La Bugal-B’Laan Tribal Association Inc.

vs Ramos However, it is of common knowledge, and of judicial notice as well, that the government is and
GR No. 127882 December 1, 2004
Facts: The Petition for Prohibition and Mandamus before the Court challenges the
constitutionality of (1) Republic Act No. [RA] 7942 (The Philippine Mining Act of 1995); (2) its
Implementing Rules and Regulations (DENR Administrative Order No. [DAO] 96-40); and (3)
the FTAA dated March 30, 1995,6 executed by the government with Western Mining
Corporation (Philippines), Inc. (WMCP). On January 27, 2004, the Court en banc promulgated
its Decision granting the Petition and declaring the unconstitutionality of certain provisions of
RA 7942, DAO 96-40, as well as of the entire FTAA executed between the government and
WMCP, mainly on the finding that FTAAs are service contracts prohibited by the 1987
Constitution. The Decision struck down the subject FTAA for being similar to service contracts,
which, though permitted under the 1973 Constitution, were subsequently denounced for being
antithetical to the principle of sovereignty over our natural resources, because they allowed
foreign control over the exploitation of our natural resources, to the prejudice of the Filipino
nation. The Decision quoted several legal scholars and authors who had criticized service
contracts for, inter alia, vesting in the foreign contractor exclusive management and control of
the enterprise, including operation of the field in the event petroleum was discovered; control
of production, expansion and development; nearly unfettered control over the disposition and
sale of the products discovered/extracted; effective ownership of the natural resource at the
point of extraction; and beneficial ownership of our economic resources. According to the
Decision, the 1987 Constitution (Section 2 of Article XII) effectively banned such service
contracts. Subsequently, respondents filed separate Motions for Reconsideration. In a
Resolution dated March 9, 2004, the Court required petitioners to comment thereon. In the
Resolution of June 8, 2004, it set the case for Oral Argument on June 29, 2004.
has for many many years been financially strapped, to the point that even the most essential
services have suffered serious curtailments — education and health care, for instance, not to
mention judicial services — have had to make do with inadequate budgetary allocations. Thus,
government has had to resort to build-operate-transfer and similar arrangements with the
private sector, in order to get vital infrastructure projects built without any governmental
outlay.
The drafters — whose ranks included many academicians, economists, businessmen, lawyers,
politicians and government officials — were not unfamiliar with the practices of foreign
corporations and multinationals.
Neither were they so naïve as to believe that these entities would provide “assistance” without
conditionalities or some quid pro quo. Definitely, as business persons well know and as a
matter of judicial notice, this matter is not just a question of signing a promissory note or
executing a technology transfer agreement. Foreign corporations usually require that they be
given a say in the management, for instance, of day-to-day operations of the joint venture.
They would demand the appointment of their own men as, for example, operations managers,
technical experts, quality control heads, internal auditors or comptrollers. Furthermore, they
would probably require seats on the Board of Directors — all these to ensure the success of the
enterprise and the repayment of the loans and other financial assistance and to make certain
that the funding and the technology they supply would not go to waste. Ultimately, they would
also want to protect their business reputation and bottom lines.

Issue: Whether or not the FTAA issued were valid.

Held: Yes. The notion that the deliberations reflect only the views of those members who
spoke out and not the views of the majority who remained silent should be clarified. We must
never forget that those who spoke out were heard by those who remained silent and did not
react. If the latter were silent because they happened not to be present at the time, they are
presumed to have read the minutes and kept abreast of the deliberations. By remaining silent,
they are deemed to have signified their assent to and/or conformity with at least some of the
views propounded or their lack of objections thereto. It was incumbent upon them, as
representatives of the entire Filipino people, to follow the deliberations closely and to speak
their minds on the matter if they did not see eye to eye with the proponents of the draft
provisions.

In any event, each and every one of the commissioners had the opportunity to speak out and
to vote on the matter. Moreover, the individual explanations of votes are on record, and they
show where each delegate stood on the issues. In sum, we cannot completely denigrate the
value or usefulness of the record of the ConCom, simply because certain members chose not
to speak out.