G.R. No. 149638 - Moncayo Integrated Small-Scale Miners Association, Inc. vs. Southeast Mindanao Gold Mining Corp.

Case Summary (G.R. No. 149638)

Factual Background

On July 1, 1985, Marcopper Mining Corporation obtained a prospecting permit covering 4,941 hectares under Proclamation No. 369, and on March 10, 1986 it obtained exploration permit EP 133 covering the same area. Marcopper assigned EP 133 to Southeast Mindanao Gold Mining Corporation (SMGMC) on February 16, 1994. DAO No. 66, issued December 27, 1991, declared 729 hectares of the Agusan-Davao-Surigao Forest Reserve open for small-scale mining subject to existing private rights, prompting adverse claims to SMGMC’s MPSA application. A panel of arbitrators in June 1997 upheld EP 133 and dismissed adverse claims, but the Mines Adjudication Board (MAB) vacated that decision on January 6, 1998 and ordered exclusion from SMGMC’s application of those portions actually occupied and actively mined on or before August 1, 1987. Independently, the Provincial Mining Regulatory Board (PMRB) proposed and, after notice and oppositions, on March 30, 1999 segregated and declared the 729-hectare area as a Peoples Small-Scale Mining Area. DENR Secretary Antonio H. Cerilles affirmed the PMRB decision with modifications on September 20, 1999, delineating the area into two blocks and prescribing further administrative measures.

Trial Court and Court of Appeals Proceedings

SMGMC challenged the DENR Secretary’s September 20, 1999 decision in the Court of Appeals by a petition under Rule 43. The Court of Appeals initially denied relief on July 31, 2000, finding no injunction prevented enforcement of the MAB decision and citing litis pendencia. Following motions for reconsideration by SMGMC and BISSMICO, the Court of Appeals amended its decision on August 27, 2001, granted reconsideration, and annulled and set aside the DENR Secretary’s decision for grave abuse of discretion in excess of jurisdiction, reasoning that the Secretary’s delineation favored certain entities and contravened the MAB decision and the scheme of RA 7076.

Petitioners’ Arguments Before the Supreme Court

MISSMA urged that the Court of Appeals should not have amended its prior dismissal based on forum shopping and litis pendencia and argued that the DENR Secretary’s action merely delineated areas for future small-scale contract applications rather than awarding rights. MISSMA further maintained that both the PMRB and the DENR Secretary may act independently of the MAB in declaring and segregating small-scale mining areas under RA 7076. Hon. Antonio H. Cerilles similarly argued that the Court of Appeals erred in revisiting forum shopping and that he acted within authority under Sections 24 and 26 of RA 7076 when he modified the PMRB decision; he also contended that the division of the 729 hectares did not amount to an award and thus did not contravene the MAB mandate. Both petitioners alternatively raised that subsequent developments, including Proclamation No. 297 and this Court’s decision in Apex Mining v. SMGMC, mooted the petitions.

Respondents’ Contentions Before the Supreme Court

SMGMC denied forum shopping and insisted the issues before the PMRB and the MAB were distinct, but argued that the DENR Secretary abandoned the MAB decision by delineating areas, and that the Secretary’s formula improperly referenced groups not parties before the PMRB. BISSMICO adopted SMGMC’s submissions. PICOP Resources, Inc. argued that the PMRB lacked authority to declare the 729-hectare portion because the land remained within a forest reserve under Presidential Decree No. 705, invoked Republic Act No. 3092, and contended that Proclamation No. 297 lacked congressional concurrence; PICOP pressed that reclassification of forest reserve lands requires congressional action. In later filings, SMGMC acknowledged that supervening developments, including this Court’s 2006 decision and Proclamation No. 297, rendered the present petitions moot.

Issues Presented to the Court

The Court identified the principal issues as: whether the Court of Appeals could abandon its ruling on forum shopping and litis pendencia and decide the merits; whether the DENR Secretary exceeded the PMRB’s decision or whether the Secretary rightly modified the PMRB decision; and whether the DENR Secretary’s division of the 729 hectares into two areas contravened the MAB decision and the purposes of RA 7076.

Subsequent Developments Affecting Justiciability

Several supervening events altered the landscape. Proclamation No. 297, issued November 25, 2002, excluded approximately 8,100 hectares in Monkayo from Proclamation No. 369 and proclaimed the area a mineral reservation and an environmentally critical area, directing the DENR to issue implementing guidelines. DAO No. 2002-18 declared an emergency and ordered stoppage of mining in the Diwalwal area, and Executive Order No. 217 created the National Task Force Diwalwal. Critically, this Court in Apex Mining v. SMGMC, promulgated June 23, 2006 and with reconsideration denied November 20, 2009, declared EP 133 expired on July 7, 1994, held its transfer to SMGMC void, and affirmed that DAO No. 66 was illegally issued in excess of the DENR Secretary’s authority, thereby removing any legal basis for SMGMC’s claim to the 729 hectares.

