refrain from implementing the aforesaid directive until its adoption of an alternative tailings disposal system. The NPCC granted MMCs request and called a conference to discuss

possible alternative disposal systems. Consequently, an Environmental Technical Committee, composed of representatives from the NPCC, the Bureau of Mines and Geo-Sciences, and MMC was created to study the feasibility of various tailings disposal systems that may be appropriate for utilization by MMC and to submit its findings and recommendations thereon.

Meanwhile, after the expiration of MMCs TPO No. POW-85-454-EJ on October 21, 1986, the NPCC issued to MMC a new temporary permit, TPO No. POW-86-454-EJ dated November 11, 1986, to expire on February 10, 1987, with the condition that [t]he tailings disposal system shall be transferred to San Antonio Pond within two (2) months from the date of this permit. MMC moved for the deletion of the condition stating that it needed to develop and mine the ore deposits underneath the San Antonio pond for it to continue its mining operations. In a letter-manifestation dated February 5, 1987, MMC requested the NPCC for an extension of TPO No. POW-86-454-EJ and the indefinite suspension of the condition in said permit until such time that the NPCC shall have finally resolved the NPCC case entitled Msgr. Rolly Oliverio, et al. vs. Marcopper Mining Corporation.

In the meantime, the NPCC was abolished by Executive Order No. 192

[7] dated June 10, 1987, and its powers and functions

were integrated into the Environmental Management Bureau and into the Pollution Adjudication Board (PAB).

[8]

On April 11, 1988, the Secretary of Environment and Natural Resources, in his capacity as Chairman of the PAB, issued an Order directing MMC to cease and desist from discharging mine tailings into Calancan Bay. The order reads:

The Temporary Permit to Operate issued to Marcopper Mining Corporation expired on February 10, 1987.

Section 96 of the National Pollution Control Commission (NPCC) Rules and Regulations, which were adopted by the Board,

provides that in no case can a permit be valid for more than one (1) year.

Records show that Marcopper Mining Corporation has not filed any application for renewal of the permit.

Marcopper Mining Corporation is hereby ordered to cease and desist from discharging mine tailings into Calancan Bay immediately upon receipt of this Order.

SO ORDERED.[9]

Immediately thereafter, the DENR Undersecretary for Environment and Research issued a telegraphic order dated April 15, 1988, enjoining immediate compliance by MMC of the cease and desist order of April 11, 1988.

MMC appealed the above orders of April 11, 1988 and April 15, 1988 to the Office of the President, docketed as O.P. Case No. 3802. In an Order dated May 2, 1988, the Office of the President denied MMCs requests for issuance of restraining orders against the orders of the PAB. Consequently, MMC filed an Urgent Ex-Parte Partial Motion for Reconsideration dated May 6, 1988, seeking the reconsideration of the above Order. In an Order dated May 13, 1988, the Office of the President granted the above partial motion for reconsideration, thus:

WHEREFORE, the instant Urgent Ex-Parte Motion for Reconsideration is hereby GRANTED, and the Order of this Office, dated May 2, 1988, is hereby set aside insofar as it denies respondent-appellants requests for issuance of restraining orders.

Accordingly, the Pollution Adjudication Board, its agents, deputies or representatives are hereby enjoined from enforcing its cease and desist order of April 15, 1988 pending resolution by this Office of respondent-appellants appeal from said orders.

It is further directed that the status quo obtaining prior to the issuance of said cease and desist order be maintained until further orders from this Office.

It is understood, however, that during the efficacy of this restraining order, respondent-appellant shall immediately undertake, at a cost of not less than P30,000.00 a day, the building of artificial reefs and planting of sea grass, mangroves and vegetation on the causeway of Calancan Bay under the supervision of the Pollution Adjudication Board and subject to such guidelines as the Board may impose.

SO ORDERED.[10]

In line with the directive from the Office of the President, the Calancan Bay Rehabilitation Project (CBRP) was created, and MMC remitted the amount of P30,000.00 a day, starting from May 13, 1988 to the Ecology Trust Fund (ETF) thereof. However, on June 30, 1991, MMC stopped discharging its tailings in the Bay, hence, it likewise ceased from making further deposits to the ETF.

From the issuance of the Order on May 13, 1988 until the cessation of the tailings disposal on June 30, 1991, MMC made its contribution to the ETF in the total amount of Thirty-Two Million Nine Hundred and Seventy-Five Thousand Pesos (P32,975,000.00). Thereafter, MMC filed a Motion dated July 9, 1991 manifesting that it would discontinue its contributions/deposits to the ETF since it had stopped dumping tailings in the Bay. MMC prayed that the Order issued by the Office of the President on May 13, 1988 be lifted.

On February 5, 1993, the Office of the President rendered a decision in O.P. Case No. 3802 dismissing the appeal; affirming the cease and desist Order issued by the PAB; and lifting the TRO dated May 13, 1988. The Office of the President resolved the appeal in this wise:

The office of the president granted the ex-parte reconsideration

This brings to the fore the primordial issue of whether or not the Secretary of Environment and Natural Resources gravely erred in declaring the TPO No. POW-86-454-EJ issued to respondent-appellant MMC expired on February 10, 1987, and in ordering the latter to cease and desist from discharging mine tailings into Calancan Bay.

Respondent-appellant argues that the cease and desist orders were issued by the PAB ex-parte, in violation of its procedural and substantive rights provided for under Section 7 (a) of P.D. No. 984 requiring a public hearing before any order or decision for the discontinuance of discharge of a sewage or industrial wastes into the water, air or land could be issued by the PAB.

We are not persuaded.

Section 7(a) of P.D. No. 984, reads in part:

Sec. 7(a) Public Hearing. Public hearing shall be conducted by the Commissioner, Deputy Commissioner or any senior official duly designated by the Commissioner prior to issuance or promulgation of any order or decision by the Commissioner requiring the discontinuance of discharge of sewage, industrial wastes and other wastes into the water, air or land resources of the Philippines as provided in the Decree: provided, that whenever the Commission finds a prima facie evidence that the discharged sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue an ex-parte order directing the discontinuance of the same or the temporary suspension or cessation of operation of the establishment or person generating such sewage or wastes without the necessity of a prior public hearing. x x x . (underscoring supplied).

Clearly then, it is self-indulgent nonsense to assume that the DENR Secretary, acting as PAB Chairman, is absolutely without authority to issue an ex-parte order requiring the discontinuance of discharge of sewage or other industrial wastes without public hearing. As can be gleaned from the afroequoted proviso, this authority to issue an ex-parte order suspending the discharge of industrial wastes is postulated upon his finding of prima-facie evidence of an imminent threat to life, public health, safety or welfare, to animal or plant life or exceeds the allowable standards set by the Commission.[11]

In a letter dated January 22, 1997[12]

, Municipal Mayor Wilfredo A. Red of Sta. Cruz, Marinduque informed the PAB that MMC stopped remitting the amount of 30,000.00 per day as of July 1, 1991 to the ETF of the CBRP. This letter-complaint of Mayor Red was docketed as DENR-PAB Case No. 04-00597-96, for violation of P.D. 984

[13] and its implementing Rules and Regulations.

In an order dated April 23, 1997, the PAB ruled that the obligation of MMC to deposit P30,000.00 per day to the ETF of the CBRP subsists, as provided for in the Order of the Office of the President dated May 13, 1988, during the efficacy of said order restraining the PAB from enforcing its cease and desist order against MMC. Since the Order was lifted only on February 5, 1993, the obligation of MMC to remit was likewise extinguished only on said date and not earlier as contended by MMC from the time it ceased dumping tailings into the Bay on July 1, 1991. We quote in part:

The issue before this Board is whether Marcopper Mining Corporation is still obliged to remit the amount of P30,000.00 to the CBRP. The answer by the Order from the Office of the President dated 13 May 1988, which states that the obligation on the part of Marcopper Mining to pay the amount of P30,000.00 per day for the rehabilitation of Calancan Bay is binding only during the efficacy of the said Order. Only until june 30 1991

The record further shows that on 05 February 1993, the Office of the President lifted its Order dated 13 May 1988. This means that as of the date of the lifting, Marcopper Mining Corporation no longer had any obligation to remit the amount of P30,000.00 to the CBRP. Thus, Marcoppers obligation only runs from 13 May 1988 to 05 February 1993. Beyond the cut-off date of 05 February 1993, Marcopper is no longer obligated to remit the amount of P30,000.00 per day to the CBRP.

