[No. 72. February 23, 1909.] Paul Charlton, filed a brief for defendant in error.
MATEO CARIÑO, plaintiff in error, vs. INSULAR GOVERNMENT OF THE PHILIPPINE
ISLANDS. 1
1. 1.APPEAL; MODE OF REVIEW; PROCEEDING FOR THE REGISTRATION OF LAND.—Writ of
error error is the proper mode of bringing up to the Federal Supreme Court for review a
judgment of the Supreme Court of the Philippine Islands, affirming a judgment below,
dismissing, upon grounds of law, an application for the registration of land.
1. 2.RECORDING LAWS; REGISTRATION OF TITLE IN PHILIPPINE ISLANDS.—The exception
of the Province of, Benguet from the operation of the Philippine Commission's act of
1903, No. 926, relating to the registration of land titles, does not apply to one who claims
present ownership of land in that province; but he is entitled to registration, if his claim
of ownership can be maintained, under the Commission's act of 1902, No. 496,
establishing a court for registration purposes, with jurisdiction "throughout the
Philippine archipelago," and authorizing, in general terms, applications to be made by
persons claiming to own the legal estate in fee simple.
1. 3.EVIDENCE; PRESUMPTION; OWNERSHIP AS AGAINST GOVERNMENT.—Every
presumption should be indulged against the United States claiming title to land in the
Province of Benguet in the Philippine Islands, which, for more than fifty years prior to the
treaty of peace with Spain of April 11, 1899 (30 Stat. at L., 1754), has been held by the
present native Igorot holder and his ancestors under claim of private ownership.
1. 4.ADVERSE POSSESSION; AGAINST GOVERNMENT; LAND IN PHILIPPINE ISLANDS.—A.
native title to land in the Province of Benguet in the Philippine Islands, which, for more
than fifty years prior to the treaty of peace with Spain of April 11, 1899, a native Igorot
and his ancestors have held in accordance with Igorot
________________
1212 U. S., 449; 53 L. ed., 594.
936
936 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
1. custom, as private property, should be recognized by the insular government, although no
document of title has issued from the Spanish Crown, where, even if tried by the law of
Spain, without reference to the effect of the change of sovereignty and of the declaration
of purpose and safeguards embodied in the Organic Act of July 1, 1902 (32 Stat. at L., 691,
chap. 1369), it is not clear that he is not the owner.
IN ERROR to the Supreme Court of the Philippine Islands to review a judgment which
affirmed a judgment of the Court of First Instance of the Province of Benguet,
dismissing an application for the registration of certain land. Reversed. See same case
below, 7 Philippine, 132.
The facts are stated in the opinion.
Messrs. Frederic R. Coudert and Howard Thayer Kingsbury argued the cause, and,
with Messrs. Charles C. Cohn, D. R. Williams, and Paul Fuller, filed a brief for plaintiff in
error.
Solicitor-General Hoyt argued the cause, and, with Mr.
Mr. Justice HOLMES delivered the opinion of the court:
This was an application to the Philippine court of land registration for the registration of
certain land. The application was granted by the court on March 4, 1904. An appeal was
taken to the Court of First Instance of the Province of Benguet, on behalf of the Government
of the Philippines, and also on behalf of the United States, those governments having taken
possession of the property for public and military purposes. The Court of First Instance
found the facts and dismissed the application upon grounds of law. This judgment was
affirmed by the Supreme Court (7 Philippine, 132), and the case then was brought here by
writ of error.
The material facts found are very few. The applicant and plaintiff in error is an Igorot
of the Province of Benguet, where the land lies. For more than fifty years before the Treaty
of Paris, April 11, 1899, (30 Stat. at L.,
937
FEBRUARY 23, 1909. 937
Cariño vs. Insular Government.
1754), as far back as the findings go, the plaintiff and his ancestors had held the land as
owners. His grandfather had lived upon it, and had maintained fences sufficient for the
holding of cattle, according to the custom of the country, some of the fences, it seems,
having been of much earlier date. His father had cultivated parts and had used parts for
pasturing cattle, and he had used it for pasture in his turn. They all had been recognized
as owners by the Igorots, and he had inherited or received the land from his father, in
accordance with Igorot custom. No document of title, however, had issued from the
Spanish Crown, and although, in 1893-1894, and again in 1896-1897, he made application
for one under the royal decrees then in force, nothing seems to have come of it, unless,
perhaps, information that lands in Benguet could not be conceded until those to be
occupied for a sanatorium, etc., had been designated,—a purpose that has been carried out
by the Philippine government and the United States. In 1901 the plaintiff filed a petition,
alleging ownership, under the mortgage law, and the lands were registered to him, that
process, however, establishing only a possessory title, it is said.
Before we deal with the merits, we must dispose of a technical point. The Government
has spent some energy in maintaining that this case should have been brought up by
appeal, and not by writ of error. We are of opinion, however, that the mode adopted was
right. The proceeding for registration is likened to bills in equity to quiet title, but it.is
different in principle. It is a proceeding in remunder a statute of the type of the Torrens
act, such as was discussed in Tyler vs. Registration Ct. Judges (175 Mass., 71; 51 L. R. A.,
433; 55 N. E., 812). It is nearer to law than to equity, and is an assertion of legal title; but
we think it unnecessary to put it into either pigeon hole. A writ of error is the general
method of bringing cases to this court, and appeal the exception, confined to equity in the
main. There is no reason for not applying the general rule to this case.
(Ormsby vs. Webb, 134 U. S., 47, 65; 33 L. ed., 805, 812; 10 Sup. Ct. Rep.,
478; Campbell vs. Porter, 162 U.
938
938 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
S., 478; 40 L. ed., 1044; 16 Sup. Ct. Rep., 871; Metropolitan R. Co. vs. District of
Columbia (Metropolitan R. Co. vs.Macfarland) 195 U. S., 322; 49 L. ed., 219; 25 Sup. Ct. Rep.,
28.)
Another preliminary matter may as well be disposed of here. It is suggested that, even
if the applicant have title, he can not have it registered, because the Philippine
Commission's Act No. 926, of 1903, excepts the Province of Benguet among others from its
operation. But that act deals with the acquisition of new titles by homestead entries,
purchase, etc., and the perfecting of titles begun under the Spanish law. The applicant's
claim is that he now owns the land, and is entitled to registration under the Philippine
Commission's Act No. 496, of 1902, which established a court for that purpose with
jurisdiction "throughout the Philippine archipelago," section 2, and authorized in general
terms applications to be made by persons claiming to own the legal estate in fee simple, as
the applicant does. He is entitled to registration if his claim of ownership can be
maintained.
We come, then, to the question on which the case was decided below,—namely,
whether the plaintiff owns the land. The position of the government, shortly stated, is that
Spain assumed, asserted, and had title to all the land in the Philippines except so far as it
saw fit to permit private titles to be acquired; that there was no prescription against the
Crown, and that, if there was, a decree of June 25, 1880, required registration within a
limited time to make the title good; that the plaintiff's land was not registered, and
therefore became, if it was not always, public land; that the United States succeeded to the
title of Spain, and so that the plaintiff has no rights that the Philippine government is bound
to respect.
If we suppose for the moment that the government's contention is so far correct that
the Crown of Spain in form asserted a title to this land at the date of the Treaty of Paris, to
which the United States succeeded, it is not to be assumed without argument .that the
plaintiff's case is at an
939
FEBRUARY 23, 1909. 939
Cariño vs. Insular Government.
end. It is true that Spain, in its earlier decrees, embodied the universal feudal theory that
all lands were held f rom the Crown, and perhaps the general attitude of conquering naions
toward people not recognized as entitled to the treatment accorded to those in the same
zone of civilization with themselves. It is true, also, that, in legal theory, sovereignty is
absolute, and that, as against foreign nations, the United States may assert, as Spain
asserted, absolute power. But it does not follow that, as against the inhabitants of the
Philippines, the United States asserts that Spain had such power. When theory is left on
one side, sovereignty is a question of strength, and may vary in degree. How far a new
sovereign shall insist upon the theoretical relation of the subjects to the head in the past,
and how far it shall recognize actual facts, are matters for it to decide.
The Province of Benguet was inhabited by a tribe that the Solicitor-General, in his
argument, characterized as a savage tribe that never was brought under the civil or
military government of the Spanish Crown. It seems probable, if not certain, that the
Spanish officials would not have granted to anyone in that province the registration to
which formerly the plaintiff was entitled by the Spanish laws and which would have made
his title beyond question good. Whatever may have been the technical position of Spain it
does not follow that, in the view of the United States, he had lost all rights and was a mere
trespasser when the present government seized his land. The argument to that effect
seems to amount to a denial of native titles throughout an important part of the Island of
Luzon, at least, for the want of ceremonieswhich the Spaniards would not have permitted
and had not the power to enforce.
The acquisition of the Philippines was not like the settlement of the white race in the
United States. Whatever consideration may have been shown to the North American
Indians, the dominant purpose of the whites in America was to occupy the land. It is
obvious that, however stated, the reason f or our taking over the Philippines was
940
940 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
No one, we suppose, would deny that, so far as consistent with paramount necessities, our
first object in the internal administration of the islands is to do justice to the natives, not
to exploit their country for private gain. By the Organic Act of July 1, 1902, chapter 1369,
section 12 (32 Statutes at Large, 691), all the property and rights acquired there by the
United States are to be administered "for the benefit of the inhabitants thereof." It is
reasonable to suppose that the attitude thus assumed by the United States with regard to
what was unquestionably its own is also its attitude in deciding what it will claim for its
own. The same statute made a bill of rights, embodying the safeguards of the Constitution,
and, like the Constitution, extends those safeguards to all. It provides that "no law shall be
enacted in said islands which shall deprive any person of life, liberty, or property without
due process of law, or deny to any person therein the equal protection of the laws." (Sec.
5.) In the light of the declaration that we have quoted f rom section 12, it is hard to believe
that the United States was ready to declare in the next breath that "any person" did not
embrace the inhabitants of Benguet, or that it meant by "property" only that which had
become such by ceremonies of which presumably a large part of the inhabitants never had
heard, and that it proposed to treat as public land what they, by native custom and by long
association,—one of the profoundest factors in human thought,—regarded as their own.
It is true that, by section 14, the Government of the Philippines is empowered to enact
rules and prescribe terms for perfecting titles to public lands where some, but not all,
Spanish conditions had been f ulfilled, and to issue patents to natives f or not more than
16 hectares of public lands actually occupied by the native or his ancestors before August
13, 1898. But this section perhaps might be satisfied if confined to cases where. the
occupation was of land admitted to be public land, and had not continued for such a length
of time and under such circumstances as to give rise to the under-
941
FEBRUARY 23, 1909. 941
Cariño vs. Insular Government.
standing that the occupants were owners at that date. We hesitate to suppose that it was
intended to declare every native who had not a paper title a trespasser, and to set the
claims of all the wilder tribes afloat. . It is true again that there is excepted from the
provision that we have quoted as to the administration of the property and rights acquired
by the United States, such land and property as shall be designated by the President for
military or other reservations, as this land since has been. But there still remains the
question what property and rights the United States asserted itself to have acquired.
Whatever the law upon these points may be, and we mean to go no further than the
necessities of decision demand, every presumption is and ought to be against the
government in a case like the present. It might, perhaps, be proper and sufficient to say
that when, as far back as testimony or memory goes, the land has been held by individuals
under a claim of private ownership, it will be presumed to have been held in the same way
from before the Spanish conquest, and never to have been public land. Certainly in a case
like this, if there is doubt or ambiguity in the Spanish law, we ought to give the applicant
the benefit of the doubt. Whether justice to the natives and the import of the Organic Act
ought not to carry us beyond a subtle examination of ancient texts, or perhaps even beyond
the attitudes of Spanish law, humane though it was, it is unnecessary to decide. If, in a tacit
way, it was assumed that the wild tribes of the Philippines were to be dealt with as the
power and inclination of the conqueror might dictate, Congress has not yet sanctioned the
same course as the proper one "for the benefit of the inhabitants thereof."
If the applicant's case is to be tried by the law of Spain, we do not discover such clear
proof that it was bad by that law as to satisfy us that he does not own the land. To begin
with, the older decrees and laws cited by the counsel for the plaintiff in error seem to
indicate pretty clearly that the natives were recognized as owning some lands, irrespective
942
942 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
of any royal grant. In other words, Spain did not assume to convert all the native
inhabitants of the Philippines into trespassers or even into tenants at will. For instance,
Book 4, title 12, Law 14 of the Recopilación de Leyes de las Indias, cited for a contrary
conclusion in Valenton vs.Murciano, 3 Philippine, 537, while it commands viceroys and
others, when it seems proper, to call for the exhibition of grants, directs them to confirm
those who hold by good grants or justa, prescripción. It is true that it begins by the
characteristic assertion of feudal overlordship and the origin of all titles in the King or his
predecessors. That was theory and discourse. The fact was that titles were admitted to
exist that owed nothing to the powers of Spain beyond this recognition in their books.
Prescription is mentioned again in the royal cedula of October 15, 1754, cited in 3
Philippine, 546; "Where such possessors shall not be able to produce title deeds, it shall
be sufficient if they shall show that ancient possession, as a valid title by prescription." It
may be that this means possession from before 1700; but, at all events, the principle is
admitted. As prescription, even against Crown lands, was recognized by the laws of Spain
we see no sufficient reason for hesitating to admit that it was recognized in the Philippines
in regard to lands over which Spain had only a paper sovereignty.
The question comes, however, on the decree of June 25, 1880, for the adjustment of
royal lands wrongfully occupied by private individuals in the Philippine Islands. This
begins with the usual theoretic assertion that, for private ownership, there must have been
a grant by competent authority; but instantly descends to fact by providing that for all legal
effects, those who have been in possession for certain times shall be deemed owners. For
cultivated land, twenty years, uninterrupted, is enough. For uncultivated, thirty. (Art. 5.)
So that, when this decree went into effect, the applicant's father was owner of the land by
the very terms of the decree. But, it is said, the object of this law was to require
943
FEBRUARY 23, 1909. 943
Cariño vs. Insular Government.
the adjustment or registration proceedings that it described, and in that way to require
every one to get a document of title or lose his land. That purpose may have been
entertained, but it does not appear clearly to have been applicable to all. The regulations
purport to have been made "for the adjustment of royal lands wrongfully occupied by
private individuals." (We follow the translation in the government's brief.) It does not
appear that this land ever was royal land or wrongfully occupied. In article 6 it is provided
that ' interested parties not included within the two preceding articles (the articles
recognizing prescription of twenty and thirty years) may legalize their possession, and
thereby acquire the full ownership of the said lands, by means of adjustment proceedings,
to be conducted in the following manner." This seems, by its very terms, not to apply to
those declared already to be owners by lapse of time. Article 8 provides for the case of
parties not asking an adjustment of the lands of which they are unlawfully enjoying the
possession, within one year, and threatens that the treasury "will reassert the ownership
of the state over the lands/' and will sell at auction such part as it does not reserve. The
applicant's possession was not unlawful, and no attempt at any such proceedings against
him or his father ever was made. Finally, it should be noted that the natural construction
of the decree is confirmed by the report of the council of state. That report puts forward
as a reason for the regulations that, in view of the condition of almost all property in the
Philippines, it is important to fix its status by general rules, on the principle that the lapse
of a fixed period legalizes completely all possession; recommends in two articles twenty
and thirty years, as adopted in the decree; and then suggests that interested parties not
included in those articles may legalize their possession and acquire ownership by
adjustment at a certain price.
It is true that the language of articles 4 and 5 attributes title to those "who may prove"
possession for the necessary time and we do not overlook the argument that this means
944
944 PHILIPPINE REPORTS ANNOTATED
Cariño vs. Insular Government.
may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not
calculated to convey to the mind of an Igorot chief the notion that ancient family
possessions were in danger, if he had read every word of it. The words "may
prove" (acrediten), as well, or better, in view of the other provisions, might be taken to
mean when called upon to do so in any litigation. There are indications that registration
was expected from all, but none sufficient to show that, for want of- it, ownership actually
gained would be lost. The effect of the proof, wherever made, was not to conf er title, but
simply to establish it, as already conferred by the decree, If not by earlier law. The royal
decree of February 13, 1894, declaring forfeited titles that were capable of adjustment
under decree of 1880, for which adjustment had not been sought, should not be construed
as confiscation, but as the withdrawal of a privilege. As a matter of fact, the applicant never
was disturbed. This same decree is quoted by the court of land registration for another
recognition of the commonlaw prescription of thirty years as still running against
alienable Crown land.
It will be perceived that the rights of the applicant under the Spanish law present a
problem not without difficulties for courts of a different legal tradition. We have deemed
it proper on that account to notice the possible effect of the change of sovereignty and the
act of Congress establishing the fundamental principles now to be observed. Upon a
consideration of the whole case we are of opinion that law and justice require that the
applicant should be granted what he seeks, and should not be deprived of what by the
practice and belief of those among whom he lived, was his property, through a refined
interpretation of an almost forgotten law of Spain.
Judgment reversed.

