9. la bugal-b’laan tribal ass, inc. vs. ramos

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    LA BUGAL-B'LAAN TRIBAL ASSOC.vs. RAMOS

    2004 January 27; G.R. No. 27!!2CAR"IO-MORAL#S$ J.

    The present petition for mandamus and prohibition assails theconstitutionality of Republic Act No. 7942,[5 other!ise "no!n as the#$%&%##%N' (%N%N) A*T + -995, alon !ith the %mplementin Rules andReulations issued pursuant thereto, /epartment of 'n0ironment andNatural Resources 1/'NR Administrati0e +rder 934, and of the inancialand Technical Assistance Areement 1TAA entered into on (arch 6, -995by the Republic of the #hilippines and (* 1#hilippines, %nc. 1(*#, acorporation orani8ed under #hilippine la!s.

    +n uly 25, -9:7, then #resident *ora8on *. A;uino issued 'nancial assistance for larescale enancial or technical assistanceareements.[-4

    The la! prescribes the ;uali>cations of contractors[-5 and rants themcertain rihts, includin timber,[-3 !ater[-7 and easement[-: rihts, andthe riht to possess e

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    The Act restricts the conditions for e

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    it allo!s fully forein o!ned corporations to e

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    They pray that the *ourt issue an orderI

    1a #ermanently en@oinin respondents from actin on any application forinancial or Technical Assistance AreementsK

    1b /eclarin the #hilippine (inin Act of -995 or Republic Act No. 7942 asunconstitutional and null and 0oidK

    1c /eclarin the %mplementin Rules and Reulations of the #hilippine(inin Act contained in /'NR Administrati0e +rder No. 934 and all othersimilar administrati0e issuances as unconstitutional and null and 0oidK and

    1d *ancellin the inancial and Technical Assistance Areement issued toestern (inin #hilippines, %nc. as unconstitutional, illeal and null and 0oid.[4-

    %mpleaded as public respondents are Ruben Torres, the then '

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    Ly 0irtue of such sale and transfer, the /'NR =ecretary, by +rder of/ecember -:, 2-,[4: appro0ed the transfer and reistration of thesub@ect TAA from (*# to =aittarius. =aid +rder, ho!e0er, !as appealedby &epanto *onsolidated (inin *o. 1&epanto to the +ce of the #resident!hich upheld it by /ecision of uly 26, 22.[49 %ts motion for

    reconsideration ha0in been denied by the +ce of the #resident byResolution of No0ember -2, 22,[5 &epanto >led a petition for re0ie![5-before the *ourt of Appeals. %ncidentally, t!o other petitions for re0ie!related to the appro0al of the transfer and reistration of the TAA to=aittarius !ere recently resol0ed by this *ourt.[52

    %t bears stressin that this case has not been rendered moot either by thetransfer and reistration of the TAA to a ilipinoo!ned corporation or by thenonissuance of a temporary restrainin order or a preliminary in@unction tostay the abo0esaid uly 26, 22 decision of the +ce of the #resident.[56The 0alidity of the transfer remains in dispute and a!aits >nal @udicial

    determination. This assumes, of course, that such transfer cures the TAAFsalleed unconstitutionality, on !hich ;uestion @udment is reser0ed.

    (*# also points out that the oriinal claimo!ners of the ma@or minerali8edareas included in the (*# TAA, namely, =aittarius, Tampa"an (inin*orporation, and =outhcot (inin *orporation, are all ilipinoo!nedcorporations,[54 each of !hich !as a holder of an appro0ed (ineral#roduction =harin Areement a!arded in -994, albeit their respecti0emineral claims !ere subsumed in the (*# TAAK[55 and that these threecompanies are the same companies that consolidated their interests in=aittarius to !hom (* sold its -M e;uity in (*#.[53 (*#

    concludes that in the e0ent that the TAA is in0alidated, the (#=As of thethree corporations !ould be re0i0ed and the mineral claims !ould re0ert totheir oriinal claimants.[57

    These circumstances, !hile informati0e, are hardly sini>cant in theresolution of this case, it in0ol0in the 0alidity of the TAA, not the possibleconse;uences of its in0alidation.

    +f the abo0eenumerated se0en rounds cited by petitioners, as !ill besho!n later, only the >rst and the last need be del0ed intoK in the latter, thediscussion shall d!ell only insofar as it ;uestions the eGecti0ity of '. +. No.

    279 by 0irtue of !hich order the ;uestioned TAA !as fored.

    %

    Lefore oin into the substanti0e issues, the procedural ;uestions posed byrespondents shall >rst be tac"led.

    R'O?%=%T'= +R ?/%*%A& R'B%'

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    hen an issue of constitutionality is raised, this *ourt can e

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    ;uestioned TAA as they allee a personal and substantial in@ury. They claimthat they !ould suGer Cirremediable displacementC[7 as a result of theimplementation of the TAA allo!in (*# to conduct minin acti0ities intheir area of residence. They thus meet the appropriate case re;uirement asthey assert an interest ad0erse to that of respondents !ho, on the other

    hand, insist on the TAAFs 0alidity.

    %n 0ie! of the alleed impendin in@ury, petitioners also ha0e standin toassail the 0alidity of '.+. No. 279, by authority of !hich the TAA !ase

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    4 li"e!ise ful>lls the re;uisites of @usticiability. Althouh these la!s !erenot in force !hen the sub@ect TAA !as entered into, the ;uestion as to their0alidity is ripe for ad@udication.

    The (*# TAA pro0idesI

    -4.6 uture &eislation

    Any term and condition more fa0ourable to inancial PTechnical AssistanceAreement contractors resultin from repeal or amendment of any e

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    #R+#R%'TQ + #R+$%L%T%+NAN/ (AN/A(?=

    Lefore the eGecti0ity in uly -997 of the Re0ised Rules of *i0il #rocedure,

    =ection 2 of Rule 35 readI

    ='*. 2. #etition for prohibition. hen the proceedins of any tribunal,corporation, board, or person, !hether eed petition in the proper court allein the facts !ithcertainty and prayin that @udment be rendered commandin the defendantto desist from further proceedin in the action or matter speci>ed therein.