It does not matter whether Marcopper was no longer dumping its tail minings into the sea even before the cut-off date of 05 February 1993. The obligation of Marcopper to pay the amount of P30,000.00 to the CBRP arises from the Office of the President Order dated 13 May 1988, not from it dumping of mine tailings.

WHEREFORE, Marcopper Mining Corporation is hereby ordered to pay the CBRP the amount of P30,000.00 per day, computed from the date Marcopper Mining Corporation stopped paying on 01 July 1991, up to the formal lifting of the subject Order from the Office of the President on 05 February 1993.

SO ORDERED.[14]

MMC assailed the aforequoted Order dated April 23, 1997 of the PAB as null and void for having been issued without jurisdiction or with grave abuse of discretion in a petition for Certiorari and Prohibition (with prayer for temporary restraining order and preliminary injunction) before the Court of Appeals which was docketed as CA-G.R. No. SP-44656. In a Resolution dated July 15, 1997, the Court of Appeals required the PAB and its members to comment on said petition.

On November 19, 1997, the Office of the Solicitor General, on behalf of the PAB and its members, filed with the Court of Appeals the required comment.

On September 15, 1997, for purposes of determining whether or not to grant MMCs prayer for a temporary restraining order and preliminary injunction, the Court of Appeals conducted a hearing where counsel for the parties were heard on oral arguments.

In a Resolution dated September 19, 1997, the Court of Appeals issued a writ of preliminary injunction, conditioned upon the filing of a bond by MMC in the amount of P500,000.00 enjoining the PAB and its members to cease and desist from enforcing the assailed Order dated April 23, 1997, until it had made a full determination on the merits of the case.

On January 7, 1998, the Court of Appeals promulgated a Decision in CA-G.R. SP No. 44656, the dispositive portion of which reads:

In view of the foregoing, the instant petition is hereby GRANTED and, accordingly, the questioned Order of respondent Pollution Adjudication Board dated 23 April 1997 is hereby SET ASIDE. Respondents are ordered to REFRAIN and DESIST from enforcing aforesaid Order. The injunctive bond filed by the petitioner in the amount of Five Hundred Thousand (P500,000.00) is hereby RELEASED.

The motion for reconsideration of the above decision was denied in a Resolution dated January 13, 1999 of the Court of Appeals.

Hence, the instant petition on the following grounds:

I

The Court of Appeals erred in ruling that Republic Act No. 7942 (otherwise known as the Philippine Mining Act of 1995) repealed the provisions of Republic Act No. 3931, as amended by Presidential Decree No. 984, (otherwise known as the National Pollution Control Decree of 1976), with respect to the power and

function of petitioner Pollution Adjudication Board to issue, renew or deny permits for the discharge of the mine tailings.

II

Respondent Marcopper Mining Corporation bound itself to pay the amount of P30,000.00 a day for the duration of the period starting May 13, 1988 up to February 5, 1993.

III

Respondent Marcopper Mining Corporation was not deprived of due process of law when petitioner Pollution Adjudication Board directed it to comply with its long-existing P30,000.00 per day obligation under the Order of the Office of the President dated May 13, 1988.

[15]

In setting aside the Order of the PAB dated April 23, 1997, requiring MMC to pay its arrears in deposits, the Court of Appeals ruled that the PAB exceeded its power and authority in issuing the subject Order for the following reasons:

The applicable and governing law in this petition is Republic Act No. 7942 otherwise known as the Philippine Mining Act of 1995 (Mining Act, approved on March 3, 1995).

Chapter XI of the Mining Act contains a series of provisions relating to safety and environmental protection on mining and quarrying operations. More specifically, Section 67 of the Mining Act in essence, grants the mines regional director the power to issue orders or to take appropriate measures to remedy any practice connected with mining or quarrying operations which is not in accordance with safety and anti-pollution laws and regulations.

From a reading of that provision, it would appear therefore that prior to the passage of the Mining Act, the Pollution Adjudication

Board had jurisdiction to act on pollution-related matters in the mining business. With the effectivity of the Mining Act and in congruence with its Sec. 115 (i.e., Repealing and Amending Clause), the power to impose measures against violations of environmental policies by mining operators is now vested on the mines regional director. Be that as it may, we are constrained to enunciate that the PAB had no authority to issue the challenged Order dated 23 April 1997. More so, respondent PAB as petitioner argued and We note, had remained perplexingly silent on the matter for almost six (6) years from July 1991 when MMC ceased to make its deposits up to April 1997 when respondent PAB precipitately issued the Order requiring MMC to pay its arrears in deposits to the ETF. And PAB, apparently oblivious to MMCs economic quandary had issued said Order ex-parte without hearing or notice.

x x x

As a general rule, the adjudication of pollution cases pertains to the Pollution Adjudication Board (PAB), except in cases where the special law, expressly or impliedly, provides for another forum, as in the instant petition.

Thus under Republic Act No. 7942 and its implementing rules and regulations, the mines regional director, in consultation with the Environmental Management Bureau (italics ours), is specifically mandated to carry out and make effective the declared national policy that the State shall promote the rational exploration, development, utilization and conservation of all mineral resources in public and private lands within the territory and exclusive economic zone of the Republic of the Philippines, through the combined efforts of government and the private sector in order to enhance national growth and protect the rights of affected communities. (Sec. 2, R.A. 7942).

Under this expansive authority, the Mines Regional Director, by virtue of this special law, has the primary responsibility to protect the communities surrounding a mining site from the deleterious effects of pollutants emanating from the dumping of tailing wastes from the surrounding areas. Thus, in the exercise of its express powers under this special law, the authority of the Mines Regional Director to impose appropriate protective and/or preventive measures with respect to pollution cases within mining operations is perforce, implied. Otherwise, the special law granting this authority may well be relegated to a mere paper tiger talking protection but allowing pollution.

It bears mention that the Pollution Adjudication Board has the power to issue an ex-parte order when there is prima facie evidence of an establishment exceeding the allowable standards set by the anti-pollution laws of the country. (Pollution Adjudication Board v. Court of Appeals, et al., 195 SCRA 112). However, with the passage of R.A. 7942, insofar as the regulation, monitoring and enforcement of anti-pollution laws are concerned with respect to mining establishments, the Mines Regional Director has a broad grant of power and authority. Clearly, pollution-related issues in mining operations are addressed to the Mines Regional Director, not the Pollution Adjudication Board.