G.R. No. 135385. December 6, 2000.
*
ISAGANI CRUZ and CESAR EUROPA, petitioners, vs.SECRETARY OF ENVIRONMENT AND
NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN
and COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS
PEOPLES,respondents.
x ----------------------------------------------------------------------- x
HON. JUAN M. FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI
KIRAM-CONNIE SATURNO, BAE MALOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-
ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU
EDUARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY,
TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG
MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAI INAY
DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY,
LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA
GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE
CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT, ANDRES
MENDIGORIN, LEOPOLDO ABUGAN,
_______________
*EN BANC.
129
VOL. 347, DECEMBER 6, 2000
Cruz vs. Secretary of Environment and Natural Resources
VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ,
RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B.
GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN,
RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H.
MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANGCAGAN,
PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA
SAWAY, JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID,
SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO, JOSEPHINE M.
ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA,
FELIFE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSA GONOS,
ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG,
SOLEDAD M. GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M.
MALUDAO, MINORS MARICEL MALID, represented by her father CORNELIO MALID,
MARCELINO M. LADRA, represented by her father MONICO D. LADRA, JENNYLYN MALID,
represented by her father TONY MALID, ARIEL M. EVANGELISTA, represented by her
mother LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO
B’LAAN TRIBAL FARMER’S ASSOCIATION, INTER-PEOPLE’S EXCHANGE, INC. and GREEN
FORUM-WESTERN VISAYAS,
x -----------------------------------------------------------------------
COMMISSION ON HUMAN RIGHTS,
x -----------------------------------------------------------------------
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION
OF NATURAL RESOURCES, INC., intervenor.
Supreme Court; Judgments; Judicial Review; Where the votes in the Court en banc are equally
divided and the necessary majority is not obtained, the case is redeliberated upon, but if after
deliberation, the voting
130
130 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
remains the same, the petition is dismissed pursuant to Rule 56, Section 7 of the Rules of Civil
Procedure.—After due deliberation on the petition, the members of the Court voted as follows: Seven
(7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and Justices
Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A.
8371. Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with
the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules
and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be
interpreted as dealing with the large-scale exploitation of natural resources and should be read in
conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza
voted to dismiss the petition solely on the ground that it does not raise a justiciable controversy and
petitioners do not have standing to question the constitutionality of R.A. 8371. Seven (7) other
members of the Court voted to grant the petition. Justice Panganiban filed a separate opinion
expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are
unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the
law, which he believes must await the filing of specific cases by those whose rights may have been
violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections 3(a),
7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon
join in the separate opinions of Justices Panganiban and Vitug. As the votes were equally divided (7
to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after
redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules
of Civil Procedure, the petition is DISMISSED.
129
PUNO, J.,Separate Opinion:
National Patrimony; Regalian Doctrine; Natural Resources; Public Lands; The “Regalian
Doctrine” or jura regalia is a Western legal concept that was first introduced by the Spaniards into the
country through the Laws of the Indies and the Royal Cedulas.—The capacity of the State to own or
acquire property is the state’s power of dominium. This was the foundation for the early Spanish
decrees embracing the feudal theory of jura regalia. The “Regalian Doctrine” or jura regalia is a
Western legal concept that was first introduced by the Spaniards into the country through the Laws of
the Indies and the Royal Cedulas.
131
VOL. 347, DECEMBER 6, 2000 131
Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; Words and Phrases; The Public Land Act (Act No. 926) operated on the
assumption that title to public lands in the Philippine Islands remained in the government, and that the
government’s title to public land sprung from the Treaty of Paris and other subsequent treaties between
Spain and the United States; The term “public land” referred to all lands of the public domain whose title
still remained in the government and are thrown open to private appropriation and settlement, and
excluded the patrimonial property of the government and the friar lands.—Act No. 926, the first Public
Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed
the disposition of lands of the public domain. It prescribed rules and regulations for the
intervenor. homesteading, selling, and leasing of portions of the public domain of the Philippine Islands, and
x prescribed the terms and conditions to enable persons to perfect their titles to public lands in the
intervenor. Islands. It also provided for the “issuance of patents to certain native settlers upon public lands,” for
x the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for
the cancellation or confirmation of Spanish concessions and grants in the Islands.” In short, the Public
Land Act operated on the assumption that title to public lands in the Philippine Islands remained in
the government; and that the government’s title to public land sprung from the Treaty of Paris and
other subsequent treaties between Spain and the United States. The term “public land” referred to all
lands of the public domain whose title still remained in the government and are thrown open to
private appropriation and settlement, and excluded the patrimonial property of the government and
the friar lands.
Same; Same; Same; Same; Land Titles; Enacted by the Philippine Commission, Act 496 placed all
public and private lands in the Philippines under the Torrens system.—Grants of public land were
brought under the operation of the Torrens system under Act 496, or the Land Registration Law of
1903. Enacted by the Philippine Commission, Act 496 placed all public and private lands in the
Philippines under the Torrens system. The law is said to be almost a verbatim copy of the
Massachusetts Land Registration Act of 1898, which, in turn, followed the principles and procedure
of the Torrens system of registration formulated by Sir Robert Torrens who patterned it after the
Merchant Shipping Acts in South Australia. The Torrens system requires that the government issue
an official certificate of title attesting to the fact that the person named is the owner of the property
described therein, subject to such liens and encumbrances as thereon noted or the law warrants or
reserves. The certificate of title is indefeasible and imprescriptible and all claims to the parcel of land
are quieted upon issuance of said certificate. This system highly facilitates land conveyance and
negotiation.
132
132 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; The delegates to the 1935 Constitutional Convention very well knew
that the concept of State ownership of land and natural resources was introduced by the Spaniards,
however, they were not certain whether it was continued and applied by the Americans, so to remove all
doubts, the Convention approved the provision in the Constitution affirming the Regalian doctrine.—The
Regalian doctrine was enshrined in the 1935 Constitution. One of the fixed and dominating objectives
of the 1935 Constitutional Convention was the nationalization and conservation of the natural
resources of the country. There was an overwhelming sentiment in the Convention in favor of the
principle of state ownership of natural resources and the adoption of the Regalian doctrine. State
ownership of natural resources was seen as a necessary starting point to secure recognition of the
state’s power to control their disposition, exploitation, development, or utilization. The delegates to
the Constitutional Convention very well knew that the concept of State ownership of land and natural
resources was introduced by the Spaniards, however, they were not certain whether it was continued
and applied by the Americans. To remove all doubts, the Convention approved the provision in the
Constitution affirming the Regalian doctrine.
Same; Indigenous Peoples Rights Act (RA. No. 8371); Ancestral Domains: Ancestral
Lands; Customary Laws; The Indigenous Peoples Rights Act (IPRA) grants the indigenous cultural
communities or indigenous peoples (ICCs/IPs) the ownership and possession of their ancestral domains
and ancestral lands, and defines the extent of these lands and domains, and the ownership given is the
indigenous concept of ownership under customary law which traces its origin to native title.—Republic
Act No. 8371 is entitled “An Act to Recognize, Protect and Promote the Rights of Indigenous Cultural
Communities/Indigenous Peoples, Creating a National Commission on Indigenous Peoples,
Establishing Implementing Mechanisms, Appropriating Funds Therefor, and for Other Purposes.” It is
simply known as “The Indigenous Peoples Rights Act of 1997” or the IPRA. The IPRA recognizes the
existence of the indigenous cultural communities or indigenous peoples (ICCs/IPs) as a distinct sector
in Philippine society. It grants these people the ownership and possession of their ancestral domains
and ancestral lands, and defines the extent of these lands and domains. The ownership given is the
indigenous concept of ownership under customary law which traces its origin to native title.
Same; Same; Same; Same; Words and Phrases; Indigenous Cultural Communities or Indigenous
Peoples refer to a group of people or homogeneous societies who have continuously lived as an organized
community on communally bounded and defined territory.—Indigenous Cultural Com-
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munities or Indigenous Peoples refer to a group of people or homogeneous societies who have
continuously lived as an organized community on communally bounded and defined territory. These
groups of people have actually occupied, possessed and utilized their territories under claim of
ownership since time immemorial. They share common bonds of language, customs, traditions and
other distinctive cultural traits, or, they, by their resistance to political, social and cultural inroads of
colonization, non-indigenous religions and cultures, became historically differentiated from the
Filipino majority. ICCs/IPs also include descendants of ICCs/IPs who inhabited the country at the time
of conquest or colonization, who retain some or all of their own social, economic, cultural and political
institutions but who may have been displaced from their traditional territories or who may have
resettled outside their ancestral domains.
Same; Same; Same; Same; The abrogation of the Filipinos’ ancestral rights in land and the
introduction of the concept of public domain were the most immediate fundamental results of Spanish
colonial theory and law.—All lands lost by the old barangays in the process of pueblo organization as
well as all lands not assigned to them and the pueblos, were now declared to be crown lands
or realengas, belonging to the Spanish king. It was from the realengas that land grants were made to
non-Filipinos. The abrogation of the Filipinos’ ancestral rights in land and the introduction of the
concept of public domain were the most immediate fundamental results of Spanish colonial theory
and law. The concept that the Spanish king was the owner of everything of value in the Indies or
colonies was imposed on the natives, and the natives were stripped of their ancestral rights to land.
Same; Same; Same; Same; Colonialism tended to divide and rule an otherwise culturally and
historically related populace through a colonial system that exploited both the virtues and vices of the
Filipinos.—The Moros and infieles resisted Spanish rule and Christianity. The Moros were driven from
Manila and the Visayas to Mindanao; while the infieles, to the hinterlands. The Spaniards did not
pursue them into the deep interior. The upland societies were naturally outside the immediate
concern of Spanish interest, and the cliffs and forests of the hinterlands were difficult and inaccessible,
allowing the infieles, in effect, relative security. Thus, the infieles, which were peripheral to colonial
administration, were not only able to preserve their own culture but also thwarted the
Christianization process, separating themselves from the newly evolved Christian community. Their
own political, economic and social systems were kept constantly alive and vibrant. The pro-Christian
or pro-Indio attitude of colonialism brought about a generally mutual feeling of suspicion, fear, and
hostility between the Christians on the one hand and the non-
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13 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Christians on the other. Colonialism tended to divide and rule an otherwise culturally and
historically related populace through a colonial system that exploited both the virtues and vices of the
Filipinos.
Same; Same; Same; Same; Under the 1973 Constitution, for the first time in Philippine history, the
“non-Christian tribes” or the “cultural minorities” were addressed by the highest law of the Republic, and
they were referred to as “cultural communities.”—It was in the 1973 Constitution that the State
adopted the following provision: “The State shall consider the customs, traditions, beliefs, and
interests of national cultural communities in the formulation and implementation of State policies.”
For the first time in Philippine history, the “non-Christian tribes” or the “cultural minorities” were
addressed by the highest law of the Republic, and they were referred to as “cultural communities.”
More importantly this time, their “uncivilized” culture was given some recognition and their “customs,
traditions, beliefs and interests” were to be considered by the State in the formulation and
implementation of State policies. President Marcos abolished the CNI and transferred its functions to
the Presidential Adviser on National Minorities (PANAMIN). The PANAMIN was tasked to integrate
the ethnic groups that sought full integration into the larger community, and at the same time “protect
the rights of those who wish to preserve their original lifeways beside the larger community.” In short,
while still adopting the integration policy, the decree recognized the right of tribal Filipinos to
preserve their way of life.
Same; Same; Same; Same; The Aquino government signified a total shift from the policy of
integration to one of preservation.—The Aquino government signified a total shift from the policy of
integration to one of preservation. Invoking her powers under the Freedom Constitution, President
Aquino created the Office of Muslim Affairs, Office for Northern Cultural Communities and the Office
for Southern Cultural Communities all under the Office of the President.
Same; Same; Same; Same; The State, by recognizing the right of tribal Filipinos to their ancestral
lands and domains, has effectively upheld their right to live in a culture distinctly their own.—The 1987
Constitution carries at least six (6) provisions which insure the right of tribal Filipinos to preserve
their way of life. This Constitution goes further than the 1973 Constitution by expressly guaranteeing
the rights of tribal Filipinos to their ancestral domains and ancestral lands. By recognizing their right
to their ancestral lands and domains, the State has effectively upheld their right to live in a culture
distinctly their own.
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Same; Same; Same; Same; Land Titles; Land titles do not exist in the indigenous peoples’
economic and social system—the concept of individual land ownership under the civil law is alien to
them.—Land titles do not exist in the indigenous peoples' economic and social system. The concept of
individual land ownership under the civil law is alien to them. Inherently colonial in origin, our
national land laws and governmental policies frown upon indigenous claims to ancestral lands.
Communal ownership is looked upon as inferior, if not inexistent.
Same; Same; Same; Same; It was to address the centuries-old neglect of the Philippine indigenous
peoples that the Tenth Congress passed and approved the Indigenous Peoples Rights Act (IPRA) of
1997.—It was to address the centuries-old neglect of the Philippine indigenous peoples that the Tenth
Congress of the Philippines, by their joint efforts, passed and approved R.A. No. 8371, the Indigenous
Peoples Rights Act (IPRA) of 1997. The law was a consolidation of two Bills—Senate Bill No. 1728 and
House Bill No. 9125.
Same; Same; Same; Same; Words and Phrases; “Ancestral Domains,” Explained.—Ancestral
domains are all areas belonging to ICCs/IPs held under a claim of ownership, occupied or possessed
by ICCs/IPs by themselves or through their ancestors, communally or individually since time
immemorial, continuously until the present, except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of government projects or any other
voluntary dealings with government and/or private individuals or corporations. Ancestral domains
comprise lands, inland waters, coastal areas, and natural resources therein and includes ancestral lands,
forests, pasture, residential, agricultural, and other lands individually owned whether alienable or not,
hunting grounds, burial grounds, worship areas, bodies of water, mineral and other natural
resources. They also include lands which may no longer be exclusively occupied by ICCs/IPs but from
which they traditionally had access to for their subsistence and traditional activities, particularly the
home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators.
Same; Same; Same; Same; Same; “Ancestral Lands,” Explained.—Ancestral lands are lands held
by the ICCs/IPs under the same conditions as ancestral domains except that these are limited to lands
and that these lands are not merely occupied and possessed but are also utilized by the ICCs/IPs under
claims of individual or traditional group ownership. These lands include but are not limited to
residential lots, rice terraces or paddies, private forests, swidden farms and tree lots.
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Cruz vs. Secretary of Environment and Natural Resources
Same; Same; Same; Same; Land Titles; Customary Laws; The National Commission on
Indigenous Peoples (NCIP) issues a Certificate of Ancestral Domain Title (CADT) in the name of the
community concerned, leaving the allocation of lands within the ancestral domain to any individual or
indigenous corporate (family or clan) claimants to the ICCs/IPs concerned to decide in accordance with
customs and traditions while with respect to ancestral lands outside the ancestral domains, the NICP
issues a Certificate of Ancestral Land Title (CALT).—Upon due application and compliance with the
procedure provided under the law and upon finding by the NCIP that the application is meritorious,
the NCIP shall issue a Certificate of Ancestral Domain Title (CADT) in the name of the community
concerned. The allocation of lands within the ancestral domain to any individual or indigenous
corporate (family or clan) claimants is left to the ICCs/IPs concerned to decide in accordance with
customs and traditions. With respect to ancestral lands outside the ancestral domain, the NCIP issues
a Certificate of Ancestral Land Title (CALT). CADTs and CALTs issued under the IPRA shall be
registered by the NCIP before the Register of Deeds in the place where the property is situated.
Same; Same; Same; Same; Same; The IPRA categorically declares ancestral lands and domains
held by native title as never to have been public land—domains and lands held under native title are,
therefore, indisputably presumed to have never been public lands and are private.—Native title refers
to ICCs/IPs’ preconquest rights to lands and domains held under a claim of private ownership as far
back as memory reaches. These lands are deemed never to have been public lands and are
indisputably presumed to have been held that way since before the Spanish Conquest. The rights of
ICCs/IPs to their ancestral domains(which also include ancestral lands) by virtue of native title shall
be recognized and respected. Formal recognition, when solicited by ICCs/IPs concerned, shall be
embodied in a Certificate of Ancestral Domain Title (CADT), which shall recognize the title of the
concerned ICCs/IPs over the territories identified and delineated. Like a Torrens title, a CADT is
evidence of private ownership of land by native title. Native title, however, is a right of private
ownership peculiarly granted to ICCs/IPs over their ancestral lands and domains. The IPRA
categorically declares ancestral lands and domains held by native title as never to have been public
land. Domains and lands held under native title are, therefore, indisputably presumed to have never
been public lands andare private.
Same; Same; Same; Same; Same; The concept of native title first upheld in Cariño v. Insular
Government, 41 Phil 935 (1909), 212 US. 449, 53 L.Ed. 594, and enshrined in the IPRA grants ownership,
albeit in limited
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Cruz vs. Secretary of Environment and Natural Resources
form, of the land to the ICCs/IPs.—In the Philippines, the concept of native title first upheld
in Cariño and enshrined in the IPRA grants ownership, albeit in limited form, of the land to the
ICCs/IPs. Native title presumes that the land is private and was never public. Cariño is the only case
that specifically and categorically recognizes native title. The long line of cases citing Cariño did not
touch on native title and the private character of ancestral domains and lands. Cariño was cited by the
succeeding cases to support the concept of acquisitive prescription under the Public Land Act which
is a different matter altogether. Under the Public Land Act, land sought to be registered must be public
agricultural land. When the conditions specified in Section 48 [b] of the Public Land Act are complied
with, the possessor of the land is deemed to have acquired, by operation of law, a right to a grant of
the land. The land ceases to be part of the public domain, ipso jure, and is converted to private
property by the mere lapse or completion of the prescribed statutory period.
Same; Same; Same; Same; Same; Ancestral lands and ancestral domains are not part of the lands
of the public domain; they are private and belong to the ICCs/IPs.—Thus, ancestral lands and ancestral
domains are not part of the lands of the public domain. They are private and belong to the ICCs/IPs.
Section 3 of Article XII on National Economy and Patrimony of the 1987 Constitution classifies lands
of the public domain into four categories: (a) agricultural, (b) forest or timber, (c) mineral lands, and
(d) national parks. Section 5 of the same Article XII mentions ancestral lands and ancestral domains
but it does not classify them under any of the said four categories. To classify them as public lands
under any one of the four classes will render the entire IPRA law a nullity. The spirit of the IPRA lies
in the distinct concept of ancestral domains and ancestral lands. The IPRA addresses the major
problem of the ICCs/IPs which is loss of land. Land and space are of vital concern in terms of sheer
survival of the ICCs/IPs. The 1987 Constitution mandates the State to “protect the rights of indigenous
cultural communities to their ancestral lands” and that “Congress provide for the applicability of
customary laws x x x in determining the ownership and extent of ancestral domain.” It is the
recognition of the ICCs/IPs distinct rights of ownership over their ancestral domains and lands that
breathes life into this constitutional mandate.
Same; Same; Same; Same; The right of ownership and possession of the ICCs/IPs to their
ancestral domains is held under the indigenous concept of ownership which maintains the view that
ancestral domains are the ICCs/IPs private but community property.—The right of ownership and
possession of the ICCs/IPs to their ancestral domains is held under the indigenous concept of
ownership. This concept maintains the view that
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Cruz vs. Secretary of Environment and Natural Resources
ancestral domains are the ICCs/IPs private but community property. It is private simply
because it is not part of the public domain. But its private character ends there. The ancestral domain
is owned in common by the ICCs/IPs and not by one particular person. The IPRA itself provides that
areas within the ancestral domains, whether delineated or not, are presumed to be communally held.
These communal rights, however, are not exactly the same as co-ownership rights under the Civil
Code. Co-ownership gives any co-owner the right to demand partition of the property held in
common. The Civil Code expressly provides that “[n]o co-owner shall be obliged to remain in the co-
ownership.” Each co-owner may demand at any time the partition of the thing in common, insofar as
his share is concerned. To allow such a right over ancestral domains may be destructive not only of
customary law of the community but of the very community itself.
Same; Same; Same; Same; Customary Laws; The IPRA, by legislative fiat, introduces a new
concept of ownership, a concept that has long existed under customary law.—Following the
constitutional mandate that “customary law govern property rights or relations in determining the
ownership and extent of ancestral domains,” the IPRA, by legislative flat, introduces a new concept of
ownership. This is a concept that has long existed under customary law.
Same; Same; Same; Same; Same; Customary law is a primary, not secondary, source of rights
under the IPRA and uniquely applies to ICCs/IPs, and its recognition does not depend on the absence of
a specific provision in the civil law.—Custom, from which customary law is derived, is also recognized
under the Civil Code as a source of law. Some articles of the Civil Code expressly provide that custom
should be applied in cases where no codal provision is applicable. In other words, in the absence of
any applicable provision in the Civil Code, custom, when duly proven, can define rights and liabilities.
Customary law is a primary, not secondary, source of rights under the IPRA and uniquely applies to
ICCs/IPs. Its recognition does not depend on the absence of a specific provision in the civil law. The
indigenous concept of ownership under customary law is specifically acknowledged and recognized,
and coexists with the civil law concept and the laws on land titling and land registration.
Same; Same; Same; Same; Natural Resources; There is nothing in IPRA that grants to the
ICCs/IPs ownership over the natural resources within their ancestral domains.—Examining the IPRA,
there is nothing in the law that grants to the ICCs/IPs ownership over the natural resources within
their ancestral domains. The right of ICCs/IPs in their ancestral
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Cruz vs. Secretary of Environment and Natural Resources
domains includes ownership, but this “ownership” is expressly defined and limited in Section
7 (a) as: “Sec. 7. a) Right of ownership—The right to claim ownership over lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing
grounds, and all improvements made by them at any time within the domains;” The ICCs/IPs are given
the right to claim ownership over “lands, bodies of water traditionally and actually occupied by
ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all improvements made by them
at any time within the domains.” It will be noted that this enumeration does not mention bodies of
water not occupied by the ICCs/IPs, minerals, coal, wildlife, floraand fauna in the traditional hunting
grounds, fish in the traditional fishing grounds, forests or timber in the sacred places, etc. and all other
natural resources found within the ancestral domains. Indeed, the right of ownership under Section
7 (a) does not cover “waters, minerals, coal, petroleum and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna and all other natural resources”enumerated
in Section 2, Article XII of the 1987 Constitution as belonging to the State.
Same; Same; Same; Same; Same; The inclusion of “natural resources” in Section 1, Part II, Rule III
of the Implementing Rules goes beyond the parameters of Section 7 (b) of the law and is contrary to
Section 2, Article XII of the 1987 Constitution.—The constitutionality of Section 1, Part II, Rule III of the
Implementing Rules was not specifically and categorically challenged by petitioners. Petitioners
actually assail the constitutionality of the Implementing Rules in general. Nevertheless, to avoid any
confusion in the implementation of the law, it is necessary to declare that the inclusion of “natural
resources” in Section 1, Part II, Rule III of the Implementing Rules goes beyond the parameters of
Section 7 (b) of the law and is contrary to Section 2, Article XII of the 1987 Constitution.
Same; Same; Same; Same; Same; The right to negotiate the terms and conditions over the natural
resources covers only their exploration which must be for the purpose of ensuring ecological and
environmental protection of, and conservation measures in the ancestral domain—it does not extend to
the exploitation and development of natural resources.—Ownership over the natural resources in the
ancestral domains remains with the State and the ICCs/IPs are merely granted the right to “manage
and conserve” them for future generations, “benefit and share” the profits from their allocation and
utilization, and “negotiate the terms and conditions for their exploration” for the purpose of “ensuring
ecological and environmental protection and conservation measures.” It must be noted that the right
to negotiate the terms and conditions over the natural re-
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Cruz vs. Secretary of Environment and Natural Resources
sources covers only their exploration which must be for the purpose of ensuring ecological and
environmental protection of, and conservation measures in the ancestral domain. It does not extend
to the exploitation and development of natural resources. Simply stated, the ICCs/IPs’ rights over the
natural resources take the form of management or stewardship. For the ICCs/IPs may use these
resources and share in the profits of their utilization or negotiate the terms for their exploration. At
the same time, however, the ICCs/IPs must ensure that the natural resources within their ancestral
domains are conserved for future generations and that the “utilization” of these resources must not
harm the ecology and environment pursuant to national and customary laws.
Same; Same; Same; Same; Same; The limited rights of “management and use” in Section 7 (b) of
the IPRA must be taken to contemplate small-scale utilization of natural resources as distinguished from
large-scale utilization.—The limited rights of “management and use” in Section 7 (b) must be taken to
contemplate small-scale utilization of natural resources as distinguished from large-scale. Small-scale
utilization of natural resources is expressly allowed in the third paragraph of Section 2, Article XII of
the Constitution “in recognition of the plight of forest dwellers, gold panners, marginal fishermen and
others similarly situated who exploit our natural resources for their daily sustenance and survival.”
Section 7 (b) also expressly mandates the ICCs/IPs to manage and conserve these resources and
ensure environmental and ecological protection within the domains, which duties, by their very
nature, necessarily reject utilization in a large-scale.
Same; Same; Same; Same; Same; The rights granted by the IPRA to the ICCs/IPs over the natural
resources in their ancestral domains merely gives the ICCs/IPs, as owners and occupants of the land on
which the resources are found, the right to the small-scale utilization of these resources, and at the same
time, a priority in their large-scale development and exploitation.—The rights granted by the IPRA to
the ICCs/IPs over the natural resources in their ancestral domains merely gives the ICCs/IPs, as
owners and occupants of the land on which the resources are found, the right to the small-scale
utilization of these resources, and at the same time, a priority in their large-scale development and
exploitation. Section 57 does not mandate the State to automatically give priority to the ICCs/IPs. The
State has several options and it is within its discretion to choose which option to pursue. Moreover,
there is nothing in the law that gives the ICCs/IPs the right to solely undertake the large-scale
development of the natural resources within their domains. The ICCs/IPs must undertake such
endeavour always under State supervision or control. This
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Cruz vs. Secretary of Environment and Natural Resources
indicates that the State does not lose control and ownership over the resources even in their
exploitation. Sections 7 (b) and 57 of the law simply give due respect to the ICCs/IPs who, as actual
occupants of the land where the natural resources lie, have traditionally utilized these resources for
their subsistence and survival.
Same; Same; Same; Same; Ecology and Environment; Indigenous rights came as a result of both
human rights and environmental protection, and have become a part of today’s priorities for the
international agenda.—Presently, there is a growing concern for indigenous rights in the
international scene. This came as a result of the increased publicity focused on the continuing
disrespect for indigenous human rights and the destruction of the indigenous peoples’ environment,
together with the national governments’ inability to deal with the situation. Indigenous rights came
as a result of both human rights and environmental protection, and have become a part of today’s
priorities for the international agenda.
Same; Same; Same; Same; Customary Laws; If the evolution of the Filipino people into a
democratic society is to truly proceed democratically, i.e., if the Filipinos as a whole are to participate
fully in the task of continuing democratization, it is the Supreme Court’s duty to acknowledge the
presence of indigenous and customary laws in the country and affirm their co-existence with the land
laws in our national legal system.—The struggle of the Filipinos throughout colonial history had been
plagued by ethnic and religious differences. These differences were carried over and magnified by the
Philippine government through the imposition of a national legal order that is mostly foreign in origin
or derivation. Largely unpopulist, the present legal system has resulted in the alienation of a large
sector of society, specifically, the indigenous peoples. The histories and cultures of the indigenes are
relevant to the evolution of Philippine culture and are vital to the understanding of contemporary
problems. It is through the IPRA that an attempt was made by our legislators to understand Filipino
society not in terms of myths and biases but through common experiences in the course of history.
The Philippines became a democracy a centennial ago and the decolonization process still continues.
If the evolution of the Filipino people into a democratic society is to truly proceed
democratically, i.e., if the Filipinos as a whole are to participate fully in the task of continuing
democratization, it is this Court’s duty to acknowledge the presence of indigenous and customary
laws in the country and affirm their co-existence with the land laws in our national legal system.
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142 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
VITUG, J., Separate Opinion:
Supreme Court; Judicial Review; Procedural Rules and Technicalities; Until an exact balance is
struck, the Court must accept an eclectic notion that can free itself from the bondage of legal nicety and
hold trenchant technicalities subordinate to what may be considered to be of overriding concern.—
Nevertheless, where a most compelling reason exists, such as when the matter is of transcendental
importance and paramount interest to the nation, the Court must take the liberal approach that
recognizes the legal standing of nontraditional plaintiffs, such as citizens and taxpayers, to raise
constitutional issues that affect them. This Court thus did so in a case that involves the conservation
of our forests for ecological needs. Until an exact balance is struck, the Court must accept an eclectic
notion that can free Itself from the bondage of legal nicety and hold trenchant technicalities
subordinate to what may be considered to be of overriding concern.
National Patrimony; Regalian Doctrine; Natural Resources; Indigenous Peoples Rights Act
(IPRA); The provisions Sections 7 and 57 of the IPRA, in their totality, are, in my view, beyond the context
of the fundamental law and virtually amount to an undue delegation, if not an unacceptable abdication,
of State authority over a significant area of the country and its patrimony.—IPRA effectively withdraws
from the public domain the so-called ancestral domains covering literally millions of hectares. The
notion of community property would comprehend not only matters of proprietary interest but also
some forms of self-governance over the carved-out territory. This concept is elaborated in Section 7
of the law which states that the “rights of ownership and possession of ICCs/IPs to their ancestral
domains shall be recognized and protected,” subsumed under which would encompass the right of
ownership (paragraph a); the right to develop, control and use lands and natural resources, including
“the right to negotiate the terms and conditions for the exploration of natural resources in the areas
for the purpose of ensuring ecological, environmental protection and the conservation measures,
pursuant to national and customary laws;” (par. b); the right to stay in the territories (par. c); the right
to return to their abandoned lands. In case of displacement (par. d); the right to regulate entry of
migrants (par. e); the right to claim parts of ancestral domains previously reserved (par. g); and the
right to resolve land conflicts. In accordance primarily with customary law (par. h). Concurrently,
Section 57 states that ICCs/IPs shall be given “priority rights in the harvesting, extraction,
development or exploitation of any natural resources within the ancestral domains.” These provisions
of IPRA, in their totality, are, in my view, beyond the context of the fun-
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Cruz vs. Secretary of Environment and Natural Resources
damental law and virtually amount to an undue delegation, if not an unacceptable abdication,
of State authority over a significant area of the country and its patrimony.
Same; Same; Same; The decision of the United States Supreme Court in Cariño v. Insular
Government, 41 Phil 935 (1910), holding that a parcel of land held since time immemorial by individuals
under a claim of private ownership is presumed never to have been public land and cited to downgrade
the application of the regalian doctrine, cannot override the collective will of the people expressed in the
Constitution.—The decision of the United States Supreme Court in Cariño vs. InsularGovernment,
holding that a parcel of land held since time immemorial by individuals under a claim of private
ownership is presumed never to have been public land and cited to downgrade the application of the
regalian doctrine, cannot override the collective will of the people expressed in the Constitution. It is
in them that sovereignty resides and from them that all government authority emanates. It is not then
for a court ruling or any piece of legislation to be conformed to by the fundamental law, but it is for
the former to adapt to the latter, and it is the sovereign act that must, between them, stand inviolate.
Customary Laws; I do not see the statement in Section 5 of Article XII of the Constitution allowing
Congress to provide “for the applicability of customary laws governing property rights or relations in
determining the ownership and extent of ancestral domains” as saying that Congress may enact a law
that would simply express that “customary laws shall govern” and end it there.—The second paragraph
of Section 5 of Article XII of the Constitution allows Congress to provide “for the applicability of
customary laws governing property rights or relations in determining the ownership and extent of
ancestral domains.” I do not see this statement as saying that Congress may enact a law that would
simply express that “customary laws shall govern” and end it there. Had it been so, the Constitution
could have itself easily provided without having to still commission Congress to do it.
Same; Customary laws, when specifically enacted to become part of statutory law, must first
undergo that publication to render them correspondingly binding and effective as such.—The
constitutional aim, it seems to me, is to get Congress to look closely into the customary laws and, with
specificity and by proper recitals, to hew them to, and make them part of, the stream of laws. The “due
process clause,” as I so understand it in Tañada vs. Tuvera would require an apt publication of a
legislative enactment before it is permitted to take force and effect. So, also
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Cruz vs. Secretary of Environment and Natural Resources
customary laws, when specifically enacted to become part of statutory law, must first undergo
that publication to render them correspondingly binding and effective as such.
KAPUNAN, J., Separate Opinion:
Indigenous Peoples Rights Act (IPRA); Words and Phrases; International Law; In international
law, the definition of what constitutes “indigenous peoples” attains some degree of controversy.—The
term “indigenous” traces its origin to the Old Latin word indu, meaning “within.” In the sense the term
has come to be used, it is nearer in meaning to the Latin word indigenus, which means “native.”
“Indigenous” refers to that which originated or has been produced naturally in a particular land, and
has not been introduced from the outside. In international law, the definition of what constitutes
“indigenous peoples” attains some degree of controversy. No definition of the term “indigenous
peoples” has been adopted by the United Nations (UN), although UN practice has been guided by a
working definition in the 1986 Report of UN Special Rapporteur Martinez Cobo.
Same; Same; In Philippine constitutional law, the term “indigenous peoples” pertains to those
groups of Filipinos who have retained a high degree of continuity from pre-Conquest culture.—In
Philippine constitutional law, the term “indigenous peoples” pertains to those groups of Fili-pinos
who have retained a high degree of continuity from pre-Conquest culture. Philippine legal history,
however, has not been kind to the indigenous peoples, characterized them as “uncivilized,” “backward
people,” with “barbarous practices” and “a low order of intelligence.”
 Same; Same; The extant Philippine national culture is the culture of the majority, its indigenous
roots were replaced by foreign cultural elements that are decidedly pronounced, if not dominant.—
Though Filipinos today are essentially of the same stock as the indigenous peoples, our national
culture exhibits only the last vestiges of this native culture. Centuries of colonial rule and neocolonial
domination have created a discernible distinction between the cultural majority and the group of
cultural minorities. The extant Philippine national culture is the culture of the majority; its indigenous
roots were replaced by foreign cultural elements that are decidedly pronounced, if not dominant.
While the culture of the majority reoriented itself to Western influence, the culture of the minorities
has retained its essentially native character.
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Supreme Court; Judicial Review; When the State machinery is set into motion to implement an
alleged unconstitutional statute, the Supreme Court possesses sufficient authority to resolve and prevent
imminent injury and violation of the constitutional process.—In the case at bar, there exists a live
controversy involving a clash of legal rights. A law has been enacted, and the Implementing Rules and
Regulations approved. Money has been appropriated and the government agencies concerned have
been directed to implement the statute. It cannot be successfully maintained that we should await the
adverse consequences of the law in order to consider the controversy actual and ripe for judicial
resolution. It is precisely the contention of the petitioners that the law, on its face, constitutes an
unconstitutional abdication of State ownership over lands of the public domain and other natural
resources. Moreover, when the State machinery is set into motion to implement an alleged
unconstitutional statute, this Court possesses sufficient authority to resolve and prevent imminent
injury and violation of the constitutional process.
Same; Same; Parties; Locus Standi; Taxpayer’s Suits; Citizen’s Suits; In a sense, all citizen’s and
taxpayer’s suits are efforts to air generalized grievances about the conduct of government and the
allocation of power.—In addition to the existence of an actual case or controversy, a person who
assails the validity of a statute must have a personal and substantial interest in the case, such that, he
has sustained, or will sustain, a direct injury as a result of its enforcement. Evidently, the rights
asserted by petitioners as citizens and taxpayers are held in common by all the citizens, the violation
of which may result only in a “generalized grievance.” Yet, in a sense, all citizen’s and taxpayer’s suits
are efforts to air generalized grievances about the conduct of government and the allocation of power.
Same; Same; Same; Same; Same; Same; National Patrimony; The preservation of the integrity
and inviolability of the national patrimony is a proper subject of a citizen’s suit.—Petitioners, as citizens,
possess the “public right” to ensure that the national patrimony is not alienated and diminished in
violation of the Constitution. Since the government, as the guardian of the national patrimony, holds
it for the benefit of all Filipinos without distinction as to ethnicity, it follows that a citizen has sufficient
interest to maintain a suit to ensure that any grant of concessions covering the national economy and
patrimony strictly complies with constitutional requirements. Thus, the preservation of the integrity
and inviolability of the national patrimony is a proper subject of a citizen’s suit.
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National Patrimony; Regalian Doctrine; The theory of jura regalia was nothing more than a
natural fruit of conquest; The Regalian theory does not negate native title to lands held in private
ownership since time immemorial.—Generally, under the concept of jura regalia, private title to land
must be traced to some grant, express or implied, from the Spanish Crown or its successors, the
American Colonial government, and thereafter, the Philippine Republic. The belief that the Spanish
Crown is the origin of all land titles in the Philippines has persisted because title to land must emanate
from some source for it cannot issue forth from nowhere. In its broad sense, the term “jura regalia”
refers to royal rights, or those rights which the King has by virtue of his prerogatives. In Spanish law,
it refers to a right which the sovereign has over anything in which a subject has a right of property
or propriedad. These were rights enjoyed during feudal times by the king as the sovereign. The theory
of the feudal system was that title to all lands was originally held by the King, and while the use of
lands was granted out to others who were permitted to hold them under certain conditions, the King
theoretically retained the title. By fiction of law, the King was regarded as the original proprietor of
all lands, and the true and only source of title, and from him all lands were held. The theory of jura
regalia was therefore nothing more than a natural fruit of conquest. The Regalian theory, however,
does not negate native title to lands held in private ownership since time immemorial.
Same; Same; Natural Resources; The mere fact that Section 3(a) of IPRA defines ancestral
domains to include the natural resources, found therein does not ipso facto convert the character of such
natural resources as private property of the indigenous people.—Section 3(a) merely defines the
coverage of ancestral domains, and describes the extent, limit and composition of ancestral domains
by setting forth the standards and guidelines in determining whether a particular area is to be
considered as part of and within the ancestral domains. In other words, Section 3(a) serves only as a
yardstick which points out what properties are within the ancestral domains. It does not confer or
recognize any right of ownership over the natural resources to the indigenous peoples. Its purpose is
definitional and not declarative of a right or title. The specification of what areas belong to the
ancestral domains is, to our mind, important to ensure that no unnecessary encroachment on private
properties outside the ancestral domains will result during the delineation process. The mere fact
that Section 3(a) defines ancestral domains to include the natural resources found therein does
not ipso facto convert the character of such natural resources as private property of the indigenous
peoples. Similarly, Section 5 in relation to Section 3(a) cannot be construed as a source of ownership
rights of indigenous people over the natural resources simply
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because it recognizes ancestral domains as their “private but community property.”
Same; Same; Same; Words and Phrases; The phrase “private but community property” is merely
descriptive of the indigenous peoples’ concept of ownership as distinguished from that provided in the
Civil Code.—The phrase “private but community property” is merely descriptive of the indigenous
peoples’ concept of ownership as distinguished from that provided in the Civil Code. In Civil Law,
“ownership” is the “independent and general power of a person over a thing for purposes recognized
by law and within the limits established thereby.” The civil law concept of ownership has the following
attributes: jus utendi or the right to receive from the thing that which it produces, jus abutendi or the
right to consume the thing by its use, jus disponendi or the power to alienate, encumber, transform
and even destroy that which is owned, and jus vindicandi or the right to exclude other persons from
the possession the thing owned. In contrast, the indigenous peoples’ concept of ownership
emphasizes the importance of communal or group ownership. By virtue of the communal character
of ownership, the property held in common “cannot be sold, disposed or destroyed” because it was
meant to benefit the whole indigenous community and not merelythe individual member.
Same; Same; Same; The concept of native title to natural resources, unlike native title to land, has
not been recognized in the Philippines.—Finally, the concept of native title to natural resources, unlike
native title to land, has not been recognized in the Philippines. NCIP and Flavier, et al. invoke the case
of Reavies v. Fianza in support of their thesis that native title to natural resources has been upheld in
this jurisdiction. They insist that “it is possible for rights over natural resources to vest on a private
(as opposed to a public) holder if these were held prior to the 1935 Constitution.” However, a
judicious examination of Reavies reveals that, contrary to the position of NCIP and Flavier, et al., the
Court did not recognize native title to natural resources. Rather, it merely upheld the right of the
indigenous peoples to claim ownership of minerals under the Philippine Bill of 1902.
Same; Same; Same; Upon the certification of certain areas as ancestral domain following the
procedure outlined in Sections 51 to 53 of the IPRA, jurisdiction of the government agency or agencies
concerned over lands forming part thereof ceases but the jurisdiction of government agencies over the
natural resources within the ancestral domains does not terminate by such certification because said
agencies are mandated under existing laws to administer the natural resources for the State, which is
the
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 owner thereof.—Undoubtedly, certain areas that are claimed as ancestral domains may still be
under the administration of other agencies of the Government, such as the Department of Agrarian
Reform, with respect to agricultural lands, and the Department of Environment and Natural
Resources with respect to timber, forest and mineral lands. Upon the certification of these areas as
ancestral domain following the procedure outlined in Sections 51 to 53 of the IPRA, jurisdiction of the
government agency or agencies concerned over lands forming part thereof ceases. Nevertheless, the
jurisdiction of government agencies over the natural resources within the ancestral domains does not
terminate by such certification because said agencies are mandated under existing laws to administer
the natural resources for the State, which is the owner thereof. To construe Section 52[i] as divesting
the State, through the government agencies concerned, of jurisdiction over the natural resources
within the ancestral domains would be inconsistent with the established doctrine that all natural
resources are owned by the State.
Same; Same; Same; Clearly, Section 2, Article XII, when interpreted in view of the pro-Filipino,
pro-poor philosophy of our fundamental law, and in harmony with the other provisions of the
Constitution rather as a sequestered pronouncement, cannot be construed as a prohibition against any
and all forms of utilization of natural resources without the State’s direct participation.—In addition to
the means of exploration, development and utilization of the country’s natural resources stated in
paragraph 1, Section 2 of Article XII, the Constitution itself states in the third paragraph of the same
section that Congress may, by law, allow small-scale utilization of natural resources by its citizens.
Further, Section 6, Article XIII, directs the State, in the disposition and utilization of natural resources,
to apply the principles of agrarian reform or stewardship. Similarly, Section 7, Article XIII mandates
the State to protect the rights of subsistence fishermen to the preferential use of marine and fishing
resources. Clearly, Section 2, Article XII, when interpreted in view of the pro-Filipino, pro-poor
philosophy of our fundamental law, and in harmony with the other provisions of the Constitution
rather as a sequestered pronouncement, cannot be construed as a prohibition against any and all
forms of utilization of natural resources without the State’s direct participation.
Same; Same; Same; Land Titles; By the enactment of IPRA, Congress did not purport to annul any
and all Torrens titles within areas claimed as ancestral lands or ancestral domains.—Further, by the
enactment of IPRA, Congress did not purport to annul any and all Torrens titles within areas claimed
as ancestral lands or ancestral domains. The statute im-
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poses strict procedural requirements for the proper delineation of ancestral lands and
ancestral domains as safeguards against the fraudulent deprivation of any landowner of his land,
whether or not he is member of an indigenous cultural community. In all proceedings for delineation
of ancestral lands and ancestral domains, the Director of Lands shall appear to represent the interest
of the Republic of the Philippines. With regard to ancestral domains, the following procedure is
mandatory: first,petition by an indigenous cultural community, or motu proprio by the NCIP; second,
investigation and census by the Ancestral domains Office (“ADO”) of the NCIP; third, preliminary
report by the ADO; fourth, posting and publication; and lastly, evaluation by the NCIP upon
submission of the final report of the ADO. With regard to ancestral lands, unless such lands are within
an ancestral domain, the statute imposes the following procedural
requirements: first, application; second, posting and publication; third, investigation and inspection
by the ADO; fourth,delineation; lastly, evaluation by the NCIP upon submission of a report by the ADO.
Hence, we cannot sustain the arguments of the petitioners that the law affords no protection to those
who are not indigenous peoples.
Indigenous Peoples; Due Process; The fact that the NCIP is composed of members of the
indigenous peoples does not mean that it (the NCIP) is incapable, or will appear to be so incapable, of
delivering justice to the non-indigenous peoples.—The fact that the NCIP is composed of members of
the indigenous peoples does not mean that it (the NCIP) is incapable, or will appear to be so incapable,
of delivering justice to the non-indigenous peoples. A person’s possession of the trait of impartiality
desirable of a judge has nothing to do with his or her ethnic roots. In this wise, the indigenous peoples
are as capable of rendering justice as the non-indigenous peoples for, certainly, the latter have no
monopoly of the concept of justice.
Same; Customary Laws; The use of customary laws under the IPRA is not absolute, for the law
speaks merely of primacy of use.—Anent the use of customary laws in determining the ownership and
extent of ancestral domains, suffice it to say that such is allowed under paragraph 2, Section 5 of
Article XII of the Constitution. Said provision states, “The Congress may provide for the applicability
of customary laws governing property rights and relations in determining the ownership and extent
of the ancestral domains.” Notably, the use of customary laws under IPRA is not absolute, for the law
speaks merely of primacy of use.The IPRA prescribes the application of such customary laws where
these present a workable solution acceptable to the parties, who are members of the same indige-
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nous group. This interpretation is supported by Section 1, Rule IX of the Implementing Rules.
Same; Same; When one of the parties to a dispute is a non-member of an indigenous group, or
when the indigenous peoples involved belong to different groups, the application of customary law is not
required.—The application of customary law is limited to disputes concerning property rights or
relations in determining the ownership and extent of the ancestral domains, where all the parties
involved are members of indigenous peoples, specifically, of the same indigenous group. It therefore
follows that when one of the parties to a dispute is a non-member of an indigenous group, or when
the indigenous peoples involved belong to different groups, the application of customary law is not
required.
Administrative Law; Presidency; Power of Control; Words and Phrases; An “independent agency”
is an administrative body independent of the executive branch or one not subject to a superior head of
department, as distinguished from a “subordinate agency” or an administrative body whose action is
subject to administrative review or revision.—The NCIP has been designated under IPRA as the
primary government agency responsible for the formulation and implementation of policies, plans
and programs to promote and protect the rights and well being of the indigenous peoples and the
recognition of their ancestral domain as well as their rights thereto. It has been granted
administrative, quasi-legislative and quasi-judicial powers to carry out its mandate. The diverse
nature of the NCIP’s functions renders it impossible to place said agency entirely under the control of
only one branch of government and this, apparently, is the reason for its characterization by Congress
as an independent agency. An “independent agency” is defined as an administrative body independent
of the executive branch or one not subject to a superior head of department, as distinguished from a
“subordinate agency” or an administrative body whose action is subject to administrative review or
revision.
Same; Same; Same; The NCIP, although independent to a certain degree, was placed by Congress
“under the office of the President” and, as such, is still subject to the President’s power to control and
supervision with respect to its performance of administrative functions.—That Congress did not intend
to place the NCIP under the control of the President in all instances is evident in the IPRA itself, which
provides that the decisions of the NCIP in the exercise of its quasi-judicial functions shall be
appealable to the Court of Appeals, like those of the National Labor Relations Commission (NLRC) and
the Securities and Exchange Commission (SEC). Nevertheless, the NCIP, although independent to a
certain degree, was
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placed by Congress “under the office of the President” and, as such, is still subject to the
President’s power of control and supervision granted under Section 17, Article VII of the Constitution
with respect to its performance of administrative functions, such as the following: (1) the NCIP must
secure the President’s approval in obtaining loans to finance its projects; (2) it must obtain the
President’s approval for any negotiation for funds and for the acceptance of gifts and/or properties
in whatever form and from whatever source; (3) the NCIP shall submit annual reports of its
operations and achievements to the President, and advise the latter on all matters relating to the
indigenous peoples; and (4) it shall exercise such other powers as may be directed by the President.
The President is also given the power to appoint the Commissioners of the NCIP as well as to remove
them from office for cause motu proprio or upon the recommendation of any indigenous community.
MENDOZA, J., Separate Opinion:
Courts; Judicial Review; The judicial power vested in the Supreme Court by Art. VIII, §1 extends
only to cases and controversies for the determination of such proceedings as are established by law for
the protection or enforcement of rights, or the prevention, redress or punishment of wrongs.—The
judicial power vested in this Court by Art. VIII, §1 extends only to cases and controversies for the
determination of such proceedings as are established by law for the protection or enforcement of
rights, or the prevention, redress or punishment of wrongs. In this case, the purpose of the suit is not
to enforce a property right of petitioners against the government and other respondents or to demand
compensation for injuries suffered by them as a result of the enforcement of the law, but only to settle
what they believe to be the doubtful character of the law in question. Any judgment that we render in
this case will thus not conclude or bind real parties in the future, when actual litigation will bring to
the Court the question of the constitutionality of such legislation. Such judgment cannot be executed
as it amounts to no more than an expression of opinion upon the validity of the provisions of the law
in question.
Same; Same; The statement that the judicial power includes the duty to determine whether there
has been a grave abuse of discretion was inserted in Art. VIII, §1 not really to give the judiciary a roving
commission to right any wrong it perceives but to preclude courts from invoking the political question
doctrine in order to evade the decision of certain cases even where violations of civil liberties are
alleged.—I do not conceive it to be the function of this Court under Art. VIII, §1 of the Constitution to
determine in the abstract whether or not there has been a grave abuse of
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discretion amounting to lack or excess of jurisdiction on the part of the legislative and
executive departments in enacting the IPRA. Our jurisdiction is confined to cases or controversies. No
one reading Art. VIII, §5 can fail to note that, in enumerating the matters placed in the keeping of this
Court, it uniformly begins with the phrase “all cases . . .” The statement that the judicial power includes
the duty to determine whether there has been a grave abuse of discretion was inserted in Art. VIII, §1
not really to give the judiciary a roving commission to right any wrong it perceives but to preclude
courts from invoking the political question doctrine in order to evade the decision of certain cases
even where violations of civil liberties are alleged.
Same; Same; The judicial power cannot be extended to matters which do not involve actual cases
or controversies without upsetting the balance of power among the three branches of the government
and erecting, as it were, the judiciary, particularly the Supreme Court, as a third branch of Congress,
with power not only to invalidate statutes but even to rewrite them.—Indeed, the judicial power cannot
be extended to matters which do not involve actual cases or controversies without upsetting the
balance of power among the three branches of the government and erecting, as it were, the judiciary,
particularly the Supreme Court, as a third branch of Congress, with power not only to invalidate
statutes but even to rewrite them. Yet that is exactly what we would be permitting in this case were
we to assume jurisdiction and decide wholesale the constitutional validity of the IPRA contrary to the
established rule that a party can question the validity of a statute only if, as applied to him, it is
unconstitutional. Here the IPRA is sought to be declared void on its face.
Same; Same; Freedom of Expression; “Chilling Effect” Syndrome; The only instance where a facial
challenge to a statute is allowed is when it operates in the area of freedom of expression—invalidation
of the statute “on its face” rather than “as applied” is permitted in the interest of preventing a “chilling”
effect on freedom of expression.—The only instance where a facial challenge to a statute is allowed is
when it operates in the area of freedom of expression. In such instance, the overbreadth doctrine
permits a party to challenge the validity of a statute even though as applied to him it is not
unconstitutional but it might be if applied to others not before the Court whose activities are
constitutionally protected. Invalidation of the statute “on its face” rather than “as applied” is
permitted in the interest of preventing a “chilling” effect on freedom of expression. But in other cases,
even if it is found that a provision of a statute is unconstitutional, courts will decree only partial
invalidity unless the invalid portion is so far in-
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separable from the rest of the statute that a declaration of partial invalidity is not possible.
Same; Same; To decline the exercise of jurisdiction where there is no genuine controversy is not
to show timidity but respect for the judgment of a coequal department of government whose acts, unless
shown to be clearly repugnant to the fundamental law, are presumed to be valid.—To decline, therefore,
the exercise of jurisdiction where there is no genuine controversy is not to show timidity but respect
for the judgment of a coequal department of government whose acts, unless shown to be clearly
repugnant to the fundamental law, are presumed to be valid. The polestar of constitutional
adjudication was set forth by Justice Laurel in the Angara case when he said that “this power of
judicial review is limited to actual cases and controversies to be exercised after full opportunity of
argument by the parties, and limited further to the constitutional question raised or the very lis mota,
presented.” For the exercise of this power is legitimate only in the last resort; and as a necessity in the
determination of real, earnest, and vital controversy between individuals. Until, therefore, an actual
case is brought to test the constitutionality of the IPRA, the presumption of constitutionality, which
inheres in every statute, must be accorded to it.
PANGANIBAN, J., Separate Opinion (Concurring and Dissenting):
National Patrimony; Ancestral Domains; Ancestral Lands; I respectfully reject the contention
that “ancestral lands and ancestral domains are not public lands and have never been owned by the
State.”—It recognizes or, worse, grants rights of ownership over lands of the public domain, waters,
x x x and other natural resources” which, under Section 2, Article XII of the Constitution, “are owned
by the State” and “shall not be alien-ated.” I respectfully reject the contention that “ancestral lands
and ancestral domains are not public lands and have never been owned by the State.” Such sweeping
statement places substantial portions of Philippine territory outside the scope of the Philippine
Constitution and beyond the collective reach of the Filipino people. As will be discussed later, these real
properties constitute a third of the entire Philippine territory; and the resources, 80 percent of the
nation’s natural wealth.
Same; Same; Same; I cannot agree to legitimize perpetual inequality of access to the nation’s
wealth or to stamp the Court’s imprimatur on a law that offends and degrades the repository of the very
authority of the Supreme Court—the Constitution of the Philippines.—Consistent with the social justice
principle of giving more in law to those who have less in life,
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Congress in its wisdom may grant preferences and prerogatives to our marginalized brothers
and sisters, subject to the irreducible caveat that the Constitution must be respected. I personally
believe in according every benefit to the poor, the oppressed and the disadvantaged, in order to
empower them to equally enjoy the blessings of nationhood. I cannot, however, agree to legitimize
perpetual inequality of access to the nation’s wealth or to stamp the Court’s imprimatur on a law that
offends and degrades the repository of the very authority of this Court—the Constitution of the
Philippines.
Same; Same; Same; Though laudable and well-meaning, IPRA, however, has provisions that run
directly afoul of our fundamental law from which it claims origin and authority.—RA 8371, which
defines the rights of indigenous cultural communities and indigenous peoples, admittedly professes
a laudable intent. It was primarily enacted pursuant to the state policy enshrined in our Constitution
to “recognize and promote the rights of indigenous cultural communities within the framework of
national unity and development.” Though laudable and well-meaning, this statute, however, has
provisions that run directly afoul of our fundamental law from which it claims origin and authority.
More specifically, Sections 3(a) and (b), 5, 6, 7(a) and (b), 8 and other related provisions contravene
the Regalian Doctrine—the basic foundation of the State’s property regime.
Vested Rights; Property; Ownership; Because of the State’s implementation of policies considered
to be for the common good, all those concerned have to give up, under certain conditions, even vested
rights of ownership.—I submit, however, that all Filipinos, whether indigenous or not, are subject to
the Constitution. Indeed, no one is exempt from its allencompassing provisions. Unlike the 1935
Charter, which was subject to “any existing right, grant, lease or concession,” the 1973 and the 1987
Constitutions spoke in absolute terms. Because of the State’s implementation of policies considered
to be for the common good, all those concerned have to give up, under certain conditions, even vested
rights of ownership.
National Patrimony; Ancestral Domains; Ancestral Lands; Four hundred years of Philippine
political history cannot be set aside or ignored by IPRA, however well-intentioned it may be.—Verily, as
petitioners undauntedly point out, four hundred years of Philippine political history cannot be set
aside or ignored by IPRA, however well-intentioned it may be. The perceived lack of understanding
of the cultural minorities cannot be remedied by conceding the nation’s resources to their exclusive
advantage. They cannot be more privileged simply because they have chosen to ignore state laws. For
having chosen not to be enfolded by statutes on
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perfecting land titles, ICCs/IPs cannot now maintain their ownership of lands and domains by
insisting on their concept of “native title” thereto. It would be plain injustice to the majority of
Filipinos who have abided by the law and, consequently, deserve equal opportunity to enjoy the
country’s resources.
Same; Same; Same; Regalian Doctrine; The concerted effort to malign the Regalian Doctrine as a
vestige of the colonial past must fail—our Constitution vests the ownership of natural resources, not in
colonial masters, but in all the Filipino people.—The concerted effort to malign the Regalian Doctrine
as a vestige of the colonial past must fail. Our Constitution vests the ownership of natural resources,
not in colonial masters, but in all the Filipino people. As the protector of the Constitution, this Court has
the sworn duty to uphold the tenets of that Constitution—not to dilute, circumvent or create exceptions
to them.
Same; Same; Same; Same; Since RA 8371 defines ancestral domains as including the natural
resources found therein and further states that ICCs/IPs own these ancestral domains, then it means that
ICCs/IPs can own natural resources.—Respondents insist, and the ponencia agrees, that paragraphs
(a) and (b) of Sections 3 are merely definitions and should not be construed independently of the
other provisions of the law. But, precisely, a definition is “a statement of the meaning of a word or
word group.” It determines or settles the nature of the thing or person defined. Thus, after defining a
term as encompassing several items, one cannot thereafter say that the same term should be
interpreted as excluding one or more of the enumerated items in its definition. For that would be
misleading the people who would be bound by the law. In other words, since RA 8371 defines
ancestral domains as including the natural resources found therein and further states that ICCs/IPs
own these ancestral domains, then it means that ICCs/IPs can own natural resources.
Same; Same; Same; Congress, through IPRA, has in effect abdicated in favor of a minority group
the State’s power of ownership and full control over a substantial part of the national patrimony, in
contravention of our most fundamental law.—But again, RA 8371 relinquishes this constitutional
power of full control in favor of ICCs/IPs, insofar as natural resources found within their territories
are concerned. Pursuant to their rights of ownership and possession, they may develop and manage
the natural resources, benefit from and share in the profits from the allocation and the utilization
thereof. And they may exercise such right without any time limit, unlike non-ICCs/IPs who may do so
only for a period not exceeding 25 years, renewable for a like period. Consistent with the Consti-
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Cruz vs. Secretary of Environment and Natural Resources
tution, the rights of ICCs/IPs to exploit, develop and utilize natural resources must also be
limited to such period. In addition, ICCs/IPs are given the right to negotiate directly the terms and
conditions for the exploration of natural resources, a right vested by the Constitution only in the State.
Congress, through IPRA, has in effect abdicated in favor of a minority group the State’s power of
ownership and full control over a substantial part of the national patrimony, in contravention of our
most fundamental law.
Same; Same; Same; In giving ICCs/IPs rights in derogation of our fundamental law, Congress is
effectively mandating “reverse discrimination.”—Indigenous peoples may have long been marginalized
in Philippine politics and society. This does not, however, give Congress any license to accord them
rights that the Constitution withholds from the rest of the Filipino people. I would concede giving
them priority in the use, the enjoyment and the preservation of their ancestral lands and domains.
But to grant perpetual ownership and control of the nation’s substantial wealth to them, to the
exclusion of other Filipino citizens who have chosen to live and abide by our previous and present
Constitutions, would be not only unjust but also subversive of the rule of law. In giving ICCs/IPs rights
in derogation of our fundamental law, Congress is effectively mandating “reverse discrimination.” In
seeking to improve their lot, it would be doing so at the expense of the majority of the Filipino people.
Such short-sighted and misplaced generosity will spread the roots of discontent and, in the long term,
fan the fires of turmoil to a conflagration of national proportions.
Social Justice; The law must help the powerless by enabling them to take advantage of
opportunities and privileges that are open to all and by preventing the powerful from exploiting and
oppressing them.—Peace cannot be attained by brazenly and permanently depriving the many in
order to coddle the few, however disadvantaged they may have been. Neither can a just society be
approximated by maiming the healthy to place them at par with the injured. Nor can the nation
survive by enclaving its wealth for the exclusive benefit of favored minorities. Rather, the law must
help the powerless by enabling them to take advantage of opportunities and privileges that are open to
all and by preventing the powerful from exploiting and oppressing them. This is the essence of social
justice—empowering and enabling the poor to he able to compete with the rich and, thus, equally enjoy
the blessings of prosperity, freedom and dignity.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition.
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VOL. 347, DECEMBER 6, 2000 157
Cruz vs.Secretaryof Environmentand Natural Resources
The facts are stated in the resolution of the Court.
Barbara Anne C. Migallos & Troy A. Luna, Raymond Parsifal A. Fortun & Bienvenido
O. Bulatao for petitioners.
The Solicitor General for respondents.
Luna, Bonpin,Perez & Associates for intervenors.
Rodolfo C. Rapista for intervenors-oppositors.
Leilene Carantes-San Juan for Sioco-Cariño Family.
R E S O L U TI O N
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus
as citizens and taxpayers, assailing the constitutionality of certain provisions of Republic
Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997
(IPRA), and its Implementing Rules and Regulations (Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents to
comment. In compliance, respondents Chairperson and Commissioners of the National
1
Commission on Indigenous Peoples (NCIP), the government agency created under the
IPRA to implement its provisions, filed on October 13, 1998 their Comment to the Petition,
in which they defend the constitutionality of the IPRA andpray that
thepetitionbedismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and
Natural Resources (DENR) and Secretary of the Department of Budget and Management
(DBM) filed through the Solicitor General a consolidated Comment. The Solicitor General
is of the view that the IPRA is partly unconstitutional on the ground that it grants
ownership over natural resources to indigenouspeoples and prays that thepetition
begranted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of
the authors of the IPRA, Mr. Ponciano Benna-
_______________
158
158 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
gen, a member of the 1986 Constitutional Commission, and the leaders and members of
112 groups of indigenous peoples (Flavier, et al.), filed their Motion for Leave to Intervene.
They join the NCIP in defending the constitutionality of IPRA and praying for the dismissal
of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion
to Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an
expression of the principle of parens patriae and that the State has the responsibility to
protect and guarantee the rights of those who are at a serious disadvantage like indigenous
peoples. For this reason it prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and
the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.),
filed a Motion to Intervene with attached Comment-in-Intervention. They agree with the
NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray that the
petition for prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors
filed their respective memoranda in which they reiterate the arguments adduced in their
earlier pleadings and during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its
Implementing Rules on the ground that they amount to an unlawful deprivation of the
State’s ownership over lands of the public domain as well as minerals and other natural
resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of
the Constitution:
1. “(1)Section 3(a) which defines the extent and coverage of ancestral domains, and Section
3(b) which, in turn, defines ancestral lands;
2. “(2)Section 5, in relation to section 3(a), which provides that ancestral domains including
inalienable public lands, bodies of water, mineral and other resources found within
ancestral domains are private but community property of the indigenous peoples;
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VOL. 347, DECEMBER 6, 2000 159
Cruz vs.Secretaryof Environmentand Natural Resources
1. “(3)Section 6 in relation to Section 3(a) and 3(b) which defines the composition of
ancestral domains and ancestral lands;
2. “(4)Section 7 which recognizes and enumerates the rights of the indigenous peoples over
theancestral domains;
3. “(5)Section 8 which recognizes and enumerates the rights of the indigenous peoples over
theancestrallands;
4. “(6)Section 57 which provides for priority rights of the indigenous peoples in the
harvesting, extraction, development or exploration of minerals and other natural
resources within the areas claimed to be their ancestral domains, and the right to enter
into agreements with non-indigenous peoples for the development and utilization of
natural resources therein for a period not exceeding 25 years, renewable for not more
than 25 years;and
5. “(7)Section 58 which gives the indigenous peoples the responsibility to maintain, develop,
protect and conserve the ancestral domains and portions thereof which are found to be
necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected
areas, forest cover or reforestation.”
2
Petitioners also contend that, by providing for an allencompassing definition of “ancestral
domains” and “ancestral lands” which might even include private lands found within said
areas, Sections 3(a) and 3(b) violate the rights of private landowners. 3
In addition, petitioners question the provisions of the IPRA defining the powers and
jurisdiction of the NCIP and making customary law applicable to the settlement of disputes
involving ancestral domains and ancestral lands on the ground that these provisions
violate the due process clause of the Constitution. These provisions are:
4
1. “(1)Sections 51 to 53 and 59 which detail the process of delineation and recognition of
ancestral domains and which vest on the NCIP the sole authority todelineate
ancestraldomainsand ancestral lands;
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160 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. “(2)Section 52[i] which provides that upon certification by the NCIP that a particular area
is an ancestral domain and upon notification to the following officials, namely, the
Secretary of Environment and Natural Resources, Secretary of Interior and Local
Governments, Secretary of Justice and Commissioner of the National Development
Corporation, the jurisdiction of said officials oversaid area terminates;
2. “(3)Section 63 which provides the customary law, traditions and practices of indigenous
peoples shall be applied first with respect to property rights, claims of ownership,
hereditary succession and settlement of land disputes, and that any doubt or ambiguity
in the interpretation thereof shall be resolvedin favorof the indigenous peoples;
3. “(4)Section 65 which states that customary laws and practices shall be used to resolve
disputes involving indigenous peoples; and
4. “(5)Section 66 which vests on the NCIP the jurisdiction over all claims and disputes
involving rights of theindigenous peoples.” 5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP
Administrative Order No. 1, series of 1998, which provides that “the administrative
relationship of the NCIP to the Office of the President is characterized as a lateral but
autonomous relationship for purposes of policy and program coordination.” They contend
that said Rule infringes upon the President’s power of control over executive departments
under Section 17,Article VII of the Constitution. 6
Petitionerspray for the following:
 1. “(1)A declaration that Sections 3, 5, 6, 7, 8, 52[i], 57, 58, 59, 63, 65 and 66 and other related
provisions of R.A. 8371 are unconstitutional and invalid;
2. “(2)The issuance of a writ of prohibition directing the Chairperson and Commissioners of
the NCIP to cease and desist from implementing theassailed provisions of R.A.8371 and
its Implementing Rules;
3. “(3)The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department
of Environment and Natural Resources CircularNo. 2, series of 1998;
_______________
As the votes were equally divided (7 to 7) and the necessary majority was not
obtained, the case was redeliberated upon. However, after redeliberation, the voting
remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil
Procedure, thepetition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices
Puno, Vitug, Kapunan, Mendoza, and Panganiban.
SO ORDERED.
Davide,
Jr. (C.J.), Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Pardo,
Buena, Gonzaga-Reyes, Ynares-Santiago and De Leon, Jr., JJ., concur.

