[ G.R. No. 183573. July 18, 2012 ] 691 Phil. 395
SECOND DIVISION
[ G.R. No. 183573. July 18, 2012 ]
DIZON COPPER SILVER MINES, INC., PETITIONER, VS. DR. LUIS D. DIZON, RESPONDENT. D E C I S I O N
PEREZ, J.:
For review[1] are the Decision[2] dated 9 May 2008 and Resolution[3] dated 1 July 2008 of the Court of Appeals in CA-G.R. SP No. 99947. In the assailed decision, the Court of Appeals declared as void ad initio petitioner’s applications for Mineral Production Sharing Agreements (MPSA) but held as valid a similar application of the respondent. The decision was a reversal of the ruling[4] of the Office of the President (OP) in O.P. Case No. 06-C-113 and a reinstatement of the previous orders[5] issued by the Secretary of the Department of Environment and Natural Resources (DENR). The decretal portion of the decision of the appellate court accordingly reads:[6]
WHEREFORE, the petition is GRANTED. The assailed decision dated December 4, 2006 and resolution dated June 20, 2007 of the Office of the President are hereby REVERSED and SET ASIDE. The orders dated December 29, 2005 and February 14, 2006 issued by the Secretary of the Department of Environment and Natural Resources are REINSTATED.
The antecedents are as follows:
The 57 Mining Claims
On 13 November 1935, Celestino M. Dizon (Celestino) filed with the Office of the Mining Recorder,[7] Declarations of Location[8] over fifty-seven (57) mining claims in San Marcelino, Zambales. The 57 mining claims, with an aggregate area of 513 hectares, were thereby recorded in the following manner:[9] Twenty-nine (29) mining claims were registered in the name of Celestino. Twelve (12) mining claims were registered in the name of Maria D. Dizon, the wife of Celestino. Eleven (11) mining claims were registered in the name of Helen D. Dizon, a daughter of Celestino. Three (3) mining claims were registered in the name of the heirs of Eustaquio L. Dizon, who was the father of Celestino. Two (2) mining claims were registered in the name of the heirs of Tiburcia M. Dizon, who was the mother of Celestino.In 1966, herein petitioner Dizon Copper-Silver Mines, Inc. was organized.[10] Among its incorporators were Celestino and his son, herein respondent Dr. Luis D. Dizon.[11] On 27 January 1967, Celestino, for himself and as attorney-infact of the other registered claim-owners, assigned their 57 mining claims to petitioner.[12] On 6 September 1975, petitioner entered into an Operating Agreement[13] with Benguet Corporation[14] (Benguet). In such agreement, petitioner authorized Benguet to, among others, “explore, equip, develop and operate” the 57 mining claims.[15] In 1977, Celestino died. In 1978, the 57 mining claims became the subject of a mining lease application[16] with the Bureau of Mines.[17] Consequently, on 1 February 1980, the government issued five (5) Mining Lease Contracts (MLCs) covering six (6) out of the 57 mining claims. They are:[18]
MLC No. MRD-211 – issued in favor of the heirs of Celestino; MLC No. MRD-212 – issued in favor of the heirs of Celestino; MLC No. MRD-213 – issued in favor of Maria D. Dizon; MLC No. MRD-219 – issued in favor of Helen D. Dizon; MLC No. MRD-222 – issued in favor of the heirs of Celestino.
