History of the Department of Environment & Natural Resources

Under PD 463, The Mineral Resources Development Decree of 1974, which took effect on May 17, 1974, applications for lease of mining claims were required to be filed with the Director of the Bureau of Mines, within two (2) days from the date of their recording. Sec. 40 of PD 463 provided that if no adverse claim was filed within (15) days after the first date of publication, it was conclusively presumed that no adverse claim existed and thereafter no objection from third parties to the grant of the lease could be heard, except protests pending at the time of publication. The Secretary would then approve and issue the corresponding mining lease contract. In case of any protest or adverse claim relating to any mining claim and lease application, Secs. 48 and 50 of PD 463 prescribed the procedure. Under Sec. 48, the protest should be filed with the Bureau of Mines. Under Sec. 50, any party not satisfied with the decision or order of the Director could, within five (5) days from receipt of the decision or order, appeal to the Secretary. The decisions of the Secretary were likewise appealable within five (5) days from receipts by the affected party to the President of the Philippines whose decision shall be final and executory. PD 463 was, however, silent as to who was authorized to cancel the mineral agreements.

On July 10, 1987, President Corazon C. Aquino issued Executive Order No. (EO) 211. Under Sec. 2 of EO 211, the processing, evaluation, and approval of all mining applications, declarations of locations, operating agreements, and service contracts were governed by PD 463, as amended. EO 211 likewise did not contain any provision on the authority to cancel operating agreements and service contracts.

On July 25, 1987, EO 279 was issued by President Aquino. It authorized the DENR Secretary to negotiate and enter into, for and in behalf of the Government, joint venture, co-production, or production-sharing agreements for the exploration, development, and utilization of mineral resources with any Filipino citizen, corporation, or association, at least 60% of whose capital was owned by Filipino citizens. The contract or agreement was subject to the approval of the President. With respect to contracts of foreign-owned corporations or foreign investors involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, the DENR Secretary could recommend approval of said contracts to the President. EO 279 provided that PD 463 and its implementing rules and regulations, which were not inconsistent with EO 279, continued in force and effect. Again, EO 279 was silent on the authority to cancel mineral agreements.

RA 7942, The Philippine Mining Act of 1995 enacted on March 3, 1995, repealed the provisions of PD 463 inconsistent with RA 7942. Unlike PD 463, where the application was filed with the Bureau of Mines Director, the applications for mineral agreements are now required to be filed with the Regional Director as provided by Sec. 29 of RA 7942. The proper filing gave the proponent the prior right to be approved by the Secretary and thereafter to be submitted to the President. The President shall provide a list to Congress of every approved mineral agreement within 30 days from its approval by the Secretary. Again, RA 7942 is silent on who has authority to cancel the agreement.

Compared to PD 463 where disputes were decided by the Bureau of Mines Director whose decisions were appealable to the DENR Secretary and then to the President, RA 7942 now provides for the creation of quasi-judicial bodies (POA and MAB) that would have jurisdiction over conflicts arising from the applications and mineral agreements. Secs. 77, 78, and 79 lay down the procedure, thus:
SEC. 77. Panel of Arbitrators.There shall be a panel of arbitrators in the regional office of the Department composed of three (3) members, two (2) of whom must be members of the Philippine Bar in good standing and one [1] licensed mining engineer or a professional in a related field, and duly designated by the Secretary as recommended by the Mines and Geosciences Bureau Director. Those designated as members of the panel shall serve as such in addition to their work in the Department without receiving any additional compensation. As much as practicable, said members shall come from the different bureaus of the Department in the region. The presiding officer thereof shall be selected by the drawing of lots. His tenure as presiding officer shall be on a yearly basis. The members of the panel shall perform their duties and obligations in hearing and deciding cases until their designation is withdrawn or revoked by the Secretary. Within thirty (30) working days, after the submission of the case by the parties for decision, the panel shall have exclusive and original jurisdiction to hear and decide on the following:

(a) Disputes involving rights to mining areas;
(b) Disputes involving mineral agreements or permits;
(c) Disputes involving surface owners, occupants and claimholders/concessionaires; and
(d) Disputes pending before the Bureau and the Department at the date of the effectivity of this Act.

SEC. 78. Appellate Jurisdiction.The decision or order of the panel of arbitrators may be appealed by the party not satisfied thereto to the Mines Adjudication Board within fifteen (15) days from receipt thereof which must decide the case within thirty (30) days from submission thereof for decision.

SEC. 79. Mines Adjudication Board.The Mines Adjudication Board shall be composed of three (3) members. The Secretary shall be the chairman with the Director of the Mines and Geosciences Bureau and the Undersecretary for Operations of the Department as members thereof.

x x x x

A petition for review by certiorari and question of law may be filed by the aggrieved party with the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.

RA 7942 is also silent as to who is empowered to cancel existing lease contracts and mineral agreements.

Meanwhile, in Southeast Mindanao Gold Mining Corp. v. MAB, the Supreme Court explained that the decision of the MAB can first be appealed, via a petition for review, to the CA before elevating the case to the Supreme Court.

After a scrutiny of the provisions of PD 463, EO 211, EO 279, RA 7942 and its implementing rules and regulations, executive issuances, and case law, the Supreme Court rules that the DENR Secretary, not the POA, has the jurisdiction to cancel existing mineral lease contracts or mineral agreements based on the following reasons:

1. The power of the DENR Secretary to cancel mineral agreements emanates from his administrative authority, supervision, management, and control over mineral resources under Chapter I, Title XIV of Book IV of the Revised Administrative Code of 1987, viz:

General Provisions

Section 1. Declaration of Policy.(1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as well as the judicious disposition, utilization, management, renewal and conservation of the countrys forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources x x x

Sec. 2. Mandate.(1) The Department of Environment and Natural Resources shall be primarily responsible for the implementation of the foregoing policy. (2) It shall, subject to law and higher authority, be in charge of carrying out the States constitutional mandate to control and supervise the exploration, development, utilization, and conservation of the countrys natural resources.
x x x x

Sec. 4. Powers and Functions.The Department shall: x x x x

(2) Formulate, implement and supervise the implementation of the governments policies, plans, and programs pertaining to the management, conservation, development, use and replenishment of the countrys natural resources;
x x x x
(4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral resources x x x
x x x x
(12) Regulate the development, disposition, extraction, exploration and use of the countrys forest, land, water and mineral resources;
(13) Assume responsibility for the assessment, development, protection, licensing and regulation as provided for by law, where applicable, of all energy and natural resources; the regulation and monitoring of service contractors, licensees, lessees, and permit for the extraction, exploration, development and use of natural resources products; x x x
x x x x
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain x x x

Chapter 2
The Department Proper

x x x x

Sec. 8. The Secretary.The Secretary shall: x x x x

(3) Promulgate rules, regulations and other issuances necessary in carrying out the Departments mandate, objectives, policies, plans, programs and projects.
(4) Exercise supervision and control over all functions and activities of the Department;
(5) Delegate authority for the performance of any administrative or substantive function to subordinate officials of the Department x x x.

It is the DENR, through the Secretary, that manages, supervises, and regulates the use and development of all mineral resources of the country. It has exclusive jurisdiction over the management of all lands of public domain, which covers mineral resources and deposits from said lands. It has the power to oversee, supervise, and police our natural resources which include mineral resources. Derived from the broad and explicit powers of the DENR and its Secretary under the Administrative Code of 1987 is the power to approve mineral agreements and necessarily to cancel or cause to cancel said agreements. (G.R. No. 169080; December 19, 2007)