VOL. 347, DECEMBER 6, 2000 161 SEPARATE OPINION

Cruz vs.Secretaryof Environmentand Natural Resources PUNO, J:

1. “(4)The issuance of a writ of prohibition directing the Secretary of Budget and Management
PRECIS
to cease and desist from disbursing public funds for the implementation of the assailed
provisions of R.A. 8371; and A classic essay on the utility of history was written in 1874 by Friedrich Nietzsche entitled
2. “(5)The issuance of a writ of mandamus commanding the Secretary of Environment and “On the Uses and Disadvantages of History for Life.” Expounding on Nietzsche’s essay,
Natural Resources to comply with his duty of carrying out the State’s constitutional Judge Richard Posner wrote: 1 2

mandate to control and supervise the exploration, development, utilization and “Law is the most historically oriented, or if you like the most backward-looking, the most ‘past-
conservation of Philippine natural resources.” 7 dependent,’ of the professions. It venerates tradition, precedent, pedigree, ritual, custom, ancient
practices, ancient texts, archaic terminology, maturity, wisdom, seniority, gerontocracy, and
interpretation conceived of as a method of recovering history. It is suspicious of innovation,
After due deliberation on the petition, the members of the Court voted as follows: discontinuities, ‘paradigm shifts,’ and the energy and brashness of youth. These ingrained attitudes
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the are obstacles to anyone who
Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity
of the challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion _______________
sustaining all challenged provisions of the law with the exception of Section 1, Part II, Rule
III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations 1 Chief Judge, US Court of Appeals for the Seventh Circuit; Senior Lecturer, University of ChicagoLaw School.
2 The University of Chicago Law Review, Vol. 67, Summer 2000, No. 3, p. 573.
Implementing the IPRA, and Section 57 of the IPRA which he contends should be 163
interpreted as dealing with the large-scale exploitation of natural resources and should be
read in conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand,
VOL. 347, DECEMBER 6, 2000 163
Justice Mendoza voted to dismiss the petition solely on the ground that it does not raise a Cruz vs. Secretary of Environment and Natural Resources
justiciable controversy and petitioners do not have standing toquestion the wants to re-orient law in a more pragmatic direction. But, by the same token, pragmatic jurisprudence
constitutionality of R.A. 8371. must come to terms with history.”
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban When Congress enacted the Indigenous Peoples Rights Act(IPRA), it
filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and introduced radical concepts into the Philippine legal system which appear to collide with
related provisions of R.A. 8371 are unconstitutional. He reserves judgment on the settled constitutional and jural precepts on state ownership of land and other natural
constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await resources. The sense and subtleties of this law cannot be appreciated without considering
the filing of specific cases by those whose rights may have been violated by the IPRA. its distinct sociology and the labyrinths of its history. This Opinion attempts to interpret
Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 IPRA by discovering its soul shrouded by the mist of our history. After all, the IPRA was
of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, enacted by Congress not only to fulfill the constitutional mandate of protecting the
indigenous cultural communities’ right to their ancestral land but more importantly, to
_______________ correct a grave historical injustice to our indigenous people.
This Opinion discusses the following:
7Transcript of Stenographic Notes of the hearing held on April 13, 1999, pp. 5-6.
162
1. I.The Development of the Regalian Doctrine in the Philippine Legal System.
162 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources 1. A.The Laws of the Indies
Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and 2. B.Valenton v. Murciano
3. C.The Public Land Acts and the Torrens System
Vitug.
4. D.The Philippine Constitutions
 1. II.The Indigenous Peoples Rights Act (IPRA).
1. A.Indigenous Peoples
1. 1.Indigenous Peoples: Their History
2. 2.Their Concept of Land
1. III.The IPRA is a Novel Piece of Legislation.
1. A.Legislative History
1. IV.The Provisions of the IPRA Do Not Contravene the Constitution.
1. A.Ancestral domains and ancestral lands are the private property of indigenous peoples
and do not constitute part of the land of the public domain.
1. 1.The right to ancestral domains and ancestral lands: how acquired
2. 2.The concept of native title
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164 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
1. (a)Cariño v. Insular Government
2. (b)Indian Title to land
3. (c)Why the Cariño doctrine is unique
1. 3.The option of securing a Torrens title to the ancestral land
1. B.The right of ownership and possession by the ICCs/IPs to their ancestral domains is a
limited form of ownership and does not include the right to alienate the same.
1. 1.The indigenous concept of ownership and customary law
1. C.Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the Regalian Doctrine enshrined in
Section 2, Article XII of the 1987 Constitution.
1. 1.The rights of ICCs/IPs over their ancestral domains and lands
2. 2.The right of ICCs/IPs to develop lands and natural resources within the ancestral
domains does not deprive the State of ownership over the natural resources, control and
supervision in their development and exploitation.
1. (a)Section 1, Part II, Rule III of the Implementing Rules goes beyond the parameters of
Section 7(a) of the law on ownership of ancestral domains and is ultra vires.
2. (b)The small-scale utilization of natural resources in Section 7 (b) of the IPRA is allowed
under Paragraph 3, Section 2, Article XII of the 1987 Constitution.
3. (c)The large-scale utilization of natural resources in Section 57 of the IPRA may be
harmonized with Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution.
1. V.The IPRA is a Recognition of Our Active Participation in the International Indigenous
Movement.
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VOL. 347, DECEMBER 6, 2000 165
Cruz vs.Secretaryof Environmentand Natural Resources
DISCUSSION
I. THE DEVELOPMENTOF THE REGALIAN DOCTRINE IN THEPHILIPPINE LEGAL SYSTEM.
The capacity of the State to own or acquire property is the state’s power of dominium. This 3
was the foundation for the early Spanish decrees embracing the feudal theory of jura
regalia. The “Regalian Doctrine” or jura regalia is a Western legal concept that was first
introduced by the Spaniards into the country through the Laws of the Indies and the Royal
Cedulas. The Laws of the Indies, i.e., more specifically, Law 14, Title 12, Book 4 of the
Novisima Recopilacion de Leyes de las Indias, set the policy of the Spanish Crown with
respect to the Philippine Islands in the following manner:
“We, having acquired full sovereignty over the Indies, and all lands, territories, and possessions not
heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining to the royal
crown and patrimony, it is our will that all lands which are held without proper and true deeds of
grant be restored to us as they belong to us, in order that after reserving before all what to us or to
our viceroys, audiencias, and governors may seem necessary for public squares, ways, pastures, and
commons in those places which are peopled, taking into consideration not only their present
condition, but also their future and their probable increase, and after distributing to the natives what
may be necessary for tillage and pasturage, confirming them in what they now have and giving them
more if necessary, all the rest of said lands may remain free and unencumbered for us to disposeof as
we may wish.
We therefore order and command that all viceroys and presidents of pretorial courts designate
at such time as shall to them seem most expedient, a suitable period within which all possessors of
tracts, farms, plantations, and estates shall exhibit to them and to the court officers appointed by them
for this purpose, their title deeds thereto. And those who are in possession by virtue of proper deeds
and receipts, or by virtue of just
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166 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
prescriptive right shall be protected, and all the rest shall be restored to us tobedisposedof at our
will.” 4
The Philippines passed to Spain by virtue of “discovery” and conquest. Consequently, all
lands became the exclusive patrimony and dominion of the Spanish Crown. The Spanish
Government took charge of distributing the lands by issuing royal grants and concessions
to Spaniards, both military and civilian. Private land titles could only be acquired from the
5
government either by purchase or by thevariousmodes of landgrant from the Crown. 6
The Laws of the Indies were followed by the Ley Hipotecaria, or the Mortgage Law of
1893.7 The Spanish Mortgage Law provided for the systematic registration of titles and
deeds as well as possessory claims. The law sought to register and tax lands pursuant to
the Royal Decree of 1880. The Royal Decree of 1894, or the “Maura Law,” was partly an
amendment of the Mortgage Law as well as the Laws of the Indies, as already amended by
previous orders and decrees. This was the last Spanish land law promulgated in the
8
Philippines. It required the “adjustment” or registration of all agricultural lands,otherwise
the lands shall revert to the state.
Four years later, by the Treaty of Paris of December 10, 1898, Spain ceded to the
government of the United States all rights, interests and claims over the national territory
of the Philippine Islands. In 1903, the United States colonial government, through
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VOL. 347, DECEMBER 6, 2000 167
Cruz vs.Secretaryof Environmentand Natural Resources
the Philippine Commission, passed Act No. 926, the first Public Land Act.
In 1904, under the American regime, this Court decided the case of Valenton v. Murciano.
Valenton resolved the question of which is the better basis for ownership of land: long-
time occupation or paper title. Plaintiffs had entered into peaceful occupation of the
subject land in 1860. Defendant’s predecessor-in-interest, on the other hand, purchased
the land from the provincial treasurer of Tarlac in 1892. The lower court ruled against the
plaintiffs on the ground that they had lost all rights to the land by not objecting to the
administrative sale. Plaintiffs appealed the judgment, asserting that their 30-year adverse
possession, as an extraordinary period of prescription in the Partidas and the Civil Code,
had given them title to the land as against everyone, including the State; and that the State,
not owning the land, couldnot validly transmit it.
The Court, speaking through Justice Willard, decided the case on the basis of “those
special laws which from earliest time have regulated the disposition of the public lands in
the colonies.” The question posed by the Court was: “Did these special laws recognize any
10
right of prescription as against the State as to these lands; and if so, to what extentwas it
recognized?”
Prior to 1880, the Court said, there were no laws specifically providing for the
disposition of land in the Philippines. However, it was understood that in the absence of
any special law to govern a specific colony, the Laws of the Indies would be followed.
Indeed, in the Royal Order of July 5, 1862, it was decreed that until regulations on the
subject could be prepared, the authorities of the Phil-ippine Islands should follow strictly
the Laws of the Indies, the Ordenanza of the Intendentes of 1786, and the Royal Cedula of
1754. 11
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168 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Quoting the preamble of Law 14, Title 12, Book 4 of the Recopilacion de Leyes de
lasIndias,the court interpreted it as follows:
“In the preamble of this law there is, as is seen, a distinct statement that all those lands belong to the
Crown which have not been granted by Philip, or in his name, or by the kings who preceded him. This
statement excludes the idea that there might be lands not so granted, that did not belong to the king. It
excludes the idea that the king was not still the owner of all ungranted lands, because some private
person had been in the adverse occupation of them. By the mandatory part of the law all the occupants
of the public lands are required to produce before the authorities named, and within a time to be fixed
by them, their title papers. And those who had good title or showed prescription were to be protected
in their holdings. It is apparent that it was not the intention of the law that mere possession for a
length of time should make the possessors the owners of the land possessed by them without any
action on the part of the authorities.”12
The preamble stated that all those lands which had not been granted by Philip, or in his
name, or by the kings who preceded him, belonged to the Crown. For those lands granted
13
by the king, the decree provided for a system of assignment of such lands. It also ordered
that all possessors of agricultural land should exhibit their title deed, otherwise, the land
would be restored to the Crown. 14
The Royal Cedula of October 15, 1754 reinforced the Recopilacion when it ordered the
Crown’s principal subdelegate to issue a generalorder directing thepublicationof the
Crown’s instructions:
“xxx to the end that any and all persons who, since the year 1700, and up to the date of the
promulgation and publication of said order, shall have occupied royal lands, whether or not x xx
cultivated or tenanted, may xxx appear and exhibit to said subdelegates the titles and patents by
9
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VOL. 347, DECEMBER 6, 2000 169
Cruz vs.Secretaryof Environmentand Natural Resources
virtue of which said lands are occupied, x xx. Said subdelegates will at the same time warn
the parties interested that in case of their failure to present their title deeds within the
term designated, without a just and valid reason therefor, they will be deprived of and
evicted from their lands, and they will begranted to others.” 15
On June 25, 1880, the Crown adopted regulations for the adjustment of lands
“wrongfully occupied” by private individuals in the Philippine Islands. Valenton construed
these regulations together with contemporaneous legislative and executive
interpretations of the law, and concluded that plaintiffs’ case fared no better under the
1880 decree and other laws which followed it, than it did under the earlier ones. Thus as
a general doctrine, the Court stated:
“While the State has always recognized the right of the occupant to a deed if he proves a possession
for a sufficient length of time, yet it has always insisted that he must make that proof before the proper
administrative officers, and obtain from them his deed, and until he did that the State remained the
absolute owner.” 16
In conclusion, the Court ruled: “We hold that from 1860 to 1892 there was no law in force
in these Islands by which the plaintiffs could obtain the ownership of these lands by
prescription, without any action by the State.” Valenton had no rights other than those
17
which accrued to mere possession. Murciano, on the other hand, was deemed to be the
owner of the land by virtue of the grant by the provincial secretary. In effect, Valenton
upheld the Spanish conceptof state ownershipof public land.
As a fitting observation, the Court added that “[t]he policy pursued by the Spanish
Government from earliest times, requiring settlers on the public lands to obtain title deeds
therefor from the State, has been continued by the American Government in Act No. 926” 18
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170 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the
Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It
prescribed rules and regulations for the homesteading, selling, and leasing of portions of
the public domain of the Philippine Islands, and prescribed the terms and conditions to
enable persons to perfect their titles to public lands in the Islands. It also provided for the
“issuance of patents to certain native settlers upon public lands,” for the establishment of
town sites and sale of lots therein, for the completion of imperfect titles, and for the
cancellation or confirmation of Spanish concessions and grants in the Islands.” In short,
the Public Land Act operated on the assumption that title to public lands in the Philippine
Islands remained in the government; and that the government’s title to public land sprung
19
from the Treaty of Paris and other subsequent treaties between Spain and the United
States. The term “public land” referred to all lands of the public domain whose title still
20
remained in the government and are thrown open to private appropriation and
settlement, and excluded the patrimonial property of the government and the friar lands.
21
Act No. 926 was superseded in 1919 by Act 2874, the second Public Land Act. This new
law was passed under the Jones Law. It was more comprehensive in scope but limited the
exploitation of agricultural lands to Filipinos and Americans and citizens of other
countries which gave Filipinos the same privileges. After the passage of the 1935
23
Constitution, Act 2874 was amended in 1936 by Commonwealth Act No.
141. Commonwealth Act No. 141 remains the present Public Land Law and it is essentially
the same Insular Government, 7 Phil. 132 [1906]; all decided by the Philippine Supreme
Court.
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VOL. 347, DECEMBER 6, 2000 171
Cruz vs.Secretaryof Environmentand Natural Resources
as Act 2874. The main difference between the two relates to the transitory provisions on
the rights of American citizens and corporations during the Commonwealth period at par
with Filipino citizens and corporations. 24
Grants of public land were brought under the operation of the Torrens system under Act
496, or the Land Registration Law of 1903. Enacted by the Philippine Commission, Act 496
placed all public and private lands in the Philippines under the Torrens system. The law is
said to be almost a verbatim copy of the Massachussetts Land Registration Act of
1898, which, in turn, followed the principles and procedure of the Torrens system of
25
registration formulated by Sir Robert Torrens who patterned it after the Merchant
Shipping Acts in South Australia. The Torrens system requires that the government issue
an official certificate of title attesting to the fact that the person named is the owner of the
property described therein, subject to such liens and encumbrances as thereon noted or
the law warrants or reserves. The certificate of title is indefeasible and imprescriptible
26
and all claims to the parcel of land are quieted upon issuance of said certificate. This
system highly facilitates land conveyance and negotiation. 27
The Regalian doctrine was enshrined in the 1935 Constitution. One of the fixed and
dominating objectives of the 1935 Constitutional Convention was the nationalization and
conservation of the natural resources of the country. There was an overwhelming
28
sentiment in the Convention in favor of the principle of state ownership of natural resources
and the adoption of the Regalian doctrine. State ownership of natural resources was seen
29
as a neces-
_______________
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172 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
sary starting point to secure recognition of the state’s power to control their disposition,
exploitation, development, or utilization. The delegates to the Constitutional Convention
30
very well knew that the concept of State ownership of land and natural resources was
introduced by the Spaniards, however, they were not certain whether it was continued
and applied by the Americans. To remove all doubts, the Convention approved the
provision in the Constitution affirming the Regaliandoctrine. 31
Thus, the 1935 Constitution, in Section 1 of Article XIII on “Conservation andUtilization
of Natural Resources,” reads as follows:
22 “Sec. 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be
limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the
capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inauguration of the Government established under this Constitution. Natural resources, with
the exception of public agricultural land, shall not be alienated, and no license, concession, or lease for
the exploitation, development, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases beneficial use may be the
measure and thelimit of the grant.”
The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV on the
“National Economy and the Patrimony of the Nation,” to wit:
“Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces
of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State.
With the exception of agricultural, industrial or commercial, residential, and resettlement lands of the
public domain, natural resources shall not be alienated, and no license, concession, or lease for the
exploration, development, exploitation, or utilization of any of the natural resources shall be
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VOL. 347, DECEMBER 6, 2000 173
Cruz vs. Secretary of Environment and Natural Resources
granted for a period exceeding twenty-five years, renewable for not more than twenty-five years, except
as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development
of water power, in which cases beneficial use may be the measure and the limit of the grant.”
The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII on
“National Economy and Patrimony,” to wit:
“Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural resources
shall not be alienated. The exploration, development and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly undertake such activities
or it may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be the measure and limit of the grant.
x x x.”
Simply stated, all lands of the public domain as well as all natural resources enumerated
therein, whether on public or private land, belong to the State. It is this concept of State
ownership that petitioners claim is being violated by the IPRA.
II. THE INDIGENOUS PEOPLES RIGHTS ACT.
Republic Act No. 8371 is entitled “An Act to Recognize, Protect and Promote the Rights of
Indigenous Cultural Communities/Indigenous Peoples, Creating a National Commission
on Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating Funds
Therefor, and for Other Purposes.” It is simply known as “The Indigenous Peoples Rights Act
of 1997” or the IPRA.
The IPRA recognizes the existence of the indigenous cultural communities
or indigenous peoples (ICCs/IPs) as a distinct sector in
174
174 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Philippine society. It grants these people the ownership and possession of their ancestral
domains and ancestral lands, and defines the extent of these lands and domains. The
ownership given is the indigenous concept of ownership under customary law which traces
its origin to native title.
Other rights are also granted theICCs/IPs, and these are:
- the right to developlandsand natural resources;
- the right to stayinthe territories;
- the right in case of displacement;
- the right to safe and clean airand water;
- the right to claim parts of reservations;
- the right to resolveconflict; 32
- the right to ancestral lands which include
1. a.the right to transfer land/property to/among members of the same ICCs/IPs, subject to
customary laws and traditions of the community concerned;
2. b.the right to redemption for a period not exceeding 15 years from date of transfer, if the
transfer is to a non-member of the ICC/IP and is tainted by vitiated consent of the ICC/IP,
or if the transferis for an unconscionable consideration.33
Within their ancestral domains and ancestral lands, the ICCs/IPs are given the right to self-
governance and empowerment, social justice and human rights, the right to preserve and
34 35
protect their culture, traditions, institutions and community intellectual rights, and the
right to develop their own sciences and technologies. 36
To carry out the policies of the Act, the law created the National Commission on
Indigenous Peoples (NCIP). The NCIP is an independent agency under the Office of the
President and is composed of seven (7) Commissioners belonging to ICCs/IPs from each
of the ethnographic areas—Region I and the Cordilleras; Region II; the
_______________
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Cruz vs.Secretaryof Environmentand Natural Resources
rest of Luzon; Island groups including Mindoro, Palawan, Romblon, Panay and the rest of
the Visayas; Northern and Western Mindanao; Southern and Eastern Mindanao; and
Central Mindanao. The NCIP took over the functions of the Office for Northern Cultural
37
Communities and the Office for Southern Cultural Communities created by former
President Corazon Aquino which were merged under a revitalized structure. 38
Disputes involving ICCs/IPs are to be resolved under customary laws and
practices. When still unresolved, the matter may be brought to the NCIP, which is granted
quasi-judicial powers. The NCIP’s decisions may be appealed to the Court of Appeals by a
39
petition for review.
Any person who violates any of the provisions of the Act such as, but not limited to,
unauthorized and/or unlawful intrusion upon ancestral lands and domains shall be
punished in accordance with customary laws or imprisoned from 9 months to 12 years
and/or fined from P100,000.00 to P500,000.00 and obliged to pay damages. 40
The IPRA is a law dealing with a specific group of people, i.e., the Indigenous Cultural
Communities (ICCs) or the Indigenous Peoples (IPs). The term “ICCs” is used in the 1987
Constitution while that of “IPs” is the contemporary international language in the
International Labor Organization (ILO) Convention 169 and the United Nations (UN)
41
Draft Declaration on the Rights of Indigenous Peoples. 42
_______________
176 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
ICCs/IPs are defined by the IPRA as:
“Sec. 3 [h]. Indigenous Cultural Communities/Indigenous Peoples.—Refer to a group of people or
homogeneous societies identified by self-ascription and ascription by others, who have continuously
lived as organized community on communally bounded and defined territory, and who have, under
claims of ownership since time immemorial, occupied, possessed and utilized such territories, sharing
common bonds of language, customs, traditions and other distinctive cultural traits, or who have,
through resistance to political, social and cultural inroads of colonization, non-indigenous religions
and cultures, became historically differentiated from the majority of Filipinos. ICCs/IPs shall likewise
include peoples who are regarded as indigenous on account of their descent from the populations
which inhabited the country, at the time of conquest or colonization, or at the time of inroads of non-
indigenous religions and cultures, or the establishment of present state boundaries, who retain some
or all of their own social, economic, cultural and political institutions, but who may have been
displaced from their traditional domains or who may have resettled outside their ancestral domains.”
Indigenous Cultural Communities or Indigenous Peoples refer to a group of people or
homogeneous societies who have continuously lived as an organized community on
communally bounded and defined territory. These groups of people have actually occupied,
possessed and utilized their territories under claim of ownership since time immemorial.
They share common bonds of language, customs, traditions and other distinctive cultural
traits, or, they, by their resistance to political, social and cultural inroads of colonization,
non-indigenous religions and cultures, became historically differentiated from the Filipino
majority. ICCs/IPs also include descendants of ICCs/IPs who inhabited the country at the
time of conquest or colonization, who retain some or all of their own social, economic,
cultural and political institutions but who may have been displaced from their traditional
territories or who may have resettled outside their ancestral domains.
1. 1.Indigenous Peoples: Their History
Presently, Philippine indigenous peoples inhabit the interiors and mountains of Luzon,
Mindanao, Mindoro, Negros, Samar,
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VOL. 347, DECEMBER 6, 2000 177
Cruz vs. Secretary of Environment and Natural Resources
Leyte, and the Palawan and Sulu group of islands. They are composed of 110 tribes and
are as follows:
 1. 1.In the Cordillera Autonomous Region—Kankaney, Ibaloi, Bontoc, Tinggian or Itneg,
Ifugao, Kalinga, Yapayao, Aeta or Agta or Pugot, and Bago of Ilocos Norte and Pangasinan;
Ibanag of Isabela, Cagayan; Ilongot of Quirino and Nueva Vizcaya; Gaddang of Quirino,
Nueva Vizcaya, Itawis of Cagayan; Ivatan of Batanes, Aeta of Cagayan, Quirino and Isabela.
2. 2.In Region III—Aetas.
3. 3.In Region IV—Dumagats of Aurora, Rizal; Remontado of Aurora, Rizal, Quezon; Alangan
or Mangyan, Batangan, Buid or Buhid, Hanunuo and Iraya of Oriental and Occidental
Mindoro; Tadyawan of Occidental Mindoro; Cuyonon, Palawanon, Tagbanua and Tao’t
bato of Palawan.
4. 4.In Region V—Aeta of Camarines Norte and Camarines Sur; Aeta-Abiyan, Isarog, and
Kabihug of Camarines Norte; Agta, and Mayon of Camarines Sur; Itom of Albay; Cimaron
of Sorsogon; and the Pullon of Masbate and Camarines Sur.
5. 5.In Region VI—Ati of Negros Occidental, Iloilo and Antique, Capiz; the Magahat of Negros
Occidental; the Corolano and Sulod.
6. 6.In Region VII—Magahat of Negros Oriental and Eskaya of Bohol.
7. 7.In Region IX—the Badjao numbering about 192,000 in Tawi-Tawi, Zamboanga del Sur;
the Kalibugan of Basilan, the Samal, Subanon and Yakat.
8. 8.Region X—Numbering 1.6 million in Region X alone, the IPs are: the Banwaon, Bukidnon,
Matigsalog, Talaanding of Bukidnon; the Camiguin of Camiguin Island; the Higa-unon of
Agusan del Norte, Agusan del Sur, Bukidnon and Misamis Occidental; the Tigwahanon of
Agusan del Sur, Misamis Oriental and and Misamis Occidental, the Manobo of the Agusan
provinces, and the Umayamnon of Agusan and Bukidnon.
9. 9.In Region XI—There are about 1,774,065 IPs in Region XI. They are tribes of the
Dibabaon, Mansaka of Davao del Norte; Blaan, Kalagan, Langilad, Tboli and Talaingod of
Davao del Sur; Mamamanua of Surigao del Sur; Mandaya of the Surigao provinces and
Davao Oriental; Manobo Blit of South Cotabato; the Mangguangon of Davao and South
Cotabato; Matigsalog of Davao del Norte and Del Sur, Tagakaolo, Tasaday and Ubo of
South Cotabato; and Bagobo of Davao del Sur and South Cotabato.
178
178 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. 10.In Region XII—Ilianen, Tiruray, Maguindanao, Maranao, Tausug, Yakan/Samal, and
Iranon. 43
How these indigenous peoples came to live in the Philippines goes back toas early as 25,000
to30,000 B.C.
Before the time of Western contact, the Philippine archipelago was peopled largely by the
Negritos, Indonesians and Malays. The strains from these groups eventually gave rise to
44
common cultural features which became the dominant influence in ethnic reformula-
_______________
Taken from the list of IPs submitted by Rep. Andolana to the House of Representatives during the
43
deliberations on H.B. No. 9125—Interpellations of Aug. 20, 1997, pp. 00086-00095. “Lost tribes” such as the
Lutangan andTatanghave not been included.
How these people came to the Philippines may be explained by two theories. One view, generally linked to
44
Professor Otley H. Beyer, suggests the “wave theory”—a series of arrivals in the archipelago bringing in different
types and levels of culture. The Negritos, dark-skinned pygmies, came between 25,000 to 30,000 B.C. Their cultural
remains are preserved by the Negrito-type Filipinos found in Luzon, Visayas and Mindanao. Their relatively inferior
culture did not enable them to overcome the pressures from the second wave of people, the Indonesians A and B
who came in 5,000 and 3,500 B.C. They are represented today by the Kalinga, Gaddang, Isneg, Mangyan, Tagbanua,
Manobo, Mandaya, Subanon, and Sama. The first group was pushed inland as the second occupied the coastal and
downriver settlements. The last wave involved Malay migrations between 500 B.C. and 1,500 A.D. They had a more
advanced culture based on metal age technology. They are represented by the Christianized and Islamized Filipinos
who pushed the Indonesian groups inland and occupied muchof the coastal,lowland and downstream areas. A
second view is postulated by Robert Fox, F. Landa Jocano, Alfredo Evangelista, and Jesus Peralta. Jocano maintains
that the Negritos, Indonesians and Malays stand co-equal as ethnic groups without any one being dominant, racially
or culturally. The geographic distribution of the ethno-linguistic groups, which shows overlapping of otherwise
similar racial strains in both upland and lowland cultures or coastal and inland communities, suggests a random and
unstructured advent of different kinds of groups in the archipelago—Samuel K. Tan, A History of the
Philippines, published by the Manila Studies Association, Inc. and the Philippine National Historical Society, Inc., pp.
33-34 [1997]; Teodoro A. Agoncillo,Historyof the Filipino People,p. 21 [1990].
179
VOL. 347, DECEMBER 6, 2000 179
Cruz vs. Secretary of Environmentand Natural Resources
tion in the archipelago. Influences from the Chinese and Indian civilizations in the third or
fourth millennium B.C. augmented these ethnic strains. Chinese economic and socio-
cultural influences came by way of Chinese porcelain, silk and traders. Indian influence
found their way into the religious-cultural aspect of precolonial society. 45
The ancient Filipinos settled beside bodies of water. Hunting and food gathering
became supplementary activities as reliance on them was reduced by fishing and the
cultivation of the soil. From the hinterland, coastal, and riverine communities, our
46
ancestors evolved an essentially homogeneous culture, a basically common way of life
where nature was a primary factor. Community life throughout the archipelago was
influenced by, and responded to, common ecology. The generally benign tropical climate
and the largely uniform flora and fauna favored similarities, not differences. Life was 47
essentiallysubsistence but not harsh. 48
The early Filipinos had a culture that was basically Malayan in structure and form.
They had languages that traced their origin to the Austronesian parent-stock and used
them not only as media of daily communication but also as vehicles for the expression of
their literary moods. They fashioned concepts and beliefs about the world that they could
49
not see, but which they sensed to be part of their lives. They had their own religion and
50
religious beliefs. They believed in the immortality of the soul and life after death. Their
rituals were based on beliefs in a ranking deity whom they called Bathalang Maykapal, and
a host of other deities, in the environmental spirits and in soul spirits. The early Filipinos
adored the sun, the moon, the animals and birds, for they seemed to consider the objects
of Nature as something to be respected. They venerated
_______________
180 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
almost any object that was close to their daily life, indicating the importance of the
relationship between man and the object of nature. 51
The unit of government was the “barangay,” a term that derived its meaning from the
Malay word “balangay,” meaning, a boat, which transported them to these shores. The 52
barangay was basically a family-based community and consisted of thirty to one hundred
families. Each barangay was different and ruled by a chieftain called a “dato.” It was the
chieftain’s duty to rule and govern his subjects and promote their welfare and interests. A
chieftain had wide powers for he exercised all the functions of government. He was the
executive, legislator and judge and was the supreme commander in time of war. 53
Laws were either customary or written. Customary laws were handed down orally from
generation to generation and constituted the bulk of the laws of the barangay. They were
preserved in songs and chants and in the memory of the elder persons in the governance worked to splinter the population of the islands into numerous small and
community. The written laws were those that the chieftain and his elders promulgated
54 separate communities. 66

from time to time as the necessity arose. The oldest known written body of laws was the
55
Maragtas Code by Datu Sumakwel at about 1250 A.D. Other old codes are the Muslim Code
of Luwaran and the Principal Code of Sulu. Whether customary or written, the laws dealt
56
with various subjects, such as inheritance, divorce, usury, loans, partnership, crime and
When the Spaniards settled permanently in the Philippines in 1565, they found the
Filipinos living in barangay settlements scattered along water routes and river banks. One
of the first tasks imposed on the missionaries and the encomenderos was to collect all
scattered Filipinos together in a reduccion. As early as 1551, the Spanish government
67

punishment, property assumed an unvarying solicitous attitude towards the natives. The Spaniards regarded it68

a sacred “duty to conscience and humanity to civilize these less fortunate people
_______________
_______________

VOL. 347, DECEMBER 6, 2000 181

Tan, supra,at 47-48.
62

Cruz vs.Secretaryof Environmentand Natural Resources Id.at 48-49.

63

Cacho v. Government of the P.I., 28 Phil. 616, 625-627 11914]; see also Ponce, The Philippine Torrens
rights, family relations and adoption. Whenever disputes arose, these were decided
64

peacefully through a court composed by the chieftain as “judge” and the barangay elders
as “jury.” Conflicts arising between subjects of different barangays were resolved by
arbitration in which a board composed of elders from neutral barangays acted as arbiters. 57
System, pp. 11-12 [1964]. In Philippine pre-colonial history, there was only one recorded transaction on the
purchase of land. The Maragtas Code tells us of the purchase of Panay Island by ten Bornean datus led by Datu Puti
from the Atis under Marikudo in the 13th century. The purchase price for the Island was a gold salakot and a long
gold necklace—Agoncillo, supra,at 25.

Constantino, supra,at 38.

65

Baranganic society had a distinguishing feature: the absence of private property in Corpuz, supra,at 39.
66

land. The chiefs merely administered the lands in the name of the barangay. The social Resettlement—“bajo el son de la campana” (under the sound of the bell) or “bajo el toque dela
67

order was an extension of the family with chiefs embodying the higher unity of the campana”(under the peal of the bell).
People v. Cayat, 68 Phil. 12, 17 [1939].
community. Each individual, therefore, participated in the community ownership of the
68

183
soil and the instruments of production as a member of the barangay. This ancient
VOL. 347, DECEMBER 6, 2000 183
58

communalism was practiced in accordance with the concept of mutual sharing of

resources so that no individual, regardless of status, was without sustenance. Ownership
of land was non-existent or unimportant and the right of usufruct was what regulated the
development of lands. Marine resources and fishing grounds were likewise free to all.
59
Coastal communities depended for their economic welfare on the kind of fishing sharing
Cruz vs.Secretaryof Environmentand Natural Resources
living in the obscurity of ignorance” and to accord them the “moral and material
advantages” of community life and the “protection and vigilance afforded them by the
same laws.” 69

concept similar to those in land communities. Recognized leaders, such as the chieftains
60
and elders, by virtue of their positions of importance, enjoyed some economic privileges
and benefits. But their rights, related to either land and sea, were subject to their
The Spanish missionaries were ordered to establish pueblos where the church and
convent would be constructed. All the new Christian converts were required to construct
their houses around the church and the unbaptized were invited to do the same. With 70

responsibility to protect the communities from danger and to provide them with the
leadership and means of survival. 61
Sometime in the 13th century, Islam was introduced to the archipelago in
Maguindanao. The Sultanate of Sulu was established and claimed jurisdiction over
territorial areas represented today by Tawi-tawi, Sulu, Palawan, Basilan and Zamboanga.
the reduccion, the Spaniards attempted to “tame” the reluctant Filipinos through Christian
indoctrination using the convento/casa real/plaza complex as focal point.
The reduccion, to the Spaniards, was a “civilizing” device to make the Filipinos law-abiding
citizens of the Spanish Crown, and in the long run, to make them ultimately adoptHispanic
culture and civilization. 71

Four ethnic All lands lost by the old barangays in the process of pueblo organization as well as all
lands not assigned to them and the pueblos, were now declared to be crown lands or
182 SUPREME COURT REPORTS ANNOTATED realengas, belonging to the Spanish king. It was from the realengas that land grants were
made tonon-Filipinos. 72

Cruz vs.Secretaryof Environmentand Natural Resources
groups were within this jurisdiction: Sama, Tausug, Yakan and Subanon. The Sultanate of
62
Maguindanao spread out from Cotabato toward Maranao territory, now Lanao del Norte
The abrogation of the Filipinos’ ancestral rights in land and the introduction of the
concept of public domain were the most immediate fundamental results of Spanish colonial
theory and law. The concept that the Spanish king was the owner of everything of value in
73

and Lanao del Sur. 63

the Indies or colonies was imposed on the natives, and the natives were stripped of
The Muslim societies evolved an Asiatic form of feudalism where land was still held in theirancestral rights to land. 74

common but was private in use. This is clearly indicated in the Muslim Code of Luwaran.
The Code contains a provision on the lease of cultivated lands. It, however, has no _______________
provisionfor the acquisition, transfer, cession or sale ofland.
64

The societies encountered by Magellan and Legaspitherefore were primitive 69 Id. at 17, citing the Decree of the Governor-General of the Philippines, Jan. 14, 1887.
economies where most production was geared to the use of the producers and to the 70 Agoncillo, supra,at 80.
fulfillment of kinship obligations. They were not economies geared to exchange and 71 Id.at 80.
72 Corpuz, supra,at 277-278.
profit. Moreover, the family basis of barangay membership as well as of leadership and
65
73 Id. at 277.
 74Id.; N.B. But see discussion in Cariño v. Insular Government, infra,where the United States Supreme Court
found that the Spanish decrees in the Philippines appeared to recognize that the natives owned some land. Whether
in the implementation of these decrees the natives’ ancestral rights to land were actually respected was not discussed
by the U.S. Supreme Court; see also Note 131,infra.
184
184 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Increasing their foothold in the Philippines, the Spanish colonialists, civil and religious,
classified the Filipinos according to their religious practices and beliefs, and divided them
into three types. First were the Indios, the Christianized Filipinos, who generally came
from the lowland populations. Second, were the Moros or the Muslim communities, and
third, were the infieles or the indigenous communities. 75
The Indio was a product of the advent of Spanish culture. This class was favored by the
Spaniards and was allowed certain status although below the Spaniards.
The Moros and infieles were regarded as the lowest classes. 76
The Moros and infieles resisted Spanish rule and Christianity. The Moros were driven
from Manila and the Visayas to Mindanao; while the infieles, to the hinterlands.The
Spaniards did not pursue them into the deep interior. The upland societies were naturally
outside the immediate concern of Spanish interest, and the cliffs and forests of the
hinterlands were difficult and inaccessible, allowing the infieles, in effect, relative
security. Thus, the infieles,which were peripheral to colonial administration, were not
77
only able to preserve their own culture but also thwarted the Christianization process,
separating themselves from the newly evolved Christian community. Their own political, 78
economic and social systems were kept constantly alive and vibrant.
The pro-Christian or pro-Indio attitude of colonialism brought about a generally
mutual feeling of suspicion, fear, and hostility between the Christians on the one hand and
the non-Christians on the other. Colonialism tended to divide and rule an otherwise
culturally and historically related populace through a colonial system that exploitedboth
the virtues and vicesof the Filipinos. 79
President McKinley, in his instructions to the Philippine Commission of April 7,1900,
addressed the existenceof the infieles:
_______________
185
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
“In dealing with the uncivilized tribes of the Islands, the Commission should adopt the same course
followed by Congress in permitting the tribes of our North American Indians to maintain their tribal
organization and government, and under which many of those tribes are now living in peace and
contentment, surrounded by civilization to which they are unable or unwilling to conform. Such tribal
government should, however, be subjected to wise and firm regulation; and, without undue or petty
interference, constant and active effort should be exercised to prevent barbarous practicesand
introduce civilized customs.” 80
Placed in an alternative of either letting the natives alone or guiding them in the path of
civilization, the American government chose “‘to adopt the latter measure as one more in
accord with humanity andwith the national conscience.” 81
The Americans classified the Filipinos into two: the Christian Filipinos and the non-
Christian Filipinos. The term “non-Christian” referred not to religious belief, but to a
geographical area, and more directly, “to natives of the Philippine Islands of a low grade of
civilization, usually living in tribal relationship apart from settled communities.”
Like the Spaniards, the Americans pursued a policy of assimilation. In 1903, they passed
Act No. 253 creating the Bureau of Non-Christian Tribes (BNCT). Under the Department of
the Interior, the BNCTs primary task was to conduct ethnographic research among
unhispanized Filipinos, including those in Muslim Mindanao, with a “special view to
determining the most practicable means for bringing about their advancement in
civilization and prosperity.” The BNCT was modeled after the bureau dealing with American
Indians. The agency took a keen anthropological interest in Philippine cultural minorities
and produced a wealth of valuable materials about them. 83
_______________
People v. Cayat, 68 Phil. 12, 17 [1939].
80
Memorandum of the Secretary of the Interior, quoted in Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 714
81
[1919]; also cited in People v. Cayat, supra, at 17-18.
Rubi v. Provincial Board of Mindoro, supra, at 693.
82
Charles MacDonald, Indigenous Peoples of the Philippines: Between Segregation and Integration, Indigenous
83
Peoples of Asia, p. 348, ed.
186
186 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The 1935 Constitution did not carry any policy on the non-Christian Filipinos. The raging
issue then was the conservation of the national patrimony for the Filipinos.
In 1957, the Philippine Congress passed RA. No. 1888,an “Act to effectuate in a more
rapid and complete manner the economic, social, moral and political advancement of the
non-Christian Filipinos or national cultural minorities and to render real, complete, and
permanent the integration of all said national cultural minorities into the body politic,
creating the Commission on National Integration charged with said functions.” The law
called for a policy of integration of indigenous peoples into the Philippine mainstream and
for this purpose created the Commission on National Integration (CNI). The CNI was given, 84
more or less, the same task as the BNCT during the American regime. The post-
independence policy of integration was like the colonial policy of assimilation understood in
the context ofaguardian-ward relationship. 85
The policy of assimilation and integration did not yield the desired result. Like the
Spaniards and Americans, government attempts at integration met with fierce
resistance. Since World War II, a tidal wave of Christian settlers from the lowlands of Luzon
and the Visayas swamped the highlands and wide open spaces in Mindanao. Knowledge
185
86
by the settlers of the Public Land Acts and the Torrens system resulted in the titling of several
ancestral lands in the settlers’ names. With government initiative and participation, this
titling displaced several indigenous peoples from their lands. Worse, these peoples were
also displaced by projects undertaken by the nationalgovernment in the name of
nationaldevelopment. by R.H. Barnes, A. Gray and B. Kingsbury, pub. by Association for
87
Asian Studies [1995]. The BNCT made a Bontok and Subanon ethnography, a history of
Sulu genealogy, and a compilation on unhispanized peoples in northern Luzon.—Owen J.
Lynch, Jr., The Philippine Colonial Dichotomy: Attraction and Disenfranchisement, 63 P.L.J.
139-140 [1988].
_______________
R.A. No. 1888 of 1957.
84
85 See People v. Cayat, supra, at 21; See also Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 694 [1919].
86 MacDonald,Indigenous Peoples of the Philippines,supra, at 351.
82
 The construction of the Ambuklao and Binga dams in the 1950’s resulted in the eviction of hundreds of Ibaloi
87
families—Cerilo Rico S.
187
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
It was in the 1973 Constitution that the State adopted the following provision:
“The State shall consider the customs, traditions, beliefs, and interests of national cultural
communities in the formulation and implementation of State policies.” 88
For the first time in Philippine history, the “non-Christian tribes” or the “cultural minorities”
were addressed by the highest law of the Republic, and they were referred to as “cultural
communities.” More importantly this time, their “uncivilized” culture was given some
recognition and their “customs, traditions, beliefs and interests” were to be considered by
the State in the formulation and implementation of State policies. President Marcos
abolished the CNI and transferred its functions to the Presidential Adviser on National
Minorities (PANAMIN).The PANAMIN was tasked to integrate the ethnic groups that sought
full integration into the larger community, and at the same time “protect the rights of those
who wish to preserve their original lifeways beside the larger community.” In short, while 89
still adopting the integration policy, the decree recognized the right of tribal Filipinos to
preserve their way of life.
90
In 1974, President Marcos promulgated P.D. No. 410,otherwise known as the Ancestral
Lands Decree. The decree provided for the issuance of land occupancy certificates to
members of the national cultural communities who were given up to 1984 to register their
claims. In 1979, the Commission on the Settlement of Land Prob-Abelardo, Ancestral
91
Domain Rights: Issues, Responses, and Recommendations, Ateneo Law Journal, vol. 38, No.
1, p. 92 [1993].
_______________
Section 11, Art. XV, 1973 Constitution.
88
Presidential Decrees Nos. 1017 and 1414.
89
The PANAMIN, however, concentrated funds and resources on image-building, publicity, and impact projects.
90
In Mindanao, the agency resorted to a policy of forced resettlement on reservations, militarization and
intimidation—MacDonald, Indigenous Peoples of the Philippines, supra,at 349-350.
No occupancy certificates were issued, however, because the government failed to release the decree’s
91
implementing rules and regulations—Abelardo, supra, at 120-121.
188
188 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
lems was created under E.O. No. 561 which provided a mechanism for the expeditious
resolution of land problems involving small settlers, landowners, and tribal Filipinos.
Despite the promulgation of these laws, from 1974 to the early 1980’s, some 100,000
Kalingas and Bontoks of the Cordillera region were displaced by the Chico River dam
project of the National Power Corporation (NPC). The Manobos of Bukidnon saw their land
bulldozed by the Bukidnon Sugar Industries Company (BUSCO). In Agusan del Sur, the
National Development Company was authorized by law in 1979 to take approximately
40,550 hectares of land that later became the NDC-Guthrie plantation in Agusan del Sur.
Most of the land was possessed by the Agusan natives. Timber concessions, water
93
projects, plantations, mining, and cattle ranching and other projects of the national
government led not only to the eviction of the indigenous peoples from their land but also
to the reduction and destruction of their natural environment. 94
The Aquino government signified a total shift from the policy of integration to one of
preservation. Invoking her powers under the Freedom Constitution, President Aquino created
the Office of Muslim Affairs, Office for Northern Cultural Communities and the Office for
Southern Cultural Communities all under the Office of the President. 95
The 1987 Constitution carries at least six (6) provisions which insure the right of tribal
187 Filipinos to preserve their way of life. 96
_______________
Id., Note 177.
92
Id.,at 93-94.
93
MacDonald, Indigenous Peoples of the Philippines, supra, at 351.
94
E.O. Nos. 122-A, 122-B and 122-C. The preamble of E.O. No. 122-B states: “Believing that the new government
95
is committed to formulate more vigorous policies, plans, programs, and projects for tribal Filipinos, otherwise
known as Indigenous Cultural Communities, taking into consideration their communal aspirations, customs,
traditions, beliefs, and interests, in order to promote and preserve their rich cultural heritage and insure their
participation in the country’s development for national unity; x x x”
Article II, sec. 22; Article VI, sec. 5, par. 2; Article XII, sec. 5; Article XIII, sec. 6; Article XIV, sec. 17; and Article
96
XVI, sec. 12.
189
VOL. 347, DECEMBER 6, 2000 189
Cruz vs.Secretaryof Environmentand Natural Resources
This Constitution goes further than the 1973 Constitution by expressly guaranteeing the
rights of tribal Filipinos to their ancestral domains and ancestral lands. By recognizing their
right to their ancestral lands and domains, the State has effectively upheld their right to live
ina culturedistinctly their own.
1. 2.Their Concept of Land
Indigenous peoples share distinctive traits that set them apart from the Filipino
mainstream. They are non-Christians. They live in less accessible, marginal, mostly upland
areas. They have a system of self-government not dependent upon the laws of the central
administration of the Republic of the Philippines. They follow ways of life and customs that
are perceived as different from those of the rest of the population. The kind of response 97
the indigenous peoples chose to deal with colonial threat worked well to their advantage
by making it difficult for Western concepts and religion to erode their customs and
traditions. The “infieles societies” which had become peripheral to colonial
administration, represented, from a cultural perspective, a much older base of archi-
pelagic culture. The political systems were still structured on the patriarchal and kinship
oriented arrangement of power and authority. The economic activities were governed by
the concepts of an ancient communalism and mutual help. The social structure which
92 emphasized division of labor and distinction of functions, not status, was maintained. The
cultural styles and forms of life portraying the varieties of social courtesies and ecological
adjustments were kept constantly vibrant. 98
Land is the central element of the indigenous peoples’ existence. There is no traditional
concept of permanent, individual, land ownership. Among the Igorots, ownership of land
more accurately applies to the tribal right to use the land or to territorial control. The
people are the secondary owners or stewards of the land and that if a member of the tribe
ceases to work, he loses his claim of ownership, and the land reverts to the beings of the
spirit world who are its true and primary owners. Under the concept of “trusteeship,”
_______________
97 MacDonald, Indigenous Peoples of the Philippines, supra, at 345.
 Samuel K. Tan, A Historyofthe Philippines, p. 54 [1997].
98
190
190 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
the right to possess the land does not only belong to the present generation but the future
onesas well.
99
Customary law on land rests on the traditional belief that no one owns the land except
the gods and spirits, and that those who work the land are its mere stewards. Customary
law has a strong preference for communal ownership, which could either be ownership by
a group of individuals or families who are related by blood or by marriage, or ownership
by residents of the same locality who may not be related by blood or marriage. The system
of communal ownership under customary laws draws its meaning from the subsistence
and highly collectivized mode of economic production. The Kalingas, for instance, who are
engaged in team occupation like hunting, foraging for forest products, and swidden
farming found it natural that forest areas, swidden farms, orchards, pasture and burial
grounds should be communally-owned. For the Kalingas, everybody has a common right
102
to a common economic base. Thus, as a rule, rights and obligations to the land are shared
in common.
Although highly bent on communal ownership, customary law on land also sanctions
individual ownership. The residential lots and terrace rice farms are governed by a limited
system of individual ownership. It is limited because while the individual owner has the
right to use and dispose of the property, he does not possess all the rights of an exclusive
and full owner as defined under our Civil Code. Under Kalinga customary law, the
103
alienation of individu-
_______________
Cordillera Studies Program, Land Use and Ownership and Public Policy in the Cordillera, 29-30 [n.d.]; also
99
cited in Dante B. Gatmaytan, Ancestral Domain Recognition in the Philippines: Trends in Jurisprudence and
Legislation,5 Phil. Nat. Res.L.J. No. 1, pp. 47-48 [1992].
Abelardo, Ancestral Domain Rights, supra, at 98-99, citing Ponciano L. Bennagen, Indigenous Attitudes Toward
100
Land and Natural Resources of Tribal Filipinos, 31 National Council of Churches in the Philippines Newsletter, Oct.-
Dec. 1991, at 4-9.
Id. at 99, citing June Prill-Brett, Bontok Land Tenure (UP Law library, mimeographed).
101
Ma. Lourdes Aranal-Sereno and Roan Libarios, The Interface of National Land Law and Kalinga Law, 58 P.L.J.
102
420, 440-441 [1983].
Ibid.
103
191
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
ally-owned land is strongly discouraged except in marriage and succession and except to
meet sudden financial needs due to sickness, death in the family, or loss of
crops. Moreover, land to be alienated should first be offered to a clan-member before any
104
village-member can purchase it, and in no case may land be sold to a non-member of
the ili. 105
Land titles do not exist in the indigenous peoples’ economic and social system. The
concept of individual land ownership under the civil law is alien to them. Inherently colonial
in origin, our national land laws and governmental policies frown upon indigenous claims to
ancestral lands. Communal ownership is looked upon as inferior, if not inexistent.
III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.
It was to address the centuries-old neglect of the Philippine indigenous peoples that the
Tenth Congress of the Philippines, by their joint efforts, passed and approved R.A. No.
8371, the Indigenous Peoples Rights Act (IPRA) of 1997. The law was a consolidation of two
Bills—Senate Bill No. 1728 and House Bill No. 9125.
Principally sponsored by Senator Juan M. Flavier, Senate Bill No. 1728 was a
107
consolidation of four proposed measures referred to the Committees on Cultural
Communities, Environment and Natu-
100
_______________
101
Ibid.
104
Ibid.
105
Ma. Lourdes Aranal-Sereno and Roan Libarios, The Interface, supra,at 420.
106
Senate Bill No. 1728 was co-sponsored by Senator Macapagal-Arroyo and co-authored by Senators Alvarez,
107
Magsaysay, Revilla, Mercado, Enrile, Honasan,Tatad, Maceda, Shahani,Osmena and Romulo. The Eighth Congress,
through Senators Rasul, Estrada and Romulo filed a bill to operationalize the mandate of the 1987 Constitution on
indigenous peoples. The bill was reported out, sponsored and interpellated but never enacted into law. In the Ninth
Congress, the bill filed by Senators Rasul and Macapagal-Arroyo was never sponsored and deliberated upon in the
floor.
192
192 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
ral Resources, Ways and Means, as well as Finance. It adopted almost en toto the
comprehensive version of Senate Bill Nos. 1476 and 1486 which was a result of six regional
consultations and one national consultation with indigenous peoples nationwide. At the 108
Second Regular Session of the Tenth Congress, Senator Flavier, in his sponsorship speech,
gave a background on the situation of indigenous peoples in the Philippines, to wit:
“The Indigenous Cultural Communities, including the Bangsa Moro, have long suffered from the
dominance and neglect of government controlled by the majority. Massive migration of their Christian
brothers to their homeland shrunk their territory and many of the tribal Filipinos were pushed to the
hinterlands. Resisting the intrusion, dispossessed of their ancestral land and with the massive
exploitation of their natural resources by the elite among the migrant population, they became
marginalized. And the government has been an indispensable party to this insidious conspiracy
against the Indigenous Cultural Communities (ICCs). It organized and supported the resettlement of
people to their ancestral land, which was massive during the Commonwealth and early years of the
Philippine Republic. Pursuant to the Regalian Doctrine first introduced to our system by Spain
through the Royal Decree of 13 February 1894 or the Maura Law, the government passed laws to
legitimize the wholesale landgrabbing and provide for easy titling or grant of lands to migrant
homesteaders within thetraditionalareas of the ICCs.” 109
191 Senator Flavier further declared:
The IPs are the offsprings and heirs of the peoples who have first inhabited and cared for the land
long before any central government was established. Their ancestors had territories over which they
ruled themselves and related with other tribes. These territories—the land—include people, their
dwelling, the mountains, the water, the air, plants, forest and the animals. This is their environment
in its totality. Their existence as indigenous peoples is manifested in their own lives through political,
economic, socio-cultural and spiritual practices. The IPs culture is the living and irrefutableproof to
this.
_______________
Sponsorship Speech of Senator Flavier, Legislative History of SBN 1728, Tenth Congress, Second Regular
108
Session, Senate, Oct 16, 1996, pp. 15-16.
106
Id. at 12.
109
193
 VOL. 347, DECEMBER 6, 2000 193
Cruz vs.Secretaryof Environmentand Natural Resources
Their survival depends on securing or acquiring land rights; asserting their rights to it; and depending
on it. Otherwise, IPs shall cease to exist asdistinct peoples.”
110
To recognize the rights of the indigenous peoples effectively, Senator Flavier proposed a
bill based on two postulates: (1) the concept of native title; and (2) theprincipleofparens
patriae.
According to Senator Flavier, “[w]hile our legal tradition subscribes to the Regalian
Doctrine reinstated in Section 2, Article XII of the 1987 Constitution,” our “decisional laws”
and jurisprudence passed by the State have “made exception to the doctrine.” This
exception was first laid down in the case of Cariño v. Insular Government where:
“xxx the court has recognized long occupancy of land by an indigenous member of the cultural
communities as one of private ownership, which, in legal concept, is termed “native title.” This ruling
has not been overturned. In fact, it was affirmed insubsequent cases.” 111
Following Cariño, the State passed Act No. 926, Act No. 2874, CA. No. 141, P.D. 705, P.D.
410, P.D. 1529, R.A. 6734 (the Organic Act for the Autonomous Region of Muslim
Mindanao). These laws, explicitly or implicitly, and liberally or restrictively, recognized
“native title” or “private right” and the existence of ancestral lands and domains. Despite
the passage of these laws, however, Senator Flavier continued:
“xxx the executive department of government since the American occupation has not implemented
the policy. In fact, it was more honored in its breach than in its observance, its wanton disregard
shown during the period unto the Commonwealth and the early years of the Philippine Republic when
government organized and supported massive resettlement of the peopletothe land of the ICCs.”
Senate Bill No. 1728 seeks to genuinely recognize the IPs right to own and possess their
ancestral land. The bill was prepared also under the principle of parens patriaeinherent in
the supreme
_______________
194 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
power of the State and deeply embedded in Philippine legal tradition. This principle
mandates that persons suffering from serious disadvantage or handicap, which places
them in a position of actual inequality in their relation or transaction with others, are
entitled to the protection of the State.
Senate Bill No. 1728 was passed on Third Reading by twenty-one (21) Senators voting in
favor and none against, with no abstention. 112
House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of the Committee on
Cultural Communities. It was originally authored and subsequently presented and
defended on the floor by
Rep. GregorioAndolanaof North Cotabato.
113
Rep.Andolana’s sponsorshipspeech reads as follows:
‘This Representation, as early as in the 8th Congress, filed a bill of similar implications that would
promote, recognize the rights of indigenous cultural communities within the framework of national
unity and development.
Apart from this, Mr. Speaker, is our obligation, the government’s obligation to assure and
ascertain that these rights shall be well-preserved and the cultural traditions as well as the indigenous
laws that remained long before this Republic was established shall be preserved and promoted. There
is a need, Mr. Speaker, to look into these matters seriously and early approval of the substitute bill
shall bring into reality the aspirations, the hope and the dreams of more than 12 million Filipinos that
they be considered in the mainstream of the Philippine society as we fashion for the year 2000.” 114
Rep. Andolana stressed that H.B. No. 9125 is based on the policy of preservation as
mandated in the Constitution. He also empha-
_______________
Journal of the Tenth Congress of the Philippines, Senate, Session No. 5, Aug. 5-6,1997, pp. 86-87.
112
Co-authors of the bill were Reps. Ermita, Teves, Plaza, Calalay, Recto, Fua, Luciano, Abad, Cosalan,
113
Aumentado, de la Cruz, Bautista, Singson, Damasing, Romualdo, Montilla, Germino, Verceles—Proceedings of Sept.
4, 1997, pp. 00107-00108.
Sponsorship speech of Rep. Andolana of House Bill No 9125 March 20, 1997.
114
195
VOL. 347, DECEMBER 6, 2000 195
Cruz vs.Secretaryof Environmentand Natural Resources
sized that the rights of IPs to their land was enunciated in Cariño v. Insular
Government which recognized the fact that they had vested rights prior to the
establishment of the Spanish and American regimes. 115
After exhaustive interpellation, House Bill No. 9125, and its corresponding amendments,
was approved on Second Reading with no objections.
IV. THE PROVISIONS OF THE IPRA
DO NOT CONTRAVENE THE CONSTITUTION.
The IPRA grants to ICCs/IPs a distinct kind of ownership over ancestral domains and
ancestral lands. Ancestral lands are not the same as ancestral domains. These are defined
in Section 3 [a] and [b] ofthe IndigenousPeoples Right Act,viz.:
“Sec. 3 a) Ancestral Domains.—Subject to Section 56 hereof, refer to all areas generally belonging to
ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under a
claim of ownership, occupied or possessed by ICCs/IPs by themselves or through their ancestors,
communally or individually since time immemorial, continuously to the present except when
interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence of
government projects or any other voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure their economic, social and cultural
welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other lands
individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources, and lands which may no longer
be exclusively occupied by ICCs/IPs but from which they traditionally had access to for their
subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic
and/or shifting cultivators;
_______________
Interpellationof Aug. 20, 1997, 6:16 p.m., p. 00061.
115
196
196 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. b)Ancestral Lands.—Subject to Section 56 hereof, refers to land occupied, possessed and
utilized by individuals, families and clans who are members of the ICCs/IPs since time
immemorial, by themselves or through their predecessors-in-interest, under claims of
individual or traditional group ownership, continuously, to the present except when
interrupted by war, force majeure or displacement by force, deceit, stealth, or as a
consequence of government projects and other voluntary dealings entered into by
government and private individuals/corporations, including, but not limited to,
residential lots, rice terraces or paddies, private forests, swiddenfarms and tree lots.”
Ancestral domains are all areas belonging to ICCs/IPs held under a claim of ownership, 198 SUPREME COURT REPORTS ANNOTATED
occupied or possessed by ICCs/IPs by themselves or through their ancestors, communally
or individually since time immemorial, continuously until the present, except when Cruz vs.Secretaryof Environmentand Natural Resources
interrupted by war, force majeure or displacement by force, deceit, stealth or as a tral domain, the NCIP issues a Certificate of Ancestral Land Title (CALT). 124

