::,

.;

REPUBLIC OF THE PHILIPPINES ...... "' ...

SUPREME COURT ZIJI3 JU,'~ /9 p;; 2: ::7 JviANILA

REPRESENTATIVE ANA THERESIA 1 fONTIVEROS­BARAQUEL of the Party List AKBAYAN, et al.,

Petitioners.

SLJPREklL: C:C!! ~~-n C"- ··;··: -MARIA LCUI~U:;.c. ;:· /-... _ : ...

-versus- G.R. Nos. 181702 & 181703

SECRETARY 01:..' THE DEPARTMEl'lT OF ENVIRONMENT AND NATURAL RESOURCES (DENR) et al.,

Respondents. X-----------------------------------------------------------------------------------------X

lVlOTJON FOR INTERVENTION

The Chamber of !\!fines of the Philippines, Inc. (the "Chamber"), by counsel, respectfully slates:

1. The Chamber 1s an incorporated association of Ilii11lng

companies having an interest in the rauonal administration of the Government's mining laws and rules, and in the development and modernization of the industry. Its membership also includes entities engaged in the exploration, extraction and processing of minerals into other products, oil exploration, cement, and other companies.

2. In La Bugal-B 'La an Tribal Association, Inc., eta!., v. Ramos, et al., 1 this Honorable Court allowed the Chamber to intervene and to participate in the proceedings therein, on the basis of the foregoing and also considering that the Court's decision in La Bugal-B 'Laan impacted upou the Chamber's interests, especially in ensuring that its members have adequate freedom to contract with inte1national mining companies for their mutual benefit, \vherc the size and character of mining operations are beyond the local companies' resources.

1 445 SCRA 1 (2004).

1-

2

3. The two petitions in this suit seek to overturn the Court's ruling in La Bugal-B 'laan and to invalidate Sections 80 and 81 of Republic Act No. 7942 (the "Mining Act"), with respect to FTAAs and MPSAs, or the Mining Act itself, as well as DENR Administrative Order Nos. 40, Series of 1996 and 2007-12 issued pursuant thereto.

4. Thus, as the Chamber has pointed out and this Honorable Court recognized in La Bugal-B 'Laan, the legal and potential economic interests of its members will directly suffer if the Petitions are granted and rulings in the December 1, 2004 and February 1, 2005 Resolutions in La Bugal-B 'Laan are overturned. The Constitution and the mining laws give the Chamber's members the freedom to organize Filipino-foreign joint ventures for large­scale undertakings that are not restricted to the 60/40 general limitation. Tf the Petition in G.R. No. 181702, which seeks the nullification of the provisions of the Mining Act with respect to financial or technical assistance agreements, is granted, that freedom will be taken away.

On the other hand, if the petition in G.R. No. 181703, which assails the granting of mineral production sharing agreements, and which prays f(w the nullification of the entire I'v1ining Act, is granted, even that class of mineral agreements reserved for J:<ilipinos or for corporations at least 60o/o of the capital of which is Filipino-owned, will no longer be available. Thus, even Filipinos and Filipino-owned corporations engaged or desiring to engage in mining under MPSAs stand to be adversely affected by this petition, if granted.

5. The Chamber desires to present for the Honorable Court's consideration information which will hopefully aiel it in the resolution of these petitions and to be heard in oral argument on this matter sometime in August 2013 as the Chamber's counsel, Vicente V. Mendoza, who will argue, has to leave for abroad and will not be back until the end of July.

6. A copy of the Chamber's Comment in Intervention is attached to this Jv1otion.

PRAYER

WHEREFORE, it is respectfully prayed that this Motion to Intervene be GRANTED, that the attached Comment in Intervention be ADMITTED

' and that the movant Chamber be HEARD in oral argument any day in August 2013 at the convenience of this Honorable Court.

Other just and equitable reliefs are also prayed for.

Quezon City for Manila.

June 14, 2013.

q~J~~~L Co-Counsel for Intervenor Chamber

of Mines of the Philippines IBP No. 00020 ; ____ _

Lifetime Membership

PTR No. 8426647 ; 06.,..13?13 ,

Quezon City

Roll No. ..18208 ----'--"-"=--------

1v1CLE Exen1pt G/F Judge IsaacS. Puna, Jr. Memorial Foundation Bldg.

30 Holy Spirit Drive, Don Antonio heights

Commonwealth Avenue Quezon City

Copies furnished:

3

~~~z;f~ VICENTE V. MENDOZA

Co-Counsel j(Jr Intervenor Chamber of Mines of the

Philippines IBP No. 834t132; 01-02-13;

Quezon City PTR No. 7547577; 01-18-13;

Quezon City Roll No. 13196 I'viCLE Exen1pt

No.3 Aster, VVest Fairview, Quezon City

Attys. Augusto B. Gatn1aytan, Antoinette G. Royo Mary Grace Ellen S. Villanueva, Christine Antoniette 0. Ramos Minerva A. Quintela and Modesto F. Onia Legal Rights & Natural Resources Center, Inc. Counsel for Petitioners in G.R. Nos. 181702 & 181703 24-A Malingap St., Teachers' Village 1101 Quezon City

The Solicitor General ASG Magtanggol M. Castro Associate Solicitor Jessica G. Gumop-As-Tirol Office of the Solicitor General 134 Amorsolo St., Legaspi Village 1229 Makati City

Atty. Reezann l(eith E. Ramos CVC Law Center Counsel for Sagittarius Mines, Inc. 11th Avenue corner 39th Street Bonifacio Triangle Bonifacio Global City 1634

4

Mr. Lauriano A. Barrios Attorney-in-Fact of Private Respondents Hallmark Mining Corporation and Austral-Asia Mining Corporation #2255 Chino Roces Avenue, Makati City

SyCip Salazar Hernandez and Gatmaitan . Counsel for QNI Philippines, Inc. 4th Fir., SSHG Law Center 105 Paseo de Roxas, Legaspi Village 1229 Makati City

- i . -~~

Attys. Nelson T. Antolin and .Joan De Venecia SyCip Salazar Hernandez & GAtmaitan Counsel for Respondent Oceana Gold (Philippines), Inc. 4th Fir., SyCip Law Center . . JU:l -~ 9 2013 ; 105 Paseo de Roxas / f L/-~~ . ~. ·_ .. ..... / 1226 Makati City . , . . .J

- _ .. ,.,. ''-'~····· -· ... - ..... -.,,

l-Ion. Paquito N. Ochoa, Jr. Executive Secretary Office of the President Malacafiang, Manila

l-Ion. Secretary Department of Environment and Natural Resources Visayas A venue, Diliman 11 04 Quezon City

Atty. Florentino P. Feliciano JUN 1 g 2013 Counsel for Respondent Oceana Gold (Philippines), Inc. 7th Fir., SyCipLaw Center 1 05 Paseo de Roxas 1226 Makati City

Atty. Ray Anthony 0. Pinoy Atty. Arveen N. Agunday Castillo Laman Tan Pantaleon and San Jose

}li~~·-• ·~ •' '•o<' • L • "L. "•• <' • '

Counsel for TVI Resources & Development Philippines, Inc. 2nd- 5111 Firs., The Valero Tower Valero Street, Salcedo Village Makati City

Attys. Juanito I. Velasco, Jr., Joven Siazon Lorenzo and Maria Elizabeth H. Fruelda Lazaro Law Firm Counsel for Asiaticus Management Corporation Suite 2202-A East Tower

Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig City

5

EXPLANATION FOR SERVICE BY REGISTERED MAlL

Due to time constraints, heavy traffic conditions, distances involved and the absence of adequate messengerial services, this pleading shall be served by registered mail.

--C?~zt~ VICENTE V.l\1ENDOZA

VERIFICATION

I, BENJAMIN PHILIP G. ROMUALDEZ, of legal age, and with office address at 7111

Floor Universal Reinsurance Building, Paseo de Roxas, Makati City, having been duly swom, hereby depose and state:

1. I am the President of the Chamber of Mines (the "Chamber"), one of the respondents in the. above-captioned case.

2. As shown by the Secretary's Certificate attached hereto as Attachment A, I have been authorized to cause the preparation and filing ofthe foregoing Motion for Intervention and to execute the verification therein, for and on behalf of the Chamber.

3. I have caused the preparation of the foregoing Motion for Intervention.

4. I have read the foregoing Motion for Intervention, the factual allegations of which are true and correct of my personal knowledge and/or based on authentic records in my or the Chamber's possession.

/fJ11J/ UENJAMIN PHILIP G. ROMUALHEZ

REPUBLIC OF THE PHILIPPINES ) CITY OF _QAUJW.JIYfi\JG .JI'J ) S.S.

Before me, a notary public in and for the city named above, personally appeared BENJAMIN PHILIP G. ROMUALDEZ, with Passport No. EA009558 issued on March 2, 2010 at DFA­Manila, who was identified by me through competent evidence of identity to be the same person who presented the foregoing instrument and signed the instrument in my presence, and who took an oath before me as to such instrument.

Witness my hand and seiJUtls l] d1l}1~June 20 13.

Doc. No. 141-Page No. 31 BookNo. t Series of 20 13.

• . ~· . l

!·:,-·--:

lc,~, '~·

SECRETARY'S CERTIFICATE

Room 809 Orligas Building, Orligas Avenue Pasig Cily 1605 Phiti.,l'illes

Tel: Nos.: (632) 635-4123to 24; 635-4~159 Telefax: (632) 635-4160

E-mail: !iQ.ffip@pldldsllJ~ Wbbsile: www.charnberofmines.com.ph

I, GASPAR R ANDRES, JR., Filipino, of legal age, married, with office address at Rm. 809 Ortigas Building, Ortigas Avenue, Pasig City 1605, Philippines, after having been duly sworn in accordance with law, hereby depose and say that:

1. I am the duly elected Corporate Secretary of THE CHAMBER OF MINES OF THE PHILIPPINES (hereinafter referred to as the "Chamber"), a non-protit corporation existing and organized under and by virtue of the laws of the Philippines and duly registered with the Securities and Exchange Commission;

2. At a Special Board of Directors' meeting of the Chamber held on May 17, 20B at the Benguet Corporation Boardroom, 7lhflr. Universal Reinsurance Building, Legaspi Village, Makati City, Philippines, at which meeting a quomm was present, the following resolution was unanimously passed and approved, to wit:

RESOLVED, that the Board ofDirectors does hereby authmize the Chamber of Mines of the Philippines and its President, Benjamin Philip G Romualdez, to intervene as a party respondent in the case of Ana Theresiaflontiveros-Baraquel, et a/. vs. Secretary of the Department of Environment and Natural Resources, et a/., docketed as SC GR Nos. 181702 and 181703 and to cause the preparation and filing of a Motion for Intervention and of a Comment In Intervention as well as other pleadings that may be required, advisable or necessary and to execute the verification and/or certification therein, for and on behalf of the Chamber, as well as to sign, execute and deliver any and all documents, and to perform any and all acts necessaty and proper, for purposes of such intervention, including but not limited to engaging the services of outside counsel and authmizing such counsel to sign, verify, and execute, any and all pleadings, motions, certifications or petitions and to participate in the oral argument and any other hearing or proceedings in connection with such intervention.

RESOLVED, FURTHER, that the Board of Directors approve and ratify any and all acts and deeds already performed and executed by the Chamber of Mines, its President, and its intemal and external legal counsels in relation and \vith respect to such intervention.

3. I hereby certify that the foregoing resolutions are in fhll force and effect and that they have not been revoked, amended or cancelled.

IN \VITNESS \VHEREOF, I have hereunto set my handJ!M'l, ll ~IJ) :if June 2013, at Makati City, Philippines.

SUBSCRIBED AND SWORN to before me on the date and place above­mentioned, affiant exhibiting his (Government-Issued Proof of ldentijication)Non­Professional Driver's License# N11-64-031913 issued on Nov. 14, 2008 at LTO. Q.C.

Doc. No. 3-liZ Page No. ; BookNo. ~/ Series of2013. f

ATfY, VTRGI 0 R. BATALLA NOTARY PUB 1.. FOR M.;KATI CITY

APPOINT · ENT NO 1'!1- 35 UNTIL •. Cf:r,~BER::, 1,201• R-,ILL .F ,.;!"lrJRN~Y «uJ•II

MCLE •21115• iBP N J - LIFETIMe MEMBEf\

PT ~0. 3t:t: -4329 JAN. 2. 2013 .XEClll'IVE 8 1.lJG CENTER ~ Ti AVf COR JUPITER S'J

AFFIDAVIT OF SERVICE

I, Leonard V. Cotoner, Filipino, of legal age, under oath, hereby depose and state:

On June 19,2013, I served copies of the following pleading:

Motion fot· Intervention with Attached Comment in Intet·vention

in the Supreme Comt's G.R. Nos. 181702 & 181703, entitled "REPRESENTATIVE ANA THERESIA HONTIVEROS-BARAQUEL OF THE PARTY LIST AKBAYAN, ET AL., VS. SECRETARY OF THE DEPARTMENT OF ENVIRONMEN'r.ANU. NATURAL RESOURCES (DENR) ET AL:" pursuant to Sections 3, 4, 5, 6, 7 and 10 of Rule'J 3~:ofi,h~ rules of Court:

by personal delivery to:

SyCip Salazar Hernandez and Gatmaitan Cmmselfor QNI Philippines, Inc. 4th Floor, SSHG Law Center l 05 Pasco de Roxas, Legaspi Village 1229 Makati City

Attys. Nelson T. Antolin and .Joan De Venecia Comrsel for Respondent Oceana Gold (Philippines), Inc. SyCip Salazar Hemandez & Gatmaitan 4th Floor, SyCipLaw Center 1 05 Paseo de Roxas, 1226 Makati City

Atty. Florentino P. Feliciano Counsel for Respondent Oceana Gold (Philippines), Inc. 7th Floor, SyCipLaw Center 1 05 Pasco de Roxas, 1226 Makati City

by registered mail to:

Attys. Augusto B. Gatmaytan, Antoinette G. Uoyo Mary Grace Ellen S. Villanueva, Christine Autoniette 0. Ramos Minerva A. Quintela and Modesto F. Onia Legal Rights & Natural Resources Center, Inc. Counsel for Petitioners in G.R. Nos. 181702 & 181703 24-A Malingap St., Teacher's Village 1101 Quezon City

The Solicitor General ASG Magtanggol M. Castro Associate Solicitor Jessica G. Gumop-As-Tirol Office of the Solicitor General 134 Amorsolo St., Legaspi Village 1229 Makati City

Atty. Reezann Keith E. Ramos CVC l .. aw Center Counsel for Sagittarius A'iines, Inc. 11th Avenue comer 39th Street Bonifacio Triangle Bonifacio Global City 1634

Mr. Lauriano A. Barrios Attorney-in-Fact of Private Respondents Hallmark Mining Corporation and Austral-Asia Mining Corporation #2255 Chino Roces A venue, Makati City

Hon. Paquino N. Ochoa, Jr. Executive Secretary Office of the President Malacafiang, Manila

Atty. Ray Anthony 0. Pinoy Atty. Arvecn N. Agunday Castillo Laman Tan Pantaleon and San Jose Cou11sel for TV! Resources & Development Philippines, Inc. 2"d -5 111 Floors, The Valero Tower Valero Street, Salcedo Village Makati City

Attys. Juanito I. Velasco, Jr., Joven Siazon Lorenzo and Maria Elizabeth H. Fruelda Lazaro Law Firm Cou11sel for Asiaticus ~fallagement Cmporation Suite 2202-A East Tower Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig City

