Miners Association vs. Factoran Jr.

G.R. No. 98332, 16 January 1995

Nature: Petition for certiorari to review the orders of the then Secretary of DENR
Ponente: Romero, J.
Facts: The petition seeks a ruling from this court on the validity of two
Administrative Orders 57 and 82 issued by the Secretary of the Department of
Environment and Natural Resources to carry out the provisions of Executive Orders
279. This petition arose from the changes introduced by Article 12, Section 2 of
the 1987 Constitution which
provided for a different system of exploration,
development and utilization of the countrys natural resources. Unlike the1935 and
1973 Constitutions that allow the utilization of inalienable lands of public domain
through license, concession or lease, the 1987 Constitution provides for the full
control and supervision by the state of the exploration, development and utilization
of the countrys natural resources.
President Corazon Aquino promulgated EO 211, which prescribes the interim
procedures in the processing and approval of applications for the exploration,
development and utilization of minerals in accordance to the 1987 Constitution. Ina
ddition, Pres. Aquino also promulgated EO 279 authorizing the DENR Secretary to
negotiate and conclude joint venture, co-production or production-sharing
agreements for the exploration, development and utilization of mineral resources
and prescribing the guidelines for such agreements and those agreements involving
technical or financial assistance by foreign-owned corporations for large-scale
exploration, development, and utilization of minerals.
In line with EO 279, the DENR Secretary issued AO 57
Guidelines of Mineral Production Sharing Agreement under EO 279 wherein small
scale mining leases and those pertaining to sand and gravel and quarry resources
covering an area of 20 hectares or less, shall be converted into production sharing
agreements within 1 year from the effectivity of these guidelines; and AO 82
Procedural Guidelines on the Award of Mineral Production Sharing Agreement
(MPSA) through negotiation which enumerates the persons or entities required to
submit Letter of Intent (LOI) and Mineral Production Sharing Agreement (MPSAs)
within 2 years from the effectivity of DENR Admin order no. 57 or until 17 July 1991.
Failure to do so within the prescribed period shall cause the abandonment of
mining, quarry and sand gravel claims. Petitioner, Miners Association of the
Philippines, mainly contend that the DENR Secretary issued both AOs 57 and 82 in
excess of his rule-making power because these are inconsistent with the provisions
of EO 279, and that both orders violate Article III, Section 10 (No law impairing the
obligation of contracts shall be passed) of the 1987 Constitution.
Issue: Whether AO Nos. 57 and 82, which are promulgated by the DENR, are valid
and constitutional.
Held: AO Nos. 57 and 82 are both constitutional and valid. This is due to the fact
that EO279, in effect, gave the Secretary of Natural Resources the legal authority to
conclude
joint
venture, coproduction, or production sharing agreements for the exploration, development and
utilization of mineral resources. Furthermore, the constitutionality of these

administrative orders goes to show that the utilization of inalienable lands of public
domain is not merely done through license, concession or lease since the options
are now also open to the State through direct undertaking or by entering into coproduction, joint venture, or production sharing agreements.

Upon the effectivity of the 1987 Constitution on 2 February 1987, the State
assumed a more dynamic role and the issuance of the administrative orders are not
violative of the constitution but was a promulgation of necessary rules and
regulations that may be necessary to effectively implement provisions there.
Article 12 Section 2 of the 1987 Constitution does not apply retroactively and the
intent was to apply the law prospectively and thus would not be violative of Article
III, section 10 of the constitution.
Also, the regulations adopted under legislative authority by a particular department
must be in harmony with the provisions of the law, and for the sole purpose of
carrying into effect its general provisions, so long as the regulations relate solely to
carrying into effect the provision of the law then they are valid.