consequence of government projects or any other voluntary dealings with government CADT’s and CALT’s issued under the IPRA shall be registered by the NCIP before the
and/or private individuals or corporations. Ancestral domains comprise lands, inland Register of Deeds in the place where the property is situated. 125

waters, coastal areas, and natural resources therein and includes ancestral lands, forests,
pasture, residential, agricultural, and other lands individually owned whether alienable or 1. (1)Right to Ancestral Domains and Ancestral Lands: How Acquired
not, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other
natural resources. They also include lands which may no longer be exclusively occupied by The rights of the ICCs/IPs to their ancestral domains and ancestral lands may be acquired
ICCs/IPs but from which they traditionally had access to for their subsistence and in two modes: (1) by native title over both ancestral lands and domains; or (2) by Torrens
traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic title under the Public Land Act and the Land Registration Act with respect to ancestral lands
and/or shifting cultivators. 116

only.
Ancestral lands are lands held by the ICCs/IPs under the same conditions as ancestral
domains except that these are limited to lands and that these lands are not merely
occupied and possessed but are also utilized by the ICCs/IPs under claims of individual or 1. (2)The Concept of Native Title
traditional group ownership. These lands include but are not limited to residential lots,
rice terraces or paddies, private forests, swidden farms and tree lots. 117 Native title is defined as:
“Sec. 3 [1]. Native Title—refers to pre-conquest rights to lands and domains which, as far back as
memory reaches, have been held under a claim of private ownership by ICCs/IPs, have never been
197 VOL. 347, DECEMBER 6, 2000 public lands and are thus indisputably presumed to have been held that way since before the Spanish
Cruz vs.Secretaryof Environmentand Natural Resources Conquest.” 126

The procedures for claiming ancestral domains and lands are similar to the procedures
embodied in Department Administrative Order (DAO) No. 2, series of 1993, signed by then
Secretary of the Department of Environment and Natural Resources (DENR) Angel
Alcala. DAO No. 2 allowed the delineation of ancestral domains by special task forces and
118
ensured the issuance of Certificates of Ancestral Land Claims (CALC’s) and Certificates of
Native title refers to ICCs/IPs’ preconquest rights to lands and domains held under a claim
of private ownership as far back as memory reaches. These lands are deemed never to
have been public lands and are indisputably presumed to have been held that way since
before the Spanish Conquest. The rights of ICCs/IPs to their ancestral domains (which also
include ancestral lands) by virtue of native title shall be recognized and respected. Formal 127

Ancestral Domain Claims (CADC’s) toIPs. recognition, when solicited by ICCs/IPs concerned, shall be embodied in a Certificate of
The identification and delineation of these ancestral domains and lands is a power Ancestral Domain Title (CADT), which
conferred by the IPRA on the National Commission on Indigenous Peoples (NCIP). The 119

_______________
guiding principle in identification and delineation is self-delineation. This means that the
120

ICCs/IPs have a decisive role in determining the boundaries of theirdomainsand in all the
A CALT refers to a title formally recognizing the rights of the ICCs/IPs over their ancestral lands—Rule II [d],
activities pertinent thereto.
124

Implementing Rules NCIPA.O. No. 1.

121

The procedure for the delineation and recognition of ancestral domains is set forth in Section 52 [k], IPRA.
125

Sections 51 and 52 of the IPRA. The identification, delineation and certification of ancestral Section 3 [1], IPRA.
126

Section 11, IPRA.

lands is in Section53 of saidlaw.
127

199
Upon due application and compliance with the procedure provided under the law and
upon finding by the NCIP that the application is meritorious, the NCIP shall issue a VOL. 347, DECEMBER 6, 2000 199
Certificate of Ancestral Domain Title (CADT) in the name of the community Cruz vs.Secretaryof Environmentand Natural Resources
concerned. The allocation of lands within the ancestral domain to any individual or
122
shall recognize the title of the concerned ICCs/IPs over the territories identified and
indigenous corporate (family or clan) claimants is left to the ICCs/IPs concerned to decide delineated. 128

in accordance with customs and traditions. With respect to ancestral lands outside the
123
Like a Torrens title, a CADT is evidence of private ownership of land by native
ances- title. Native title, however, is a right of private ownership peculiarly granted to ICCs/IPs
over their ancestral lands and domains. The IPRA categorically declares ancestral lands
_______________ and domains held by native title as never to have been public land. Domains and lands held
under native title are, therefore, indisputably presumed to have never been public lands
A CADT refers to a title formally recognizing the right of possession and ownership of ICCs/IPs over their
and are private.
122

ancestral domains identified and delineated in accordance with the IPRA—Rule II [c], Rules & Regulations
Implementing the IPRA, NCIP Admin. Order No. 1.
Section 53 [a], IPRA.
123
1. (a)Cariño v. Insular Government 129

198
The concept of native title in the IPRA was taken from the 1909 case of Cariño v. Insular
Government. Cariño firmly established a concept of private land title that existed
130
irrespective of any royal grant from the State.
In 1903, Don Mateo Cariño, an Ibaloi, sought to register with the land registration
court 146 hectares of land in Baguio Municipality, Benguet Province. He claimed that this
land had been possessed and occupied by his ancestors since time immemorial; that his
grandfather built fences around the property for the holding of cattle and that his father
cultivated some parts of the land. Cariño inherited the land in accordance with Igorot
custom. He tried to have the land adjusted under the Spanish land laws, but no document
issued from the Spanish Crown. In 1901, Cariño obtained a possessory title to the land
131
under the Spanish Mortgage Law. The North American colonial government, however,
132
ignored his possessory title and built a public road on the land prompting him
_______________
Ibid.
128
41 Phil. 935 (1909), 212 U.S. 449, 53 L.Ed. 594.
129
Sponsorship Speech of Senator Juan Flavier, Leg. History of SBN 1728, Tenth Congress, Second Regular
130
Session, Oct. 16, 1996, p. 13.
It was the practice of the Spanish colonial government not to issue titles to Igorots—Owen J. Lynch,
131
Jr., Invisible Peoples and a Hidden Agenda: The Origins of Contemporary Philippine Land Laws (1900-1913), 63 P.L.J.
249, 288 [1988], citing the testimony of Benguet Provincial Governor William F. Pack, Records at 47,Cariño.
Maura Law or the Royal Decree of Feb. 13, 1894.
132
200
200 SUPREME COURT REPORTSANNOTATED
Cruz vs. Secretaryof Environmentand Natural Resources
to seek a Torrens title to his property in the land registration court. While his petition was
pending, a U.S. military reservation was proclaimed over his land and, shortly thereafter,
133
a military detachment was detailed on the property with orders to keep cattle and
trespassers, including Cariño, off the land. 134
In 1904, the land registration court granted Cariño’s application for absolute
ownership to the land. Both the Government of the Philippine Islands and the U.S.
Government appealed to the C.F.I. of Benguet which reversed the land registration court
and dismissed Cariño’s application. The Philippine Supreme Court affirmed the C.F.I, by
135
applying the Valenton ruling. Cariño took the case to the U.S. Supreme Court. On one hand, 136
the Philippine government invoked the Regalian doctrine and contended that Cariño failed
to comply with the provisions of the Royal Decree of June 25, 1880, which required
registration of land claims within a limited period of time. Cariño, on the other, asserted
that he was the absolute owner of the land jure gentium, and that the land neverformed
part of the public domain.
In a unanimous decision written by Justice Oliver Wendell Holmes, theU.S.Supreme
Court held:
“It is true that Spain, in its earlier decrees, embodied the universal feudal theory that all lands were
held from the Crown, and perhaps the general attitude of conquering nations toward people not
recognized as entitled to the treatment accorded to those in the same zone of civilization with
themselves. It is true, also, that in legal theory, sovereignty is absolute, and that, as against foreign
nations, the United States may assert, as Spain asserted, absolute power. But it does not follow that,
as against the inhabitants of the Philippines, the United States asserts that Spain
_______________
136 In 1901, Cariño had entered into a promissory agreement with a U.S. merchant in Manila.The note obliged Cariño to sell the
land at issue “as soon as he obtains from the Government of the United States, or its representatives in the Philippines, real and
definitivetitle.”See Lynch, Invisible Peoples, supra,at290, citing Government’s Exhibit G, Records, at 137-138,Cariño.
201
VOL. 347, DECEMBER 6, 2000 201
Cruz vs.Secretaryof Environmentand Natural Resources
had such power. When theory is left on one side, sovereignty is a question of strength, and may vary
in degree. How far a new sovereign shall insist upon the theoretical relation of the subjects to the head
in the past, and how far it shall recognize actual facts, are mattersfor it to decide.” 137
The U.S. Supreme Court noted that it need not accept Spanish doctrines. The choice was
with the new colonizer. Ultimately, the matter had tobe decidedunder U.S. law.
The Cariño decision largely rested on the North American constitutionalist’s concept
of “due process” as well as the pronounced policy “‘to do justice to the natives.” It was 138
based on the strong mandate extended to the Islands via the Philippine Bill of 1902 that
“No law shall be enacted in said islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the equal protection
of the laws.” The court declared:
“The acquisition of the Philippines was not like the settlement of the white race in the United States.
Whatever consideration may have been shown to the North American Indians, the dominant purpose
of the whites in America was to occupy land. It is obvious that, however stated, the reason for our
taking over the Philippines was different. No one, we suppose, would deny that, so far as consistent
with paramount necessities, our first object in the internal administration of the islands is to do justice
to the natives, not to exploit their country for private gain. By the Organic Act of July 1, 1902, chapter
1369, section 12 (32 Statutes at Large, 691), all the property and rights acquired there by the United
States are to be administered ‘for the benefit of the inhabitants thereof.’ It is reasonable to suppose
that the attitude thus assumed by the United States with regard to what was unquestionably its own
is also its attitude in deciding what it will claim for its own. The same statute made a bill of rights,
embodying the safeguards of the Constitution, and, like the Constitution, extends those safeguards to
all. It provides that ‘no law shall be enacted in said islands which shall deprive any person of life,
liberty, or property without due process of law, or deny to any person therein the equal protection of
the laws.’ In the light of the declaration that we have quoted from section 12, it is hard to believe that
the United States was ready to declare in the next breath that “any person” did not embrace the
inhabitants of Benguet,
_______________
202
202 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
or that it meant by “property” only that which had become such by ceremonies of which presumably
a large part of the inhabitants never had heard, and that it proposed to treat as public land what they,
by native custom and by long association,—of the profoundest factors in human thought,—regarded
as their own.” 139
The Courtwent further:
“[E]very presumption is and ought to be against the government in a case like the present. It might,
perhaps, be proper and sufficient to say that when, as far back as testimony or memory goes, the land
has been held by individuals under a claim of private ownership, it will be presumed to have been held in
the same way from before the Spanish conquest, and never to have been public land. Certainly in a case
like this, if there is doubt or ambiguity in the Spanish law, we ought to give the applicant the benefit
of the doubt.” 140
The court thus laid down the presumption of a certain title held (1) as far back as testimony
or memory went, and (2) under a claim of private ownership. Land held by this title is
presumed to “never have beenpublic land.”
 Against this presumption, the U.S. Supreme Court analyzed the Spanish decrees
upheld in the 1904 decision of Valenton v. Murciano. The U.S. Supreme Court
found noproof that the Spanish decrees did not honor native title. On the contrary, the
decrees discussed in Valentonappeared to recognize that the natives owned some land,
irrespective of any royal grant. The Regalian doctrine declared in the preamble of
the Recopilacion was all “theory and discourse” and it was observed that titles were
admitted to existbeyond thepowers of the Crown,viz.:
“If the applicant’s case is to be tried by the law of Spain, we do not discover such clear proof that it was
bad by that law as to satisfy us that he does not own the land. To begin with, the older decrees and laws
cited by the counsel for the plaintiff in error seem to indicate pretty clearly that the natives were
recognized as owning some lands, irrespective of any royal grant. In other words, Spain did not assume
to convert all the native in-
_______________
139 Id.at 940.
Id.at 941.
140
203
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
habitants of the Philippines into trespassers or even into tenants at will. For instance, Book 4, title 12,
Law 14 of the Recopilacion de Leyes de las Indias, cited for a contrary conclusion in Valenton v.
Murciano, 3 Philippine 537, while it commands viceroys and others, when it seems proper, to call for
the exhibition of grants, directs them to confirm those who hold by good grants or justa prescripcion.
It is true that it begins by the characteristic assertion of feudal overlordship and the origin of all titles in
the King or his predecessors. That was theory and discourse. The fact was that titles were admitted to
exist that owed nothing to the powers of Spain beyond this recognition in their books” (Emphasis
supplied). 141
The court further stated that the Spanish “adjustment” proceedings never held sway over
unconquered territories. The wording of the Spanish laws were not framed in a manner as
to convey to the natives that failure to register what to them has always been their own
would mean loss of such land. The registration requirement was “not to confer title, but
simply to establish it”; it was “not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it.”
By recognizing this kind of title, the court clearly repudiated the doctrine
of Valenton. It was frank enough, however, to admit the possibility that the applicant might
have been deprived of his land under Spanish law because of the inherent ambiguity of the
decrees and concomitantly, the various interpretations which may be given them. But
precisely because of the ambiguity and of the strong “due process mandate” of the
Constitution, the court validated this kind of title. This title was sufficient, even without
142
government administrative action, and entitled the holder to a Torrens certificate. Justice
Holmes explained:
“It will be perceived that the rights of the applicant under the Spanish law present a problem not
without difficulties for courts of a legal tradition. We have deemed it proper on that account to notice
the possible
_______________
Id.at 941-942.
141
Aranal-Sereno and Libarios, The Interface Between Kalinga Land Law, supra at 428—This article was one of those circulated
142
among the Constitutional Commissioners in the formulation of Sec. 5, Article XII of the 1987 Constitution (4 Record of the Constitutional
Commission 33).
204
204 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
effect of the change of sovereignty and the act of Congress establishing the fundamental principles
now to be observed. Upon a consideration of the whole case we are of the opinion that law and justice
require that the applicant should be granted what he seeks, and should not be deprived of what, by
the practice and belief of those among whom he lived, was his property, through a refined
interpretation of an almost forgotten law of Spain.” 143
Thus, the court ruled in favor of Cariño and ordered the registrationof the148hectares
inBaguio Municipality in hisname. 144
Examining Cariño closer, the U.S. Supreme Court did not categorically refer to the title
it upheld as “native title.” It simply said:
“The Province of Benguet was inhabited by a tribe that the Solicitor-General, in his argument,
characterized as a savage tribe that never was brought under the civil or military government of the
Spanish Crown. It seems probable, if not certain, that the Spanish officials would not have granted to
anyone in that province the registration to which formerly the plaintiff was entitled by the Spanish Laws,
and which would have made his title beyond question good. Whatever may have been the technical
position of Spain it does not follow that, in the view of the United States, he had lost all rights and was
a mere trespasser when the present government seized his land. The argument to that effect seems
to amount to a denial of native titles through an important part of the Island of Luzon, at least, for the
203 want of ceremonies which the Spaniards would not have permitted and had not the power to
enforce.”
145
This is the only instance when Justice Holmes used the term “native title” in the entire
length of the Cariñodecision. It is observed that the widespread use of the term “native
title” may be traced to Professor Owen James Lynch, Jr., a Visiting Professor at
______________
Id.at 944.
143
Certificate of Title No. 2 covering the 148 hectares of Baguio Municipality was issued not in the name of
144
Cariño who died on June 6, 1908, but to his lawyers John Hausserman and Charles Cohn and his attorney-in-fact
Metcalf Clarke. Hausserman, Cohn and Clarke sold the land to the U.S. Government in a Deed of Quitclaim—Richel
B. Langit, Igorot Descendants Claim Rights to Camp John Hay, Manila Times, p. 1, Jan. 12, 1998.
Id.at 939.
145
205
VOL. 347, DECEMBER 6, 2000 205
Cruz vs.Secretaryof Environmentand Natural Resources
the University of the Philippines College of Law from the Yale University Law School. In
1982, Prof. Lynch published an article in the Philippine Law Journal entitled Native Title,
Private Right and Tribal Land Law. This article was made after Professor Lynch visited
146
over thirty tribal communities throughout the country and studied the origin and
development of Philippine land laws. He discussed Cariño extensively and used the term
147
“native title” to refer to Cariño’s title as discussed and upheld by the U.S. Supreme Court in
said case.
1. (b)Indian Title
In a footnote in the same article, Professor Lynch stated that the concept of “native title”
as defined by Justice Holmes in Cariño “is conceptually similar to “aboriginal title” of the
American Indians. This is not surprising, according to Prof. Lynch, considering that during
148
the American regime, government policy towards ICCs/IPs was consistently made in
reference to native Americans. This was clearly demonstrated in the case of Rubi v.
149
Provincial Board of Mindoro. 150
 In Rubi, the Provincial Board of Mindoro adopted a Resolution authorizing the
provincial governor to remove the Mangyans from
________________
57 P.L.J. 268, 293-296 [1982].
146
Prom 1987 to 1988, Prof. Lynch allowed the P.L.J. to publish parts of his doctoral dissertation at the Yale Law
147
School entitled “Invisible Peoples: A History of Philippine Land Law.” Please see The Legal Bases of Philippine
Colonial Sovereignty: An Inquiry, 62 P.L.J. 279 [1987]; Land Rights, Land Laws and Land Usurpation: The Spanish Era
(15681898),63 P.L.J. 82 [1988]; The Colonial Dichotomy: Attraction and Disenfranchisement, 63 P.L.J. 112; Invisible
Peoples and a Hidden Agenda: The Origins of Contemporary Philippine Land Laws (1900-1913),63 P.L.J. 249.
“Native title” is a common law recognition of pre-existing aboriginal land interests in Australia—Maureen
148
Tehan, Customary Title, Heritage Protection, and Property Rights in Australia: Emerging Patterns of Land Use in the
Post-Mabo Era, 7 Pacific Rim Law & Policy Journal, No. 3, p. 765 [June 1998].
Lynch,Native Titles, supra, Note 164, p. 293.
149
39 Phil. 660 [1919].
150
206
206 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
their domains and place them in a permanent reservation in Sitio Tigbao, Lake Naujan.
Any Mangyan who refused to comply was to be imprisoned. Rubi and some Mangyans,
including one who was imprisoned for trying to escape from the reservation, filed for
habeas corpus claiming deprivation of liberty under the Board Resolution. This Court
denied the petition on the ground of police power. It upheld government policy promoting
the idea that a permanent settlement was the only successful method for educating the
Mangyans, introducing civilized customs, improving their health and morals, and
protecting the public forests in which they roamed. Speaking throughJustice Malcolm, the
151
court said:
“Reference was made in the President’s instructions to the Commission to the policy adopted by the
United States for the Indian Tribes. The methods followed by the Government of the Philippine Islands
in its dealings with the so-called non-Christian people is said, on argument, to be practically identical
with that followed by the United States Government in its dealings with the Indian tribes. Valuable
lessons, it is insisted, can be derived byaninvestigation of the American-Indian policy. From the
beginning of the United States, and even before, the Indians have been treated as “in a state of
pupilage.” The recognized relation between the Government of the United States and the Indians may
be described as that of guardian and ward. It is for the Congress to determine when and how the
guardianship shall be terminated. The Indians are alwayssubject to theplenary authority ofthe United
States. 152
x x x.
As to the second point, the facts in the Standing Bear case and the Rubi case are not exactly
identical. But even admitting similarity of facts, yet it is known to all that Indian reservations do exist
in the United States, that Indians have been taken from different parts of the country and placed on
these reservations, without any previous consultation as to their own wishes, and that, when once so
located, they have been made to remain on the reservation for their own good and for the general
good of the country. If any lesson can be drawn from the Indian policy of the United States, it is that
the determination of this policy is for the legislative and executive branches of the government and
that when once so decided upon, the courts should not interfere to upset a carefully planned
_______________
207
VOL. 347, DECEMBER 6, 2000 207
Cruz vs.Secretaryof Environmentand Natural Resources
governmental system. Perhaps, just as many forceful reasons exist for the segregation of the
Manguianes in Mindoro as existed for the segregation of the different Indiantribes in the United
States.” 153
Rubi applied the concept of Indian land grants or reservations in the Philippines. An Indian
reservation is a part of the public domain set apart by proper authority for the use and
occupation of a tribe or tribes of Indians. It may be set apart by an act of Congress, by
154
treaty, or by executive order, but it cannot be established by custom and prescription. 155
Indian title to land, however, is not limited to land grants or reservations. It also covers
the “aboriginal right of possession or occupancy.” The aboriginal right of possession
156
depends on the actual occupancy of the lands in question by the tribe or nation as their
ancestral home, in the sense that such lands constitute definable territory occupied
exclusively by the particular tribe or nation. It 157
________________
Id.at 700.
153
42 C.J.S., Indians,Sec. 29 [1944 ed.].
154
There are 3 kinds of Indian reservations: (a) those created by treaties prior to 1871; (b) those created by acts
155
of Congress since 1871; and (c) those made by Executive Orders where the President has set apart public lands for
the use of the Indians in order to keep them within a certain territory—42 C.J.S., Indians, Sec. 29 citing Sioux Tribe
of Indians v. U.S., 94 Ct. Cl. 150, 170, certiorari granted 62 S. Ct. 631, 315 U. S. 790, 86 L. Ed. 1194, affirmed 62 S. Ct.
1095, 316 U.S. 317, 86 L.Ed. 1501. It is observed that the first two kinds may include lands possessed by aboriginal title.
The last kind covers Indian reservations proper. Until 1871, Indian tribes were recognized by the United States as
possessing the attributes of nations to the extent that treaties were made with them. In that year, however, Congress,
by statute, declared its intention thereafter to make the Indian tribes amenable directly to the power and authority
of the United States by the immediate exercise of its legislative power over them, instead of by treaty. Since then,
Indian affairs have been regulated by acts of Congress and by contracts with the Indian tribes practically amounting
to treaties—41 Am Jur 2d, Indians, Sec. 55 [1995 ed.].
42 C.J.S. Indians,Sec. 28 [1944 ed.].
156
Ibid; see also U.S. v. Santa Fe Pac. R. Co., Ariz., 62 S. Ct. 248, 314 U.S. 339, 86 L. Ed. 260 [1941].
157
208
208 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
is a right which exists apart from any treaty, statute, or other governmental action,
although in numerous instances treaties have been negotiated with Indian tribes,
recognizing their aboriginal possession and delimiting their occupancy rights or settling
and adjusting theirboundaries. 158
American jurisprudence recognizes the Indians’ or native Americans’ rights to land they
have held and occupied before the “discovery” of the Americas by the Europeans. The earliest
definitive statement by the U.S. Supreme Court on the nature of aboriginal title was made in
1823 in Johnson & Graham’s Lessee v. M'Intosh. 159
In Johnson, the plaintiffs claimed the land in question under two (2) grants made by
the chiefs of two (2) Indian tribes. The U.S. Supreme Court refused to recognize this
conveyance, the plaintiffs being private persons. The only conveyance that was recognized
was that made by the Indians to the government of the European discoverer. Speaking for
the court, Chief Justice Marshall pointed out that the potentates of the old world believed
that they had made ample compensation to the inhabitants of the new world by bestowing
civilization and Christianity upon them; but in addition, said the court, they found it
necessary, in order to avoid conflicting settlements and consequent war, to establish the
principle that discovery gives title to the government by whose subjects, or by whose
authority, the discovery was made, against all other European governments, which title
might be consummated by possession. The exclusion of all other Europeans gave to the
160
nation making the discovery the sole right of acquiring the soil from the natives and
establishing settlements upon it. As regards the natives, the court further stated that:
“Those relations which were to exist between the discoverer and the natives were to be regulated by
themselves. The rights thus acquired being exclusive, no otherpowercould interpose between them.
In the establishment of these relations, the rights of the original inhabitants were, in no instance,
entirely disregarded; but were necessarily,
________________
209
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
to a considerable extent, impaired. They were admitted to be the rightful occupants of the soil, with a
legal as well as just claim to retain possession of it, and to use it according to their own discretion; but
their rights to complete sovereignty, as independent nations, were necessarily diminished, and their
power to dispose of the soil at their own will, to whomsoever they pleased, was denied by the
fundamental principle that discovery gave exclusive titleto those who made it.
While the different nations of Europe respected the right of the natives as occupants, they asserted
the ultimate dominion to be in themselves; and claimed and exercised, as a consequence of this ultimate
dominion, a power to grant the soil, while yet in possession of the natives. These grants have been
understood by all to convey a title to the grantees, subject only to the Indian right of occupancy.”
Thus, the discoverer of new territory was deemed to have obtained the exclusive right to
acquire Indian land and extinguish Indian titles. Only to the discoverer—whether to
England, France, Spain or Holland—did this right belong and not to any other nation or
private person. The mere acquisition of the right nonetheless did not extinguish Indian
claims to land. Rather, until the discoverer, by purchase or conquest, exercised its right,
the concerned Indians were recognized as the “rightful occupants of the soil, with a legal
as well as just claim to retain possession of it.” Grants made by the discoverer to her
subjects of lands occupied by the Indians were held to convey a title to the grantees,
subject only to the Indian right of occupancy. Once the discoverer purchased the land from
the Indians or conquered them, it was only then that the discoverer gained an absolute
title unrestricted by Indian rights.
The court concluded, in essence, that a grant of Indian lands by Indians could not
convey a title paramount to the title of the United States itself tootherparties, saying:
It has never been contended that the Indian title amounted to nothing. Their right of possession has
never been questioned. The claim of government extends to the complete ultimate title, charged with this
right of possession, and to the exclusive power of acquiring that right.” 162
_______________
Id.at 689.
161
Id. at 696; see also 41 ALR Fed 425, Annotation: Proof and Extinguishment of Aboriginal Title to Indian Lands,
162
Sec. 2 [a] [1979].
210
210 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
It has been said that the history of America, from its discovery to the present day, proves
the universal recognition of this principle. 163
The Johnson doctrine was a compromise. It protected Indian rights and their native
lands without having to invalidate conveyances made by the government to many U.S.
citizens. 164
Johnson was reiterated in the case of Worcester v. Georgia. In this case, the State of
165
Georgia enacted a law requiring all white persons residing within the Cherokee nation to
obtain a license or permit from the Governor of Georgia; and any violation of the law was
deemed a high misdemeanor. The plaintiffs, who were white missionaries, did not obtain
said license and were thus charged with a violation ofthe Act.
The U.S. Supreme Court declared the Act as unconstitutional for interfering with the
treaties established between the United States and the Cherokee nation as well as the Acts
of Congress regulating intercourse with them. It characterized the relationship between
the United States government and the Indians as:
“The Indian nations were, from their situation, necessarily dependent on some foreign potentate for
the supply of their essential wants, and for their protection from lawless and injurious intrusions into
209 their country. That power was naturally termed their protector. They had been arranged under the
protection of Great Britain; but the extinguishment of the British power in their neighborhood, and
the establishment of that of the United States in its place, led naturally to the declaration, on the part
of the Cherokees, that they were under the protection of the United States, and of no other power.
They assumed the relation with the United States which had before subsisted with Great Britain.
This relation was that of a nation claiming and receiving the protection of one more powerful,
not that of individuals abandoning their national character,and submitting as subjects tothelaws of a
master.” 166
_______________
161
211
VOL. 347, DECEMBER 6, 2000 211
Cruz vs.Secretaryof Environmentand Natural Resources
It was the policy of the U.S. government to treat the Indians as nations with distinct
territorial boundaries and recognize their right of occupancy over all the landswithin
theirdomains. Thus:
“From the commencement of our government Congress has passed acts to regulate trade and
intercourse with the Indians; which treat them as nations, respect their rights, and manifest a firm
purpose to afford that protection which treaties stipulate. All these acts, and especially that of 1802,
which is still in force, manifestly consider the several Indian nations as distinct political communities,
having territorial boundaries, within which their authority is exclusive, and having a right to all the lands
within those boundaries, which is not only acknowledged, but guaranteed by the United States.
x x x.
“The Indian nations had always been considered as distinct, independent political communities,
retaining their original natural rights, as the undisputed possessors of the soil from time
immemorial, with the single exception of that imposed by irresistible power, which excluded them
from intercourse with any other European potentate than the first discoverer of the coast of the
particular region claimed: and this was a restriction which those European potentates imposed on
themselves, as well as on the Indians. The very term “nation,” so generally applied to them, means “a
people distinct from others.” x xx. 167
The Cherokee nation, then, is a distinct community, occupying its own territory, with boundaries
accurately described, in which the laws of Georgia can have no force, and which the citizens of Georgia
have no right to enter but with the assent of the Cherokees themselves or in conformity with treaties
and with the acts of Congress. The whole intercourse between the United States and this nation is, by
our Constitution and laws, vestedin the government of the United States.” 168
The discovery of the American continent gave title to the government of the discoverer as
against all other European governments. Designated as the naked fee, this title was to be 169
consum-
_______________
Id.at 500.
167
Id. at 501.
168
The title of the government to Indian lands, the naked fee, is a sovereign title, government having no landlord
169
from whom it holds the fee—Shoshone Tribe of Indians of Wind River Reservation in Wyoming v.
 212
212 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
mated by possession and was subject to the Indian title of occupancy. The discoverer
acknowledged the Indians’ legal and just claim to retain possession of the land, the Indians
being the original inhabitants of the land. The discoverer nonetheless asserted the
exclusive right to acquire the Indians’ land—either by purchase, “defensive” conquest, or
cession—and in so doing, extinguish the Indian title. Only the discoverer could extinguish
Indian title because it alone asserted ultimate dominion in itself. Thus, while the different
nations of Europe respected the rights of the natives as occupants, they all asserted the
ultimate dominion and title to be in themselves. 170
As early as the 19th century, it became accepted doctrine that although fee title to the
lands occupied by the Indians when the colonists arrived became vested in the sovereign—
first the discovering European nation and later the original 13 States and the United States—
a right of occupancy in the Indian tribes was nevertheless recognized. The Federal
Government continued the policy of respecting the Indian right of occupancy, sometimes
called Indian title, which it accorded the protection of complete ownership. But this
171
aboriginal Indian interest simply constitutes “permission” from the whites to occupy the
land, and means mere possession not specifically recognized as ownership by Congress. It
is clear that this right of occupancy based upon aboriginal possession is not a property
right. It is vulnerable to affirmative action by the federal government who, as sovereign,
173
possessed exclusive power to
_______________
U.S., 85 Ct. Cl. 331, certiorari granted U.S. v. Shoshone Tribe of Indians, 58 S. Ct. 609, 303 U.S. 629, 82 L. Ed.
1090, affirmed 58 S. Ct. 794, 304 U.S. 111, 82 L.Ed. 1213, 1218-1219 [1938].
Buttz v. Northern Pac. R. Co., Dak., at 30 L. Ed. 330, 335; Beecher v. Wetherby, Wis., 95 U.S. 517, 24 L. Ed. 440,
170
441 [1877]; see also 42 C.J.S.,Indians,Sec. 28 [1944 ed.].
Annotation, Proof and Extinguishment of Aboriginal Title to Indian Lands, 41 ALR Fed 425, Sec. 2 [b]
171
[1979]—hereinafter cited as Aboriginal Title to IndianLands.
Ibid.; see also Tee Hit Ton Indians v. U.S., 348 U.S. 272, 99 L. Ed. 314, 320, 75 S. Ct. 313 [1955], reh den 348
172
U.S. 965, 99 L. Ed. 753, 75 S. Ct. 521.
Ibid.;Tee Hit Ton Indians v.U.S.,at 99 L. Ed. 320.
173
213
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
extinguish the right of occupancy at will. Thus, aboriginal title is not the same as legal
174
title. Aboriginal title rests on actual, exclusive and continuous use and occupancy for a long
time. It entails that land owned by Indian title must be used within the tribe, subject to its
175
laws and customs, and cannot be sold to another sovereign government nor to any
citizen. Such title as Indians have to possess and occupy land is in the tribe, and not in the
176
individual Indian; the right of individual Indians to share in the tribal property usually
depends upon tribal membership, the property of the tribe generally beingheld in
communal ownership. 177
As a rule, Indian lands are not included in the term “public lands,” which is ordinarily
used to designate such lands as are subject to sale or other disposal under general
laws. Indian land which has been abandoned is deemed to fall into the public do-
178
_______________
Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 39 L. Ed. 2d 73, 94 S Ct. 772 [1974]; U.S. v. Alcea Bank
174
of Tillamooks, 329 U.S. 40, 91 L. Ed. 29. 67 S. Ct. 167 [1946].
For compensation under the Indian Claims Commission Act, the proof of aboriginal title rests on actual,
175
exclusive and continuous use and occupancy for a long time prior to the loss of the property. (The Indian Claims
Commission Act awards compensation to Indians whose aboriginal titles were extinguished by the government
through military conquest, creation of a reservation, forced confinement of Indians and removal of Indians from
certain portions of the land and the designation of Indian land into forest preserve, grazing district, etc.)—Aboriginal
Title to Indian Lands, supra, atSecs. 2[a], 3[a],pp. 431, 433, 437.
Aboriginal Title to Indian Lands, supra, at Sec. 2[b], p. 435.
176
41 Am Jr 2d, Indians,Sec. 59[1995 ed.].
177
An allotment of Indian land contains restrictions on alienation of the land. These restrictions extend to a
178
devise of the land by will—Missouri, K. & T R. Co. v. U.S., 235 U.S. 37, 59 L. Ed. 116, 35 S. Ct. 6 [1914]; A railroad land
grant that falls within Indian land is null and void—Northern P. R. Co. v. U.S., 227 U.S. 355, 57 L. Ed. 544, 33 S. Ct. 368
[1913]; Portions of Indian land necessary for a railroad right of way were, by the terms of the treaty, declared “public
land,” implying that land beyond the right of way was private—Kindred v. Union P.R. Co., 225 U.S. 582, 56 L. Ed. 1216,
32 S. Ct. 780 [1912]; see also 41 Am Jur 2d, Indians,Sec. 58 [1995 ed.].
214
214 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretaryof Environmentand Natural Resources
main. On the other hand, an Indian reservation is a part of the public domain set apart for
179
the use and occupation of a tribe of Indians. Once set apart by proper authority, the
180
reservation ceases to be public land, and until the Indian title is extinguished, no one but
Congress can initiate any preferential right on, or restrict the nation’s power to dispose
172
of,them.
181
The American judiciary struggled for more than 200 years with the ancestral land claims
of indigenous Americans. And two things are clear. First, aboriginal title is
182
recognized. Second, indigenous property systems are also recognized. From a legal point
of view, certain benefits can be drawn from a comparison of Philippine IPs to native
Americans. Despite the similarities between native title and aboriginal title, however,
183
there are at present some misgivings on whether jurisprudence on American Indians may
be cited authoritatively in the Philippines. The U.S. recognizes the possessory rights of the
Indians over their land; title to the land, however, is deemed to have passed to the U.S. as
successor of the discoverer. The aboriginal title of ownership is not specifically recognized
as ownership by action authorized by Congress. The protection of aboriginal title merely
184
guards against encroachment
_______________
213
Aboriginal Title to Indian Lands, supra, at Sec. 2[a], p. 433.
179
42 C.J.S. Indians,Sec. 29 [1944 ed.]
180
Ibid.
181
North American Indians have made much progress in establishing a relationship with the national
182
government and developing their own laws. Some have their own government-recognized constitutions. Usually the
recognition of Indian tribes depends on whether the tribe has a reservation. North American tribes have reached
such an advanced stage that the main issues today evolve around complex jurisdictional and litigation matters.
Tribes have acquired the status of sovereign nations within another nation, possessing the right to change and
grow—Jose Paulo Kastrup, The Internationalization of Indigenous Rights from the Environmental and Human Rights
Perspective, Texas International Law Journal, vol. 32:97, 104[1997].
Lynch, Native Title, supra, at 293.
183
Dante Gatmaytan, Ancestral Domain Recognition in the Philippines: Trends in Jurisprudence and Legislation, 5
184
Phil. Nat. Res. L.J. No. 1, pp. 43, 40 [Aug. 1992]; see also Tee Hit Ton Indians v. U.S., supra, at 320.
215
VOL. 347, DECEMBER 6, 2000 215
Cruz vs.Secretaryof Environmentand Natural Resources
by persons other than the Federal Government. Although there are criticisms against the
185 land. It is this long, continuous, open and adverse possession in the concept of owner of
refusal to recognize the native Americans’ ownership of these lands, the power of the 186 thirty years both for ordinary citizens and members of the national cultural
194

