Two petitions challenge the constitutionality of Republic Act No. 7942 (The Philippine Mining Act of 1995), particularly sections 80 and 81, and various related administrative issuances of the Department of Environment and Natural Resources (DENR). 

The first, Hontiveros – Baraquel, et al. vs. Secretary of DENR, et al. (G.R. No. 181702), seeks the writs of Prohibition and Mandamus with Application for Restraining Order and challenges the legality of Section 81 of Republic Act 7942 or the Philippine Mining Act of 1995 and DENR Administrative Order No. 12, series of 2007 (DAO 07-12). It was filed by members of the House of Representatives and residents of South Cotabato, Koronadal City, Sultan Kudarat, Nueva Vizcaya and Zamboanga del Sur and names as respondents the Secretary of the Department of Environment and Natural Resources (DENR), and the current holders of FTAA namely: Sagittarius Mines, Inc. (SMI), Oceanagold (Philippines), Inc., and TVI Resources and Development Philippines, Inc. (TVIRD).  Petitioners asked the Court to, among others, (a) issue a Temporary Restraining Order and/or a Preliminary Injunction; (b) enjoin the respondents from acting on any application for Financial or Technical Assistance Agreements (FTAA); (c) Declare DAO 07-12 and RA no. 7942 as unconstitutional and void; and (d) cancel all existing FTAAs.

Petitioners argue that: (1) section 811 of the Mining Act of 1995 is unconstitutional because: (1) it violated the rule on delegated legislation; (2) the Secretary of the DENR (public respondent) acted with grave abuse of discretion resulting to lack or excess of jurisdiction in the issuance of DAO 07-12; and (3) both section 81 of the Mining Act and DAO 07-12 are unconstitutional because they allow inequitable sharing of wealth contrary to Article XII, Section 1, par. 1 and Section 2, par. 1 and 4 of the 1987 Constitution.

In support, petitioners submit that:

  1. Section 81 of the Mining Act of 1995 violated the rule on delegated legislation when it failed to meet the completeness and sufficient standard tests. First, it failed the completeness test because as interpreted by the Supreme Court in La Bugal B’laan Tribal Association, Inc. v. Ramos the term “among other things” does not provide the sources (where) revenueshould be taken from. Therefore, eventhough Section 81 provides an additional government share, the same is totally dependent on the discretion of the public respondent. Second, the Mining Act also failed to meet the sufficient standard test as it does not only fail to provide the sources from which additional government share shall be taken from, but it also fails to provide the metes and bounds of this power of the government to receive its share, subjecting it to the whim and caprices of the executive power. The determination of the sources of revenue is inherently lodged in the legislative, and therefore, the law should already establish such sources with the implementing agency left only to enforce the law.
  1. The Secretary of the DENR acted with grave abuse of discretion resulting to lack or excess of jurisdiction in the issuance of DAO 07-12 since (a) the said department order went beyond the scope of subordinate legislation; and (b) public respondent violated the equal protection clause with the issuance of DAO 07-12.

As a result of the law leaving too much discretion to the implementing agency, public respondents have issued DAO 07-12 beyond its power of subordinate legislation. In fact, Sec. 81 leaves to the public respondent overbroad discretionary powers to determine what shall consist of ‘among other things’ as additional government share. It further grants the public respondent the discretion to determine which is an equitable sharing of wealth. Thus, public respondent declared that if the exactions amount to fifty percent (50%) of the Net Mining Revenue, no additional government share shall be collected – contrary to the law, and to this Honorable Court’s pronouncement in La Bugal.

Public respondent violated the equal protection clause with the issuance of DAO 07-12. With the DAO 07-12, private respondents who were already awarded FTAAs are given options with regard to the fiscal regime which they think would be least costly to them. Meanwhile, corporations with pending applications and future FTAAs are required to conform to only one fiscal regime. Private respondents’ FTAAs and future FTAAs are given the same rights; therefore, the same obligations should also be imposed.