    #rohibition is a pre0enti0e remedy.[74 %t see"s a @udment orderin thedefendant to desist from continuin !ith the commission of an act percei0edto be illeal.[75

    The petition for prohibition at bar is thus an appropriate remedy. hile theell under said contract. #etitioners see" to pre0ent them from ful>llinsuch obliations on the theory that the contract is unconstitutional and,therefore, 0oid.

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

    $%'RAR*$Q + *+?RT=

    The contention that the >lin of this petition 0iolated the rule on hierarchy ofcourts does not li"e!ise lie. The rule has been erst impression, !hich are the proper sub@ect ofattention of the appellate court. This is a procedural rule borne ofe

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    does not i0e a party unrestricted freedom of choice of court forum. Theresort to this *ourtFs primary @urisdiction to issue said !rits shall be allo!edonly !here the redress desired cannot be obtained in the appropriate courtsor !here eled !ith the Reional Trial *ourt, and those aainst thelatter, !ith the *ourt of Appeals. A direct in0ocation of the =upreme *ourtFsoriinal @urisdiction to issue these !rits should be allo!ed only !here thereare special and important reasons therefor, clearly and speci>cally set out inthe petition. This is established policy. %t is a policy necessary to pre0entinordinate demands upon the *ourtFs time and attention !hich are betterde0oted to those matters !ithin its e

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    To appreciate the import of these issues, a 0isit to the history of the pertinentconstitutional pro0ision, the concepts contained therein, and the la!senacted pursuant thereto, is in order.

    =ection 2, Article J%% reads in fullI

    =ec. 2. All lands of the public domain, !aters, minerals, coal,petroleum, and other mineral oils, all forces of potential enery, >sheries,forests or timber, !ildlife, Eora and fauna, and other natural resources areo!ned by the =tate. ith the e

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    realia. %ntroduced by =pain into these %slands, this feudal concept is basedon the =tateFs po!er of dominium, !hich is the capacity of the =tate to o!nor ac;uire property.[79

    %n its broad sense, the term C@ura realiaC refers to royal rihts, or those

    rihts !hich the Hin has by 0irtue of his preroati0es. %n =panish la!, itrefers to a riht !hich the so0erein has o0er anythin in !hich a sub@ecthas a riht of property or propriedad. These !ere rihts en@oyed durinfeudal times by the "in as the so0erein.

    The theory of the feudal system !as that title to all lands !as oriinally heldby the Hin, and !hile the use of lands !as ranted out to others !ho !erepermitted to hold them under certain conditions, the Hin theoreticallyretained the title. Ly >ction of la!, the Hin !as rearded as the oriinalproprietor of all lands, and the true and only source of title, and from him alllands !ere held. The theory of @ura realia !as therefore nothin more than

    a natural fruit of con;uest.[:

    The #hilippines ha0in passed to =pain by 0irtue of disco0ery and con;uest,[:- earlier =panish decrees declared that Call lands !ere held from the*ro!n.C[:2

    The Realian doctrine enance its !ars aainst othernations.[:4 (inin la!s durin the =panish reime reEected this

    perspecti0e.[:5

    T$' A('R%*AN +**?#AT%+N AN/T$' *+N*'==%+N R')%('

    Ly the Treaty of #aris of /ecember -, -:9:, =pain ceded Cthe archipelao"no!n as the #hilippine %slandsC to the ?nited =tates. The #hilippines !ashence o0erned by means of oranic acts that !ere in the nature of chartersser0in as a *onstitution of the occupied territory from -9 to -965.[:3Amon the principal oranic acts of the #hilippines !as the Act of *onressof uly -, -92, more commonly "no!n as the #hilippine Lill of -92, throuh

    !hich the ?nited =tates *onress assumed the administration of the#hilippine %slands.[:7 =ection 2 of said Lill reser0ed the disposition ofmineral lands of the public domain from sale. =ection 2- thereof allo!ed thefree and open e

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    %slands, both sur0eyed and unsur0eyed, are hereby declared to be free andopen to e

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    concessionaire o0er the countryFs natural resource, for it is i0en eed that the *onstitution conformed substantially!ith the pro0isions of the Act of *onress appro0ed on (arch 24, -964.[-5+n (ay -4, -965, the *onstitution !as rati>ed by the ilipino people.[-3

    The -965 *onstitution adopted the Realian doctrine, declarin all naturalresources of the #hilippines, includin mineral lands and minerals, to beproperty belonin to the =tate.[-7 As adopted in a republican system, themedie0al concept of @ura realia is stripped of royal o0ertones and o!nershipof the land is 0ested in the =tate.[-:

    =ection -, Article J%%%, on *onser0ation and ?tili8ation of Natural Resources,of the -965 *onstitution pro0idedI

    ='*T%+N -. All aricultural, timber, and mineral lands of the public domain,

    !aters, minerals, coal, petroleum, and other mineral oils, all forces ofpotential enery, and other natural resources of the #hilippines belon to the=tate, and their disposition, e

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    alienated, and no license, concession, or lease for the ecial use may be the

    measure and the limit of the rant.

