Didipio Earth-Savers' Multi-Purpose Association, Inc. (DESAMA) Et Al.v Elisea Gozun, Et Al. G.R. No. 157882 March 30, 2006

G.R. No. 157882. March 30, 2006.
DIDIPIO EARTH-SAVERS’ MULTI-PURPOSE ASSOCIATION, INCORPORATED

(DESAMA), MANUEL BUTIC, CESAR MARIANO, LAURO ABANCE, BEN TAYABAN,
ANTONIO DINGCOG, TEDDY B. KIMAYONG, ALONZO ANANAYO, ANTONIO
MALAN-UYA, JOSE BAHAG, ANDRES INLAB, RUFINO LICYAYO, ALFREDO
CULHI, CATALILNA INABYUHAN, GUAY DUMMANG, GINA PULIDO, EDWIN
ANSIBEY, CORAZON SICUAN, LOPEZ DUMULAG, FREDDIE AYDINON, VILMA
JOSE, FLORENTINA MADDAWAT, LINDA DINGCOG, ELMER SICUAN, GARY
ANSIBEY, JIMMY MADDAWAT, JIMMY GUAY,
_______________
* FIRST DIVISION.
587
VOL. 485, MARCH 30, 2006
587
Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

(DESAMA) vs. Gozun
ALFREDO CUT-ING, ANGELINA UDAN, OSCAR INLAB, JUANITA CUT-ING,

ALBERT PINKIHAN, CECILIA TAYABAN, CRISTA BINWAK, PEDRO DUGAY,
SR., EDUARDO ANANAYO, ROBIN INLAB, JR., LORENZO PULIDO, TOMAS
BINWAG, EVELYN BUYA, JAIME DINGCOG, DINAOAN CUT-ING, PEDRO
DONATO, MYRNA GUAY, FLORA ANSIBEY, GRACE DINAMLING, EDUARDO
MENCIAS, ROSENDA JACOB, SIONITA DINGCOG, GLORIA JACOB, MAXIMA
GUAY, RODRIGO PAGGADUT, MARINA ANSIBEY, TOLENTINO INLAB, RUBEN
DULNUAN, GERONIMO LICYAYO, LEONCIO CUMTI, MARY DULNUAN, FELISA
BALANBAN, MYRNA DUYAN, MARY MALAN-UYA, PRUDENCIO ANSIBEY,
GUILLERMO GUAY, MARGARITA CULHI, ALADIN ANSIBEY, PABLO DUYAN,
PEDRO PUGUON, JULIAN INLAB, JOSEPH NACULON, ROGER BAJITA, DINAON
GUAY, JAIME ANANAYO, MARY ANSIBEY, LINA ANANAYO, MAURA DUYAPAT,
ARTEMEO ANANAYO, MARY BABLING, NORA ANSIBEY, DAVID DULNUAN,
AVELINO PUGUON, LUCAS GUMAWI, LUISA ABBAC, CATHRIN GUWAY, CLARITA
TAYABAN, FLORA JAVERA, RANDY SICOAN, FELIZA PUTAKI, CORAZON P.
DULNUAN, NENA D. BULLONG, ERMELYN GUWAY, GILBERT BUTALE, JOSEPH
B. BULLONG, FRANCISCO PATNAAN, JR., SHERWIN DUGAY, TIRSO
GULLINGAY, BENEDICT T. NABALLIN, RAMON PUNADWAN, ALFONSO DULNUAN,
CARMEN D. BUTALE, LOLITA ANSIBEY, ABRAHAM DULNUAN, ARLYNDA
BUTALE, MODESTO A. ANSIBEY, EDUARDO LUGAY, ANTONIO HUMIWAT,
ALFREDO PUMIHIC, MIKE TINO, TONY CABARROGUIS, BASILIO TAMLIWOK,
JR., NESTOR TANGID, ALEJO TUGUINAY, BENITO LORENZO, RUDY BAHIWAG,
ANALIZA BUTALE, NALLEM LUBYOC, JOSEPH DUHAYON, RAFAEL CAMPOL,
MANUEL PUMALO, DELFIN AGALOOS, PABLO CAYANGA, PERFECTO SISON,
ELIAS NATAMA, LITO PUMALO, SEVERINA DUGAY, GABRIEL PAKAYAO,
JEOFFREY SINDAP, FELIX TICUAN, MARIANO S.
588
588
SUPREME COURT REPORTS ANNOTATED

(DESAMA) vs. Gozun
MADDELA, MENZI TICAWA, DOMINGA DUGAY, JOE BOLINEY, JASON ASANG,

TOMMY ATENYAYO, ALEJO AGMALIW, DIZON AGMALIW, EDDIE ATOS, FELIMON
BLANCO, DARRIL DIGOY, LUCAS BUAY, ARTEMIO BRAZIL, NICANOR MODI,
LUIS REDULFIN, NESTOR JUSTINO, JAIME CUMILA, BENEDICT GUINID,
EDITHA ANIN, INOH-YABAN BANDAO, LUIS BAYWONG, FELIPE DUHALNGON,
PETER BENNEL, JOSEPH T. BUNGGALAN, JIMMY B. KIMAYONG, HENRY
PUGUON, PEDRO BUHONG, BUGAN NADIAHAN, SR., MARIA EDEN ORLINO,
SPC, PERLA VISSORO, and BISHOP RAMON VILLENA, petitioners, vs.
ELISEA GOZUN, in her capacity as SECRETARY of the DEPARTMENT OF
ENVIRONMENT and NATURAL RESOURCES (DENR), HORACIO RAMOS, in his
capacity as Director of the Mines and Geosciences Bureau (MGB-
DENR), ALBERTO ROMULO, in his capacity as the Executive Secretary
of the Office of the President, RICHARD N. FERRER, in his
capacity as Acting Undersecretary of the Office of the President,
IAN HEATH SANDERCOCK, in his capacity as President of CLIMAX-
ARIMCO MINING CORPORATION, respondents.
Constitutional Law; Justiciable Controversy, Defined; Words and
Phrases; A justiciable controversy is defined as a definite and
concrete dispute touching on the legal relations of parties
having adverse legal interests which may be resolved by a court
of law through the application of a law.—A justiciable
controversy is defined as a definite and concrete dispute
touching on the legal relations of parties having adverse legal
interests which may be resolved by a court of law through the
application of a law. Thus, courts have no judicial power to
review cases involving political questions and as a rule, will
desist from taking cognizance of speculative or hypothetical
cases, advisory opinions and cases that have become moot.
Same; Judicial Power; Judicial power includes the duty of the

courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable; Requisites of.—The
Constitution is quite explicit on this matter. It provides that
judicial power includes the duty of the courts of justice to
settle actual controversies
589
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589

(DESAMA) vs. Gozun
involving rights which are legally demandable and enforceable.

Pursuant to this constitutional mandate, courts, through the
power of judicial review, are to entertain only real disputes
between conflicting parties through the application of law. For
the courts to exercise the power of judicial review, the
following must be extant (1) there must be an actual case calling
for the exercise of judicial power; (2) the question must be ripe
for adjudication; and (3) the person challenging must have the
“standing.”
Same; Eminent Domain; “Taking” under the concept of eminent

domain as entering upon private property for more than a
momentary period, and, under the warrant or color of legal
authority devoting it to a public use.—Republic v. Vda. de
Castellvi, 58 SCRA 336, 350 (1974), defines “taking” under the
concept of eminent domain as entering upon private property for
more than a momentary period, and, under the warrant or color of
legal authority, devoting it to a public use, or otherwise
informally appropriating or injuriously affecting it in such a
way as to substantially oust the owner and deprive him of all
beneficial enjoyment thereof.
Same; Same; Eminent Domain and Police Power Distinguished.—The

power of eminent domain is the inherent right of the state (and
of those entities to which the power has been lawfully delegated)
to condemn private property to public use upon payment of just
compensation. On the other hand, police power is the power of the
state to promote public welfare by restraining and regulating the
use of liberty and property. Although both police power and the
power of eminent domain have the general welfare for their
object, and recent trends show a mingling of the two with the
latter being used as an implement of the former, there are still
traditional distinctions between the two.
Same; Same; When a property interest is appropriated and applied

to some public purpose, there is compensable taking.—A thorough
scrutiny of the extant jurisprudence leads to a cogent deduction
that where a property interest is merely restricted because the
continued use thereof would be injurious to public welfare, or
where property is destroyed because its continued existence would
be injurious to public interest, there is no compensable taking.
However, when a property interest is appropriated and applied to
some public purpose, there is compensable taking.
590
590

