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    The Supreme Court dismissed the petition challenging the constitutionality of the Philippine Mining Act of 1995 and its implementing rules. It held that: 1) Section 76 of the Act, which allows mining companies to enter private lands, is a valid "taking" provision since it allows taking for public use and provides for just compensation. 2) The Act does not improperly encroach on the courts' power to determine just compensation, as claims can still be decided by courts. 3) While Section 76 effects a taking, the Act is not unconstitutional as it balances private property rights with the government's power to promote mining for public benefit. The petition was therefore dismissed.

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    The Supreme Court dismissed the petition challenging the constitutionality of the Philippine Mining Act of 1995 and its implementing rules. It held that: 1) Section 76 of the Act, which allows mining companies to enter private lands, is a valid "taking" provision since it allows taking for public use and provides for just compensation. 2) The Act does not improperly encroach on the courts' power to determine just compensation, as claims can still be decided by courts. 3) While Section 76 effects a taking, the Act is not unconstitutional as it balances private property rights with the government's power to promote mining for public benefit. The petition was therefore dismissed.

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    46 views5 pages

    Upload 2 - DESAMA V Gozun

    Uploaded by

    Patricia Villamil
    The Supreme Court dismissed the petition challenging the constitutionality of the Philippine Mining Act of 1995 and its implementing rules. It held that: 1) Section 76 of the Act, which allows mining companies to enter private lands, is a valid "taking" provision since it allows taking for public use and provides for just compensation. 2) The Act does not improperly encroach on the courts' power to determine just compensation, as claims can still be decided by courts. 3) While Section 76 effects a taking, the Act is not unconstitutional as it balances private property rights with the government's power to promote mining for public benefit. The petition was therefore dismissed.

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    –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

    DESAMA, et al. v Gozun, et al


    [G.R. No. 157882] | [March 30, 2006] | [CHICO-NAZARIO, J]

    Petitioners: DIDIPIO EARTH-SAVERS' MULTI-PURPOSE ASSOCIATION, INC. (DESAMA), et al.


    Respondents: ELISEA GOZUN, in her capacity as SECRETARY of the DEPARTMENT OF ENVIRONMENT
    and NATURAL RESOURCES (DENR), et al.

    –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    CASE SUMMARY

    Trigger word/s: taking vs regulation


    FACTS: Prior to the passage of the Philippine Mining Act of 1995 into law, Former President Ramos executed
    a Financial and Technical Assistance Agreement (FTAA) with Arimco Mining Corporation (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. 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. Petitioners filed a petition for prohibition and
    mandamus, with a prayer for a TRO. 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
    IRR, and (3) canceling the FTAA issued to CAMC.
    HELD: Petition dismissed. The Philippine Mining Act of 1995 and its IRR are NOT UNCONSTITUTIONAL
    insofar as they relate to FTAAs referred to in paragraph 4 of Section 2 of Article XII of the Constitution.
    Although Sec. 76 of the Act is a taking provision, it is valid since the taking is for public use and the Act
    provides for just compensation.
    –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    FACTS

     25 July 1987 - then President Cory Aquino promulgated EO 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.
     20 June 1994 - then President Ramos executed an FTAA with Arimco Mining Corporation (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.
     March 1995 - President Ramos signed into law RA No. 7942 known as the Philippine Mining Act of
    1995
     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.
    –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    ISSUES & HELD