    The nationali8ation and conser0ation of the natural resources of the country!as one of the >

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    plebiscite.[--2 The Amendment e

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    concessions did not confer upon the concessionaire o!nership o0er thepetroleum lands and petroleum deposits.[-22 $o!e0er, they did rantconcessionaires the riht to e

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    of the enition of Cser0ice contractsC in the#hilippines is pro0ided as follo!sI

    A ser0ice contract is a contractual arranement for enain in thee

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    resource, or directly manaes the producti0e enterprise, operations of theenance petroleum enancin, and the proceeds of sale of thepetroleum produced under the contract shall be the source of funds forpayment of the ser0ice fee and the operatin e

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    utili8ation of any of the natural resources shall be ranted for a periode0e years, rene!able for not more than t!enty>0e years,esheries, or industrialuses other than the de0elopment of !ater po!er, in !hich cases bene>cialuse may be the measure and the limit of the rant.

    hile =ection 9 of the same Article maintained the ilipinoonly policy in theen@oyment of natural resources, it also allo!ed ilipinos, upon authority ofthe Latasan #ambansa, to enter into ser0ice contracts !ith any person orentity for the e

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    #residential /ecree No. 436,[-39 also "no!n as The (ineral Resources/e0elopment /ecree of -974, !as enacted on (ay -7, -974. =ection 44 ofthe decree, as amended, pro0ided that a lessee of a minin claim may enterinto a ser0ice contract !ith a ;uali>ed domestic or forein contractor for the

    esh and >sheryDa;uatic products.[-7-

    #residential /ecree No. 75[-72 1The Re0ised orestry *ode of the#hilippines, appro0ed on (ay -9, -975, allo!ed Cforest products licensees,

    lessees, or permitees to enter into ser0ice contracts for >nancial, technical,manaement, or other forms of assistance . . . !ith any forein person orentity for the e

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    The -9:7 *onstitution retained the Realian doctrine. The >rst sentence of=ection 2, Article J%% statesI CAll lands of the public domain, !aters,minerals, coal, petroleum, and other mineral oils, all forces of potentialenery, >sheries, forests or timber, !ildlife, Eora and fauna, and other

    natural resources are o!ned by the =tate.C

    &i"e the -965 and -976 *onstitutions before it, the -9:7 *onstitution, in thesecond sentence of the same pro0ision, prohibits the alienation of naturalresources, esh farmin, !ith priority to

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    1- The =tate may directly underta"e such acti0ities.

    12 The =tate may enter into coproduction, @oint 0enture or productionsharin areements !ith ilipino citi8ens or ;uali>ed corporations.

    16 *onress may, by la!, allo! smallscale utili8ation of natural resourcesby ilipino citi8ens.

    14 or the larescale enancial assistance.[-:3

    '

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    1c contribution of the pro@ect to the economy, and 1d other factors that !illpro0ide for a fair and e;uitable sharin bet!een the )o0ernment and thecontractor. The )o0ernment shall also be entitled to compensations for itsother contributions !hich shall be areed upon by the parties, and shallconsist, amon other thins, the contractorFs income ta

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    hat is mandatory under '.+. No. 2, and !hat due process re;uires, asthis *ourt held in Taada 0. Tu0era,[2-7 is the publication of the la! for!ithout such notice and publication, there !ould be no basis for theapplication of the ma

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    future ser0ice contracts and the past ser0ice contracts under (r. (arcos isthe eneral la! to be enacted by the leislature and the noti>cation of*onress by the #residentU That is the only diGerence, is it notU

    (R. B%&&')A=. That is riht.

    =R. TAN. =o those are the safeuards[U

    (R. B%&&')A=. Qes. There !as no la! at all o0ernin ser0ice contractsbefore.

    =R. TAN. Than" you, (adam #resident.[26 [ mphasis supplied.

    (*# also cites the follo!in statements of *ommissioners )ascon, )arcia,Nolledo and Tadeo !ho alluded to ser0ice contracts as they e

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    in0ol0in either technical or >nancial assistanceC. =uch a diGerencebet!een the lanuae of a pro0ision in a re0ised constitution and that of asimilar pro0ision in the precedin constitution is 0ie!ed as indicati0e of adiGerence in purpose.[265 %f, as respondents suest, the concept ofCtechnical or >nancial assistanceC areements is identical to that of Cser0ice

    contracts,C the *+N*+( !ould not ha0e bothered to >t the same do !ith ane! collar. To uphold respondentsF theory !ould reduce the >rst to a mereeuphemism for the second and render the chane in phraseoloymeaninless.

    An erms that technical or>nancial assistance areements are not synonymous to ser0ice contracts.

    [The *ourt in construin a *onstitution should bear in mind the ob@ectsouht to be accomplished by its adoption, and the e0ils, if any, souht to bepre0ented or remedied. A doubtful pro0ision !ill be e

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    (=. O?'=A/A. Another point of clari>cation is the phrase Cand utili8ation ofnatural resources shall be under the full control and super0ision of the=tate.C %n the -976 *onstitution, this !as limited to citi8ens of the#hilippinesK but it !as remo0ed and substituted by Cshall be under the fullcontrol and super0ision of the =tate.C as the concept chaned so that

    these particular resources !ould be limited to citi8ens of the #hilippinesU +r!ould these resources only be under the full control and super0ision of the=tateK meanin, nonciti8ens !ould ha0e access to these natural resourcesU%s that the understandinU

    (R. B%&&')A=. No, (r. Bice#resident, if the *ommissioner reads the ne

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    assistance they do not o!n anythin but on conditions that ha0e to bedetermined by la! !ith the concurrence of *onress. =o, it is 0eryrestricti0e.

    %f the *ommissioner !ill remember, this remo0es the possibility for ser0ice

    contracts !hich !e said yesterday !ere a0enues used in the pre0ious reimeto o around the 34 re;uirement.[26: [ mphasis supplied.

    The present *hief ustice, then a member of the *+N*+(, also referred tothis limitation in scope in proposin an amendment to the 34re;uirementI

    (R. /AB%/'. (ay % be allo!ed to e

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    only to ilipino citi8ens.

    Than" you.[269 [ mphasis supplied.