by depositing copies of the said Motion for Intervention with attached Comment in Intervention on June 19, 2013 in the Makati Central Post Office, as evidenced by Registry Receipt Nos. hereto attached and indicated after the names of the addressees, and with instructions to the postmaster to return the mail to the sender after ten ( 1 0) days if undelivered.

IN WITNESS WHEREOF, I have hereunto signed this affidavit this 19th day of June, 2013 in Makati City.

-ntt-__ Leml;ll~ Cotone1·

REPUBLIC OF THE PHILIPPINES) CITY OF MAKATI )S.S.

Before me, a notary public in and for the city named above, personally appeared:

Driver's License No.

Leonard V. Cotoner N03-08-00819 Oct. 29, 201 0/Makati City

who is personally known to me to be the same person who presented the foregoing instrument and signed the instrument in my presence, and who took an oath before me as to such instnunent.

Witness my hand and seal this 19th day of June, 2013.

Doc No. :J-2.1> ; Page No. ~IJ, ;

Book No. ~1).2.. ; Series of 2013.

2

EMMANUEL C. PARAS Notary, Public tor Milkctl City

Appointment No. M-257 until Dec. 31, 2014 Roll of At~~;me~' N<C). 27102

PTR No. 3670437MC~ I.J1/02J'l3; Makatl City 16P No. 911763; CifU2i1S.; Moakaii Chaptef

SyCiplaw Carder, ·1 05 Pauco de Roxa& MakaU City. 12~6 Metro Manila

PhiUpplnes

REPUBLIC OF THE PHlLlPPlNES SUPREIVIE COUHT

MANILA

En Bane

REPRESENTATIVE ANA THERESTA HONTIVEROS­BARAQUEL of the Party List AKBAYAN, et a1.,

Petitioners.

... '1,..,'.

ZOl3 Ji.J.~.~ 19 r)·,• ,...,_ r--, .. t l L· ,;

-versus- G. R. NOS. 18 1 7 02 & 1 81 7 0 3

SECRETARY OF THE DEPARTMENT OF ENVIRONNIENT AND NATURAL RESOURCES (DENR), et al.,

Respondents. X-----------------------------------------------------------------------------------------X

COl\1l\1ENT IN INTERVENTION

Intervenor Chamber of Mines of the Philippines, by counsel, and by way of comment on the petitions for certiorari and prohibition, respectfully states:

1. Petitioners' contentions in these cases have already been passed upon and disposed of against the petitioners in La Bugal­B 'Laan Tribal Ass 'll v. Ramos. 1

2. This Honorable Court should stand by its prior decision in La Bugal-B 'Laan.

3. \Vhat is an equitable revenue sharing in mining is, considering the separation of powers in the government, a question for the legislative and executive branches of government to decide.

I 445 SCRA 1 (2004).

2

Discussion

I.

Petitioners' arguments in these cases have already been passed upon and disposed of against the petitioners in La Bugal-B'Laan Tribal Ass'n v. Ramos.

A. In G.R. No. 181702, in respect of Section 81 and FTAAs.

1. Petitioners claim that Section 81 of the Mining Act cons6tutes an undue delegation of legislative power because, while Section 81 "provides an additional government share , . . . the term 'among other things' does not provide the sources revenue should be taken from." 2

In La Bugal-B 'laan the Supreme Court ruled:

Governnzent~Y Share in an FTAA Not Consisting Solely of Taxes, Duties and Fees

The law provides no definition of the term among other things, for the reason that Congress deliberately avoided setting unnecessary limitations as to what may constitute compensation to the State for the exploitation and use of mineral resources. But the inclusion of that phrase clearly and unmistakably reveals the legislative intent to have the State collect more than just the usual taxes, duties and fees. Certainly, there is nothing in that phrase - or in the second paragraph of Section 8 l -that would suggest that such phrase should be interpreted as referring only to taxes, duties, fees and the like.

Precisely for that reason, to fulfil the legislative intent behind the inclusion of the phrase among other things in the second paragraph of Section 81, the DENR structured and formulated in DAO 99-56 the said additional government share. Such a share was to consist not of taxes, but of a share in the earnings or cash flows of the mining enterprise. The additional government share was to be paid by the contractor on top of. the basic share, so as to achieve a fifty-fifty sharing- between the

2 Petition for Prohibition and Mandamus in G .R. No. 181702 (hereafter called the "FT AA

Petition"), par.38, p. 11.

3

government and the contractor-- of net benefits from mining. In the Ramos-De Vera paper, the explanation of the three options or formulas 68 -- presented in DAO 99-56 for the computation of the additional government share - serves to debunk the claim that the government's take from an FT AA consists solely of taxes, fees and duties .

. . . [W]hat is quite evident is the fact that the additional government share, as formulated, has nothing to do with taxes -- direct or indirect - or with duties, fees or charges. To repeat, it is over and above the basic government share composed of taxes and duties. Simply put, the additional share may be (a) an amount that will result in a 50-50 sharing of the cumulative present value of the cash flows of the enterprise; (b) an amount equivalent to 25 percent of the additional or excess profits of the enterprise, reckoned against a benchmark return on investments; or (c) an amount that will result in a i1fty-fifty sharing of the cumulative net mining revenue fl"mn the end of the recovery period up to the taxable year in question. The contractor is required to select one of the three options or fonnulae for computing the additional share, an option it will apply to all of its mining operations.

As used above, "net mining revenue" is defined as the gross output from mining operations for a calendar year, less deductible expenses (inclusive of taxes, duties and fees). Such revenue would roughly be equivalent to "taxable income" or income before income tax. Definitely, as compared with, say, calculating the additional government share on the basis of net income (after income tax), the net mining revenue is a better and much more reasonable basis for such computation, as it gives a truer picture of the profitability of the company .

. . . [T]he three options or formulae do not yet take into account the indirect taxes and other financial contributions of mining projects. These indirect taxes and other contributions are real and actual benefits enjoyed by the Filipino people and/or government. Now, if some of the quantifiable items arc taken into account in the computations, the financial modelling would show that the total government share increases to 60 percent or higher- in one instance, as much as 77 percent and even 89 percent - of the net present value of total benefits from the project. As noted in the Ramos-De Vera paper, these results are not at all shabby, considering that the contractor puts

4

in all the capital requirements and assumes all the risks, without the government having to contribute or risk anything.

One last point on the subject. The legislature acted judiciously in not defining the terms among other things and, instead, leaving it to the agencies concerned to devise and develop the various modes of arriving at a reasonable and fair amount for the additional government share. As can be seen frotp DAO 99-56, the agencies concerned did an admirable job of conceiving and developing not just one formula, but three different formulae for aniving at the additional govemment share. Each of these options is quite fair and reasonable; and, as Messrs. Ramos and De Vera stated, other alternatives or schemes for a possible improvement of the fiscal regime for FT AAs are also being studied by the government.

[N]ot locking into a fixed definition of the term among other things will ultimately be more beneficial to the government, as it will have that innate nexibility to adjust to and cope with rapidly changing circumstances, particularly those in the international markets. Such flexibility is especially significant for the govetnment in terms of helping our mining enterprises remain competitive in world markets despite challenging and shifting economic scenarios. 3

2. Petitioners further claim that Section 81 of the Mining Act is unconstitutional because it allows the inequitable sharing of wealth, contrary to Article XII, Section l, par. 1 and Section 2, pars. 1 and 4 of the 1987 Constitution. According to Petitioners, Section 81 "is . . . disadvantageous to the State as it ... limits, in practice and application, government share to taxes, fees and royalties. "4

This point has also been answered already. In La Bugal B 'Laan, it was held:

In connection with the foregoing discussion on the basic and additional government shares, it is pertinent at this juncture to mention the criticism leveled at the second paragraph of Section 81 of RA 7942, quoted earlier. The said proviso has been denounced, because, allegedly, the State's share in FTAAs with foreign contractors has been limited to taxes, fees and

3 445 SCRA, at 162-171. 4 FTAA Petition, pars. 65-66, pp. 18-19.

5

duties only; in effect, the State has been deprived of a share in the after-tax income of the enterprise ....

The law provides no definition of the term among other things, for the reason that Congress deliberately avoided setting unnecessary limitations as to what may constitute compensation to the State for the exploitation and use of mineral resources. But the inclusion of that phrase clearly and unmistakably reveals the legislative intent to have the State collect more than just the usual taxes, duties and fees. Certainly, there is nothing in that phrase - or in the second paragraph of Section 81 -­that would suggest that such phrase should be inteqJreted. as referring only to taxes, duties, fees and the like.

Precisely for that reason, to fulfil the legislative intent ... the DENR structured and formulated in DAO 99-56 the said additional government share .... The additional government share was to be paid by the contractor on top of the basic share, so as to achieve a fifty-fifty sharing- between the government and the contractor- of net benefits from mining ....

