Didipio Earth-Saver's Multi-purpose Association vs.

Ramos
G.R. No. 157882
Mar. 30, 2006

FACTS:
This petition for prohibition and mandamus under Rule 65 of the Rules of Court assails the
constitutionality of Republic Act No. 7942 otherwise known as the Philippine Mining Act of 1995,
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.
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.
Subsequently, AMC consolidated with Climax Mining Limited to form a single company
that now goes under the new name of Climax-Arimco Mining Corporation (CAMC), the
controlling 99% of stockholders of which are Australian nationals.
On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No. 7942
entitled, "An Act Instituting A New System of Mineral Resources Exploration, Development,
Utilization and Conservation," otherwise known as 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 This was soon superseded by DAO No. 96-40, s. 1996, which took effect on 23 January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.
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.
The CAMC FTAA grants in favor of CAMC the right of possession of the Exploration
Contract Area, the full right of ingress and egress and the right to occupy the same. It also
bestows CAMC the right not to be prevented from entry into private lands by surface owners or
occupants thereof when prospecting, exploring and exploiting minerals therein.
Didipio Earth-Savers' Multi-Purpose Association, Inc., an organization of farmers and
indigenous peoples organized under Philippine laws, representing a community actually
affected by the mining activities of CAMC, as well as other residents of areas affected by the
mining activities of CAMC.
ISSUES:
1. WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THE CAMC FTAA ARE VOID
BECAUSE THEY ALLOW THE UNJUST AND UNLAWFUL TAKING OF PROPERTY
WITHOUT PAYMENT OF JUST COMPENSATION , IN VIOLATION OF SECTION 9,
ARTICLE III OF THE CONSTITUTION.
2. WHETHER OR NOT THE MINING ACT AND ITS IMPLEMENTING RULES AND
REGULATIONS ARE VOID AND UNCONSTITUTIONAL FOR SANCTIONING AN
UNCONSTITUTIONAL ADMINISTRATIVE PROCESS OF DETERMINING JUST
COMPENSATION.
3. WHETHER OR NOT THE STATE, THROUGH REPUBLIC ACT NO. 7942 AND THE
CAMC FTAA, ABDICATED ITS PRIMARY RESPONSIBILITY TO THE FULL CONTROL
AND SUPERVISION OVER NATURAL RESOURCES.
4. WHETHER OR NOT THE RESPONDENTS' INTERPRETATION OF THE ROLE OF
WHOLLY FOREIGN AND FOREIGN-OWNED CORPORATIONS IN THEIR
INVOLVEMENT IN MINING ENTERPRISES, VIOLATES PARAGRAPH 4, SECTION 2,
ARTICLE XII OF THE CONSTITUTION.
5. WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS

RULING:
1. NO. 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.

2. NO. There is nothing in the provisions of the assailed law and its implementing rules and
regulations that exclude the courts from their jurisdiction to determine just compensation
in expropriation proceedings involving mining operations.
Although Section 105 confers upon the Panel of Arbitrators the authority to decide cases
where surface owners, occupants, concessionaires refuse permit holders entry, thus,
necessitating involuntary taking, this does not mean that the determination of the just
compensation by the Panel of Arbitrators or the Mines Adjudication Board is final and
 conclusive. The determination is only preliminary unless accepted by all parties
concerned. There is nothing wrong with the grant of primary jurisdiction by the Panel of
Arbitrators or the Mines Adjudication Board to determine in a preliminary matter the
reasonable compensation due the affected landowners or occupants. The original and
exclusive jurisdiction of the courts to decide determination of just compensation remains
intact despite the preliminary determination made by the administrative agency.

3. RA 7942 provides for the state's control and supervision over mining operations. The
following provisions thereof establish the mechanism of inspection and visitorial rights
over mining operations and institute reportorial requirements.
The setup under RA 7942 and DAO 96-40 hardly relegates the State to the role of a
“passive regulator” dependent on submitted plans and reports. On the contrary, the
government agencies concerned are empowered to approve or disapprove -- hence, to
influence, direct and change -- the various work programs and the corresponding
minimum expenditure commitments for each of the exploration, development and
utilization phases of the mining enterprise.

4. 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. Thus, we come to the inevitable conclusion 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 x x x involving either technical
or financial assistance” in an exclusionary and limiting manner.

5. NO. The mere fact that the term service contracts found in the 1973 Constitution was not
carried over to the present constitution, sans any categorical statement banning service
contracts in mining activities, does not mean that service contracts as understood in the
1973 Constitution was eradicated in the 1987 Constitution.
The 1987 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; this time, however,
safety measures were put in place to prevent abuses of the past regime.
The phrase agreements involving either technical or financial assistance, referred to in
paragraph 4, are in fact service contracts. But unlike those of the 1973 variety, the new
ones are between foreign corporations acting as contractors on the one hand; and on
the other, the government as principal or “owner” of the works. In the new service
contracts, the foreign contractors provide capital, technology and technical know-how,
and managerial expertise in the creation and operation of large-scale mining/extractive
enterprises; and the government, through its agencies (DENR, MGB), actively exercises
control and supervision over the entire operation.