Mining Cases_revised.docx

CUARTEROS, PEE JAY T. Section E CASE DIGESTS MINING CASES

October 17, 2015

APEX MINING CO., INC. vs. SOUTHEAST MINDANAO GOLD MINING CORP., et al., G.R. Nos. 152613 & 152628, November 20, 2009. BALITE COMMUNAL PORTAL MINING COOPERATIVE vs. SOUTHEAST MINDANAO GOLD MINING CORP., et al., G.R. NO. 152619-20 THE MINES ADJUDICATION BOARD AND ITS MEMBERS, et al. vs. SOUTHEAST MINDANAO GOLD MINING CORPORATION, G.R. NO. 152870-71 FACTS: In an assailed decision held by the Court, it was ruled that the assignment of Exploration Permit (EP) 133 in favor of the Southeast Mindanao Gold Mining Corporation (SEM) violated one of the conditions stipulated in the permit, i.e., that the same shall be for the exclusive use and benefit of Marcopper Mining Corporation (MMC) or its duly authorized agents. Since SEM did not claim or submit evidence that it was a designated agent of MMC, the latter cannot be considered as an agent of the former that can use EP 133 and benefit from it. It also ruled that the transfer of EP 133 violated Presidential Decree No. 463, which requires that the assignment of a mining right be made with the prior approval of the Secretary of the Department of Environment and Natural Resources (DENR). Moreover, the Assailed Decision pointed out that EP 133 expired by non-renewal since it was not renewed before or after its expiration. On 25 November 2002, the President issued Proclamation No. 297 declaring the Diwalwal Gold Rush Area as a mineral reservation and as an environmentally critical area. The Assailed Decision upheld the validity of said proclamation. In view of this, and considering Section 5 of Republic Act No. 7942 or the Mining Act of 1995 which provided that mining operations in mineral reservations may be undertaken directly by the State or through a contractor, the Court deemed the issue of ownership of priority right over the contested Diwalwal Gold Rush Area as having been overtaken by the said proclamation. Thus, it was held that it is now within the prerogative of the Executive Department to undertake directly the mining operations of the disputed area or to award the operations to private entities including petitioners Apex and Balite, subject to applicable laws, rules and regulations, and provided that these private entities are qualified. Apex, for its part, filed a Motion for Clarification of the Assailed Decision, praying that the Court elucidate on the Decision's

pronouncement that mining operations, are now, therefore within the full control of the State through the executive branch. Moreover, Apex asked the Court to order the Mines and Geosciences Board (MGB) to accept its application for an exploration permit. Balite, in its Manifestation and Motion, echoes the same concern as that of Apex on the actual takeover by the State of the mining industry in the disputed area to the exclusion of the private sector. In addition, Balite prays that the Court directs MGB to accept its application for an exploration permit. ISSUE: Whether or not SEM acquired a vested right over the area; Whether or not Proclamation No. 297 is constitutional; and whether or not the Court can grant an order for the MGB to accept Apex’s and Balite’s application. HELD: Marcopper Mining Corporation (MMC) and Southeast Mindanao Gold Mining Corporation (SEM) did not have vested rights over the diwalwal gold rush area. Pursuant to the Philippine Bill of 1902, all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed are free and open to exploration, occupation, and purchase, and the land in which they are found to occupation and purchase, by citizens of the United States, or of said Islands. With the effectivity of the 1935 Constitution, where the regalian doctrine was again adopted; excluded, however, from the property of public domain were the mineral lands and minerals that were located and perfected by virtue of the Philippine Bill of 1902, since they were already considered private properties of the locators. The possessory rights of mining claim holders under the Bill remained intact and effective, and such rights were recognized as property rights that the holders could convey or pass by descent. In the instant cases, SEM does not aver or prove that its mining rights had been perfected and completed when the Philippine Bill of 1902 was still the operative law. Surely, it is impossible for SEM to successfully assert that it acquired mining rights over the disputed area in accordance with the same bill, since it was only in 1984 that MMC, SEM's predecessor-in-interest, filed its declaration of locations and its prospecting permit application in compliance with Presidential Decree No. 463. It was on 1 July 1985 and 10 March 1986 that a Prospecting Permit and EP 133, respectively, were issued to MMC. Considering these facts, there is no possibility that MMC or SEM could have acquired a perfected mining claim under the auspices of the Philippine Bill of 1902. Under the 1935, 1973, and 1987 Constitutions, national wealth, such as mineral resources, are owned by the State and not by their discoverer. The discoverer or locator can only develop and utilize said minerals for his own benefit if he has complied with all the requirements set forth by applicable laws and if the State has conferred on him such right through permits, concessions or agreements. Without

