http://www.mb.com.ph/MAIN2006062767877.html

By REY G. PANALIGAN

The Supreme Court (SC) yesterday affirmed the cancellation of all mining operations within the Agusan-Davao-Surigao Forest Reserve known as the Diwalwal Gold Rush Area and ruled that under the law, the government may, on its own, take over the mining operations or enter into an agreement with any qualified entity.

In a decision written by Justice Minita V. Chico Nazario, the SC reversed the Court of Appeals (CA) and ruled that the Exploration Permit No. 133 of Marcopper Mining Corp. (MCC) had long expired and, thus, the transfer of the permit to the firm’s subsidiary, Southeast Mindanao Gold Mining Corp. (SEM), was illegal.

But the SC affirmed the CA’s ruling that declared illegal the segregation of 729 hectares within the forest reserve as non-forest lands which were opened to small-scale mining operations in 1991 by then Natural Resources Secretary Fulgencio Factoran Jr. through Department Administrative Order No. 66 (DAO 66).

The 32-page decision also settled the conflicting claims of Apex Mining Co., Inc., the Balite Communal Portal Mining Cooperative, and other small mining firms such as the Monkayo Integrated Small Scale Miners Association, Inc, Davao United Miners Cooperative, Punting-Bato Gold Miners Cooperative, and private individuals over rights on the mineralrich forest reserve in Mindanao.

“It is now up to the Executive Department whether to take the first option, i.e., to undertake directly the mining operations of the Diwalwal Gold Rush Area. As already ruled, the state may not be precluded from considering a direct takeover of the mines, if it is the only plausible remedy in sight to the gnawing complexities generated by the gold rush. The state need be guided only by the demands of public interest in settling on this option, as well as its material and logistic feasibility,” the SC said.

“The state can also opt to award mining operations in the mineral reservation to private entities including petitioners Apex and Balite, if it wishes. The exercise of this prerogative lies with the Executive Department over which courts will not interfere,” it said.
“Consequently, the state, should it so desire, may now award mining operations in the disputed area to any qualified entity it may determine,” it added.

Chief Justice Artemio V. Panganiban and Justices Consuelo Ynares Santiago, Ma. Alicia Austria Martinez, and Romeo J. Callejo Sr. of the SC’s first division concurred in the decision.

All parties to the case, particularly MMC, SEM, Apex Mining, and Balite, have 15 days to file their motions for reconsideration.Three cases were filed with the SC in connection with the supposed rights and claims over the operations in the Diwalwal Gold Rush Area.

In its petition, Apex Miming told the SC that SEM’s EP No.133 was null and void due to the failure of MMC to comply with the terms and conditions prescribed in the said permit.
APEX also maintained that “it has superior and preferential right” to stake its claim over the entire 4,941 hectares in Diwalwal since it was the first to occupy the area and the first to record its mining claims over the land.

Balite, meanwhile, argued that with the issuance of DAO No. 66, its occupation in the contested area, particularly over the 729 hectares small-scale mining area, has entitled it to file its Mineral Production Sharing Agreement (MPSA).

Balite pointed out that its MPSA application should have been given preference over that of SEM’s because its MPSA was filed ahead.

The Mines Adjudication Board (MAB), the third petitioner, told the SC that the issue on who has superior right over the disputed area has become moot and academic with the issuance of Proclamation No. 297 by President Arroyo on Nov. 25, 2002 declaring the disputed area as mineral reservation.

In declaring null and void EP 133 of SEM, the SC said that the MMC violated the terms and conditions prescribed in the permit, particularly the condition that categorically states that the permit shall be for exclusive use and benefit of MMC or its duly authorized agents.

“While it may be true, that SEM, the assignee of EP 133, is a 100 percent subsidiary corporation of MMC, records are bereft of any evidence showing that the former is the duly authorized agent of the latter,” the SC said.

“Records indicate that on July 6, 1993, EP 133 was extended for 12 months or until July 6, 1994. MMC never renewed its permit prior and after its expiration. Thus, EP 133 expired by non-renewal,” it said.

“With the expiration of EP 133 on July 6, 1994, MMC lost any right to the Diwalwal Gold Rush Area. SEM, on the other hand, has not acquired any right to the said area because the transfer of EP 133 in its favor is invalid. Hence, both MMC and SEM have not acquired any vested right over the 4,941.6 hectares which used to be covered by EP 133,” it added.

In the case of Apex Mining and Balite, the SC said that their claims over Diwalwal Gold Rush Area have been rendered moot and academic with the issuance of Proclamation 297 and DAO No. 2002-18, both constitutionally-sanctioned acts of the Executive Branch.

“Mining operations in the Diwalwal Mineral Reservation are now, therefore, within the full control of the state through the Executive Branch. Pursuant to Section 5 of Republic Act No. 7942, the state can either directly undertake the exploration, development and utilization of the area or it can enter into agreements with qualified entities,” the SC said.