Court’s Analysis of Mootness and Effect of Apex v. SMGMC

The Court found that the 2006 Apex decision and the 2009 resolution were dispositive. Because EP 133 had expired and its transfer to SMGMC was void, SMGMC lacked any legal basis to claim rights to the 729 hectares that had been the subject of the DENR Secretary’s modification. Because this Court declared DAO No. 66 illegal, the PMRB’s declaration and the DENR Secretary’s affirmance with modification had no operative basis. The 2009 resolution further instructed that the Executive Department may award mining operations in the disputed area to any qualified entity it determined and that the Mines and Geosciences Bureau may process pending exploration permits under applicable law. Given these subsequent developments, the Court concluded that the petitions were rendered moot and academic and that no effective relief could now be ordered by this Court.

Authority of Agencies and Legal Framework Considered

The Court reviewed the respective powers of the MAB, the PMRB, and the DENR Secretary under the controlling statutes. The MAB possesses exclusive original jurisdiction over disputes involving rights to mining areas, mineral agreements, and related matters under RA 7942, and appellate jurisdiction over panel of arbitrators’ decisions. The PMRB, created by RA 7076, may declare and segregate gold-rich areas for small-scale mining, award small-scale contracts, and settle disputes within declared small-scale mining areas, subject to review by the DENR Secretary and the implementing rules in DAO No. 34-92. Section 26 of RA 7076 and DAO No. 34-92, sec. 21.1 vest the DENR Secretary with direct supervision and control over the small-scale mining program, a power the Court distinguished from mere supervision by noting that control permits the Secretary to alter, modify, or nullify subordinate decisions. The Court also recognized the constitutional grant that mineral resources are under the State’s full control and supervision (Article XII, Section 2, 1987 Constitution) and that the Pr

Case Syllabus (G.R. No. 149638)

Parties and Procedural Posture

Moncayo Integrated Small-Scale Miners Association, Inc. (MISSMA) filed a petition for review under Rule 45 challenging the Court of Appeals' amended decision setting aside the DENR Secretary's affirmation with modification of a PMRB declaration.
Hon. Antonio H. Cerilles, in his capacity as then DENR Secretary, filed a separate petition for review under Rule 45 challenging the same Court of Appeals' amended decision.
Respondents included Southeast Mindanao Gold Mining Corporation (SMGMC), JB Management Mining Corporation, PICOP Resources, Inc., the Mt. Diwata-Upper Ulip Mandaya Tribal Council, Inc., and Balite Integrated Small-Scale Mining Corp. (BISSMICO) who opposed the petitions.
The petitions assailed the Court of Appeals' August 27, 2001 amended decision that annulled and set aside the DENR Secretary's September 20, 1999 decision for grave abuse of discretion in excess of jurisdiction.
The Supreme Court ultimately denied the petitions as moot and academic due to subsequent supervening developments that disposed of the controversy.

Key Facts

EP 133 was an exploration permit originally issued to Marcopper Mining Corporation covering 4,941 hectares within the Agusan-Davao-Surigao Forest Reserve.
Marcopper assigned EP 133 to SMGMC by deed dated February 16, 1994, and SMGMC applied for MPSA No. 128 over the same area.
DAO No. 66 declared 729 hectares of the forest reserve open for small-scale mining and prompted adverse claims to SMGMC's MPSA application by several small-scale miners and cooperatives.
The panel of arbitrators dismissed the adverse claims but the Mines Adjudication Board (MAB) vacated that ruling and ordered exclusion of the area actually occupied and actively mined on or before August 1, 1987 from SMGMC's application.
The Provincial Mining Regulatory Board (PMRB) later segregated and declared the 729-hectare area a People's Small-Scale Mining Area, and the DENR Secretary affirmed that decision with modifications delineating two operational blocks and imposing relocation and supervision conditions.

Procedural History

The PMRB decision of March 30, 1999 was affirmed with modifications by the DENR Secretary on September 20, 1999, and reconsideration was denied on February 2, 2000.
SMGMC filed a petition under Rule 43 to the Court of Appeals which initially denied the petition on July 31, 2000.
The Court of Appeals amended its prior disposition on August 27, 2001 and set aside the DENR Secretary's decision for grave abuse of discretion in excess of jurisdiction.
The present petitions for review were filed in this Court by MISSMA (G.R. No. 149638) and DENR Secretary Cerilles (G.R. No. 149916) contesting the Court of Appeals' amended decision.
Subsequent consolidated litigation culminated in this Court's decision in Apex Mining v. SMGMC, which declared EP 133 expired and DAO No. 66 illegal, and in a later En Banc resolution denying reconsideration.

Issues Presented

Whether the Court of Appeals properly set aside its earlier finding of litis pendencia and forum shopping and proceeded to decide the merits.
Whether the DENR Secretary exceeded his authority by modifying the PMRB's declaration and by delineating areas within the 729 hectares in favor of specific entities.
Whether the DENR Secretary's division of the 729 hectares contravened the MAB mandate and the purpose of Republic Act No. 7076.
Whether subsequent developments rendered the petitions moot and academic.

Contentions of Parties

MISSMA contended that the Court of Appeals should not have amended its decision because SMGMC was guilty of forum shopping and litis pendencia given pending actions contesting the MAB decision.
DENR Secretary Cerilles argued that he acted within authority under Sections 24 and 26 of RA 7076 in modifying the PMRB decision and that his delineation did not award rights but only identified areas for application.
SMGMC argued that no forum shopping existed and that the DENR Secretary had improperly fashioned terri