the imprimatur of the State, any mining aspirant does not have any definitive right over the mineral land because mineral land is owned by the State, and the same cannot be alienated to any private person as explicitly stated in Section 2, Article XIV of the 1987 Constitution. Proclamation No. 297 is in harmony with Article XII, Section 4, of the Constitution. There is nothing in the constitutional provision that prohibits the President from declaring a forest land as an environmentally critical area and from regulating the mining operations therein by declaring it as a mineral reservation in order to prevent the further degradation of the forest environment and to resolve the health and peace and order problems that beset the area. Contrary to the contention of Apex and Balite, the fourth paragraph of Section 2, Article XII of the Constitution and Section 5 of Republic Act No. 7942 sanctions the State, through the executive department, to undertake mining operations directly, as an operator and not as a mere regulator of mineral undertakings. The fourth paragraph of Section 2, Article XII of the 1987 Constitution provides that the State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Section 5 of Republic Act No. 7942 states that the mining operations in mineral reservations shall be undertaken by the DENR or a contractor. Moreover, Section 2, Article XII of the Constitution provides that the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. It is the sole prerogative of the executive department to undertake directly or to award the mining operations of the contested area. It is the duty of the appropriate administrative body to determine the qualifications of the applicants. It is only when this administrative body whimsically denies the applications of qualified applicants that the Court may interfere. But until then, the Court has no power to direct said administrative body to accept the application of any qualified applicant. BENGUET CORPORATION vs. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES-MINES ADJUDICATION BOARD and J.G. REALTY AND MINING CORPORATION, G.R. No. 163101, February 13, 2008 FACTS: Benguet and J.G. Realty entered into a Royalty Agreement with Option to Purchase (RAWOP), wherein J.G. Realty was acknowledged as the owner of four mining claims situated in Camarines Norte. The mining claims were covered by Mineral Production Sharing Agreeement Application No. APSA-V-0009 jointly filed by J.G. Realty as claimowner and Benguet as operator. In the RAWOP, Benguet obligated itself to perfect the rights to the mining claims and/or otherwise acquire the mining rights to the

mineral claims. Within 24 months from the execution of the RAWOP, Benguet should also cause the examination of the mining claims for the purpose of determining whether or not they are worth developing with reasonable probability of profitable production. Benguet undertook also to furnish J.G. Realty with a report on the examination, within a reasonable time after the completion of the examination. Moreover, also within the examination period, Benguet shall conduct all necessary exploration in accordance with a prepared exploration program. If it chooses to do so and before the expiration of the examination period, Benguet may undertake to develop the mining claims upon written notice to J.G. Realty. Benguet must then place the mining claims into commercial productive stage within 24 months from the written notice. It is also provided in the RAWOP that if the mining claims were placed in commercial production by Benguet, J.G. Realty should be entitled to a royalty of five percent (5%) of net realizable value, and to royalty for any production done by Benguet whether during the examination or development periods. On August 9, 1989, the Executive Vice-President of Benguet Corp., Antonio N. Tachuling, issued a letter informing J.G. Realty of its intention to develop the mining claims. J.G. Realty, however, replied informing Benguet Corp. that it is terminating the RAWOP on the grounds that Benguet Corp. has failed to perform the obligations set forth in the RAWOP, i.e., to undertake development works within 2 years from the execution of the Agreement; that the contract was violated by allowing high graders to operate on our claim; that no stipulation was provided with respect to the term limit of the RAWOP; and that non-payment of the royalties thereon as provided in the RAWOP. In response, Benguet Corp. alleged that it complied with its obligations by investing PhP 42.4 million to rehabilitate the mines, and that the commercial operation was hampered by the non-issuance of a Mines Temporary Permit by the Mines and Geosciences Bureau (MGB) which must be considered as force majeure, entitling Benguet to an extension of time to prosecute such permit. Benguet further claimed that the high graders mentioned were already operating prior to Benguet’s taking over of the premises, and that J.G. Realty had the obligation of ejecting such small scale miners. Benguet also alleged that the nature of the mining business made it difficult to specify a time limit for the RAWOP. Benguet then argued that the royalties due to J.G. Realty were in fact in its office and ready to be picked up at any time. It appeared that, previously, the practice by J.G. Realty was to pick-up checks from Benguet representing such royalties. However, starting August 1994, J.G. Realty allegedly refused to collect such checks from Benguet. Thus, Benguet posited that there was no valid ground for the termination of the RAWOP. It also reminded J.G. Realty that it should submit the disagreement to arbitration rather than unilaterally terminating the RAWOP.

