La Bugal-B’Laan v. Ramos

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

La Bugal-B’Laan v. Ramos
G.R. No. 127882.
December 1, 2004

Facts:

The Petition for Prohibition and Mandamus before the Court challenges the constitutionality of (1) Republic Act 7942 (The Philippine Mining Act of 1995); (2) its Implementing Rules and Regulations (DENR Administrative Order [DAO] 96-40); and (3) the Financial and Technical Assistance Agreement (FTAA) dated 30 March 1995, executed by the government with Western Mining Corporation (Philippines), Inc. (WMCP).

On 27 January 2004, the Court en banc promulgated its Decision, granting the Petition and declaring the unconstitutionality of certain provisions of RA 7942, DAO 96-40, as well as of the entire FTAA executed between the government and WMCP, mainly on the finding that FTAAs are service contracts prohibited by the 1987 Constitution. The Decision struck down the subject FTAA for being similar to service contracts,[9] which, though permitted under the 1973 Constitution, were subsequently denounced for being antithetical to the principle of sovereignty over our natural resources, because they allowed foreign control over the exploitation of our natural resources, to the prejudice of the Filipino nation.

The Decision quoted several legal scholars and authors who had criticized service contracts for, inter alia, vesting in the foreign contractor exclusive management and control of the enterprise, including operation of the field in the event petroleum was discovered; control of production, expansion and development; nearly unfettered control over the disposition and sale of the products discovered/extracted; effective ownership of the natural resource at the point of extraction; and beneficial ownership of our economic resources. According to the Decision, the 1987 Constitution (Section 2 of Article XII) effectively banned such service contracts. Subsequently, Victor O. Ramos (Secretary, Department of Environment and Natural Resources [DENR]), Horacio Ramos (Director, Mines and Geosciences Bureau [MGB-DENR]), Ruben Torres (Executive Secretary), and the WMC (Philippines) Inc. filed separate Motions for Reconsideration.

Issue:

Whether or not the Court has a role in the exercise of the power of control over the EDU of our natural resources?

Held:

The Chief Executive is the official constitutionally mandated to “enter into agreements with foreign owned corporations.” On the other hand, Congress may review the action of the President once it is notified of “every contract entered into in accordance with this [constitutional] provision within thirty days from its execution.” In contrast to this express mandate of the President and Congress in the exploration, development and utilization (EDU) of natural resources, Article XII of the Constitution is silent on the role of the judiciary. However, should the President and/or Congress gravely abuse their discretion in this regard, the courts may -- in a proper case -- exercise their residual duty under Article VIII. Clearly then, the judiciary should not inordinately interfere in the exercise of this presidential power of control over the EDU of our natural resources.

Under the doctrine of separation of powers and due respect for co-equal and coordinate branches of government, the Court must restrain itself from intruding into policy matters and must allow the President and Congress maximum discretion in using the resources of our country and in securing the assistance of foreign groups to eradicate the grinding poverty of our people and answer their cry for viable employment opportunities in the country. “The judiciary is loath to interfere with the due exercise by coequal branches of government of their official functions.” As aptly spelled out seven decades ago by Justice George Malcolm, “Just as the Supreme Court, as the guardian of constitutional rights, should not sanction usurpations by any other department of government, so should it as strictly confine its own sphere of influence to the powers expressly or by implication conferred on it by the Organic Act.” Let the development of the mining industry be the responsibility of the political branches of government. And let not the Court interfere inordinately and unnecessarily. The Constitution of the Philippines is the supreme law of the land. It is the repository of all the aspirations and hopes of all the people.

The Constitution should be read in broad, life-giving strokes. It should not be used to strangulate economic growth or to serve narrow, parochial interests. Rather, it should be construed to grant the President and Congress sufficient discretion and reasonable leeway to enable them to attract foreign investments and expertise, as well as to secure for our people and our posterity the blessings of prosperity and peace. The Court fully sympathize with the plight of La Bugal B’laan and other tribal groups, and commend their efforts to uplift their communities. However, the Court cannot justify the invalidation of an otherwise constitutional statute along with its implementing rules, or the nullification of an otherwise legal and binding FTAA contract. The Court believes that it is not unconstitutional to allow a wide degree of discretion to the Chief Executive, given the nature and complexity of such agreements, the humongous amounts of capital and financing required for large-scale mining operations, the complicated technology needed, and the intricacies of international trade, coupled with the State’s need to maintain flexibility in its dealings, in order to preserve and enhance our country’s competitiveness in world markets. On the basis of this control standard, the Court upholds the constitutionality of the Philippine Mining Law, its Implementing Rules and Regulations - insofar as they relate to financial and technical agreements - as well as the subject Financial and Technical Assistance Agreement (FTAA).