    The opinion of another member of the *+N*+( is persuasi0e[24 and

    lea0es no doubt as to the intention of the framers to eliminate ser0icecontracts altoether. $e !ritesI

    #araraph 4 of =ection 2 speci>es larescale, capitalintensi0e, hihlytechnoloical underta"ins for !hich the #resident may enter into contracts!ith foreino!ned corporations, and enunciates strict conditions that shouldo0ern such contracts. < <

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    shall be under the full control and super0ision of the =tate. =uch acti0itiesmay be directly underta"en by the state, or it may enter into coproduction,@oint 0enture, production sharin areements !ith ilipino citi8ens orcorporations or associations sisheries, or industrial uses otherthan the de0elopment of !ater po!er, bene>cial use may be the measureand limit of the rant.

    The =tate shall protect the nationFs marine !ealth in its archipelaic !aters,territorial sea, and e

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    $e elaboratesI

    &oo"in at the #hilippine model, !e can discern the follo!in 0esties of theconcession reime, thusI

    -. Liddin of a selected area, or leasin the choice of the area to theinterested party and then neotiatin the terms and conditions of thecontractK 1=ec. 5, #./. :7

    2. (anaement of the enterprise 0ested on the contractor, includinoperation of the >eld if petroleum is disco0eredK 1=ec. :, #./. :7

    6. *ontrol of production and other matters such as e

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    rhetoric. The -976 *harter still pro0ided that the enancial, technical,

    manaement, or other forms of assistance. =ince forein in0estors ha0e thecapital resources, the actual e

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    as presently !orded in the -976 *onstitution, a ser0ice contract i0es fullcontrol o0er the contract area to the ser0ice contractor, for him to !or",manae and dispose of the proceeds or production. %t !as a subterfue toet around the nationality re;uirement of the constitution.[24: [ mphasissupplied.

    %n the annotations on the proposed Article on National 'conomy and#atrimony, the ?.#. &a! draft summari8ed the rationale therefor, thusI

    5. The last pararaph is a modi>cation of the ser0ice contract pro0isionfound in =ection 9, Article J%B of the -976 *onstitution as amended. This-976 pro0ision shattered the frame!or" of nationalism in our fundamentalla! 1see (aallona, CNationalism and its =ub0ersion in the *onstitutionC.Throuh the ser0ice contract, the -976 *onstitution had leitimi8ed that!hich !as prohibited under the -965 constitution the e

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    bene>ciaries of #hilippine natural resources. This arranement is clearlyincompatible !ith the constitutional ideal of nationali8ation of naturalresources, !ith the Realian doctrine, and on a broader perspecti0e, !ith#hilippine so0ereinty.

    The proponents ne0ertheless ac"no!leded the need for capital andtechnical "no!ho! in the larescale e

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    by theses licensees, rantees, concessionaires. (oreo0er, some of themdisreard the conser0ation of natural resources and do not protect theen0ironment from deradation. The proposed role of the =tate !ill enable itto a reater share in the pro>ts it can also acti0ely husband its naturalresources and enae in de0elopmental prorams that !ill be bene>cial to

    them.

    4. Aside from the three ma@or schemes for the e

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    or >nancial assistance.C[256

    %n the case of the other commissioners, *ommissioner Nolledo himselfclari>ed in his !or" that the present charter prohibits ser0ice contracts.[254*ommissioner )ascon !as not totally a0erse to forein participation, but

    fa0ored stricter restrictions in the form of ma@ority conressionalconcurrence.[255 +n the other hand, *ommissioners )arcia and Tadeo mayha0e 0eered to the e

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    assistance areement directly !ith the )o0ernment throuh the /epartment.[ mphasis supplied.

    C'ned by R.A. No. 7942, means the searchin orprospectin for mineral resources by eoloical, eochemical or eophysical

    sur0eys, remote sensin, test pittin, trendin, drillin, shaft sin"in,tunnelin or any other means for the purpose of determinin the e

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    15 =ection 69,[2:2 !hich allo!s the contractor in a >nancial andtechnical assistance areement to con0ert the same into a mineralproductionsharin areementK

    13 =ection 53,[2:6 !hich authori8es the issuance of a mineral

    processin permit to a contractor in a >nancial and technical assistanceareementK

    The follo!in pro0isions of the same Act are li"e!ise 0oid as they aredependent on the foreoin pro0isions and cannot stand on their o!nI

    1- =ection 6 1,[2:4 !hich de>nes the term Ccontractor,C insofar asit applies to a >nancial or technical assistance areement.

    =ection 64,[2:5 !hich prescribes the manancialor technical assistance areementsK

    =ection 63,[2:3 !hich allo!s neotiations for >nancial or technicalassistance areementsK

    =ection 67,[2:7 !hich prescribes the procedure for >lin and e0aluation of>nancial or technical assistance areement proposalsK

    =ection 6:,[2:: !hich limits the term of >nancial or technical assistanceareementsK

    =ection 4,[2:9 !hich allo!s the assinment or transfer of >nancial or

    technical assistance areementsK

    =ection 4-,[29 !hich allo!s the !ithdra!al of the contractor in an TAAK

    The second and third pararaphs of =ection :-,[29- !hich pro0ide for the)o0ernmentFs share in a >nancial and technical assistance areementK and

    =ection 9,[292 !hich pro0ides for incenti0es to contractors in TAAs insofaras it applies to said contractorsK

    hen the parts of the statute are so mutually dependent and connected as

    conditions, considerations, inducements, or compensations for each other, asto !arrant a belief that the leislature intended them as a !hole, and that ifall could not be carried into eGect, the leislature !ould not pass the residueindependently, then, if some parts are unconstitutional, all the pro0isions!hich are thus dependent, conditional, or connected, must fall !ith them.[296

    There can be little doubt that the (*# TAA itself is a ser0ice contract.