ISSUE: Whether or not Benguet Corp. the cancellation of the RAWOP is valid and such cancellation prejudiced the substantial rights of Benguet Corp. HELD: The cancellation of the RAWOP by the POA was based on two grounds: (1) Benguet’s failure to pay J.G. Realty’s royalties for the mining claims; and (2) Benguet’s failure to seriously pursue MPSA Application No. APSA-V-0009 over the mining claims. Evidently, the RAWOP itself provides for the mode of royalty payment by Benguet. The fact that there was the previous practice whereby J.G. Realty picked-up the checks from Benguet is unavailing. The mode of payment is embodied in a contract between the parties. Benguet’s claim that J.G. Realty must prove nonpayment of its royalties is both illogical and unsupported by law and jurisprudence. The obligation of Benguet to pay royalties to J.G. Realty has been admitted and supported by the provisions of the RAWOP. Thus, the burden to prove such obligation rests on Benguet. The MPSA Application No. APSA-V-0009 has been pending with the MGB for a considerable length of time. Benguet, in the RAWOP, obligated itself to perfect the rights to the mining claims and/or otherwise acquire the mining rights to the mineral claims but failed to present any evidence showing that it exerted efforts to speed up and have the application approved. In fact, Benguet never even alleged that it continuously followed-up the application with the MGB and that it was in constant communication with the government agency for the expeditious resolution of the application. Such allegations would show that, indeed, Benguet was remiss in prosecuting the MPSA application and clearly failed to comply with its obligation in the RAWOP. ARMANDO C. CARPIO vs. SULU RESOURCES DEVELOPMENT CORPORATION, G.R. No. 148267, August 08, 2002 FACTS: Sulu Resources Development Corporation filed a petition for Mines Production Sharing Agreement (MPSA) No. MPSA-IV-131, covering certain areas in Antipolo, Rizal. Carpio filed an opposition/adverse claim thereto, alleging, inter alia, that his landholdings in Cupang and Antipolo, Rizal will be covered by Sulu’s claim, thus he enjoys a preferential right to explore and extract the quarry resources on his properties. After due proceedings were made, the Panels of Arbitrator of the Mines and Geo-Sciences Bureau of the DENR rendered a Resolution upholding Carpio’s opposition/adverse claim. Sulu appealed the foregoing to the Mines Adjudication Board (MAB), and it was granted, dismissing Carpio’s claim.

ISSUE: Whether or not the MAB’s decision is appealable to the Court of Appeals first or directly to the Supreme Court. HELD: There are sufficient legal footings authorizing a review of the MAB Decision under Rule 43 of the Rules of Court. Under the rule, appeals from their judgments and final orders are now required to be brought to the CA on a verified petition for review. A quasi-judicial agency or body is an organ of government, other than a court or legislature, which affects the rights of private parties through either adjudication or rule-making. MAB falls under this definition; hence, it is no different from the other quasi-judicial bodies enumerated under Rule 43. According to Section 3 of Rule 43, an appeal under Rule 43 may be taken to the Court of Appeals within the period and in the manner therein provided whether the appeal involves questions of fact, of law, or mixed questions of fact and law. Hence, appeals from quasijudicial agencies even only on questions of law may be brought to the CA. On the other hand, Section 79 of RA No. 7942 provides that decisions of the MAB may be reviewed by the Supreme Court on a petition for review by certiorari. This provision is obviously an expansion of the Court’s appellate jurisdiction, an expansion to which this Court has not consented. This is inconsistent with Section 30, Article VI of the 1987 Constitution. The judicial policy of observing the hierarchy of courts dictates that direct resort from administrative agencies to this Court will not be entertained, unless the redress desired cannot be obtained from the appropriate lower tribunals, or unless exceptional and compelling circumstances justify availment of a remedy falling within and calling for the exercise of our primary jurisdiction. In brief, appeals from decisions of the MAB shall be taken to the CA through petitions for review in accordance with the provisions of Rule 43 of the 1997 Rules of Court. CELESTIAL NICKEL MINING EXPLORATION CORPORATION vs. MACROASIA CORPORATION (FORMERLY INFANTA MINERAL AND INDUSTRIAL CORPORATION), and LEBACH MINING CORPORATION, G.R. No. 169080, December 19, 2007 BLUE RIDGE MINERAL CORPORATION vs. HON. ANGELO REYES IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, et al., G.R. No. 172936 CELESTIAL NICKEL MINING EXPLORATION CORPORATION vs. BLUE RIDGE MINERAL CORPORATION and MACROASIA CORPORATION (FORMERLY INFANTA MINERAL AND INDUSTRIAL CORPORATION), G.R. No. 176226