The MLCs were issued for a term of twenty-five (25) years, or up to 31 January 2005.[19]
The MPSA Applications
On 4 July 1991, Benguet filed an MPSA application with the DENR.[20] The application, designated as MPSA-P-III-16,[21] seeks to place all existing mining claims and interests then operated by Benguet under production sharing agreements in line with Executive Order No. 279 of 25 July 1987.[22] Specifically, MPSA-P-III-16 covers the following mining interests:[23] Forty-two (42) mining claims[24] of the Sagittarius Alpha Realty Corporation; Two (2) prospecting permits over two (2) parcels of land[25] of the Camalca Mining Corporation; and The remaining 51 mining claims of petitioner are not under MLCs. On 3 March 1995, Republic Act No. 7942, or the Philippine Mining Act of 1995, was enacted. On 12 December 1997, Benguet and petitioner terminated their Operating Agreement. In 2004, Benguet assigned MPSA-P-III-16 in favor of the latter.[26] On 22 October 2004, the DENR Mines and Geosciences Bureau (MGB) Regional Office III signified its acquiescence and recorded MPSA-P-III-16 in the name of petitioner.[27] On 16 December 2004, petitioner sent a letter to the DENR MGB Regional Office III, requesting the said office to include the 6 mining claims under MLCs in MPSA-P-III-16.[28] On 4 January 2005, the DENR MGB Regional Office III informed[29] the petitioner of its approval of the request and manifested that the 6 mining claims under the MLCs will now be included in MPSA-P-III-16. Despite the pendency of MPSA-P-III-16, petitioner nonetheless filed with the DENR another MPSA application on 31 January 2005. This time, petitioner’s application was designated as MPSA-P-III-0305[30] and covers all 57 of its mining claims, inclusive of the 6 under MLCs.[31] On 28 February 2005, respondent filed with the DENR his MPSA-P-III-05-05[32]—an MPSA application covering 281.9544 hectares of mineral location in San Marcelino, Zambales. It includes the 6 mining claims under MLCs.[33] Subsequently, the DENR MGB Regional Office III verified that several areas applied for by respondent in MPSA-P-III-05-05 overlaps with those in petitioner’s MPSA-P-III-16 and MPSA-III-03-05.[34]
The DENR Orders
On 29 December 2005, the DENR Secretary issued an Order[35] declaring petitioner’s MPSA-P-III-16 and MPSA-P-III-03-05 void ab initio. In contrast, the order held respondent’s MPSA-P-III-05-05 as a valid MPSA application worthy of due course.[36] The dispositive portion of the order thus reads:[37]
WHEREFORE, in view of the foregoing considerations, Benguet Corporation MPSA-III-P-16 [sic] application and Dizon Copper Silver Mines Incorporated Application MP-P-III-03-05 [sic] are declared, as they are, declared VOID AB-INITIO, while Dr. Luis D. Dizons MA-P-III-05-05 [sic] (APSA-0001389-III) is hereby, as it is declared VALID and EXISTING and can be given due course, subject to strict compliance with the provision of the Philippine Mining Act of 1995 and its Implementing Rules and Regulations.
In nullifying petitioner’s applications, the DENR Secretary echoed the findings of the DENR MGB Regional Office III that: 1. With respect to MPSA-P-III-16. Benguet has no personality to file MPSA-P-III-16.[38] Benguet, by itself, has no legal personality to file such application because it is a mere operator of petitioner.[39] Moreover, MPSA-P-III-16 was denied area status and clearance by the Forest Management Services of DENR Region III.[40] 2. With respect to MPSA-P-III-03-05. MPSA-P-III-03-05 was filed at a time when several areas included therein were still closed to mining applications.[41] Such areas refer to those subject to the MLCs that, as it turned out, were not yet expired when MPSA-P-III-03-05 was filed.[42] On 17 January 2006, petitioner filed before the DENR a Motion for Reconsideration[43] of the 29 December 2005 order. Petitioner also submitted a Supplemental Motion for Reconsideration[44] on 31 January 2006. On 14 February 2006, the DENR Acting Secretary issued an Order[45] denying petitioner’s motion for reconsideration. The motion for reconsideration of the petitioner was dismissed for being moot and academic, on account of the fact that on the day before such motion was filed, or on 17 January 2006, the DENR already approved MPSA P-III-05-05 and a full-fledged MPSA, designated as MPSA No. 227 2006-III,[46] was already issued in favor of the respondent.[47] Petitioner promptly filed an appeal[48] to the Office of the President.
The OP Ruling
On appeal, the OP completely reversed the DENR Secretary. In its Decision[49] dated 4 December 2006, the OP: (1) overturned the 29 December 2005 and 14 February 2006 orders of the DENR Secretary, (2) cancelled the approval of MPSA-P-III-05-05 into MPSA No. 2272006- III, and (3) revived petitioner’s MPSA-P-III-03-05 for further re-evaluation by the DENR. The fallo of the OP ruling reads:[50]
WHEREFORE, premises considered, the DENR Order dated December 29, 2005 declaring MPSA-P-III-16 and MA-P-III-03-05 void ab initio and declaring MA-P-III-05-05 as valid and existing, and the DENR ORDER dismissing DCSMI’s [petitioner’s] motion for reconsideration, are hereby REVERSED and SET ASIDE. The issuance of MPSA No. 227-2006-III in favor of Dr. Dizon [respondent] is likewise SET ASIDE. The Mineral Production Agreement Application of DCMI [petitioner], denominated as MA-P-III-03-05, is hereby REMANDED to the DENR for REEVALUATION if the same is compliant with the requirements of the law
. Aggrieved, respondent appealed[51] to the Court of Appeals.