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    =ection -.6 of the (*# TAA rants (*# Cthe e

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    #ursuant to =ection -.2 of the TAA, (*# shall pro0ide C[all >nancin,technoloy, manaement and personnel necessary for the (inin+perations.C The minin company binds itself to Cperform all (inin+perations . . . pro0idin all necessary ser0ices, technoloy and >nancin in

    connection there!ith,C[297 and to Cfurnish all materials, labour, e;uipmentand other installations that may be re;uired for carryin on all (inin+perations.C[29: (*# may ma"e e

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    the e

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    demandin the impossible or the impracticableK and unreasonable or absurdconse;uences, if possible, should be a0oided.[65 *ourts are not to i0e!ords a meanin that !ould lead to absurd or unreasonable conse;uencesand a literal interpretation is to be re@ected if it !ould be un@ust or lead toabsurd results.[63 That is a stron arument aainst its adoption.[67

    Accordinly, petitionersF interpretation must be re@ected.

    The foreoin discussion has rendered unnecessary the resolution of theother issues raised by the petition.

    $'R'+R', the petition is )RANT'/. The *ourt hereby declaresunconstitutional and 0oidI

    1- The follo!in pro0isions of Republic Act No. 7942I

    1a The pro0iso in =ection 6 1a;,

    1b =ection 26,

    1c =ection 66 to 4-,

    1d =ection 53,

    1e The second and third pararaphs of =ection :-, and

    1f =ection 9.

    12 All pro0isions of /epartment of 'n0ironment and Natural ResourcesAdministrati0e +rder 934, s. -993 !hich are not in conformity !ith this/ecision, and

    16 The inancial and Technical Assistance Areement bet!een the)o0ernment of the Republic of the #hilippines and (* #hilippines, %nc.

    =+ +R/'R'/.

    /a0ide, r., *.., #uno, Ouisumbin, *arpio, *orona, *alle@o, =r., and Tina. .,concur.

    Bitu, ., see =eparate +pinion.

    #ananiban, ., see =eparate +pinion.

    Qnares=antiao, =ando0al)utierre8 and Austria(artine8, ., @oins .#ananibanFs separate opinion.

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    [-3 %d., sec. 72.

    [-7 %d., sec. 76.

    [-: %d., sec. 75.

    [-9 %d., sec. 74.

    [2 %d., sec. 73.

    [2- %d., ch. J%%%.

    [22 %d., secs. 222.

    [26 %d., secs. 46, 45.

    [24 %d., secs. 4349, 5-52.

    [25 %d., ch. %J.

    [23 %d., ch. J.

    [27 %d., ch. J%.

    [2: %d., ch. J%B.

    [29 %d., ch. JB.

    [6 %d., ch. JB%.

    [6- %d., ch. J%J.

    [62 %d., ch. JB%%.

    [66 =ection --3, R.A. No. 7942 pro0ides that the Act Cshall ta"e eGect thirty16 days follo!in its complete publication in t!o 12 ne!spapers of eneralcirculation in the #hilippines.C

    [64 (*# TAA, sec. 4.-.

    [65 Rollo, p. 22.

    [63 %bid.

    [67 %bid.

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    [6: %bid. The number has since risen to -29 applications !hen thepetitioners >led their Reply. 1Rollo, p. 636.

    [69 %d., at 22.

    [4 %d., at 2624.

    [4- %d., at 5256. 'mphasis and underscorin supplied.

    [42 (*# TAA, p. 2.

    [46 Rollo, p. 22.

    [44 %d., at 754.

    [45 Bide Note 4.

    [43 Rollo, p. 754.

    [47 %d., at 755.

    [4: %d., at 73-736.

    [49 %d., at 734773.

    [5 %d., at 7:27:3.

    [5- /oc"eted as *.A.). R. No. 74-3-.

    [52 ).R. No. -56::5, entitled &epanto *onsolidated (inin *ompany 0. (*Resources %nternational #ty. &td., et al., decided =eptember 24, 26 and).R. No. -532-4, entitled &epanto (inin *ompany 0. (* Resources%nternational #ty. &td., (* 1#hilippines, %nc., =outhcot (inin *orporation,Tampa"an (inin *orporation and =aittarius (ines, %nc., decided =eptember26, 26.

    [56 =ection -2, Rule 46 of the Rules of *ourt, in0o"ed by pri0ate respondent,

    states, C The appeal shall not stay the a!ard, @udment, >nal order orresolution souht to be re0ie!ed unless the *ourt of Appeals shall directother!ise upon such terms as it may deem @ust.C

    [54 (*#Fs Reply 1dated (ay 3, 26 to #etitionersF *omment 1to the(anifestation and =upplemental (anifestation, p. 6.

    [55 %bid.

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    [53 %bid.

    [57 (*#Fs Reply 1dated (ay 3, 26 to #etitionersF *omment 1to the(anifestation and =upplemental (anifestation, p. 4.

    [5: #hilippine *onstitution Association 0. 'nri;ue8, 265 =*RA 53 1-994KNational 'conomic #rotectionism Association 0. +npin, -7- =*RA 3571-9:9K /umlao 0. *+('&'*, 95 =*RA 692 1-9:.

    [59 /umlao 0. *+('&'*, supra.

    [3 Loard of +ptometry 0. *olet, 23 =*RA :: 1-993.

    [3- /umlao 0. *+('&'*, supra.

    [32 =ubic Lay (etropolitan Authority 0. *ommission on 'lections, 232 =*RA492 1-993.

    [36 Anara 0. 'lectoral *ommission, 36 #hil. -69 1-963.

    [34 %nterated Lar of the #hilippines 0. amora, 66: =*RA :-, - 12K/umlao 0. *+('&'*, supraK #eople 0. Bera, 35 #hil. 53 1-967.

    [35 /umlao 0. *+('&'*, supra.

    [33 %nterated Lar of the #hilippines 0. amora, supra.

    [37 'rmita(alate $otel and (otel +perators Association, %nc. 0. *ity (ayorof (anilaW 2- =*RA 449 1-937.