MACROASIA CORPORATION (FORMERLY INFANTA MINERAL AND INDUSTRIAL CORPORATION) vs. BLUE RIDGE MINERAL CORPORATION and CELESTIAL NICKEL MINING EXPLORATION CORPORATION, G.R. No. 176319 FACTS: On September 24, 1973, the then Secretary of Agriculture and Natural Resources and Infanta Mineral and Industrial Corporation (Infanta) entered into a Mining Lease Contract (V-1050) for a term of 25 years up to September 23, 1998 for mining lode claims covering an area of 216 hectares at Sitio Linao, Ipilan, Brooke's Point, Palawan. Infanta's corporate name was changed to Cobertson Holdings Corporation on January 26, 1994 and subsequently to its present name, Macroasia Corporation, on November 6, 1995. Sometime in 1997, Celestial filed a Petition to Cancel the subject mining lease contracts and other mining claims of Macroasia before the Panel of Arbitrators (POA) of the Mines and Geo-Sciences Bureau (MGB) of the DENR. Blue Ridge, in an earlier letter-petition, also wrote the Director of Mines to seek cancellation of mining lease contracts and other mining rights of Macroasia and another entity, Lebach Mining Corporation (Lebach), in mining areas in Brooke's Point. Celestial sought the cancellation of Macroasia's lease contracts on the following grounds: (1) the nonpayment of Macroasia of required occupational fees and municipal taxes; (2) the non-filing of Macroasia of Affidavits of Annual Work Obligations; (3) the failure of Macroasia to provide improvements on subject mining claims; (4) the concentration of Macroasia on logging; (5) the encroachment, mining, and extraction by Macroasia of nickel ore from Celestial's property; (6) the ability of Celestial to subject the mining areas to commercial production; and (7) the willingness of Celestial to pay fees and back taxes of Macroasia. In the ruling of the Panel of Arbitrators (POA) of the DENR, it was held that Macroasia and Lebach not only automatically abandoned their areas/mining claims but likewise had lost all their rights to the mining claims. POA gave Celestial the preferential right to Macroasia's mining areas. It also upheld Blue Ridge's petition but only as against the Mining Lease Contract areas of Lebach. The said leased areas were declared automatically abandoned. It gave Blue Ridge priority right to the aforesaid Lebach's areas/mining claims. Blue Ridge and Macroasia appealed before the MAB. The MAB affirmed the POA findings that Macroasia abandoned its mining claims. However, contrary to the findings of the POA, the MAB found that it was Blue Ridge that had prior and preferential rights over the mining claims of Macroasia, and not Celestial. Both Celestial and Macroasia moved for reconsideration. Celestial asserted that it had better rights than Blue Ridge over the mining claims of Macroasia as it had correctly filed its petition, and filed its MPSA application after Macroasia's lease contract expired on January 17, 1997 and after the POA's resolution was issued on September 1,

