Didipio Earth-Savers v. Gozun

G.R. No. 157882 (March 30, 2006)

Facts:

The case involves a petition for prohibition and mandamus filed by Didipio Earth-Savers Multi-Purpose Association, Inc. (DESAMA) and several individuals against various government officials and a foreign mining corporation, Climax-Arimco Mining Corporation (CAMC). The petitioners challenge the constitutionality of Republic Act No. 7942, known as the Philippine Mining Act of 1995, along with its implementing rules and regulations, specifically DENR Administrative Order No. 96-40. They also contest the Financial and Technical Assistance Agreement (FTAA) entered into between the Philippine government and CAMC.

The background of the case traces back to Executive Order No. 279 issued by then-President Corazon C. Aquino in 1987, which allowed the Department of Environment and Natural Resources (DENR) to accept proposals from foreign corporations for mining activities. Subsequently, Republic Act No. 7942 was enacted in 1995, establishing a new system for mineral resources exploration, development, and utilization. The FTAA with CAMC was executed in 1994, covering a significant land area in Nueva Vizcaya and Quirino provinces.

The petitioners, representing local farmers and indigenous peoples, filed a demand for the cancellation of the FTAA, arguing that the Mining Act and its implementing rules were unconstitutional. They claimed that these laws allowed for the unlawful taking of private property without just compensation, violated the state's responsibility to control natural resources, and permitted foreign corporations to engage in mining activities contrary to the Constitution.

After several correspondences with government officials and the Mines and Geosciences Bureau (MGB) regarding their demands, the petitioners filed the present case, seeking to enjoin the respondents from acting on FTAA applications, declare the Mining Act unconstitutional, and cancel the FTAA issued to CAMC.

Legal Issues:

1. Whether Republic Act No. 7942 and the CAMC FTAA are unconstitutional for allowing the taking of property without just compensation, violating Section 9, Article III of the Constitution.
2. Whether the Mining Act and its implementing rules sanction an unconstitutional administrative process for determining just compensation.
3. Whether the state has abdicated its responsibility for the control and supervision of natural resources through the Mining Act and FTAA.
4. Whether the involvement of wholly foreign-owned corporations in mining enterprises violates the Constitution.
5. Whether the 1987 Constitution prohibits service contracts in mining.

Arguments:

Petitioners' Arguments:

• The Mining Act and FTAA allow for the unjust taking of private property without just compensation, violating constitutional provisions.
• The administrative process for determining compensation is unconstitutional and lacks judicial oversight.
• The state has relinquished its control over natural resources to foreign corporations, undermining national interests.
• The involvement of foreign corporations in mining operations contravenes constitutional mandates regarding resource management.
• The absence of explicit provisions for service contracts in the 1987 Constitution indicates a prohibition against such arrangements.

Respondents' Arguments:

• The petitioners lack standing as they have not demonstrated actual harm or imminent threat to their property rights.
• The Mining Act and FTAA do not constitute a taking under eminent domain but are valid exercises of police power aimed at promoting public welfare.
• The state retains sufficient control over mining operations through various regulatory mechanisms established in the Mining Act.
• The provisions allowing foreign corporations to participate in mining do not violate the Constitution, as they are framed within the context of technical and financial assistance.
• The absence of the term "service contracts" in the 1987 Constitution does not imply a prohibition against such agreements.

Court's Decision and Legal Reasoning:

The Supreme Court dismissed the petition, ruling that the Mining Act and its implementing rules are constitutional. The Court found that the petitioners had standing to challenge the laws due to their potential impact on their property rights. It clarified that the entry into private lands for mining operations, as provided in the Mining Act, constitutes a taking under the power of eminent domain, but such taking is permissible if it serves a public purpose and just compensation is provided.

The Court emphasized that the Mining Act includes provisions for just compensation and that the determination of compensation is a judicial function, not solely an administrative one. It also noted that the state retains significant control over mining operations through various regulatory measures, ensuring that the interests of the Filipino people are protected.

Furthermore, the Court interpreted the constitutional provisions regarding foreign participation in mining, concluding that the phrase "agreements involving either technical or financial assistance" does not exclude foreign management or operation of mining enterprises. The Court upheld the validity of the FTAA, stating that it aligns with the constitutional framework for resource management.

Significant Legal Principles Established:

• The distinction between taking under eminent domain and regulation under police power.
• The requirement for just compensation in cases of taking, even when the property is not physically appropriated.
• The interpretation of constitutional provisions regarding foreign participation in natural resource management, allowing for broader engagement than previously understood.
• The affirmation of the state's role in regulating and supervising mining activities to protect public interest.