BY ATTY. JULIUS GREGORY B. DELGADO
PROVINCE OF OCCIDENTAL MINDORO VS. AGUSAN PETROLEUM AND MINERAL CORPORATION, G.R. NO. 248932 (JANUARY 14, 2025): LOCAL ORDINANCES BANNING LARGE-SCALE MINING RENDERED UNCONSTITUTIONAL AND CONTRARY TO LAW
In a Decision dated January 14, 2025, the Supreme Court En Banc, through its ponente Senior Associate Justice Marvic M.V.F. Leonen, opened the ponencia with this emphatic legal doctrine, “While the Constitution recognizes the autonomy of local government units to enact ordinances and adopt resolutions for the general welfare of their constituents, this does not extend to vetoing the national law. The Province of Occidental Mindoro exceeded its powers and authority when it completely banned all large-scale exploration and mining operations within its territorial jurisdiction, in contravention of Republic Act No. 7942 or the Philippine Mining Act of 1995.”
The instant case is a Petition for Review on Certiorari assailing the ruling of the Regional Trial Court of Mamburao, Occidental Mindoro, which declared invalid Municipal Ordinance No. 106-2008, Series of 2008, of the Municipality of Abra de Ilog, and Provincial Ordinance No. 34-09, Series of 2009, and Provincial Resolutions No. 109, Series of 2008, and 140, Series of 2009, of the Province of Occidental Mindoro, imposing a 25-year moratorium on large-scale mining within the Municipality of Abra de Ilog and the Province of Occidental Mindoro.
On October 16, 2008, Agusan Petroleum and Mineral Corporation (“Agusan Petroleum”), a contractor for large-scale mining, entered into a Financial or Technical Assistance Agreement No. 03-2008-IVB (FTAA) with the Republic of the Philippines, through then Executive Secretary Eduardo Ermita, on behalf of then Gloria Macapagal-Arroyo. Under the FTAA, Agusan Petroleum is given exclusive right to explore, mine, utilize, and market minerals that may be derived from 46,050.6483 hectares of land located at Baco, San Teodoro and Puerto Galera in Oriental Mindoro, and Mamburao and Abra de Ilog in Occidental Mindoro.
On October 13, 2014, Agusan Petroleum filed a Petition for Declaratory Relief with the Regional Trial Court, challenging the validity and constitutionality of the subject Ordinances and Resolutions. Agusan Petroleum averred that the subject Ordinances and Resolutions affected its rights under the FTAA; intrude into State’s ownership of, and full power and control over the exploration, development, and utilization of, the country’s mineral resources; violate the non-impairment of contract clause; are contrary to law; and are unreasonable, oppressive, and discriminatory. Agusan Petroleum also contends that there is no basis to completely ban large-scale mining because Republic Act No. 7942 and its implementing rules provide safeguards for the protection of the environment, which are being implemented by the Department of Environment and Natural Resources (DENR) and Mines and Geosciences Bureau (MGB).
In its Comment, the Province of Occidental Mindoro argued that the Ordinances and Resolutions are valid exercise of police power of local government units and only temporarily regulate large-scale mining. The Municipality of Abra de Ilog asserted that other local government units of territories covered in the contract area should have been impleaded. It further asserted that there was no consultation with the affected inhabitants and local government units prior to the FTAA; that the FTAA could not prevail over the express will of the people through the local governments; and that declaratory relief is not a proper remedy.
The Office of the Solicitor General (OSG), in its Comment, alleged that the Ordinances and Resolutions were enacted by the two local government units pursuant to their delegated police power under the general welfare clause, Section 16 of Republic Act No. 7160, and in accordance with the devolution of powers under Article V, Section 3 of the Constitution. The OSG added that the requisites for a valid exercise of police power were satisfied since public interest was at the heart of the assailed Ordinances and Resolutions and the means employed were necessary and not oppressive. The OSG also argued that the means employed were necessary and not oppressive and in case of doubt of the authority of LGUs, it should be resolved in favor of greater devolution of powers. Also, the OSG argued that Agusan Petroleum has not shown any prior consultation and approval of the Sanggunian concerned prior to the implementation of the FTAA, as required by Sections 26 and 27 of Republic Act No. 7160, that under Section 19 of Republic Act No. 7942, there are certain areas closed to mining operations, i.e., “areas expressly prohibited by law;” and that the FTAA cannot prevail over the police power of local government units.
The trial court, upon filing of Motion for Summary Judgment by Agusan Petroleum, ruled in favor of the latter and invalidated and rendered unconstitutional and contrary to law the subject Ordinances and Resolutions. The Supreme Court ruled first on the procedural issue on the authority of the Provincial Legal Officer to represent the LGUs sans deputation by the OSG which technicality the Court brushed aside to resolve substantive matters.
Citing Kilusang Magbubukid ng Pilipinas vs. Aurora Pacific Economic Zone and Freeport Authority, G.R. No. 198688 (November 24, 2020), the Supreme Court held that Local Government Units are not imperium in imperio; that they are not sovereign within the State. They remain under the President’s supervision, coordinating with national government on project implementations and financial and technical assistance. Citing the landmark case of Magtajas vs. Pryce Properties, G.R. No. 111097 (July 20, 1994), the Supreme Court also held that LGUs cannot exercise their power contrary to the Constitution, Republic Act No. 7160, or any other existing statute enacted by Congress since they “merely derive their power from the State legislature; as such, they cannot regulate activities already allowed by statute.”