The Decision of the Court of Appeals and This Petition
As earlier intimated, the Court of Appeals reversed the ruling of the OP and reinstated the 29 December 2005 and 14 February 2006 Orders of the DENR Secretary.[52] In doing so, the appellate court substantially agreed with the findings of the DENR. Hence, the present appeal[53] raising the core issue of whether the Court of Appeals erred in reinstating the 29 December 2005 and 4 February 2006 Orders of the DENR Secretary. The petitioner, for its part, would like this Court to answer in the affirmative. Petitioner maintains that MPSA-P-III-16 and MPSAP- III-03-05 were valid MPSA applications.[54] In support thereof, petitioner contradicts the findings of the DENR, as concurred in by the Court of Appeals, and argues that: 1. Benguet has the personality to file MPSA-P-III-16.[55] The authority of Benguet to file mining applications on behalf of petitioner is justified by— Sections 1.01(b), 1.03, 7.01(j) and 9.04 of the Operating Agreement between petitioner and Benguet: Section 1.01(b)[56] gives Benguet authority for the “acquisition of other real rights xxx.” Section 1.03[57] grants Benguet authority to “apply for patent or lease and/or patent or lease surveys” with respect to the 57 mining claims. Section 7.01(j)[58] gives Benguet authority to “xxx enter into contracts, agreements xxx.” Section 9.04[59] constitutes Benguet as attorney-in-fact of petitioner, authorized “to prepare, execute, amend, correct, supplement and register any document relating to or affecting” the 57 mining claims “which may be necessary to be executed, amended, corrected, supplemented, filed or registered.” Letter dated 14 June 1991 of petitioner to Benguet,[60] which was appended in MPSA-P-III-16. In the said letter, petitioner, thru its then president Mr. Juvencio D. Dizon, signified its conformity with the proposal of Benguet to file a production sharing agreement application covering the 57 mining claims.[61 ] 2. Benguet, by submitting the complete requirements for an MPSA application in MPSA-P-III-16, fully complied with the requirements of Sections 112 and 113 of Republic Act No. 7942.[62] Thus, petitioner still has the preferential right over any other similar applicants to pursue the area covered by the subject 57 mining claims.[63] 3. While MPSA-P-III-03-05 was filed during the subsistence of the MLCs, such fact does not suffice to totally nullify said application. The claims under the MLCs, which are supposedly not open to mining applications, all but occupy only a small portion of the area covered in MPSA-P-III-03-05.[64] Petitioner also accuses the DENR Secretary of “hastily” approving MPSA-P-III-05-05 into MPSA No. 227-2006-III.[65] Petitioner alleges that MPSA-P-III-05-05 was approved despite noncompliance by the respondent with the “mandatory” requirements under Sections 37 and 38 of the Implementing Rules and Regulations (IRR) of Republic Act No. 7942.[66]
OUR RULING
We deny the appeal. MPSA-P-III-16 is Not a Valid MPSA Application Before discussing the merits of MPSA-P-III-16 as an MPSA application, it is significant to point out that as of 22 December 2005, the DENR Secretary had already issued a Memorandum[67] sustaining the denial by the Forest Management Service of DENR Region III to issue an area status and clearance for MPSA-P-III-16. Among the reasons set forth by the DENR in refusing to issue such clearance were:[68]
- x x x. 2. The application for clearance was denied two times by the Technical Director of the Forest Management Service of DENR Region III which is the “Government Agency concerned” with the authority in the regions which has jurisdiction over the applied for as far as Forest management is concern [sic]. The first denial was on November 9, 1998 and the second on February 25, 1999. 3. The area is within both a “DENR Project Area” – The President Ramon Magsaysay Reforestation Project of CENRO – Olongapo; and, “The Southern Zambales Forest Reserve established under Republic Act No. 3092” with the latter encompassing most of the entire area of the MPSA application. (Emphasis supplied).
