Miners Association Of The Philippines Vs Factoran 4v3x31

MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner, vs. HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment and Natural Resources, and JOEL D. MUYCO, Director of Mines and Geosciences Bureau, respondents G.R. No. 98332 January 16, 1995

ROMERO, J.:

Facts: Former President Cory Aquino, exercising legislative power, issued EO211 prescribing the interim procedures in the processing and approval of exploration, development and utilization of minerals. To implement the act, Secretary of DENR promulgated AO No. 57 and 82. On 25 July 1987 the then President Aquino issued EO279 authorizing the DENR SECRETARY to negotiate and conclude t venture, co-production, production sharing, development and those agreements involving technical or financial assistance by foreign owned corporations for large scale EDU. Pursuant to Sec 6 of EO 279, the DENR issued AO No.57 which provides that all existing mining leases or agreements which were granted AFTER the affectivity of the 1987 Constitution, except 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 agreement within one year from the effectivity of the guidelines. On 20 November 1990, Sec of DENR issued EO No. 82 laying down the Procedural Guidelines on the award of mineral Production sharing agreement. This order provides the person or entities required to submit a LETTER OF INTENT and MINERAL PRODUCTION SHARING AGREEMENT within 2 years from the effectivity of AO No.57 or until 17 July 1991. Failure to do so within the prescribed period shall cause the abandonment of mining, quarry, gravel and sand. The Miners Association Inc assailed the validity of the above-mentioned issuances and alleged the following: 1. Sec of DENR issued both AO57 and 82 in excess of their rule-making power under Section 6 of EO279. 2. The orders violate the non-impairment of contracts provision under the bill of rights on the ground the AO57 unduly pre-terminates existing mining leases and other mining agreements and automatically converts them into production-sharing agreements within one year from its effectivity date.

3. AO No.82 declares that failure to submit the LETTER OF INTENT and Mineral Production Sharing Agreement within 2 years from the date of effectivity of said guidelines shall cause an abandonment of their mining, quarry, sand and gravel permits.

On 13 November 1991, Continental Marble Corp sought to intervene in the cases alleging that the TRO issued by the Court, the DENR Regional Office in San Fernando Pampanga refused to renew its Mines Temporary Permit and claimed further that its rights and interest are prejudicially affected by AO No.57 and 82. Issue: 1. Whether AO57 and 82 have the effect of abrogating the existing mining laws and unduly preterminate the existing mining leases and agreements.

Held: No. PD No. 463, as amended, pertains to the old system of EDU of natural resources through license, concession or lease which has been disallowed by Article XII, Sec 2 of the 1987 Philippine Constitution. By virtue of this constitutional mandate and its implementing laws, the provisions dealing with license, concession or leases ceased to operate as the governing laws. In other words, in all areas of istration and management of mineral lands, the provision of PD463, as amended and other existing laws still govern. Upon the effectivity of the 1987 Consti on 2 February 1987, the State assumed a more dynamic role in EDU. Article XII, Section 2 explicitly ordains that EDU shall under the full control and supervision of the State. Given these considerations, there is no clear showing that the DENR Sec has transcended the bounds demarcated in the EO279 for the exercise of his rulemaking power. Article XII, Sec 2 of the 1987 Consti does not apply retroactively to license, concession or lease granted by the government under the 1973 Consti or before the effectivity of the present Constitution. The intent to apply prospectively was stressed during the deliberations in the Constitutional Commission. AO No. 57 applies only to all existing mining leases or agreements which were granted after the effectivity of the 1987 Consti pursuant to EO No. 211. It bears to mention that under the text of EO211, there is a reservation clause which provides that the privileges as well as the and conditions of all existing mining leases or agreements granted after the effectiviyt of the present constitution shall be subject to any and all modification or alterations which the

Congress may adopt. Hence, the strictures of the non-impairment of contract clause do not apply to the aforesaid mining leased or agreements after the effectivity of the 1987 Consti. The State in the exercise of police power may not be precluded by the constitutional restriction on non-impairment of contracts. Police power being co-extensive with the necessities of the case and the demands of public interest.