Case Summary (G.R. No. 152613 152628)
Petitioners and Respondents
Petitioners:
- Apex Mining Co., Inc. (Apex)
- Balite Communal Portal Mining Cooperative (Balite)
- Mines Adjudication Board and its members
Respondents: - Southeast Mindanao Gold Mining Corporation (SEM)
- Various small-scale miners’ associations and cooperatives
Key Dates
• 1 July 1985 – MMC granted prospecting permit by Bureau of Forest Development
• 10 March 1986 – Bureau of Mines issued EP 133 to MMC
• 16 February 1994 – MMC purportedly assigned EP 133 to SEM
• 6 July 1994 – EP 133 expired by non-renewal
• 25 November 2002 – President issued Proclamation No. 297 declaring the Diwalwal area a mineral reservation
• 23 June 2006 – Third Division decision holding assignment invalid, EP 133 expired, Proclamation No. 297 valid
• 20 November 2009 – En banc resolution denying motions for reconsideration and clarifications
Applicable Law
• 1987 Philippine Constitution, Article XII, Section 2 (State ownership and full control of minerals) and Section 4 (forest lands)
• Presidential Decree No. 463 (1974) – Philippine Mining Code under the 1973 Constitution, governing exploration permits, assignments (Sec. 97), definitions of exploration, development, exploitation
• Republic Act No. 7942 (Mining Act of 1995), Sections 5 (establishment of mineral reservations) and 25 (assignment of exploration permits)
• Relevant statutes on forest reservations (RA 3092; Administrative Code of 1987) and protected areas (RA 7586, RA 6657)
Validity of Exploration Permit 133 Assignment
• EP 133 expressly prohibited assignment except to MMC’s duly authorized agent (Permit Condition 6)
• No evidence SEM was designated as MMC’s agent; assignment lacked Secretary of DENR approval as required by PD 463 Sec. 97 (and by RA 7942 Sec. 25)
• Assignment void ab initio; SEM acquired no valid permit rights
Non-acquisition of Vested Rights by SEM
• Exploration permits confer only inchoate exploration rights, not vested property rights to exploit minerals
• Under PD 463, exploration is distinct from development and exploitation; exploration permit holders have priority for future mineral agreements but no automatic extraction rights
• The 1987 Constitution’s regalian doctrine vests mineral ownership in the State; private rights arise only under statutorily conferred permits or agreements
• EP 133 expired on 6 July 1994 for non-renewal; any assumed rights lapsed
Effect of Proclamation No. 297
• Proclamation No. 297 (25 November 2002) declared the disputed area a mineral reservation and environmentally critical area under RA 7942 Sec. 5
• Executive may directly undertake mining operations (subject to just compensation for existing claimants) or award operations to qualified contractors, recognizing existing rights
• Proclamation stands as a constitutionally presumed valid exercise of presidential power; challenges raised only in SEM’s motion for reconsideration (too late)
Relation to Apex Mining Co. v. Garcia
• Apex Mining Co., Inc. v. Garcia (G.R. No. 92605, 16 July 1991) addressed procedure for acquiring mining rights in a forest reserve, not EP 133’s expiration or assignment issues
• Subsequent developments (EP 133’s non-renewal, unlawful assignment, Proclamation No. 297) were not settled by Apex v. Garcia and legitimately supersede its ruling
Timeliness of Constitutional Challenge
• SEM’s objections to Proclamation No. 297 raised first in its motion for reconsideration—after initial pleadings and hearings—thereby forfeited by belatedness
• No pleading or evidence in earlier stages challenged Proclamation’s validity; constitutional questions must be raised at the earliest opportunity
Disposition of Motions and Application of Executive Prerogative
•
Case Syllabus (G.R. No. 152613 152628)
Background and Facts
- On February 27, 1931, Governor General Dwight F. Davis issued Proclamation No. 369 establishing the 1,927,400-hectare Agusan-Davao-Surigao Forest Reserve.
- Within that forest reserve lies the Diwalwal Gold Rush Area—a 4,941.6759-hectare tract spanning Monkayo, Davao del Norte and Cateel, Davao Oriental.
- In November 1983 Camilo Banad and fellow residents discovered gold traces on Mt. Diwata and filed Declarations of Location (DOLs). They later organized the Balite Communal Portal Mining Cooperative.
- On December 12, 1983, Apex Mining Co., Inc. (“Apex”) entered into operating agreements with Banad’s group; other small-scale miners also registered DOLs through early 1984.
- Marcopper Mining Corporation (“MMC”) initially filed sixteen DOLs on February 2, 1984 but learned the area was a forest reservation and instead secured from the Bureau of Forest Development a Prospecting Permit effective July 1, 1985 over the entire 4,941.6759 hectares.
- MMC filed Exploration Permit Application No. 84-40 on November 11, 1985; Exploration Permit No. 133 (“EP 133”) was issued by the Mines and Geosciences Bureau (BMG) on March 10, 1986.
- In April 1986 MMC petitioned the BMG to cancel Apex’s mining claims as conflicting with EP 133; BMG dismissed the petition on December 9, 1986, but the DENR reversed on April 15, 1987, upholding EP 133.
- Apex appealed to the Office of the President which affirmed on July 27, 1989; Apex then filed a petition for certiorari with the Supreme Court (“Apex v. Garcia,” G.R. No. 92605) which on July 16, 1991 held the disputed area to be forest reserve and validated MMC’s EP 133.
- On December 27, 1991, DENR Administrative Order No. 66 declared 729 hectares within Diwalwal as non-forest land open to small-scale mining; multiple cooperatives, including Balite and Monkayo Integrated Small Scale Miners Association, filed Mineral Production-Sharing Agreement (MPSA) applications.
- On January 5, 1994 Rosendo Villaflor and others petitioned to cancel EP 133 and admit their MPSA. On February 16, 1994, MMC assigned EP 133 to Southeast Mindanao Gold Mining Corporation (“SEM”), allegedly its wholly-owned subsidiary.
- SEM filed its MPSA Application No. 128 on June 23, 1994; dozens of adverse claims were docketed before a DENR-constituted Panel of Arbitrators (“PA”).
- The PA on June 13, 1997 reaffirmed EP 133’s validity and dismissed all adverse claims for failure to submit required sketch plans.
- Adversaries appealed to the Mines Adjudication Board (“MAB”). On January 6, 1998 the MAB set aside the PA, declared EP 133 expired by nonrenewal, excluded the 729 hectares, imposed a moratorium, and gave SEM conditional due course of its MPSA application.
- The Court of Appeals, in CA-G.R. SP Nos. 61215 & 61216 (March 13, 2002), reversed the MAB, upheld EP 133 as valid and assignable to SEM, declared DAO 66 void, and dismissed adverse claimants for sketch-plan defects.
- Petitioners Apex, Balite and the MAB filed separate Rule 45 petitions before the Supreme Court (G.R. Nos. 152613, 152628,