[W]hat is quite evident is the fact that the additional government share, as formulated, has nothing to do with taxes - direct or indirect - or with duties, fees or charges. To repeat, it is over and above the basic government share composed of taxes and duties. Simply put, the additional share may be (a) an amount that will result in a 50-50 sharing of the cumulative present value of the cash t1ows of the enterprise; '(b) an amount equivalent to 25 percent of the additional or excess profits of the enterprise, reckoned against a benchmark return on investments; or (c) an amount that will result in a fifty-fifty sharing of the cumulative net mining revenue from the end of the recovery period up to the taxable year in question. The contractor is required to select one of the three options or fommlae for computing the additional share, an option it will apply to all of its mining operations.

As used above, "net mining revenue" is defined as the gross output from mining operations for a calendar year, less deductible expenses (inclusive of taxes, duties and fees). Such revenue would roughly be equivalent to "taxable income" or income before income tax. Definitely, as compared with, say, calculating the additional government share on the basis of nel income (after income tax), the net mining revenue is a bt;tter and much more reasonable basis for such computation, as it gives a truer picture of the profitability of the company.

6

To demonstrate that the three options or fonnulations will operate as intended, Messrs. Ramos and de Vera also performed some quantifications of the government share via a financial modeling of each of the three options discussed above. They found that the government would get the highest share from the option that is based on the net mining revenue, as compared with the other two options, considering only the basic and the additional shares; and that, even though production rate decreases, the government share will actually increase when the net mining revenue and the additional profit-based options are used.

Furthen11ore, it should be noted that the three options or formulae do not yet take into account the indirect taxes and other financial contributions of mining projects. These indirect taxes and other contributions are real and actual benefits enjoyed by the Filipino people and/or government. Now, if some of the quantifiable items are taken into account in the computations, the financial modelling would show that the total government share increases to 60 percent or higher - in one

. instance, as much as 77 percent and even 89 percent - of the net present value of total benefits from the project. As noted in the Ramos-De Vera paper, these results are not at all shabby, considering that the contractor puts in all the capital requirements and assumes all the risks, without the government having to contribute or risk anything.

. . . To remove all doubts then, we hold that the State's share is not limited to taxes, duties and fees only and that the DENR/MGB intemretation of the phrase amm}g other things is correct. Definite~his DENRJMGB interpretation is not only legally soupd, but also greatly advantageous to the government.5 (Emphasis added)

3. Petitioners claim that Section 81 is disadvantageous to the state because Sec. 81 and DAO 07-12 allow the computation of the government share from mining operations based on Net Mining Revenue.6

In La Bugal-B 'Laan, the Supreme Court held that using the net mining revenue as basis for computing the government' share is more reasonable. It is clear that petitioners' contention is nothing but a mere disagreement with that ruling. In the absence of an actual case or

5 445 SCRA, at 162-170. 6 FT AA Petition, par. 74, pp. 22.

7

controversy, such disagreement cannot be the basis of changing a ruling · otherwise already final. In La Bugal-B 'Laan it was held:

The additional government share is computed by using one of three options or schemes presented in DAO 99-56: (1) a fifty-fifty sharing in the cumulative present value of cash flows; (2) the share based on excess profits; and (3) the sharing based on the cumulative net mining revenue. The particular formula to be applied will be selected by the contractor, with a written notice to the government prior to the commencement of the development and construction phase of the mining project.7

As used above, "net mining revenue" is defined as the gross output from mining operations for a calendar year, less deductible expenses (inclusive of taxes, duties and fees). Such revenue would roughly be equivalent to "taxable income" or income before income tax. Definitely, as compared with, say_,_ calculating the additional government share on the basis of net income (after income tax), the net mining revenue is a better and much more reasonable basis for such computation, as it gives a truer picture of the profitability of the comnany.8

(Emphasis added)

4. Petitioners claim that foreign corporations (which are holders of FTAAs) are unduly benefited because they profit from the exploitation of our natural resources while paying only the Basic Government, and, subject to certain conditions, the Additional Government Share.9

As the Supreme Court noted in La Bugal-B 'Laan, however, there are risks assumed by an FT AA contractor and the massive expenditures required of such a contractor:

Our Mineral Resources Not Given Away for Free by RA 7942

[I]f only to disabuse our minds, we should address lhe contention that our mineral resources are effectively given away for free by the law (RA 7942) in general and by Sections 80, 81, 84 and 112 in particular.

7 445 SCRA, at 161. 8 Id., at 169. 9 FTAA Petition, pars. 74-77, pp. 22-23

8

Foreign contractors do not just waltz into town one day and leave the next, taking away mineral resources without paying anything. In order to get at the minerals, they have to invest huge sums of money (tens or hundreds of millions of dollars) in exploration works first. If the exploration proves unsuccessful, all the cash spent thereon will not be returned to the foreign investors; rather, those funds will have been infused into the local economy, to remain there permanently. The benefits therefrom cannot be simply ignored. And assuming that the foreign contractors are successful in finding ore bodies that are viable for commercial exploitation, they do not just pluck out the minerals and cart them off. They have first to build camp sites and roadways; dig mine shafts and connectii1g tunnels; prepare tailing ponds, storage areas and vehicle depots; install their machinery and equipment, generator sets, pumps, water tanks and sewer systems, and so on.

In short, they need to expend a great deal more of their funds for facilities, equipment and supplies, fuel, salaries of local labor and technical staff, and other operating expenses. In the meantime, they also have to pay taxes, duties, fees, and royalties. All told, the exploration, pre-feasibility, feasibility, development and construction phases together add up to as many as eleven years. The contractors have to continually shell out funds for the duration of over a decade, before they can commence commercial production from which they would eventually derive revenues. All that money translates into a lot of "pump-priming" for the local economy.

Granted that the contractors are allowed subsequently to recover their pre-operating expenses, still, that eventuality will happen only after they shall have first put out the cash and fueled the economy. Moreover, in the process of recouping their investments and costs, the foreign contractors do not actually pull out the money from the economy. Rather, they recover or recoup their investments out of actual commercial production by not paying a portion of the basic government share corresponding to national taxes, along with the additional government share, for a period of not more than five years counted from the commencement of commercial production.

It must be noted that there can be no recovery without commencing actual commercial production. ln the meantime that the contractors are recouping costs, they need to continue operating; in order to do so, they have to disburse money to meet their various needs. ln shoJi, money is continually infused into the economy.

9

The foregoing discussion should serve to rid us of the mistaken belief that, since the foreign contractors are allowed to recover their investments and costs, the end result is that they practically get the minerals for free, which leaves the Filipino people none the better for it. 10

Capital and Expertise Provided, Yet All Risks Assum.ed by Contractor

Here, we will repeat what has not been emphasized and appreciated enough: the fact that the contractor in an FTAA provides all the needed capital, technical and managerial expertise, and technology required to undertake the project.

In regard to the WMCP FTAA, the then foreign-owned WMCP as contractor committed, at the very outset, to make capital investments of up to US$50 million in that single mining project. WMCP claims to have already poured in well over P800 million into the country as of February 1998, with more in the pipeline. These resources, valued in the tens or hundreds of millions of dollars, are invested in a mining project that provides no assurance whatsoever that any part of the investment will be ultimately recouped.

At the same time, the contractor must comply with legally imposed environmental standards and the social obligations, for which it also commits to make significant expenditures of funds. Throughout, the contractor assumes all the risks 79 of the business; as mentioned earlier. These risks are indeed very high, considering that the rate of success in exploration is extremely 10\ .. The probability of finding any mineral or petroleum in commercially viable quantities is estimated to be about 1:1 ,000 only. On that slim chance ri9es the contractor's hope of recouping investments and generating profits. And when the contractor has recouped its initial investments in the project, the govemment share increases to sixty percent of net benefits - without the State ever being in peril of incurring costs, expenses and losses.