(DESAMA) vs. Gozun
Same; Police Power; In the exercise of its police power

regulation, the state restricts the use of private property, but
none of the property interests in the bundle of rights which
constitute ownership is appropriated for use by or for the
benefit of the public.—According to noted constitutionalist, Fr.
Joaquin Bernas, SJ, in the exercise of its police power
regulation, the state restricts the use of private property, but
none of the property interests in the bundle of rights which
constitute ownership is appropriated for use by or for the
benefit of the public. Use of the property by the owner was
limited, but no aspect of the property is used by or for the
public. The deprivation of use can in fact be total and it will
not constitute compensable taking if nobody else acquires use of
the property or any interest therein.
Same; Eminent Domain; Taking may include trespass without actual

eviction of the owner, material impairment of the value of the
property or prevention of the ordinary uses for which the
property was intended such as the establishment of an easement.—
While the power of eminent domain often results in the
appropriation of title to or possession of property, it need not
always be the case. Taking may include trespass without actual
property was intended such as the establishment of an easement.
In Ayala de Roxas v. City of Manila, 9 Phil. 215, 221 (1907), it
was held that the imposition of burden over a private property
through easement was considered taking; hence, payment of just
compensation is required.
Same; Same; Requisites of Taking in Eminent Domain.—In Republic
v. Castellvi, 58 SCRA 336, 350-352 (1974), this Court had the
occasion to spell out the requisites of taking in eminent domain,
to wit: (1) the expropriator must enter a private property; (2)
the entry must be for more than a momentary period; (3) the entry
must be under warrant or color of legal authority; (4) the
property must be devoted to public use or otherwise informally
appropriated or injuriously affected; (5) the utilization of the
property for public use must be in such a way as to oust the
owner and deprive him of beneficial enjoyment of the property.
Same; Same; Mines and Mining; The holders of mining rights enter
private lands for purposes of conducting mining activities such
as exploration, extraction and processing of minerals.—The entry
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591

(DESAMA) vs. Gozun
referred to in Section 76 is not just a simple right-of-way which

is ordinarily allowed under the provisions of the Civil Code.
Here, the holders of mining rights enter private lands for
purposes of conducting mining activities such as exploration,
extraction and processing of minerals. Mining right holders build
mine infrastructure, dig mine shafts and connecting tunnels,
prepare tailing ponds, storage areas and vehicle depots, install
their machinery, equipment and sewer systems. On top of this,
under Section 75, easement rights are accorded to them where they
may build warehouses, port facilities, electric transmission,
railroads and other infrastructures necessary for mining
operations. All these will definitely oust the owners or
occupants of the affected areas the beneficial ownership of their
lands. Without a doubt, taking occurs once mining operations
commence.
Statutory Construction; In order that one law may operate to

repeal another law, the two laws must be inconsistent—the former
must be so repugnant as to be irreconcilable with the latter act—
repeals by implication are not favored, and will not be decreed
unless it is manifest that the legislature so intended.—It is an
established rule in statutory construction that in order that one
law may operate to repeal another law, the two laws must be
inconsistent. The former must be so repugnant as to be
irreconciliable with the latter act. Simply because a latter
enactment may relate to the same subject matter as that of an
earlier statute is not of itself sufficient to cause an implied
repeal of the latter, since the new law may be cumulative or a
continuation of the old one. As has been the ruled, repeals by
implication are not favored, and will not be decreed unless it is
manifest that the legislature so intended. As laws are presumed
to be passed with deliberation and with full knowledge of all
existing ones on the subject, it is but reasonable to conclude
that in passing a statute it was not intended to interfere with
or abrogate any former law relating to the same matter, unless
the repugnancy between the two is not only irreconcilable, but
also clear and convincing, and flowing necessarily from the
language used, unless the later act fully embraces the subject
matter of the earlier, or unless the reason for the earlier act
is beyond peradventure removed. Hence, every effort must be used
to make all acts stand and if, by any reasonable construction,
they can be reconciled, the latter act will not operate as a
repeal of the earlier.
592
592

(DESAMA) vs. Gozun
Constitutional Law; Eminent Domain; Mines and Mining; Public use

as a requirement for the valid exercise of the power of eminent
domain is now synonymous with public interest, public benefit,
public welfare and public convenience—it includes the broader
notion of indirect public benefit or advantage—public use as
traditionally understood as “actual use by the public” has
already been abandoned—mining industry plays a pivotal role in
the economic development of the country and is a vital tool in
the government’s thrust of accelerated recovery.—The taking to be
valid must be for public use. Public use as a requirement for the
valid exercise of the power of eminent domain is now synonymous
with public interest, public benefit, public welfare and public
convenience. It includes the broader notion of indirect public
benefit or advantage. Public use as traditionally understood as
“actual use by the public” has already been abandoned. Mining
industry plays a pivotal role in the economic development of the
country and is a vital tool in the government’s thrust of
accelerated recovery. The importance of the mining industry for
national development is expressed in Presidential Decree No. 463:
WHEREAS, mineral production is a major support of the national
economy, and therefore the intensified discovery, exploration,
development and wise utilization of the country’s mineral
resources are urgently needed for national development.
Irrefragably, mining is an industry which is of public benefit.
Same; Same; Same; There is 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.—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.
Same; Same; Same; The determination of just compensation in

eminent domain cases is a judicial function.—The question on the
judicial determination of just compensation has been settled in
the case of Export Processing Zone Authority v. Dulay, 149 SCRA
305, 312 (1987), wherein the court declared that the
determination of just compensation in eminent domain cases is a
judicial function. Even as the executive department or the
legislature may make the initial determinations, the same cannot
prevail over the court’s findings.
593
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(DESAMA) vs. Gozun
Same; Congress; The legislature, in enacting the mining act, is

presumed to have deliberated with full knowledge of all existing
laws and jurisprudence on the subject.—The legislature, in
enacting the mining act, is presumed to have deliberated with
full knowledge of all existing laws and jurisprudence on the
subject. Thus, it is but reasonable to conclude that in passing
such statute it was in accord with the existing laws and
jurisprudence on the jurisdiction of courts in the determination
of just compensation and that it was not intended to interfere
with or abrogate any former law relating to the same matter.
Indeed, 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.
Mines and Mining; Statutes; R.A. No. 7942 provides for the
state’s control and supervision over mining operations.—
Petitioners charge that Rep. Act No. 7942, as well as its
Implementing Rules and Regulations, makes it possible for FTAA
contracts to cede over to a fully foreign-owned corporation full
control and management of mining enterprises, with the result
that the State is allegedly reduced to a passive regulator
dependent on submitted plans and reports, with weak review and
audit powers. The State is not acting as the supposed owner of
the natural resources for and on behalf of the Filipino people;
it practically has little effective say in the decisions made by
the enterprise. In effect, petitioners asserted that the law, the
implementing regulations, and the CAMC FTAA cede beneficial
ownership of the mineral resources to the foreign contractor. It
must be noted that this argument was already raised in La Bugal-
594
594

(DESAMA) vs. Gozun
B’Laan Tribal Association, Inc. v. Ramos, 445 SCRA 1, 132-137

(2004), where the Court answered in the following manner: RA 7942
provides for the state’s control and supervision over mining
operations.
Same; Constitutional Law; 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.—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.
SPECIAL CIVIL ACTION in the Supreme Court. Prohibition and

Mandamus.
The facts are stated in the opinion of the Court.
Melizel F. Asuncion for petitioners.
Francis Joseph G. Ballesteros collaborating counsel for

petitioners.
Roberto C. San Juan for respondent Climax-Arimco Mining

Corporation.
The Solicitor General for public respondents.
CHICO-NAZARIO, J.:
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
595
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(DESAMA) vs. Gozun
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.
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.
Previously, however, or specifically 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.
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.
596
596

(DESAMA) vs. Gozun
On 7 September 2001, counsels for petitioners filed a demand

letter addressed to then DENR Secretary Heherson Alvarez, for the
cancellation of the CAMC FTAA for the primary reason that Rep.
Act No. 7942 and its Implementing Rules and Regulations DAO 96-40
are unconstitutional. The Office of the Executive Secretary was
also furnished a copy of the said letter. There being no response
to both letters, another letter of the same content dated 17 June
2002 was sent to President Gloria Macapagal Arroyo. This letter
was indorsed to the DENR Secretary and eventually referred to the
Panel of Arbitrators of the Mines and Geosciences Bureau (MGB),
Regional Office No. 02, Tuguegarao, Cagayan, for further action.
On 12 November 2002, counsels for petitioners received a letter

from the Panel of Arbitrators of the MGB requiring the
petitioners to comply with the Rules of the Panel of Arbitrators
before the letter may be acted upon.
Yet again, counsels for petitioners sent President Arroyo another

demand letter dated 8 November 2002. Said letter was again
forwarded to the DENR Secretary who referred the same to the MGB,
Quezon City.
In a letter dated 19 February 2003, the MGB rejected the demand

of counsels for petitioners for the cancellation of the CAMC
FTAA.
Petitioners thus filed the present petition for prohibition and

mandamus, with a prayer for a temporary restraining order. They
pray that the Court issue an order:
1.enjoining public respondents from acting on any application for

FTAA;
2.declaring unconstitutional the Philippine Mining Act of 1995
and its Implementing Rules and Regulations;
3.canceling the FTAA issued to CAMC.
In their memorandum petitioners pose the following issues:
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(DESAMA) vs. Gozun
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.
II
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.
III
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.
IV
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.
V
WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE
CONTRACTS.1
Before going to the substantive issues, the procedural question

raised by public respondents shall first be dealt with. Public
respondents are of the view that petitioners’ eminent domain
claim is not ripe for adjudication as they fail to allege that
CAMC has actually taken their properties nor do they allege that
their property rights have been endangered or are in danger on
account of CAMC’s FTAA. In effect, public respondents insist that
the issue of eminent domain is not a justiciable controversy
which this Court can take cognizance of.
_______________
1 Rollo, pp. 595-596.
598
598