  1. Section 81 of the Mining Act and DAO 07-12 are unconstitutional because they allow inequitable sharing of wealth contrary to Article XII, Section 1, par. 1 and Section 2, par. 1 and 4 of the 1987 Constitution. Under Article XII, Section 2 of the Constitution, mineral resources form part of the national patrimony of the State. As owner-in-trust of these resources, the exploration, development and utilization of mineral resources shall be under the full control and supervision of the State. From this arrangement, the government is thus expected to receive its share as the owner-in-trust of the mineral lands, or in another sense, for the use and development of the mineral lands it holds in trust for the people, as well as other lands and natural resources that were utilized for mining operations, which include water, land and forest resources. Contrary to this, Sec. 81 and DAO 07-12 limit, in practice and application, government share to taxes, fees and royalties. Under DAO 07-12, to determine the government share from the mining operations, the fifty percent (50%) Net Mining Revenue (NMR) is merely used as a comparison to the total taxes collected to determine the ceiling of collectible Additional Government Share (AGS.)

Petitioners assert that there must first be a clear determination through research and study with regard to which fiscal arrangement shall result to an “equitable sharing of wealth” considering the other cultural, social, environmental and economic loss and risks that mining entails.

Read the entire Petition in G.R. No. 181702 below
(if the document doesn't load, please click here to view the file.)



The second, Hontiveros – Baraquel, et al. vs. Secretary of DENR, et al.,  G.R. No. 181703, also seeks the writs of Prohibition and Mandamus with Application for Temporary Restraining Order and challenges the legality and constitutionality of Section 80 of Republic Act 7942 as regards the government share in a Mineral Production Sharing Agreement (MPSA); specifically, it questions the validity of the MPSAs issued by the Secretary of the Department of Environment and Natural Resources (public respondent) to the private respondents and their predecessor corporations.  It was filed by Members of the House of Representatives and residents of Mati, Davao Oriental (petitioners).

Petitioners allege that the public respondent acted with grave abuse of discretion in processing and issuing MPSAs in accordance with RA 7942 and Department Order 96-40, these two being in violation of Article XII, Section 1, par. 1 and Section 2, par. 1 of the 1987 Constitution. Specifically, Section 80 of RA 7942 and its implementing rule (Section 212 of DAO 96-40) provide that the government share shall be excise taxes. According to the petitioners, this fiscal arrangement is glaringly contradictory to the Constitutional provision that the development of the national patrimony should be based on an equitable distribution of wealth and that this clear defect in the law limiting the share of the state to excise taxes cannot be remedied by any executive issuance.

Petitioners ask that the Honorable Court (a) issue a Temporary Restraining Order and/or a Preliminary Injunction; (2) enjoin the public respondent from acting on any application for MPSA; (3) declare RA No. 7942 as unconstitutional and void; (4) declare the Implementing Rules and Regulations of the Mining Act or DAO 96-40 and all other similar administrative issuances as unconstitutional and void; and (5) order the declaration of nullity of existing MPSAs.

Petitioners argue that the DENR Secretary  acted with grave abuse of discretion in processing and issuing Mineral Product Sharing Agreements (MPSAs) in accordance with RA 7942 and Department Order 96-40, these two being in violation of Article XII, Section 1, par. 1 and Section 2, par. 1 of the 1987 Constitution.

In support, petitioners argue that a Mineral Production Sharing Agreement (MPSA) is defined by Section 26(a) of RA 7942 as an agreement where the Government grants to the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. In a MPSA, the contribution of the government is its ownership-in-trust of the mineral lands, while the contribution of the contractor shall be the necessary financing, technology, management and personnel. From this arrangement, the government is expected to receive its share as the owner-in-trust of the mineral lands, contributing these lands as its investment for the exploitation of mineral resources. However, Section 80 of RA 7942 and Section 212 of DAO 96-40 provide that the government share shall be excise taxes. This fiscal arrangement is glaringly contradictory to the Constitutional provision that the development of the national patrimony should be based on an equitable distribution of wealth. This clear defect in the law limiting the share of the state to excise taxes cannot be remedied by any executive issuance.

