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Class 1.

Land Ownership in the Philippines ISSUES:


1. Whether or not the Philippine Mining Act is unconstitutional
 La BugalB’laan vs. Ramos, G.R. No. 127882, for allowing fully foreign-owned corporations to exploit the
Philippine mineral resources.
January 27,2004, 421 SCRA 148, 184-193 (2004)
2. Whether or not the FTAA between the government and
The constitutional provision allowing the President to enter into WMCP is a ―service contract‖ that permits fully foreign owned
FTAA is a exception to the rule that participation in the nation’s companies to exploit the Philippine mineral resources.
natural resources is reserved exclusively to Filipinos. Provision must HELD:
be construed strictly against their enjoyment by non-Filipinos.
First Issue: RA 7942 is Unconstitutional
FACTS: RA 7942 (The Philippine Mining Act) took effect on April 9, 1995.
Before the effectivity of RA 7942, or on March 30, 1995, the President RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for
signed a Financial and Technical Assistance Agreement (FTAA) with permitting fully foreign owned corporations to exploit the Philippine natural
WMCP, a corporation organized under Philippine laws, covering close to resources.
100,000 hectares of land in South Cotabato, Sultan Kudarat, Davao del
Sur and North Cotabato. On August 15, 1995, the Environment Secretary Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine
Victor Ramos issued DENR Administrative Order 95-23, which was later which states that ―All lands of the public domain, waters, minerals, coal,
repealed by DENR Administrative Order 96-40, adopted on December 20, petroleum, and other minerals, coal, petroleum, and other mineral oils, all
1996. forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State.‖ The same
Petitioners prayed that RA 7942, its implementing rules, and the FTAA section also states that, ―the exploration and development and utilization
between the government and WMCP be declared unconstitutional on of natural resources shall be under the full control and supervision of the
ground that they allow fully foreign owned corporations like WMCP to State.
exploit, explore and develop Philippine mineral resources in contravention
of Article XII Section 2 paragraphs 2 and 4 of the Charter. Conspicuously absent in Section 2 is the provision in the 1935 and 1973
Constitution authorizing the State to grant licenses, concessions, or leases
In January 2001, WMC - a publicly listed Australian mining and exploration for the exploration, exploitation, development, or utilization of natural
company - sold its whole stake in WMCP to Sagittarius Mines, 60% of resources. By such omission, the utilization of inalienable lands of the
which is owned by Filipinos while 40% of which is owned by Indophil public domain through license, concession or lease is no longer allowed
Resources, an Australian company. DENR approved the transfer and under the 1987 Constitution.
registration of the FTAA in Sagittarius‘ name but Lepanto Consolidated
assailed the same. The latter case is still pending before the Court of Under the concession system, the concessionaire makes a direct equity
Appeals. investment for the purpose of exploiting a particular natural resource within
a given area. The concession amounts to complete control by the
EO 279, issued by former President Aquino on July 25, 1987, authorizes concessionaire over the country‘s natural resource, for it is given exclusive
the DENR to accept, consider and evaluate proposals from foreign owned and plenary rights to exploit a particular resource at the point of extraction.
corporations or foreign investors for contracts or agreements involving
wither technical or financial assistance for large scale exploration, The 1987 Constitution, moreover, has deleted the phrase ―management
development and utilization of minerals which upon appropriate or other forms of assistance‖ in the 1973 Charter. The present Constitution
recommendation of the (DENR) Secretary, the President may execute with now allows only ―technical and financial assistance.‖ The management
the foreign proponent. WMCP likewise contended that the annulment of and the operation of the mining activities by foreign contractors, the primary
the FTAA would violate a treaty between the Philippines and Australia feature of the service contracts was precisely the evil the drafters of the
which provides for the protection of Australian investments. 1987 Constitution sought to avoid.
The constitutional provision allowing the President to enter into FTAAs is technology, management, and personnel necessary for the Mining
an exception to the rule that participation in the nation‘s natural resources Operations.
is reserved exclusively to Filipinos. Accordingly, such provision must be
construed strictly against their enjoyment by non-Filipinos. Therefore, RA These contractual stipulations and related provisions in the FTAA taken
7942 is invalid insofar as the said act authorizes service contracts. together, grant WMCP beneficial ownership over natural resources that
Although the statute employs the phrase ―financial and technical properly belong to the State and are intended for the benefit of its citizens.
agreements‖ in accordance with the 1987 Constitution, its pertinent These stipulations are abhorrent to the 1987 Constitution. They are
provisions actually treat these agreements as service contracts that grant precisely the vices that the fundamental law seeks to avoid, the evils that
beneficial ownership to foreign contractors contrary to the fundamental it aims to suppress. Consequently, the contract from which they spring
law. must be struck down.