(DESAMA) vs. Gozun
A justiciable controversy is defined as a definite and concrete

dispute touching on the legal relations of parties having adverse
legal interests which may be resolved by a court of law through
the application of a law.2 Thus, courts have no judicial power to
review cases involving political questions and as a rule, will
desist from taking cognizance of speculative or hypothetical
cases, advisory opinions and cases that have become moot.3 The
Constitution is quite explicit on this matter.4 It provides that
judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally
demandable and enforceable. Pursuant to this constitutional
mandate, courts, through the power of judicial review, are to
entertain only real disputes between conflicting parties through
the application of law. For the courts to exercise the power of
judicial review, the following must be extant (1) there must be
an actual case calling for the exercise of judicial power; (2)
the question must be ripe for adjudication; and (3) the person
challenging must have the “standing.”5
An actual case or controversy involves a conflict of legal

rights, an assertion of opposite legal claims, susceptible of
judicial resolution as distinguished from a hypothetical or
abstract difference or dispute.6 There must be a contrariety of
_______________
2 Velarde v. Social Justice Society, G.R. No. 159357, 28 April

2004, 428 SCRA 283, 291.
3 PHILIPPINE POLITICAL LAW, Isagani Cruz, p. 23 (1995 ed.).
4 Article VIII, Section 1. x x x Judicial power includes the duty

of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the Government.
5 Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 425; 292 SCRA
402, 412-413 (1998).
6 Board of Optometry v. Hon. Colet, 328 Phil. 1187, 1206; 260

SCRA 88, 104 (1996).
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(DESAMA) vs. Gozun
legal rights that can be interpreted and enforced on the basis of

existing law and jurisprudence.
Closely related to the second requisite is that the question must

be ripe for adjudication. A question is considered ripe for
adjudication when the act being challenged has had a direct
adverse effect on the individual challenging it.7
The third requisite is legal standing or locus standi. It is

defined as a personal or substantial interest in the case such
that the party has sustained or will sustain direct injury as a
result of the governmental act that is being challenged, alleging
more than a generalized grievance.8 The gist of the question of
standing is whether a party alleges “such personal stake in the
outcome of the controversy as to assure that concrete adverseness
which sharpens the presentation of issues upon which the court
depends for illumination of difficult constitutional questions.”9
Unless a person is injuriously affected in any of his
constitutional rights by the operation of statute or ordinance,
he has no standing.10
In the instant case, there exists a live controversy involving a

clash of legal rights as Rep. Act No. 7942 has been enacted, DAO
96-40 has been approved and an FTAAs have been entered into. The
FTAA holders have already been operating in various provinces of
the country. Among them is CAMC which operates in the provinces
of Nueva Vizcaya and Quirino where numerous individuals including
the petitioners are imperiled of being ousted from their
landholdings in view of the CAMC FTAA. In light of this, the
court cannot await the adverse consequences of the law in order
to consider the con-
_______________
7 Integrated Bar of the Philippines v. Zamora, 392 Phil. 618,

632-633; 338 SCRA 81 (2000).
8 Dumlao v. Commission on Elections, G.R. No. L-52245, 22 January

1980, 95 SCRA 392, 402.
9 Integrated Bar of the Philippines v. Zamora, supra note 7, p.

633.
10 Ermita-Malate Hotel and Motel Operators Association, Inc. v.

City Mayor of Manila, 128 Phil. 473, 480-481; 20 SCRA 849 (1967).
600
600

(DESAMA) vs. Gozun
troversy actual and ripe for judicial intervention.11 Actual

eviction of the land owners and occupants need not happen for
this Court to intervene. As held in Pimentel, Jr. v. Hon.
Aguirre:12
“By the mere enactment of the questioned law or the approval of
the challenged act, the dispute is said to have ripened into a
judicial controversy even without any other overt act. Indeed,
even a singular violation of the Constitution and/or the law is
enough to awaken judicial duty.”13
Petitioners embrace various segments of the society. These

include 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. These
petitioners have the standing to raise the constitutionality of
the questioned FTAA as they allege a personal and substantial
injury.14 They assert that they are affected by the mining
activities of CAMC. Likewise, they are under imminent threat of
being displaced from their landholdings as a result of the
implementation of the questioned FTAA. They thus meet the
appropriate case requirement as they assert an interest adverse
to that of respondents who, on the other hand, claim the validity
of the assailed statute and the FTAA of CAMC.
Besides, the transcendental importance of the issues raised and

the magnitude of the public interest involved will have a bearing
on the country’s economy which is to a greater extent dependent
upon the mining industry. Also affected by the
_______________
11 Cruz v. Secretary of Environment & Natural Resources, G.R. No.

135385, 6 December 2000, 347 SCRA 128, 256.
12 391 Phil. 84; 336 SCRA 201 (2000).
13 Id., p. 107; p. 222.

14 La Bugal-B’Laan Tribal Association, Inc. v. Ramos, G.R. No.
127882, 27 January 2004, 421 SCRA 148, 179.
601
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(DESAMA) vs. Gozun
resolution of this case are the proprietary rights of numerous

residents in the mining contract areas as well as the social
existence of indigenous peoples which are threatened. Based on
these considerations, this Court deems it proper to take
cognizance of the instant petition.
Having resolved the procedural question, the constitutionality of

the law under attack must be addressed squarely.
First Substantive Issue: Validity of Section 76 of Rep. Act No.

7942 and DAO 96-40
In seeking to nullify Rep. Act No. 7942 and its implementing
rules DAO 96-40 as unconstitutional, petitioners set their sight
on Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40
which they claim allow the unlawful and unjust “taking” of
private property for private purpose in contradiction with
Section 9, Article III of the 1987 Constitution mandating that
private property shall not be taken except for public use and the
corresponding payment of just compensation. They assert that
public respondent DENR, through the Mining Act and its
Implementing Rules and Regulations, cannot, on its own, permit
entry into a private property and allow taking of land without
payment of just compensation.
Interpreting Section 76 of Rep. Act No. 7942 and Section 107 of

DAO 96-40, juxtaposed with the concept of taking of property for
purposes of eminent domain in the case of Republic v. Vda. de
Castellvi,15 petitioners assert that there is indeed a “taking”
upon entry into private lands and concession areas.
_______________
15 157 Phil. 329, 344; 58 SCRA 336, 350 (1974). It defines

“taking” under the concept of eminent domain as entering upon
private property for more than a momentary period, and, under the
warrant or color of legal authority, devoting it to a public use,
or otherwise informally appropriating or injuriously affecting it
in such a way as substantially to oust the owner and deprive him
of all beneficial enjoyment thereof.
602
602

(DESAMA) vs. Gozun
Republic v. Vda. de Castellvi defines “taking” under the concept

of eminent domain as entering upon private property for more than
a momentary period, and, under the warrant or color of legal
authority, devoting it to a public use, or otherwise informally
appropriating or injuriously affecting it in such a way as to
substantially oust the owner and deprive him of all beneficial
enjoyment thereof.
From the criteria set forth in the cited case, petitioners claim
that the entry into a private property by CAMC, pursuant to its
FTAA, is for more than a momentary period, i.e., for 25 years,
and renewable for another 25 years; that the entry into the
property is under the warrant or color of legal authority
pursuant to the FTAA executed between the government and CAMC;
and that the entry substantially ousts the owner or possessor and
deprives him of all beneficial enjoyment of the property. These
facts, according to the petitioners, amount to taking. As such,
petitioners question the exercise of the power of eminent domain
as unwarranted because respondents failed to prove that the entry
into private property is devoted for public use.
Petitioners also stress that even without the doctrine in the

Castellvi case, the nature of the mining activity, the extent of
the land area covered by the CAMC FTAA and the various rights
granted to the proponent or the FTAA holder, such as (a) the
right of possession of the Exploration Contract Area, with full
right of ingress and egress and the right to occupy the same; (b)
the right not to be prevented from entry into private lands by
surface owners and/or occupants thereof when prospecting,
exploring and exploiting for minerals therein; (c) the right to
enjoy easement rights, the use of timber, water and other natural
resources in the Exploration Contract Area; (d) the right of
possession of the Mining Area, with full right of ingress and
egress and the right to occupy the same; and (e) the right to
enjoy easement rights, water and other natural resources in the
Mining Area, result in a taking of private property.
603
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(DESAMA) vs. Gozun
Petitioners quickly add that even assuming arguendo that there is
no absolute, physical taking, at the very least, Section 76
establishes a legal easement upon the surface owners, occupants
and concessionaires of a mining contract area sufficient to
deprive them of enjoyment and use of the property and that such
burden imposed by the legal easement falls within the purview of
eminent domain.
To further bolster their claim that the legal easement

established is equivalent to taking, petitioners cite the case of
National Power Corporation v. Gutierrez16 holding that the
easement of right-of-way imposed against the use of the land for
an indefinite period is a taking under the power of eminent
domain.
Traversing petitioners’ assertion, public respondents argue that

Section 76 is not a taking provision but a valid exercise of the
police power and by virtue of which, the state may prescribe
regulations to promote the health, morals, peace, education, good
order, safety and general welfare of the people. This government
regulation involves the adjustment of rights for the public good
and that this adjustment curtails some potential for the use or
economic exploitation of private property. Public respondents
concluded that “to require compensation in all such circumstances
would compel the government to regulate by purchase.”
Public respondents are inclined to believe that by entering

private lands and concession areas, FTAA holders do not oust the
owners thereof nor deprive them of all beneficial enjoyment of
their properties as the said entry merely establishes a legal
easement upon surface owners, occupants and concessionaires of a
mining contract area.
_______________
16 G.R. No. 60077, 18 January 1991, 193 SCRA 1, 7.