The power of taxation is an inherent power of the State. It is not similar to the concept of ownership. The Supreme Court held in the cases of Court of Industrial Relations v. Court of Appeals and Atlas Consolidated Mining v. CA that regardless of whether or not the respondents’ business would turn out to be a success or a failure, respondents are still required by law to pay (excise) taxes for the privilege of doing business. It is not, in any way, equivalent to the contemplated share of the government for the utilization of non-renewable mineral resources. The obligation of mining corporations to pay taxes, fees and royalties comes from the clear language of the laws, while the obligation of mining corporations to pay additional government share comes from contracts or other obligations, in this case, MPSAs.

Read the entire Petition in G.R. No. 181703 below
(if the document doesn't load, please click here to view the file.)


 

Comment-in-Intervention  filed by Chamber of Mines of the Philippines
[G.R. No. 181702 and 181703: Hontiveros – Baraquel vs. Secretary of DENR]

On June 19, 2013, the Chamber of Mines of the Philippines (the Chamber) filed a Motion for Intervention with attached Comment-in-Intervention alleging in part that (1) it is an incorporated association of mining companies that have an interest in the rational administration of the government’s mining laws and rules; (2) the SC has allowed it to intervene and to participate in the proceedings in the previous case of La Bugal-B’laan Tribal Association, Inc., et. al. v. Ramos, et. al. considering that the mentioned case impacted upon the Chamber’s interests, especially in ensuring that its members have adequate freedom to contract with international mining companies fort heir mutual benefit; and (3) it desires to present information which will hopefully aid the Honorable Court in its resolution of the present petitions. From the foregoing, the Chamber prays that (1) its Motion to Intervene be granted; (2) that the attached Comment-in-Intervention be admitted; and that (3) it be heard in oral argument any day in August 2013 at the convenience of the Honorable Court.

In its Comment-in-Intervention, the Chamber raised the following issues: (1) Petitioners’ contentions have already been passed upon and disposed of against the petitioners in the case of La Bugal-B’laan Tribal Association, Inc., et. al. v. Ramos, et. al.; (2) the Supreme Court should stand by its prior decision in La Bugal-B’laan; and (3) what is an equitable revenue sharing in mining is a question for the legislative and executive branches of government to decide. Subsequently, the Intervenor prays that the Honorable Court dismiss the present petitions.

Read the Chamber of Mines of the Philippines Comment below
(if the document doesn't load, please click here to view the file.)

In response, the DENR Secretary, as the Cabinet officer responsible for the issuance of various DENR Administrative Orders (DAOs) relating to RA 7942, namely DAO 96-40 and DAO 07-12, submitted his Comment in compliance with the Supreme Court’s Resolution dated 11 March 2008. Therein, the DENR Secretary argued that the petitions must be dismissed for lack of merit because:

  1. The Court had already declared RA 7942 and DAO 96-40 constitutional.
    • By virtue of the decision in La Bugal Blaan, the Court had already ruled on the issue of the constitutionality of the Mining Act and the IRR to put a stop to cases that would unnecessarily challenge its constitutionality.
    • Contrary to petitioners’ claim, the basis of determining the additional share (among other things) is not solely given to the DENR Secretary.
    • It was held that the inclusion of the phrase “among other things” in the second paragraph of Section 81 clearly reveals the legislative intent to have the State collect more than just the usual taxes, duties and fees.
  2. The instant petition is barred by the principle of stare decisis.
    • The decision in La Bugal had categorically upheld the constitutionality and validity of RA 7942 and DAO 96-40 and DAO 99-56, specifically on the interpretation of:
      • Government share
      • “among other things”
      • delegated legislative power
      • equitable sharing of financial benefits in the three fiscal regimes

    Given this, the issues raised should no longer be the subject of re-litigation based on the principle of stare decisis.