And even in the worst possible scenario- an absence of commercial quantities of minerals to justify development-- the contractor would already have spent several million pesos for exploration works, before arriving at the point in which it can make that determination and decide to cut its losses. In fact,

10 Id., at 179-181.

10

during the first year alone of the exploration period, the contractor was already committed to spend not less than P24 million. The FTAA therefore clearly ensures benefits for the local economy, courtesy of the contractor.

All in all, this setup cannot be regarded as disadvantageous to the State or the Filipino people; it certainly cannot be said to convey beneficial ownership of our minet:al

i' . 11 resources to 1ore1gn contractors.

5. As to petitioners' assertion that the sharing based on the profits from mining operations is inequitable as it limits the state share primarily to taxes, fees, royalties, with little, if any, based on actual profits,

12 the Court

noted in La Bugal-B 'Laan that, the determination of how much "pro tit" the government should derive from mining operations is a policy matter best left to the wisdom and discretion of the Executive and Legislative branches of government:

In regard to the present Dissenting Opinion of Justice Carpio, which in the main attacks RA 7942 (the Mining Law), DAO 56-99 and the subject FTAA for allegedly limiting "the equitable share of the State from the mining profits of the foreign contractor" (p. 46), suffice it to reiterate that .. the development of the mining industry [is] the responsibility of the political branches of government. And let not this Court interfere inordinately and unnecessarily." The issue of how much "profit" the nation should or could derive from the exploration, development and utilization of the country's mineral resources is a policy matter, over which we "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 povetiy of our people and answer their cry for viable employment opportunities in the country," (pp. 240-241, Resolution dated December 1, 2004). That the aforementioned law, executive issuance and contract had been declared constitutional will not prevent Congress or the President or the parties to the FTAA from amending or modifying them, if indeed, in their opinion they are unwise or wanting in any respect. 13

11 Id., at 190-191. 12 Id., at p. 18 and par. 77, p. 23. 13 Resolution, G.R. No. 12782, February 1, 2005.

11

B. In G.R. No. 181703, in re~pect l~{

Section 80 and AfPSAs.

6. On petitioners' contention that Section 80 of the Mining Act is unconstitutional because it limits the government share to excise taxes, 14

again, suffice it to say that the Supreme Court already held in La Bugal- ' B 'Laan that the determination of how much "profit" the government should derive from the conduct of mining operations is a policy decision that is best left to the wisdom and determination of the Executive and Legislative branches of government.

II.

This Honorable Court should stand by its prior decision in

La Rugal B'Laan.

A. In accordance with Article 8 of the Civil Code, tlze decision in La Bugal B 'Laan is, not only "the law of the case", but the law.

7. Article 8 of the Civil Code declares "judicial decisions applying or interpreting the laws or the Constitution" as "form[ing] a part of the legal system of the Philippines." They thus have the same authority and binding force as law. They bind not only the immediate parties to a case but all those subject to law and all branches of the government. Such is the de<;ision of this Court in La Bugal-B 'Laan. It binds not only the petitioners in that case but others similarly situated like petitioners in these cases. It also binds the government.

8. While this Court may change or abandon its rulings, it may do so only for good reasons. Mere belief that a prior case was wrongly decided is not a ground for ovenuling it. Otherwise, the criticism that the Court is flip-flopping would be hard to resist. More than that the legal system would be subverted and the legitimacy of judicial institutions would be undermined if judicial decisions can so be easily changed.

9. Here, petitioners have shown no compelling reason for abandoning the ruling in La Bugal-B 'Laan, their arguments being mere rehash of those already overruled in La Bugal-B 'Laan. Precedents may be set side where the old has proved to be unworkable, where new rulings have

14 Petition for Prohibition and Mandamus in G.R. No. 181703 (the "MPSA Petition)·, pars. 43 --

46, pp. 11 -- 12.

l2

all but formally overruled the old one, or where conditions have so changed over time that the old rule has become inequitable. None of these. factors justifying re-examination has been shown to be present in these cases.

B. There is not even an actual case or controversy in which to re-litigate constitutional issues.

10. If a re-examination of the ruling in La Bugal-B 'Laan is to be made at all, it must be in an actual case or controversy, with parties with substantial interest to protect, so that the Comt can fully appreciate the impact of the law and the implementing orders on the rights and interests of , parties and thus reach a sound judgment.

11. In this case, there is no actual case or controversy, with real pmties complaining of hurt or injury suffered as a result of the application to them of the law and the DENR regulations and agreements in question. Petitioners merely seek a "facial" determination of the validity of Sections 80 and 81 of the Philippine Mining Act and the orders issued pursuant thereto by the DENR on the basis of their claim that the law and regulations contravene the provisions of the Constitution by allowing the government to receive less than a fair share in the exploration, development and utilization of our natural resources.

12. Petitioners' in G.R. No. 181702 alleged interest is as "lawmakers being member of the House Representatives" as regards thrce 15

of them, and as "taxpayers and as one of many directly affected by the operations undertaken by virtue of the [agreements in question]," as regards , the rest. Such interest is not sufficient to entitle them to sue on constitutional grounds. Lawmakers have standing only where they allege a violation or invasion by the other branches of the government of the prerogatives, powers and privileges of the House to which they belong. 16

Petitioner-congressmen should precisely be concerned that questions, which involve matters of policy and wisdom of legislation, are being raised to this Court instead of Congress.

13. With respect to the rest of the petitioners who claim they are taxpayers, the settled rule is that taxpayers will be allowed standing only if the law they question involves an exercise of the taxing or spending powers of Congress. Thus, it has been held that a taxpayer has standing to question the validity of laws providing for the disbursement of public funds upon the theory that "the expenditure of public funds by an oHicer of the State for the

15 Petitioners Ana Theresia Hontiveros-Baraqucl, Lorenzo R. Tanada III, and Tecloro A. Casino. ' 16

P lzilippine Constitution Ass 'n v. Enriquez, 235 SCRA 5 l6 (1994); Gonzales v. Macaraig, Jr., 191 SCRA452 (1990).

13

purpose of administering an unconstitutional act constitutes a misapplication of such funds." 17 The Philippine Mining Act of 1995 is not an appropriation act, nor do petitioners complain of any illegal expenditure of public funds under it. Indeed, in the United States, federal taxpayer's suits are strictly allowed only where the party bringing the suit can demonstrate (l) a logical link between his status as a taxpayer and the type of legislative enactment he is questioning and (2) a nexus between his status as a taxpayer and "the precise nature of the constitutional infringement he alleges." 18 Pe~itioners have not alleged any illegal disbursement of public funds. Their additional claim that they are residents of municipalities "directly atTected by operations undertaken by virtue of [the agreements in question]" casts them in the category of parties whose complaint is nothing but a generalized grievance shared in common with others. These parties lack the requisite standing to complain against the constitutionality of that against which they are complaining.

14. Nor is this a public action that citizens may bring. Public actions have been recognized "when the question is one of public right and the object of the mandamus is to procure the enforcement of a public , duty." 19 On this ground this Honorable Court recognized the standing of citizens who invoked the "people's right to be informed on matters of public concern" to bring a suit for mandamus to compel the Executive Department to publish various presidential decrees, letters of instruction, general orders, proclamations, executive orders, letters of implementation and administrative order.20 No such public right is invoked by petitioners in this case.

15. The filing of these petitions cannot be justified under the so-called "expanded jurisdiction" of the Supreme Court under Article VIII, Section 1, par. 2 of the present Constitution by alleging grave abuse of discretion by the legislative and executive departments of the government. The jurisdiction of this Court under this provision is still subject to the primordial requirement of Article VIII, Section 5 ( 1) (2) which defines the jurisdiction both original and appellate of this Court in terms of "case".

16. In G.R. No. 181702 petitioners assetied statuses is insufficient to enable them to sue raising in question the constitutionality of Section 81 of the Mining Law. In G.R. No. 181703, they assert no interest at all and it may not properly be presumed that they arc suing in the same capacity to question the constitutional validity of Section 80 of the same law.