604
604

(DESAMA) vs. Gozun
Taking in Eminent Domain Distinguished from Regulation in Police

Power
The power of eminent domain is the inherent right of the state
(and of those entities to which the power has been lawfully
delegated) to condemn private property to public use upon payment
of just compensation.17 On the other hand, police power is the
power of the state to promote public welfare by restraining and
regulating the use of liberty and property.18 Although both
police power and the power of eminent domain have the general
welfare for their object, and recent trends show a mingling19 of
the two with the latter being used as an implement of the former,
there are still traditional distinctions between the two.
Property condemned under police power is usually noxious or

intended for a noxious purpose; hence, no compensation shall be
paid.20 Likewise, in the exercise of police power, property
rights of private individuals are subjected to restraints and
burdens in order to secure the general comfort, health, and
prosperity of the state. Thus, an ordinance prohibiting theaters
from selling tickets in excess of their seating capacity (which
would result in the diminution of profits of the theater-owners)
was upheld valid as this would promote the comfort, convenience
and safety of the customers.21 In U.S. v. Toribio,22 the court
upheld the provisions of Act No. 1147, a statute regulating the
slaughter of carabao for the purpose of conserving an adequate
supply of draft animals, as a valid
_______________
17 Robern Development Corporation v. Quitain, 373 Phil. 773, 792-

793; 315 SCRA 150, 165 (1999).
18 U.S. v. Toribio, 15 Phil. 85, 93 (1910); Rubi v. The

Provincial Board of Mindoro, 39 Phil. 660, 708 (1919).
19 Association of Small Landowners of the Philippines, Inc. v.

Secretary of Agrarian Reform, G.R. No. 78742, 14 July 1989, 175
SCRA 343, 371.
20 U.S. v. Toribio, supra note 18, p. 370.
21 People v. Chan, 65 Phil. 611 (1938).
22 Supra note 18, p. 97.
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(DESAMA) vs. Gozun
exercise of police power, notwithstanding the property rights

impairment that the ordinance imposed on cattle owners. A zoning
ordinance prohibiting the operation of a lumber yard within
certain areas was assailed as unconstitutional in that it was an
invasion of the property rights of the lumber yard owners in
People v. De Guzman.23 The Court nonetheless ruled that the
regulation was a valid exercise of police power. A similar ruling
was arrived at in Seng Kee S Co. v. Earnshaw and Piatt24 where an
ordinance divided the City of Manila into industrial and
residential areas.
A thorough scrutiny of the extant jurisprudence leads to a cogent

deduction that where a property interest is merely restricted
because the continued use thereof would be injurious to public
welfare, or where property is destroyed because its continued
existence would be injurious to public interest, there is no
compensable taking.25 However, when a property interest is
appropriated and applied to some public purpose, there is
compensable taking.26
According to noted constitutionalist, Fr. Joaquin Bernas, SJ, in

the exercise of its police power regulation, the state restricts
the use of private property, but none of the property interests
in the bundle of rights which constitute ownership is
appropriated for use by or for the benefit of the public.27 Use
of the property by the owner was limited, but no aspect of the
property is used by or for the public.28 The deprivation of use
can in fact be total and it will not constitute compensable
taking if nobody else acquires use of the property or any
interest therein.29
_______________
23 90 Phil. 132 (1951).
24 56 Phil. 204 (1931).
25 THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A

COMMENTARY, Bernas, p. 420.
26 Id.
27 Id., p. 421.
28 Id.
29 Id.
606
606

(DESAMA) vs. Gozun
If, however, in the regulation of the use of the property,

somebody else acquires the use or interest thereof, such
restriction constitutes compensable taking. Thus, in City
Government of Quezon City v. Ericta,30 it was argued by the local
government that an ordinance requiring private cemeteries to
reserve 6% of their total areas for the burial of paupers was a
valid exercise of the police power under the general welfare
clause. This court did not agree in the contention, ruling that
property taken under the police power is sought to be destroyed
and not, as in this case, to be devoted to a public use. It
further declared that the ordinance in question was actually a
taking of private property without just compensation of a certain
area from a private cemetery to benefit paupers who are charges
of the local government. Being an exercise of eminent domain
without provision for the payment of just compensation, the same
was rendered invalid as it violated the principles governing
eminent domain.
In People v. Fajardo,31 the municipal mayor refused Fajardo
permission to build a house on his own land on the ground that
the proposed structure would destroy the view or beauty of the
public plaza. The ordinance relied upon by the mayor prohibited
the construction of any building that would destroy the view of
the plaza from the highway. The court ruled that the municipal
ordinance under the guise of police power permanently divest
owners of the beneficial use of their property for the benefit of
the public; hence, considered as a taking under the power of
eminent domain that could not be countenanced without payment of
just compensation to the affected owners. In this case, what the
municipality wanted was to impose an easement on the property in
order to preserve the view or beauty of the public plaza, which
was a form of utilization of Fajardo’s property for public
benefit.32
_______________
30 207 Phil. 648; 122 SCRA 759 (1983).
31 104 Phil. 443 (1958).
32 THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES,

supra note 25, p. 422.
607
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(DESAMA) vs. Gozun
While the power of eminent domain often results in the
appropriation of title to or possession of property, it need not
always be the case. Taking may include trespass without actual
property was intended such as the establishment of an easement.33
In Ayala de Roxas v. City of Manila,34 it was held that the
imposition of burden over a private property through easement was
considered taking; hence, payment of just compensation is
required. The Court declared:
“And, considering that the easement intended to be established,

whatever may be the object thereof, is not merely a real right
that will encumber the property, but is one tending to prevent
the exclusive use of one portion of the same, by expropriating it
for public use which, be it what it may, can not be accomplished
unless the owner of the property condemned or seized be
previously and duly indemnified, it is proper to protect the
appellant by means of the remedy employed in such cases, as it is
only adequate remedy when no other legal action can be resorted
to, against an intent which is nothing short of an arbitrary
restriction imposed by the city by virtue of the coercive power
with which the same is invested.”
And in the case of National Power Corporation v. Gutierrez,35

despite the NPC’s protestation that the owners were not totally
deprived of the use of the land and could still plant the same
crops as long as they did not come into contact with the wires,
the Court nevertheless held that the easement of right-of-way was
a taking under the power of eminent domain. The Court said:
“In the case at bar, the easement of right-of-way is definitely a

taking under the power of eminent domain. Considering the nature
and effect of the installation of 230 KV Mexico-Limay
transmission lines, the limitation imposed by NPC against the use
of the land for
_______________
33 CONSTITUTIONAL LAW, Cruz, p. 66 (1995 ed.).
34 9 Phil. 215, 221 (1907).
35 Supra note 16.
608
608

(DESAMA) vs. Gozun
an indefinite period deprives private respondents of its ordinary

use.”
A case exemplifying an instance of compensable taking which does

not entail transfer of title is Republic v. Philippine Long
Distance Telephone Co.36 Here, the Bureau of Telecommunications,
a government instrumentality, had contracted with the PLDT for
the interconnection between the Government Telephone System and
that of the PLDT, so that the former could make use of the lines
and facilities of the PLDT. In its desire to expand services to
government offices, the Bureau of Telecommunications demanded to
expand its use of the PLDT lines. Disagreement ensued on the
terms of the contract for the use of the PLDT facilities. The
Court ruminated:
“Normally, of course, the power of eminent domain results in the

taking or appropriation of title to, and possession of, the
expropriated property; but no cogent reason appears why said
power may not be availed of to impose only a burden upon the
owner of the condemned property, without loss of title and
possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement right of way.”37
In Republic v. Castellvi,38 this Court had the occasion to spell

out the requisites of taking in eminent domain, to wit:
(1)the expropriator must enter a private property;