State to extinguish these titles has remainedfirmly entrenched. 187 minorities that converts the land from public into private and entitles the registrant to a
195

Under the IPRA, the Philippine State is not barred form asserting sovereignty over the Torrens certificate of title.
ancestral domains and ancestral lands. The IPRA, however, is still in its infancy and any
188

similarities between its application in the Philippines vis-à-vis American Jurisprudence on _______________
aboriginal title will depend on the peculiar facts of each case.
Susi v. Razon, 48 Phil. 424 [1925]; Herico v. Dar, 95 SCRA 437[1980].
189

Ibid.
190

1. (c)Why theCariño doctrine is unique Director of Lands v. Intermediate Appellate Court, 146 SCRA 509[1986]; Director of Lands v. Buyco, 216
191

SCRA 78 [1992]; Republic v. Court of Appeals and 235 SCRA 567 [1994].
75 Phil. 890 [1946].
192

In the Philippines, the concept of native title first upheld in Cariño and enshrined in the Id.at 892.
193

IPRA grants ownership, albeit in limited form, of the land to the ICCs/IPs. Native title Sec. 48 [b], CA 141.
194

presumes that the land is private and was never public. Cariño is the only case that Sec. 48 [c], CA. 141, as amended. This provision was added in 1964 by R.A. 3872.
195

217
specifically and categorically recognizes native title. The long line of cases citing Cariño did
not touch on native title and the private character of ancestral domains and lands. Cariño VOL. 347, DECEMBER 6, 2000 217
was cited by the succeeding cases to support the concept of acquisitive prescription under the Cruz vs.Secretaryof Environmentand Natural Resources
Public Land Act which is a different matter

_______________ 1. (3)The Option of Securing a Torrens Title to the Ancestral Land Indicates that the Land is
Private.
Ibid.
185

D. Gatmaytan, supra, citing Churchill, The Earth is Our Mother-Struggles for American Indian Land and
186
The private character of ancestral lands and domains as laid down in the IPRA is
Liberation in the Contemporary United States, The State of Native America: Genocide, Colonization and Resistance
139 (M. Jaimes 1992); and Indian Law Resource Center, United States Denial of Indian Property Rights: A Study in further strengthened by the option given to individual ICCs/IPs over their individually-
Lawless Power and Racial Discrimination, Rethinking Indian Law 15 (National Lawyers Guild, Committee on Native owned ancestral lands. For purposes of registration under the Public Land Act and the Land
American Struggles 1982). Registration Act, the IPRA expressly converts ancestral land into public agricultural land
Id., Note 28, stating that some earlier decisions of the U.S. Supreme Court have held that Congress is subject
which may be disposed of by the State. The necessary implication is that ancestral land is
187

to the strictures of the Constitution in dealing with Indians. When Indian property is taken for non-Indian use, the
U.S. government is liable for payment of compensation, and an uncompensated taking may be enjoined. F. private. It, however, has to be first converted to public agricultural land simply for
Cohen, Handbook of Federal Indian Law 217 [1982], citing Shoshone Tribe v. U.S.299 U.S. 476 [1937]; Choate v. registration purposes. To wit:
Trapp, 224 U.S. 665 [1912]; and Lane v. Pueblo of Santa Rosa, 249 U.S. 110 [1919]. “Sec. 12. Option to Secure Certificate of Title Under Commonwealth Act 141, as amended, or the Land
See Discussion,infra,Part IV (c) (2).
188
Registration Act 496.—Individual members of cultural communities, with respect to their
216
individually-owned ancestral lands who, by themselves or through their predecessors-in-interest,
216 SUPREME COURT REPORTS ANNOTATED have been in continuous possession and occupation of the same in the concept of owner since time
immemorial or for a period of not less than thirty (30) years immediately preceding the approval of
Cruz vs.Secretaryof Environmentand Natural Resources this Act and uncontested by the members of the same ICCs/IPs shall have the option to secure title to
altogether. Under the Public Land Act, land sought to be registered must be public their ancestral lands under the provisions of CommonwealthAct 141, as amended,or theLand
agricultural land. When the conditions specified in Section 48 [b] of the Public Land Act Registration Act 496.
are complied with, the possessor of the land is deemed to have acquired, by operation of For this purpose, said individually-owned ancestral lands, which are agricultural in character and
law, a right to a grant of the land. The land ceases to be part of the public domain, ipso
189 190
actually used for agricultural, residential, pasture, and tree farming purposes, including those with a
jure, and is converted to private property by the mere lapseor completionof
191
slope of eighteen percent (18%) or more, are hereby classified as alienable and disposable
agriculturallands.
theprescribed statutoryperiod.
The option granted under this section shall be exercised within twenty (20)years from the
It was only in the case of Oh Cho v. Director of Lands that the court declared that the
192
approval of this Act.” 196

rule that all lands that were not acquired from the government, either by purchase or ICCs/IPs are given the option to secure a Torrens certificate of title over their individually-
grant, belong to the public domain has an exception. This exception would be any land that owned ancestral lands. This option is limited to ancestral lands only, not domains, and
should have been in the possession of an occupant and of his predecessors-in-interest such lands must be individually,not communally, owned.
since time immemorial. It is this kind of possession that would justify the presumption Ancestral lands that are owned by individual members of ICCs/IPs who, by themselves
that the land had never been part of the public domain or that it had been private property or through their predecessors-in-interest, have been in continuous possession and
even before the Spanish conquest. Oh Cho,however, was decided under the provisions of
193
occupation of the
the Public Land Act and Cariño was cited to support the applicant’s claim of acquisitive
prescription under the said Act. _______________
All these years, Cariño had been quoted out of context simply to justify long,
continuous, open and adverse possession in the concept of owner of public agricultural 196 Section 12, IPRA.
 218
218 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
same in the concept of owner since time immemorial or for a period of not less than 30
197
years, which claims are uncontested by the members of the same ICCs/IPs, may be
registered under CA. 141, otherwise known as the Public Land Act, or Act 496, the Land
Registration Act. For purposes of registration, the individuallyowned ancestral lands are
classified as alienable and disposable agricultural lands of the public domain, provided,
they are agricultural in character and are actually used for agricultural, residential,
pasture and tree farming purposes. These lands shall be classified as public agricultural
lands regardless of whether they have a slopeof 18% or more.
The classification of ancestral land as public agricultural land is in compliance with the
requirements of the Public Land Act and the Land Registration Act. CA. 141, the Public
Land Act, deals specifically with lands of the public domain. Its provisions apply to those
198
lands “declared open to disposition or concession” xxx “which have not been reserved for
public or quasi-public purposes, nor appropriated by the Government, nor in any manner
become private property, nor those on which a private right authorized and recognized by
this Act or any other valid law x xx or which having been reserved or appropriated, have
ceased to be so.” Act 496, the Land Registration Act, allows registration only of private
199
lands and public agricultural lands. Since ancestral domains and lands are private, if the
ICC/IP wants to avail of the benefits of CA. 141 and Act 496, the IPRA itself converts his
ancestral land, regardless of whether the land has a slope of eighteen per cent (18%) or
over, fromprivate to publicagricultural land forproperdisposition.
200
_______________
197“Time immemorial” refers “to a period of time when as far back as memory can go, certain ICCs/IPs are
known to have occupied, possessed in the concept of owner, and utilized a defined territory devolved to them, by
operation of customary law or inherited from their ancestors, in accordance with their customs and traditions.” (Sec.
3 [p], IPRA).
198Section 2, CA. 141.
199Section 8, CA. 141.
200The classification of ancestral lands 18% in slope or over as alienable in the IPRA is an exception to Section
15, P.D. 705, the Revised Forestry Code.
219
VOL. 347, DECEMBER 6, 2000 219
Cruz vs.Secretaryof Environmentand Natural Resources
The option to register land under the Public Land Act and the Land Registration Act has
nonetheless a limited period. This option must be exercised within twenty (20) years from
October 29, 1997, the dateof approvalof theIPRA.
Thus, ancestral lands and ancestral domains are not part of the lands of the public
domain. They are private and belong to the ICCs/IPs. Section 3 of Article XII on National
Economy and Patrimony of the 1987 Constitution classifies lands of the public domain into
four categories: (a) agricultural, (b) forest or timber, (c) mineral lands, and (d) national
parks. Section 5 of the same Article XII mentions ancestral lands and ancestral domains but
it does not classify them under any of the said four categories. To classify them as public
lands under any one of the four classes will render the entire IPRA law a nullity. The spirit
of the IPRA lies in the distinct concept of ancestral domains and ancestral lands. The IPRA
addresses the major problem of the ICCs/IPs which is loss of land. Land and space are of
vital concern in terms of sheer survival of theICCs/IPs.
201
The 1987 Constitution mandates the State to “protect the rights of indigenous cultural
communities to their ancestral lands” and that “Congress provide for the applicability of
customary laws x x x in determining the ownership and extent of ancestral domain.” It is the
202
recognition of the ICCs/IPs distinct rights of ownership over their ancestral domains and
lands that breathes life into this constitutional mandate.
Registration under the Public Land Act and Land Registration Act recognizes the concept
of ownership under the civil law. This ownership is based on adverse possession for a
specified period, and harkens to Section 44 of the Public Land Act on administrative
_______________
Charles MacDonald, Indigenous Peoples of the Philippines: Between Segregation and Integration, Indigenous
201
Peoples of Asia, supra, at pp. 345, 350.
Section 5, ArticleXII, 1987 Constitution.
202
220
220 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
legalization (free patent) of imperfect or incomplete titles and Section 48 (b) and (c) of the
same Act on the judicial confirmation of imperfector incomplete titles. Thus:
“Sec. 44. Any natural-born citizen of the Philippines who is not the owner of more than twenty-four
hectares and who since July fourth, 1926 or prior thereto, has continuously occupied and cultivated,
either by himself or through his predecessors-in-interest, a tract or tracts of agricultural public lands
subject to disposition, or who shall have paid the real estate tax thereon while the same has not been
occupied by any person shall be entitled, under the provisions of this chapter, to have a free patent
issued to him for such tract or tracts of such land not to exceed twenty-four hectares.
A member of the national cultural minorities who has continuously occupied and cultivated, either
by himself or through his predecessors-in-interest, a tract or tracts of land, whether disposable or not
since July 4, 1955, shall be entitled to the right granted in the preceding paragraph of this section:
Provided, That at the time he files his free patent application he is not the owner of any real property
secured or disposable under the provision of the Public Land Law. 203
x x x.
“Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain
or claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of titletherefor, under theLand
Registration Act,to wit:
1. (a)[perfectionofSpanish titles] x x x.
2. (b)Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this Chapter.
_______________
Words in italics were amendments introduced by R.A. 3872 in 1964.
203
221
VOL. 347, DECEMBER 6, 2000 221
Cruz vs.Secretaryof Environmentand Natural Resources
 1. (c)Members of the national cultural minorities who by themselves or through their that areas within the ancestral domains, whether delineated or not, are presumed to be
predecessors-in-interest have been in open, continuous, exclusive and notorious possession communally held. These communal rights, however, are not exactly the same as co-
209

and occupation of lands of the public domain suitable to agriculture, whether disposable or ownership rights under the Civil Code. Co-ownership gives any co-owner the right to
210

not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
demand partition of the property held in common. The Civil Code expressly provides that
granted in sub-section (b) hereof.”
“[n]o co-owner shall be obliged to remain in the co-ownership.” Each co-owner may
204

demand at any time the partition of the thing in common, insofar as his share is
Registration under the foregoing provisions presumes that the land was originally public concerned. To allow such a right over ancestral domains may be
211

agricultural land but because of adverse possession since July 4, 1955 (free patent) or at
least thirty years (judicial confirmation), the land has become private. Open, adverse, _______________
public and continuous possession is sufficient, provided, the possessor makes proper
application therefor. The possession has to be confirmed judicially or administratively Sec. 55, IPRA provides: “Sec. 55. Communal rights.—Subject to Section 56 hereof, areas within the ancestral
209

after which a Torrens title is issued. domains, whether delineated or not, shall be presumed to be communally held: Provided, That communal rights
under this Act shall not be construed as co-ownership as provided in Republic Act No. 386, otherwise knownas the
A Torrens title recognizes the owner whose name appears in the certificate as entitled
New Civil Code “
to all the rights of ownership under the civil law. The Civil Code of the Philippines defines Ibid.
210

ownership in Articles 427, 428 and 429. This concept is based on Roman Law which the Article 494,Civil Code.
211

Spaniards introduced to the Philippines through the Civil Code of 1889. Ownership, under 223
Roman Law, may be exercised over things or rights. It primarily includes the right of the VOL. 347, DECEMBER 6, 2000 223
owner to enjoy and dispose of the thing owned. And the right to enjoy and dispose of the
Cruz vs.Secretaryof Environmentand Natural Resources
thing includes the right to receive from the thing what it produces, the right to consume 205

the thing by its use, the right to alienate, encumber, transform or even destroy the thing
206
destructive not only of customary law of the community but of the very community itself. 212

owned, and the right to exclude from the possession of the thing owned by any other
207
Communal rights over land are not the same as corporate rights over real property,
person to whom the owner has not transmitted such thing. 208
much less corporate condominium rights. A corporation can exist only for a maximum of
fifty (50) years subject to an extension of another fifty years in any single instance. Every 213

_______________
stockholder has the right to disassociate himself from the corporation. Moreover, the 214

corporation itself may be dissolved voluntarily or involuntarily. 215

Words in italics were amendments introduced by R.A. 3872 on June 18, 1964. On January 25, 1977, however,
204
Communal rights to the land are held not only by the present possessors of the land but
Sec. 48 [b] and 48 [c] were further amended by P.D. 1073 stating that these provisions on cultural minorities apply extends to all generations of the ICCs/IPs, past, present and future, to the domain. This is the
only to alienable and disposable lands of the public domain—Please seeRepublic v. CA and Paran, 201 SCRA 1, 10- reason why the ancestral domain must be kept within the ICCs/IPs themselves. The
11 [1991].
Jus utendi, jus fruendi.
205
domain cannot be transferred, sold or conveyed to other persons.It belongs to the ICCs/IPs
Jus abutendi.
206 as a community.
Jus disponendi.
207
Ancestral lands are also held under the indigenous concept of ownership. The lands are
Jus vindicandi. Please see Tolentino, Civil Code, vol. II, pp. 45-46 [1992]; see also Tolentino, vol. I, pp. 12-14.
208
communal. These lands, however, may be transferred subject to the following limitations:
222
(a) only to the members of the same ICCs/IPs; (b) in accord with customary laws and
222 SUPREME COURT REPORTS ANNOTATED traditions; and (c) subject to the right of redemption of the ICCs/IPs for a period of 15
Cruz vs.Secretaryof Environmentand Natural Resources years if the land was transferred to a non-member of the ICCs/IPs.
Following the constitutional mandate that “customary law govern property rights or
relations in determining the ownership and extent of ancestral domains,” the IPRA, by 216

1. 1.The indigenous Conceptof Ownershipand Customary Law. legislative fiat, introduces a new concept of ownership. This is a concept that has long existed
under customary law. 217

Ownership of ancestral domains by native title does not entitle the ICC/IP to a torrens title
but to a Certificate of Ancestral Domain Title (CADT). The CADT formally recognizes _______________
the indigenous concept of ownership of the ICCs/IPs over their ancestral domain. Thus:
“Sec. 5. Indigenous concept of ownership:—Indigenous concept of ownership sustains the view that Antonio M. La Vina, Arguments for Communal Title, Part II, 2
212

ancestral domains and all resources found therein shall serve as the material bases of their cultural Phil. Nat. Res. L. J. 23 [Dec. 1989].
integrity. The indigenous concept of ownership generally holds that ancestral domains are the Section 11, Corporation Code.
213

ICCs/IPs private but community property which belongs to all generations and therefore cannot be Sections 60-72, Corporation Code.
214

Section 117, Corporation Code. Please see also La Vina, Arguments for Communal Title, Part II, supra, at 23.
215

sold, disposed or destroyed. It likewise covers sustainable traditional resource rights.” Section 5, par. 2, Article XII, 1987 Constitution.
216

The right of ownership and possession of the ICCs/IPs to their ancestral domains is held under Customary law is recognized by the Local Government Code of 1991 in solving disputes among members of
217

the indigenous concept of ownership. This concept maintains the view that ancestral the indigenous communities, viz.:
domains are the ICCs/IPs private but community property. It is private simply because it is 224
not part of the public domain. But its private character ends there. The ancestral domain is 224 SUPREME COURT REPORTS ANNOTATED
owned in common by the ICCs/IPs and not by one particular person. The IPRA itself provides

Cruz vs.Secretaryof Environmentand Natural Resources
Custom, from which customary law is derived, is also recognized under the Civil Code as a
source of law. Some articles of the Civil Code expressly provide that custom should be
218
applied in cases where no codal provision is applicable. In other words, in the absence of
219
any applicable provision in the Civil Code, custom, when dulyproven, candefine rights and
liabilities. 220
Customary law is a primary, not secondary, source of rights under the IPRA and
uniquely applies to ICCs/IPs. Its recognition does not depend on the absence of a specific
provision in the civil law. The indigenous concept of ownership under customary law is
specifically acknowledged and recognized, and coexists with the civil law concept and the
laws on land titling andland registration. 221
_______________
“Sec. 412 (c). Conciliation among members of indigenous cultural communities.—The customs and traditions of
indigenous cultural communities shall be applied in settling disputes between members of theculturalcommunities.”
Law writes custom into contract—Hongkong & Shanghai Bank v. Peters, 16 Phil. 284 [1910].
218
The Civil Code provides:
“Art. 11. Customs which are contrary to law, public order or public policy shall not becountenanced.”
“Art. 12 A custom must be proved as a fact, according to the rules of evidence.”
Article 78 on marriages between Mohammedans or pagans who live in the non-Christian provinces—this is
219
now Art. 33 of the Family Code; Art. 118, now Art. 74 of the Family Code on property relations between spouses;
Art. 577 on the usufructuary of woodland; Art. 657 on easement of right of way for passage of livestock; Arts. 678,
1315, 1376, 1522, 1564 and 1577.Please seeAquino, Civil Code, vol. 1, p. 25.
Castle Bros. v. Gutierrez Hermanos, 11 Phil. 629 [1908]; In Re: Firm Name of Ozaeta Romulo, 92 SCRA
220
1 [1979]; Yao Kee v. Sy-Gonzales, 167 SCRA 736 [1988]; Please see Aquino, Civil Code, vol. 1, p. 26 for a list of other
cases.
This situation is analogous to the Muslim Code or the Code of Muslim Personal Laws (P.D. 1083) which took
221
effect on February 4, 1977 despite the effectivity of the Civil Code and the Family Code. P.D. 1083 governs persons,
family relations and succession among Muslims, the adjudication and settlement of disputes, the organization of the
Shari’a courts, etc.
225
VOL. 347, DECEMBER 6, 2000 225
Cruz vs.Secretaryof Environmentand Natural Resources
To be sure, the indigenous concept of ownership exists even without a paper title. The CADT
is merely a “formal recognition” of native title. This is clear from Section11of theIPRA, to
wit:
“Sec. 11. Recognition of Ancestral Domain Rights.—The rights of ICCs/IPs to their ancestral domains
by virtue of Native Title shall be recognized and respected. Formal recognition, when solicited by
ICCs/IPs concerned shall be embodied in a Certificate of Ancestral Domain Title, which shall recognize
the title of the concerned ICCs/IPs over the territories identified and delineated.”
The moral import of ancestral domain, native land or being native is “belongingness” to the
land, being people of the land—by sheer force of having sprung from the land since time
beyond recall, and the faithful nurture of the land by the sweat of one’s brow. This is
fidelity of usufructuary relation to the land—the possession of stewardship through
perduring, intimate tillage, and the mutuality of blessings between man and land; from
man, care for land; fromthe land, sustenance for man. 222
1. 1.The Rights of ICCs/IPs Over Their Ancestral Domains and Lands
The IPRA grants the ICCs/IPs several rights over their ancestral domains and ancestral
lands. Section 7 provides for the rights over ancestraldomains:
“Sec. 7. Rights to Ancestral Domains.—The rights of ownership and possession of ICCs/IPs to their
ancestral domains shall be recognized and protected. Such rights include:
_______________
Mariflor P. Pagusara, The Kalinga Ili: Cultural-Ecological Reflections on Indigenous Theora and Praxis of Man-
222
Nature Relationship,Dakami Ya Nan Dagami, p. 36, Papers and Proceedings of the 1st Cordillera Multi-Sectoral Land
Congress, 11-14 March 1983, Cordillera Consultative Committee [1984].
226
226 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
1. a)Right of Ownership.—The right to claim ownership over lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and
fishing grounds, and all improvements made by them at any time within the domains;
2. b)Right to Develop Lands and Natural Resources.—Subject to Section 56 hereof, the right to
develop, control and use lands and territories traditionally occupied, owned, or used; to
manage and conserve natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the profits from allocation and
utilization of the natural resources found therein; the right to negotiate the terms and
conditions for the exploration of natural resources in the areas for the purpose of ensuring
ecological, environmental protection and the conservation measures, pursuant to national
and customary laws; the right to an informed and intelligent participation in the
formulation and implementation of any project, government or private, that will affect or
impact upon the ancestral domains and to receive just and fair compensation for any
damages which they may sustain as a result of the project; and the right to effective
measures by the government to prevent any interference with, alienation and
encroachment upon these rights;
3. c)Right to Stay in the Territories.—The right to stay in the territory and not to be removed
therefrom. No ICCs/IPs will be relocated without their free and prior informed consent,
nor through any means other than eminent domain, x x x;
4. d)Right in Case of Displacement.—In case displacement occurs as a result of natural
catastrophes, the State shall endeavor to resettle the displaced ICCs/IPs in suitable areas
where they can have temporary life support systems: x x x;
5. e)Right to Regulate the Entry of Migrants.—Right to regulate the entry of migrant settlers
and organizations into their domains;
6. f)Right to Safe and Clean Air and Water.—For this purpose, the ICCs/IPs shall have access
to integrated systems for the management of their inland waters and air space;
7. g)Right to Claim Parts of Reservations.—The right to claim parts of the ancestral domains
which have been reserved for various purposes, except those reserved and intended for
common and public welfare and service;
8. h)Right to Resolve Conflict.—Right to resolve land conflicts in accordance with customary
laws of the area where the land is located, and only in default thereof shall the complaints
be submitted to amicable settlement and to the Courts of Justice whenever necessary.”
227
VOL. 347, DECEMBER 6, 2000 227
Cruz vs. Secretary of Environment and Natural Resources
Section 8 provides for the rights over ancestral lands:
“Sec. 8. Rights to Ancestral Lands.—The right of ownership and possession of the ICCs/IPs to their
ancestral lands shall he recognized and protected.
 1. a)Right to transfer land/property.—Such right shall include the right to transfer land or
property rights to/among members of the same ICCs/IPs, subject to customary laws and
traditions of the community concerned.
2. b)Right to Redemption.—In cases where it is shown that the transfer of land/property
rights by virtue of any agreement or devise, to a non-member of the concerned ICCs/IPs
based on real contributions to the economic growth and general welfare of the country. In such
agreements, the state shall promote the development and useof local scientific and technical
resources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.” 223

is tainted by the vitiated consent of the ICCs/IPs, or is transferred for an unconscionable

consideration or price, the transferor ICC/IP shall have the right to redeem the same _______________
within a period not exceeding fifteen (15) years from the date of transfer.”
Section 2, Article XII.
223

Section 7 (a) defines the ICCs/IPs right of ownership over their ancestral domains which 229

covers (a) lands, (b) bodies of water traditionally and actually occupied by the ICCs/IPs, VOL. 347, DECEMBER 6, 2000 229
(c) sacred places, (d) traditional hunting and fishing grounds, and (e) all improvements Cruz vs.Secretaryof Environmentand Natural Resources
made by them at any time within the domains. The right of ownership includes the
All lands of the public domain and all natural resources—waters, minerals, coal, petroleum,
following rights: (a) the right to develop lands and natural resources; (b) the right to stay
and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife,
in the territories; (c) the right to resettlement in case of displacement; (d) the right to
flora and fauna, and other natural resources—are owned by the State. The Constitution
regulate the entry of migrants; (e) the right to safe and clean air and water; (f) the right to
provides that in the exploration, development and utilization of these natural resources,
claim parts of the ancestral domains as reservations; and (g) the right to resolve conflict
the State exercises full control and supervision, and may undertake the same in four (4)
in accordance with customary laws.
modes:
Section 8 governs their rights to ancestral lands. Unlike ownership over the ancestral
domains, Section 8 gives the ICCs/IPs also the right to transfer the land or property rights
to members of the same ICCs/IPs or non-members thereof. This is in keeping with the 1. 1.The State maydirectlyundertake such activities; or
option given to ICCs/IPs to secure a Torrens title over the ancestral lands,but notto 2. 2.The State may enter into co-production, joint venture or production-sharing agreements
with Filipinocitizensor qualified corporations;
domains. 3. 3.Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens;
1. 2.The Right of ICCs/IPs to Develop Lands and Natural Resources Within the Ancestral 4. 4.For the large-scale exploration, development and utilization of minerals, petroleum and
Domains Does Not Deprive the State of Ownership Over the Natural Resources and Control other mineral oils, the President may enter into agreements with foreign-owned
and Supervision in their Development and Exploitation. corporations involving technical or financial assistance.

228 As owner of the natural resources, the State is accorded primary power and responsibility in
228 SUPREME COURT REPORTS ANNOTATED the exploration, development and utilization of these natural resources. The State may
directly undertake the exploitation and development by itself, or, it may allow
Cruz vs.Secretaryof Environmentand Natural Resources participation by the private sector through coproduction, joint venture, or production-
224 225

The Regalian doctrine on the ownership, management and utilization of natural resources sharing agreements. These agreements may be for a period of 25 years, renewable for
226

is declared in Section 2, Article XII of the 1987 Constitution, viz.: another 25 years. The
“Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces
of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are
_______________
owned by the State. With the exception of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. The State may directly undertake such activities, or, it may enter A “co-production agreement” is defined as one wherein the government provides input to the mining
224

operation other than the mineral resource—Section 26 (b), R.A. 7942, the Philippine Mining Act of 1995.
into coproduction, joint venture, or production-sharing agreements with Filipino citizens, or A “joint venture agreement” is one where a joint-venture company is organized by the government and the
225

corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such contractor with both parties having equity shares, and the government entitled to a share in the gross output—
agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty- Section26 (c), R.A. 7942.
five years, and under such terms and conditions as may be provided by law. In cases of water rights A mineral “production-sharing agreement” is one where the government grants to the contractor the
226

for irrigation, water supply, fisheries, or industrial uses other than the development of water power, exclusive right to conduct mining operations within a contract area and shares in the gross output. The contractor
beneficial use maybe themeasure and limit of the grant. provides the financing, technology, management and personnel necessary for the implementation of the
The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and agreementr-Section 26 (a), R.A. 7942.
230
exclusive economic zone, and reserve its use and enjoymentexclusivelyto Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as 230 SUPREME COURT REPORTS ANNOTATED
well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers,
lakes, bays, and lagoons. Cruz vs. Secretary of Environment and Natural Resources
The President may enter into agreements with foreign-owned corporations involving either State, through Congress, may allow the small-scale utilization of natural resources by
technical or financial assistance for large-scale exploration, development, and utilization of minerals, Filipino citizens. For the large-scale exploration of these resources, specifically minerals,
petroleum, and other mineral oils according to the general terms and conditions provided by law,
petroleum and other mineral oils, the State, through the President, may enter into
technical and financial assistance agreements with foreign-owned corporations.
Under the Philippine Mining Act of 1995, (R.A. 7942) and the People’s Small-Scale
Mining Act of 1991 (R.A. 7076) the three types of agreements, i.e., coproduction, joint
venture or production-sharing, may apply to both large-scale and small-scale
227
mining. “Small-scale mining” refers to “mining activities which rely heavily on manual
228
labor using simple implements and methods and do not use explosivesor heavy mining
equipment.” 229
Examining the IPRA, there is nothing in the law that grants to the ICCs/IPs ownership
over the natural resources within their ancestral domains. The right of ICCs/IPs in their
ancestral domains includes ownership, but this “ownership” is expressly defined and limited
in Section 7 (a)as:
“Sec. 7. (a) Right of ownership—The right to claim ownership over lands, bodies of water traditionally
and actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all
improvements made bythem at anytimewithin the domains”;
The ICCs/IPs are given the right to claim ownership over “lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and
fishing grounds, and all improvements made by them at any time within the domains.” It
will be noted that this enumeration does not mention bodies of water not occupied by the
ICCs/IPs, minerals, coal, wildlife, flora
_______________
Section 26, R.A. 7942.
227
Section 3 [d], People’s Small-Scale Mining Act of 1991 (R.A. 7076) provides:
228
“Sec. 3 [d] ‘Small-scale mining contract’ refers to coproduction, joint venture or mineral production sharing
agreement between the State and a small-scale mining contractor for the small-scale utilization of a plot of mineral
land.”
Section 3 [b], R.A. 7076.
229
231
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
and fauna in the traditional hunting grounds, fish in the traditional fishing
grounds, forests or timber in the sacred places, etc. and all other natural resources found
within the ancestral domains. Indeed, the right of ownership under Section 7 (a) does not
cover “waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna and all other natural resources”
enumerated in Section 2,Article XII of the 1987 Constitution asbelonging to the State.
The non-inclusion of ownership by the ICCs/IPs over the natural resources in
Section7(a) complies with theRegaliandoctrine.
1. (a)Section 1, Part II, Rule III of the Implementing Rules Goes Beyond the Parameters of Sec. 7
(a) of the IPRA And is Unconstitutional.
The Rules Implementing the IPRA in Section 1, Part II, Rule III reads:
230
“Section 1. Rights of Ownership.—ICCs/IPs have rights of ownership over lands, waters, and natural
resources and all improvements made by them at any time within the ancestral domains/lands. These
rights shall include, but not limited to, the right over the fruits, the right to possess, the right to use,
right to consume, right to exclude and right to recover ownership, and the rights or interests over
land and natural resources. The right to recover shall be particularly applied to lands lost through
fraud or any form or vitiated consent or transferred for an unconscionable price.”
Section 1 of the Implementing Rules gives the ICCs/IPs rights of ownership over “lands, waters
and natural resources.” The term “natural resources” is not one of those expressly mentioned in
Section 7 (a) of the law. Our Constitution and jurisprudence clearly declare that the right to claim
ownership over land does not necessarily include the right to claim ownership over the natural
resources found on or under the land. The IPRA itself makes a
231
_______________
NCIP Administrative Order No. 1, Series of 1998.
230
In Republic v. Court of Appeals, 160 SCRA 228, 239 [1988], Cruz, J., ponente,it was declared that if a person is the owner of a
231
piece of agricultural land on which minerals are discovered, his ownership of such land does not give him the right to extract or utilize
the said minerals
232
232 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
distinction between land and natural resources. Section 7 (a) speaks of the right of ownership only over
the land within the ancestral domain. It is Sections 7 (b) and 57 of the law that speak of natural
resources, and these provisions, as shall be discussed later, do not give the ICCs/IPs the rightof ownership
over these resources.
The constitutionality of Section 1, Part II, Rule III of the Implementing Rules was not
specifically and categorically challenged by petitioners. Petitioners actually assail the
constitutionality of the Implementing Rules in general. Nevertheless, to avoid any 232
confusion in the implementation of the law, it is necessary to declare that the inclusion of
“natural resources” in Section 1, Part II, Rule III of the Implementing Rules goes beyond
the parameters of Section 7 (b) of the law and is contrary to Section 2, Article XII of the 1987
Constitution.
1. (a)The Small-Scale Utilization of Natural Resources In Sec. 7 (b) of the IPRA Is Allowed Under
Paragraph 3, Section 2 of Article XII of the Constitution.
231 Ownership over natural resources remain with the State and the IPRA in Section 7 (b) merely
grants the ICCs/IPs the right to manage them, viz.:
“Sec. 7 (b) Right to Develop Lands and Natural Resources.—Subject to Section 56 hereof, right to
develop, control and use lands and territories traditionally occupied, owned, or used; to manage and
conserve natural resources within the territories and uphold the responsibilities for future
generations; to benefit and share the profits from allocation and utilization of the natural resources
found therein; the right to negotiate the terms and conditions for the exploration of natural resources
in the areas for the purpose of ensuring ecological, environmental protection and the conservation
measures, pursuant to national and customary laws; the right to an informed and intelligent
participation in the formulation and implementation of any project, government or private, that will
affect or impact upon the ancestral domains and to receive just and fair compensa-without the
permission of the State to which such minerals belong—also cited in H. de Leon, Phil. Constitutional
Law, Principles and Cases, vol. 2, pp. 800-801 [1999].
_______________
See Ground I, Grounds to Issue Writ of Prohibition, Petition, p. 14.
232
233
VOL. 347, DECEMBER 6, 2000 233
Cruz vs.Secretaryof Environmentand Natural Resources
tion for any damages which they may sustain as a result of the project; and the right to effective
measures by the government to prevent any interference with, alienation and encroachment upon
these rights”;
The right to develop lands and natural resources under Section 7 (b) ofthe IPRA
enumerates the following rights:
1. a)the right to develop, control and use lands and territoriestraditionally occupied;
2. b)the right to manage and conserve natural resources within the territoriesand uphold the
responsibilities for future generations;
3. c)the right to benefit and share the profits from the allocation and utilization of thenatural
resources found therein;
4. d)the right to negotiate the terms and conditions for the exploration of natural
resources for the purpose of ensuring ecological, environmental protection and the
conservation measures, pursuant to national and customarylaws;
5. e)the right to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or impact upon the
ancestral domains and to receive just and fair compensation for any damages which they
may sustain as a result of the project;
6. f)the right to effective measures by the government to prevent any interference with,
alienation andencroachment upon these rights.
233
Ownership over the natural resources in the ancestral domains remains with the State and
the ICCs/IPs are merely granted the right to “manage and conserve” them for future
generations, “benefit and share” the profits from their allocation and utilization, and
“negotiate the terms and conditions for their exploration” for the purpose of “ensuring
ecological and environmental protection and
_______________
Section 7 (b) is subject to Section 56 of the same law which provides:
233
“Sec. 56. Existing Property Rights Regimes.—Property rights within the ancestral domains already existing
and/or vested upon effectivity of this Act, shallbe recognized and respected.”
The law took effect 15 days upon publication in the O.G. or in any 2 newspapers of general circulation (Sec. 84,
IPRA). The IPRA was published in the Chronicle and Malaya on Nov. 7, 1997.
234
234 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
conservation measures.” It must be noted that the right to negotiate the terms and
conditions over the natural resources covers only their exploration which must be for the
purpose of ensuring ecological and environmental protection of, and conservation
measures in the ancestral domain. It does not extend to the exploitation and development
ofnatural resources.
Simply stated, the ICCs/IPs’ rights over the natural resources take the form of
management or stewardship. For the ICCs/IPs may use these resources and share in the
profits of their utilization or negotiate the terms for their exploration. At the same time,
however, the ICCs/IPs must ensure that the natural resources within their ancestral
domains are conserved for future generations and that the “utilization” of these resources
must not harm the ecology and environment pursuant tonationaland customary laws. 234
The limited rights of “management and use” in Section 7 (b) must be taken to
contemplate small-scale utilization of natural resources as distinguished from large-scale.
Small-scale utilization of natural resources is expressly allowed in the third paragraph of
Section 2, Article XII of the Constitution “in recognition of the plight of forest dwellers, gold
panners, marginal fishermen and others similarly
_______________
234 Section 9 of the IPRA also gives the ICCs/IPs the ff. responsibilities overtheir ancestral domains:
1. “a) Maintain Ecological Balance.—To preserve, restore, and maintain a balanced ecology in the ancestral
domain by protecting the flora and fauna, watershed areas, and other reserves;
2. b)Restore Denuded Areas.—To actively initiate, undertake and participate in the reforestation of
denuded areas and other development programs and projects subject tojust and reasonable
remuneration;
3. c)Observe Laws.—To observe and comply with the provisions of this Act and therules and regulations
for its effectiveimplementation.”Section 58 of the same law also mandates that ancestral domains or
portions thereof, which are found to be necessary for critical watersheds, mangroves, wildlife
sanctuaries, wilderness, protected areas, forest cover, or reforestation as determined by appropriate
agencies with the full participation of the ICCs/IPs concerned shall be maintained, managed and
developed for such purposes. The ICCs/IPs concerned shall be given the responsibility to maintain,
develop, protect and conserve such areas with thefull and effective assistance of government agencies.
235
VOL. 347, DECEMBER 6, 2000 235
Cruz vs.Secretaryof Environmentand Natural Resources
situated who exploit our natural resources for their daily sustenance and
survival” Section 7 (b) also expressly mandates the ICCs/IPs to manage and conserve these
235
resources and ensure environmental and ecological protection within the domains, which
duties, by their very nature, necessarily reject utilization in a large-scale.
1. (c)The Large-Scale Utilization of Natural Resources In Section 57 of the IPRA Is Allowed
Under Paragraphs 1 and 4, Section 2, Article XII of the1987 Constitution.
Section 57 of the IPRA provides:
“Sec. 57. Natural Resources within Ancestral Domains.—The ICCs/IPs shall have priority rights in the
harvesting, extraction, development or exploitation of any natural resources within the ancestral
domains. A non-member of the ICCs/IPs concerned may be allowed to take part in the development
and utilization of the natural resources for a period of not exceeding twenty-five (25) years renewable
for not more than twenty-five (25) years: Provided, That a formal and written agreement is entered
into with the ICCs/IPs concerned or that the community, pursuant to its own decision-making
process, has agreed to allow such operation: Provided finally, That the NCIP may exercise visitorial
powers and take appropriate action to safeguard the rights of the ICCs/IPs under the same contract.”
Section 57 speaks of the “harvesting, extraction, development or exploitation of natural
resources within ancestral domains” and “gives the ICCs/IPs ‘priority rights’ therein.” The
terms “harvesting, extraction, development or exploitation” of any natural resources within
the ancestral domains obviously refer to large-scale utilization. It is utilization not merely
for subsistence but for commercial or other extensive use that require technology other
than manual labor. The law recognizes the probability of requir-
236
_______________
Hector S. de Leon, Textbook on the New Philippine Constitution pp. 473-474 [1987] citing the 1986 UP Law
235
Constitution Project, The National Economy and Patrimony, p. 11.
Under the Small-Scale Mining Act of 1991, “small-scale mining” refers to “mining activities which rely heavily
236
on manual labor using
236
236 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
ing a non-member of the ICCs/IPs to participate in the development and utilization of the
natural resources and thereby allows such participation for a period of not more than 25
years, renewable for another 25 years. This may be done on condition that a formal written
agreement be entered into by the non-member and members of the ICCs/IPs.
Section 57 of the IPRA does not give the ICCs/IPs the right to “manage and conserve”
the natural resources. Instead, the law only grants the ICCs/IPs “priority rights” in the
development or exploitation thereof. Priority means giving preference. Having priority
rights over the natural resources does not necessarily mean ownership rights. The grant
of priority rights implies that there is a superior entity that owns these resources and this
entity has the power to grant preferential rights over the resources to whosoever itself
chooses.
Section 57 is not a repudiation of the Regalian doctrine. Rather, it is an affirmation of
the said doctrine that all natural resources found within the ancestral domains belong to
the State. It incorporates by implication the Regalian doctrine, hence, requires that the
provision be read in the light of Section 2, Article XII of the 1987 Constitution. Interpreting
Section 2, Article XII of the 1987 Constitution in relation to Section 57 of IPRA, the State, as
237
owner of these natural resources, may directly undertake the development and exploitation
of the natural resources by itself, or in the alternative, it may recognize the priority rights of
the ICCs/IPs as owners of the land on which the natural resources are found by entering into
a co-production, joint venture, or production-sharing agreement with them. The State may
likewise enter into any of said agreements with a non-member of the ICCs/IPs, whether
natural or juridical, or enter into agreements with foreign-owned corporations involving
either technical or financial assistance for the large-scale exploration, development and
utilization of minerals, petroleum, and other mineral oils, or allow such non-member to
participate in its agreement with the ICCs/IPs. If the State decides to enter into an
agreement with a non-ICC/IP member, the National Commis-
_______________
simple implements and methods and do not use explosives or heavy mining equipment”—Section 3 [b],R.A.
7076.
See infra.,pp. 77-79.
237
237
VOL. 347, DECEMBER 6, 2000 237
Cruz vs. Secretary of Environment and Natural Resources
sion on Indigenous Peoples (NCIP) shall ensure that the rights of the ICCs/IPs under the
agreement shall be protected. The agreement shall be for a period of 25 years, renewable
for another 25 years.
To reiterate, in the large-scale utilization of natural resources within the ancestral
domains, the State, as owner of these resources, has four (4) options: (1) it may, of and by
itself, directly undertake the development and exploitation of the natural resources; or (2) it
may recognize the priority rights of the ICCs/IPs by entering into an agreement with them
for such development and exploitation; or (3) it may enter into an agreement with a non-
member of the ICCs/IPs, whether natural or juridical, local or foreign; or (4) it may allow
such non-member to participate in the agreement with the ICCs/IPs.
The rights granted by the IPRA to the ICCs/IPs over the natural resources in their
ancestral domains merely gives the ICCs/IPs, as owners and occupants of the land on which
the resources are found, the right to the small-scale utilization of these resources, and at the
same time, a priority in their large-scale development and exploitation. Section 57 does not
mandate the State to automatically give priority to the ICCs/IPs. The State has several
options and it is within its discretion to choose which option to pursue.Moreover, there is
nothing in the law that gives the ICCs/IPs the right to solely undertake the large-scale
development of the natural resources within their domains. The ICCs/IPs must undertake
such endeavour always under State supervision or control. This indicates that the State
does not lose control and ownership over the resources even in their exploitation. Sections
7 (b) and 57 of the law simply give due respect to the ICCs/IPs who, as actual occupants of
the land where the natural resources lie, have traditionally utilized these resources for
their subsistence and survival.
Neither is the State stripped of ownership and control of the natural resources by the
following provision:
“Section 59. Certification Precondition.—All departments and other governmental agencies shall
henceforth be strictly enjoined from issuing, renewing or granting any concession, license or lease, or
entering into any production-sharing agreement, without prior certification from the NCIP that the
area affected does not overlap with any ancestral domain. Such certification shall only be issued after
a field-based investiga-
238
238 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
tion is conducted by the Ancestral Domains Office of the area concerned: Provided, That no
certification shall be issued by the NCIP without the free and prior informed and written consent of
the ICCs/IPs concerned: Provided, further, That no department, government agency or government-
owned or -controlled corporation may issue new concession, license, lease, or production sharing
agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall
have the right to stop or suspend, in accordance with this Act, any project that has not satisfied the
requirement of this consultation process.”
Concessions, licenses, lease or production-sharing agreements for the exploitation of
natural resources shall not be issued, renewed or granted by all departments and
government agencies without prior certification from the NCIP that the area subject of the
agreement does not overlap with any ancestral domain. The NCIP certification shall be
issued only after a field-based investigation shall have been conducted and the free and
prior informed written consent of the ICCs/IPs obtained. Non-compliance with the
consultation requirement gives the ICCs/IPs the right to stop or suspend any project
granted by any department or government agency.
As its subtitle suggests, this provision requires as a precondition for the issuance of
any concession, license or agreement over natural resources, that a certification be issued
by the NCIP that the area subject of the agreement does not lie within any ancestral
domain. The provision does not vest the NCIP with power over the other agencies of the
State as to determine whether to grant or deny any concession or license or agreement. It
merely gives the NCIP the authority to ensure that the ICCs/IPs have been informed of the
agreement and that their consent thereto has been obtained. Note that the certification
applies to agreements over natural resources that do not necessarily lie within the
ancestral domains. For those that are found within the said domains, Sections 7(b) and 57
of the IPRA apply.
V. THE IPRA IS A RECOGNITION OF OUR ACTIVE PARTICIPATION IN THE INDIGENOUS
INTERNATIONAL MOVEMENT.
The indigenous movement can be seen as the heir to a history of anti-imperialism
stretching back to prehistoric times. The move-
239
VOL. 347, DECEMBER 6, 2000 239
Cruz vs. Secretary of Environment and Natural Resources
ment received a massive impetus during the 1960’s from two sources. First, the
decolonization of Asia and Africa brought into the limelight the possibility of peoples
controlling their own destinies. Second, the right of self-determination was enshrined in
the UN Declaration on Human Rights. The rise of the civil rights movement and anti-
238
The World Bank supported the Chico Dam project. Due to the Kalingas’ opposition, the WB pulled out of the
243

project but the conflict between the Philippine government and the natives endured long after—Marcus
racism brought to the attention of North American Indians, Aborigines in Australia, and Colchester, Indigenous Peoples’ Rights and Sustainable Resource Use in South and Southeast Asia, Indigenous Peoples
Maori in New Zealand the possibility of fighting for fundamental rights and freedoms. of Asia, supra, pp. 59, 71-72.
In 1974 and 1975, international indigenous organizations were founded, and during 239 Kingsbury, supra,at 417.
244

the 1980’s, indigenous affairs were on the international agenda. The people of the Section 22, Article II, 1987 Constitution.
245

Interpellation of Senator Flavier on S.B. No. 1728, Deliberation on Second Reading, November 20, 1996, p.
246

Philippine Cordillera were the first Asians to take part in the international indigenous 20.
movement. It was the Cordillera People’s Alliance that carried out successful campaigns Guide to R.A. 8371, Coalition for IPs Rights and Ancestral Domains, the International Labor Organization, and
247

against the building of the Chico River Dam in 1981-82 and they have since become one of the ILO-Bilance-Asia Dep’t, p. 3 [1999].
Also referred to as the “Indigenous and Tribal Peoples Convention, 1989.”
the best-organized indigenousbodies in the world.
248

SeeIntroduction to ILO Convention No. 169, par. 4.

