la bugal b’laan tribal association inc powerpoint

7/29/2019 La Bugal Blaan Tribal Association Inc Powerpoint

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LA BUGAL BLAAN TRIBAL ASSOCIATION

INC., ET AL. V. VICTOR O. RAMOS,SECRETARY DEPARTMENT OF

ENVIRONMENT AND NATURAL RESOURCES;

HORACIO RAMOS, DIRECTOR, MINES AND

GEOSCIENCES BUREAU (MGB-DENR);


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OVERVIEW

RA 7942 (The Philippine Mining Act) took

effect on April 9, 1995. Before the effectivityof RA 7942, or on March 30, 1995, thePresident signed a Financial and TechnicalAssistance Agreement (FTAA) with WMCP, acorporation organized under Philippine laws,covering close to 100, 000 hectares of land inSouth Cotabato, Sultan Kudarat, Davao delSur and North Cotabato. On August 15, 1995,the Environment Secretary Victor Ramos

issued DENR Administrative Order 95-23,which was later repealed by DENRAdministrative Order 96-40, adopted onDecember 20, 1996.


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FACTS

1. Petitioners prayed that RA 7942, itsimplementing rules, and the FTAA

between the government and WMCP

(Western Mining Corporation

(Philippines)inc.) be declared

unconstitutional on ground that they allow

fully foreign owned corporations like

WMCP to exploit, explore and developPhilippine mineral resources in

contravention of Article XII Section 2

paragraphs 2 and 4 of the Charter


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FACTS On January 10, 1997, counsels for petitioner

sent a letter to Ramos demanding DENR to stopimplementing RA7942 and DAO 96-40. Noresponse, thus the petition for Mandamus andProhibition with prayer of TRO and preliminary

injunction(denied) claiming that petitionerRamos acted without or in excess of jurisdictionin implementing the assailed Constitutionalityof RA 7942 [1], of DENR Administrative Order

96-40 [2], and of the Financial and TechnicalAssistance Agreement entered into on 30 March1995 between the Republic of the Philippinesand WMC(Philippines) , Inc.


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FACTS

In January 2001, WMC a publicly listedAustralian mining and explorationcompany sold its whole stake in WMCPto Sagittarius Mines, 60% of which is

owned by Filipinos while 40% of which isowned by Indophil Resources, an

Australian company. DENR approved thetransfer and registration of the FTAA in

Sagittarius name but LepantoConsolidated assailed the same. The lattercase is still pending before the Court of

Appeals.


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FACTS

EO 279, issued by former President Aquino on July25, 1987, authorizes the DENR to accept, considerand evaluate proposals from foreign ownedcorporations or foreign investors for contracts oragreements involving either technical or financialassistance for large scale exploration, developmentand utilization of minerals which upon appropriaterecommendation of the (DENR) Secretary, thepresident may execute with foreign proponent.

WMCP likewise contended that the annulment of theFTAA would violate a treaty between the Philippinesand Australia which provides for the protection of

Australian investments.


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1. Whether or not the Philippine Mining Act isunconstitutional for allowing fully foreign-owned corporations to exploit Philippinemineral resources

2. Whether or not the FTAA between thegovernment and WMCP is a service contractthat permits fully foreign owned companies toexploit Philippine mineral resources

3. Whether the Court has a role in the exercise ofthe power of control over the EDU of ournatural resources


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1. RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fullyforeign owned corporations to exploit Philippine natural resources. Article XII Section 2 of the 1987 Constitution retained the Regalian doctrine which

states that All lands of the public domain, waters, minerals, coal, petroleum, and

other minerals, coal, petroleum, and other mineral oils, all forces of potential energy,

fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are

owned by the State. The same section also states that, exploration and development

and utilization of natural resources shall be under the full control and supervision of

the State.

Absent in Section 2 is the provision in the 1935 and 1973 Constitutions authorizingthe State to grant licenses, concessions, or leases for the exploration, exploitation,

development or utilization of natural resources.With such omission, the utilization of

inalienable lands of public domain through license, concession or lease is no longer

allowed under the 1987 Constitution


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Under the concession system, the concessionaire makesa direct equity investment for the purpose of exploitinga particular natural resource within a given area. Theconcession amounts to complete control by theconcessionaire over the countrys natural resource, for itis given exclusive and plenary rights to exploit a

particular resource at the point of extraction.

The 1987 Constitution, moreover, has deleted thephrase management or other forms of assistance in the1973 Charter. The present Constitution now allows onlytechnical and financialassistance. The management oroperation of mining activities by foreign contractors, theprimary feature of service contracts was precisely the evilthe drafters of the 1987 Constitution sought to avoid.