This being the case, the questioned Order dated 23 April 1997 requiring MMC to pay its arrears in deposits was beyond the power and authority of the Pollution Adjudication Board to issue and as such, petitioner may seek appropriate injunctive relief from the court. Thus, certiorari lies against public respondent PAB.[16]

The Court of Appeals likewise ruled that the obligation of MMC to contribute to the ETF of the CBRP ceased inasmuch as the latter discontinued dumping tailings into the Bay and the actual

funds in the ETF are sufficient to rehabilitate the Bay. It ratiocinated thus:

In the instant case, it is of record that petitioner MMC undertakes its obligation to provide for the rehabilitation of the Bay waters. This obligation, through its monetary contribution to the ETF, is however anchored on its continuing disposal of the mines tailings waste into the Bay. Hence, since it ceased its mining operations in the affected area as of July 1991 and had not been discharging any tailings wastes since then, its consequent duty to rehabilitate the polluted waters, if any, no longer exists.

x x x

Be that as it may, this Court observes that out of the approximate sum of thirty-two (32) million pesos contributed by the petitioner to the ETF there is admittedly an existing estimated balance of fourteen (14) million pesos in the Fund. For its part, petitioner does not renege on its obligation to rehabilitate and in fact undertakes to continue the rehabilitation process until its completion within two (2) years time and which would only cost six (6) million pesos. Thus, as petitioner convincingly argued and which respondent unsatisfactorily rebuked, the existing fourteen (14) million pesos in the ETF is more than enough to complete the rehabilitation project. (TSN, Hearing dated 15 September 1997, at pp. 56 to 62, Rollo).

xxx. Without much ado, the Court concurs with the finding that to demand a daily deposit of thirty thousand (P30, 000.00) pesos even if the root of the obligation, that is, the dumping of tailings waste, had ceased to exist, is indubitably of a herculean and onerous burden on the part of petitioner amounting to a deprivation of its property and a denial of its right to due process.[17]

Unsatisfied, the OSG argues that the Philippine Mining Act of 1995 did not amend or repeal the provisions of Republic Act No. 3931, as amended by Presidential Decree No. 984 (otherwise known as the National Pollution Control Decree of 1976); that the Mines Regional Director has no power over areas outside mining installations and over areas which are not part of the mining or quarrying operations such as Calancan Bay; that the powers of the Mines Regional Director cannot be exercised to the exclusion of other government agencies; that the jurisdiction of a Mines Regional Director with respect to anti-pollution laws is limited to practices committed within the confines of a mining or quarrying installation; that the dumping of mine tailings into Calancan Bay occurred long before the effectivity of the Philippine Mining Act and that MMC cannot hide under cover of this new law. The OSG further argues that the portion of the Order of May 13, 1988, setting the period of time within which MMC shall pay P30,000.00 per day, which is during the efficacy of the restraining order was never questioned or appealed by MMC. Finally, the OSG argues that PAB did not violate MMCs right to due process by the issuance of the Order dated April 23, 1988 without notice and hearing as it was simply requiring MMC to comply with an obligation in an Order which has long become final and executory.

In the context of the established facts, the issue that actually emerges is: Has the PAB under RA 3931 as amended by PD 984 (National Pollution Control Decree of 1976) been divested of its authority to try and hear pollution cases connected with mining operations by virtue of the subsequent enactment of RA 7942 (Philippine Mining Act of 1995)? As mentioned earlier, the PAB took cognizance and ruled on the letter-complaint (for violation of PD 984 and its implementing rules and regulations) filed against MMC by Marinduque Mayor Wilfredo Red. In the subject Order dated April 23, 1997, the PAB ruled that MMC should pay its arrears in deposits to the ETF of the CBRP computed from the day it stopped dumping and paying on July 1, 1991 up to the

lifting of the Order of the Office of the President dated May 13, 1988 on February 5, 1993.

The answer is in the negative. We agree with the Solicitor General that the Court of Appeals committed reversible error in ruling that the PAB had no authority to issue the Order dated April 23, 1997.

Republic Act No. 3931 (An Act Creating The National Water And Air Pollution Control Commission) was passed in June 18, 1964 to maintain reasonable standards of purity for the waters and air of the country with their utilization for domestic, agricultural, industrial and other legitimate purposes. Said law was revised in 1976 by Presidential Decree No. 984 (Providing For The Revision Of Republic Act No. 3931, Commonly Known As The Pollution Control Law, And For Other Purposes) to strengthen the National Pollution Control Commission to best protect the people from the growing menace of environmental pollution. Subsequently, Executive Order No. 192, s. 1987 (The Reorganization Act of the DENR) was passed. The internal structure, organization and description of the functions of the new DENR, particularly the Mines and Geosciences Bureau, reveals no provision pertaining to the resolution of cases involving violations of the pollution laws.

[18] The Mines and Geo-Sciences

Bureau was created under the said EO 192 to absorb the functions of the abolished Bureau of Mines and Geo-Sciences, Mineral Reservations Development Board and the Gold Mining Industry Development Board to, among others, recommend policies, regulations and programs pertaining to mineral resources development; assist in the monitoring and evaluation of the Bureaus programs and projects; and to develop and promulgate standards and operating procedures on mineral resources development.

[19]

On the other hand, the PAB was created and granted under the same EO 192 broad powers to adjudicate pollution cases in general. Thus,

SEC. 19. Pollution Adjudication Board. There is hereby created a Pollution Adjudication Board under the Office of the Secretary. The Board shall be composed of the Secretary as Chairman, two (2) Undersecretaries as may be designated by the Secretary, the Director of Environmental management, and three (3) others to be designated by the Secretary as members. The Board shall assume the powers and functions of the Commission/Commissioners of the National Pollution Control Commission with respect to the adjudication of pollution cases under Republic Act 3931 and Presidential Decree 984, particularly with respect to Section 6 letters e, f, g, j, k, and p of P.D. 984. The Environmental Management Bureau shall serve as the Secretariat of the Board. These powers and functions may be delegated to the regional offices of the Department in accordance with rules and regulations to be promulgated by the Board.

[20]

Section 6 letters e, f, g, j, k, and p of PD 984 referred to above are quoted as follows:

SEC. 6. Powers and Functions. The Commission shall have the following powers and functions:

(e) Issue orders or decision to compel compliance with the provisions of this Decree and its implementing rules and regulations only after proper notice and hearing.

(f) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such discontinuance must be accomplished.

(g) Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for the prevention and abatement of pollution, for the discharge of sewage, industrial waste, or for the installation or operation of sewage works and industrial disposal system or parts thereof: Provided, however, That the Commission, by rules and regulations, may require subdivisions,

condominium, hospitals, public buildings and other similar human settlements to put up appropriate central sewerage system and sewage treatment works, except that no permits shall be required to any sewage works or changes to or extensions of existing works that discharge only domestic or sanitary wastes from a singles residential building provided with septic tanks or their equivalent. The Commission may impose reasonable fees and charges for the issuance or renewal of all permits required herein.

(h)

(i)

(j) Serve as arbitrator for the determination of reparations, or restitution of the damages and losses resulting from pollution.

(k) Deputize in writing or request assistance of appropriate government agencies or instrumentalities for the purpose of enforcing this Decree and its implementing rules and regulations and the orders and decisions of the Commission.

(l)

(m)

(n)

(o)

(p) Exercise such powers and perform such other functions as may be necessary to carry out its duties and responsibilities under this Decree.

Section 7(a) of P.D. No. 984 further provides in part:

Sec. 7(a) Public Hearing. Public hearing shall be conducted by the Commissioner, Deputy Commissioner or any senior official

duly designated by the Commissioner prior to issuance or promulgation of any order or decision by the Commissioner requiring the discontinuance of discharge of sewage, industrial wastes and other wastes into the water, air or land resources of the Philippines as provided in the Decree: provided, that whenever the Commission finds a prima facie evidence that the discharged sewage or wastes are of immediate threat to life, public health, safety or Welfare, or to animal or plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue and ex-parte order directing the discontinuance of the same or the temporary suspension or cessation of operation of the establishment or person generating such sewage or wastes without the necessity of a prior public hearing. x x x . (underscoring supplied).

The ruling of the Court of Appeals that the PAB has been divested of authority to act on pollution-related matters in mining operations is anchored on the following provisions of RA 7942 (Philippine Mining Act of 1995):

SEC. 67. Power to Issue Orders. The mines regional director shall, in consultation with the Environmental Management Bureau, forthwith or within such time as specified in his order, require the contractor to remedy any practice connected with mining or quarrying operations, which is not in accordance with safety and anti-pollution laws and regulations. In case of imminent danger to life or property, the mines regional director may summarily suspend the mining or quarrying operations until the danger is removed, or appropriate measures are taken by the contractor or permittee.

And

SEC. 115. Repealing and Amending Clause. All laws, executive orders, presidential decrees, rules and regulations, or

parts thereof which are inconsistent with any of the provisions of this Act are hereby repealed or amended accordingly.