(2)the entry must be for more than a momentary period;
(3)the entry must be under warrant or color of legal authority;
(4)the property must be devoted to public use or otherwise
informally appropriated or injuriously affected;
_______________
36 136 Phil. 20; 26 SCRA 620 (1969).
37 Id., pp. 29-30; p. 628.
38 Supra note 15, pp. 345-347.
609
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(DESAMA) vs. Gozun
(5)the utilization of the property for public use must be in such
a way as to oust the owner and deprive him of beneficial
enjoyment of the property.
As shown by the foregoing jurisprudence, a regulation which
substantially deprives the owner of his proprietary rights and
restricts the beneficial use and enjoyment for public use amounts
to compensable taking. In the case under consideration, the entry
referred to in Section 76 and the easement rights under Section
75 of Rep. Act No. 7942 as well as the various rights to CAMC
under its FTAA are no different from the deprivation of
proprietary rights in the cases discussed which this Court
considered as taking. Section 75 of the law in question reads:
“Easement Rights.—When mining areas are so situated that for

purposes of more convenient mining operations it is necessary to
build, construct or install on the mining areas or lands owned,
occupied or leased by other persons, such infrastructure as
roads, railroads, mills, waste dump sites, tailing ponds,
warehouses, staging or storage areas and port facilities,
tramways, runways, airports, electric transmission, telephone or
telegraph lines, dams and their normal flood and catchment areas,
sites for water wells, ditches, canals, new river beds,
pipelines, flumes, cuts, shafts, tunnels, or mills, the
contractor, upon payment of just compensation, shall be entitled
to enter and occupy said mining areas or lands.”
Section 76 provides:
“Entry into private lands and concession areas—Subject to prior

notification, holders of mining rights shall not be prevented
from entry into private lands and concession areas by surface
owners, occupants, or concessionaires when conducting mining
operations therein.”
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
610
610

(DESAMA) vs. Gozun
private lands by surface owners or occupants thereof when

prospecting, exploring and exploiting minerals therein.
The entry referred to in Section 76 is not just a simple right-

of-way which is ordinarily allowed under the provisions of the
Civil Code. Here, the holders of mining rights enter private
lands for purposes of conducting mining activities such as
exploration, extraction and processing of minerals. Mining right
holders build mine infrastructure, dig mine shafts and connecting
tunnels, prepare tailing ponds, storage areas and vehicle depots,
install their machinery, equipment and sewer systems. On top of
this, under Section 75, easement rights are accorded to them
where they may build warehouses, port facilities, electric
transmission, railroads and other infrastructures necessary for
mining operations. All these will definitely oust the owners or
occupants of the affected areas the beneficial ownership of their
lands. Without a doubt, taking occurs once mining operations
commence.
Section 76 of Rep. Act No. 7942 is a Taking Provision

Moreover, it would not be amiss to revisit the history of mining
laws of this country which would help us understand Section 76 of
Rep. Act No. 7942.
This provision is first found in Section 27 of Commonwealth Act
No. 137 which took effect on 7 November 1936, viz.:
“Before entering private lands the prospector shall first apply

in writing for written permission of the private owner, claimant,
or holder thereof, and in case of refusal by such private owner,
claimant, or holder to grant such permission, or in case of
disagreement as to the amount of compensation to be paid for such
privilege of prospecting therein, the amount of such compensation
shall be fixed by agreement among the prospector, the Director of
the Bureau of Mines and the surface owner, and in case of their
failure to unanimously agree as to the amount of compensation,
all questions at issue shall be determined by the Court of First
Instance.”
611
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(DESAMA) vs. Gozun
Similarly, the pertinent provision of Presidential Decree No.

463, otherwise known as “The Mineral Resources Development Decree
of 1974,” provides:
“SECTION 12. Entry to Public and Private Lands.—A person who

desires to conduct prospecting or other mining operations within
public lands covered by concessions or rights other than mining
shall first obtain the written permission of the government
official concerned before entering such lands. In the case of
private lands, the written permission of the owner or possessor
of the land must be obtained before entering such lands. In
either case, if said permission is denied, the Director, at the
request of the interested person may intercede with the owner or
possessor of the land. If the intercession fails, the interested
person may bring suit in the Court of First Instance of the
province where the land is situated. If the court finds the
request justified, it shall issue an order granting the
permission after fixing the amount of compensation and/or rental
due the owner or possessor: Provided, That pending final
adjudication of such amount, the court shall upon recommendation
of the Director permit the interested person to enter, prospect
and/or undertake other mining operations on the disputed land
upon posting by such interested person of a bond with the court
which the latter shall consider adequate to answer for any damage
to the owner or possessor of the land resulting from such entry,
prospecting or any other mining operations.”
Hampered by the difficulties and delays in securing surface

rights for the entry into private lands for purposes of mining
operations, Presidential Decree No. 512 dated 19 July 1974 was
passed into law in order to achieve full and accelerated mineral
resources development. Thus, Presidential Decree No. 512 provides
for a new system of surface rights acquisition by mining
prospectors and claimants. Whereas in Commonwealth Act No. 137
and Presidential Decree No. 463 eminent domain may only be
exercised in order that the mining claimants can build, construct
or install roads, railroads, mills, warehouses and other
facilities, this time, the power of eminent domain may now be
invoked by mining operators for the entry, acquisition and use of
private lands, viz.:
612
612

(DESAMA) vs. Gozun
“SECTION 1. Mineral prospecting, location, exploration,
development and exploitation is hereby declared of public use and
benefit, and for which the power of eminent domain may be invoked
and exercised for the entry, acquisition and use of private
lands. x x x.”
The evolution of mining laws gives positive indication that

mining operators who are qualified to own lands were granted the
authority to exercise eminent domain for the entry, acquisition,
and use of private lands in areas open for mining operations.
This grant of authority extant in Section 1 of Presidential
Decree No. 512 is not expressly repealed by Section 76 of Rep.
Act No. 7942; and neither are the former statutes impliedly
repealed by the former. These two provisions can stand together
even if Section 76 of Rep. Act No. 7942 does not spell out the
grant of the privilege to exercise eminent domain which was
present in the old law.
It is an established rule in statutory construction that in order

that one law may operate to repeal another law, the two laws must
be inconsistent.39 The former must be so repugnant as to be
irreconciliable with the latter act. Simply because a latter
enactment may relate to the same subject matter as that of an
earlier statute is not of itself sufficient to cause an implied
repeal of the latter, since the new law may be cumulative or a
continuation of the old one. As has been the ruled, repeals by
implication are not favored, and will not be decreed unless it is
manifest that the legislature so intended.40 As laws are presumed
to be passed with deliberation and with full knowledge of all
existing ones on the subject, it is but reasonable to conclude
that in passing a statute it was not intended to interfere with
or abrogate any former law relating to the same matter, unless
the repugnancy between the two is not only irreconcilable, but
also clear and convincing, and flowing necessarily from the
language used, unless the later
_______________
39 Valera v. Tuason, Jr., 80 Phil. 823, 827 (1948).

40 United States v. Palacio, 33 Phil. 208, 216 (1916).
613
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(DESAMA) vs. Gozun
act fully embraces the subject matter of the earlier, or unless

the reason for the earlier act is beyond peradventure removed.41
Hence, every effort must be used to make all acts stand and if,
by any reasonable construction, they can be reconciled, the
latter act will not operate as a repeal of the earlier.
Considering that Section 1 of Presidential Decree No. 512 granted

the qualified mining operators the authority to exercise eminent
domain and since this grant of authority is deemed incorporated
in Section 76 of Rep. Act No. 7942, the inescapable conclusion is
that the latter provision is a taking provision.
While this Court declares that the assailed provision is a taking

provision, this does not mean that it is unconstitutional on the
ground that it allows taking of private property without the
determination of public use and the payment of just compensation.
The taking to be valid must be for public use.42 Public use as a

requirement for the valid exercise of the power of eminent domain
is now synonymous with public interest, public benefit, public
welfare and public convenience.43 It includes the broader notion
of indirect public benefit or advantage. Public use as
traditionally understood as “actual use by the public” has
already been abandoned.44
Mining industry plays a pivotal role in the economic development

of the country and is a vital tool in the government’s thrust of
accelerated recovery.45 The importance of the mining industry for
national development is expressed in Presidential Decree No. 463:
_______________
41 Id.
42 Heirs of Juancho Ardona v. Reyes, 210 Phil. 187, 197; 125 SCRA
220 (1983).
43 Id.
44 Id., p. 198; p. 233.
45 Executive Order No. 211.
614
614

(DESAMA) vs. Gozun
“WHEREAS, mineral production is a major support of the national
economy, and therefore the intensified discovery, exploration,
development and wise utilization of the country’s mineral
resources are urgently needed for national development.”
Irrefragably, mining is an industry which is of public benefit.
That public use is negated by the fact that the state would be
taking private properties for the benefit of private mining firms
or mining contractors is not at all true. In Heirs of Juancho
Ardona v. Reyes,46 petitioners therein contended that the
promotion of tourism is not for public use because private
concessionaires would be allowed to maintain various facilities
such as restaurants, hotels, stores, etc., inside the tourist
area. The Court thus contemplated:
The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of

deference to legislative policy even if such policy might mean
taking from one private person and conferring on another private
person applies as well in the Philippines.
“. . . Once the object is within the authority of Congress, the

means by which it will be attained is also for Congress to
determine. Here one of the means chosen is the use of private
enterprise for redevelopment of the area. Appellants argue that
this makes the project a taking from one businessman for the
benefit of another businessman. But the means of executing the
project are for Congress and Congress alone to determine, once
the public purpose has been established. x x x”47
Petitioners further maintain that the state’s discretion to

decide when to take private property is reduced contractually by
Section 13.5 of the CAMC FTAA, which reads:
If the CONTRACTOR so requests at its option, the GOVERNMENT shall

use its offices and legal powers to assist in the acquisition at
reasonable cost of any surface areas or rights required by the
_______________
46 Supra note 42.
47 Id., p. 201.
615
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(DESAMA) vs. Gozun
CONTRACTOR at the CONTRACTOR’s cost to carry out the Mineral

Exploration and the Mining Operations herein.
All obligations, payments and expenses arising from, or incident

to, such agreements or acquisition of right shall be for the
account of the CONTRACTOR and shall be recoverable as Operating
Expense.
According to petitioners, the government is reduced to a sub-

contractor upon the request of the private respondent, and on
account of the foregoing provision, the contractor can compel the
government to exercise its power of eminent domain thereby
derogating the latter’s power to expropriate property.
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.48 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. Hence, when confronted with the same question in La
Bugal-B’Laan Tribal Association, Inc. v. Ramos,49 the Court
answered:
“Clearly, petitioners have needlessly jumped to unwarranted

conclusions, without being aware of the rationale for the said
provision. That provision does not call for the exercise of the
power of eminent domain—and determination of just compensation is
not an
_______________
48 La Bugal-B’Laan Tribal Association, Inc. v. Ramos, G.R. No.