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The constitutional provision allowing the President toenter into FTAAs is an exception to the rule thatparticipation in the nations natural resources is reservedexclusively to Filipinos. Accordingly such provision mustbe construed strictly against their enjoyment by non-Filipinos. Therefore RA 7942 is invalid insofar as said actauthorizes service contracts

Although the statute employs the phrase financial andtechnical agreements in accordance with the 1987Constitution, its pertinent provisions actually treat these

agreements as service contracts that grant beneficialownership to foreign contractors contrary to thefundamental law


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The underlying assumption in the provisions of

the law is that the foreign contractor manages themineral resources just like the foreign contractorin a service contract. By allowing foreigncontractors to manage or operate all the aspectsof the mining operation, RA 7942 has in effectconveyed beneficial ownership over the nationsmineral resources to these contractors, leaving theState with nothing but bare title thereto.

The same provisions, whether by design orinadvertence, permit a circumvention of the

constitutionally ordained 60-40% capitalizationrequirement for corporations or associationsengaged in the exploitation, development andutilization of Philippine natural resources.


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The Court finds the following provisions of R.A. No. 7942 to be

violative of Section 2, Article XII of the Constitution and herebydeclares unconstitutional and void:

(1) The proviso in Section 3 (aq), which defines "qualified person," towit:Provided, That a legally organized foreign-owned corporation shallbe deemed a qualified person for purposes of granting anexploration permit, financial or technical assistance agreement ormineral processing permit.

(2) Section 23, which specifies the rights and obligations of anexploration permittee, insofar as said section applies to a financialor technical assistance agreement,

(3) Section 33, which prescribes the eligibility of a contractor in afinancial or technical assistance agreement;

(4) Section 35, which enumerates the terms and conditions for everyfinancial or technical assistance agreement;

(5) Section 39, which allows the contractor in a financial andtechnical assistance agreement to convert the same into a mineralproduction-sharing agreement;


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(6) Section 56, which authorizes the issuance of a mineralprocessing permit to a contractor in a financial and technicalassistance agreement;The following provisions of the same Act are likewise void asthey are dependent on the foregoing provisions and cannotstand on their own:

(1) Section 3 (g), which defines the term "contractor," insofar asit applies to a financial or technical assistance agreement.

Section 34, which prescribes the maximum contract area in a

financial or technical assistance agreements;

Section 36, which allows negotiations for financial or technicalassistance agreements;


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Section 37, which prescribes the procedure for filing and evaluationof financial or technical assistance agreement proposals;

Section 38, which limits the term of financial or technical assistanceagreements;

Section 40, which allows the assignment or transfer of financial or

technical assistance agreements;Section 41, which allows the withdrawal of the contractor in anFTAA;The second and third paragraphs of Section 81, which provide forthe Government's share in a financial and technical assistanceagreement; and

Section 90, which provides for incentives to contractors in FTAAsinsofar as it applies to said contractors;


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When the parts of the statute are so mutually

dependent and connected as conditions,considerations, inducements, orcompensations for each other, as to warrant abelief that the legislature intended them as a

whole, and that if all could not be carried intoeffect, the legislature would not pass theresidue independently, then, if some partsare unconstitutional, all the provisions whichare thus dependent, conditional, orconnected, must fall with them.


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Ruling 2. The FTAA between WMCP and the Philippine

government is likewise unconstitutional since theagreement itself is a service contract.

Section 1.3 of the FTAA grants WMCP, a fully foreignowned corporation, the exclusive right to explore,exploit, utilize and dispose of all minerals and by-products that may be produced from the contractarea. Section 1.2 of the same agreement providesthat WMCP shall provide all financing, technology,management, and personnel necessary for the MiningOperations.

These contractual stipulations and related provisionsin the FTAA taken together, grant WMCP beneficialownership over natural resources that properly belongto the State and are intended for the benefit of itscitizens. These stipulations are abhorrent to the 1987

Constitution. They are precisely the vices that thefundamental law seeks to avoid, the evils that it aims


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The Chief Executive is the official constitutionallymandated to enter into agreements with foreign ownedcorporations. On the other hand, Congress may review theaction of the President once it is notified of every contractentered into in accordance with this [constitutional]provision within thirty days from its execution. In contrast

to this express mandate of the President and Congress inthe exploration, development and utilization (EDU) ofnatural resources,Article XII of the Constitution issilent on the role of the judiciary. However, should thePresident and/or Congress gravely abuse their discretion inthis regard, the courts may -- in a proper case -- exercisetheir residual duty under Article VIII. Clearly then, the

judiciary should not inordinately interfere in the exercise ofthis presidential power of control over the EDU of ournatural resources.

la bugal b’laan tribal association inc powerpoint

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