240
249

Presently, there is a growing concern for indigenous rights in the international scene.
This came as a result of the increased publicity focused on the continuing disrespect for
indigenous human rights and the destruction of the indigenous peoples’ environment,
together with the national governments’ inability to deal with the situation. Indigenous
rights came as a result of both human rights and environmental protection, and have
become a partof today’spriorities for the internationalagenda. 242
_______________
Andrew Gray, The Indigenous Movement in Asia, Indigenous Peoples of Asia, ed. By Barnes, Gray and
238
241
VOL. 347, DECEMBER 6, 2000 241
241 Cruz vs.Secretaryof Environmentand Natural Resources
the “Convention Concerning the Protection and Integration of Indigenous and Other Tribal
and Semi-Tribal Populations in Independent Countries” (ILO No. 107) passed on June 26,
1957. Developments in international law made it appropriate to adopt new international
standards on indigenous peoples “with a view to removing the assimilationist orientation
of the earlier standards,” and recognizing the aspirations of these peoples to exercise
control over theirown institutions,waysof life and economic development.” 250

Kingsbury, pub. By Ass’n, for Asian Studies,at 35, 42 [1995].

E.g. International Indian TreatyCouncil, World Council of IPs.
239 CONCLUSION
Gray, The Indigenous Movement in Asia, supra, at 44, citing the International Work Group for Indigenous
240
The struggle of the Filipinos throughout colonial history had been plagued by ethnic and
Affairs,1988.
Jose Paulo Kastrup, The Internationalization of Indigenous Rights from the Environmental and Human Rights
241
religious differences. These differences were carried over and magnified by the Philippine
Perspective, 32 Texas International Law Journal 97, 102 [1997]. government through the imposition of a national legal order that is mostly foreign in origin
Benedict Kingsbury, “Indigenous Peoples” in International Law: A Constructivist Approach to the Asian
242 or derivation. Largely unpopulist, the present legal system has resulted in the alienation
251

Controversy, The American Journal of InternationalLaw, vol. 92:414, 429 [1998]. of a large sector of society, specifically, the indigenous peoples. The histories and cultures
240
of the indigenes are relevant to the evolution of Philippine culture and are vital to the
240 SUPREME COURT REPORTS ANNOTATED understanding of contemporary problems. It is through the IPRA that an attempt was
252

Cruz vs.Secretaryof Environmentand Natural Resources
International institutions and bodies have realized the necessity of applying policies,
programs and specific rules concerning IPs in some nations. The World Bank, for example,
first adopted a policy on IPs as a result of the dismal experience of projects in Latin
America. The World Bank now seeks to apply its current policy on IPs to some of its
243
projects in Asia. This policy has provided an influential model for the projects of
made by our legislators to understand Filipino society not in terms of myths and biases
but through common experiences in the course of history. The Philippines became a
democracy a centennial ago and the decolonization process still continues. If the evolution
of the Filipino people into a democratic society is to truly proceed democratically, i.e., if
the Filipinos as a whole are to participate fully in the task of continuing
democratization, it is this Court’s duty to acknowledge the presence of indigenous and
253

theAsianDevelopment Bank. 244

customary laws in the country and affirm their co-existence with the land laws in our
The 1987 Philippine Constitution formally recognizes the existence of ICCs/IPs and national legal system.
declares as a State policy the promotion of their rights within the framework of national
_______________
unity and development. The IPRA amalgamates the Philippine category of ICCs with the
245

international category of IPs, and is heavily influenced by both the International Labor
246

Id., pars. 5 and 6.

Organization (ILO) Convention 169 and the United Nations (UN) Draft Declaration on the
250

Perfecto V. Fernandez, Towards a Definition of National Policy on Recognition of Ethnic Law within the
251

Rights of IndigenousPeoples. 247

Philippine Legal Order, 55 P.L.J. 383, 385 [1980].
ILO Convention No. 169 is entitled the “Convention Concerning Indigenous and Tribal Samuel K Tan, A History of the Philippines, Manila Studies Association, Inc. andthe Phil. National Historical
252

Society,Inc., p. 6 [1997].
Peoples in Independent Countries” and was adopted on June 27, 1989. It is based on the
248

Fernandez, supra, at 385, 391.

253

Universal Declaration of Human Rights, the International Covenant on Economic, Social 242
and Cultural Rights, the International Covenant on Civil and Political Rights, and many
242 SUPREME COURT REPORTS ANNOTATED
other international instruments on the prevention of discrimination. ILO Convention No.
249

169 revised Cruz vs.Secretaryof Environmentand Natural Resources

With the foregoing disquisitions, I vote to uphold the constitutionality of theIndigenous
_______________ Peoples Rights Act of 1997.
SEPARATE OPINION
VITUG, J.:
An issue of grave national interest indeed deserves a proper place in any forum and, when it
shows itself in a given judicial controversy, the rules of procedure, like locus standi, the
propriety of the specific remedy invoked, or the principle of hierarchy of courts, that may
ordinarily be raised by party-litigants, should not be so perceived as good and inevitable
justifications for advocating timidity, let alone isolationism,by theCourt.
A cardinal requirement, to which I agree, is that one who invokes the Court’s
adjudication must have a personal and substantial interest in the dispute; indeed, the 1
developing trend would require a logical nexus between the status asserted and the claim
sought to be adjudicated in order to ensure that one is the proper and appropriate party
to invoke judicial power. The rule requires a party to aptly show a personal stake in the
2
outcome of the case or an injury to himself that can be redressed by a favorable decision
so as to warrant his invocation of the Court’s jurisdiction and to render legally feasible the
exercise of the Court’s remedial powers in his behalf. If it were otherwise, the exercise of
that power can easily become too unwieldy by its sheer magnitude and scope to a point
that may, in no small measure, adversely affect its intended essentiality, stability and
consequentially.
Nevertheless, where a most compelling reason exists, such as when the matter is of
transcendental importance and paramount interest to the nation, the Court must take the
3 ownership and possession of ICCs/IPs to their ancestral domains shall be recognized and
liberal approach that recognizes the legal standing of nontraditional plaintiffs, such
_______________
People vs. Vera, 65 Phil. 56, 89; Macasiano vs. National Housing Authority, 224 SCRA 236, 244 (1993).
1
Am Jur § 189, p. 591, S. v. D., 410 US 841, 35 L Ed 2d 536, 93 S Ct 1146.
2
Legaspi vs. Civil Service Commission, 150 SCRA 530, 540 (1987); Tanada vs. Tuvera, 136 SCRA 27, 36, 37
3
(1985).
243
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
as citizens and taxpayers, to raise constitutional issues that affect them. This Court thus
4
did so in a case that involves the conservation of our forests for ecological needs. Until an
5
exact balance is struck, the Court must accept an eclectic notion that can free itself from the
bondage of legal nicety and hold trenchant technicalities subordinate towhatmaybe
considered to be ofoverriding concern.
The petition seeks a declaration by the Court of unconstitutionally of certain
provisions of Republic Act No. 8371, a law that obviously is yet incapable of exact equation
in its significance to the nation and its people now and in the generations yet to come.
Republic Act No. 8371, otherwise also known as the Indigenous Peoples Rights Act of 1997
CIPRA”), enacted into law in 1997 and made effective on 22 November 1997, is apparently
intended to be a legislative response to the 1987 Constitution which recognizes the rights
of indigenous cultural communities “within the framework of national unity and
development” and commands the State, “subject to the provisions of this Constitution and
6
national development policies and programs,” to protect the rights of indigenous cultural
communities to their ancestral lands in order to ensure their economic, social, and cultural
well-being. 7
Among the assailed provisions in IPRA is its Section 3(a) which defines “ancestral
domains” to embrace “all areas generally belonging to ICCs/IPs comprising lands, inland
waters, coastal areas, and natural resources” including “ancestral lands, forests, pasture,
residential, agricultural, and other lands individually owned whether alienable and
disposable or otherwise,” over which indigenous cultural communities/indigenous peoples
(“ICCs/IPs”) could exercise virtual ownership and control.
IPRA effectively withdraws from the public domain the so-called ancestral domains
covering literally millions of hectares. The notion of community property would comprehend
not only matters of
_______________
Defensor Santiago, Miriam, Constitutional Law, First Edition, 1994, p. 11; see also Rev. Fr. Joaquin Bernas, S.J.,
4
on the 1987 Constitution of the Republic of the Philippines, 1996 Ed.,pp. 336-337.
Oposa vs. Factoran, Jr., 224 SCRA 792 (1993).
5
Art. 11, Sec. 22.
6
Art. XII, Sec. 5.
7
244
244 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
proprietary interest but also some forms of self governance over the curved-out
territory. This concept is elaborated in Section 7 of the law which states that the “rights of
protected,” subsumed under which would encompass the right of ownership(paragraph
a); the right to develop, control and use lands and natural resources, including “the right to
negotiate the terms and conditions for the exploration of natural resources in the areas for
the purpose of ensuring ecological, environmental protection and the conservation
measures, pursuant to national and customary laws”; (par. b); the right to stay in the
territories (par. c); the right to return to their abandoned lands in case of displacement (par.
d); the right to regulate entry of migrants (par. e); the right to claim parts of ancestral
domains previously reserved (par. g); and the right to resolve land conflicts in accordance
243 primarily with customary law (par. h).Concurrently, Section 57 states that ICCs/IPs shall
be given “priority rights in the harvesting, extraction, development or exploitation of any
natural resources within the ancestral domains.” These provisions of IPRA, in their totality,
are, in my view, beyond the context of the fundamental law and virtually amount to an undue
delegation, if not an unacceptable abdication, of State authority over a significant area of
the country and its patrimony.
Article XII of the 1987 Constitution expresses that all “lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned
by the State,” and, with the exception of agricultural lands, “shall not be alienated.” It ordains
that the “exploration, development, and utilization of natural resources shall be under the
full controland supervisionof the State.” 8
These provisions had roots in the 1935 Constitution which, along with some other
specific mandates in the 1935 Constitution, forming Article XII under the title
“Conservation and Utilization of Natural Resources,” were derived largely from the report
of the Committee on Nationalization and Preservation of Lands and other
_______________
8 Sec. 2.
 245 the idea of Comm. Bennagen is for the possibility of the codification of these customary laws. So before
VOL. 347, DECEMBER 6, 2000 245 these are codified, we cannot now mandate that the same must immediately be applicable. We leave
it to Congress to determine the extent of the ancestral domain and the ownership thereof in relation
Cruz vs.Secretaryof Environmentand Natural Resources to whatever may have been codified earlier. So, in short, let us not put thecart ahead of the horse.” 15

Natural Resources. According to the Committee report, among the principles upon which
9 The constitutional aim, it seems to me, is to get Congress to look closely into the customary
these provisions were based, was “that the land, minerals, forests and other natural laws and, with specificity and by proper recitals, to hew them to, and make them part of, the
resources constitute the exclusive heritage of the Filipino Nation,” and should thereby “be stream of laws. The “due process clause,” as I so understand it in Tañada vs. Tuvera would 16

preserved for those under the sovereign authority of the Nation and for their require an apt publication of a legislative enactment before it is permitted to take force
posterity.” The delegates to the 1934 Constitutional Convention were of the unanimous
10 and effect. So, also, customary laws, when specifically enacted to become part of statutory
view that the “policy on natural resources, being fundamental to the nation’s survival law, must first undergo that publication to render them correspondingly binding and
should not be left to the changing mood of the lawmakingbody.” 11 effective as such.
The 1987 Constitution, like the precursor provisions in the 1935 and 1973 Undoubtedly, IPRA has several good points, and I would respectfully urge Congress to re-
Constitutions, thus expresses this regalian doctrine of the old, and the domainial examine the law. Indeed, the State is ex-
doctrine of the new, that all lands and natural resources belong to the state other than
those which it recognizes to be of private ownership. Except for agricultural lands of the _______________
public domain which alone may be alienated, forest or timber, and mineral lands, as well as
all other natural resources, of the country must remain with the state, the exploration, 4 Record of the ConstitutionalCommission 32.
15

146 SCRA 446 (1986).

development and utilization of which shall be subject to its full control and supervision
16

247
albeit allowing it to enter into coproduction, joint venture or production-sharing
agreements, or into agreements with foreign-owned corporations involving technical or VOL. 347, DECEMBER 6, 2000 247
financial assistance for large-scale exploration,development andutilization. 12
Cruz vs.Secretaryof Environmentand Natural Resources
The decision of the United States Supreme Court in Cariño vs. Insular horted to protect the rights of indigenous cultural communities to their ancestral lands, a
Government, holding that a parcel of land held since time immemorial by individuals
13
task that would entail a balancing of interest between their specific needs and the
under a claim of private ownership is presumed never to have been public land and cited imperatives of national interest.
to downgrade the application of the regalian doctrine, cannot override the collective will of WHEREFORE, I vote to grant thepetition.
the people expressed in the Constitution. It is in them that sovereignty resides and from
SEPARATE OPINION
them that all government authority emanates. It is not then for a court ruling or any piece
14

_______________ KAPUNAN, J.:

9II Aruego, The Framing of the Philippine Constitution, p. 594. You ask if we own the land . .. How can you own that which will outlive you? Only the race own the
10Ibid., p. 595. land because only the race lives forever. To claim a piece of land is a birthright of every man. The
11Ibid., p. 600. lowly animals claim their place; how much more man? Man is born to live. Apu Kabunian, lord of us
12CONST., Art. XII, Sec. 2; Miners Association of the Philippines, Inc. vs. Factoran, J[r., 240 SCRA 100 (1995). all, gave us life and placed us in the world to live human lives. And where shall we obtain life? From
1341 Phil. 935. the land. To work (the land) is an obligation, not merely a right. In tilling the land, you possess it. And
CONST., Art. II, Sec. I.
so land is a grace that must be nurtured. To enrich it and make it fructify is the eternal exhortation of
14

246
Apu Kabunian to all his children. Land is sacred. Land is beloved.From its womb springs . .. life.
246 SUPREME COURT REPORTS ANNOTATED —Macli-ing Dulag, Chieftain of the Kalinga
Tribe (quoted in Ponciano L. Bennagen,
Cruz vs.Secretaryof Environmentand Natural Resources “Tribal Filipinos” in Indigenous View of
of legislation to be conformed to by the fundamental law, but it is for the former to adapt Land and the Environment, ed. Shelton H.
Davis, the World Bank Discussion Papers,
to the latter, and it is the sovereign act that must, between them, stand inviolate. No. 188, pp. 71-72.)
The second paragraph of Section 5 of Article XII of the Constitution allows Congress to It is established doctrine that a statute should be construed whenever possible in harmony
provide "for the applicability of customary laws governing property rights or relations in with, rather than in violation of, the Constitution. The presumption is that the legislature
1

determining the ownership and extent of ancestral domains.” I do not see this statement intended to enact a valid, sensible and just law and one which operates no further than
as saying that Congress may enact a law that would simply express that “customary laws may be necessary to effectuate the specific purpose of the law. 2

shall govern” and end it there. Had it been so, the Constitution could have itself easily
provided it without having to still commission Congress to do it. Mr. Chief Justice Davide _______________
has explained this authority of Congress, during the deliberations of the 1986
Constitutional Convention, thus: Teehankee vs. Rovira, 75 Phil. 634 (1945); San Miguel Corporation vs. Avelino, 89 SCRA 69 (1979); Phil. Long
1

“Mr. Davide. xxx Insofar as the application of the customary laws governing property rights or Distance Telephone Co. w. Collector of Internal Revenue, 90 Phil 674 (1952).
relations in determining the ownership and extent of the ancestral domain is concerned, it is In re Guarina, 24 Phil, 37 (1913).
2

respectfully submitted that the particular matter must be submitted to Congress. I understand that 248

248 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The challenged provisions of the Indigenous Peoples Rights Act (IPRA) must be construed
in view of such presumption of constitutionality. Further, the interpretation of these
provisions should take into account the purpose of the law, which is to give life to the
constitutional mandate that the rights of the indigenous peoples be recognized and
protected.
The struggle of our indigenous peoples to reclaim their ancestral lands and domains
and therefore, their heritage, is not unique. It is one that they share with the red-skinned
“Indians” of the United States, with the aborigines of Australia, the Maori of New Zealand
and the Sazmi of Sweden, to name a few. Happily, the nations in which these indigenous
peoples live all have enacted measures in an attempt to heal an oppressive past by the
promise of a progressive future. Thus has the international community realized the
injustices that have been perpetrated upon the indigenous peoples. This sentiment among
the family of nations is expressed in a number of documents, the most recent and most
comprehensive of which is the Draft United Nations Declaration on the Rights of
Indigenous Peoples which was adopted by the UN Sub-Commission on Prevention of
Discrimination and Protection of Minorities by its resolution on August 26, 1994. Among
the rights recognized by the UN Draft is the restitution of lands, territories and even the
resources which the indigenous peoples have traditionally owned or otherwise occupied
or used, and which have been confiscated, occupied, used or damaged without the free and
informed consent of the indigenouspeoples.
A Historical Backdrop on the Indigenous Peoples
The term “indigenous” traces its origin to the Old Latin word indu, meaning “within.” In
the sense the term has come to be used, it is nearer in meaning to the Latin
word indigenus, which means “native.” “Indigenous” refers to that which originated or has
3
been
_______________
In Philippine Colonial history, the term indio applied to indigenous throughout the vast Spanish empire. India
3
was a synonym for all of Asia east of the Indus River. Even after it became apparent that the explorer Christopher
Columbus was not able to reach territories lying off the east
249
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
produced naturally in a particular land, and has not been introduced from the outside. In
international law, the definition of what constitutes “indigenous peoples” attains some
degree of controversy. No definition of the term “indigenous peoples” has been adopted
by the United Nations (UN), although UN practice has been guided by a working definition
in the 1986 Report of UN Special Rapporteur Martinez Cobo: 5
Indigenous communities, peoples and nations are those which, having a historical continuity with
pre-invasion and pre-colonial societies that developed on their territories, consider themselves
distinct from other sections of the societies now prevailing in those territories, or parts of them. They
form at present non-dominant sections of society and are determined to preserve, develop and
transmit to future generations their ancestral territories, and their ethnic identity, as the basis of their
continued existence as peoples, in accordance with their own cultural patterns, social institutionsand
legal systems.
This historical continuity may consist of the continuation, for an extended period reaching into
the present, of one or more of the following factors:
1. (a)Occupation of ancestral lands, or atleast ofpart of them;
2. (b)Common ancestry with the original occupants of these lands;
3. (c)Culture in general, or in specific manifestations (such as religion, living under a tribal
system, membership of an indigenous community, dress, means of livelihood, life-
style,etc.);
_______________
coast of Asia, the Spanish persisted in referring to all natives within their empire as los Indios. (Owen J. Lynch.
Jr., THE PHILIPPINE COLONIAL DICHOTOMY: Attraction and Disenfranchisement, 63 PL J 112 [1988] citing R.
BERKHOFER, THE WHITE MAN’S INDIAN: IMAGES OF THE AMERICAN INDIAN FROM COLUMBUS TO THE
PRESIDENT 5 [1979].
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1976), p. 1151.
4
Benedict Kingsbury, “Indigenous Peoples” in International Law: A Constructivist Approach to the Asian
5
Controversy, 92 The American Journal of International Law 414, 419 (1998) citing Jose Martinez Cobo, Study of the
Problem of Discrimination against indigenous population, UN Doc. E/CN.4/Sub. 2/1986/7/ Add. 4, paras. 379-80.
250
250 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
1. (d)Language (whether used as the only language, as mother-tongue, as the habitual means
of communication at home or in the family, or as the main, preferred, habitual, general or
normal language);
2. (e)Residence in certain parts of the country; or in certain regions of the world;
3. (f)Other relevant facts. 6
In Philippine constitutional law, the term “indigenous peoples” pertains to those groups of
Filipinos who have retained a high degree of continuity from pre-Conquest
culture. Philippine legal history, however, has not been kind to the indigenous peoples,
7
characterized them as “uncivilized,” “backward people,” with “barbarous practices” and
8 9 10
“a low orderofintelligence.” 11
Drawing inspiration from both our fundamental law and international law, IPRA now
employs the politically-correct conjunctive term “indigenous peoples/indigenous cultural
communities” as follows:
Sec. 3. Definition of Terms.—For purposes of this Act, the following terms shall mean:
xxx
249
1. (h)Indigenous peoples/Indigenous cultural communities.—refer to a group of people or homogenous
societies identified by self-ascription and ascription by others, who have continuously lived as
organized community on communally bounded and defined territory,
4
_______________
6 Ibid. This definition is criticized for taking the potentially limited, and controversial view of indigenous peoples by requiring
“historical continuity with pre-invasion and pre-colonial societies that developed on their territories.”
7 4 RECORD OF THE CONSTITUTIONAL COMMISSION 34.
8 Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 680 (1919).
9 Hearing before the Committee on the Philippines, United States Senate, Sixty-Third Congress, Third Session on HR 18459, pp.
346, 351. Quoted inRubiat 686.
10 United States President McKinleys’ Instruction to the Philippine Commission, April 7, 1900, quoted In Rubiat 680.
11 US v. Tubban, 29 Phil. 434, 436 (1915).
251
VOL. 347, DECEMBER 6, 2000 251
Cruz vs.Secretaryof Environmentand Natural Resources
and who have, under claims of ownership since time immemorial, occupied, possessed and utilized such territories, _______________
sharing common bonds of language, customs, traditions, and other distinctive cultural traits, or who have, through
resistance to political, social and cultural inroads of colonization, non-indigenous religions and cultures, became
See RENATO CONSTANTINO, THE PHILIPPINES: A PAST REVISITED (1975), pp. 26-41; TEODORO
14

historically differentiated from the majority of Filipinos. Indigenous peoples shall likewise include peoples who are
AGONCILLO, A HISTORY OF THE FILIPINO PEOPLE, 8th ed., pp. 5, 74-75.
regarded as indigenous on account of their descent from the populations which inhabited the country at the time of
Response of Rep. Gregorio A. Andolana to the interpellation of Rep. John Henry R. Osmena on House Bill No.
15

conquest or colonization, or at the time of inroads of non-indigenous religions and cultures, or the establishment of
9125, Journal of August 20 and 21, 1997 of the House of Representatives, p. 20.
present State boundaries, who retain some or all of their own social, economic, cultural and political institutions,
Philippines Yearbook (1998 ed.), p. 366.
16

but who may have been displaced from their traditional domains or who may have resettled outside theirancestral
253
domains x x x.
Long before the Spaniards set foot in these islands, the indigenous peoples were already VOL. 347, DECEMBER 6, 2000 253
plowing our soil and hunting in our forests. The Filipinos of Aeta and Malay stock, who Cruz vs.Secretaryof Environmentand Natural Resources
were the original inhabitants of our archipelago, were, at that time, practicing a native Sec. 22. The State recognizes and promotes the rights of indigenous peoples within the frameworkof
culture. From the time the Spaniards arrived up to the early part of the American national unityand development. 17

regime, these native inhabitants resisted foreign invasion, relentlessly fighting for their
12
lands. Today, from the remote uplands of Northern Luzon, to Palawan, Mindoro and
Mindanao, the indigenous peoples continue to live on and cultivate their ancestrallands,
the lands of their forefathers.
Though Filipinos today are essentially of the same stock as the indigenous peoples,
Sec. 5. The State, subject to the provisions of this Constitution and national development policies
and programs, shall protect the rights of indigenous cultural communities to their ancestral lands to
ensure their economic, social, andcultural well-being.
The Congress may provide for the applicability of customary laws governing property rights and
relations in determining the ownership and extent of ancestral domains. 18

our national culture exhibits only the last vestiges of this native culture. Centuries of
colonial rule and neocolonial domination have created a discernible distinction between
the cultural majority and the group of cultural minorities. The extant Philippine national
13
culture is the culture of the majority; its in-
Sec. 1. The Congress shall give the highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic and political inequalities,
and remove cultural inequities by equitably diffusing wealth and political power for the common
good.
To this end, the State shall regulate the acquisition, ownership, use and disposition of
propertyand its increments. Sec. 6. The State shall apply the principles of agrarian reform or
19

_______________ stewardship, whenever applicable in accordance with law, in the disposition and utilization of other
natural resources, including lands of the public domain under lease or concession, subject to prior
See Owen J. Lynch, Jr., INVISIBLE PEOPLES AND A HIDDEN AGENDA: The Origins of Contemporary Philippine
12 rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral
Land Laws (1900-1913), 63 PLJ 249 (1988). lands. 20

For an introduction to the chasm that exists between Philippine Law and Indigenous Custom Law, see Owen
13
J. Lynch, Jr., Native Title, Private Right and Tribal Land Law: An Introductory Survey 52 PLJ 268 (1982); and the
Philippine Indigenous Law Collection: An Introduction and PreliminaryBibliography, 58 PLJ 457 (1983), by the same
Sec. 17. The State shall recognize, respect, and protect the rights of indigenous cultural
communities to preserve and develop their cultures, traditions, and institutions. It shall consider
these rights in the formulation of national plans and policies. 21

author.
252
_______________
252 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources Article II of the Constitution, entitled State Principles and Policies.
17

Article XII of the Constitution, entitled National Economy and Patrimony.

digenous roots were replaced by foreign cultural elements that are decidedly pronounced,
18

Article XIII of the Constitution, entitled Social Justice and Human Rights.
19

if not dominant. While the culture of the majority reoriented itself to Western influence,
14
Ibid.
20

the culture of the minorities hasretained its essentially nativecharacter. One of every six Article XIV of the Constitution, entitled Education, Science, Technology, Arts, Culture,and Sports.
21

254
Filipinos is a member of an indigenous cultural community. Around twelve million
Filipinos are members of the one hundred and ten or so indigenous cultural 254 SUPREME COURT REPORTS ANNOTATED
communities, accounting for more than seventeen per centum of the estimated seventy
15

Cruz vs.Secretaryof Environmentand Natural Resources

million Filipinos in our country. Sadly, the indigenous peoples are one of the poorest
16

Sec. 12. The Congress may create a consultative body to advise the President on policies affecting
sectors of Philippine society. The incidence of poverty and malnutrition among themes indigenous cultural communities, the ma-jorityof the members of which shallcome fromsuch
significantly higher than the national average. The indigenous peoples are also among the communities. 22

most powerless. Perhaps because of their inability to speak the language of law and power,
they have been relegated to the fringes of society. They have little, if any, voice in national
politics and enjoy the least protection from economic exploitation.
The Constitutional Policies on Indigenous Peoples
The framers of the 1987 Constitution, looking back to the long destitution of our less
fortunate brothers, fittingly saw the historic opportunity to actualize the ideals of people
IPRA was enacted precisely to implement the foregoing constitutional provisions. It
provides, among others, that the State shall recognize and promote the rights of
indigenous peoples within the framework of national unity and development, protect their
rights over the ancestral lands and ancestral domains and recognize the applicability of
customary laws governing property rights or relations in determining the ownership and
extent of the ancestral domains. Moreover, IPRA enumerates the civil and political rights
23

empowerment and social justice, and to reach out particularly to the marginalized sectors
of society, including the indigenous peoples. They incorporated in the fundamental law _______________
several provisions recognizing and protecting the rights and interests of the indigenous
Article XVI of the Constitution, entitled General Provisions.
peoples, to wit:
22
 SECTION 2. Declaration of State Policies.—The State shall recognize and promote all the rights of Indigenous
23 Subic Bay Metropolitan Authority v. COMELEC, 262 SCRA 492, 513 (1996).
29

Cultural Communi-ties/Indigenous Peoples (ICCs/IPs) hereunder enumerated within the framework of the Board of Optometry v. Colet, 260 SCRA 88, 104 (1996).
30

Constitution: 256
256 SUPREME COURT REPORTS ANNOTATED
1. a)The State shall recognize and promote the rights of ICCs/IPs within the framework of national unity
and development; Cruz vs.Secretaryof Environmentand Natural Resources
2. b)The State shall protect the rights of ICCs/IPs to their ancestral domains to ensure their economic, or that which seeks to resolve hypothetical or feigned constitutional problems. A petition 31

social and cultural well being and shall recognize the applicability of customary laws governing
property rights or relations in determining the ownership and extent of ancestral domain;
3. c)The State shall recognize, respect and protect the rights of ICCs/IPs to preserve and develop their
cultures, traditions and institutions. It shall consider these rights in the formulation of national laws
raising a constitutional question does not present an “actual controversy,” unless it alleges
a legal right or power. Moreover, it must show that a conflict of rights exists, for inherent
in the term “controversy” is the presence of opposing views or contentions. Otherwise, 32

and policies;
4. d)The State shall guarantee that members of the ICCs/IPs regardless of sex, shall equally enjoy the full
measure of human rights and freedoms without distinction or discrimination;
5. e)The State shall take measures, with the participation of the ICCs/IPs concerned, to protect their rights
and guarantee respect for their cultural integrity, and to ensure that members of the ICCs/IPs benefit
the Court will be forced to resolve issues which remain unfocused because they lack such
concreteness provided when a question emerges precisely framed from a clash of
adversary arguments exploring every aspect of a multifaceted situation embracing
conflicting and demanding interests. The controversy must also be justiciable; that is, it
33

on an equal footing from the rights and opportunities which national laws and regulations grant to
other members of the population; and
must be susceptible of judicial determination. 34

6. f)The State recognizes its obligations to respond to the strong expression of the ICCs/IPs for cultural In the case at bar, there exists a live controversy involving a clash of legal rights. A law
integrity by assuring has been enacted, and the Implementing Rules and Regulations approved. Money has been
appropriated and the government agencies concerned have been directed to implement
255 the statute. It cannot be successfully maintained that we should await the adverse
VOL. 347, DECEMBER 6, 2000 255 consequences of the law in order to consider the controversy actual and ripe for judicial
resolution. It is precisely the contention of the petitioners that the law, on its face,
Cruz vs.Secretaryof Environmentand Natural Resources constitutes an unconstitutional abdication of State ownership over lands of the public
of the indigenous peoples; spells out their social and cultural rights; acknowledges a
24 25
domain and other natural resources. Moreover, when the State machinery is set into
general concept of indigenous property right and recognizes title thereto; and creates the 26
motion to implement an alleged unconstitutional statute, this Court possesses sufficient
NCIP as an independent agency under theOffice of the President. 27
authority to resolve and prevent imminent injury and violation of the constitutional
Preliminary Issues process.
A.The petition presentsan actual controversy. B. Petitioners, as citizensand taxpayers, have the requisite standing to raise the
The time-tested standards for the exercise of judicial review are: (1) the existence of an constitutional questions herein.
appropriate case; (2) an interest personal and substantial by the party raising the In addition to the existence of an actual case or controversy, a person who assails the
constitutional question; (3) the plea that the function be exercised at the earliest validity of a statute must have a personal
opportunity; and (4) the necessity that the constitutional question be passed upon in order
todecide the case. 28
_______________
Courts can only decide actual controversies, not hypothetical questions or cases. The 29

threshold issue, therefore, is whether an “appropriate case” exists for the exercise of Muskrat v. United States, 219 US 346, 362 (1913).
31

judicial review in the present case. WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY, 1976, p. 497.
32

UnitedStates v. Freuhauf, 365 US 146 (1961).

An “actual case or controversy” means an existing case or controversy which is both
33

Association of Small Landowners v. Secretary of Agrarian Reform,175 SCRA 343, 364 (1989); Joya v. PCGG, 225
34

ripe for resolution and susceptible of judicial determination, and that which is not SCRA 568 (1993).
conjectural or anticipatory, maximum ICC/IP participation in the direction of education,
30 257
health, as well as other services of ICCs/Ips, in order to render such services more VOL. 347, DECEMBER 6, 2000 257
responsive to the needs and desires of thesecommunities. Towards these ends, the State
shall institute and establish the necessary mechanisms to enforce and guarantee the Cruz vs.Secretaryof Environmentand Natural Resources
realization of these rights, taking into consideration their customs, traditions, values, and substantial interest in the case, such that, he has sustained, or will sustain, a direct
beliefs, interests and institutions, and to adopt and implement measures to protect their injury as a result of its enforcement. Evidently, the rights asserted by petitioners as
35

rights to their ancestral domains. citizens and taxpayers are held in common by all the citizens, the violation of which may
result only in a “generalized grievance.” Yet, in a sense, all citizen’s and taxpayer’s suits
36

_______________ are efforts to air generalized grievances about the conduct of government and the
allocation of power. 37

24 See Sections 13-20, R.A. 8371. In several cases, the Court has adopted a liberal attitude with regard to standing. The 38

25 See Sections 21-37, R.A. 8371. proper party requirement is considered as merely procedural, and the Court has ample
39

26 See Sections 4-12, R.A. 8371. discretion with regard thereto. As early as 1910, the Court in the case of Severino vs.
40

27 See Sections 38-50, R.A. 8371.

28 Dumlao v. COMELEC, 95 SCRA 392, 400 (1980), citing People vs. Vera, 65 Phil. 56 (1937). GovernorGeneral held:41
xxx [W]hen the relief is sought merely for the protection of private rights, the relator must show some
personal or special interest in the subject matter, since he is regarded as the real party in interest and
his right must clearly appear. Upon the other hand, when the question is one of public right and the
object of the mandamus is to procure the enforce-
Such a right belongs to a different category of rights altogether for it concerns nothing less than self-
preservation and self-perpetuation—aptly and fittingly stressed by petitioners—the advancement of
which may even be said to predate all governments and constitutions. As a matter of fact, these basic
rights need not even be written in the Constitution for they are assumed to existfrom theinception of
humankind. 48

_______________
35People v.Vera, 65 Phil. 56, 89 (1937).
36Lozada v. COMELEC, 120 SCRA 337, 342 (1983).
37US v. Richardson, 418 US 166, 194 S Ct 2940, 41 L Ed 2d 678 (1974).
38 Kilosbayan v. Guingona, 232 SCRA 110, 135 (1994), citing, among others, Philconsa v. Gimenez, 15 SCRA 479 (1965); CLU v.
Executive Secretary, 194 SCRA 317 (1991); Guingona v. Carague, 196 SCRA 221 (1991); Osmena. v. COMELEC,199 SCRA
750 (1991); Basco v. PAGCOR, 197 SCRA 52 (1991); Carpio v. Executive Secretary, 206 SCRA 290 (1992).
In Kilosbayan v. Morato (250 SCRA 130 [1995]) the Court discoursed on the rule on standing as follows: taxpayers may sue on the
claim of illegal disbursement of funds, or to assail the constitutionality of a tax measure; voters may question the validity of election
laws; citizens may raise constitutional questions of transcendental importance which must be settled early; and, legislators may
question the validity of official acts which infringe their prerogatives.
39 Araneta v. Dinglasan, 84 Phil. 368, 373 (1949).
40 Assn. of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175 SCRA 343, 364-365 (1989).
41 16 Phil. 365 (1910), citing HIGH, EXTRAORDINARY LEGAL REMEDIES.
Petitioners, as citizens, possess the “public right” to ensure that the national patrimony is
not alienated and diminished in violation of the Constitution. Since the government, as the
guardian of the national patrimony, holds it for the benefit of all Filipinos without
distinction as to ethnicity, it follows that a citizen has sufficient interest to maintain a suit
to ensure that any grant of concessions covering the national economy and patrimony
strictly complies with constitutional requirements. Thus, the preservation of the integrity
and inviolability of the national patrimony is a proper subjectof a citizen’s suit.
In addition, petitioners, as taxpayers, possess the right to restrain officials from
wasting public funds through the enforcement of an unconstitutional statute. It is well-
settled that a taxpayer has the right to enjoin public officials from wasting public funds
through the implementation of an unconstitutional statute, and by necessity, he may
49

258
assail the validity of a statute appropriating public funds. The taxpayer has paid his taxes
50

258 SUPREME COURT REPORTS ANNOTATED and contributed to the public coffers and, thus, may inquire into the manner by which the
Cruz vs.Secretaryof Environmentand Natural Resources proceeds of his taxes are spent. The expenditure by an official of the State for the purpose
ment of a public duty, the people are regarded as the real party in interest, and the relator at whose of administering an invalid law constitutes a misapplication of suchfunds. 51

instigation the proceedings are instituted need not show that he has any legal or special interest in the The IPRA appropriates funds as indicated in its title: “An Act to Recognize, Protect and
result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws. 42 Promote the Rights of Indigenous Cultural Communities/Indigenous Peoples, Creating the
This Court has recognized that a “public right,” or that which belongs to the people at large, National Commis-
may also be the subject of an actual case or controversy. In Severino, we ruled that a private
citizen may enforce a “public right” in behalf of other citizens. We opined therein that: _______________
... [T]he right which [petitioner] seeks to enforce is not greater or different from that of any other
qualified elector in the municipality of Silay. It is also true that the injury which he would suffer in Ibid.
48

case he fails to obtain the relief sought would not be greater or different from that of the other Philconsa v. Mathay, 18 SCRA 300, 306 (1966).
49

electors; but he is seeking to enforce a public right as distinguished from a private right. The real party Philconsa v. Gimenez, 15 SCRA 479, 487 (1965), citing 11 AM JUR 761.
50

in interest is the public, or the qualified electors of the town of Silay. Each elector has the same right Sanidad v. COMELEC, 73 SCRA 333, 358-359 (1976); Pascual v. Secretary of Public Works, 110 Phil.
51

331 (1960); Tan v. Macapagal, 43 SCRA 677, 680 (1972).

and would suffer the same injury. Each elector stands on the same basis with reference to maintaining a 260
petition whether or not the relief sought by the relator should be granted. 43

In Tañada v. Tuvera, the Court enforced the “public right” to due process and to be
44
260 SUPREME COURT REPORTS ANNOTATED
informedof matters ofpublic concern. Cruz vs.Secretaryof Environmentand Natural Resources
In Garcia vs. Board of Investments, the Court upheld the “public right” to be heard or
45
sion on Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating Funds
consulted on matters of national concern. Therefor, and for Other Purposes.” In the same manner, Section 79 authorizes for the
In Oposa v. Factoran,46 the Court recognized the “public right” of citizens to “a balanced expenditure of public funds by providing that “the amount necessary to finance [its] initial
and healthful ecology which, for the first time in our nation’s constitutional history, is implementation shall be charged against the current year’s appropriation for the Office for
solemnly incorporated in the fundamental law.” Mr. Justice (now Chief Justice) Hilario G.
47
Northern Cultural Communities (the “ONCC”) and the Office for Southern Cultural
Davide, Jr., delivering the opinion ofthe Court, stated that: Communities (the “OSCC”),” which were merged as organic offices of the NCIP. Thus,the
52 53

IPRA is a valid subject of a taxpayer’s suit.