17 Pascual v. Secretwy of Public Works, 119 Phil. 331 (1960). See also Uy v. Sandiganbayan, 433 SCRA 424 (2004). 18 Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942,20 L.Ed2d 947 (1968). 19 Severino v. Governor-General, 16 Phil. 366, 378 (1910). 20 Tailada v. Tlll'era, 136 SCRA 33 (1985).

13

purpose of administering an unconstitutional act constitutes a misapplication of such funds." 17 The Philippine Mining Act of 1995 is not an appropriation act, nor do petitioners complain of any illegal expenditure of public funds under it. Indeed, in the United States, federal taxpayer's suits are strictly allowed only where the party bringing the suit can demonstrate ( l) a logical link between his status as a taxpayer and the type of legislative enactment he is questioning and (2) a nexus between his status as a taxpayer and "the precise nature of the constitutional infringement he alleges." 18 Pe~itioners have not alleged any illegal disbursement of public funds. Their additional claim that they are residents of municipalities "directly atTected by operations undertaken by virtue of [the agreements in question]" casts them in the category of parties whose complaint is nothing but a generalized grievance shared in common with others. These parties lack the requisite standing to complain against the constitutionality of that against which they are complaining.

14. Nor is this a public action that citizens may bring. Public actions have been recognized "when the question is one of public right and the object of the mandamus is to procure the enforcement of a public , duty." 19 On this ground this Honorable Court recognized the standing of citizens who invoked the "people's right to be informed on matters of public concern" to bring a suit for mandamus to compel the Executive Department to publish various presidential decrees, letters of instruction, general orders, proclamations, executive orders, letters of implementation and administrative order.20 No such public right is invoked by petitioners in this case.

15. The filing of these petitions cannot be justified under the so-called "expanded jurisdiction" of the Supreme Court under Article VIII, Section 1, par. 2 of the present Constitution by alleging grave abuse of discretion by the legislative and executive departments of the government. The jurisdiction of this Court under this provision is still subject to the primordial requirement of Article VIJI, Section 5 (1) (2) which defines the jurisdiction both original and appellate of this Court in terms of "case".

16. ln G.R. No. 181702 petitioners asserted statuses is insufficient to enable them to sue raising in question the constitutionality of Section 81 of the I\1ining Law. In G.R. No. 181703, they assert no interest at all and it may not properly be presumed that they are suing in the same capacity to question the constitutional validity of Section 80 of the same law.

17 Pascual v. Secretwy of Public Works, 11 <) Phil. 331 (1 %0). Sec also Uy v. Sandiganbayan, 433 SCRA 424 (2004). 18 Flast v. Cohen, 392 U.S. 83, 88 S.Cl. 1942, 20 L.Ed2d 947 (1968). 19 Severino v. Governor-General, 16 Phil. 366, 378 (1910). 20 Tw!ada v. Tu\'era, 136 SCRA 33 (1985).

15

analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by­line analysis of detailed statutes, ... ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided.24

20. In fact, petitioners invoke the following ruling of this Honorable Court:

The constitutionality of a statute cannot, in every instance, be detennined by mere comparison of its provisions with applicable provisions of the Constitution, since the statute may be constitutionally valid as applied to one set of facts and invalid in its application to another.25

They argue that a statute "may be constitutional on its face, but unconstitutional in application."26 Petitioners thus recognize that the petitions at bar indeed are not the cases in which to litigate the constitutional issues they are raising.

21. Intervenor Chamber of Mines of the Philippines' contention is precisely that, since there is no actual case or controversy with actual facts and a record evidence before this Court, the constitutional questions being raised by petitioner have no factual foundation on which judgment may' safely be made.

C. There are no special reasons fur abandoning the decision in La Bugal­B 'Laan. TVhat there zs, to the contrary, is evety reason for maintaining it.

22. Indeed, there are no special, compelling reasons to abandon La Bugal-B 'Laan. To the contrary, the doctrine of stare decisis bids this Court

24 Id. quoting Youngerv. Harris, 401 U.S. 37 (1971). 25

Central Bank Employees Ass 'n v. Banko Sentral ng Pilipinas, 446 SCRA 299, 347 (2004) (emphasis added). 26 FTAA Petition, pp. 12-13.

16

to steadfastly maintain its prior ruling. Reference is made to the great economic strides that the country is at present making and to the need to sustain the growth. Mining is a pillar of industry, and economists arc agreed , that foreign investments are the key to our economic growth. No less than the legal infrastructure of the country must therefore be strengthened. The laws, both statutory and case-law, must be stable and predictable if business and other affairs, which are organized and structured iu reliance on the laws, are to operate in an optimum condition so that they can contribute to productivity. Not only would a weak enforcement mechanism scare off foreign and even domestic investors. It would reflect badly on the judiciary and shake confidence in its integrity. Adherence to precedents will assure the public, especially foreign investors, of the stability and predictability of our laws.

111.

What is an equitable revenue sharing in nunmg is, considering the separation of powers in government, a question for the legislative and executive branches of government to decide.

23. In G.R. No. 181702, petitioners' basic contention is that Section 81 of the Mining Act gives wide discretion in determining the government's share in the exploration, development and utilization of mineral resources, with the result that the government's share, as provided in DAO 07-12, is inequitable and contrary to the "goals of the national economy [which] are a more equitable distribution goods and services, a sustained increase in the amount of good and service produced, ... and an expanding productivity as the key to raising the quality of 1 ife for all, especially the underprivileged."27

Put this way, the question, it will be seen, is actually for the consideration of the policy determining branches of the government. Economic issues about which people differ are at stake and it is important that these issues be debated with oppmiunity to be heard given to all the stakeholders in society and not limited to the pmiies involved in these cases, before any decision is anived at. '

A. Under the Constitution, the judicial power of revie·w is limited to actual cases or controversies involving the Tnaintenance of the constitutional order and the protection of individual rights.

27 FTAA Petition, par. 48, p. 14.

17

24. "The separation of powers is a fundamental principle in our system of government," Justice Laurel declared more than half a century ago in the leading case of Angara v. Electoral1hbunal. 28 In this system, the role of the judiciary is two-fold: to determine the "the proper allocation of powers between the several departments and among the integral or constituent units" of the government and "to establish for the parties in an actual controversy the right which that instrument secures and guarantees to them."

25. In the exercise of this function, the judiciary's "power of judicial review is limited to actual cases and controversies to be exercised after full opportunity of arguments by the parties, and limited further to the constitutional question raised or the very lis mota presented .... [T]he judiciary does not pass upon questions of wisdom, justice or expediency of legislation. More than that, courts accord the presumption of constitutionality to legislative enactments, not only because the legislature is presumed to abide by the Constitution but also because the judiciary, in the determination of actual controversies, must reflect the wisdom and justice of the people as expressed through their representatives in the executive and legislative departments of the government."

26. Here, as already explained, petitioners do not bring an "acluul case or controversy" to this Court but only questions in the debatable area of economic as to what constitutes equitable sharing in the exploration, development, and utilization of mineral resources. Petitioners do not , complain that they have been injured as a result of the application to them of Sections 80 and 81, DAO 07-12, and the FT AAs and MPSAs entered into pursuant to the law.

27. Indeed, petitioners have not even shown how much contractors or miners make under the agreements compared to the government's share so as to show that the latter is grossly disadvantageous. All they assert is that because Section 81 provides that the government's share shall "consist of, among other things, the contractor's income tax, excise tax, special allowance, withholding tax ... ," without specifying what "among other things" shall consist of, in practice the government's share is limited to taxes, duties and fees, in the case of FTAAs, and to excise taxes, in the case of MPSAs, which after all are due the government because of the activities of the contractors and miners, but otherwise, the latter's earnings from mining are exclusively theirs. The issue they raise is thus for the lawmaking branch of the government to consider.

28. Charged with the duty of determining the proper allocation of powers under the Constitution it would be highly improper for the judiciary