Verily, the DENR Secretary excluded “most of the entire area” originally covered by MPSA-P-III-16 as closed to mining applications for being within the “President Ramon Magsaysay Reforestation Project of CENRO–Olongapo” and “The Southern Zambales Forest Reserve.”[69] The Memorandum, as the Court takes it, effectively leaves the mining claims of petitioner as the only point of contention left in MPSA-P-III-16. Now, to the issue at hand. As can be culled from the facts, Benguet filed MPSA-P-III-16 in order to place the mining claims and interests operated by it, which includes those of the petitioner, under MPSAs. The application, in effect, seeks to enforce a right[70] belonging to holders of existing mining claims and others interests to enter into mineral agreements with the government. As mere operator, therefore, Benguet cannot file MPSA-P-III-16 in its name without authorization from the holders of the mining claims and interests included therein. Petitioner argues in favor of the validity of MPSA-P-III-16, at least insofar as its mining claims are concerned, on the assertion that it duly authorized Benguet to file the application under their Operating Agreement and its Letter dated 14 June 1991.[71] We are not convinced. First. It must be clarified at the outset that the inclusion of the 6 mining claims under MLCs in MPSA-P-III-16 is not valid. The records of this case are definite that the MLCs covering 6 of the subject claims were actually issued by the government in the names of Maria Dizon, Helen Dizon and the heirs of Celestino—not in favor of the petitioner.[72] Hence, such mining leases could not be included in MPSA-P-III-16 for possible conversion into MPSAs without securing the individual consent of the recognized lessees thereof. Needless to state, authorization by the petitioner in connection with the mining claims covered by the MLCs, if there was any, would not be material. Second. With respect to the remaining 51 mining claims not under MLCs, this Court finds absolutely nothing in the Operating Agreement between petitioner and Benguet that can reasonably be construed as giving the latter authority to file an MPSA application thereon. After perusal of the records, this Court finds that the provisions of the Operating Agreement relied upon by petitioner in arguing otherwise, were taken out of context: 1. Benguet’s authority “to acquire real rights” under Section 1.01(b) is actually limited only to such rights “as indicated in the Development Program” of the Operating Agreement.[73] Unfortunately, an MPSA was never shown to have been contemplated by, much less included in, such Development Program. 2. Section 1.03 only grants Benguet authority to “apply for patent or lease and/or patent or lease surveys.”[74] However, as will be discussed below, a mining patent, lease or any survey thereof is substantially different from an MPSA. 3. Section 7.01(j), on the other hand, premises the authority of Benguet to “enter into contracts, agreements” on Section 7.03 of the Operating Agreement that actually requires prior authorization from petitioner in the event the former enters into any “major contracts.”[75] An MPSA may be considered as falling under the term “major contracts” for the simple reason that it will re-define the very relations between the owners of the existing mining claims and the government with respect to such claims. In connection with the foregoing, the Letter dated 14 June 1991, appended in MPSA-P-III-16, cannot be considered as valid authorization from petitioner. There was no showing that the board of directors of petitioner approved of Benguet’s proposal to file an MPSA application. 4. Neither can Section 9.04, which constituted Benguet as attorney-in-fact of petitioner, be construed as sufficient authorization. The said section confines the authority of Benguet “to prepare, execute, amend, correct, supplement and register any document” relating to the 57 mining claims, only to those documents “necessary to carry out the intents and purposes” of the Operating Agreement.[76] Entering into MPSAs, however, could not have been included in the “intents and purposes” of the Operating Agreement. It must be pointed out that the Operating Agreement was executed way back in 1975, during which Presidential Decree No. 463 still governed mining operations in the country. Presidential Decree No. 463, as previous mining laws before it, sanctioned a system of exploitation of natural resources based on “license, concession or lease.”