1997. Moreover, it argued that priority was not an issue when the contested area had not yet been declared abandoned. Thus, Blue Ridge's MPSA application filed on June 17, 1996 had no effect and should not be considered superior since Macroasia's lease contracts were still valid and subsisting and could not have been canceled by Macroasia's mere failure to perform annual work obligations and pay corresponding royalties/taxes to the government. Macroasia, in its Motion for Reconsideration, reiterated that it did not abandon its mining claims, and even if mining was not listed among its purposes in its amended Articles of Incorporation, its mining activities were acts that were only ultra vires but were ratified as a secondary purpose by its stockholders in subsequent amendments of its Articles of Incorporation. However, before the resolution of the foregoing motions, Macroasia filed its Supplemental Motion for Reconsideration questioning the jurisdiction of the POA in canceling mining lease contracts and mining claims. It averred that the power and authority to grant, cancel, and revoke mineral agreements is exclusively lodged with the DENR Secretary. The MAB resolved that neither it nor the POA has the power to revoke the mineral agreements for such power is exclusively lodged with the DENR Secretary. Moreover, the MAB held that there was no abandonment by Macroasia because the DENR Secretary had not decided to release Macroasia from its obligations. ISSUE: Whether or not the POA or the MAB has the power to grant, cancel, or revoke mineral agreements. HELD: No. After a scrutiny of the provisions of PD 463, EO 211, EO 279, RA 7942 and its implementing rules and regulations, executive issuances, and case law, the Court ruled that the DENR Secretary, not the POA, has the jurisdiction to cancel existing mineral lease contracts or mineral agreements. The following are the reasons: 1. The power of the DENR Secretary to cancel mineral agreements emanates from his administrative authority, supervision, management, and control over mineral resources under Chapter I, Title XIV of Book IV of the Revised Administrative Code of 1987; 2. RA 7942 confers to the DENR Secretary specific authority over mineral resources; 3. Under RA 7942, the power of control and supervision of the DENR Secretary over the MGB to cancel or recommend cancellation of mineral rights clearly demonstrates the authority of the DENR Secretary to cancel or approve the cancellation of mineral agreements; 4. The DENR Secretary's power to cancel mining rights or agreements through the MGB can be inferred from Sec. 230,

Chapter XXIV of DENR AO 96-40 on cancellation, revocation, and termination of a permit/mineral agreement/FTAA; and 5. Celestial and Blue Ridge are not unaware of the stipulations in the Mining Lease Contract Nos. V-1050 and MRD-52, the cancellation of which they sought from the POA. It is clear from said lease contracts that the parties are the Republic of the Philippines represented by the Secretary of Agriculture and Natural Resources (now DENR Secretary) as lessor, and Infanta (Macroasia) as lessee, and the power of the lessor to cancel the lease when the lessee fails to comply with any provision of PD 463 as amended, and Commonwealth Acts Nos. 137, 466 and 470, as amended, and/or the rules and regulations promulgated thereunder, or any of the covenants therein. Verily, RA 7942, similar to PD 463, confers exclusive and primary jurisdiction on the DENR Secretary to approve mineral agreements, which is purely an administrative function within the scope of his powers and authority. In exercising such exclusive primary jurisdiction, the DENR Secretary, through the MGB, has the best competence to determine to whom mineral agreements are granted. Unless it is shown that the then DENR Secretary has acted in a wanton, whimsical, or oppressive manner, giving undue advantage to a party or for an illegal consideration and similar reasons, the Court cannot look into or review the wisdom of the exercise of such discretion. DIDIPIO EARTH-SAVERS MULTI-PURPOSE ASSOCIATION, INCORPORATED (DESAMA), et al. vs. ELISEA GOZUN, IN HER CAPACITY AS SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR), et al., G.R. No. 157882, March 30, 2006 FACTS: On 25 July 1987, then President Corazon C. Aquino promulgated Executive Order No. 279 which authorized the DENR Secretary to accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts of agreements involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, which, upon appropriate recommendation of the Secretary, the President may execute with the foreign proponent. On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No. 7942 or the Philippine Mining Act of 1995. On 15 August 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 23, Series of 1995, containing the implementing guidelines of Rep. Act No. 7942. This was soon superseded by DAO No. 96-40, s. 1996, which took effect on 23 January 1997 after due publication. Previously, however, or specifically on 20 June 1994, President Ramos executed an FTAA with AMC over a total land area of 37,000 hectares covering the provinces of Nueva Vizcaya and Quirino. Included in this area is Barangay Dipidio, Kasibu, Nueva