127882, 1 December 2004, 445 SCRA 1, 228.
49 Id., p. 150.
616
616

(DESAMA) vs. Gozun
issue—as much as it calls for a qualified party to acquire the
surface rights on behalf of a foreign-owned contractor.
Rather than having the foreign contractor act through a dummy

corporation, having the State do the purchasing is a better
alternative. This will at least cause the government to be aware
of such transaction/s and foster transparency in the contractor’s
dealings with the local property owners. The government, then,
will not act as a subcontractor of the contractor; rather, it
will facilitate the transaction and enable the parties to avoid a
technical violation of 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:
Section 76. x x x Provided, that any damage to the property of

the surface owner, occupant, or concessionaire as a consequence
of such operations shall be properly compensated as may be
provided for in the implementing rules and regulations.
Section 107. Compensation of the Surface Owner and Occupant.—Any

damage done to the property of the surface owners, occupant, or
concessionaire thereof as a consequence of the mining operations
or as a result of the construction or installation of the
infrastructure mentioned in 104 above shall be properly and
justly compensated.
Such compensation shall be based on the agreement entered into

between the holder of mining rights and the surface owner,
occupant or concessionaire thereof, where appropriate, in
accordance with P.D. No. 512. (Emphasis supplied.)
Second Substantive Issue: Power of Courts to Determine Just
Compensation
Closely-knit to the issue of taking is the determination of just
compensation. It is contended that Rep. Act No. 7942 and Section
107 of DAO 96-40 encroach on the power of the trial courts to
determine just compensation in eminent domain
617
VOL. 485, MARCH 30, 2006
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(DESAMA) vs. Gozun
cases inasmuch as the same determination of proper compensation

are cognizable only by the Panel of Arbitrators.
The question on the judicial determination of just compensation

has been settled in the case of Export Processing Zone Authority
v. Dulay50 wherein the court declared that the determination of
just compensation in eminent domain cases is a judicial function.
Even as the executive department or the legislature may make the
initial determinations, the same cannot prevail over the court’s
findings.
Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO

96-40 states that holder(s) of mining right(s) shall not be
prevented from entry into its/their contract/mining areas for the
purpose of exploration, development, and/or utilization. That in
cases where surface owners of the lands, occupants or
concessionaires refuse to allow the permit holder or contractor
entry, the latter shall bring the matter before the Panel of
Arbitrators for proper disposition. Section 106 states that
voluntary agreements between the two parties permitting the
mining right holders to enter and use the surface owners’ lands
shall be registered with the Regional Office of the MGB. In
connection with Section 106, Section 107 provides that the
compensation for the damage done to the surface owner, occupant
or concessionaire as a consequence of mining operations or as a
result of the construction or installation of the infrastructure
shall be properly and justly compensated and that such
compensation shall be based on the agreement between the holder
of mining rights and surface owner, occupant or concessionaire,
or where appropriate, in accordance with Presidential Decree No.
512. In cases where there is disagreement to the compensation or
where there is no agreement, the matter shall be brought before
the Panel of Arbitrators. Section 206 of the implementing rules
and regulations provides an aggrieved party the remedy to appeal
the decision of the Panel of Arbitrators to the Mines
Adjudication
_______________
50 G.R. No. L-59603, 29 April 1987, 149 SCRA 305, 312.
618
618

(DESAMA) vs. Gozun
Board, and the latter’s decision may be reviewed by the Supreme

Court by filing a petition for review on certiorari.51
An examination of the foregoing provisions gives no indication

that the courts are excluded from taking cognizance of
expropriation cases under the mining law. The disagreement
referred to in Section 107 does not involve the exercise of
eminent domain, rather it contemplates of a situation wherein the
permit holders are allowed by the surface owners entry into the
latters’ lands and disagreement ensues as regarding the proper
compensation for the allowed entry and use of the private lands.
Noticeably, the provision points to a voluntary sale or
transaction, but not to an involuntary sale.
The legislature, in enacting the mining act, is presumed to have

deliberated with full knowledge of all existing laws and
jurisprudence on the subject. Thus, it is but reasonable to
conclude that in passing such statute it was in accord with the
existing laws and jurisprudence on the jurisdiction of courts in
the determination of just compensation and that it was not
intended to interfere with or abrogate any former law relating to
the same matter. Indeed, 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
_______________
51 Section 211 of DAO 96-40 provides: The decision of the Board

may be reviewed by filing a petition for review with the Supreme
Court within thirty (30) days from receipt of the order or
decision of the Board.
619
VOL. 485, MARCH 30, 2006
619

(DESAMA) vs. Gozun
Panel of Arbitrators or the Mines Adjudication Board to determine

in a preliminary matter the reasonable compensation due the
affected landowners or occupants.52 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. As held in Philippine Veterans
Bank v. Court of Appeals:53 “The jurisdiction of the Regional
Trial Courts is not any less “original and exclusive” because the
question is first passed upon by the DAR, as the judicial
proceedings are not a continuation of the administrative
determination.”
Third Substantive Issue: Sufficient Control by the State Over

Mining Operations
Anent the third issue, petitioners charge that Rep. Act No. 7942,
as well as its Implementing Rules and Regulations, makes it
possible for FTAA contracts to cede over to a fully foreign-owned
corporation full control and management of mining enterprises,
with the result that the State is allegedly reduced to a passive
regulator dependent on submitted plans and reports, with weak
review and audit powers. The State is not acting as the supposed
owner of the natural resources for and on behalf of the Filipino
people; it practically has little effective say in the decisions
made by the enterprise. In effect, petitioners asserted that the
law, the implementing regulations, and the CAMC FTAA cede
beneficial ownership of the mineral resources to the foreign
contractor.
It must be noted that this argument was already raised in La

Bugal-B’Laan Tribal Association, Inc. v. Ramos,54 where the Court
answered in the following manner:
_______________
52 Philippine Veterans Bank v. Court of Appeals, 379 Phil. 141,

147; 322 SCRA 139, 145 (2000).
53 Id., p. 149; p. 147.
54 Supra note 48, pp. 132-137.
620
620

(DESAMA) vs. Gozun
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 in this manner:
1.Sec. 8 which provides for the DENR’s power of overall

supervision and periodic review for “the conservation,
management, development and proper use of the State’s mineral
resources”;
2.Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB)
under the DENR to exercise “direct charge in the administration
and disposition of mineral resources,” and empowers the MGB to
“monitor the compliance by the contractor of the terms and
conditions of the mineral agreements,” “confiscate surety and
performance bonds,” and deputize whenever necessary any member or
unit of the Phil. National Police, barangay, duly registered non-
governmental organization (NGO) or any qualified person to police
mining activities;
3.Sec. 66 which vests in the Regional Director ”exclusive
jurisdiction over safety inspections of all installations,
whether surface or underground,” utilized in mining operations.
4.Sec. 35, which incorporates into all FTAAs the following terms,
conditions and warranties:
“(g)Mining operations shall be conducted in accordance with the
provisions of the Act and its IRR.
“(h)Work programs and minimum expenditures commitments.
x x x x
“(k)Requiring proponent to effectively use appropriate anti-
pollution technology and facilities to protect the environment
and restore or rehabilitate mined-out areas.
“(l)The contractors shall furnish the Government records of
geologic, accounting and other relevant data for its mining
operation, and that books of accounts and records shall be open
for inspection by the government. x x x.
621
VOL. 485, MARCH 30, 2006
621

(DESAMA) vs. Gozun
“(m)Requiring the proponent to dispose of the minerals at the

highest price and more advantageous terms and conditions.
x x x x
“(o)Such other terms and conditions consistent with the
Constitution and with this Act as the Secretary may deem to be
for the best interest of the State and the welfare of the
Filipino people.”
The foregoing provisions of Section 35 of RA 7942 are also
reflected and implemented in Section 56 (g), (h), (l), (m) and
(n) 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:
• The contractor is to relinquish to the government those

portions of the contract area not needed for mining operations
and not covered by any declaration of mining feasibility (Section
35-e, RA 7942; Section 60, DAO 96-40).
• The contractor must comply with the provisions pertaining to
mine safety, health and environmental protection (Chapter XI, RA
7942; Chapters XV and XVI, DAO 96-40).
• For violation of any of its terms and conditions, government
may cancel an FTAA. (Chapter XVII, RA 7942; Chapter XXIV, DAO 96-
40).
• An FTAA contractor is obliged to open its books of accounts and
records for inspection by the government (Section 56-m, DAO 96-
40).
• An FTAA contractor has to dispose of the minerals and by-
products at the highest market price and register with the MGB a
copy of the sales agreement (Section 56-n, DAO 96-40).
• MGB is mandated to monitor the contractor’s compliance with the
terms and conditions of the FTAA; and to deputize, when
necessary, any member or unit of the Philippine National Police,
the barangay or a DENR-accredited nongovernmental organization to
police mining activities (Section 7-d and -f, DAO 96-40).
622
622