The underlying assumption in the provisions of the law is that the foreign
 Cruz vs. Secretary of Environment and Energy
contractor manages the mineral resources just like the foreign contractor
in a service contract. By allowing foreign contractors to manage or operate Resources, G.R. 135385, December 6, 2000.
all the aspects of the mining operation, RA 7942 has, in effect, conveyed
beneficial ownership over the nation‘s mineral resources to these FACTS:
contractors, leaving the State with nothing but bare title thereto. Petitioners Isagani Cruz and Cesar Europa filed a suit for prohibition
and mandamus as citizens and taxpayers, assailing the constitutionality
The same provisions, whether by design or inadvertence, permit a of certain provisions of Republic Act No. 8371, otherwise known as the
circumvention of the constitutionally ordained 60-40% capitalization
requirement for corporations or associations engaged in the exploitation, Indigenous People’s Rights Act of 1997 (IPRA) and its implementing
development and utilization of Philippine natural resources. rules and regulations (IRR). The petitioners assail certain provisions of
the IPRA and its IRR on the ground that these amount to an unlawful
When parts of a statute are so mutually dependent and connected as deprivation of the State’s ownership over lands of the public domain as
conditions, considerations, inducements or compensations for each other well as minerals and other natural resources therein, in violation of the
as to warrant a belief that the legislature intended them as a whole, then if
some parts are unconstitutional, all provisions that are thus dependent, regalian doctrine embodied in section 2, Article XII of the Constitution.
conditional or connected, must fail with them.
ISSUE:
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations Do the provisions of IPRA contravene the Constitution?
are limited only to merely technical or financial assistance to the State for
large scale exploration, development and utilization of minerals, petroleum
HELD:
and other mineral oils.
No, the provisions of IPRA do not contravene the Constitution.
Second Issue: RP Government-WMCP FTAA is a Service Contract Examining the IPRA, there is nothing in the law that grants to the
ICCs/IPs ownership over the natural resources within their ancestral
The FTAA between he WMCP and the Philippine government is likewise domain. Ownership over the natural resources in the ancestral domains
unconstitutional since the agreement itself is a service contract.
remains with the State and the rights granted by the IPRA to the
Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, ICCs/IPs over the natural resources in their ancestral domains merely
the exclusive right to explore, exploit, utilize and dispose of all minerals gives them, as owners and occupants of the land on which the resources
and by-products that may be produced from the contract area.‖ Section 1.2 are found, the right to the small scale utilization of these resources, and
of the same agreement provides that EMCP shall provide all financing, at the same time, a priority in their large scale development and
exploitation.
Additionally, ancestral lands and ancestral domains are not part of the  Spanish Law: "Where such possessors shall not be able to produce
lands of the public domain. They are private lands and belong to the title deeds, it shall be sufficient if they shall show that ancient
ICCs/IPs by native title, which is a concept of private land title that possession, as a valid title by prescription." For cultivated land, 20
years, uninterrupted, is enough. For uncultivated, 30.
existed irrespective of any royal grant from the State. However, the
right of ownership and possession by the ICCs/IPs of their ancestral  Applicant's possession was not unlawful, and no attempt at any
domains is a limited form of ownership and does not include the right such proceedings against him or his father ever was made.
to alienate the same.
 Every native who had not a paper title is not a trespasser.

 Carino vs. Insular Government, G.R. No. 2869,  There must be a presumption against the government when a
private individual claims property as his or her own. It went so far
March 25, 1907; 212 US 449. as to say that the lands will be deemed private absent contrary
proof.
 Sec. 2 Art. XII 1987 Constitution

FACTS:
 Carino is an Igorot of the Province of Benguet, where the land lies Points to ponder:
filed for writ of error because the CFI and SC dismissed his petition
for application 1. What came first: sovereignty or property rights?
2. What is the significance of the dates in the land
 For more than 50 years before the Treaty of Paris, April 11, 1899, he registration laws?
and his ancestors had held the land as recognized owners by the
Igorots. (grandfather maintain fences for holding cattle>father had
cultivated parts and used parts for pasturing cattle>he used it for
pasture)

 1893-1894 & 1896-1897: he made an application but with no avail

 1901: petition alleging ownership under the mortgage law and the
lands were registered to him but process only established
possessory title

 Even if the applicant have title, he cannot have it registered,


because the Philippine Commission's Act No. 926, of 1903, excepts
the Province of Benguet among others from its operation

ISSUE: W/N Carino has ownership and is entitled to registration.


HELD: YES. Petition Granted.
 Land was not registered, and therefore became, if it was not always,
public land.

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