The other provisions in Chapter XI on Safety and Environmental Protection found in RA 7942 promote the safe and sanitary upkeep of mining areas to achieve waste-free and efficient mine development with particular concern for the physical and social rehabilitation of areas and communities affected by mining activities

[21], without however, arrogating unto the mines regional

director any adjudicative responsibility.

From a careful reading of the foregoing provisions of law, we hold that the provisions of RA 7942 do not necessarily repeal RA 3931, as amended by PD 984 and EO 192. RA 7942 does not contain any provision which categorically and expressly repeals the provisions of the Pollution Control Law. Neither could there be an implied repeal. It is well-settled that repeals of laws by implication are not favored and that courts must generally assume their congruent application. Thus, it has been held:

The two laws must be absolutely incompatible, and a clear finding thereof must surface, before the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare et concordare leqibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with other laws aas to form a uniform system of jurisprudence. The fundament is that the legislature should be presumed to have known the existing laws on the subject and not have enacted conflicting statutes. Hence, all doubts must be resolved against any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all laws on the subject.[22]

There is no irreconcilable conflict between the two laws. Section 19 of EO 192 vested the PAB with the specific power to adjudicate pollution cases in general. Sec. 2, par. (a) of

PD 984 defines the term pollution as referring to any alteration of the physical, chemical and biological properties of any water, air and/or land resources of the Philippines , or any discharge thereto of any liquid, gaseous or solid wastes as will or is likely to create or to render such water, air and land resources harmful, detrimental or injurious to public health, safety or welfare or which will adversely affect their utilization for domestic, commercial, industrial, agricultural, recreational or other legitimate purposes.

On the other hand, the authority of the mines regional director is complementary to that of the PAB. Section 66 of RA 7942 gives the mines regional director exclusive jurisdiction over the safety inspection of all installations, surface or underground in mining operations. Section 67 thereof vests upon the regional director power to issue orders requiring a contractor to remedy any practice connected with mining or quarrying operations which is not in accordance with safety and anti-pollution laws and regulations; and to summarily suspend mining or quarrying operations in case of imminent danger to life or property. The law likewise requires every contractor to undertake an environmental protection and enhancement program which shall be incorporated in the work program which the contractor shall submit as an accompanying document to the application for a mineral agreement or permit. In addition, an environmental clearance certificate is required based on an environment impact assessment. The law also requires contractors and permittees to rehabilitate the mined-out areas, and set up a mine rehabilitation fund. Significantly, the law allows and encourages peoples organizations and non-governmental organizations to participate in ensuring that contractors/permittees shall observe all the requirements of environmental protection.

From the foregoing, it readily appears that the power of the mines regional director does not foreclose PABs authority to determine and act on complaints filed before it. The power granted to the mines regional director to issue orders requiring the

contractor to remedy any practice connected with mining or quarrying operations or to summarily suspend the same in cases of violation of pollution laws is for purposes of effectively regulating and monitoring activities within mining operations and installations pursuant to the environmental protection and enhancement program undertaken by contractors and permittees in procuring their mining permit. While the mines regional director has express administrative and regulatory powers over mining operations and installations, it has no adjudicative powers over complaints for violation of pollution control statutes and regulations.

True, in Laguna Lake Development Authority vs. Court of Appeals,

[23] this Court held that adjudication of pollution cases

generally pertains to the Pollution Adjudication Board (PAB) except where the special law provides for another forum. However, contrary to the ruling of the Court of Appeals, RA 7942 does not provide for another forum inasmuch as RA 7942 does not vest quasi-judicial powers in the Mines Regional Director. The authority is vested and remains with the PAB.

Neither was such authority conferred upon the Panel of Arbitrators and the Mines Adjudication Board which were created by the said law. The provisions creating the Panel of Arbitrators for the settlement of conflicts refers to disputes involving rights to mining areas, mineral agreements or permits and those involving surface owners, occupants and claim-holders/concessionaires.

[24] The scope of authority of the Panel of

Arbitrators and the Mines Adjudication Board conferred by RA 7942 clearly exclude adjudicative responsibility over pollution cases. Nowhere is there vested any authority to adjudicate cases involving violations of pollution laws and regulations in general.

Thus, there is no genuine conflict between RA 7942 and RA 3931 as amended by PD 984 that precludes their co-existence. Moreover, it has to be conceded that there was no intent on the part of the legislature to repeal the said law. There is nothing in

the sponsorship speech[25]

of the laws proponent, Representative Renato Yap, and the deliberations that followed thereafter, to indicate a legislative intent to repeal the pollution law. Instead, it appears that the legislature intended to maximize the exploration, development and utilization of the countrys mineral resources to contribute to the achievement of national economic and social development with due regard to the social and environmental cost implications relative thereto. The law intends to increase the productivity of the countrys mineral resources while at the same time assuring its sustainability through judicious use and systematic rehabilitation. Henceforth, the Department of Environment and Natural Resources as the primary government agency responsible for the conservation, management, development, and proper use of the States mineral resources, through its Secretary, has the authority to enter into mineral agreements on behalf of the Government upon the recommendation of the Director, and to promulgate such rules and regulations as may be necessary to carry out the provisions of RA 7942.

[26] The PAB and the Mines Regional Director, with

their complementary functions and through their combined efforts, serve to accomplish the mandate of RA 3931 (National Pollution Control Decree of 1976) as amended by PD 984 and EO 192 and that of RA 7942 (Philippine Mining Act of 1995).

That matter settled, we now go to the issue of whether the appellate court erred in ruling that there is no basis for further payments by MMC to the Ecology Trust Fund of the Calancan Bay Rehabilitation Project considering that MMC convincingly argued and which respondent unsatisfactorily rebuked, the existing fourteen (14) million pesos in the ETF is more than enough to complete the rehabilitation project. Indeed, the records reveal that witness for PAB, Mr. Edel Genato, who is the Technical Resource person of the PAB for the project admitted that the funds in the ETF amounting to about Fourteen Million Pesos are more than sufficient to cover the costs of

There was no amendment

rehabilitation. Hereunder are excerpts from the transcript of stenographic notes taken during the hearing held on September 15, 1997:

ATTY. HERNANDEZ:[27]

I would like your Honor, if the court will allow, our witness from the EBRB Your Honor would attest to that . . .

JUSTICE JACINTO:

Is it not being taken from the 14 million?

ATTY. HERNANDEZ:

Yes, Your Honor.

JUSTICE RASUL:

What is his role?

ATTY. HERNANDEZ:

He is our Technical Resource person Your Honor, of the project.

JUSTICE RASUL:

In other words, he has participated in the . . (inaudible)?

ATTY. HERNANDEZ:

Yes, Your Honor.

JUSTICE RASUL:

Do you agree with him?

MR. EDEL GENATO:

Yes, Your Honor, that the Calancan rehabilitation program is being funded by Marcopper through the Ecology Trust Fund.

JUSTICE RASUL:

Will the construction be finished in two years time?

MR. EDEL GENATO:

Presently, under the Steering Committee of the Calancan Bay Rehabilitation, there is another phase that is being proposed. Actually the two years time will definitely cover the other phase of the . . (inaudible)

JUSTICE RASUL:

Never mind that. Will the amount be sufficient to the end of the construction?

MR. EDEL GENATO:

Yes, Sir.

JUSTICE RASUL:

Enough?

MR. EDEL GENATO:

Yes, Sir.

JUSTICE RASUL:

There is no more need for collecting the 30 thousand a day? . . . Do not . . . I will hold you for contempt . . .

ATTY. HERNANDEZ:

Im sorry Your Honor.

JUSTICE RASUL:

Again.

MR. EDEL GENATO:

Well Your Honor, I cannot comment on the amount Your Honor.

JUSTICE RASUL:

You have already made your comment, but you received some signal from your lawyer.

ATTY. HERNANDEZ:

Your Honor . . .

MR. EDEL GENATO:

No, no Your Honor. . .

JUSTICE RASUL:

My question is, do you agree with him that the 14 million fund will be enough to sustain the construction up to the end?

MR. EDEL GENATO:

Two years?

JUSTICE RASUL:

Yes.