(DESAMA) vs. Gozun
• An FTAA cannot be transferred or assigned without prior

approval by the President (Section 40, RA 7942; Section 66, DAO
96-40).
• A mining project under an FTAA cannot proceed to the
construction/development/utilization stage, unless its
Declaration of Mining Project Feasibility has been approved by
government (Section 24, RA 7942).
• The Declaration of Mining Project Feasibility filed by the
contractor cannot be approved without submission of the following
documents:
1.Approved mining project feasibility study (Section 53-d, DAO
96-40)
2.Approved three-year work program (Section 53-a-4, DAO 96-40)
3.Environmental compliance certificate (Section 70, RA 7942)
4.Approved environmental protection and enhancement program
(Section 69, RA 7942)
5.Approval by the Sangguniang Panlalawigan/Bayan/ Barangay
(Section 70, RA 7942; Section 27, RA 7160)
6.Free and prior informed consent by the indigenous peoples
concerned, including payment of royalties through a Memorandum of
Agreement (Section 16, RA 7942; Section 59, RA 8371)
• The FTAA contractor is obliged to assist in the development of
its mining community, promotion of the general welfare of its
inhabitants, and development of science and mining technology
(Section 57, RA 7942).
• The FTAA contractor is obliged to submit reports (on quarterly,
semi-annual or annual basis as the case may be; per Section 270,
DAO 96-40), pertaining to the following:
1.Exploration
2.Drilling
3.Mineral resources and reserves
4.Energy consumption
5.Production
623
VOL. 485, MARCH 30, 2006
623

(DESAMA) vs. Gozun
6.Sales and marketing

7.Employment
8.Payment of taxes, royalties, fees and other Government Shares
9.Mine safety, health and environment
10.Land use
11.Social development
12.Explosives consumption
• An FTAA pertaining to areas within government reservations
cannot be granted without a written clearance from the government
agencies concerned (Section 19, RA 7942; Section 54, DAO 96-40).
• An FTAA contractor is required to post a financial guarantee
bond in favor of the government in an amount equivalent to its
expenditures obligations for any particular year. This
requirement is apart from the representations and warranties of
the contractor that it has access to all the financing,
managerial and technical expertise and technology necessary to
carry out the objectives of the FTAA (Section 35-b, -e, and -f,
RA 7942).
• Other reports to be submitted by the contractor, as required
under DAO 96-40, are as follows: an environmental report on the
rehabilitation of the mined-out area and/or mine waste/tailing
covered area, and anti-pollution measures undertaken (Section 35-
a-2); annual reports of the mining operations and records of
geologic accounting (Section 56-m); annual progress reports and
final report of exploration activities (Section 56-2).
• Other programs required to be submitted by the contractor,
pursuant to DAO 96-40, are the following: a safety and health
program (Section 144); an environmental work program (Section
168); an annual environmental protection and enhancement program
(Section 171).
The foregoing gamut of requirements, regulations, restrictions
and limitations imposed upon the FTAA contractor by the statute
and regulations easily overturns petitioners’ contention. 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.
624
624

(DESAMA) vs. Gozun
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.
Once these plans and reports are approved, the contractor is

bound to comply with its commitments therein. Figures for mineral
production and sales are regularly monitored and subjected to
government review, in order to ensure that the products and by-
products are disposed of at the best prices possible; even copies
of sales agreements have to be submitted to and registered with
MGB. And the contractor is mandated to open its books of accounts
and records for scrutiny, so as to enable the State to determine
if the government share has been fully paid.
The State may likewise compel the contractor’s compliance with

mandatory requirements on mine safety, health and environmental
protection, and the use of anti-pollution technology and
facilities. Moreover, the contractor is also obligated to assist
in the development of the mining community and to pay royalties
to the indigenous peoples concerned.
Cancellation of the FTAA may be the penalty for violation of any

of its terms and conditions and/or noncompliance with statutes or
regulations. This general, all-around, multipurpose sanction is
no trifling matter, especially to a contractor who may have yet
to recover the tens or hundreds of millions of dollars sunk into
a mining project.
Overall, considering the provisions of the statute and the

regulations just discussed, we believe that the State definitely
possesses the means by which it can have the ultimate word in the
operation of the enterprise, set directions and objectives, and
detect deviations and noncompliance by the contractor; likewise,
it has the capability to enforce compliance and to impose
sanctions, should the occasion therefor arise.
In other words, the FTAA contractor is not free to do whatever it

pleases and get away with it; on the contrary, it will have to
follow the government line if it wants to stay in the enterprise.
Ineluctably then, RA 7942 and DAO 96-40 vest in the government
more than a sufficient degree of control and supervision over the
conduct of mining operations.
625
VOL. 485, MARCH 30, 2006

625

(DESAMA) vs. Gozun
Fourth Substantive Issue: The Proper Interpretation of the

Constitutional Phrase “Agreements Involving Either Technical or
Financial Assistance”
In interpreting the first and fourth paragraphs of Section 2,
Article XII of the Constitution, petitioners set forth the
argument that foreign corporations are barred from making
decisions on the conduct of operations and the management of the
mining project. The first paragraph of Section 2, Article XII
reads:
x x x The exploration, development, and utilization of natural

resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it
may enter into co-production, joint venture, or production
sharing agreements with Filipino citizens, or corporations or
associations at least sixty percentum of whose capital is owned
by such citizens. Such agreements may be for a period not
exceeding twenty five years, renewable for not more than twenty
five years, and under such terms and conditions as may be
provided by law x x x.
The fourth paragraph of Section 2, Article XII provides:
“The President may enter into agreements with foreign-owned

corporations involving either technical or financial assistance
for large scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the
general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the
country x x x.”
Petitioners maintain that the first paragraph bars aliens and
foreign-owned corporations from entering into any direct
arrangement with the government including those which involve co-
production, joint venture or production sharing agreements. They
likewise insist that the fourth paragraph allows foreign-owned
corporations to participate in the large-scale exploration,
development and utilization of natural resources, but such
participation, however, is merely limited to an agreement for
either financial or technical assistance only.
626
626

(DESAMA) vs. Gozun
Again, this issue has already been succinctly passed upon by this
Court in La Bugal-B’Laan Tribal Association, Inc. v. Ramos.55 In
discrediting such argument, the Court ratiocinated:
“Petitioners claim that the phrase “agreements x x x involving

either technical or financial assistance” simply means technical
assistance or financial assistance agreements, nothing more and
nothing else. They insist that there is no ambiguity in the
phrase, and that a plain reading of paragraph 4 quoted above
leads to the inescapable conclusion that what a foreign-owned
corporation may enter into with the government is merely an
agreement for either financial or technical assistance only, for
the large-scale exploration, development and utilization of
minerals, petroleum and other mineral oils; such a limitation,
they argue, excludes foreign management and operation of a mining
enterprise.
This restrictive interpretation, petitioners believe, is in line
with the general policy enunciated by the Constitution reserving
to Filipino citizens and corporations the use and enjoyment of
the country’s natural resources. They maintain that this Court’s
Decision of January 27, 2004 correctly declared the WMCP FTAA,
along with pertinent provisions of RA 7942, void for allowing a
foreign contractor to have direct and exclusive management of a
mining enterprise. Allowing such a privilege not only runs
counter to the “full control and supervision” that the State is
constitutionally mandated to exercise over the exploration,
development and utilization of the country’s natural resources;
doing so also vests in the foreign company “beneficial ownership”
of our mineral resources. It will be recalled that the Decision
of January 27, 2004 zeroed in on “management or other forms of
assistance” or other activities associated with the “service
contracts” of the martial law regime, since “the management or
operation of mining activities by foreign contractors, which is
the primary feature of service contracts, was precisely the evil
that the drafters of the 1987 Constitution sought to eradicate.”
x x x x
We do not see how applying a strictly literal or verba legis

interpretation of paragraph 4 could inexorably lead to the
conclusions arrived at in the ponencia. First, the drafters’
choice of words—heir
_______________
55 Id., pp. 101-105.
627
VOL. 485, MARCH 30, 2006
627
(DESAMA) vs. Gozun
use of the phrase agreements x x x involving either technical or

financial assistance—does not indicate the intent to exclude
other modes of assistance. The drafters opted to use 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. The word “involving” as
used in this context has three connotations that can be
differentiated thus: one, the sense of “concerning,” “having to
do with,” or “affecting”; two, “entailing,” “requiring,”
“implying” or “necessitating”; and three, “including,”
“containing” or “comprising.”
Plainly, none of the three connotations convey a sense of

exclusivity. Moreover, the word “involving,” when understood in
the sense of “including,” as in including technical or financial
assistance, necessarily implies that there are activities other
than those that are being included. In other words, if an
agreement includes technical or financial assistance, there is
apart from such assistance—something else already in, and covered
or may be covered by, the said agreement.
In short, it allows for the possibility that matters, other than

those explicitly mentioned, could be made part of the agreement.
Thus, we are now led to the conclusion that the use of the word
“involving” implies that these agreements with foreign
corporations are not limited to mere financial or technical
assistance. The difference in sense becomes very apparent when we
juxtapose “agreements for technical or financial assistance”
against “agreements including technical or financial assistance.”
This much is unalterably clear in a verba legis approach.
Second, 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. For example, they would
have used the sentence foreign corporations are absolutely
prohibited from involvement in the management or operation of
mining or similar ventures or words of similar import. A search
for such stringent wording yields negative results. Thus, we come
to the inevitable conclusion that
628
628