28 63 Phil.139 (1936).

18

to disregard the limits placed on its power of review and invade the province of policy making by responding to petitioners' complaint.

29. The role of the Supreme Court in a system of separated powers is finely illustrated in A1issouri, Kansas, &Texas R. Co. v. A1ay. 29 A Texas statute penalized railroad companies for permitting Johnson grass to grow on lands contiguous to railroads. There was no question that Johnson grass was a menace to crops, but the plaintiff contended that the statute denied railroad companies the equal protection of the laws because the statute was directed solely at them and not at others also. In rejecting plaintiff's claim, the Court, in an opinion by Justice Holmes, held:

The question is whether this case lies on one side or the other side of a line which has to be worked out between cases differing only in degree. With regard to the manner in which such a question should be approached, it is obvious that the legislature is the only judge of the policy of a proposed discrimination .... When a state legislature has declared that, in its opinion, policy requires a certain measure, its action should not be disturbed by the courts under the 14th Amendme!!1_ unless they can see clearly that there is no fair reason for the law that would require with equal force its extension to others when it leaves untouched.

Approaching the question in this way, we feel unable to say that the law before us may not have been justified by local conditions. It would have been more obvious to extend the regulation at least to highways. But it may have been found, for all that we know, that the seed of Johnson grass is dropped from the cars in such quantities as to cause special trouble. It m~~ that the neglected strips occupied by railroads afford a ground where noxious weeds esQecially flourish, and that whereas self­interest leads the owners of fanns to keep down pest~he railroad companies have done nothing in a 111atter which concen1s their neighbors onl~!her reasons may_Q~magli1e~L Great constitutional provisions must be ad[!1inistered witl! caution. Some pliD:_J1mst be allowed for the jQints_Q[Jbe machine, and it must be remembered that legislatures are ultimate guardians of the liberties and welfare of the people in guite as great degree as the courts (Emphasis added)

B. The judiciary is not equipped to deal with far-flung zssues of policy questions.

29 194 U.S. 267 ( 1904).

'•

' r

19

30. Proof of the inappropriateness of these issues for judicial resolution is the disagreement among economists and between the parties as ' to the advantages and disadvantages of the prevailing fiscal regime under the Mining Act and the Mining Act AOs. While Atty. Christian Monsod asserts that government is not getting an equitable share from the mining industry, Dr. Bernardo Villages, a noted economist and likewise a member of the 1986 Constitutional Commission, takes the opposite view. The Chamber reserves the right to submit at a later date to this Honorable Court a Memorandum prepared by Dr. Villegas disputing the contention that the present sharing arrangement is inequitable and contrary to the goals of the national economy as set forth in the Constitution, pmiicularly in Article XII, Section 1, par. 1 and Section 2, par. 4 thereof.

31. lt might be that in ordinary cases, this Court resolved issues that are of a technical nature. But those ordinary cases went up to this Court on appeal, and had their origins in the trial courts or in quasi-judicial agencies where an extensive fact-finding exercise was unde1iaken - e.g., filing of factual submissions, hearing of witnesses, presentation of evidence. Thus, , by the time those cases are elevated to this Court, this Comi has before it extensive records and findings of fact upon which it can rely. In other words, in those cases, this Court is not required to conduct its own fact­finding trial or to make its own original factual findings and conclusions.30

That is not the situation here where the petitions were filed directly in this Court. In these suits, this Comi docs not have the benefit of an evidentiary record upon which it can apply theories and models.

32. It is noteworthy that, with respect to FrAAs, even petitioners recognize that

there must be a clear determination first through research and study with regard to which fiscal arrangement shall result to an 'equitable sharing of wealth' considering the other cultural, social, environmental and economic loss and risks that mining

"1 31 ental s.

33. For indeed, the capability and expertise required to evaluate and assess the various factors cited by petitioners are possessed by the

30 In fact, with respect to cases originating from quasi-judicial bodies which arc s1;ecializcd to their specific fields, this Court has adopted the general rule that the "[tlindings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, arc generally accorded not only great respect but even iinality." Crewlink, Inc. v. Editha Teringtering, 682 SCRA 12 (20 12). 31 Petition for Prohibition and Mandamus, p. 20.

I'

I I I (

20

Legislative and the Executive branches of government. The Executive Branch, in particular, with its various agencies specializing in the different fields and areas cited by petitioners, is especially able to assess all of these considerations. The Legislative and Executive Branches have precisely made their determination as to which fiscal regime is most suitable - and that is the one presently enshrined in the Mining Act and the Mining Act AOs.

34. Petitioners claim that when the Executive and Legislative branches adopted the current fiscal regime for FTAAs and MPSAs, they did' so without first conducting the necessary "research and study."32 This, without anything more, does not justify the exercise of the Court's power of judicial review. As this Court itself has emphasized, it cannot question the wisdom of the acts of its co-equal branches of government as doing so would be a clear and untenable breach of the doctrine of separation of powers. Thus, in Garcia v. The Executive Secretary, this Court held: 33

In Tatad, we declared that the fundamental principle espoused by Section 19, Article XTl of the Constitution is competition. Congress, by enacting R.A. No. 8479, deten11ined that this objective is better realized by liberalizing the oil market, instead of continuing with a highly regulated system enforced by means of restrictive prior controls. This legislative determination was a lawful exercise of Congress' prerogative and one that this Court must respect and uphold. Regardless of the individual opinions of the Members of this Court, we cannot, acting as a body, question the wisdom of a co-equal department's acts. The courts do not involve themselves with or delve into the policy or wisdom of a statute; it sits, not to review or revise legislative action, but to enforce the legislative will. ...

C. On the other hand, the legislative and executive branches of the government have adequate facilities for .resolving economic questions and other policy matters and they are open and operating.

32 FTAA Petition, par. 69, p. 20. 33 583 SCRA 119, at 133.

''

I I I (/;

21

35. The policy making branches of the government are in fact open and operating. The constitutional order is functioning in accordance with democratic processes. Bills to amend the Philippine Mining Act are pending consideration in Congress. In the l51

h Congress, for example, three bills (House Bills Nos. 206, 3763, and 4315) seeking to put in place an ~ntirely new regulatory regime for mining, have been filed in the House of Representatives, and it is noteworthy that somne of the sponsors of those bills were petitioners Lorenzo R. Tanada Ill and Teodoro A. Casino. There is no reason why these branches of the government should now be bypassed by petitioners.

36. In addition, the Mining Industry Coordinating Council is reported in the June 7, 2013 issue of the Philippine Daily lnquirer34 to be readying a study on a proposed revenue sharing scheme on mining to be submitted to the President of the Philippines. Once approved, it will be embodied in a bill for submission to Congress in July.

37. The MICC is an inter-agency council Created by Executive Order No. 79, and tasked with "conduct[ing ] an assessment and review of all mining-related laws, rules and regulations, issuances, and agreements with the view of formulating recommendations to improve the allooalion of revenues and risk between the government and the mining sector .... "

38. It is composed of the Cabinet Clusters on (a) Climate Change Adaptation and Mitigation; and (b) Economic Development. 35 The

34 Philippine Daily Inquirer, June 7, 2013, p. B 3. 35 The current membership ofthe MICC is as follows:

[A] From the Economic Development Cluster:

[a] Secretary of the Department of Finance;

[b] Secretary of the National Economic Development Authority;

[ c] Secretary of the Department of Trade and Industry;

[ d] Secretary of the Department of Budget and Management;

[e] Secretary of the Department ofTransportation and Communications;

[f] Secretary of the Department of Tourism;

[g] Governor of the Bangko Sentral ng Pilipiinas;

[h] Executive Director of the Public-Private Partnership Center

[i] Chairman ofthe National Competitiveness Council

[B] From the Climate Change Adaptation & Mitigation Cluster

[a] Secretary of the Department of Environment and Natural Resources;

[b] Chairman of the Housing and Urban Development Coordinating Council

[ c] Secretary of the Department of Social Welfare and Development

[ d] Secretary of the Department of Agrarian Reform

[ e] Secretary of the Department of National Defense

''

' ' 22

Secretary of Justice, the Chairperson of the National Commission of Indigenous Peoples, and the President of the Union of Local Authorities of the Philippines are likewise members. 36