MR. EDEL GENATO:

Your Honor. . .

JUSTICE AMIN:

Categorical answer.

JUSTICE RASUL:

You just answer, is it enough, in your own honest way, on your honor?

MR. EDEL GENATO:

I think so Your Honor.[28]

We must sustain the appellate court on this point on account of the testimony of Mr. Edel Genato. Further, we note that the Office of the President never objected nor ruled on the manifestation dated July 9, 1991 filed by MMC that it would stop paying since it already ceased dumping mine tailings into the bay. Still further, the order of the OP directing MMC to rehabilitate at a cost of P30,000.00 a day during the efficacy of

the restraining order had become functus officio since MMC voluntarily stopped dumping mine tailings into the bay.

To sum up, PAB has jurisdiction to act and rule on the letter-complaint of Mayor Wilfredo Red of Marinduque for violation of PD 984 and its implementing rules and regulations which jurisdiction was not lost upon the passage of RA 7942 (the Philippine Mining Act of 1995). Nevertheless, MMC must be declared not to have arrears in deposits as admittedly, the ETF already has more than sufficient funds to undertake the rehabilitation of Calancan Bay.

WHEREFORE, the petition is hereby partially GRANTED. The assailed Decision is REVERSED insofar as the jurisdiction of the PAB to act on the complaint is concerned; but AFFIRMED insofar as Marcopper Mining Corporation has no arrears in deposits with the Ecology Trust Fund of the Calancan Bay Rehabilitation Project.

SO ORDERED.

Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.

[1] Dated January 7, 1998; Annex A, Rollo, pp. 33-43. [2]

Sixth Division composed of Associate Justices Omar U. Amin (ponente), Jesus M. Elbinias and Hector L. Hofilea. [3] Dated April 23, 1997; Annex D, Rollo, pp. 61-62. [4]

Composed of Victor O. Ramos (Chairman), Antonio G.M. La Via (Presiding Officer) and Delfin Ganapin, Jr., Manuel S. Gaspay, Leonardo U. Sawal, Profirio C. Macatangay as members. [5]

Dated January 13, 1999, Rollo, p. 45.

[6] The Philippine Mining Act of 1995 defines Mine wastes and tailings as soil and rock materials from surface or underground mining and milling operations with no economic value to the generator of the same. [7]

Providing For The Reorganization Of The Department Of Environment, Energy And Natural Resources, Renaming it As The Department of Environment and Natural Resources, And For Other Purposes. [8]

See Secs. 16 & 19. [9] Original Records, Annex B, p. 20. [10] OR, Annex C, pp. 21-23. [11]

Rollo, pp. [12] OR, Annex D, pp. 24-25. [13]

Providing for the Revision of Republic Act No. 3931, commonly known as the Pollution Control Law and for Other Purposes. [14] Original Records, Annex A, pp. 18-19. [15]

Rollo, pp. 15-16. [16]

Rollo, pp. 39-42. [17]

Rollo, pp. 40, 42. [18]

SEC. 6. Structural Organization.- The Department shall consist of the Department proper, the staff offices, the staff bureaus and the regional/provincial/community natural resources offices.

The Department proper shall consist of the following:

(a) Office of the Secretary

(b) Offices of the Undersecretaries

(c) Offices of Assistant Secretaries

(d) Public Affairs Office

(e) Special Concerns Office

(f) Pollution Adjudication Board

The staff sectoral bureaus, on the other hand, shall be composed of:

(a) Forest Management Bureau

(b) Lands Management Bureau

(c) Mines and Geo-Sciences Bureau

(d) Environmental Management Bureau

(e) Ecosystems Research and Development Bureau

(f) Protected Areas and Wildlife Bureau.

The field offices shall consist of all department regional offices, the provincial offices and the community offices. [19]

SEC. 15. Mines and Geo-Sciences Bureau. There is hereby created the Mines and Geo-Sciences Bureau which shall absorb the functions of the Bureau of Mines and Geo-Sciences (BMGS), Mineral Reservations Development Board (MRDB) and the Gold Mining Industry Development Board (GMIDB) all of which are hereby merged in accordance with Section 24 hereof except those line functions and powers which are transferred to the regional field office. The Mines and Geo-Sciences Bureau, to be headed by a Director and assisted by an Assistant Director shall advise the Secretary on matters pertaining to geology and mineral resources exploration, development and conservation and shall have the following functions, but not limited to:

(a) Recommend polices, regulations and programs pertaining to mineral resources development and geology;

(b) Recommend policies, regulations and oversee the development and exploitation of mineral resources of the sea within the countrys jurisdiction such as silica sand, gold placer, magnetite and chromite sand, etc.

(c) Advise the Secretary on the granting of mining rights and contracts over areas containing metallic and non-metallic mineral resources;

(d) Advise the Regional Office on the effective implementation of mineral development and conservation programs as well as geological surveys;

(e) Assist in the monitoring and evaluation of the Bureaus programs and projects to ensure efficiency and effectiveness thereof;

(f) Develop and promulgate standards and operating procedures on mineral resources development and geology;

(g) Supervise and control the development and packaging of nationally applicable technologies on geological survey, mineral resource assessment, mining and metallurgy; the provision of geological, metallurgical, chemical and rock mechanics laboratory services; the conduct of marine geological and geophysical survey and natural exploration drilling programs;

(h) Perform other functions as may be assigned by the Secretary and/or provided by law. [20]

Emphasis ours. [21]

SEC. 63. Mines Safety and Environmental Protection.-All contractors and permittees shall strictly comply with all the mines safety rules and regulations as may be promulgated by the Secretary concerning the safe and sanitary upkeep of the mining operations and achieve waste-free and efficient mine development. Personnel of the Department involved in the implementation of mines safety, health and environmental rules and regulations shall be covered under Republic Act No. 7305.

x x x

SEC. 66. Mine Inspection. The regional director shall have exclusive jurisdiction over the safety inspection of all installations, surface or underground, in mining operations at reasonable hours of the day or night and as much as possible in a manner that will not impede or obstruct work in progress of a contractor or permittee.

xxx xxx xxx.

xxx xxx xxx.

SEC. 69. Environmental Protection. Every contractor shall undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit. Such environmental program shall be incorporated in the work program which the contractor or permittee shall submit as an accompanying document to the application for a mineral agreement or permit. The work program shall include not only plans relative to mining operations but also to rehabilitation, regeneration, revegetation and reforestation of mineralized areas, slope and stabilization of mined-out and tailings covered areas, aquaculture, watershed development and water conservation; and socioeconomic development.

SEC. 70. Environmental Impact Assessment (EIA). Except during the exploration period of a mineral agreement or financial or technical assistance agreement or an exploration permit, an environmental clearance certificate shall be required based on an environmental impact assessment and procedures under the Philippine Environmental Impact Assessment system including Sections 26 and 27 of the Local Government Code of 1991 which require national government agencies to maintain ecological balance, and prior consultation with the local government units, non-governmental and peoples organizations and other concerned sectors of the community: Provided, That a completed ecological profile of the proposed mining area shall also constitute part of the environmental impact

assessment. Peoples organizations and non-governmental organizations shall be allowed and encouraged to participate in ensuring that contractors/permittees shall observe all the requirements of environmental protection.