[77] MPSAs, on the other hand, deviate drastically from this system. An MPSA is one of the mineral agreements innovated by the 1987 Constitution by which the State takes on a broader and more dynamic role in the exploration, development and utilization of the country’s mineral resources.[78] By such agreements, the government does not become a mere licensor, concessor or lessor of mining resources—but actually assumes “full control and supervision” in the exploration, development and utilization of the concerned mining claims in consonance with Section 2, Article XII of the Constitution.[79] The policy introduced by the 1987 Constitution, therefore, represents a significant shift in the hitherto existing relations between the government and mining claimants. This considerable change in the former system of mining leases under previous mining laws, in turn, makes it difficult for this Court to fathom that petitioner and Benguet contemplated the execution of MPSAs as part of their Operating Agreement. To hold otherwise, would simply stretch the limits of reason and human foresight. Accordingly, this Court agrees with the finding of the DENR and the Court of Appeals that MPSA-P-III-16 was filed by Benguet without any valid authorization and, therefore, cannot be considered as a valid MPSA application. Effect of the Invalidity of MPSA-P-III-16 In order to fully understand the effect of the invalidity of MPSA-P-III-16 on the mining claims of the petitioner and its rights thereto, the relevant provisions of Republic Act No. 7942 as well as its IRR must be considered. In so far as the 6 mining claims under MLCs are concerned, Section 112 of Republic Act No. 7942 applies. The provision provides for the non-impairment and continued recognition of existing valid mining leases, which means that the subject leases will remain valid until their expiration, i.e. on 31 January 2005.[80] On the other hand, the 51 mining claims not covered by MLCs are subject to Section 113 of Republic Act No. 7942. The said section gives “holders of existing mining claims, lease or quarry applications” with “preferential rights to enter into any mode of mineral agreement with the government” within two (2) years from the promulgation of the rules and regulations implementing said law.[81] Section 113 was further clarified by Section 273 of the IRR[82] of Republic Act No. 7942 and by DENR Memorandum Order (M.O.) No. 97-07. The pertinent provisions of DENR M.O. 97-07 states:
Section 4. Date of Deadline Under Sections 272 and 273 of the IRR Consistent with pertinent national policy, the September 13, 1997 deadline under Section 272 of the IRR and the September 14, 1997 deadline under Section 273 of the IRR, which fall on a Saturday and Sunday, respectively, shall be imposed on September 15, 1997. x x x x Section 8. Claimants/Applicants Required to File Mineral Agreement Only holders of mining claims and lease/quarry applications filed prior to the effectivity of the Act which are valid and existing as defined in Section 5 hereof who have not filed any Mineral Agreement applications over areas covered by such mining claims and lease/quarry applications are required to file Mineral Agreement applications pursuant to Section 273 of the IRR on or before September 15, 1997; Provided, that the holder of such a mining claim or lease/quarry application involved in a mining dispute/ease shall instead file on or before said deadline a Letter of Intent to file the necessary Mineral Agreement application; Provided, further, That if the mining claim or lease/quarry application is not determined to be invalid in the dispute/case, the claimant or applicant shall have thirty (30) days from the final resolution of the dispute/case to filed the necessary Mineral Agreement application; Provided, finally, that failure by the claimant or applicant to file the necessary Mineral Agreement application within said thirty (30)-day period shall result in the abandonment of such claim or application, after which, any area covered by the same shall be opened for Mining Applications. Holders of such valid and existing mining claims and lease/quarry applications who had filed or been granted applications other than those for Mineral Agreements prior to September 15, 1997 shall have until such date to file/convert to Mineral Agreement applications, otherwise, such previously filed or granted applications shall be cancelled. (Emphasis and underscoring supplied).