    [3: #etitioners Roberto #. Amloy, Ra;im &. /abie, =imeon $. /olo@o, %melda)andon, &eny L. )usanan, (arcelo &. )usanan, Ouintol A. &abuayan,&omines &a!ay, and Lenita #. Tacuayan.

    [39 #etitioners Flon Autin (. /abie, (ario &. (ancal, Alden =. Tusan, =r.=usuan +. Lolanio, +N/, &olita ). /emonte0erde, Len@ie &. Ne;uinto, Rose&ilia =. Romano and Amparo =. Qap.

    [7 Rollo, p. 3.

    [7- %d. at 667, citin (alabanan 0. )a! *hin, -:- =*RA :4 1-99.

    [72 243 =*RA 54 1-995.

    [76 #eople 0. Bera, supra.

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    [74 (ilitante 0. *ourt of Appeals, 66 =*RA 6-: 12.

    [75 %bid.

    [73 *ru8 0. =ecretary of 'n0ironment and Natural Resources, 647 =*RA -2:12, Hapunan, ., =eparate +pinion. [ mphasis supplied.

    [77 oya 0. #residential *ommission on )ood )o0ernment, 225 =*RA 53:1-996.

    [7: %nterated Lar of the #hilippines 0. amora, supra.

    [79 . Lernas, =.., The -9:7 *onstitution of the #hilippinesI A *ommentary-9 1-993.

    [: *ru8 0. =ecretary of 'n0ironment and Natural Resources, supra,Hapunan, ., =eparate +pinion.

    [:- %d., #uno, ., =eparate +pinion, and #ananiban, ., =eparate +pinion.

    [:2 *ario 0. %nsular )o0ernment, 2-2 ?= 449, 56 &.'d. 595 1-99. orinstance, &a! -4, Title -2, Loo" 4 of the Recopilacion de &eyes de las %ndiasproclaimedI

    e ha0in ac;uired full so0ereinty o0er the %ndies, and all lands, territories,and possessions not heretofore ceded a!ay by our royal predecessors, or by

    us, or in our name, still pertainin to the royal cro!n and patrimony, it is our!ill that all lands !hich are held !ithout proper and true deeds of rant berestored to us accordin as they belon to us, in order that after reser0inbefore all !hat to us or to our 0iceroys, audiencias, and o0ernors may seemnecessary for public s;uares, !ays, pastures, and commons in those places!hich are peopled, ta"in into consideration not only their present condition,but also their future and their probable increase, and after distributin to thenati0es !hat may be necessary for tillae and pasturae, con>rmin them in!hat they no! ha0e and i0in them more if necessary, all the rest of saidlands may remain free and unencumbered for us to dispose of as !e may!ish.

    [:6 Republic 0. *ourt of Appeals, -3 =*RA 22: 1-9::. %t has been noted,ho!e0er, that Cthe prohibition in the [-965 *onstitution aainst alienationby the state of mineral lands and minerals is not properly a part of theRealian doctrine but a separate national policy desined to conser0e ourmineral resources and pre0ent the state from bein depri0ed of suchminerals as are essential to national defense.C 1A. Noble@as, #hilippine &a!on Natural Resources -23-27 [-959 ed., citin B. rancisco, The Ne! (inin

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    &a!.

    [:4 *ru8 0. =ecretary of 'n0ironment and Natural Resources, supra,Hapunan, ., =eparate +pinion, citin A. Noble@as, #hilippine &a! on NaturalResources 3 1-93-. Noble@as continuesI

    Thus, they asserted their riht of o!nership o0er mines and minerals orprecious metals, olds, and sil0er as distinct from the riht of o!nership ofthe land in !hich the minerals !ere found. Thus, !hen on a piece of landminin !as more 0aluable than ariculture, the so0erein retained o!nershipof mines althouh the land has been alienated to pri0ate o!nership.)radually, the riht to the o!nership of minerals !as e

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    Analoous pro0isions are found in the *i0il *ode of =pain determinin theo!nership of mines. %n its Article 669 1Article 42, Ne! *i0il *odeenumeratin properties of public o!nership, the mines are included, untilspecially ranted to pri0ate indi0iduals. %n its article 65 1Art. 467, Ne! *i0il*ode declarin that the proprietor of any parcel of land is the o!ner of its

    surface and of e0erythin under it, an e

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    #hilippine %slands.

    [-- Aabin, supra, at 6.

    [-2 #eople 0. &insanan, 32 #hil. 343 1-965.

    [-6 %bid.

    [-4 %bid.

    [-5 %bid.

    [-3 %bid.

    [-7 Ato" Liede (inin *o. 0. %ntermediate Appellate *ourt, supra.

    [-: Lernas, =.., supra, at -9--, citin &ee $on $o" 0. /a0id, 4:=*RA 672 1-972.

    [-9 %% . Arueo, The ramin of the #hilippine *onstitution 592 1-949.

    [-- %d., at 33-.

    [--- %d., at 34. /eleate Arueo e

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    ?tili8ation of the #etroleum Resources of the #hilippinesK to 'ncourae the*onser0ation of such #etroleum ResourcesK to Authori8e the =ecretary ofAriculture and Natural Resources to *reate an Administration ?nit and aTechnical Loard in the Lureau of (inesK to Appropriate unds thereforK andfor other purposes.

    [--3 Rep. Act No. 6:7 1-949, as amended, art. - 1b.

    [--7 %d., art. - 1c.

    [--: %d., art. 5.

    [--9 %d., art. 6-. The same pro0ision reconi8ed the rihts of Americanciti8ens under the #arity AmendmentI

    /urin the eGecti0ity and sub@ect to the pro0isions of the ordinance

    appended to the *onstitution of the #hilippines, citi8ens of the ?nited =tatesand all forms of business enterprises o!ned and controlled, directly orindirectly, by citi8ens of the ?nited =tates shall en@oy the same rihts andobliations under the pro0isions of this Act in the same manner as to, andunder the same conditions imposed upon, citi8ens of the #hilippines orcorporations or associations o!ned or controlled by citi8ens of the#hilippines.