Vizcaya. Subsequently, AMC consolidated with Climax Mining Limited to form a single company that now goes under the new name of ClimaxArimco Mining Corporation (CAMC), the controlling 99% of stockholders of which are Australian nationals. This is a petition for prohibition and mandamus assailing the constitutionality of Republic Act No. 7942 or the Philippine Mining Act of 19995, together with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the Financial and Technical Assistance Agreement (FTAA) entered into on 20 June 1994 by the Republic of the Philippines and Arimco Mining Corporation (AMC), a corporation established under the laws of Australia and owned by its nationals. ISSUE: Whether or not R.A. 7942 and its implementing rules and regulations is unconstitutional; whether or not DENR DAO 96-40 is unconstitutional; and whether or not the FTAA is valid. HELD: Republic Act No. 7942 and its Implementing Rules and Regulations contained in DAO 96-40 insofar as they relate to financial and technical assistance agreements referred to in paragraph 4 of Section 2 of Article XII of the Constitution are not unconstitutional. The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own land, identifies to the government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure. The government then acquires ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable the latter to proceed to fully implement the FTAA. Eminent domain is not yet called for at this stage since there are still various avenues by which surface rights can be acquired other than expropriation. The FTAA provision under attack merely facilitates the implementation of the FTAA given to CAMC and shields it from violating the Anti-Dummy Law. There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just compensation in expropriating private properties. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of just compensation Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO 96-40 states that holder(s) of mining right(s) shall not be prevented from entry into its/their contract/mining areas for the purpose of exploration, development, and/or utilization. That in cases where surface owners of the lands, occupants or concessionaires refuse to allow the permit holder or contractor entry, the latter shall bring the matter before the Panel of Arbitrators for proper disposition. Section 106 states that voluntary agreements between the two parties permitting the mining right holders to enter and use the surface owners lands shall be

registered with the Regional Office of the MGB. In connection with Section 106, Section 107 provides that the compensation for the damage done to the surface owner, occupant or concessionaire as a consequence of mining operations or as a result of the construction or installation of the infrastructure shall be properly and justly compensated and that such compensation shall be based on the agreement between the holder of mining rights and surface owner, occupant or concessionaire, or where appropriate, in accordance with Presidential Decree No. 512. In cases where there is disagreement to the compensation or where there is no agreement, the matter shall be brought before the Panel of Arbitrators. Section 206 of the implementing rules and regulations provides an aggrieved party the remedy to appeal the decision of the Panel of Arbitrators to the Mines Adjudication Board, and the latter’s decision may be reviewed by the Supreme Court by filing a petition for review on certiorari. An examination of the foregoing provisions gives no indication that the courts are excluded from taking cognizance of expropriation cases under the mining law. The disagreement referred to in Section 107 does not involve the exercise of eminent domain, rather it contemplates of a situation wherein the permit holders are allowed by the surface owners entry into the latter’s lands and disagreement ensues as regarding the proper compensation for the allowed entry and use of the private lands. Noticeably, the provision points to a voluntary sale or transaction, but not to an involuntary sale. The FTAA contractor is not free to do whatever it pleases and get away with it; on the contrary, it will have to follow the government line if it wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-40 vest in the government more than a sufficient degree of control and supervision over the conduct of mining operations. LEPANTO CONSOLIDATED MINING CO. vs. WMC RESOURCES INT'L. PTY. LTD., WMC PHILIPPINES, INC. and SAGITTARIUS MINES, INC., G.R. NO. 162331, November 20, 2006 FACTS: On 22 March 1995, the Philippine Government and WMC Philippines, the local wholly-owned subsidiary of WMC Resources International Pty. Ltd. (WMC Resources) executed a Financial and Technical Assistance Agreement, denominated as the Columbio FTAA No. 02-95-XI (Columbio FTAA) for the purpose of large scale exploration, development, and commercial exploration of possible mineral resources in an area of 99,387 hectares located in the provinces of South Cotabato, Sultan Kudarat, Davao del Sur, and North Cotabato in accordance with Executive Order No. 279 and Department Administrative Order No. 63, Series of 1991. The Columbio FTAA is covered in part by 156 mining claims held under various Mineral Production Sharing Agreements (MPSA) by Southcot Mining Corporation, Tampakan Mining Corporation, and Sagittarius Mines,