_______________
C. The petition for prohibition and mandamusis not an improper remedy.
Id.,at 371.
42 Prohibition is an extraordinary writ directed against any tribunal, corporation, board,
Id.,at 374-375
43
officer or person, whether exercising judicial, quasi-judicial or ministerial functions,
136 SCRA 27, 37 (1985).
44
ordering said entity or person to desist from further proceedings when said proceedings
177 SCRA 374, 383 (1989).
are without or in excess of said entity’s or person’s jurisdiction, or are accompanied with
45

224 SCRA 792 (1993).

46

Id.,at 805.
47 grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate
259 remedy in the ordinary course of law. Mandamus, on the other hand, is an extraordinary
54

VOL. 347, DECEMBER 6, 2000 259 writ commanding a tribunal, corporation, board, officer or person, immediately or at some
other specified time, to do the act required to be done, when said entity or person
Cruz vs.Secretaryof Environmentand Natural Resources unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust or station, or when said entity or person unlawfully excludes courts or where exceptional and compelling circumstances justify such invocation. We 57

another from the use and held in People v. Cuaresma that: 58

A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of
_______________ extraordinary writs against first level (“inferior”) courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court’s
Section 79. Appropriations.—The amount necessary to finance the initial implementation of this Act shall be
52
original jurisdiction to issue these writs should be allowed only where there are special and important
charged against the current year’s appropriation of the ONCC and the OSCC. Thereafter, such sums as may be reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy
necessary for its continued implementation shall be included in theannual General Appropriations Act. necessary to prevent inordinate demands upon the Court’s time and attention which are better
Section 74. Merger of ONCC/OSCC—The Office for Northern Cultural Communities (ONCC) and the Office for
53
devoted to those matters within its exclusive juris-
Southern Cultural Communities (OSCC), created under Executive Order Nos. 122-B and 122-C respectively, are
hereby merged as organic offices of the NCIP and shall continue to function under a revitalized and strengthened
_______________
structure to achieve the objectives of the NCIP x x x.
Section 2, Rule 65, 1997 RULES OF CIVIL PROCEDURE.
54

261 Article VIII of the Constitution states:

56

Sec. 5. The Supreme Court shall have the following powers:

VOL. 347, DECEMBER 6, 2000 261
Cruz vs.Secretaryof Environmentand Natural Resources 1. (1)Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions
for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course oflaw. 55
xxx
In this case, the petitioners pray that respondents be restrained from implementing
the challenged provisions of the IPRA and its Implementing Rules and the assailed DENR Batas Pambansa Blg. 129 (B.P. 129), as amended, provides:
Circular No. 2, series of 1998, and that the same officials be enjoined from disbursing
public funds for the implementation of the said law and rules. They further ask that the Sec. 9. Jurisdiction.—The Court of Appeals shallexercise:
Secretary of the DENR be compelled to perform his duty to control and supervise the
activities pertaining to natural resources. 1. (1)Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and
auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;
Prohibition will lie to restrain the public officials concerned from implementing the
questioned provisions of the IPRA and from disbursing funds in connection therewith if
x x x.
the law is found to be unconstitutional. Likewise, mandamus will lie to compel the Sec. 21. Original jurisdiction in other cases.—Regional Trial Courts shall exercise originaljurisdiction:
Secretary of the DENR to perform his duty to control and supervise the exploration,
development, utilization and conservation of the country’s natural resources. 1. (1)In the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may
Consequently, the petition for prohibition and mandamusis not an improperremedy for be enforcedinany part of their respective regions;and
2. (2)In actions affecting ambassadors and other public ministers and consuls.
the relief sought.
D. Notwithstanding the failure of petitioners to observe the hierarchy of courts, the Court 57 Tano vs. Socrates, 278 SCRA 154, 173-174 (1997).
58 172 SCRA 415 (1989).
assumes jurisdiction over the petition in view of the importanceof the issues raised therein. 263
Between two courts of concurrent original jurisdiction, it is the lower court that should
initially pass upon the issues of a case. That way, as a particular case goes through the
VOL. 347, DECEMBER 6, 2000 263
hierarchy of courts, it is shorn of all but the important legal issues or those of first Cruz vs.Secretaryof Environmentand Natural Resources
impression, which are the proper subject of attention of the appellate court. This is a diction, and to prevent further over-crowding of the Court’s docket x xx. (Emphasis supplied.) 59

procedural rule borne of experience and adopted to improve the administration of justice. IPRA aims to rectify the historical injustice inflicted upon indigenous peoples. Its impact
This Court has consistently enjoined litigants to respect the hierarchy of courts. upon the lives not only of the indigenous peoples but also upon the lives of all Filipinos
Although this Court has concurrent jurisdiction with the Regional Trial Courts and the cannot be denied. The resolution of this case by the Court at the earliest opportunity is
Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas necessary if the aims of the law are to be achieved. This reason is compelling enough to
allow petitioners’ invocation of this Court’sjurisdiction in the first instance.
_______________
Substantive Issues
Section 3, Rule 65, 1997 RULES OF CIVIL PROCEDURE.
55 Primary Issue
262 The issue of prime concern raised by petitioners and the Solicitor General revolves around
262 SUPREME COURT REPORTS ANNOTATED the constitutionality of certain provisions of IPRA, specifically Sections 3(a), 3(b), 5, 6, 7,
8, 57, 58 and 59. These provisions allegedly violate Section 2, Article XII of the Constitution,
Cruz vs.Secretaryof Environmentand Natural Resources which states:
corpus and injunction, such concurrence does not give a party unrestricted freedom of
56
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
choice of court forum. The resort to this Court’s primary jurisdiction to issue said writs forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
shall be allowed only where the redress desired cannot be obtained in the appropriate resources are owned by the State. With the exception of agricultural lands, all other natural resources
shall not be alienated. The exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly undertake such activities,
or it may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, beneficial use maybe themeasure and limit of the grant.
The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoymentexclusivelyto Filipino citizens.
_______________
Id.,424.
59
264
264 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The Congress, may, by law, allow small-scale utilization of natural resources by Filipino citizens, as
well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers,
lakes, bays and lagoons.
The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development and utilization of minerals,
petroleum, and other mineral oils according to the general terms and conditions provided by law,
based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and
technicalresources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.
Under IPRA, indigenous peoples may obtain the recognition of their right of
ownership over ancestral lands and ancestral domains by virtue of native title. The
60 61
term “ancestral lands” under the statute refers to landsoccupied by individuals, families
and clans who are members of indigenous cultural communities, in-
_______________
Section 7. Rights to Ancestral Domains.—The rights of ownership and possession of ICCs/IPs to their ancestral
60
domains shall be recognized and protected. Such rightsshallinclude:
1. (a)Right of Ownership.—The right to claim ownership over lands, bodies of water traditionally and
actually occupied by ICCs/IPs, sacred places, traditional
2. (b)hunting and fishing grounds, and all improvements made bythem at any timewithin thedomains;
xxx
Section 3(1) Native Title—refers to pre-conquest rights to lands and domains which, as far back as memory
61
reaches, have been held under a claim of private ownership by ICCs/IPs, have never been public lands and are thus
indisputably presumed to have been held that way since beforethe Spanish Conquest; x x x
Section 3(p) Time Immemorial—refers to a period of time when as far back as memory can go, certain ICCs/IPs
are known to have occupied, possessed in the concept of owners, and utilized a defined territory devolved to them,
by operation of customary law or inherited from their ancestors, in accordance with their customs and traditions.
265
VOL. 347, DECEMBER 6, 2000 265
Cruz vs. Secretary of Environment and Natural Resources
eluding residential lots, rice terraces or paddies, private forests, swidden farms and tree
lots. These lands are required to have been “occupied, possessed and utilized” by them or
through their ancestors “since time immemorial, continuously to the present.” On the 62
other hand, “ancestral domains” is defined as areas generally belonging to indigenous
cultural communities, including ancestral lands, forests, pasture, residential and
agricultural lands, hunting grounds, worship areas, and lands no longer occupied
exclusively by indigenous cultural communities but to which they had traditional access,
particularly the home ranges of indigenous cultural communities who are still nomadic or
shifting cultivators. Ancestral domains also include inland waters, coastal areas and
natural resources therein. Again, the same are required to have been
63
_______________
Section 3(b) Ancestral Lands-—Subject to Section 56 hereof, refers to land occupied, possessed and utilized
62
by individuals, families and clans who are members of the ICCs/IPs since time immemorial, by themselves or
through their predecessors-in-interest, under claims of individual or traditional group ownership, continuously to
the present except when interrupted by war, force majeure or displacement by force, deceit, stealth, or as a
consequence of government projects or any other voluntary dealings entered into by the government and private
individuals/corporations, including, but not limited to, residential lots, rice terraces or paddies, private forests,
swidden farms and tree lots;
Section 3(a) Ancestral Domains—Subject to Section 56 hereof, refer to all areas generally belonging to
63
ICCs/IPs comprising lands, inland waters, coastal areas and natural resources therein, held under a claim of
ownership, occupied or possessed by Indigenous peoples, by themselves or through their ancestors, communally or
individually since time immemorial, continuously to the present except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings
entered into by the government and private individuals/corporations, and which are necessary to ensure their
economic, social and cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and
other lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other resources, and lands which may no longer be exclusively be occupied
by Indigenous peoples but from which they traditionally had access to for their subsistence and traditional activities,
particularly the home ranges of ICCs/IPs who are still nomadic and/or shiftingcultivators.
266
266 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
“held under a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or
through their ancestors, communally or individually since time immemorial, continuously
to the present.” Under Section 56, property rights within the ancestral domains already
64
existing and/or vested upon effectivity of said law “shall be recognized and respected.”
Ownership is the crux of the issue of whether the provisions of IPRA pertaining to
ancestral lands, ancestral domains, and natural resources are unconstitutional. The
fundamental question is, who, between the State and the indigenous peoples, are the
rightful ownersof these properties?
It bears stressing that a statute should be construed in harmony with, and not in
violation, of the fundamental law. The reason is that the legislature, in enacting a statute,
65
is assumed to have acted within its authority and adhered to the constitutional limitations.
Accordingly, courts should presume that it was the intention of the legislature to enact a
valid, sensible, and just law and one which operates no further than may be necessary to
effectuate the specific purpose of thelaw. 66
A. The provisions of IPRA recognizing the ownership of indigenous peoples over the ancestral
lands and ancestral domains are not unconstitutional.
In support of their theory that ancestral lands and ancestral domains are part of the public
domain and, thus, owned by the State, pursuant to Section 2, Article XII of the Constitution,
petitioners and theSolicitorGeneral advance thefollowing arguments:
First, according to petitioners, the King of Spain under international law acquired exclusive dominion
over the Philippines by virtue of discovery and conquest. They contend that the Spanish King under
the theory of jura regalia, which was introduced into Philippine law upon Spanish conquestin 1521, sovereign has over anything in which a subject has a right of property
acquired title toall thelandsin the archipelago. or propriedad. These were rights enjoyed during feudal times by the king as the sovereign.
71

The theory of the feudal system was that title to all lands was originally held by the
_______________ King, and while the use of lands was granted out to others who were permitted to hold
them under certain conditions, the King theoretically retained the title. By fiction of law,
72

Ibid.
the King was regarded as the original proprietor of all lands, and the true and only source
64

Hebron v. Reyes, 104 Phil. 175 (1958); San Miguel Corporation v. Avelino, 89 SCRA 69 (1979).
65

In re Guarina, 24 Phil. 37 (1913).

66 of title, and from him all lands were held. 73

267 The theory of jura regalia was therefore nothing more than a natural fruitof conquest. 74

VOL. 347, DECEMBER 6, 2000 267 The Regalian theory, however, does not negate native title to lands held in private
ownership since time immemorial. In the landmark case of Cariño vs. Insular
Cruz vs.Secretaryof Environmentand Natural Resources Government the United
75

Second, petitioners and the Solicitor General submit that ancestral lands and ancestral domains are
owned by the State. They invoke the theory of jura regalia which imputes to the State the ownership _______________
of all lands and makes the State the original source of all private titles. They argue that the Philippine
State, as successor to Spain and the United States, is the source of anyasserted right of ownership in
PEÑA, REGISTRATION OF LAND TITLES AND DEEDS, 1994 rev.ed., p. 15.
land.
68

1 BOUVIER’S LAW DICTIONARY, 3rd revision, p. 1759.

69

Third, petitioners and the Solicitor General concede that the Cariño doctrine exists. However, BLACKS LAW DICTIONARY, 6th ed., p. 1282.
70

petitioners maintain that the doctrine merely states that title to lands of the public domain may be 76 CORPUS JURIS SECUNDUM, citing Hart v. Burnett, 15 Cal. 530, 566.
71

acquired by prescription. The Solicitor General, for his part, argues that the doctrine applies only to WASHBURN, p. 44; see also WILLIAMS, PRINCIPLES OF THE LAW ON REAL PROPERTY, 6th ed. (1886),R. 2;
72

alienable lands of the public domain and, thus, cannot be extended to other lands of the public domain BIGELOW, p. 2.
such as forest or timber, mineral lands,and national parks. WARVELLE, ABSTRACTS AND EXAMINATION OF TITLE TO REAL PROPERTY (1907), p. 18.
73

Fourth, the Solicitor General asserts that even assuming that native title over ancestral lands and 1 DICTIONARY OF ENGLISH LAW (Jowitt, ed.), p. 797.
74

41 Phil. 935, 212 U.S. 449, 53L Ed. 594 (1909).

ancestral domains existed by virtue of the Cariño doctrine, such native title was extinguished upon
75

269
the ratification of the 1935 Constitution.
Fifth, petitioners admit that Congress is mandated under Section 5, Article XII of the Constitution VOL. 347, DECEMBER 6, 2000 269
to protect that rights of indigenous peoples to their ancestral lands and ancestral domains. However,
they contend that the mandate is subject to Section 2, Article XII and the theory of jura
Cruz vs.Secretaryof Environmentand Natural Resources
regalia embodied therein. According to petitioners, the recognition and protection under R.A. 8371 States Supreme Court, reversing the decision of the pre-war Philippine Supreme Court,
76

of the right of ownership over ancestral lands and ancestral domains is far in excess of the legislative
power and constitutional mandate of Congress.
Finally, on the premise that ancestral lands and ancestral domains are owned by the State,
petitioners posit that R.A. 8371 violates Section 2, Article XII of the Constitution which prohibits the
alienation of non-agricultural lands of the public domain and othernatural resources.
I am notpersuaded by these contentions.
made the following pronouncement:
xxx Every presumption is and ought to be taken against the Government in a case like the present. It
might, perhaps, be proper and sufficient to say that when, as far back as testimony or memory goes, the
land has been held by individuals under a claim of private ownership, it will be presumed to have been
held in the same way from before the Spanish conquest, and never to have been public land, x x
x (Emphasis supplied.)
77

Undue reliance by petitioners and the Solicitor General on the theory of jura regalia is
understandable. Not only is the theory well recognized in our legal system; it has been
regarded, almost with reverence, as the immutable postulate of Philippine land law. It has
been incorporated into our fundamental law and has been recognized by the Court.
_______________
SeeLee Hong Hok vs. David, 48 SCRA 372 (1972).
67
268
268 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Generally, under the concept of jura regalia, private title to land must be traced to some
grant, express or implied, from the Spanish Crown or its successors, the American Colonial
government, and thereafter, the Philippine Republic. The belief that the Spanish Crown is
The above ruling institutionalized the recognition of the existence of native title to land, or
ownership of land by Filipinos by virtue of possession under a claim of ownership since
time immemorial and independent of any grant from the Spanish Crown, as an exception
67
to the theory of jura regalia.
In Cariño, an Igorot by the name of Mateo Cariño applied for registration in his name
of an ancestral land located in Benguet. The applicant established that he and his ancestors
had lived on the land, had cultivated it, and had used it as far they could remember. He also
proved that they had all been recognized as owners, the land having been passed on by
inheritance according to native custom. However, neither he nor his ancestors had any
document of title from the Spanish Crown. The government opposed the application for
registration, invoking the theory of jura regalia. On appeal, the United States Supreme
Court held that the applicant was entitled to the registration of his native title to their
ancestral land.
Cariño was decided by the U.S. Supreme Court in 1909, at a time when decisions of the
U.S. Court were binding as precedent in our jurisdiction. We applied the Cariñodoctrine in
78

the origin of all land titles in the Philippines has persisted because title to land must the 1946 case of Oh Cho vs. Director of Lands, where we stated that “[a]ll lands
79

emanate from some source for it cannot issue forth fromnowhere. 68

In its broad sense, the term “jura regalia” refers to royal rights, or those rights which
69
_______________
the King has by virtue of his prerogatives. In Spanish law, it refers to a right which the
70
 Cariño vs. Insular Government, 7 Phil. 132 (1906). The Philippine Supreme Court in this case held that in the
76
Philippines, there is no conclusive presumption of a grant of title to land from the Government founded merelyupon
long possession of the same bythe applicant.
Cariño vs. Insular Government, supra note 75,at 941.
77
Section 10, Philippine Bill of 1902.
78
75 Phil. 890 (1946).
79
270
270 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
that were not acquired from the Government either by purchase or by grant, belong to the
public domain, but [a]n exception to the rule would be any land that should have been in
the possession of an occupant and of his predecessors in interest since time immemorial,
for such possession would justify the presumption that the land had never been part of the
public domain or that it had been private property even before the Spanish conquest.”
Petitioners however aver that the U.S. Supreme Court’s ruling in Cariño was premised
on the fact that the applicant had complied with the requisites of acquisitive prescription,
having established that he and his predecessors-in-interest had been in possession of the
property since time immemorial. In effect, petitioners suggest that title to the ancestral
land applied for by Cariño was transferred from the State, as original owner, to Cariño by
virtue of prescription. They conclude that the doctrine cannot be the basis for decreeing
“by mere legislative fiat . .. that ownership of vast tracts of land belongs to [indigenous
peoples] without judicial confirmation.” 81
The Solicitor General, for his part, claims that the Cariño doctrine applies only to
alienable lands of the public domain and, as such, cannot be extended to other lands of the
public domain such as forestor timber, mineral lands, andnational parks.
There is no merit in these contentions.
A proper reading of Cariño would show that the doctrine enunciated therein applies
only to lands which have always been considered as private, and not to lands of the public
domain, whether alienable or otherwise. A distinction must be made between ownership
of land under native title and ownership by acquisitive prescription against the State.
Ownership by virtue of native title presupposes that the land has been held by its
possessor and his predecessors-in-interest in the concept of an owner since time
immemorial. The land is not acquired from the State, that is, Spain or its successors-in-
interest, the United States and the Philippine Government. There has been no transfer of
title from the State as
_______________
Id.,at 892.
80
Memorandum of Petitioners, Rollo,p. 861.
81
271
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
the land has been regarded as private in character as far back as memory goes. In contrast,
ownership of land by acquisitive prescription against the State involves a conversion of
the character of the property from alienable public land to private land, which
presupposes a transfer of title from the State to a private person. Since native title assumes
that the property covered by it is private land and is deemed never to have been part of
the public domain, the Solicitor General’s thesis that native title under Cariñoapplies only
to lands of the public domain is erroneous. Consequently, the classification of lands of the
public domain into agricultural, forest or timber, mineral lands, and national parks under
the Constitution is irrelevant to the application of the Cariño doctrine because the
82
Regalian doctrine which vests in the State ownership of lands of the public domain does
not cover ancestral lands and ancestral domains.
Legal history supports the Cariño doctrine.
When Spain acquired sovereignty over the Philippines by virtue of its discovery and
occupation thereof in the 16th century and the Treaty of Tordesillas of 1494 which it
entered into with Portugal, the continents of Asia, the Americas and Africa were
83
considered as terra nulliusalthough already populated by other peoples. The discovery 84
and occupation by the European States, who were then considered as the only members
of the international community of civilized nations, of lands in the said continents were
deemed sufficient to create title under international law. 85
Although Spain was deemed to have acquired sovereignty over the Philippines, this
80
did not mean that it acquired title to all lands in the archipelago. By virtue of the colonial
laws of Spain, the
_______________
Section 3, Article XII, CONSTITUTION.
82
Under the Treaty of Tordesillas, the world was divided between Spain and Portugal, with the former having
83
exclusive power to claim all lands and territories west of the Atlantic Ocean demarcation line (Lynch, The Legal Bases
of Philippine Colonial Sovereignty, 62 Phil L J 279, 283 [1987]).
See AKEHURST, A MODERN INTRODUCTION TO INTERNATIONAL LAW, 5th ed., 142-143.
84
See CRUZ, INTERNATIONAL LAW, 1996 ed., pp. 106-107.
85
272
272 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Spanish Crown was considered to have acquired dominiononly over theunoccupied and
unclaimed portions ofour islands. 86
In sending the first expedition to the Philippines, Spain did not intend to deprive the
natives of their property. Miguel Lopez de Legazpi was under instruction of the Spanish
King to do no harm to the natives and to their property. In this regard, an authority on the
early Spanish colonial period in the Philippineswrote:
The government of [the King of Spain] Philip II regarded the Philippines as a challenging opportunity
to avoid a repetition of the sanguinary conquests of Mexico and Peru. In his written instructions for
the Adelantado Legazpi, who commanded the expedition, Philip II envisaged a bloodless pacification
of the archipelago. This extraordinary document could have been lifted almost verbatim from the
lectures of the Dominican theologian, Francisco de Vitoria, delivered in the University of Salamanca.
The King instructed Legazpi to inform the natives that the Spaniards had come to do no harm to their
persons or to their property. The Spaniards intended to live among them in peace and in friendship
and ‘‘to explain to them the law of Jesus Christ by which they will be saved.” Although the Spanish
expedition could defend themselves if attacked, the royal instruc-
271 _______________
Cariño v. Insular Government, supra note 75, at 939.
86
This point finds significance in light of the distinction between sovereignty and dominion. Sovereignty is the right to exercise the
functions of a State to the exclusion of any other State (Case Concerning the Island of Las Palmas [1928], UNRIAA II 829, 838). It is often
referred to as the power of imperium, which is defined as the government authority possessed by the State (BERNAS, THE
CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY VOL. 2, p. 419). On the other hand, dominion,
or dominium, is the capacity of the State to own or acquire property such as lands and natural resources.
Dominium was the basis for the early Spanish decrees embracing the theory of jura regalia. The declaration in Section 2, Article
XII of the 1987 Constitution that all lands of the public domain are owned by the State is likewise founded
on dominium (Ibid.). If dominium, not impeHum, is the basis of the theory of jura regalia, then the lands which Spain acquired in the 16th
century were limited to non-private lands, because it could only acquire lands which were not yet privately-owned or occupied by the
Filipinos. Hence, Spain acquired title only over lands which were unoccupied and unclaimed, i.e.,public lands.
273