    [-2 %d., art. -.

    [-2- %d., art. 6.

    [-22 %d., art. 9.

    [-26 %bid.

    [-24 Rep. Act No. 6:7 1-949, as amended, art. :.

    [-25 %d., art. 25.

    [-23 %d., art. 47.

    [-27 %d., art. 3.

    [-2: %d., art. 34. Article 49, R.A. No. 6:7 oriinally imposed an annuale

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    [-6 Rep. Act No. 6:7 1-949, as amended, art. 35.

    [-6- rancisco, supra, at -6.

    [-62 Rep. Act No. 6:7 1-949, as amended, art. 9 1b 6.

    [-66 %d., art. 9 1b 4.

    [-64 %d., art. 96A.

    [-65 %d., art. 96.

    [-63 %bid.

    [-67 Rep. Act No. 6:7 1-949, as amended, art. 94.

    [-6: %d., art. -3.

    [-69 %d., art. 95.

    [-4 %bid.

    [-4- Rep. Act No. 6:7 1-949, as amended, art. 95 1e.

    [-42 /imaiba, supra, at 6-5, citin abri"ant, +il /isco0ery and Technical*hane in =outheast Asia, &eal Aspects of #roduction =harin *ontracts inthe %ndonesian #etroleum %ndustry, ---2, sections -6*.24 and -6*.25

    1-972.

    [-46 Aabin, supra, at 4.

    [-44 /imaiba, supra, at 6-:.

    [-45 Amendin #residential /ecree No. : issued on +ctober 2, -972, and#romulatin an Amended Act to #romote the /isco0ery and #roduction of%ndienous #etroleum and Appropriate unds Therefor.

    [-43 #res. /ecree No. :7 1-972, sec. 4.

    [-47 Aabin, supra, at 3.

    [-4: (. (aallona, =er0ice *ontracts in #hilippine Natural Resources, 9orld Lull. -, 4 1-996.

    [-49 #res. /ecree No. :7 1-972, sec. 3.

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    [-5 %d., sec. 4.

    [-5- %d., sec. 3.

    [-52 %d., sec. 7.

    [-56 %d., sec. :.

    [-54 %bid.

    [-55 %bid.

    [-53 #res. /ecree No. :7 1-972, sec. 9.

    [-57 %d., sec. -2.

    [-5: %d., sec. -6.

    [-59 /imaiba dra!s the follo!in comparison bet!een the ser0icecontract scheme and the concession systemI

    %n both the concession system and the ser0ice contract scheme, !or" and>nancial obliations are re;uired of the de0eloper. ?nder Republic Act No.6:7 and #residential /ecree No. :7, the concessionaire and the ser0icecontractors are e

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    them.

    %n the royalty system, the concessionaire may be discouraed to producemore for the reason that since the royalty paid to the host country is closelylin"ed to the 0olume of production, the reater the produce, the more

    amount or royalty !ould be allocated to the )o0ernment. This is not so inthe production sharin system. The share of the )o0ernment dependslarely on the net proceeds of production after reimbursin the ser0icecontractor of its reco0erable ets to the host country. 1/imaiba,

    supra, at 6666-.

    [-3 Aabin, supra, at 3.

    [-3- The antecedents leadin to the #roclamation are narrated in a0ellana0. 'cation or re@ection the *onstitution of the Republic of the#hilippines proposed by the -97- *onstitutional *on0ention, andappropriatin funds therefor, as !ell as settin the plebiscite for suchrati>cation on anuary -5, -976.

    +n anuary -7, -976, the #resident issued #roclamation No. --2 certifyinand proclaimin that the *onstitution proposed by the -97- *onstitutional*on0ention Chas been rati>ed by an o0er!helmin ma@ority of all the 0otescast by the members of all the Laranays 1*iti8ens Assemblies throuhoutthe #hilippines, and has thereby come into eGect.C

    [-32 Lernas, =.., supra, at --3, Note 2:, citin =ession of No0ember 25,

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    [-77 *onst., art. JB%%%, sec. 27K /e &eon 0. 'suerra, -56 =*RA 32 1-9:7.

    [-7: (iners Association of the #hilippines, %nc. 0. actoran, r., 24 =*RA -1-995.

    [-79 %bid.

    [-: %bid.

    [-:- . Lernas, =.., The %ntent of the -9:3 *onstitution riters :-2 1-995.

    [-:2 (iners Association of the #hilippines, %nc. 0. actoran, r., supra.

    [-:6 %%% Records of the *onstitutional *ommission 255.

    [-:4 %d., at 655653.

    [-:5 *onst. 1-9:3, art. %%, sec. -.

    [-:3 *ru8 0. =ecretary of 'n0ironment and Natural Resources, supra, #uno,., =eparate +pinion.

    [-:7 Rep. Act No. 7942 1-995, sec. 9.

    [-:: ='*. :2. Allocation of )o0ernment =hare. The )o0ernment share asreferred to in the precedin sections shall be shared and allocated inaccordance !ith =ections 29 and 292 of Republic Act No. 7-3 other!ise

    "no!n as the &ocal )o0ernment *ode of -99-. %n case the de0elopment andutili8ation of mineral resources is underta"en by a o0ernmento!ned orcontrolled corporation, the sharin and allocation shall be in accordance!ith =ections 29- and 292 of the said *ode.

    [-:9 An Act *reatin A #eopleFs =mall=cale (inin #roram and for otherpurposes.

    [-9 Rep. Act No. 7942 1-995, sec. 42.

    [-9- %d., secs. 6 1ab and 23.