  3. There is no undue delegation of powers in DAO 07-12.
    • DAO 07-12 is merely a reiteration of the provisions in DAO 99-56 regarding the FTAA, which was declared constitutional by the Supreme Court in La Bugal. Considering the discussions in the aforementioned case, the government selected the fiscal option most favorable to the government.
    • Existing FTAA contracts were executed under EO 270 and DAO 63-90, while prospective FTAAS will be covered by RA 7942.
  4. DAO 07-12 provides for an equitable financial regime
  1. The total government share is not exclusively limited to the two percent (2%) excise tax; The determination of the nature of government share is a policy prerogative of Congress, not of the judiciary; MPSA holders, being Filipino citizens, are accorded better contractual deals than FTAA holders
    • In reality, mining companies are still obliged to pay all other national and local taxes and fees. Other indirect taxes, duties fees and impositions are also paid which may be considered part of the benefits from an MPSA project.
    • The excise tax is actually the government’s share as owner-in-trust of the minerals and mineral lands. Although called a tax, it is imposed not by virtue of the taxing power of the state but because of the State’s ownership of the minerals on which the tax is imposed.
    • There is no constitutional prohibition disallowing taxes as the government share in mineral resource development. La Bugal expressly included excise tax in the definition of basic government share. Thus the principle of res judicata applies.
    • The determination of the nature of government share is a policy prerogative of Congress, not the judiciary.
  1. All MPSAs include a section on Mandatory Environmental Protection and Mine Safety and Health; Not all MPSAs were issued pursuant to RA 7942.
    • The exploration and development of natural resources and minerals is not prohibited per se in the Philippines.
    • Many MPSAs were issued pursuant to EO 270 prior to RA 7942
    • Operations of legitimate mining companies which are situated in far-flung, mostly undeveloped areas of the country encourage development of communities which otherwise would not have been developed.
    • RA 7942 contains a separability clause such that even if Section 80 or 81 is infirm, the rest of the law remains valid.
  2. The rights of the Filipino people are well protected.
    • Rational exploration, development, utilization and conservation of mineral resources are ensured as there is a periodic Review of existing mineral reservations
    • A study of each and every contract be conducted with regard to its environmental impact
  3. Petitioners have no locus standi; The petitions raise no actual controversy.
    • Petitioners fail to allege a personal stake in the outcome of the controversy
    • They did not establish rights or privileges that are in danger of being violated or that they will be subjected to penalties or burdens as a result of the implementation of the laws.
    • No showing that public funds are illegally disbursed or that public money is being deflected to improper purpose or that public funds are wasted though the enforcement of an invalid or unconstitutional law.
  1. Petitioners are not entitled to a Temporary Restraining Order/ Writ of Preliminary Injunction
    • They failed to show any clear and unmistakable right to be protected, or established that they are entitled to judicial protection, much less a sufficient interest in the vindication of the asserted public right.
    • The issuance of any restraining order will wreak great havoc on our economy as it will paralyze the entire mining industry.

Read the DENR’s Comment below
(if the document doesn't load, please click here to view the file.)


The private respondents impleaded in both cases also submitted their respective Comment, arguing uniformly that the petitions should be dismissed albeit for different reasons.

Private respondent OceanaGold is the current holder of the Financial or Technical Assistance Agreement (FTAA) No. 001 approved on 20 June 1994. It was impleaded as a private respondent in G.R. 181702, challenging the validity of Section 81 of the Mining Act of 1995 and DENR’s DAO 2007-12.  In its Comment dated 25 April 2008, OceanaGold argued that the petition provides no valid ground for the relief sought and should be dismissed because: (1) the Petition states no legal cause for the cancellation of OceanaGold’s FTAA; (2) stare decisis precludes the re-litigation of the validity of Section 81 of the Mining Act; and (3) DAO 07-12 is not violative of the equal protection clause of the 1987 Constitution.

