Case Summary (G.R. No. 216920)
Key Dates
• July 25, 1987 – Issuance of Executive Order No. 279.
• March 3, 1995 – Enactment of Republic Act No. 7942 (Philippine Mining Act of 1995).
• March 30, 1995 – Execution of Financial and Technical Assistance Agreement (FTAA) with WMCP.
• August 15, 1995 & December 20, 1996 – Issuance and revision of DENR Administrative Orders implementing RA 7942.
• January 27, 2004 – Supreme Court decision.
Applicable Law
• 1987 Philippine Constitution, Article XII, Section 2.
• Republic Act No. 7942 (Philippine Mining Act of 1995).
• EO 279 (July 25, 1987).
• DAO 95-23 and DAO 96-40 (Implementing Rules of RA 7942).
• FTAA between the Republic and WMCP.
Procedural Posture and Requisites for Review
Petitioners filed a petition for mandamus and prohibition to restrain the DENR from processing FTAA applications, challenge the constitutionality of RA 7942 and DAO 96-40, and annul the WMCP FTAA. The Court confirmed (1) actual controversy, (2) petitioners’ personal and substantial interest as land users threatened with displacement, (3) timely plea of constitutional questions, and (4) centrality of constitutionality in the case.
Standing and Remedy
Resident farmers and indigenous communities demonstrated concrete adversity to mining operations, satisfying standing. The petition for prohibition was appropriate to prevent implementation of allegedly unconstitutional laws and agreements.
Evolution of Natural-Resources Regimes
• Spanish Regime: Regalian doctrine—State ownership of all natural resources.
• American Era: Concession system allowed both Filipinos and Americans to exploit minerals; private ownership included mineral rights.
• 1935 Constitution: Reinforced Regalian doctrine; natural resources exploitation limited to Filipinos (60% capital requirement).
• Parity Amendments (1946–1974) extended exploitation rights to U.S. citizens.
• Petroleum Act of 1949: Continued concession system for petroleum with royalties; passive State role.
Martial-Law Service Contracts (1972–1986)
• PD 87 and subsequent decrees introduced service contracts: foreign contractors provided finance, technology, and management in return for production shares and operational control.
• 1973 Constitution authorized service contracts with “any person or entity” for financial, technical, management, or “other forms of assistance,” eroding Filipino control.
1987 Constitution’s Natural-Resources Framework
• Reaffirmed State ownership and inalienability of natural resources (Regalian doctrine).
• Permitted co-production, joint venture, and production-sharing with Filipino-owned entities (60% capital).
• Enabled the President to enter into “agreements involving either technical or financial assistance” with foreign-owned corporations for large-scale mineral, petroleum, and mineral-oils projects, “based on real contributions,” with congressional notification.
• Deleted the term “service contracts” and limited foreign participation to technical or financial assistance.
Effectivity of EO 279
EO 279 took effect immediately upon publication in the Official Gazette on August 3, 1987. Its effectivity was validly established despite the President’s loss of legislative power upon the convening of the first Congress, as the EO was enacted while she still held such power under the Provisional Constitution.
Constitutional Challenge to FTAA and RA 7942
Petitioners contended that WMCP’s FTAA conferred full management and operational rights—effectively service contracts—in violation of the 1987 Constitution’s limitation to “technical or financial assistance.” They argued RA 7942 and DAO 96-40 institutionalized service-contract features (exclusive rights to manage, exploit, and dispose of minerals) for foreign-owned contractors.
Interpretation of “Technical or Financial Assistance”
Strict literalism would bar any management role, forcing separate agreements for management functions—a
Case Syllabus (G.R. No. 216920)
Facts and Parties
- Petitioners include La Bugal-Balaan Tribal Association, indigenous communities, individual members, and various environmental NGOs, farmers’ cooperatives, and minors represented by guardians.
- Respondents are public officials: the DENR Secretary (Victor O. Ramos), the Director of the Mines and Geosciences Bureau, the Executive Secretary, plus private respondent WMC (Philippines), Inc. (WMCP).
- Petitioners challenge the constitutionality of Republic Act No. 7942 (Philippine Mining Act of 1995), DAO 96-40 (its IRR), and the FTAA executed under EO 279 (1987) between the Republic and WMCP.
- The FTAA originally covered 99,387 hectares in Mindanao and granted WMCP exclusive rights over exploration, development, processing, and disposal of minerals.
- WMCP later transferred its FTAA to Sagittarius Mines, Inc. (60% Filipino-owned), but petitioners maintain the case is not moot pending final resolution of that transfer.
Issues Presented
- Whether petitioners have standing and an actual case or controversy to invoke judicial review and seek writs of prohibition and mandamus.
- Whether EO 279 lawfully took effect and whether its implementing orders (DAO 96-40) are valid.
- Whether RA 7942 and DAO 96-40 permit service contracts or akin agreements to foreign corporations in violation of Section 2, Article XII of the 1987 Constitution.
- Whether the FTAA with WMCP vests prohibited management or utilization rights in a foreign-owned corporation.
Procedural and Justiciability Rulings
- Petition for prohibition and mandamus granted due course; pl