    [-92 C*ontractorC means a ;uali>ed person actin alone or in consortium!ho is a party to a mineral areement or to a >nancial or technicalassistance areement. 1%d., sec. 6[.

    [-96 C*ontract areaC means land or body !ater delineated for purposes ofe

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    [-94 C)ross outputC means the actual mar"et 0alue of minerals or mineralproducts from its minin area as de>ned in the National %nternal Re0enue*ode 1%d., sec. 6[0.

    [-95 %d., sec. 23 1a.

    [-93 An Act Reducin '

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    [2-4 Hapatiran 0. Tan, -36 =*RA 67- 1-9::.

    [2-5 #ro0idin for the #ublication of &a!s either in the +cial )a8ette or ina Ne!spaper of )eneral *irculation in the #hilippines as a Re;uirement for

    their 'Gecti0ity.

    [2-3 =ection -, '.+. No. 2 !as subse;uently incorporated in theAdministrati0e *ode of -9:7 1'

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    1e submits a /eclaration of (inin easibility [=ections 5.4 and 5.5,

    1f durin the de0elopment period, determines the timetable, submits !or"prorams, pro0ides the reports and determines and e

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    [263 *i0il &iberties ?nion 0. '

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    [25 %d., at 9--. #rofessor &abita also suests thatI

    < < rst par.

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    shall ha0e the riht to possess and use ecation, holders of minin rihts shall not be pre0ented from entry intopri0ate lands and concession areas by surface o!ners, occupants, orconcessionaires !hen conductin minin operations thereinI #ro0ided, Thatany damae done to the property of the surface o!ner, occupant, orconcessionaire as a conse;uence of such operations shall be properlycompensated as may be bee pro0ided for in the implementin rules andreulationsI #ro0ided, further, That to uarantee such compensation, theperson authori8ed to conduct minin operation shall, prior thereto, post a

    bond !ith the reional director based on the type of properties, thepre0ailin prices in and around the area !here the minin operations are tobe conducted, !ith surety or sureties satisfactory to the reional director.['mphasis supplied.

    [277 %d., sec. 69, >rst par.

    [27: %d., sec. 69, second par.

    [279 %d., sec. 65 1e.

    [2: ='*. 26. Rihts and +bliations of the #ermittee. < < nancial or technicalassistance areement o0er the permit area, !hich application shall beranted if the permittee meets the necessary ;uali>cations and the termsand conditions of any such areementI #ro0ided, That the e

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    technical assistance areement.

    [2:- ='*. 65. Terms and *onditions. The follo!in terms, conditions, and!arranties shall be incorporated in the >nancial or technical assistanceareement, to !itI

    1a A >rm commitment in the form of a s!orn statement, of an amountcorrespondin to the enancial uarantee bond shall be posted in fa0or of the )o0ernment inan amount e;ui0alent to the ecations and none of the dis;uali>cations for enterin into theareementK

    1e Representations and !arranties that the contractor has or has access toall the >nancin, manaerial and technical e

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    1i #referential use of local oods and ser0ices to the manancial or technical assistance areement at the hihestprice and more ad0antaeous terms and conditions as pro0ided for under therules and reulations of this ActK

    1n #ro0ide for consultation and arbitration !ith respect to the interpretationand implementation of the terms and conditions of the areementsK and

    1o =uch other terms and conditions consistent !ith the *onstitution and !iththis Act as the =ecretary may deem to be for the best interest of the =tate

    and the !elfare of the ilipino people.

    [2:2 ='*. 69. +ption to *on0ert into a (ineral Areement. Thecontractor has the option to con0ert the >nancial or technical assistanceareement to a mineral areement at any time durin the term of theareement, if the economic 0iability of the contract area is found to beinade;uate to @ustify larescale minin operations, after proper notice to the=ecretary as pro0ided for under the implementin rules and reulationsK#ro0ided, That the mineral areement shall only be for the remainin periodof the oriinal areement.

    %n the case of a forein contractor, it shall reduce its e;uity to forty percent14M in the corporation, partnership, association, or cooperati0e. ?poncompliance !ith this re;uirement by the contractor, the =ecretary shallappro0e the con0ersion and e

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    permit.

    [2:4 ='*. 6. /e>nition of Terms. As used in and for purposes of this Act,the follo!in terms, !hether in sinular or plural, shall meanI

    < < ed person actin alone or in consortium !hois a party to a mineral areement or to a >nancial or technical assistanceareement.

    [2:5 ='*. 64. (anancial or technical assistance areement shall ha0e a term not e0e 125 years to start from the e0e 125 years under such terms and conditions as may bepro0ided by la!.

    [2:9 ='*. 4. AssinmentDTransfer. A >nancial or technical assistanceareement may be assined or transferred, in !hole or in part, to a ;uali>ed

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    person sub@ect to the prior appro0al of the #residentI #ro0ided, That the#resident shall notify *onress of e0ery >nancial or technical assistanceareement assined or con0erted in accordance !ith this pro0ision !ithinthirty 16 days from the date of the appro0al thereof.

    [29 ='*. 4-. ithdra!al from inancial or Technical Assistance Areement. The contractor shall manifest in !ritin to the =ecretary his intention to!ithdra! from the areement, if in his @udment the minin pro@ect is noloner economically feasible, e0en after he has eed all his>nancial, >scal or leal obliations.

    [29- ='*. :-. )o0ernment =hare in +ther (ineral Areements. < < nancial or technical assistance areement shall

    consist of, amon other thins, the contractorFs corporate income ta

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    [29: %d., sec. -.-1c.

    [299 %d., sec. 3.4.

    [6 Rollo, pp. 536534.

    [6- *i0il *ode, art. :.

    [62 *onst., art %%%, sec. -.

    [66 Bide Note 226.

    [64 Rollo, p. 246.

    [65 *i0il &iberties ?nion 0. '