In support, OceanaGold submitted that:

  1. The petitioners pray for the cancellation of OceanaGold’s FTAA. However, the petition nowhere alleges any legal ground or argument for that relief. The FTAA of OceanaGold was entered into with the government on June 20, 1994, or a year before the passage of the Mining Act. Having been executed prior to the Mining Act’s enactment into law, the fiscal regime governing the FTAA could not have been taken from that law, but is embodied in the FTAA itself.

The petition does not question the constitutionality or legality of any provisions of OceanaGold’s FTAA. Instead, it only asserts that Section 81 of the Mining Act and the fiscal regime under DAO 07-12 suffer from constitutional infirmities. However, the constitutional vices that petitioners purport to find in the Mining Act and DAO 07-12 in this case cannot automatically be imputed to the prior law under which the OceanaGold FTAA was issued.

  1. Assuming arguendo that petitioner’s attack on the validity of Section 81 and DAO 07-12 affects the OceanaGold FTAA, stare decisis precludes the relitigation of that issue. The arguments of the present petition to the effect that Section 81 of the Mining Act and its rules are unconstitutional are mere rehash of the arguments raised in the case of La Bugal, namely that Section 81 and its implementing regulation (i) violate the rule against undue delegation of legislative power; and (ii) permit the inequitable sharing of wealth between the government and FTAA holders.

Where the same questions relating to the same event have been put forward, litigated and decided in a previous case by a competent court, the rule of stare decisis will bar any attempt to re-litigate the same issue. As regards the issue of constitutionality of Section 81 of the Mining Act, the Supreme Court held in the case of La Bugal that there is nothing in the second paragraph of Section 81 that can be construed as a delegation of legislative power. In addressing DAO 99-56, the precursor of DAO 07-12, the Court added that it is the President in whom the constitution has vested the power to enter into FTAAs and the prerogative to determine their terms and conditions. 

  1. DAO 07-12 is not violative of the equal protection clause of the 1987 Constitution:  the equal protection clause does not prevent the DENR from changing terms under which future FTAAs would be issued. Petitioners claim that DAO 07-12 violates the equal protection clause because it accords less rights to future FTAA holders as compared to the rights enjoyed by present FTAA holders. OceanaGold submits that petitioners have no legal standing to raise the issue of equal protection here, and this makes it unnecessary for the Honorable Court to take cognizance of the argument. However, assuming arguendo that petitioners have legal standing to raise the equal protection issue, their argument in any case fails for lack of merit.

The equal protection doctrine is a limitation on laws which confer rights and impose liabilities, not (a limitation of) the exercise of the state’s right to contract the development and exploitation of its natural resources. In the former, the law cannot unreasonably classify and discriminate. In the latter, the state as owner of the natural resource is expected to seek the best terms it can obtain. As the SC held in La Bugal, how much profit to get from mining contracts is a policy matter over which the President and Congress have maximum discretion.

Petitioners’ equal protection argument proposes that the fiscal provisions in all current and future FTAAs must remain equal and identical. To uphold this argument is to make it impossible for the executive to exercise meaningful discretion and flexibility in advancing the state’s pecuniary and economic interests in these transactions.

Read the Comment of OceanaGold below.
(if the document doesn't load, please click here to view the file.)


On April 29, 2008, another private respondent Sagittarius Mines, Inc. (SMI) also filed its Comment/Opposition to the petition filed by Rep. Ana Teresa Hontiveros-Baraquel, et al.  in G. R. No. 181702, arguing for the dismissal of the Petition because:

  • A. The Court has already upheld the validity of Section 81 of RA 7942, the Philippine Mining Act of 1995, as well as the validity of the Financial Technical Assistance Agreements (FTAA) entered into between the state and private respondent SMI. It further argued that Section 81 of RA 7942 does not violate the rule on delegated legislation nor does the Department of Environment and Natural Resources (DENR) Administrative Order No. 07-12 go beyond the limits of subordinate legislation and does not violate the equal protection clause. Furthermore, it held that the instant petition was already barred by res judicata and stare decisis.
  • B.  The FTAA entered into between the state and private respondent SMI does not owe its existence from the assailed RA 7942 or DENR AO No. 07-12 but from Executive Order (EO) No. 279, Series of 1987.
  • C. The petitioners are not entitled to the issuance of a temporary restraining order and/or writ of preliminary injunction since they have failed to demonstrate a clear legal right to any injunctive writ, considering that mining activities per se do not constitute prohibited acts under the Constitution and relevant laws.
  • D. The petitioners are not entitled to the issuance of a TRO and/or writ of preliminary injunction since they have failed to show that they stand to suffer grave and irreparable injury if no injunctive writ issues.
  • E.  The petitioners have failed to pray for, and indicate with sufficient specificity, the acts sought to be enjoined with respect to private respondent SMI.

Read SMI’s Comment below.
(if the document doesn't load, please click here to view the file.)


Private respondent TVI Resource Development Phils., Inc. (TVI) also asked the High Court to deny for utter lack of merit the petition filed by Rep. Ana Teresa Hontiveros-Baraquel, et al. in G.R. No. 181702, submitting the following arguments:

  • The requisites for judicial review are not present in this case since there is no actual case or controversy that warrants the exercise of the Supreme Court’s power of judicial review;
  • The petitioners do not have legal standing to raise the purported constitutional issues involved in the case;
  • The issues raised involve political questions;
  • The petitioners failed to implead or give notice to the Office of the Solicitor General regarding the filing of the petition;
  • Regardless of the procedural defects, the Petition patently lacks merit since it raised issues previously decided by the High Court;
  • Section 81 of RA 7942 does not violate the rule on delegated legislation;
  • In promulgating DAO 07-12, the DENR Secretary did not usurp Congress’ legislative powers;
  • Under RA 7942 and DAO 07-12, the Philippine government is not deprived of its share in the revenues of large-scale mining operations;
  • The obligation of FTAA contractors to pay the basic government share is based on law and not on contract;
  • RA 7942 and DAO 07-12 do not limit government share to taxes, fees and royalties;
  • The basic government share is imposed by the State as the owner-in-trust of natural resources.

It also contended that “the petition is nothing more than a nuisance suit should be denied by the High Court.”

Insert TVI Comment below.
(if the document doesn't load, please click here to view the file.)


Asiaticus Management Corporation (AMCOR), one of the private respondents in G.R. No. 181703, filed its Comment/Opposition to the petition on 11 July 2008, in compliance with the Supreme Court’s Resolution dated 15 April 2008. Therein, AMCOR stated that the issue is whether the share of the government in MPSAs in the form of excise taxes on minerals is the only source of government share, and if such share is truly inadequate or unreasonable. AMCOR posited that it is too simplistic and inaccurate to assail the constitutionality of the law based on the mistaken notion that the government has no share under the MPSA as a capital contributor.  It prayed that the petition be dismissed for lack of merit, submitting the following arguments in support:

  1. The government is permitted by the Constitution to contract with private entities for the exploration, development and utilization of the country’s natural resources 
  • Petitioners have failed to point to a specific constitutional provision that has been violated or transgressed by RA 7942
  • There is no conflict between the constitutional declaration of State ownership of all mineral resources and the sharing agreement provided in RA 7942 and DENR DAO 96-40
  • The exploration, development and utilization of natural resources and minerals is not prohibited per se in the Philippines
  1. The total government share in an MPSA is a matter of legislative policy that is beyond the scope of judicial review
  • The Constitution has not set characterized what is low, high or adequate share of the government. The constitution expressly provides that the co-production, joint venture, production-sharing or FTAA shall be done “under such terms and conditions as may be provided by law”.  Congress, in its wisdom and independence, and in its supremacy over its own domain, set the government share in Section 80 of 7942.
  • Petitioners present questions that delve into the wisdom of RA 7942, which matters are not within the purview of judicial review but within the province of the Legislature.
  • The question of whether the total government share in an MPSA is just and reasonable based in profit levels of the mining companies is clearly a political question as it involves a determination of policy by the sovereign people, as embodied in the actions of the legislature. 
  • Even if the rate set is conceded to be low for argument’s sake, the remedy is legislative not judicial.
  • The inequitable situation of limiting government’s share to the excise tax on mineral products decried by the petitioners fails to account for the economic risks relative to the mining exploration and operation. These risks should be taken into context in the determination of the rate of total government share in MPSAs. Congress precisely made this policy determination in enacting RA 7942, particularly section 80.
  1. As such legislative expression of policy which became the consideration of the parties to entire into mineral production sharing agreements, to modify, amend and altogether nullify the existing MPSAs of the seven mining companies managed by AMCOR, is to violate the constitutional guarantee of non-impairment of contracts  
  • To grant the petitioners’ prayer is tantamount to full impairment, not just substitution, of all existing mining contracts. Mining companies like those managed by AMCOR in this case, will incur substantial and grave losses if their MPSAs are declared null and void, resulting even into closures and irreversible business losses and loss of employment.
  1. The exploration, development and utilization of the country’s natural resources provide significant direct benefits to local communities and the government
  • The Supreme Court in La Bugal has recognized that mining activities bring about significant direct benefits to local communities and to the State itself.
  • Assuming arguendo that the total government share in an MPSA shall be the excise tax on mineral products alone, MPSA holders nonetheless pay taxes, fees and assessments in addition to the excise tax required by law (e.g. corporate income tax, customs duties and fees, EVAT, etc).
  • As the State’s natural resources are explored, developed and utilized, vast employment is created and infrastructures are built, resulting in tangible benefits to local communities and the populace.
  1. The alleged damage to the environment supposedly caused by the exploration, development and utilization of the country’s natural resources is sufficiently addressed by the safeguards provided by law.
  • The arguments forwarded by the petitioners as to environment degradation are purely speculative and without legal and factual bases.
  • RA 7942 has provided for sufficient guidelines and safeguards by which mining activities are to be undertaken, in consideration of the benefits owing to the state and the positive outcome of these mining activities to the community and the environment. It also requires that a periodic review of exiting mineral reservations as a means of ensuring the sustainable exploration, development and utilization of mineral resources. Further, it requires that a study of the environmental impact of each mining project be undertaken, with the end in view of ensuring environmental protection.
  • The purported risks attendant to mining bewailed by petitioners are not enough reason to declare an otherwise valid legislation, unconstitutional.
  1. Petitioners have no clear legal right that requires protection 
  • Petitioners have no basis to support their application, as in fact, they have failed to clearly, sufficiently and conclusively establish a clear and unmistakable right, much less the material or substantial invasion thereof, as would entitle them to the extraordinary remedy of injunctive relief.
  • Petitioners have not adduced anything on record to establish a clear legal right on their part and the concomitant injury they will thus suffer if an injunctive writ prayed for is not granted.
  • Petitioners failed to demonstrate that they are entitled to the extraordinary remedy of preliminary injunction. At best, they merely present an alleged right that is yet to be determined.
  1. Petitioners will not suffer any grave and irreparable injury by the non-issuance of a temporary restraining order and/ or writ of preliminary injunction  
  • The facts upon which the application in the instant case is based are purely self-serving and have not been established with concrete proof on record.
  • The specious grounds relied upon by petitioners fail to meet the standard of pressing necessity and irreparable injury.

Read Asiaticus’s Comment below
(if the document doesn't load, please click here to view the file.)


Issues having been crystallized, the Court required all parties to submit their respective Memoranda.