(DESAMA) vs. Gozun
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.
Fifth Substantive Issue: Service Contracts Not

Deconstitutionalized
Lastly, petitioners stress that the service contract regime under
the 1973 Constitution is expressly prohibited under the 1987
Constitution as the term service contracts found in the former
was deleted in the latter to avoid the circumvention of
constitutional prohibitions that were prevalent in the 1987
Constitution. According to them, the framers of the 1987
Constitution only intended for foreign-owned corporations to
provide either technical assistance or financial assistance. Upon
perusal of the CAMC FTAA, petitioners are of the opinion that the
same is a replica of the service contract agreements that the
present constitution allegedly prohibit.
Again, this contention is not well-taken. 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.56 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.57 We ruled, thus:
“To our mind, however, such intent cannot be definitively and

conclusively established from the mere failure to carry the same
_______________
56 Id.
57 Id.
629
VOL. 485, MARCH 30, 2006
629
(DESAMA) vs. Gozun
expression or term over to the new Constitution, absent a more

specific, explicit and unequivocal statement to that effect. What
petitioners seek (a complete ban on foreign participation in the
management of mining operations, as previously allowed by the
earlier Constitutions) is nothing short of bringing about a
momentous sea change in the economic and developmental policies;
and the fundamentally capitalist, free-enterprise philosophy of
our government. We 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, merely on
the basis of the omission of the terms service contract from or
the failure to carry them over to the new Constitution. There has
to be a much more definite and even unarguable basis for such a
drastic reversal of policies.
x x x x
The foregoing are mere fragments of the framers’ lengthy

discussions of the provision dealing with agreements x x x
involving either technical or financial assistance, which
ultimately became paragraph 4 of Section 2 of Article XII of the
Constitution. Beyond any doubt, the members of the ConCom were
actually debating about the martial-law-era service contracts for
which they were crafting appropriate safeguards.
In the voting that led to the approval of Article XII by the

ConCom, the explanations given by Commissioners Gascon, Garcia
and Tadeo indicated that they had voted to reject this provision
on account of their objections to the “constitutionalization” of
the “service contract” concept.
Mr. Gascon said, “I felt that if we would constitutionalize any

provision on service contracts, this should always be with the
concurrence of Congress and not guided only by a general law to
be promulgated by Congress.” Mr. Garcia explained, “Service
contracts are given constitutional legitimization in Sec. 3, even
when they have been proven to be inimical to the interests of the
nation, providing, as they do, the legal loophole for the
exploitation of our natural resources for the benefit of foreign
interests.” Likewise, Mr. Tadeo cited inter alia the fact that
service contracts continued to subsist, enabling foreign
interests to benefit from our natural resources. It was hardly
likely that these gentlemen would have objected so strenuously,
had the provision called for mere technical or financial
assistance and nothing more.
630
630

(DESAMA) vs. Gozun
The deliberations of the ConCom and some commissioners’

explanation of their votes leave no room for doubt that the
service contract concept precisely underpinned the commissioners’
understanding of the “agreements involving either technical or
financial assistance.”
x x x x
From the foregoing, we are impelled to conclude that 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.
x x x x
It is therefore reasonable and unavoidable to make the following

conclusion, 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 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.”58
WHEREFORE, the instant petition for prohibition and mandamus is

hereby DISMISSED. Section 76 of Republic Act No. 7942 and Section
107 of DAO 96-40; Republic Act No. 7942 and its Implementing
Rules and Regulations contained in DAO 96-40—insofar as they
relate to financial and technical assistance agreements referred
to in paragraph 4 of Section 2 of Article XII of the Constitution
are NOT UNCONSTITUTIONAL.
_______________
58 Id., pp. 105-128.
631
VOL. 485, MARCH 30, 2006
631
(DESAMA) vs. Gozun
SO ORDERED.
Panganiban (C.J., Chairperson), Ynares-Santiago, Austria-

Martinez and Callejo, Sr., JJ., concur.
Petition for prohibition and mandamus dismissed.
Notes.—Eminent domain is the inherent right of the state (and of

those entities to which the power has been lawfully delegated) to
condemn private property to public use upon payment of just
compensation. (Robern Development Corporation vs. Quitain, 315
SCRA 150 [1999])
The provisions of Republic Act No. 7942 (Philippine Mining Act of

1995) do not necessarily repeal Republic Act No. 3931 (Pollution
Control Law), as amended by Presidential Decree No. 984 and
Executive Order No. 192—repeals of laws by implication are not
favored and courts must generally assume their congruent
application. (Republic vs. Marcopper Mining Corporation, 335 SCRA
386 [2000])
Police power cannot be diminished by any contract. (Agan, Jr. vs.

Philippine International Air Terminals Co., Inc., 420 SCRA 575
[2004])
The judicial power to declare a law or an executive order

unconstitutional is limited to actual cases and controversies to
be exercised after full opportunity of argument by the parties
and limited further to the constitutional question raised or the
very lis mota presented; Fourfold requisites in deciding
constitutional law issues. (Sanlakas vs. Executive Secretary, 421
SCRA 656 [2004])
——o0o——
632
632
PAL Employees Savings and Loan Association, Inc. vs. Philippine

Airlines, Inc.

(DESAMA) vs. Gozun, 485 SCRA 586, G.R. No. 157882 March 30, 2006

Didipio Earth-Savers' Multi-Purpose Association, Inc. (DESAMA) Et Al.v Elisea Gozun, Et Al. G.R. No. 157882 March 30, 2006

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G.R. No. 157882. March 30, 2006.

DIDIPIO EARTH-SAVERS’ MULTI-PURPOSE ASSOCIATION, INCORPORATED

VOL. 485, MARCH 30, 2006

Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

ALFREDO CUT-ING, ANGELINA UDAN, OSCAR INLAB, JUANITA CUT-ING,

SUPREME COURT REPORTS ANNOTATED

Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

MADDELA, MENZI TICAWA, DOMINGA DUGAY, JOE BOLINEY, JASON ASANG,

Same; Judicial Power; Judicial power includes the duty of the

VOL. 485, MARCH 30, 2006

Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

involving rights which are legally demandable and enforceable.

Same; Eminent Domain; “Taking” under the concept of eminent

Same; Same; Eminent Domain and Police Power Distinguished.—The

Same; Same; When a property interest is appropriated and applied

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Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

Same; Police Power; In the exercise of its police power

Same; Eminent Domain; Taking may include trespass without actual

VOL. 485, MARCH 30, 2006

Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

referred to in Section 76 is not just a simple right-of-way which

Statutory Construction; In order that one law may operate to

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Constitutional Law; Eminent Domain; Mines and Mining; Public use

Same; Same; Same; The determination of just compensation in

VOL. 485, MARCH 30, 2006

Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

Same; Congress; The legislature, in enacting the mining act, is

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Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

B’Laan Tribal Association, Inc. v. Ramos, 445 SCRA 1, 132-137

SPECIAL CIVIL ACTION in the Supreme Court. Prohibition and

The facts are stated in the opinion of the Court.

Melizel F. Asuncion for petitioners.

Francis Joseph G. Ballesteros collaborating counsel for

Roberto C. San Juan for respondent Climax-Arimco Mining

The Solicitor General for public respondents.

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Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

Natural Resources (DENR) Administrative Order No. 96-40, s. 1996

On 25 July 1987, then President Corazon C. Aquino promulgated

On 3 March 1995, then President Fidel V. Ramos signed into law

Previously, however, or specifically on 20 June 1994, President

Subsequently, AMC consolidated with Climax Mining Limited to form

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Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

On 7 September 2001, counsels for petitioners filed a demand

On 12 November 2002, counsels for petitioners received a letter

Yet again, counsels for petitioners sent President Arroyo another

In a letter dated 19 February 2003, the MGB rejected the demand

Petitioners thus filed the present petition for prohibition and

1.enjoining public respondents from acting on any application for

VOL. 485, MARCH 30, 2006

WHETHER OR NOT THE RESPONDENTS’ INTERPRETATION OF THE ROLE OF

Before going to the substantive issues, the procedural question

1 Rollo, pp. 595-596.

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Didipio Earth-Savers’ Multi-Purpose Association, Incorporated

A justiciable controversy is defined as a definite and concrete

An actual case or controversy involves a conflict of legal

2 Velarde v. Social Justice Society, G.R. No. 159357, 28 April