Per the above-cited provisions of DENR M.O. No. 97-07, holders of existing mining claims or lease/quarry applications have only until the 15th of September 1997 to file an appropriate mineral agreement application in the exercise of their “preferential rights to enter into mineral agreements with the government” involving their claims. DENR M.O. No. 97-07 also provides that failure of the said holders to exercise such preferential right is deemed an abandonment of their existing mining claims or applications. In the instant case, MPSA-P-III-16 was the only MPSA application that was filed before the mandatory deadline. Aside from it, petitioner filed no other valid MPSA application covering its mining claims before 15 September 1997. Given the foregoing, it becomes clear that a finding of invalidity of MPSA-P-III-16 has a profound effect on petitioner’s rights as to the 51 mining claims not covered by MLCs: First. The invalidity of MPSA-P-III-16 necessarily meant that petitioner was not able to validly exercise its preferential rights under Section 113 of Republic Act No. 7942. As a result, petitioner is already deemed to have abandoned its mining claims as of 15 September 1997. Second. The assignment of MPSA-P-III-16 in favor of petitioner has also been rendered of no consequence. Such assignment was made by Benguet, and then approved by the DENR, only in 2004—which is well beyond the 15 September 1997 deadline.[83] At that time, petitioner had already lost any legal vested interest it had in the subject mining claims. Third. Petitioner’s MPSA-P-III-03-05, filed on 31 January 2005, is considered as a new application insofar as the subject 51 mining claims are concerned. Petitioner thereby enjoys no preference regarding the said application’s approval. We now come to the final issue raised. MPSA-P-III-05-05 over MPSA-P-III-03-05 Petitioner next argues that the Court of Appeals erred in sustaining the DENR’s approval of respondent’s MPSA-P-III-05-05 into MPSA No. 227-2006-III.[84] Petitioner alleges that the appellate court failed to recognize that the DENR Secretary had adopted a “hasty” procedure in assessing the merits of respondent’s MPSA-PIII- 05-05 and had approved the same without requiring the latter to comply with Sections 37 and 38 of the IRR of Republic Act No. 7942.[85] Petitioner thus asks this Court to set aside MPSA No. 2272006- III and to order the DENR to instead make a re-evaluation of its own application, MPSA-P-III-03-05.[86] We are not persuaded. To begin with, petitioner’s postulation that respondent did not comply with Sections 37 and 38 of the IRR of Republic Act No. 7942,[87] raises a factual issue that was never raised in the proceedings a quo. The procedural norm is that factual issues are barred in appeals by certiorari, with more reason if such issues are only being raised for the first time before this Court.[88] Anent the issue regarding the approval of MPSA-P-III-05-05, it must be emphasized herein that under Republic Act No. 7942, the DENR Secretary has been conferred with the exclusive and primary jurisdiction to approve mineral agreements, such as MPSAs.[89] In the seminal case Celestial Nickel Mining Exploration Corporation v. Macroasia Corporation, this Court described such function as purely administrative in nature and one that is fully within the DENR Secretary’s competence and discretion. Concededly, it is the DENR Secretary, thru the MGB, who is in the best position to determine to whom mineral agreements are granted.[90] Accordingly, the doctrine of primary jurisdiction finds application to the case at bench. Celestial captures the doctrine in the context of mining applications in this wise:
Settled is the rule that the courts will defer to the decisions of the administrative offices and agencies by reason of their expertise and experience in the matters assigned to them pursuant to the doctrine of primary jurisdiction. Administrative decisions on matter within the jurisdiction of administrative bodies are to be respected and can only be set aside on proof of grave abuse of discretion, fraud, or error of law. Unless it is shown that the then DENR Secretary has acted in a wanton, whimsical, or oppressive manner, giving undue advantage to a party or for an illegal consideration and similar reasons, this Court cannot look into or review the wisdom of the exercise of such discretion.[91] (Emphasis supplied).
In the case at bench, this Court finds no such arbitrariness on the part of the DENR Secretary in approving respondent’s MPSA-PIII- 05-05 at the expense of petitioner’s MPSA-P-III-03-05. Contrary to the allegations of petitioner, there was never any “hasty” approval of MPSA-P-III-05-05. The records attest that the approval of MPSAP- III-05-05 by the DENR Secretary came a full ten (10) months after such application was filed[92] and was, in fact, based from the evaluation of the DENR MGB Regional Office III that petitioner’s MPSA-P-III-03-05 was filed at a time when the 6 mining claims covered therein were still under subsisting MLCs in favor of the Dizons[93] and, hence, still closed to mining applications.[94] In choosing to act favorably on MPSA-P-III-05-05, the DENR Secretary merely exercised its rightful discretion to determine who among competing mining applicants is more qualified for a mining agreement. This consideration, aside from the fact that petitioner’s MPSA-P-III-03-05 covers areas still closed to mining applications when it was filed, underscores the reasonableness of the orders of the DENR Secretary. This Court finds itself heavy-handed to disturb them. WHEREFORE, the instant petition is DENIED. The appealed Decision dated 9 May 2008 and Resolution dated 1 July 2008 or the Court of Appeals in CA-G.R. SP No. 99947 are hereby AFFIRMED. Costs against petitioner. SO ORDERED.. Carpio, (Chairperson), J., see dissenting opinion. Brion, J., see concurring opinion. Sereno, J., I join the dissent of J. Carpio. Reyes, J. concur.