SEC. 71. Rehabilitation.-Contractors and permittees shall technically and biologically rehabilitate the excavated mined-out, tailings covered and disturbed areas to the condition of environmental safety, as may be provided in the implementing rules and regulations of this Act. A mine rehabilitation fund shall be created, based on the contractors approved work program, and shall be deposited as a trust fund in a government depository bank and used for physical and social rehabilitation of areas and communities affected by mining activities and for research on the social, technical and preventive aspects of rehabilitation. Failure to fulfill the above obligation shall mean immediate suspension or closure of the mining activities of the contractor/permittee concerned. [22]

Hagad vs. Gozo-Dadole, 251 SCRA 242 (1995). [23]

231 SCRA 292 (1994). [24]

Chapter XIII. Settlement of Conflicts

SEC. 77. Panel of Arbitrators. -- There shall be a panel of arbitrators in the regional office of the Department composed of three (3) members, two (2) of whom must be members of the Philippine Bar in good standing and one a licensed mining engineer or a professional in a related field, and duly designated by the Secretary as recommended by the Mines and Geosciences Bureau Director. Those designated as members of the panel shall serve as such in addition to their work in the Department without receiving any additional compensation. As much as practicable, said members shall come down from the different bureaus of the Department in the region. The presiding officer thereof shall be selected by the drawing of lots. His tenure as presiding officer shall be on a yearly basis. The members of

the panel shall perform their duties and obligations in hearing and deciding cases until their designation is withdrawn or revoked by the Secretary. Within thirty (30) working days, after the submission of the case by the parties for decision, the panel shall have exclusive and original jurisdiction to hear and decide on the following:

(a) Disputes involving rights to mining areas;

(b) Disputes involving mineral agreements or permits;

(c) Disputes involving surface owners, occupants and claim-holders/concessionaires; and

(d) Disputes pending before the Bureau and the Department at the date of the effectivity of this Act.

SEC. 78. Appellate Jurisdiction. -- the decision or order of the panel of arbitrators may be appealed by the party not satisfied thereto to the Mines Adjudication Board within fifteen (15) days from receipt thereof which must decide the case within thirty (30) days from submission thereof for decision.

SEC. 79. Mines Adjudication Board. -- The Mines Adjudication Board shall be composed of three (3) members. The Secretary shall be the chairman with the Director of the Mines and Geosciences Bureau and the Undersecretary for Operations of the Department as members thereof. The Board shall have the following powers and functions:

(a) To promulgate rules and regulations governing the hearing and disposition of cases before it, as well as those pertaining to its internal functions, and such rules and regulations as may be necessary to carry out its functions;

(b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, statement of accounts, agreements, and other documents as may be material to a just determination of the

matter under investigation, and to testify in any investigation or hearing conducted in pursuance of this Act;

(c ) To conduct hearings on all matters within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings at any time and place, refer technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or irregularity, whether in substance or in form, give all such directions as it may be deem necessary or experiment in the determination of the dispute before it, and dismiss the mining dispute as part thereof, where it is trivial or where further proceedings by the Board are not necessary or desirable;

(1) To hold any person in contempt, directly or indirectly, and impose appropriate penalties therefor; and

(2) To enjoin any or all acts involving or arising from any case pending before it which, if not restrained forthwith, may cause grave or irreparable damage to any of the parties to the case or seriously affect social and economic stability.

In any proceeding before the Board, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Act that shall govern. The Board shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Board, the parties may be represented by legal counsel. The findings of fact of the Board shall be conclusive and binding on the parties and its decision or order shall be final and executory.

[25] It is an undisputed fact that the Philippines is one of the highly mineralized countries in the world with a wide range of economic minerals found in over 77 percent of its 76 provinces.

The country was estimated to have 30.8 billion metric tons, of which 11.5 billion metric tons (37.3%) are metallic and 19.3 billion metric tons (62.3%) are non-metallic.

As of 1990, the countrys total mineral ore reserves was 18 million metric tons. Metallic ores such as primary gold, primary copper, chromite and iron, were pegged at 8.8 billion metric tons. Non-metallic ores, on the other hand, such as cement raw materials, magnesite and marble, were placed at around 9.1 billion metric tons.

In the 1970s when the mining industry was contributing about 23% of the countrys total export earnings, it had 32 metal producing firms.

The heydays of the mining industry was not to be sustained when world metal prices started to decline in 1982.

While there were 31 gold and copper mining firms in 1982, this dwindled to only 16 in 1987, and to 12 as of this month.

Today, almost all the remaining mining firms are declaring losses in millions and are laying off thousands of workers.

Where lies the problem? What needs to be done?

While the most obvious explanation for the sorry state of the mining industry is the plummeting worldwide market prices especially for metals, much blame is pointed at inconsistent and changing laws that fail to optimize the use of our mineral resources and make the industry incompetitive in the global market.

The mining industry has also been hit by environmental groups. . . /ala

x x x

MR. YAP (R.) . . . by environmental groups who have been painting mining as a dirty, unnecessary and ecologically devastating exercise.

In the past months, your Committees on Natural Resources, Ways and Means, and Local Government have been working to resuscitate the mining industry by coming up with a most practicable mining package. These measures are: Committee Report No. 294 on House Bill No. 10816; Committee Report No. 289 on House Bill No. 10693 and Committee Report to be filed on House Bill No. 10694.

This mining package seeks to address the three major concerns of the industry: the need for a comprehensive law to cover the exploration, development, utilization and conservation of mineral resources; the need to address the mining safety and environmental protection concerns in the mining operations; and the need to revitalize the mining industry for it to be able to compete in the world market through: (1) incentives under the Omnibus Investments Acts; (2) the setting of the government share or excise tax under the National Internal Revenue Act at 2% to make the mining industry competitive worldwide; and lastly, the exemption to tailings dam or pond and other pollution control devices from the real property tax under the Local Government Code.

x x x

On the aspect of mining safety and environmental protection, the Act mandates strict compliance by the contractors and permittees with the mines safety rules and regulations that shall be promulgated by the DENR Secretary.

Furthermore, Mr. Speaker, the Act also requires contractors, licensees and permittees to rehabilitate technically and biologically the excavated mined-out, tailings covered and disturbed areas.

[26] See Sec. 8.

[27] Counsel for PAB.

[28] Rollo, pp. 246-254.

G.R. No. 127882 January 27, 2004

LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., represented by its Chairman F'LONG MIGUEL M. LUMAYONG, WIGBERTO

E. TAADA, PONCIANO BENNAGEN, JAIME TADEO, RENATO R. CONSTANTINO, JR., F'LONG AGUSTIN M.

DABIE, ROBERTO P. AMLOY, RAQIM L. DABIE, SIMEON H. DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN, MARCELO L. GUSANAN, QUINTOL A. LABUAYAN,

LOMINGGES D. LAWAY, BENITA P. TACUAYAN, minors JOLY L. BUGOY, represented by his father UNDERO D. BUGOY, ROGER M. DADING, represented by his father

ANTONIO L. DADING, ROMY M. LAGARO, represented by his father TOTING A. LAGARO, MIKENY JONG B. LUMAYONG, represented by his father MIGUEL M. LUMAYONG, RENE T.

MIGUEL, represented by his mother EDITHA T. MIGUEL, ALDEMAR L. SAL, represented by his father DANNY M. SAL,

DAISY RECARSE, represented by her mother LYDIA S. SANTOS, EDWARD M. EMUY, ALAN P. MAMPARAIR, MARIO L. MANGCAL, ALDEN S. TUSAN, AMPARO S. YAP, VIRGILIO

CULAR, MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN CARLO CULAR, VIRGILIO CULAR, JR., represented by their father VIRGILIO CULAR, PAUL ANTONIO P. VILLAMOR, represented by his parents JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR, ANA GININA R. TALJA, represented by her father MARIO JOSE B. TALJA, SHARMAINE R. CUNANAN,

represented by her father ALFREDO M. CUNANAN, ANTONIO JOSE A. VITUG III, represented by his mother ANNALIZA A.

VITUG, LEAN D. NARVADEZ, represented by his father MANUEL E. NARVADEZ, JR., ROSERIO MARALAG

LINGATING, represented by her father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E. DE VERA,

MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO, OND, LOLITA G. DEMONTEVERDE, BENJIE L.

NEQUINTO,1 ROSE LILIA S. ROMANO, ROBERTO S.

