Republic of the Philippines

TARLAC STATE UNIVERSITY

San Vicente, Tarlac City, Tarlac

SCHOOL OF LAW

A Term Paper on

Select Environmental Law Cases

The Gold on Native People’s Land:

A Mining Anthology

In partial fulfillment of the

requirements of the Course Law 218 –

Natural Resources and Environmental Law

Presented by:

Nikko V. Canillo

Presented to:

Atty. Marlon P. Tabilisma

Academic Year 2019-2020

First Semester
PAGE 1
Contents

Factual antecedents: ............................................................................. 3

Issues: .................................................................................................. 3

Conclusion of the Supreme Court: ......................................................... 3

NO RESTRICTION OF MEANING BY A VERBA LEGIS INTERPRETATION ... 4

RATIO LEGIS ET ANIMA ........................................................................ 6

Ultimate Test: State’s “Control” Determinative of Constitutionality ......... 7

PAGE 2
 La Bugal-B’laan Tribal Association, et. al.

vs.

Secretary Victor O. Ramos, et. al.

[G.R. No. 127882. December 1, 2004]

Factual antecedents:

After the court’s decision on the preceding case on January 27,

2004, respondents subsequently 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. The OSG also adopts the
Motion for reconsideration filed by the Chamber of Mines of the
Philippines, Inc. (CMP), upon filing of a Motion for Intervention.

Issues:

Below are the issues to be resolved by the Court, the resolution of

these questions will depend the validity and constitutionality of certain
provisions of the Philippine Mining Act of 1995 (RA 7942) and its
Implementing Rules and Regulations (DAO 96-40), as well as the WMCP
FTAA:

(1) Whether the constitutional phrase “agreements involving either

technical or financial assistance” has been properly interpreted; and

(2) Whether RA 7942 and its implementing Rules enable the

government to exercise that degree of control sufficient to direct and
regulate the conduct of affairs of individual enterprises and restrain
undesirable activities.

Conclusion of the Supreme Court:

(1) No. The phrase “agreements involving either technical or financial

assistance” should not be construed literally as to interpret it in a
restrictive manner.

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 The Supreme Court, in resolving the issue on the proper
interpretation of the Constitutional Phrase “Agreements involving either
technical or financial assistance”, had discussed the principles of
constitutional construction.

NO RESTRICTION OF MEANING BY A VERBA LEGIS

INTERPRETATION

The Court did not see how applying a strictly literal or verba legis
interpretation of paragraph 4 could inexorably lead to the conclusions
arrive at the ponencia (pertaining to the first decision). The phrase does
not indicate the intent to exclude other modes of assistance. The drafters
opted to use the involving when they could have simply said agreements
for financial or technical assistance, if that was their intention to begin
with. In this case, the limitation would be very clear and no further debate
would ensue.

In contrast, the use of the word “involving” signifies the possibility

of the inclusion of other forms of assistance or activities having to do with,
otherwise related to or compatible with financial or technical assistance.
If the real intention of the drafters was to confine foreign corporations to
financial or technical assistance and nothing more, their language would
have certainly been so unmistakably restrictive and stringent as to leave
no doubt in anyone’s mind about their true intent.

Thus, the Court concludes that there was a conscious and deliberate
decision to avoid the use of restrictive wording that bespeaks an intent not
to use the expression “agreements. . . involving technical or financial
assistance” in an exclusionary manner.

Deletion of “Service Contracts” to Avoid Pitfalls of Previous

Constitutions, Not to Ban Service Contracts Per Se

The mere omission of the term service contract or the failure to carry
them over to the new Constitution is not an indication that the government
changes its economic and fundamental policies, and the fundamentally
capitalist, free-enterprise philosophy. The Court cannot imagine such a
radical shift being undertaken by our government, to the great prejudice
of the mining sector in particular and our economy in general.

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 The literal and restrictive interpretation of paragraph 4 suffers from
certain internal logical inconsistencies that generate ambiguities in the
understanding of the provision. It is unnecessary and as a matter of fact,
financial, and even technical assistance, would be welcomed in the mining
industry anytime with open arms, on account of the dearth of local capital
and the need to continually update technological know-how and improve
technical skills.

The provision in question was intended to refer to agreements other

than those of mere financial or technical assistance, for if only such are
allowed, there would be no need to limit them to large-scale mining
operations, as there would be far greater need for them in the smaller-
scale mining activities.

The Charter’s Plain Language

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 naive as to believe that these entities
would provide “assistance” without conditionalities or some quid pro quo

Thus, by specifying such “agreements involving assistance,” the

drafters necessarily gave implied assent to everything that these
agreements necessarily entailed; or that could reasonably be deemed
necessary to make them tenable and effective, including management
authority with respect to the day-to-day operations of the enterprise and
measures for the protection of the interests of the foreign corporation,
PROVIDED THAT Philippine sovereignty over natural resources and full
control over the enterprise undertaking EDU activities remain firmly in the
State.