Hence, on the first substantive issue whether the subject Ordinances and Resolutions are ultra vires, the Supreme Court held that while the exploration, development and utilization of mineral resources necessarily affects the environment, “with regard to addressing environmental concerns relevant to mining activities, the local government unit’s exercise of its powers under the Local Government Code must be consistent with the provisions of Republic Act No. 7942, a later legislative enactment specially regulating mining.”
The Supreme Court also held that “neither are the subject Ordinances and Resolutions a valid exercise of police power for being overly broad. It is the reasonableness of the measure, not its effectiveness to meet the objectives of environmental protection, which bears on its constitutionality. She expresses that the best interests of its constituents may be upheld by the province’s rigor in evaluating and approving respondent’s mining activities.”
Parenthetically, the Court also held that ordinances and resolutions of LGUs cannot be considered as falling under Section 19 (d) of Republic Act No. 7942 as among those areas closed to mining, to wit: “areas expressly prohibited by law”, as the power to enact laws is primarily lodged with the legislature which is generally prohibited from delegating its legislative functions and duties and relieving itself rom its mandate under the Constitution. The Court further held that local ordinances, on the other hand, are passed pursuant to delegated authority coming from Congress, and are subservient to laws. The Court further held that had Congress intended to include local ordinances which may prohibit areas from mining, it should have expressly so stated in Republic Act No. 7942.
Finally, the Supreme Court outlined to numerous safeguards under the Mining Act of 1995, to wit:
“Republic Act No. 7942 and its 2010 Revised Implementing Rules contain specific provisions to ensure safety and environment protection in mining operations. Mining permits and agreements contain a stipulation that mining operations conform with Republic Act No. 7942 and its 2010 Revised Implementing Rules and Regulations and incorporate such terms and conditions on industrial safety and anti-pollution measures and restoration and/or protection of the environment.
All contractors and permittees must give due and equal emphasis to environmental considerations, as well as health and safety concerns. They are required to submit an environmental work program even during the exploration stage, prepare the environmental impact statement as basis for the issuance of the environmental protection and enhancement program, as monitored by the DENR Mines and Geosciences Bureau.
x x x x x x x x x
On the other hand, the environmental protection and enhancement program ‘sets out the environmental protection, enhancement and rehabilitation commitments for the life-of-mine/exploration period and extend to the completion of rehabilitation of disturbed land in a technically and environmentally competent manner.’
The DENR issues an environmental compliance certificate after an exhaustive assessment of the projected environmental impacts. The environmental compliance certificate outlines the conditions under which the activity or project with ecological impact can be undertaken.
Compliance with all the requirements of environmental protection is monitored by a multi-partite monitoring team composed of ‘representatives of the proponent and of stakeholder groups, including representatives from concerned [local government units], locally accredited [non-governmental organizations/people’s organizations], the community, concerned [Environmental Management Bureau’s] Regional Office, relevant government agencies, and other sectors that may be identified during the negotiations.’ The team submits a semi-annual monitoring report within January and July of each year.
Republic Act No. 7942 requires strict compliance by all contractors and permittees with DENR Administrative Order No. 2000-98 on Mine Safety and Health Standards, which provides rules for the safe and sanitary upkeep of mining operations and waste-free and efficient mine development. The regional director has exclusive jurisdiction over the safety inspection of all installations, surface or underground, in mining operations; and to require the contractor to remedy any practice connected with mining or quarrying operations, which is not in accordance with safety and anti-pollution laws and regulations.
In case of imminent danger to life or property, the mines regional director may summarily suspend the mining or quarrying operations until the danger is removed, or appropriate measures are taken by the contractor or permittee.
The contractors’ /permittees’ obligation continue even after the termination of the mining operations. Republic Act No. 7942 also requires contractors and permittees to rehabilitate the excavated, mined-out, tailings covered and disturbed areas to the condition of environmental safety.
Failure of the contractor/permittee to comply with any of the requirements provided in Republic Act No. 7942 or its 2010 Revised Implementing Rules, without a valid reason, as well as violation of the terms and conditions of the permit or agreement, may cause the suspension or cancellation of any permit or agreement. Also, material falsehoods in the statements made in the exploration permit, mining agreement and financial or technical assistance agreement are grounds for revocation and termination of the permit or agreement.
In sum, Republic Act No. 7942 already provides stringent measures to safeguard the environment. Local government units, in the exercise of their autonomy, cannot disregard Republic Act No. 7942 and completely ban altogether all large-scale mining activities within their jurisdiction. What the national legislature expressly allows, the local government units may not disallow by ordinance or resolution. On the other hand, local government units must actively participate and coordinate with the DENR in the full enforcement of the law within their locality. With regard to the requirement of prior informed consent under the Republic Act No. 7160 in relation to Republic Act No. 7942, local governments have the authority to evaluate each application for a mining project to be conducted within their area, express their concerns or objections thereto, and/or withhold their approval, if these concerns are not addressed.”