    1. W/N Section 76 of RA No. 7942 is a “taking” provision? – YES

     Petitioner’s arguments:
    1. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 allow the unlawful and
    unjust "taking" of private property for private purpose in violation of 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.
    2. CAMC’s entry into the private property amount to taking as defined in Republic v. Vda.
    de Castellvi. – “Taking” under the concept of eminent domain is 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.
     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;
     the entry into the property is under the warrant or color of legal authority pursuant to
    the FTAA executed between the government and CAMC;
     the entry substantially ousts the owner or possessor and deprives him of all
    beneficial enjoyment of the property.
    3. the nature of the mining activity, the extent of the land area covered by the CAMC FTAA and
    the various rights granted to the FTAA holder result in a taking of private property
    4. If there is no absolute physical taking, Section 76 establishes, at the very least, a legal
    easement which falls within the purview of eminent domain
     Respondents’ arguments:
    1. 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.
    2. 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
     SC:
    1. Section 76 of Rep. Act No. 7942 is a Taking Provision
    o 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.
    2. Sec. 76 being a taking provision 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
    o 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.
     Mining is an industry which is of public benefit. It plays a pivotal role in the
    economic development of the country
    o There is no basis for the claim that the Mining Act and its IRR 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

    A. “Taking” in Eminent Domain vs. “Regulation” in Police Power


    o Eminent domain vs. Police Power

    Eminent domain power Police power


    Definition inherent right of the state power of the state to promote
    (and of those entities to public welfare by restraining and
    which the power has been regulating the use of liberty and
    lawfully delegated) to property.
    condemn private property
    to public use upon
    payment of just
    compensation.
    Nature of property private property for public usually noxious or intended
    condemned use upon payment of just for a noxious purpose; hence,
    compensation. no compensation shall be paid
    Property appropriated Yes No
    for public use?
    o When SC ruled that regulation of the use of the property = compensable taking:
    1. City Government of Quezon City v. Ericta - ordinance requiring private cemeteries to
    reserve 6% of their total areas for the burial of paupers
    2. People v. Fajardo - the 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
    2. W/N RA No. 7942 and its IRR encroach on the power of the courts to determine just compensation –
    NO
     Petitioner’s argument: Rep. Act No. 7942 and its IRR encroach on the power of the trial courts
    to determine just compensation in eminent domain cases inasmuch as the same determination
    of proper compensation are cognizable only by the Panel of Arbitrators
     SC: 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.
    o 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.
    o The original and exclusive jurisdiction of the courts to decide determination of just
    compensation remains intact despite the preliminary determination made by the
    administrative agency.
    3. W/N the State lost sufficient control over mining operations because of RA No. 7942, its IRR and the
    FTAA – NO
     Petitioner’s argument: RA No. 7942, as well as its IRR, 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.
     SC: (This argument was already raised inL a Bugal-B'Laan Tribal Association, Inc. v. Ramos)
    o The setup under RA 7942 and DAO 96-40 does not reduce the State to the role of a
    "passive regulator" dependent on submitted plans and reports. On the contrary, the
    government agencies concerned are empowered to approve or disapprove — hence, to
    influence, direct and change — the various work programs and the corresponding
    minimum expenditure commitments for each of the exploration, development and
    utilization phases of the mining enterprise.
    o The requirements, regulations, restrictions and limitations imposed upon the FTAA
    contractor by the statute and regulations easily overturns petitioners' contention.
    4. W/N foreign corporations are barred from making decisions on the conduct of mining operations – NO
     Petitioner’s arguments:
    1. Par. 1 of Sec. 2 of Art. XII of the Constitution 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
    2. Par. 4 of Sec. 2 of Art. XII of the Constitution 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
     SC: this issue has already been succinctly passed upon by this Court in La Bugal-B'Laan Tribal
    Association, Inc. v. Ramos
    5. W/N service contracts are prohibited under the 1987 Constitution – NO
     Petitioner’s argument: the service contract regime found under the 1973 Constitution is
    expressly prohibited under the 1987 Constitution as the term service contracts was deleted in
    the 1987 Constitution
     SC: The mere fact that the term service contracts found in the 1973 Constitution was not carried
    over to the present constitution does not mean that service contracts as understood in the 1973
    Constitution was eradicated in the 1987 Constitution
    o 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.

    –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    RULING: Petition dismissed (in favor of Respondents)

    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.

    SO ORDERED.

    –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    NOTES

     Section 76 of RA No. 7942


    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.

     Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40
    Section 76. . . . 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.

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