Absence of Closing-Out Rules or Guidelines

If the drafters had meant to ban the service contracts altogether,

they would have had to provide for the termination or pretermination of
the existing contracts at the time they were deliberating. They would have
at least left specific instruction to Congress to deal with these closing-out
issues, perhaps by way of general guidelines and a timeline within which

PAGE 5
to carry them. It is inconceivable that the drafters of the Constitution
would leave such an important matter.

Under the circumstances, the logical inconsistencies resulting from

petitioners’ literal and purely verbal egis approach to the paragraph 4 of
Section 2 of Article XII compel a resort to other aids to interpretation.

RATIO LEGIS ET ANIMA

In order to resolve inconsistencies, incongruities and ambiguities

encountered and to supply the deficiencies of the plain-language
approach, there is a need for recourse to the proceedings of the 1986
Constitutional Commission.

Pertinent portions of the deliberations of the members of the

Constitutional Commission conclusively show that they discussed
agreements involving either technical or financial assistance in the same
breadth as service contracts and used the terms interchangeably and that
they knew exactly that they are dealing with service contracts.

It was obvious from the discussion of the Constitutional

Commission that they were not about to ban or eradicate service contracts,
instead, they were plainly crafting provisions to put in place safeguards
that would eliminate or minimize the abuses prevalent during the martial
law regime.

Agreements Involving Technical or Financial Assistance Are Service

Contracts with Safeguards

The court are impelled to conclude that the phrase agreements

involving technical or financial assistance are, in fact, service contracts.
But unlike those of the 1973 variety, the new ones are between foreign
contractors on the one hand; and on the other, the government as
principal or owner of the works.

The court concludes, based on the above arguments. As written by

the framers and ratified and adopted by the people, the Constitution allows
the continued use of service contracts with foreign corporations – “as
contractors who would invest in and operate and manage extractive
enterprises, subject to the full control and supervision of the State – “ sans

PAGE 6
the abuses of the past regime. The purpose is clear. To develop and utilize
our mineral, petroleum and other resources on a large scale for the
immediate and tangible benefit of the Filipino people.

In view of the foregoing discussion, we should reverse the Decision

of January 27, 2004, and in fact now hold a view different from that of the
Decision, which had these findings: (a) paragraph 4 of Section 2 of Article
XII limits foreign involvement in the local mining industry to agreements
strictly for either financial or technical assistance only; (b) the same
paragraph precludes arguments that the grant to foreign corporations the
management of local mining operations, as such agreements are
purportedly in the nature of service contracts as these were understood
under the 1973 Constitution; (c) these service contracts were supposedly
"de-constitutionalized" and proscribed by the omission of the term service
contracts from the 1987 Constitution; (d) since the WMCP FTAA contains
provisions permitting the foreign contractor to manage the concern, the
said FTAA is invalid for being a prohibited service contract; and (e)
provisions of RA 7942 and DAO 96-40, which likewise grant managerial
authority to the foreign contractor, are also invalid and unconstitutional.

Ultimate Test: State’s “Control” Determinative of Constitutionality

Ut Magis Valeat Quam Pereat

Every part of the Constitution is to be given effect, and the

Constitution is to be read and understood as a harmonious whole. Thus,
“full control and supervision” by the state must be understood as one that
does not preclude the legitimate exercise of management prerogatives by
the foreign contractor.

The first paragraph of Section 2 of Article XII mandates the primacy

and supremacy of the principle of sovereignty and State control and
supervision over all aspects of exploration, development and utilization of
the country’s natural resources, but such “full control and supervision”
cannot be taken literally to mean that the State controls and supervises
everything involved, down to the minutest details, and makes all the
decisions required in the mining operations.

PAGE 7
 The concept of control adopted in Section 2 of Article XII must be
taken to mean less than dictatorial, all-encompassing control; but
nevertheless sufficient to give the State the power to direct, restrain,
regulate and govern the affairs of the extractive enterprises. Control by the
State may be on a macro level, through the establishment of policies,
guidelines, regulations, industry standards and similar measures that
would enable the government to control the conduct of affairs in various
enterprises and restrain activities deemed not desirable or beneficial.

Sufficient Control over Mining Operations Vested in the State by RA 7942

and DAO 96-40

RA 7942 provides for the State’s control and supervision over mining
operations. It establishes the mechanism of inspection and visitorial rights
over mining operations and institute reportorial requirements. Such rights
are also reflected and implemented in the provisions of the Implementing
Rules, DAO 96-40. Moreover, RA 7942 and DAO 96-40 also provide
various stipulations confirming the government’s control over mining
enterprises, i.e. the contractors’ duty to comply with the provisions
pertaining to mine safety, health and environmental protection and the
government’s right to cancel an FTAA for the violation of any of its terms,
among others.

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