Case Summary (G.R. No. 191705)
Summary of Facts
BMEC, headed by Basiana, applied for an MPSA covering 6,642 hectares in 1997. While the application was pending, BMEC assigned all rights under this application to Manila Mining Corporation in 2000, which in turn assigned its rights to SRMI in 2005. Following this, SRMI and Basiana executed a Memorandum of Agreement wherein SRMI was to conduct exploration and small-scale mining. Necessary permits were issued to SRMI and associated companies, and SRMI applied for an MPSA covering a 591-hectare area based on BMEC’s application.
However, in 2006, the DENR Secretary issued a cease and desist order halting mining operations due to violations such as excess annual production and labor issues. The Minerals Development Council also ordered mining stoppage, indicating that alleged small-scale mining activities were improperly conducted. Subsequently, civil complaints alleging breach of trust, rescission of contracts, and abuse of rights were filed by petitioners against SRMI and others. The Mines and Geosciences Bureau (MGB) recommended approval of SRMI’s application in January 2008, prompting petitioners to file protests before the MGB Panel of Arbitrators (MGB-POA). Despite ongoing protests, the DENR Secretary entered into MPSA No. 261-2008-XIII with SRMI.
Procedural History
The petitioners filed a petition for review with the Court of Appeals (CA) challenging the validity of the MPSA issued to SRMI, alleging denial of due process and questioning the legal basis of the Secretary’s approval. The CA initially nullified MPSA No. 261-2008-XIII in its December 10, 2008 decision, reasoning that the DENR Secretary lacked jurisdiction to approve the MPSA while the administrative protests before the MGB-POA were pending. This decision treated the petition as a certiorari case alleging grave abuse of discretion.
SRMI filed a motion for reconsideration, which the CA granted via an Amended Decision on June 18, 2009. The CA reversed its earlier ruling, holding that the DENR Secretary’s approval of the MPSA was an administrative, not quasi-judicial, act and the petitioners’ recourse was premature as they had not exhausted administrative remedies. The CA also found that the petitioners committed forum shopping by filing the petition despite the ongoing administrative protest.
Issues on Appeal
The petitioners argued that the CA erred in reversing its initial decision, insisting that the approval of SRMI’s MPSA involved quasi-judicial functions and that the petitioners were justified in seeking judicial review before exhausting administrative remedies because the issues raised were questions of law. They also contended that the CA misapplied the doctrine cited in Celestial Nickel Mining Exploration Corporation v. Macroasia Corporation, claiming that the present case differed materially and that the DENR Secretary acted in grave abuse of discretion.
Respondents countered that the DENR Secretary acted within the scope of his administrative authority and that the petitioners merely rehashed arguments already rejected by the CA. The Office of the Solicitor General for the DENR Secretary maintained that the CA rightly dismissed the petition on grounds of forum shopping.
Legal Analysis: Nature of DENR Secretary’s Functions
The Supreme Court clarified that the DENR Secretary’s approval and execution of an MPSA constitute administrative, not quasi-judicial, functions. Quasi-judicial functions require adjudication of factual disputes determining the rights of parties with effects akin to judicial decisions. Here, the Secretary’s role is to evaluate applications upon recommendations from the MGB, ensuring compliance with statutory requirements and assessing the applicant’s technical and financial capability.
Approving or rejecting MPSA applications involves enforcing policies and supervising natural resources, which is executive and administrative in nature as mandated under the Revised Administrative Code of 1987 and Republic Act No. 7942 (Philippine Mining Act of 1995). This administrative power does not involve deciding disputes of rights between competing claimants, which are properly addressed through administrative adjudication (by MGB) or judicial proceedings.
Doctrines of Primary Jurisdiction and Exhaustion of Administrative Remedies
The Court emphasized that the petitioners prematurely sought judicial intervention without exhausting available administrative remedies. The doctrine of primary jurisdiction requires deference to specialized administrative bodies, like the MGB or the DENR Secretary, when resolving technical or policy-related mining disputes before resorting to the courts. Similarly, the doctrine of exhaustion of remedies mandates pursuing administrative relief first, rendering premature court actions dismissible.
The petitioners should have pursued cancellation or termination of the MPSA directly with the DENR Secretary, who possesses implied power to cancel mineral agreements under the Re
...continue readingCase Syllabus (G.R. No. 191705)
Parties and Procedural History
- Petitioners: Basiana Mining Exploration Corporation (BMEC), Basiana Mining Development Corporation (BMDC), and Rodney O. Basiana in his capacity as President and duly authorized representative of BMEC and BMDC.
- Respondents: Honorable Secretary of the Department of Environment and Natural Resources (DENR) and SR Metals Inc. (SRMI).
- The case arose from a petition for review on certiorari under Rule 45, seeking the reversal of the Court of Appeals (CA) Amended Decision dated June 18, 2009, in CA-G.R. SP No. 103033.
- The CA originally declared the MPSA approval null and void but later reversed and set aside that decision upon reconsideration motions from DENR and SRMI.
- Petitioners assailed the DENR Secretary’s approval of MPSA No. 261-2008-XIII in favor of SRMI as unlawful and without basis.
Facts of the Case
- BMEC, headed by Basiana, applied for a Mineral Production Sharing Agreement (MPSA) on July 31, 1997, for the extraction of nickel and other minerals covering 6,642 hectares in Tubay and Jabonga, Agusan del Norte, docketed as MPSA (XIII)-00014.
- BMEC assigned all rights in MPSA (XIII)-00014 first to Manila Mining Corporation on April 29, 2000, which later assigned these to SRMI on October 17, 2005.
- On October 18, 2005, Basiana and SRMI entered into a Memorandum of Agreement entrusting SRMI to perform technical and mining operations.
- Subsequently, DENR and the Provincial Government issued necessary permits to SRMI and related corporations for mining operations.
- SRMI applied for an MPSA for a smaller area of 591 hectares, docketed as APSA-000014-XIII.
- The DENR Secretary issued a cease and desist order on November 24, 2006, due to operational violations including excess production and improper labor cost declarations.
- Petitioners filed complaints before the Regional Trial Court for rescission of contract, abuse of rights, accounting, breach of trust, and other claims between 2007 and 2008.
- The Mines and Geosciences Bureau (MGB) Director recommended approval of SRMI’s APSA application on January 10, 2008.
- DENR Secretary nevertheless entered into MPSA No. 261-2008-XIII with SRMI for the development and commercial utilization of minerals covering 572.64 hectares in 2008.
- Petitioners filed before CA challenging the approval on grounds of denial of due process and lack of legal basis.
Issues Presented
- Whether the DENR Secretary's approval of MPSA No. 261-2008-XIII in favor of SRMI is null and void for lack of jurisdiction or grave abuse of discretion.
- Whether the CA erred in dismissing the petition for review on grounds of lack of jurisdiction and prematurity due to non-exhaustion of administrative remedies.
- Whether the petitioners’ challenge to the DENR Secretary’s administrative act can properly be reviewed by the CA under certiorari or appeal.
- Whether the doctrine of exhaustion of administrative remedies and primary jurisdiction applies to the approval and cancellation of mining agreements.
- Whether the petitioners committed forum shopping by filing the petition despite the pending protest before the M