39. There is thus no lack of remedy at the legislative level for any perceived inadequacy of the current fiscal regime. Intrusion into the domain of policy underestimates the capacity of the other branches of the government to discharge their respective functions under the system of separation of powers and in fact disrespects them. This Honorable Court is doubtless aware of this, that is why in Department of Environment and Natural Resources v. DENR Region 12 Employees it warned those who would resort to it for the resolution of nonjudicial questions thus:37

The Supreme Court should not be thought of as having been tasked with the awesome responsibility of overseeing the entire bureaucracy. Unless there is a clear showing of constitutional infirmity or grave abuse of discretion amounting to lack or excess of jurisdiction, the Court's exercise of the judicial power, pervasive and limitless it may seem to be, still must succumb to the paramount doctrine of separation of powers ....

[f] Chainnan of the Metro Manila Development Authority

[g] Chainnan of the Climate Change Commission

[h] Presidential Assistant for Climate Change

[il Presidential Adviser for Environment Protection

[C] Common members of both clusters:

[a] Secretary of the Department of Public Works and Highways

[b] Secretary of the Department of Agriculture

[ c] Secretary of the Department of Interior and Local Government

[ d] Solicitor General

[ e] Presidential Spokesperson

[f] Secretary of the Presidential Communications Development and Strategic Plmming Office

[g] Secretaty of the Presidential Legislative Liaison Office

[h] Secretaty of the Presidential Management Service

[i] Executive Secretary

[D] Additional Members:

[a] Secretary of the Department of Justice

[b] Chairman of the National Commission on Indigenous Peoples

[ c] Chairman of the Union of Local Authorities of the Philippines. 36 EO 79, Section 9. 37 409 SCRA 359, 370 (2003).

' ' 23

PJ{AYER

WHERFORE, Intervenor Chamber of Mines respectfully prays that the Honorable Court DISMISS the Petitions.

Other just and equitable reliefs arc also prayed for.

Quezon City for Manila.

June 14, 2013.

'~-iA~.~ Co-Counsel for Intervenor Chamber

of Mines of the Philippines IBP No. ID.oozo

Lifetime Membership

PTR No. 8426647 ; 06-13-,-JJ

\lnezon City

Roll No. J8208 -------IviCLE Exen1pt

G/F Judge IsaacS. Puno, Jr. Ivlen1.0rial Foundation Bldg.

30 1-Ioly Spirit Drive, Don Antonio heights

Con11nonwealth Avenue Quezon City

Copies furnished:

.J

--a~rz;frk~ VICENTE V. MENDOZA

Co-Counsel for Interveiwr Clumzber of Mines of tlze

Plzilippines IBP No. 834432; 01-02-13;

Quezon City PTR No. 7547577; 01-18-13;

Quezon City Roll No. 13196 MCLE Exernpt

No.3 Aster, \Nest Fairview, Quezon City

Attys. Augusto B. Gatmaytan, Antoinette G. Royo Mary Grace EllenS. Villanueva, Christine Antoniette 0. Ramos Minerva A. Quintela and l\1odesto 11. Onia Legal Rights & Natural Resources Centct·, Inc. Counsel for Petitioners in G.R. Nos. 181702 & 181703 24-A Malingap St., Teachers' Village 11 01 Quezon City

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The Solicitor General ASG Magtanggol M. Castro Associate Solicitor .Jessica G. Gumop-As-Tirol Office of the Solicitor General 134 Amorsolo St., Legaspi Village 1229 Makati City

Atty. Reezann Keith E. Ramos CVC Law Centet· Counsel for Sagittarius Mines, Inc. 11th Avenue corner 39th Street Bonifacio Triangle Bonifacio Global City 1634

Mt·. Lauriano A. Barrios Attorney-in-Fact of Private Respondents Hallmark Mining Corporation and Austral-Asia Mining Corporation #2255 Chino Roces Avenue, Makati City

SyCip Salazar Hernandez and Gatmaita~1 Counsel for QNI Philippines, Inc. ' 4th Flr., SSHG Law Center JUN 1 9 2013 105 Paseo de Roxas, Legaspi Village 1229 Makati City

!! ~EN{ . --~, -····---·----·~

Attys. Nelson T. Antolin and Joan De Venecia SyCip Salazar Hernandez & GAtmaitan JUN Counsel for Respondent Oceana Gold (Philippines), fnc. 4th Flr., SyCip Law Center 105 Paseo de Roxas 1226 Makati City

lion. Paquito N. Ochoa, .Jr. Executive Secretary Office of the President Malacafiang, Manila

Hon. Secretary Department of Environment and Natural Resources Visayas Avenue, Diliman 1104 Quezon City

Atty. Florentino P. Feliciano Counsel for Respondent Oceana Gold (Philippines), Inc. 71

h Flr., SyCipLaw Center 105 Paseo de Roxas JU:; <4 •• -,

1.1 1)"):

1226 Makati City

1 o ?on It lf/J,/_~·

' i

Atty. Ray Anthony 0. Pinoy Atty. Arveen N. Agunday

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Castillo Laman Tan Pantaleon and San Jose Counsel for TVI Resources & Development Philippines, Inc. 2nd- 5th Firs., The Valero Tower Valero Street, Salcedo Village Makati City

Attys .• J uanito I. Velasco, Jr., J oven Siazon Lorenzo and 1\1aria Elizabeth H. Fruelda Lazaro Law Finn Counsel for Asiaticus Management Corporation Suite 2202-A East Tower Philippine Stock Exchange Center Exchange Road, 01iigas Center Pasig City

EXPLANATION FOR SERVICE BY REGISTERED lVIAIL

Due to time constraints, heavy trat11c conditions, distances involved and the absence of adequate messengerial services, this pleading shall be served by registered mail.

--w~az1~" VICENTE V. MENDOZA

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VERIFICATION

I, BENJAMIN PHILIP G. ROMUALDEZ, of legal age, and with office address at 7TH

Floor, Universal Reinsurance Building, Paseo de Roxas, Makati City, having been duly sworn, hereby depose and state:

1. I am the President of the Chamber of Mines (the "Cbamber"), one of the respondents in the above-captioned case.

2. As shown by the Secretary's Certificate attached hereto as Attachment A, I have been authorized to cause the preparation and filing of the foregoing Comment In Intervention ' and to execute the verification therein, for and on behalf of the Chamber.

3. I have caused the preparation of the foregoing Comment in Intervention.

4. I have read the foregoing Comment In Intervention, the factual allegations of which are true and correct of my personal knowledge and/or based on authentic records in my or the Chamber's possession. ·

REPUBLIC OF THE PHILIPPINES ) <tWIIW_1f~D ) S.S.

Before me, a notary public in and for the city named above, personally appeared BENJAMIN PHILIP G. ROMUALDEZ with Passport No. EA0039558 issued on March 2, 2010 at DFA­Manila, who was identified by me through competent evidence of identity to be the satpe person who presented the foregoing instrument and signed the instrument in my presence, and who took an oath before me as to such instrument.

Witness my hand and sdiJN1is LL ~.Qlar June 20 13.

Doc. No. If~ Page No. ~~

BookNo. J Series of2013.

LIN~~EZ NOTARY PUBLIC UNTIL DEC. 31,2014

COMMISS!O~J No. 0268-13 65 SIKAP ST., M/.\·lDI\LUYONG CITY

HOLL OF ATT0f\:~:Y~ No. 52122 IBP No. 9057GG/N,)\.'. '14, 2D1:?/RSM

PTR No. 1612712/JN-l. :1, 2DISi;~\i'S.J["JALUYONO MCLE No.IV-0003JJ1, OCT. '1''1, 21)11

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SECRETARY'S CERTIFICATE

Room 809 Ortigas Building, Ortigas Avenue Pasig City 1605 Philippines ,

Tel: Nos.: (632) 635-4123 to 24; 635-4159 Telefax: (632) 635-4160

E-mail: comQ@pldldsl.net Website: WWIN.chamberofmines.com ph

I, GASPAR R ANDRES, JR., Filipino, of legal age, married, with oflice address at Rm. 809 Ortigas Building, Ortigas Avenue, Pasig City 1605, Philippines, after having been duly sworn in accordance with law, hereby depose and say that:

1. I am the duly elected Corporate Secretary of THE CHAMBER OF MlNES OF THE PHILIPPINES (hereinafter referred to as the "Chamber"), a non-profit corporation existing and organized under and by virtue of the laws of the Philippines and duly registered with the Securities and Exchange Commission;

2. At a Special Board of Directors' meeting of the Chamber held on May 17, 2013 at the Benguet Corporation Boardroom, 7lhFJr. Universal Reinsurance Building, Legaspi Village, Makati City, Philippines, at which meeting a quorum was present, the following resolution was unanimously passed and approved, to wit:

RESOLVED, that the Board of Directors does hereby authorize the Chamber of Mines of the Philippines and its President, Benjamin Philip G Romualdez, to intervene as a party respondent in the case of Ana TheresiaHontiveros-Baraquel, et al. vs. Secretary of the Department of Environment and Natural Resources, et a/., docketed as SC GR Nos. 181702 and 181703 and to cause the preparation and filing of a Motion for Intervention and of a Comment In Intervention as well as other pleadings that may be required, advisable or necessary and to execute the verification and/or certification therein, for and on behalf of the Chamber, as well as to sign, execute and deliver any and all documents, and to perform any and all acts necessary and proper, for purposes of such intervention, including but not limited to engaging the services of outside counsel and authorizing such counsel to sign, verify, and execute, any and all pleadings, motions, certifications or petitions and to participate in the oral argument and any other hearing or proceedings in connection with such intervention.

RESOLVED, FURTHER, that the Board of Directors approve and ratify any and all acts and deeds already performed and executed by the Chamber of Mines, its President, and its internal and external legal counsels in relation and with respect to such intervention.

3. I hereby certify that the foregoing resolutions are in full force and effect and that they have not been revoked, amended or cancelled.

IN WITNESS WHEREOF, I have hereunto set my handJ!JJ\ ll ~{)):tf June 2013, at Makati City, Philippines.

(. '

SUBSCRIBED AND SWORN to before me on the date and place above­mentioned, affiant exhibiting his (Government-Issued Proof of Jdentification)Non­Professional Driver's License #Nll-64-031913 issued on Nov. 14,2008 at LTO. Q.C.

Doc.No. 3~ PageNo. . ; BookNo. ~/ Series of2013. f

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