Inc. (collectively called the Tampakan Companies), in accordance with the Tampakan Option Agreement entered into by WMC Philippines and the Tampakan Companies for purposes of exploration of the mining claims in Tampakan, South Cotabato. The Option Agreement, among other things, provides for the grant of the right of first refusal to the Tampakan Companies in case WMC Philippines desires to dispose of its rights and interests in the mining claims covering the area subject of the agreement. WMC Resources subsequently divested itself of its rights and interests in the Columbio FTAA, and on 12 July 2000 executed a Sale and Purchase Agreement with petitioner Lepanto over its entire shareholdings in WMC Philippines, subject to the exercise of the Tampakan Companies' exercise of their right of first refusal to purchase the subject shares. On 28 August 2000, petitioner sought the approval of the 12 July 2000 Agreement from the DENR Secretary. In an Agreement dated 6 October 2000, however, the Tampakan Companies sought to exercise its right of first refusal. Thus, in a letter dated 13 October 2000, petitioner assailed the Tampakan Companies' exercise of its right of first refusal, alleging that the Tampakan Companies failed to match the terms and conditions set forth in the 12 July 2000 Agreement. ISSUE: Whether or not the application to the Columbio FTAA failed to comprehend the express language of Section 40 of the Philippine Mining Act of 1995 requiring the approval of the President on the transfer or assignment of a financial or technical assistance agreement. HELD: The Columbio FTAA was entered into by the Philippine Government and WMC Philippines on 22 March 1995, undoubtedly before the Philippine Mining Act of 1995 took effect on 14 April 1995. Furthermore, it is undisputed that said FTAA was granted in accordance with Executive Order No. 279 and Department Administrative Order No. 63, Series of 1991, which does not contain any similar condition on the transfer or assignment of financial or technical assistance agreements. Thus, it would seem that what petitioner would want this Court to espouse is the retroactive application of the Philippine Mining Act of 1995 to the Columbio FTAA, a valid agreement concluded prior to the naissance of said piece of legislation. By imposing a new condition apart from those already contained in the agreement, before the parties to the Columbio FTAA may assign or transfer its rights and interest in the said agreement, Section 40 of the Philippine Mining Act of 1995, if made to apply to the Columbio FTAA, will effectively modify the terms of the original contract and thus impair the obligations of the parties thereto and restrict the exercise of their vested rights under the original agreement. Such modification to the Columbio FTAA, particularly in the conditions imposed for its valid

transfer is equivalent to an impairment of said contract violative of the Constitution. JOHN ERIC LONEY, STEVEN PAUL REID and PEDRO B. HERNANDEZ vs. PEOPLE OF THE PHILIPPINES, G.R. NO. 152644, February 10, 2006 FACTS: John Eric Loney, Steven Paul Reid, and Pedro B. Hernandez are the President and Chief Executive Officer, Senior Manager, and Resident Manager for Mining Operations, respectively, of Marcopper Mining Corporation (MMC), a corporation engaged in mining in the province of Marinduque. MMC has been storing its tailings from its operations on a pit whose base ran a drainage tunnel leading to the Boac and Makalupnit rivers. Eventually, the tailings gushed out of or near the tunnel's end, and in a few days the pit discharged millions of tons of tailings into the rivers. ISSUE: Whether or not the petitioners are in violation of Republic Act No. 7942 or the Philippine Mining Act, Presidential Decree No. 1067 or the Water Code of the Philippines, Presidential Decree No. 984 or the Anti-Pollution Law, and Article 356 of the Revised Penal Code on Reckless Imprudence Resulting in Damage to Property. HELD: Yes. There is no multiplicity or duplicity of offense charged in a single information in this case. A mala in se felony cannot absorb mala prohibita crimes. The Court had long ruled that a single act or incident might offend against two or more entirely distinct and unrelated provisions of law thus justifying the prosecution of the accused for more than one offense. The only limit to this rule is the Constitutional prohibition that no person shall be twice put in jeopardy of punishment for the same offense. In this case, double jeopardy is not at issue because not all of its elements are present. In P.D. 1067, the gravamen of the offense is the absence of the proper permit to dump said mine tailings. In P.D. 984, the gravamen is the pollution itself. In R.A. 7942, the additional fact that must be established is the willful violation and gross neglect on the part of the accused to abide by the terms and conditions of the Environmental Compliance Certificate, particularly that the Marcopper should ensure the containment of run-off and silt materials from reaching the rivers. In Art. 365 of the Revised Penal Code, the additional element that must be established is the lack of necessary or adequate precaution, negligence, recklessness and imprudence on the part of the accused to prevent damage to property.