VERZOLA, EDUARDO AURELIO C. REYES, LEAN LOUEL A. PERIA, represented by his father ELPIDIO V. PERIA,

2 GREEN

FORUM PHILIPPINES, GREEN FORUM WESTERN VISAYAS, (GF-WV), ENVIRONMETAL LEGAL ASSISTANCE CENTER

(ELAC), PHILIPPINE KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN

(KAISAHAN),3 KAISAHAN TUNGO SA KAUNLARAN NG

KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR AGRARIAN REFORM and RURAL

DEVELOPMENT SERVICES, INC. (PARRDS), PHILIPPINE PART`NERSHIP FOR THE DEVELOPMENT OF HUMAN

RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA), WOMEN'S LEGAL BUREAU (WLB), CENTER FOR

ALTERNATIVE DEVELOPMENT INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT INSTITUTE (UDI), KINAIYAHAN

FOUNDATION, INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL (SALIGAN), LEGAL RIGHTS AND NATURAL

RESOURCES CENTER, INC. (LRC), petitioners, vs.

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 WMC (PHILIPPINES), INC.4 respondents.

D E C I S I O N

CARPIO-MORALES, J.:

The present petition for mandamus and prohibition assails the constitutionality of Republic Act No. 7942,

5otherwise known as

the PHILIPPINE MINING ACT OF 1995, along with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order 96-40, and of the Financial and Technical

Assistance Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a corporation organized under Philippine laws.

On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 279

6 authorizing the DENR Secretary

to accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts or 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. In entering into such proposals, the President shall consider the real contributions to the economic growth and general welfare of the country that will be realized, as well as the development and use of local scientific and technical resources that will be promoted by the proposed contract or agreement. Until Congress shall determine otherwise, large-scale mining, for purpose of this Section, shall mean those proposals for contracts or agreements for mineral resources exploration, development, and utilization involving a committed capital investment in a single mining unit project of at least Fifty Million Dollars in United States Currency (US $50,000,000.00).

7

On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to "govern the exploration, development, utilization and processing of all mineral resources."

8 R.A. No. 7942 defines the

modes of mineral agreements for mining operations,9 outlines the

procedure for their filing and approval,10

assignment/transfer11

and withdrawal,

12 and fixes their terms.

13 Similar provisions govern

financial or technical assistance agreements.14

The law prescribes the qualifications of contractors15

and grants them certain rights, including timber,

16 water

17and

easement18

rights, and the right to possess explosives.19

Surface owners, occupants, or concessionaires are forbidden from

preventing holders of mining rights from entering private lands and concession areas.

20 A procedure for the settlement of

conflicts is likewise provided for.21

The Act restricts the conditions for exploration,22

quarry23

and other

24 permits. It regulates the transport, sale and processing of

minerals,25

and promotes the development of mining communities, science and mining technology,

26 and safety and

environmental protection.27

The government's share in the agreements is spelled out and allocated,

28 taxes and fees are imposed,

29incentives

granted.30

Aside from penalizing certain acts,31

the law likewise specifies grounds for the cancellation, revocation and termination of agreements and permits.

32

On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila Times, two newspapers of general circulation, R.A. No. 7942 took effect.

33 Shortly before the

effectivity of R.A. No. 7942, however, or on March 30, 1995, the President entered into an FTAA with WMCP covering 99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato.

34

On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 95-23, s. 1995, otherwise known as the Implementing Rules and Regulations of R.A. No. 7942. This was later repealed by DAO No. 96-40, s. 1996 which was adopted on December 20, 1996.

On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary demanding that the DENR stop the implementation of R.A. No. 7942 and DAO No. 96-40,

35 giving the

DENR fifteen days from receipt36

to act thereon. The DENR, however, has yet to respond or act on petitioners' letter.

37

Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They allege that at the time of the filing of the petition, 100 FTAA applications had already been filed, covering an area of 8.4 million hectares,

38 64 of which applications are by fully foreign-

owned corporations covering a total of 5.8 million hectares, and at least one by a fully foreign-owned mining company over offshore areas.

39

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:

I

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows fully foreign owned corporations to explore, develop, utilize and exploit mineral resources in a manner contrary to Section 2, paragraph 4, Article XII of the Constitution;

II

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows the taking of private property without the determination of public use and for just compensation;

III

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it violates Sec. 1, Art. III of the Constitution;

IV

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows enjoyment by foreign citizens as well as fully foreign owned corporations of the nation's marine wealth contrary to Section 2, paragraph 2 of Article XII of the Constitution;

V

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows priority to foreign and fully foreign owned corporations in the exploration, development and utilization of mineral resources contrary to Article XII of the Constitution;

VI

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows the inequitable sharing of wealth contrary to Sections [sic] 1, paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the Constitution;

VII

x x x in recommending approval of and implementing the Financial and Technical Assistance Agreement between the President of the Republic of the Philippines and Western Mining Corporation Philippines Inc. because the same is illegal and unconstitutional.

40

They pray that the Court issue an order:

(a) Permanently enjoining respondents from acting on any application for Financial or Technical Assistance Agreements;

(b) Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as unconstitutional and null and void;

(c) Declaring the Implementing Rules and Regulations of the Philippine Mining Act contained in DENR Administrative Order No. 96-40 and all other similar administrative issuances as unconstitutional and null and void; and

(d) Cancelling the Financial and Technical Assistance Agreement issued to Western Mining Philippines, Inc. as unconstitutional, illegal and null and void.

41

Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O. Ramos, the then DENR Secretary, and Horacio Ramos, Director of the Mines and Geosciences Bureau of the DENR. Also impleaded is private respondent WMCP, which entered into the assailed FTAA with the Philippine Government. WMCP is owned by WMC Resources International Pty., Ltd. (WMC), "a wholly owned subsidiary of Western Mining Corporation Holdings Limited, a publicly listed major Australian mining and exploration company."

42 By WMCP's information, "it is

a 100% owned subsidiary of WMC LIMITED."43

Respondents, aside from meeting petitioners' contentions, argue that the requisites for judicial inquiry have not been met and that the petition does not comply with the criteria for prohibition and mandamus. Additionally, respondent WMCP argues that there has been a violation of the rule on hierarchy of courts.

After petitioners filed their reply, this Court granted due course to the petition. The parties have since filed their respective memoranda.

WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January 23, 2001, WMC sold all its shares in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation

organized under Philippine laws.44

WMCP was subsequently renamed "Tampakan Mineral Resources Corporation."

45 WMCP

claims that at least 60% of the equity of Sagittarius is owned by Filipinos and/or Filipino-owned corporations while about 40% is owned by Indophil Resources NL, an Australian company.

46 It

further claims that by such sale and transfer of shares, "WMCP has ceased to be connected in any way with WMC."

47

By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, 2001,

48 approved the transfer and registration of

the subject FTAA from WMCP to Sagittarius. Said Order, however, was appealed by Lepanto Consolidated Mining Co. (Lepanto) to the Office of the President which upheld it by Decision of July 23, 2002.

49 Its motion for reconsideration having

been denied by the Office of the President by Resolution of November 12, 2002,

50 Lepanto filed a petition for review

51 before

the Court of Appeals. Incidentally, two other petitions for review related to the approval of the transfer and registration of the FTAA to Sagittarius were recently resolved by this Court.

52

It bears stressing that this case has not been rendered moot either by the transfer and registration of the FTAA to a Filipino-owned corporation or by the non-issuance of a temporary restraining order or a preliminary injunction to stay the above-said July 23, 2002 decision of the Office of the President.

53 The validity

of the transfer remains in dispute and awaits final judicial determination. This assumes, of course, that such transfer cures the FTAA's alleged unconstitutionality, on which question judgment is reserved.

WMCP also points out that the original claimowners of the major mineralized areas included in the WMCP FTAA, namely, Sagittarius, Tampakan Mining Corporation, and Southcot Mining Corporation, are all Filipino-owned corporations,

54 each of which

was a holder of an approved Mineral Production Sharing

Agreement awarded in 1994, albeit their respective mineral claims were subsumed in the WMCP FTAA;

55 and that these three

companies are the same companies that consolidated their interests in Sagittarius to whom WMC sold its 100% equity in WMCP.

56 WMCP concludes that in the event that the FTAA is

invalidated, the MPSAs of the three corporations would be revived and the mineral claims would revert to their original claimants.