On 30 May 2011, petitioners filed their Memorandum pursuant to the Honorable Court’s Resolution dated 15 February 2011. In its Memorandum, petitioners forwarded the following issues to the Court:

  • Whether the petitions are properly filed;
  • Whether Section 81, RA No. 7942 is unconstitutional as it violates the rule on delegated legislation;
  • Whether the Secretary of the DENR (public respondent) acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing DAO 07-12;
  • Whether Section 81, RA No. 7942 and DAO 07-12 are unconstitutional for allowing the inequitable sharing of wealth contrary to Section 1, par. 1 and Section 2, par. 1 and 4 of Article XII of the 1987 Constitution;
  • Whether Section 80, RA 7942 and pertinent implementing rules and regulations are unconstitutional and contrary to the equitable distribution of wealth as they limit government share to “excise taxes” only; and
  • Whether public respondent acted without or in excess of jurisdiction, or with grave abuse of discretion in the processing, issuance or approval of Mineral Product Sharing Agreement (MPSA) application.

Read petitioners’ Memorandum below.
(if the document doesn't load, please click here to view the file.)


Public respondent DENR submitted its Memorandum on 27 May 2011; it contained . essentially the same arguments raised in the Comment.

Read DENR’s Memorandum
(if the document doesn't load, please click here to view the file.)


Private respondents AMCOR, SMI, TVI, OceanGold and Asiaticus also submitted their respective Memorandum.  No argument that had not been raised before in their respective Comment was raised in the private respondents’ Memoranda.

Read Memorandum submitted by Asiaticus below.
(if the document doesn't load, please click here to view the file.)



Read Memorandum submitted by SMI below.
(if the document doesn't load, please click here to view the file.)


Read Memorandum submitted by TVI below.
(if the document doesn't load, please click here to view the file.)

 

On January 22, 2013, the Court En Banc issued a “Move in the Premises” resolution—which required the parties to inform the Court of developments pertinent to the case which may help in the immediate disposition thereof. (Oliveras v. Lopez, G.R. No. L-29727, 14 December 1988, 168 SCRA 431)—directed to the parties.  In the Resolution, the Court took note that “a significant period has passed since the parties’ last compliance with this Court’s Resolution dated 15 February 2011 and considering that published reports indicate that administrative issuances have been issued in relation to the Mining Act” and ordered the parties to “move in the premises” by “informing the Court of new and relevant issuances and regulations that may or will have an effect in the disposition of the case since their last compliance.”

The Court also set the the two petitions for oral argument on 16 April 2013 at 2:00 PM at the Session Hall, Supreme Court Compound, Baguio City.

Read 22 January 2013 “Move in the Premises” Resolution below.
(if the document doesn't load, please click here to view the file.)


After compliance by the parties with the “Move in the Premises” Resolution, the Court issued its Advisory in relation to the Oral Argument scheduled on 16 April 2013.

Read Advisory below.
(if the document doesn't load, please click here to view the file.)



Read Supplemental Advisory below.
(if the document doesn't load, please click here to view the file.)


 


Sec. 81 Government Share in Other Mineral Agreements. The share of the Government in co-production and joint-venture agreements shall be negotiated by the Government and the contractor taking into consideration the: (a) capital investment of the project, (b) risks involved, (c) contribution of the project to the economy, and (d) other factors that will provide for a fair and equitable sharing between the Government and the contractor. The Government shall also be entitled to compensations for its other contributions which shall be agreed upon by the parties, and shall consist, among other things, the contractor's income tax, excise tax, special allowance, withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of a foreign national, and all such other taxes, duties and fees as provided for under existing laws.

The Government share in financial or technical assistance agreement shall consist of, among other things, the contractor's corporate income tax, excise tax, special allowance, withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholder in case of a foreign national and all such other taxes, duties and fees as provided for under existing laws.

The collection of government share in financial or technical assistance agreement shall commence after the financial or technical assistance agreement contractor has fully recovered its pre-operating expenses, exploration, and development expenditures, inclusive.