57

These circumstances, while informative, are hardly significant in the resolution of this case, it involving the validity of the FTAA, not the possible consequences of its invalidation.

Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the first and the last need be delved into; in the latter, the discussion shall dwell only insofar as it questions the effectivity of E. O. No. 279 by virtue of which order the questioned FTAA was forged.

I

Before going into the substantive issues, the procedural questions posed by respondents shall first be tackled.

REQUISITES FOR JUDICIAL REVIEW

When an issue of constitutionality is raised, this Court can exercise its power of judicial review only if the following requisites are present:

(1) The existence of an actual and appropriate case;

(2) A personal and substantial interest of the party raising the constitutional question;

(3) The exercise of judicial review is pleaded at the earliest opportunity; and

(4) The constitutional question is the lis mota of the case. 58

Respondents claim that the first three requisites are not present.

Section 1, Article VIII of the Constitution states that "(j)udicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable." The power of judicial review, therefore, is limited to the determination of actual cases and controversies.

59

An actual case or controversy means an existing case or controversy that is appropriate or ripe for determination, not conjectural or anticipatory,

60 lest the decision of the court would

amount to an advisory opinion.61

The power does not extend to hypothetical questions

62 since any attempt at abstraction could

only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities.

63

"Legal standing" or locus standi has been defined as a personal and 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,

64alleging more than a

generalized grievance.65

The gist of the question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions."

66Unless a person is injuriously affected in any of his

constitutional rights by the operation of statute or ordinance, he has no standing.

67

Petitioners traverse a wide range of sectors. Among them are La Bugal B'laan Tribal Association, Inc., a farmers and indigenous people's cooperative organized under Philippine laws representing a community actually affected by the mining activities of WMCP, members of said cooperative,

68 as well as

other residents of areas also affected by the mining activities of WMCP.

69 These petitioners have standing to raise the

constitutionality of the questioned FTAA as they allege a personal and substantial injury. They claim that they would suffer "irremediable displacement"

70 as a result of the implementation of

the FTAA allowing WMCP to conduct mining activities in their area of residence. They thus meet the appropriate case requirement as they assert an interest adverse to that of respondents who, on the other hand, insist on the FTAA's validity.

In view of the alleged impending injury, petitioners also have standing to assail the validity of E.O. No. 279, by authority of which the FTAA was executed.

Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue either or both contracting parties to annul it.

71 In other words, they contend that petitioners are not real

parties in interest in an action for the annulment of contract.

Public respondents' contention fails. The present action is not merely one for annulment of contract but for prohibition and mandamus. Petitioners allege that public respondents acted without or in excess of jurisdiction in implementing the FTAA, which they submit is unconstitutional. As the case involves constitutional questions, this Court is not concerned with whether petitioners are real parties in interest, but with whether they have legal standing. As held in Kilosbayan v. Morato:

72

x x x. "It is important to note . . . that standing because of its constitutional and public policy underpinnings, is very different from questions relating to whether a particular plaintiff is the real party in interest or has capacity to sue. Although all three requirements are directed towards ensuring that only certain parties can maintain an action, standing restrictions require a partial consideration of the merits, as well as broader policy concerns relating to the proper role of the judiciary in certain

areas.["] (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328 [1985])

Standing is a special concern in constitutional law because in some cases suits are brought not by parties who have been personally injured by the operation of a law or by official action taken, but by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence, the question in standing is whether such parties have "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)

As earlier stated, petitioners meet this requirement.

The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills the requisites of justiciability. Although these laws were not in force when the subject FTAA was entered into, the question as to their validity is ripe for adjudication.

The WMCP FTAA provides:

14.3 Future Legislation

Any term and condition more favourable to Financial &Technical Assistance Agreement contractors resulting from repeal or amendment of any existing law or regulation or from the enactment of a law, regulation or administrative order shall be considered a part of this Agreement.

It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more favorable to WMCP, hence, these laws, to the extent that they are favorable to WMCP, govern the FTAA.

In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing agreements.

SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. x x x That the provisions of Chapter XIV on government share in mineral production-sharing agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply to a mining lessee or contractor unless the mining lessee or contractor indicates his intention to the secretary, in writing, not to avail of said provisions x x x Provided, finally, That such leases, production-sharing agreements, financial or technical assistance agreements shall comply with the applicable provisions of this Act and its implementing rules and regulations.

As there is no suggestion that WMCP has indicated its intention not to avail of the provisions of Chapter XVI of R.A. No. 7942, it can safely be presumed that they apply to the WMCP FTAA.

Misconstruing the application of the third requisite for judicial review that the exercise of the review is pleaded at the earliest opportunity WMCP points out that the petition was filed only almost two years after the execution of the FTAA, hence, not raised at the earliest opportunity.

The third requisite should not be taken to mean that the question of constitutionality must be raised immediately after the execution of the state action complained of. That the question of constitutionality has not been raised before is not a valid reason for refusing to allow it to be raised later.

73 A contrary rule would

mean that a law, otherwise unconstitutional, would lapse into constitutionality by the mere failure of the proper party to promptly file a case to challenge the same.

PROPRIETY OF PROHIBITION AND MANDAMUS

Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule 65 read:

SEC. 2. Petition for prohibition. When the proceedings of any tribunal, corporation, board, or person, whether exercising functions judicial or ministerial, are without or in excess of its or his jurisdiction, or with grave abuse of discretion, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant to desist from further proceeding in the action or matter specified therein.

Prohibition is a preventive remedy.74

It seeks a judgment ordering the defendant to desist from continuing with the commission of an act perceived to be illegal.

75

The petition for prohibition at bar is thus an appropriate remedy. While the execution of the contract itself may be fait accompli, its implementation is not. Public respondents, in behalf of the Government, have obligations to fulfill under said contract. Petitioners seek to prevent them from fulfilling such obligations on the theory that the contract is unconstitutional and, therefore, void.

The propriety of a petition for prohibition being upheld, discussion of the propriety of the mandamus aspect of the petition is rendered unnecessary.

HIERARCHY OF COURTS

The contention that the filing of this petition violated the rule on hierarchy of courts does not likewise lie. The rule has been explained thus:

Between two courts of concurrent original jurisdiction, it is the lower court that should initially pass upon the issues of a case. That way, as a particular case goes through the hierarchy of courts, it is shorn of all but the important legal issues or those of first impression, which are the proper subject of attention of the appellate court. This is a procedural rule borne of experience and adopted to improve the administration of justice.

This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this Court has concurrent jurisdiction with the Regional Trial Courts and the Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give a party unrestricted freedom of choice of court forum. The resort to this Court's primary jurisdiction to issue said writs shall be allowed only where the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify such invocation. We held in People v. Cuaresma that:

A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only where there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket x x x.

76 [Emphasis supplied.]

The repercussions of the issues in this case on the Philippine mining industry, if not the national economy, as well as the

novelty thereof, constitute exceptional and compelling circumstances to justify resort to this Court in the first instance.

In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the requirements of an actual case or legal standing when paramount public interest is involved.

77 When

the issues raised are of paramount importance to the public, this Court may brush aside technicalities of procedure.

78

II

Petitioners contend that E.O. No. 279 did not take effect because its supposed date of effectivity came after President Aquino had already lost her legislative powers under the Provisional Constitution.

And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O. No. 279, violates Section 2, Article XII of the Constitution because, among other reasons:

(1) It allows foreign-owned companies to extend more than mere financial or technical assistance to the State in the exploitation, development, and utilization of minerals, petroleum, and other mineral oils, and even permits foreign owned companies to "operate and manage mining activities."

(2) It allows foreign-owned companies to extend both technical and financial assistance, instead of "either technical or financial assistance."

To appreciate the import of these issues, a visit to the history of the pertinent constitutional provision, the concepts contained therein, and the laws enacted pursuant thereto, is in order.

Section 2, Article XII reads in full:

Sec. 2. All lands of the public domain, waters, 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. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in rivers, lakes, bays, and lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and