VOL. 347, DECEMBER 6, 2000 273
Cruz vs.Secretaryof Environmentand Natural Resources
tions admonished the commander to commit no aggressive act which might arouse native hostility.
Spanish colonial laws recognized and respected Filipino landholdings including native
land occupancy. Thus, the Recopilación de Leyes de las Indias expressly conferred
88
ownership of lands already held by the natives. The royal decrees of 1880 and 1894 did
89
not extinguish native title to land in the Philippines. The earlier royal decree, dated June
25, 1880, provided that all those in
_______________
87PHELAN, THE HISPANIZATION OF THE PHILIPPINES: SPANISH AIMS AND FILIPINOS RESPONSES, 1565-
1700 (1959), pp. 8-9.
88Cariño vs. Insular Government, supra note 75,at 943.
89Book 4, Title 12, Law 9, decreed by Philip II, 1 June 1594. We order that grants of farms and lands to Spaniards
be without injury to the Indians and that those which have been granted to their loss and injury, be returned to the
lawful owners.
Book 4, Title 12, Law 14. We having acquired full sovereignty over the Indies, and all lands, territories, and
possessions not heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining the royal
crown and patrimony, it is our will that all lands which are held without proper and true deeds of grant be restored
to us according as they belong to us, in order that xxx after distributing to the natives what may be necessary for
tillage and pasteurage, confirming them in what they now have and giving them more if necessary, all the rest of said
lands may remain free and unencumbered for us to dispose of as we wish. [Quoted in Valenton v. Murciano, 3 Phil.
537, 542-543 (1904).] (Emphasis supplied.)
Book 6, Title 1, Law 15, decreed by King Philip II, at Madrid, 7 November 1574. We command that in the
Philippine Islands the Indians not be removed from one to another settlement by forceandagainst their will.
Book 6, Title 1, Law 23, otherwise known as Ordinance 10 of 1609 decreed by Philip III. It is right that time
should be allowed the Indians to work their own individual lands and thoseof the community.
Book 6, Title 1, Law 32, decreed by Philip II, 16 April 1580. We command the Viceroys, Presidents, and
Audiencias that they see to it that the Indians havecomplete libertyin their dispositions.
Royal Cedula of October 15, 1754. Where such possessors shall not be able to produce title deeds it shall be
sufficient if they shall show that ancient possession, as a valid title by prescription: x x x. [Quoted in Valenton v.
Murciano, supra, at 546.] (Emphasis supplied.)
274
274 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
“unlawful possession of royal lands” must legalize their possession by means of
adjustment proceedings, and within the period specified. The later royal decree, dated
90
February 13, 1894, otherwise known as the Maura Law, declared that titles that were
capable of adjustment under the royal decree of 1880, but for which adjustment was not
sought, were forfeited. Despite the harsh wording of the Maura Law, it was held in the case
of Cariño that the royal decree of 1894 should not be construed as confiscation of title, but
merely as thewithdrawal of theprivilege of registering such title. 91
Neither was native title disturbed by the Spanish cession of the Philippines to the
United States, contrary to petitioners’ assertion that the US merely succeeded to the rights
of Spain, including the latter’s rights over lands of the public domain. Under the Treaty of 92
Paris of December 10, 1898, the cession of the Philippines did not impair any right to
property existing at the time. During the
93
_______________
90 Article 6 of the royal decree of June 25, 1880, quoted in Valenton v. Murciano, supra note 89 at 549.
Cariño v. Insular Government, supra note 75, at 944.
91
92 Memorandum of Petitioners, par. 3.4,Rollo,pp. 845-846.
93 TheTreaty of Paris reads in part:
Article III. Spain cedes to the United States the archipelago known as the Philippine Islands,x x x.
The United States will pay to Spain the sum of twenty million dollars, within three months after the exchange
of the ratifications of the presenttreaty.
xxx
87
Article VIII. In conformity with the provisions of Articles One, Two, and Three of this treaty, Spain relinquishes
in Cuba, and cedes in Porto Rico and other islands of the West Indies, in the Island of Guam, and in the Philippine
Archipelago, all the buildings, wharves, barracks, forts, structures, public highways, and other immovable property
which, in conformity with law, belong to the public domain and as such belong to the Crown of Spain.
And it is hereby declared that the relinquishment or cession, as the case may be, to which the preceding
paragraph refers, can not in any respect impair the property or rights which by law belong to the peaceful possession
of property of all kinds, of provinces, municipalities, public or private establishments, ecclesiastical or civic bod-
275
VOL. 347, DECEMBER 6, 2000 275
Cruz vs.Secretaryof Environmentand Natural Resources
American colonial regime, native title to land was respected, even protected. The
Philippine Bill of 1902 provided that property and rights acquired by the US through
cession from Spain were to be administered for the benefit of the Filipinos. In obvious 94
adherence to libertarian principles, McKinley’s Instructions, as well as the Philippine Bill
of 1902, contained a bill of rights embodying the safeguards of the US Constitution. One of
these rights, which served as an inviolable rule upon every division and branch of the
American colonial government in the Philippines, was that “no person shall be deprived
95
of life, liberty, or property without due process of law.” These vested rights safeguarded
96
by the Philippine Bill of 1902 were in turn expressly protected by the due process clause
of the 1935 Constitution. Resultantly, property rights of the indigenous peoples over their
ancestral lands and ancestral domains were firmly established in law.
Nonetheless, the Solicitor General takes the view that the vested rights of indigenous
peoples to their ancestral lands and domains were “abated by the direct act by the
sovereign Filipino people of ratifying the 1935 Constitution.” He advances the following
97
arguments:
_______________
ies, or any other associations having legal capacity to acquire and possess property in the aforesaid territories
renounced or ceded, or of private individuals, of whatsoever nationality such individuals may be.
The statute reads in part:
94
Section 12. That all the property and rights which may have been acquired in the Philippine Islands under the
treaty of peace with Spain,signed December tenth, eighteen hundred and ninety-eight, except such land or other
property as shall be designated by the President of the United States for military and other reservations of the
Government of the United States, are hereby placed under the control of the Government of said Islands, to be
administered for the benefit of theinhabitants thereof,exceptas provided bythis Act.
McKinley’s Instructions to the Second Philippine Commission, in MENDOZA, FROM MCKINLEY’S
95
INSTRUCTIONS TO THE NEW CONSTITUTION: DOCUMENTS ON THE PHILIPPINE CONSTITUTIONAL
SYSTEM (1978) p. 71.
Id.,at 65-75; Section 5, Philippine Bill of 1902.
96
Solicitor General’s Memorandum, Rollo,pp. 668-669.
97
276
276 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
The Sovereign, which is the source of all rights including ownership, has the power to restructure the
consolidation of rights inherent in ownership in the State. Through the mandate of the Constitutions
that have been adopted, the State has wrested control of those portions of the natural resources it
deems absolutely necessary for social welfare and existence. It has been held that the State may
impair vested rights through a legitimate exercise of police power.
 Vested rights do not prohibit the Sovereign from performing acts not only essential to but
determinative of social welfare and existence. To allow otherwiseis to invite havoc in the established
social system, x x x
Time-immemorial possession does not create private ownership in cases of natural resources
that have been found from generation to generation to be critical to the survival of the Sovereign and
its agent, the State. 98
Stated simply, the Solicitor General’s argument is that the State, as the source of all titles
to land, had the power to re-vest in itself, through the 1935 Constitution, title to all lands,
including ancestral lands and ancestral domains. While the Solicitor General admits that
such a theory would necessarily impair vested rights, he reasons out that even vested
rights of ownership over ancestral lands and ancestral domains are not absolute and may
be impaired by the legitimate exercise of police power.
I cannot agree. The text of the provision of the 1935 Constitution invoked by the
Solicitor General, while embodying the theory of jura regalia, is too clear for any
misunderstanding. It simply declares that “all agricultural, timber, and mineral lands of
the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, and other natural resources of the Philippines belong to the
State.” Nowhere does it state that cer-
99
_______________
Id.at 668.
98
Section 1, Article XII, 1935 Constitution reads:
99
All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and
their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines, or to
corporations or associations at least sixty per centum of the
277
VOL. 347, DECEMBER 6, 2000 277
Cruz vs.Secretaryof Environmentand Natural Resources
tain lands which are “absolutely necessary for social welfare and existence,” including
those which are not part of the public domain, shall thereafter be owned by the State. If
there is any room for constitutional construction, the provision should be interpreted in
favor of the preservation, rather than impairment or extinguishment, of vested rights.
Stated otherwise, Section 1, Article XII of the 1935 Constitution cannot be construed to
mean that vested right which had existed then were extinguished and that the landowners
were divested of their lands, all in the guise of “wrest[ing] control of those portions of the
natural resources [which the State] deems absolutely necessary for social welfare and
existence.” On the contrary, said Section restated the fundamental rule against the
diminution of existing rights by expressly providing that the ownership of lands of the
public domain and other natural resources by the State is “subject to any existing right,
grant, lease, or concessions.” The “existing rights” that were intended to be protected must,
perforce, include the right of ownership by indigenous peoples over their ancestral lands
and domains. The words of the law should be given their ordinary or usual meaning, and 100
the term “existing rights” cannot be assigned an unduly restrictive definition.
Petitioners concede that Congress is mandated under Section 5, Article XII of the 1987
Constitution to protect the rights of in-
101
_______________
capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time
of the inauguration of the Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development,
or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable
for another twenty five years, except as to water rights for irrigation, water supply, fisheries or industrial uses other
than the development of water power, in which cases beneficial use may be the measure and limit of the grant.
Central Azucarera Don Pedro v. Central Bank, 104 Phil. 598 (1954).
100
Sec. 5, Article XII. The State, subject to the provisions of this Constitution and national development policies
101
and programs, shall protect
278
278 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
digenous peoples to their ancestral lands and ancestral domains. Nonetheless, they
contend that the recognition and protection under IPRA of the right of ownership of
indigenous peoples over ancestral lands and ancestral domains are far in excess of the
legislative power and constitutional mandate of the Congress, since such recognition and
102
protection amount to the alienation of lands of the public domain, which is proscribed
under Section 2, Article XIIn of the Constitution.
Section 5, Article XII of the Constitution expresses the sovereign intent to “protect
the rights of indigenous peoples to their ancestral lands.” In its general and ordinary sense,
the term “right” refers to any legally enforceable claim. It is a power, privilege, faculty or
103
demand inherent in one person and incident upon another. When used in relation to 104
property, “right” includes any interest in or title to an object, or any just and legal claim to
hold, use and enjoy it. Said provision in the Constitution cannot, by any reasonable
105
construction, be interpreted to exclude the protection of the right of ownership over such
ancestral lands. For this reason, Congress cannot be said to have exceeded its
constitutional mandate and power in enacting the provisions of IPRA, specifically Sections
7(a) and 8, which recognize the right of ownership of the indigenous peoplesover ancestral
lands.
The second paragraph of Section 5, Article XII also grants Congress the power to
“provide for the applicability of customary laws governing property rights or relations in
determining the ownership and extent of ancestral domains.” In light of this provision,
does Congress have the power to decide whether ancestral domains shall be private
property or part of the public domain? Also, does Congress have the power to determine
whether the “extent” of
_______________
the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social,and
cultural well-being.
The Congress may provide for the applicability of customary laws governing property rights and relations in
determining the ownership and extent of ancestral domains.
See Memorandum of Petitioners, Rollo, pp. 863-864.
102
SIBAL, PHILIPPINE LEGAL ENCYCLOPEDIA, p. 893
103
BLACK’S LAW DICTIONARY, 5th ed., p. 1189.
104
Ibid.
105
279
VOL. 347, DECEMBER 6, 2000 279
Cruz vs. Secretary of Environment and Natural Resources
ancestral domains shall include the natural resources found therein?
It is readily apparent from the constitutional records that the framers of the
Constitution did not intend Congress to decide whether ancestral domains shall be public
or private property. Rather, they acknowledged that ancestral domains shall be treated as
private property, and that customary laws shall merely determine whether such private
ownership is by the entire indigenous cultural community, or by individuals, families, or
clans within the community. The discussion below between Messrs. Regalado and
Bennagen and Mr. Chief Justice Davide, then members of the 1986 Constitutional
Commission, is instructive:
MR. REGALADO. Thank you, Madame President. May I seek some clarifications from either
Commissioner Bennagen or Commissioner Davide regarding this phrase “CONGRESS SHALL
PROVIDE FOR THE APPLICABILITY OF CUSTOMARY LAWS GOVERNING PROPERTY RIGHTS OR
RELATIONS in determining the ownership and extent of the ancestral domain,” because ordinarily it
is the law on ownership and the extent thereof which determine the property rights or relations
arising therefrom. On the other hand, in this proposed amendment the phraseology is that it is the
property rights or relations which shall be used as the basis in determining the ownership and extent
of the ancestral domain. I assume there must be a certain difference in the customary laws and our
regular civil laws on property.
MR. DAVIDE. That is exactly the reason, Madam President, why we will leave it to Congress to
make the necessary exception to the general law on property relations.
MR. REGALADO. I was thinking if Commissioner Bennagen could give us an example of such a
customary law wherein it is the property rights and relations that determine the ownership and the
extent of that ownership, unlike the basic fundamental rule that it is the ownership and the extent of
ownership which determine the property rights and relations arising therefrom and consequent
thereto. Perhaps, these customary laws may have a different provision or thrust so that we could
make the corresponding suggestions also by way of an amendment.
MR. DAVIDE. That is exactly my own perception.
MR. BENNAGEN. Let me put it this way.
There is a range of customary laws governing certain types of ownership. There would be
ownership based on individuals, on clan or lineage,
280
280 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
or on community. And the thinking expressed in the consultation is that this should be codified and
should be recognized in relation to existing national laws. That is essentiallytheconcept. (Emphasis
106
supplied.)
The intention to treat ancestral domains as private property is also apparent from the
following exchange between Messrs. Suarez and Bennagen:
MR. SUAREZ. When we speak of customary laws governing property rights or relations in
determining the ownership and extent of the ancestral domain, are we thinking in
terms of the tribal ownership or community ownership or of private ownership within
the ancestral lands or ancestral domain?
MR. BENNAGEN. The concept of customary laws is that it is considered as ownership by
privateindividuals,clans and even communities.
MR. SUAREZ. So, there will be two aspects to this situation. This means that the State will
set aside the ancestral domain and there is a separate law for that. Within the ancestral
domain it could accept more specific ownership in terms of individualswithin the
ancestrallands.
MR. BENNAGEN. Individuals and groups within the ancestral domain.107 (Emphasis
supplied.)
It cannot be correctly argued that, because the framers of the Constitution never expressly
mentioned Cariño in their deliberations, they did not intend to adopt the concept of native
title to land, or that they were unaware of native title as an exception to the theory of jura
regalia. The framers of the Constitution, as well as the people adopting it, were presumed
108
to be aware of the prevailing judicial doctrines concerning the subject of constitutional
provisions, and courts should take these doctrines into consideration in construing
theConstitution. 109
Having thus recognized that ancestral domains under the Constitution are considered
as private property of indigenous peoples,
_______________
4 RECORD OF THE CONSTITUTIONAL COMMISSION 32.
106
Id., at 37.
107
Solicitor General’s Memorandum, Rollo, p. 665.
108
Torres v. Tan Chim, 69 Phil 518 (1940); CIR v. Guerrero, 21 SCRA 180 (1967).
109
281
VOL. 347, DECEMBER 6, 2000 281
Cruz vs. Secretary of Environment and Natural Resources
the IPRA, by affirming or acknowledging such ownership through its various provisions,
merely abides by the constitutional mandate and does not suffer any vice of
unconstitutionality.
Petitioners interpret the phrase “subject to the provisions of this Constitution and
national development policies and programs” in Section 5, Article XII of the Constitution
to mean “as subject to the provision of Section 2, Article XII of the Constitution,” which
vests in the State ownership of all lands of the public domain, mineral lands and other
natural resources. Following this interpretation, petitioners maintain that ancestral lands
and ancestral domains are the property of the State.
This proposition is untenable. Indeed, Section 2, Article XII reiterates the declarations
made in the 1935 and 1973 Constitutions on the state policy of conservation and
nationalization of lands of the public domain and natural resources, and is of paramount
importance to our national economy and patrimony. A close perusal of the records of the
1986 Constitutional Commission reveals that the framers of the Constitution inserted the
phrase “subject to the provisions of this Constitution” mainly to prevent the impairment
of Torrens titles and other prior rights in the determination of what constitutes ancestral
lands and ancestral domains, to wit:
MR. NATIVIDAD. Just one question. I want to clear this section protecting ancestral lands.
How does this affect the Torrens title and other prior rights?
MR. BENNAGEN. I think that was also discussed in the committee hearings and we did say
that in cases where due process is clearly established in terms of prior rights, these
two have to be respected.
MR. NATIVIDAD. The other point is: How vast is this ancestral land? Is it true that parts of
Baguio City are considered as ancestral lands?
MR. BENNAGEN. They could be regarded as such. If the Commissioner still recalls, in one
of the publications that I provided the Commissioners, the parts could be considered
as ancestral domain in relation to the whole population of Cordillera but not in relation
to certain individuals or certain groups.
MR. NATIVIDAD. The Commissioner means that the whole Baguio City is considered as
ancestral land?
282
282 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
MR. BENNAGEN. Yes, in the sense that it belongs to Cordillera or in the same manner that
Filipinos can speak of the Philippine archipelago as ancestral land, but not in terms of
the right of a particular person or particular group to exploit, utilize, or sell it.
MR. NATIVIDAD. But is clear that the prior rights will be respected.
MR. BENNAGEN. Definitely. 110
Thus, the phrase “subject to the provisions of this Constitution” was intended by the
framers of the Constitution as a reiteration of the constitutional guarantee that no person
shall be deprived of property without dueprocessof law.
 There is another reason why Section 5 of Article XII mandating the protection of rights
of the indigenous peoples to their ancestral lands cannot be construed as subject to Section
2 of the same Article ascribing ownership of all public lands to the State. The Constitution
must be construed as a whole. It is a rule that when construction is proper, the whole
Constitution is examined in order to determine the meaning of any provision. That
construction should beusedwhichwould give effect to the entire instrument. 111
Thus, the provisions of the Constitution on State ownership of public lands, mineral
lands and other natural resources should be read together with the other provisions
thereof which firmly recognize the rights of the indigenous peoples. These, as set forth
herein before, include: Section 22, Article II, providing that the State recognizes and
112
promotes the rights of indigenous peoples within the framework of national unify and
development; Section 5, Article XII, calling for the protection of the rights of indigenous
cultural communities to their ancestral lands to ensure their economic, social, and cultural
well-being, and for the applicability of customary laws governing property rights and
relations in determining the ownership and extent of ancestral domains; Section 1, Article
XIII,directing the removal or reduction of social, economic,
_______________
4 RECORD OF THE CONSTITUTIONAL COMMISSION 36.
110
See I COOLEY, CONST., LIMITATIONS, 8TH ED., pp. 127-129.
111
See pp. 8-9 of this Opinion for the full text of the constitutional provisions mentioned.
112
283
VOL. 347, DECEMBER 6, 2000 283
Cruz vs.Secretaryof Environmentand Natural Resources
political and cultural inequities and inequalities by equitably diffusing wealth and political
power for the common good; Section 6, Article XIII, directing the application of the
principles of agrarian reform or stewardship in the disposition and utilization of other
natural resources, subject to prior rights, homestead rights of small settlers, and the rights
of indigenous communities to their ancestral lands; Section 17, Article XIV, decreeing that
the State shall recognize, respect, and protect the rights of indigenous cultural
communities to preserve and develop their cultures, traditions, and institutions;
and Section 12, Article XVI, authorizing the Congress to create a consultative body to advise
the President on policies affecting indigenous culturalcommunities.
Again, as articulated in the Constitution, the first goal of the national economy is
the more equitable distribution of opportunities, income, and wealth. Equity is given 113
prominence as the first objective of national economic development. The framers of the 114
Constitution did not, by the phrase “subject to the provisions of this Constitution and
national development policies and programs,”
_______________
Section 1, Article XII provides:
113
The goals of the national economy are a more equitable distribution of opportunities, income, and wealth’, a
sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raisingthe qualityof life for all, especially theunderprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and
agrarian reform, through industries that make full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against
unfair foreigncompetition and tradepractices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum
opportunity to develop. Private enterprises, including corporations, cooperatives and similar collective
organizations, shall be encouraged to broaden the base of their ownership. (Emphasis supplied.)
BERNAS, THE INTENT OF THE 1986 CONSTITUTION WRITERS, p. 800, citing the sponsorship speech of Dr.
114
Bernardo Villegas, Chairman of the Committee on NationalEconomy and Patrimony.
284
284 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
intend to establish a hierarchy of constitutional norms. As explained by then
Commissioner (now Chief Justice) Hilario G. Davide, Jr., it was not their objective to make
certain interests primary or paramount, or to create absolute limitations or outright
prohibitions;rather, the idea is towards the balancing of interests:
BISHOP BACANI. In Commissioner Davide’s formulation of the first sentence, he says: “The State,
SUBJECT TO THE provisions of this Constitution AND NATIONAL DEVELOPMENT POLICIES AND
PROGRAMS shall guarantee the rights of cultural or tribal communities to their ancestral lands to
insure their economic, social and cultural wellbeing. “ There are at least two concepts here which
receive different weights very often. They are the concepts of national development policies and
programs, and the rights of cultural or tribal communities to their ancestral lands, et cetera. I would
like to ask: When the Commissioner proposed this amendment, which was the controlling concept? I
ask this because sometimes the rights of cultural minorities are precisely transgressed in the interest
of national development policies and programs. Hence, I would like to know which is the controlling
concept here. Is it the rights of indigenous peoples to their ancestral lands or is it national
development policies and programs.
MR. DAVIDE. It is not really a question, of which is primary or which is more paramount. The
concept introduced here is really the balancing of interests. That is what we seek to attain. We have
to balance the interests taking into account the specific needs and the specific interests also of these
cultural communities in like manner that we did so in the autonomous regions. (Emphasis supplied.)
115
B. The provisions of RA. 8371 do not infringe upon the State’s ownership over thenatural
resources withinthe ancestral domains.
Petitioners posit that IPRA deprives the State of its ownership over mineral lands of the
public domain and other natural resources, as well as the State’s full control and
116
supervision over the exploration, development and utilization of natural
resources. Specifically, petitioners and the Solicitor General assail Sections 3
117
_______________
4 RECORD OF THE CONSTITUTIONAL COMMISSION 34.
115
Petition, Rollo, pp. 18-19.
116
Id.,at 20
117
285
VOL. 347, DECEMBER 6, 2000 285
Cruz vs.Secretaryof Environmentand Natural Resources
(a), 5, and 7 of IPRA as violative of Section 2, Article XII of the Constitution which states,
118 119 120
in part, that “[a] 11 lands of the public
_______________
118 Section 3. Definition of Terms.—For Purposes of this Act, the followingterms shall mean:
1. a)Ancestral Domains.—Subject to Section 56 hereof, refer to all areas generally belonging to ICCs/IPs
comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim of
ownership, occupied or possessed by ICCs/IPs, by themselves or through their ancestors, communally
or individually since time immemorial, continuously to the present except when interrupted by
war, force majeure or displacement by force, deceit, stealth or as a consequence of government
projects or any other voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure their economic, social and cultural
 welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other lands,
individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources, and lands which may no longer
be exclusively occupied by ICCs/IPs but from which they traditionally had access to for their
subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still
nomadicand/or shifting cultivators.
Section 5. Indigenous Concept of Ownership.—Indigenous concept of ownership sustains the view that
119
ancestral domains and all resources found therein shall serve as the material bases of their cultural integrity. The
indigenous concept of ownership generally holds that ancestral domains are the ICCs/IPs private but community
property which belongs to all generations and therefore cannot be sold, disposed or destroyed. Itlikewise covers
sustainable traditional resourcerights.
Section 7. Rights to Ancestral Domains.—The rights of ownershipand possession of ICCs/IPs to their ancestral
120
domains shall be recognized and protected. Such rightsshallinclude:
1. (a)Right of Ownership.—The right to claim ownership over lands, bodies of water traditionally and
actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains;
2. (b)Right to Develop Lands and Natural Resources.—Subject to Section 56 hereof, right to develop, control
and use lands and territories traditionally occupied, owned, or used; to manage and con-
286
286 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources
are owned by the State.” They would have the Court declare as unconstitutional Section
121
3(a) of IPRA because the inclusion of natural resources in the definition of ancestral
domains purportedly results in the abdication ofState ownership over theseresources.
I am not convinced.
Section 3(a) merely defines the coverage of ancestral domains, and describes the
extent, limit and composition of ancestral domains by setting forth the standards and
guidelines in determining whether a particular area is to be considered as part of and
within the ancestral domains. In other words, Section 3(a) serves only as a yardstick which
points out what properties are within the ancestral domains. It does not confer or
recognize any right of ownership over the natural resources to the indigenous peoples. Its
purpose is definitional and not declarative ofa right or title.
The specification of what areas belong to the ancestral domains is, to our mind,
important to ensure that no unnecessary encroachment on private properties outside the
ancestral domains will result during the delineation process. The mere fact that Section
3(a) defines ancestral domains to include the natural resources
_______________
serve natural resources within the territories and uphold the responsibilities for future generations; to benefit
and share the profits from allocation and utilization of the natural resources found therein; the right to negotiate
the terms and conditions for the exploration of natural resources in the areas for the purpose of ensuring ecological,
environmental protection and the conservation measures, pursuant to national and customary laws; the right to an
informed and intelligent participation in the formulation and implementation of any project, government or private,
that will affect or impact upon the ancestral domains and to receive just and fair compensation for any damages
which they may sustain as a result of the project; and the right to effective measures by the government to prevent
any interference with, alienation and encroachment upon these rights; x x x (Emphasis supplied.)
Section 2, Article XII, CONSTITUTION.
121
287
VOL. 347, DECEMBER 6, 2000 287
Cruz vs.Secretaryof Environmentand Natural Resources
found therein does not ipso facto convert the character of such natural resources as
private property of the indigenous peoples. Similarly, Section 5 in relation to Section 3(a)
cannot be construed as a source of ownership rights of indigenous people over the natural
resources simply because it recognizes ancestral domains as their “private but community
property.”
The phrase “private but community property” is merely descriptive of the indigenous
peoples’ concept of ownership as distinguished from that provided in the Civil Code. In
Civil Law, “ownership” is the “independent and general power of a person over a thing for
purposes recognized by law and within the limits established thereby.” The civil law 122
concept of ownership has the following attributes: jus utendi or the right to receive from
the thing that which it produces, jus abutendi or the right to consume the thing by its
use, jus disponendi or the power to alienate, encumber, transform and even destroy that
which is owned and jus vindicandi or the right to exclude other persons from the
possession the thing owned. In contrast, the indigenous peoples’ concept of ownership
123
emphasizes the importance of communal or group ownership. By virtue of the communal
character of ownership, the property held in common “cannot be sold, disposed or
destroyed” because it was meant to benefit the whole indigenous community and not
124
merely the individualmember. 125
That IPRA is not intended to bestow ownership over natural resources to the
indigenous peoples is also clear from the deliberations of the bicameral conference
committee on Section 7 which recites the rights of indigenous peoples over their ancestral
domains, to wit:
_______________
TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE PHILIPPINES, Vol. II, p.
122
42 (1983); see alsoArticles 427 and 428, Civil Code.
Id.,at 43.
123
Section 5, R.A. 8371.
124
Ibid.
125
288
288 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
CHAIRMAN FLAVIER. Accepted. Section 8 rights to ancestral domain, this iswhere we transferredthe
126
other provision but here itself—
HON. DOMINGUEZ. Mr. Chairman, if I may be allowed to make a very short Statement. Earlier,
Mr. Chairman, we have decided to remove the provisions on natural resources because we all agree that
that belongs to the State. Now, the plight or the rights of those indigenous communities living in forest
and areas where it could be exploited by mining, by dams, so can we not also provide a provision to
give little protection or either rights for them to be consulted before any mining areas should be done
in their areas, any logging done in their areas or any dam construction because this has been
disturbing our people especially in the Cordilleras. So, if there could be, if our lawyers or the
secretariat could just propose a provision for incorporation here so that maybe the right to
consultation and the right to be compensated when there are damages within their ancestral lands.
CHAIRMAN FLAVIER. Yes, very well taken but to the best of my recollection both are already
considered in subsequent sections which we are now lookingfor.
HON. DOMINGUEZ. Thank you.
CHAIRMAN FLAVIER. First of all there is a line that gives priority use for the indigenous people
where they are. Number two, in terms of the mines there is a need for prior consultation of source
which is here already. So, anyway it is on the record that you want to make sure that the secretariat
takes note of those two issues and my assurance is that it is alreadythereand I will make sure that
theycross check.
 HON. ADAMAT. I second that, Mr. Chairman.
CHAIRMAN FLAVIER. Okay, thank you. So we now move to Section 8, there is a Senate version
you do not have and if you agree we will adopt that. (Emphasis supplied.)
127
Further, Section 7 makes no mention of any right of ownership of the indigenous peoples
over the natural resources. In fact, Sec-
_______________
Should be Section 7. The Transcript of Session Proceedings of the deliberations of the Bicameral Conference
126
Committee on National Cultural Communities regarding House Bill No. 9125 refers to Section 8 but the Committee
was actually discussing Section 7 on Rights to Ancestral Domains.
Transcript of Session Proceedings, Bicameral Conference Committee on National Cultural Communities,
127
October 9, 1997, XTV-2.
289
VOL. 347, DECEMBER 6, 2000 289
Cruz vs.Secretaryof Environmentand Natural Resources
tion 7(a) merely recognizes the “right to claim ownership over lands, bodies of water
traditionally and actually occupied by indigenous peoples, sacred places, traditional
hunting and fishing grounds, and all improvements made by them at any time within the
domains.” Neither does Section 7(b), which enumerates certain rights of the indigenous
peoples over the natural resources found within their ancestral domains, contain any
recognition of ownership vis-a-vis the natural resources.
What is evident is that the IPRA protects the indigenous peoples’ rights and welfare in
relation to the natural resources found within their ancestral domains, including the 128
preservation of the ecological balance therein and the need to ensure that the indigenous
peoples will not be unduly displaced when State-approved activities involving the natural
resources located therein are undertaken.
Finally, the concept of native title to natural resources,unlike native title to land, has
not been recognized in the Philippines. NCIP and Flavier, et al. invoke the case of Reavies
v. Fianza in support of their thesis that native title to natural resources has been upheld
129
in this jurisdiction. They insist that “it is possible for
130
_______________
Sections 7 (b) and Section 57,R.A. 8371.
128
40 Phil. 1017 (1909), 215 US 16, 54 L Ed 72.
129
Ibid. The facts of the case were discussed in Fianza vs. Reavies, (7 Phil. 610 [1909]) thus: Jose Fianza, et al.,
130
members of the Igorot tribe, claimed that he and his predecessors had, for more than fifty years prior to 1901,
possessed a certain parcel of mineral land on which were found two gold mines. The same parcel of land was also
claimed by an American, J.F. Reavies, who entered the land in 1901 and proceeded to locate mining claims according
to the mining laws of the United States. The Philippine Supreme Court held that Fianza, et al. were the rightful
owners of the mineral lands pursuant to Section 45 of the Philippine Bill of 1902 which in sum states that where a
person has held or worked on his mining claims for a period equivalent to ten years, evidence of such possession
and working of the claims for such period shall be sufficient to establish a right to a patent thereto. On appeal, the
United States Supreme Court affirmed the decision of the Philippine Supreme Court and held that the indigenous
peoples were the rightful owners of the contested parcel of land, stating that the possession and working by
Fianza, et al. of the
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290 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
rights over natural resources to vest on a private (as opposed to a public) holder if these
were held prior to the 1935 Constitution.” However, a judicious examination
131
of Reavies reveals that, contrary to the position of NCIP and Flavier, et al., the Court did not
recognize native title to natural resources. Rather, it merely upheld the right of the
indigenous peoples to claim ownership of minerals under the Philippine Bill of1902.
While as previously discussed, native title to land or private ownership by Filipinos of
land by virtue of time immemorial possession in the concept of an owner was
acknowledged and recognized as far back during the Spanish colonization of the
Philippines, there was no similar favorable treatment as regards natural resources. The
unique value of natural resources has been acknowledged by the State and is the
underlying reason for its consistent assertion of ownership and control over said natural
resources from the Spanish regime up to the present. Natural re-
132
_______________
mining claim in the Philippine Islands for the time required under the Section 45 of the Philippine Bill of 1902
to establish the right to a patent, need not have been under a claim of title.
Memorandum of Intervenors Flavier, et al., Rollo,p. 918.
131
Article I of the Decree of Superior Civil Government of January 29, 1864 provided that The supreme
132
ownership of mines throughout the kingdom belong to the crown and the king. They shall not be exploited except
by persons who obtained special grant from this superior government and by those who may secure it thereafter,
subject to this regulation.” (FRANCISCO, PHILIPPINE LAWS ON NATURAL RESOURCES, 2nd ed. [1956], p. 14, citing
the unpublished case of Lawrence v. Garduno G.R. No. 19042.)
Article 2 of the Royal Decree of May 14, 1867 (the Spanish Mining Law), the law in force at the time of the cession of the Philippines to
the United States contained a similar declaration, thus:
The ownership of the substances enumerated in the preceding article (among them those of inflammable nature) belongs to
the state, and they cannot be disposed of without an authorization issued by the Superior Civil Governor.
The Spanish Civil Code contained the following analogous provisions affirming the State’s ownership overminerals:
Art. 339. Property of public dominium is—
xxx
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VOL. 347, DECEMBER 6, 2000 291
Cruz vs.Secretaryof Environmentand Natural Resources
sources, especially minerals, were considered by Spain as an abundant source of revenue
to finance its battles in wars against other
_______________
2. That belonging exclusively to the State which, without being of general public use, is employed in some public service, or in the
development of the national wealth, such as walls, fortresses, and other works for the defense of the territory, and mines,until granted
to private individuals.
Art. 350. The proprietor of land is the owner of the surface and of everything under it and may build, plant or excavate thereon,
as he may see fit, subject to any existing easements and to the provisions of the Laws on Mines and Watersand to police regulations.
After the Philippines was ceded to Spain, the Americans continued to adhere to the concept of State-ownership
of natural resources. However, the open and free exploration, occupation and purchase of mineral deposits and the
land where they may be found were allowed under the Philippine Bill of 1902. Section 21 thereof stated:
Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed, are hereby declared
to be free and open to exploration, occupation and purchase, and the land in which they are found, to occupation and purchase, by
citizens of the United States, or of said Islands: Provided, That when on any lands in said Islands entered and occupied as agricultural
lands under the provisions of this Act, but not patented, mineral deposits have been found, the working of such mineral deposits is
hereby forbidden until the person, association, or corporation who or which has entered and is occupying such lands shall have paid to
the Government of said Islands such additional sum or sums as will make the total amount paid for the mineral claim or claims in which
said deposits are located equal to the amount charged by the Government for the same as mineral claims.
Other natural resources such as water and forests were similarly regarded as belonging to the State during
both the Spanish and American rule in the Philippines,viz:
Article 33 of the Law of Waters of August 3, 1866 defined waters of public ownership as (1) the waters
springing continuously or intermittently from lands of the public domain; (2) the waters of rivers; and (3) the
continuous or intermittent waters of springs and creeks running through their natural channels.
Article 1 of the same law states:
The following arealso part of the national domain open to public use:
1. 1.The coasts or maritime frontiers of the Philippine territory with their coves, inlets, creeks, roadsteads, bays and ports
2. 2.The coast of the sea, that is, the maritime zone encircling the coasts, to the full width recognized by international law.
The state provides for and regulates the police supervision and the uses of this zone as well as
 292
292 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
nations. Hence, Spain, by asserting its ownership over minerals wherever these may be
found, whether in public or private lands, recognized the separability of title over lands
and that over minerals which may befound therein. 133
_______________
the right of refuge and immunity therein, in accordance with law and international treaties.
With respect to forests, there are references made regarding State-ownership of forest lands in Supreme Court
decisions (See Director of Forestry vs. Munoz, 23 SCRA 1183, 1198-1199 [1968]; Director of Lands vs. Abanzado, 65
SCRA 5, 11 [1975]; Mapa vs. Insular Government, 10 Phil. 175, 184 [1908]; Montano vs. Insular Government, 12 Phil.
572, 584 [1909]).
The State’s ownership over natural resources was embodied in the 1935, 1973 and 1987 Constitutions. Section
1, Article XII of the 1935 Constitution declared:
All agricultural, timber and mineral lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of
potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of
which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated,
and no license, concession, or lease for the exploitation, or utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries,
or industrial uses other than the development of water power, in which cases beneficial use may be the measure and the limit of the
grant.
Section 8, ArticleXIV of the 1973 Constitution provided:
All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife,
and other natural resources of the, Philippines belong to the State. With the exception of agricultural, industrial or commercial,
residential, and resettlement lands of the public domain, natural resources shall not be alienated, and no license, concession, or lease
for the exploration, development, exploitation, or utilization of any of the natural resources shall be granted for a period exceeding
twenty-five years, renewable for not more than twenty-five years. except as to water rights for irrigation water supply, fisheries, or
industrial uses other than the development of water power, in which cases, beneficial usemay be the measure and limit of the grant.
NOBLEJAS, PHILIPPINE LAW ON NATURAL RESOURCES 1961 Revised Ed., p. 6.
133
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Cruz vs.Secretaryof Environmentand Natural Resources
On the other hand, the United States viewed natural resources as a source of wealth for its
nationals. As the owner of natural resources over the Philippines after the latter’s cession
from Spain, the United States saw it fit to allow both Filipino and American citizens to
explore and exploit minerals in public lands, and to grant patents to private mineral lands.
A person who acquired ownership over a parcel of private mineral land pursuant to the
laws then prevailing could exclude other persons, even the State, from exploiting minerals
within his property. Although the United States made a distinction between minerals
134
found in public lands and those found in private lands, title in these minerals was in all
cases sourced from the State. The framers of the 1935 Constitution found it necessary to
maintain the State’s ownership over natural resources to insure their conservation for
future generations of Filipinos, to prevent foreign control of the country through economic
domination; and to avoid situations whereby “the Philippines would become a source of
international conflicts, thereby posingdangerto its internal security and independence.
135
The declaration of State ownership and control over minerals and other natural
resources in the 1935 Constitution was reiterated in both the 1973 and 1987
136
Constitutions.
137
_______________
134 See LAUREL (ED.), PROCEEDINGS OF THE PHILIPPINE CONSTITUTIONAL CONVENTION, VOL. VI, pp. 494-
495.
Explanatory Note of the Committee on Nationalization of Lands and Natural Resources, September 14, 1934,
135
reproduced in LAUREL (ED.), PROCEEDINGS OF THE PHILIPPINE CONSTITUTIONAL CONVENTION, VOL. VII, pp.
464-468; see also DE LEON AND DE LEON, JR., PHILIPPINE CONSTITUTIONAL LAW: PRINCIPLES AND CASES, VOL.
2, pp. 801-802.
Section 8, Article XIV, see note 139 for the full text of the provision.
136
Paragraph 1, Section 2, Article XII of the 1987 Constitution provides:
137
All lands of the public domain, waters, minerals, coal, petroleum, and other minerals oils, all forces of potential energy, fisheries, forests
or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all
other natural resources shall not be alienated. The explo-
294
294 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Having ruled that the natural resources which may be found within the ancestral domains
belong to the State, the Court deems it necessary to clarify that the jurisdiction of the NCIP
with respect to ancestral domains under Section 52 [i] of IPRA extends only to
thelands and not to thenatural resourcestherein.
Section 52[i] provides:
Turnover of Areas Within Ancestral Domains Managed by Other Government Agencies.—The
Chairperson of the NCIP shall certify that the area covered is an ancestral domain. The secretaries of
the Department of Agrarian Reform, Department of Environment and Natural Resources, Department
of Interior and Local Government, and Department of Justice, the Commissioner of the National
Development Corporation, and any other government agency claiming jurisdiction over the area shall
be notified thereof. Such notification shall terminate any legal basis for the jurisdiction previously
claimed.
Undoubtedly, certain areas that are claimed as ancestral domains may still be under the
administration of other agencies of the Government, such as the Department of Agrarian
Reform, with respect to agricultural lands, and the Department of Environment and
Natural Resources with respect to timber, forest and mineral lands. Upon the certification
of these areas as ancestral domain following the procedure outlined in Sections 51 to 53
of the IPRA, jurisdiction of the government agency or agencies concerned
over lands forming part thereof ceases. Nevertheless, the jurisdiction of government
agencies over the natural resources within the ancestral domains does not terminate by
such certification because said agencies are mandated under existing laws to administer
the natu-
_______________
ration, development, and utilization of natural resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations and associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.
295
VOL. 347, DECEMBER 6, 2000 295
Cruz vs.Secretaryof Environmentand Natural Resources
ral resources for the State, which is the owner thereof. To construe Section 52[i] as
divesting the State, through the government agencies concerned, of jurisdiction over the
natural resources within the ancestral domains would be inconsistent with the established
doctrine that all natural resourcesareownedby the State.
C. The provisions of IPRA pertaining to the utilization of natural resourcesare
notunconstitutional.
The IPRA provides that indigenous peoples shall have the right to manage and conserve
the natural resources found on the ancestral domains, to benefit from and share in the
profits from the allocation and utilization of these resources, and to negotiate the terms
and conditions for the exploration of such natural resources. The statute also grants them 138
priority rights in the harvesting, extraction, development or exploitation of any natural
resources within the ancestral domains. Before the NCIP can 139
_______________
Section 7. Rights to Ancestral Domains.—The rights of ownership and possession of ICCs/IPs to their
138
ancestral domains shall be recognized and protected. Such rightsshallinclude:
xxx
b) Right to Develop Lands and Natural Resources.—Subject to Section 56 hereof, right to develop, control and use lands and territories
traditionally occupied, owned, or used; to manage and conserve natural resources within the territories and uphold the responsibilities
for future generations; to benefit and share the profits from allocation and utilization of the natural resources found therein; the right to
negotiate the terms and conditions for the exploration of natural resources in the areas for the purpose of ensuring ecological,
environmental protection and the conservation measures, pursuant to national and customary laws; the right to an informed and
intelligent participation in the formulation and implementation of any project, government or private, that will affect or impact upon
the ancestral domains and to receive just and fair compensation for any damages which they may sustain as a result of the project; and
the right to effective measures by the government to prevent any interference with, alienation and encroachment upon these rights;
Section 57. Natural Resources within Ancestral Domains.—TheICCs/IPs shall have priority rights in the
139
harvesting, extraction, develop-
296
296 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
issue a certification for the renewal, or grant of any concession, license or lease, or for the
perfection of any production-sharing agreement the prior informed written consent of the
indigenous peoples concerned must be obtained. In return, the indigenous peoples are
140
given the responsibility to maintain, develop, protect and conserve the ancestral domains
or portions thereof which are found to be necessary for critical watersheds, mangroves,
wildlife sanctuaries, wilderness, protected areas, forest cover, or reforestation. 141
_______________
ment or exploitation of any natural resources within the ancestral domains. A non-member of the ICCs/IPs
concerned may be allowed to take part in the development and utilization of the natural resources for a period of
not exceeding twenty-five (25) years renewable for not more than twenty-five (25) years: Provided, That a formal
and written agreement is entered into with the ICCs/IPs concerned or that the community, pursuant to its own
decision making process, has agreed to allow such operation: Provided, finally, That the NCIP may exercise visitorial
powers and take appropriate action to safeguard the rights of the ICCs/IPs under the same contract.
140Section 59. Certification Precondition.—All departments and other governmental agencies shall henceforth
be strictly enjoined from issuing, renewing, or granting any concession, license or lease, or entering into any
production-sharing agreement, without prior certification from the NCIP that the area affected does not overlap
with any ancestral domain. Such certification shall only be issued after a field-based investigation is conducted by
the Ancestral Domains Office of the area concerned: Provided, That no certification shall be issued by the NCIP without
the free and prior informed and written consent of Indigenous peoples concerned: Provided, further, That no
department, government agency or govern-ment-owned or controlled corporation may issue new concession,
license, lease, or production sharing agreement while there, is a pending application for a CADT: Provided,
finally, That the ICCs/IPs shall have the right to stop or suspend, in accordance with this Act, any project that has not
satisfied the requirement of thisconsultation process.
141Section 58. Environmental Considerations.—Ancestral domains or portions thereof, which are found to be
necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover, or
reforestation as determined by appropriate agencies with the full participation of the Indigenous peoples concerned
shall be maintained, managed and developed for such purposes: The indigenous peoples con-
297
VOL. 347, DECEMBER 6, 2000 297
Cruz vs.Secretaryof Environmentand Natural Resources
The Solicitor General argues that these provisions deny the State an active and dominant
role in the utilization of our country’s natural resources. Petitioners, on the other hand,
allege that under the Constitution the exploration, development and utilization of natural
resources may only be undertaken by the State, either directly or indirectly through co-
production, joint venture, or production-sharing agreements. To petitioners, no other 142
method is allowed by the Constitution. They likewise submit that by vesting ownership of
ancestral lands and ancestral domains in the indigenous peoples, IPRA necessarily gives
them control over the use and enjoyment of such natural resources, to the prejudice of the
State. 143
Section 2, Article XII of the Constitution provides in paragraph 1 thereof that the
exploration, development and utilization of natural resources must be under the full
control and supervision of the State, which may directly undertake such activities or enter
into co-production, joint venture, or production-sharing agreements. This provision,
however, should not be read in isolation to avoid a mistaken interpretation that any and
all forms of utilization of natural resources other than the foregoing are prohibited. The
Constitution must be regarded as consistent with itself throughout. No constitutional 144
provision is to be separated from all the others, or to be considered alone, all provisions
bearing upon a
_______________
cerned shall be given the responsibility to maintain, develop, protect and conserve such areas with the full and
effective assistance of government agencies. Should the Indigenous peoples decide to transfer the responsibility over
the areas, said decision must be made in writing. The consent of the Indigenous peoples should be arrived at in
accordance with its customary laws without prejudice to the basic requirements of existing laws on free and prior
Informed consent: Provided, That the transfer shall be temporary and will ultimately revert to the Indigenous
peoples in accordance with the program for technology transfer; Provided, further, That no Indigenous peoples shall
be displaced or relocated for the purpose enumerated under this section without the written consent of the specific
persons authorized to give consent.
Citing Section 2, Article XII of the Constitution.
142
Memorandum of Petitioners, Id.,at 840-841.
143
State v. Lathrop, 93 Ohio St 79, 112 NE 209, cited in 16 AM JUR 2d, ConstitutionalLaw, § 100.
144
298
298 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
particular subject are to be brought into view and to be so interpreted as to effectuate the
great purposes of the fundamental law. 145
In addition to the means of exploration, development and utilization of the country’s
natural resources stated in paragraph 1, Section 2 of Article XII, the Constitution itself
states in the third paragraph of the same section that Congress may, by law, allow small-
scale utilization of natural resources by its citizens. Further, Section 6, Article XIII, directs
146
the State, in the disposition and utilization of natural resources, to apply the principles of
agrarian reform or stewardship. Similarly, Section 7, Article XIII mandates the State to
147
protect the rights of subsistence fishermen to the preferential use of marine and fishing
resources. Clearly,148
_______________
145 Old Wayne Mutual Life Assn. v. McDonough, 204 US 6, 51 L Ed 345, cited in 16 AM JUR 2d Constitutional Law,§
100.
146 Third paragraph, Section 2, Article XII, Constitution—
The Congress may, by law, allow small scale-utilization of natural resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fishworkers in rivers,lakes, bays, and lagoons.
147 Section 6, Article XIII, Constitution—
The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition
and utilization of other natural resources, including lands of the public domain under lease or concession suitable to agriculture, subject
to prior rights, homestead rights of small settlers, and the rights of the indigenous communities to their ancestral lands.
The State may resettle landless farmers and farmworkers in its own agricultural estates which shall be distributed to them in the
manner provided by law.
148 Section 7, Article XIII, Constitution—
The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of the communal
marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and
research, adequate financial, production, and marketing assistance, and other services. The State shall also protect, develop, and
conserve such resources. The protection shall extend to offshore
299
VOL. 347, DECEMBER 6, 2000 299
Cruz vs.Secretaryof Environmentand Natural Resources
Section 2, Article XII, when interpreted in view of the pro-Filipino, pro-poor philosophy of
our fundamental law, and in harmony with the other provisions of the Constitution rather
as a sequestered pronouncement, cannot be construed as a prohibition against any and
149
all forms of utilization of natural resources without the State’s direct participation.
Through the imposition of certain requirements and conditions for the exploration,
development and utilization of the natural resources under existing laws, the State 150
retains full control over such activities, whetherdoneon small-scale basis or otherwise. 151
The rights given to the indigenous peoples regarding the exploitation of natural
resources under Sections 7(b) and 57 of IPRA amplify what has been granted to them
under existing laws, such as the Small-Scale Mining Act of 1991 (R.A. 7076) and the
Philippine Mining Act of 1995 (R.A. 7942). R.A. 7076 expressly provides that should an
ancestral land be declared as a people’s small-scale mining area, the members of the
indigenous peoples living within said area shall be given priority in the awarding of small-
scale mining contracts. R.A. 7942 declares that no ancestral land shall be opened for mining
152
operations without the prior consent of the
_______________
fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from
their labor in the utilization of marine and fishing resources.
149Bower v. Big Horn Canal Assn. (Wyo) 307 P2d 593, cited in 16 AM JUR 2d Constitutional Law, § 100.
Republic Act No. 7076 (the Small-Scale Mining Act of 1991), Republic Act No. 7942 (the Philippine Mining
150
Act of 1995).
151Section 3(b) of R.A. 7076 defines “small-scale mining” as referring to mining activities which rely heavily on
manual labor using simple implements and methods and do not use explosives or heavy mining equipment.
152Section 7, R.A. 7076 provides:
Ancestral lands.—No ancestral land may be declared as a people’s smallscale mining area without the prior consent of the cultural
communities concerned: Provided, That, if ancestral lands are declared as people’s small-scale mining areas, the members of the cultural
communities therein shall be given priority for the awarding of a people’s small-scale mining contract.
300
300 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
indigenous cultural community concerned and in the event that the members of such
153
indigenous cultural community give their consent to mining operations within their
ancestral land, royalties shall be paid to them by theparties to themining contract. 154
In any case, a careful reading of Section 7(b) would reveal that the rights given to the
indigenous peoples are duly circumscribed. These rights are limited only to the
following: to manage and conserve natural resources within territories and uphold it for
future generations; to benefit and share the profits from allocation and utilization of the
natural resources found therein; to negotiate the terms and conditions for the
exploration of natural resources in the areas for the purpose of ensuring ecological,
environmental protection and the conservation measures, pursuant to national and
customary laws; to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or impact upon the
ancestral domains and to receive just and fair compensation for any damages which they
may sustain as a result of the project, and the right to effective measures by the government
to prevent any interference with, alienation andencroachment of theserights.
It must be noted that the right to negotiate terms and conditions granted under
Section 7(b) pertains only to the exploration of natural resources. The term “exploration”
refers only to the search or prospecting of mineral resources, or any other means for the
purpose of determining the existence and the feasibility of mining them for profit. The 155
exploration, which is merely a preliminary activity, cannot be equated with the entire
process of “exploration, development and utilization” of natural resources which under
the Constitutionbelong to theState.
Section 57, on the other hand, grants the indigenous peoples “priority rights” in the
utilization of natural resources and not absolute ownership thereof. Priority rights does
not mean exclusive rights. What is granted is merely the right of preference or first
_______________
Section 16, R.A. 7942.
153
Section 17, R.A. 794?.
154
Sec. 3(q), Chapter 1, Republic Act No. 7942 (the Philippine Mining Act of 1995).
155
301
VOL. 347, DECEMBER 6, 2000 301
Cruz vs. Secretary of Environment and Natural Resources
consideration in the award of privileges provided by existing laws and regulations, with
due regard to the needs and welfare of indigenous peoples living in the area.
There is nothing in the assailed law which implies an automatic or mechanical
character in the grant of concessions. Nor does the law negate the exercise of sound
discretion by government entities. Several factors still have to be considered. For example,
the extent and nature of utilization and the consequent impact on the environment and on
the indigenous peoples’ way of life are important considerations. Moreover, the
indigenous peoples must show that they live in the area and that they are in the best
position to undertake the required utilization.
It must be emphasized that the grant of said priority rights to indigenous peoples is
not a blanket authority to disregard pertinent laws and regulations. The utilization of said
natural resources is always subject to compliance by the indigenous peoples with existing
laws, such as R.A. 7076 and R.A. 7942 since it is not they but the State, which owns these
resources.
It also bears stressing that the grant of priority rights does not preclude the State from
undertaking activities, or entering into coproduction, joint venture or production-sharing
agreements with private entities, to utilize the natural resources which may be located
within the ancestral domains. There is no intention, as between the State and the
indigenous peoples, to create a hierarchy of values; rather, the object is to balance the
interests of the State for national development and those of the indigenous peoples.
Neither does the grant of priority rights to the indigenous peoples exclude non-
indigenous peoples from undertaking the same activities within the ancestral domains
upon authority granted by the proper governmental agency. To do so would unduly limit
the ownership rights of the State over the natural resources.
To be sure, the act of the State of giving preferential right to a particular sector in the
utilization of natural resources is nothing new. As previously mentioned, Section 7, Article
XIII of the Constitution mandates the protection by the State of “the rights of subsistence
fishermen, especially of local communities, to the preferential
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302 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
use of communal marine and fishing resources, both inland and offshore.”
Section 57 further recognizes the possibility that the exploration and exploitation of
natural resources within the ancestral domains may disrupt the natural environment as
well as the traditional activities of the indigenous peoples therein. Hence, the need for the
prior informed consent of the indigenous peoples before any search for or utilization of
the natural resources within their ancestral domains is undertaken.
In a situation where the State intends to directly or indirectly undertake such
activities, IPRA requires that the prior informed consent of the indigenous peoples be
obtained. The State must, as a matter of policy and law, consult the indigenous peoples in
accordance with the intent of the framers of the Constitution that national development
policies and programs should involve a systematic consultation to balance local needs as
well as national plans. As may be gathered from the discussion of the framers of the
Constitution on this point, the national plan presumably takes into account the
requirements of the region after thorough consultation. To this end, IPRA grants to the
156
indigenous peoples the right to an informed and intelligent participation in the
formulation and implementation of any project, government or private, and the right not
to be removed therefrom without their free and prior informed consent. As to non- 157
members, the prior informed consent takes the form of a formal and written agreement
between the indigenous peoples and non-members under the proviso in Section 57 in case
the State enters into a co-production, joint venture, or production-sharing agreement with
Filipino citizens, or corporations. This requirement is not peculiar to IPRA. Existing laws
and regulations, such as the Philippine Environmental Policy, the Environmental Impact
158
System, the Local Government Code
159 160
_______________
4 RECORD OF THE CONSTITUTIONAL COMMISSION 37.
156
Sections 7(a)and (b), R.A. 8371.
157
Presidential Decree No. 1151 (1971).
158
Presidential Decree No. 1586 (1978) and DENR Administrative Order No. 37 (1996).
159
Republic Act No. 7160 (1991).
160
303
VOL. 347, DECEMBER 6, 2000
Cruz vs.Secretaryof Environmentand Natural Resources
and the Philippine Mining Act of 1995 already require increased consultation and
161
participation of stakeholders, such as indigenous peoples, in the planning of activities with
significant environment impact.
The requirement in Section 59 that prior written informed consent of the indigenous
peoples must be procured before the NCIP can issue a certification for the “issuance,
renewal, or grant of any concession, license or lease, or to the perfection of any production-
sharing agreement,” must be interpreted, not as a grant of the power to control the
exploration, development and utilization of natural resources, but merely the imposition
of an additional requirement for such concession or agreement. The clear intent of the law
is to protect the rights and interests of the indigenous peoples which may be adversely
affected by the operation of such entities or licensees.
Corollary Issues
A. IPRA does not violate the Due Process clause.
The first corollary issue raised by petitioners is whether IPRA violates Section 1, Article III
of the Constitution, which provides that “no person shall be deprived of life, liberty, or
property without due process of law, nor shall any person be deprived the equal
protection of the laws.”
Petitioners maintain that the broad definition of ancestral lands and ancestral
domains under Section 3(a) and 3(b) of IPRA includes private lands. They argue that the
inclusion of private lands in the ancestral lands and ancestral domains violates the due
process clause. Petitioners’ contention is erroneous.
162
Sections 3(a) and 3(b) expressly provide that the definition of ancestral lands and
ancestral domains are “subject to Section 56,” which reads:
_______________
Republic Act No. 7942.
161
Petition, Rollo, pp. 23-25.
162
304
304 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Sec. 56. Existing Property Rights Regimes.—Property rights within the ancestral domains already
existing and/or vested upon effectivity of this Act, shall be recognizedandprotected.
Petitioners, however, contend that Section 56 aims to protect only the vested rights of
indigenous peoples, but not those who are not members of such communities. Following
their interpretation, IPRA, under Section 56, recognizes the rights of indigenous peoples
to their ancestral lands and ancestral domains, subject to the vested rights of the same
communities to such ancestral lands and ancestral domains.Such interpretation is obviously
incorrect.
The “property rights” referred to in Section 56 belong to those acquired by individuals,
whether indigenous or non-indigenous peoples. Said provision makes no distinction as to
the ethnic origins of the ownership of these “property rights.” The IPRA thus recognizes
and respects “vested rights” regardless of whether they pertain to indigenous or non-
indigenous peoples. Where the law does not distinguish, the courts should not
distinguish. What IPRA only requires is that these “property rights” already exist and/or
163
vestedupon its effectivity.
Further, by the enactment of IPRA, Congress did not purport to annul any and all
303 Torrens titles within areas claimed as ancestral lands or ancestral domains. The statute
imposes strict procedural requirements for the proper delineation of ancestral lands and
ancestral domains as safeguards against the fraudulent deprivation of any landowner of
his land, whether or not he is member of an indigenous cultural community. In all
proceedings for delineation of ancestral lands and ancestral domains, the Director of
Lands shall appear to represent the interest of the Republic of the Philippines. With
164
regard to ancestral domains, the following procedure is mandatory: first,petition by an
indigenous cultural community, or motu proprio by the NCIP; second, investigation and
census by the Ancestral domains Office (“ADO”) of the NCIP; third,preliminary report by
the ADO; fourth, posting and publication; and lastly, evaluation by the NCIP upon
submission of the final
_______________
 Ramirez v. CA 248 SCRA 590, 596 (1995).
163 Section 62. Resolution of Conflicts.—In cases of conflicting interest, where there are adverse claims within the
171

Section 53 (f), R.A. 8371.

164 ancestral domains as delineated in the survey plan, and which can not be resolved, the NCIP shall hear and decide,
305 after notice to the proper parties, the disputes arising from the delineation of such ancestral domains: Provided, That
if the dispute is between and/or among ICCs/IPs regarding the traditional boundaries of their respective ancestral
VOL. 347, DECEMBER 6, 2000 305 domains, customary process shall be followed. The NCIP shall promulgate the necessary rules and regulations to
carry out its adjudicatory functions: Provided, further, That any decision, order, award or ruling of the NCIP on any
Cruz vs.Secretaryof Environmentand Natural Resources ancestral domain dispute or on any matter pertaining to the application, implementation, enforcement and
report of the ADO. With regard to ancestral lands, unless such lands are within an
165
interpretation of this Act may be brought by Petition for Review to the Court of Appeals within fifteen (15) days
ancestral domain, the statute imposes the following procedural from receipt of a copy thereof.
Memorandum of Petitioners, Rollo,pp. 873-874.
requirements: first,application; second, posting and publication; third,investigation and
172

Section 3 (f). Customary Laws.—refer to a body of written and/or unwritten rules, usages, customs and
173

inspection by the ADO; fourth,delineation; lastly, evaluation by the NCIP upon submission practices traditionally and continuallyrecognized,accepted and observed by respective ICCs/IPs;
of a report by the ADO. Hence, we cannot sustain the arguments of the petitioners that
166 xxx
the law affords no protection to those who arenot indigenous peoples. Sec. 63. Applicable Laws.—Customary laws, traditions and practices of the ICCs/IPs of the land where the
conflict arises shall be applied first with respect to property rights, claims and ownerships, hereditary succession
Neither do the questioned sections of IPRA on the composition and powers and and settlement of land disputes. Any doubt or ambiguity in the application and interpretation of laws shall be
jurisdiction of the NCIP and the application of customary law, violate thedue process
167 168
resolved in favor of the ICCs/IPs.
clauseof the Constitution. 307
Petitioners point out that IPRA provides that the NCIP shall be composed exclusively VOL. 347, DECEMBER 6, 2000 307
of members of indigenous peoples, and that the NCIP shall have jurisdiction over all
Cruz vs.Secretaryof Environmentand Natural Resources
169

claims and disputes involving indigenous peoples, including even disputes between a
170

disputes involving indigenous peoples. They assert that “[w]hen the dispute involves a
174

_______________ member of an [indigenous cultural community and another who is not], a resolution of
such a dispute based on customary laws. . . would clearly be a denial of due process . . .
Section 52, R.A. 8371.
165
[because those who are not indigenous peoples] do not know what these customary laws
Section 53, R.A. 8371.
166 are.” 175

Sections 40, 51, 52, 53, 54, 62and 66, R.A. No. 8371.
167
Petitioners’ concerns are unfounded. The fact that the NCIP is composed of members
Sections 63 and 65, R.A. No. 8371.
of the indigenous peoples does not mean that it (the NCIP) is incapable, or will appear to
168

Section 40. Composition.—The NCIP shall be an independent agency under the Office of the President and
169

shall be composed of seven (7) Commissioners belonging to the ICCs/IPs, one (1) of whom shall be the Chairperson.
The Commissioners shall be appointed by the President of the Philippines from a list of recommendees submitted
by authentic ICCs/IPs: Provided, That the seven (7) Commissioners shall be appointed specifically from each of the
following ethnographic areas, Region I and the Cordilleras; Region II, the rest of Luzon; Island Groups including
Mindoro, Palawan, Romblon, Panay and the rest of the Visayas; Northern and Western Mindanao; Southern and
Eastern Mindanao; and Central Mindanao: Provided, That at least two (2) of the seven (7) Commissioners shall be
women.
Section 66. Jurisdiction of the NCIP.—The NCIP, through its regional offices, shall have jurisdiction over all
170
be so incapable, of delivering justice to the non-indigenous peoples. A person’s possession
of the trait of impartiality desirable of a judge has nothing to do with his or her ethnic
roots. In this wise, the indigenous peoples are as capable of rendering justice as the non-
indigenous peoples for, certainly, the latter have no monopoly of the conceptofjustice.
In any case, there are sufficient checks in the law against any abuse by the NCIP of its
quasi-judicial powers. Section 67 states that the decision of the NCIP shall be appealable
to the Court of Appeals by petition for review. The regular remedies under our rules of

claims and disputes involving rights of ICCs/IPs. Provided, however, That no such dispute shall be brought to the
NCIP unless the parties have exhausted all remedies provided under their customary laws. For this purpose, a procedure are likewise available to any party aggrieved by the decision of the NCIP.
certification shall be issued by the Council of Elders/Leaders who participated in the attempt to settle the dispute Anent the use of customary laws in determining the ownership and extent of ancestral
that the same has not been resolved, which
domains, suffice it to say that such is allowed under paragraph 2, Section 5 of Article XII of
306
the Constitution. Said provision states, “The Congress may provide for the applicability of
306 SUPREME COURT REPORTS ANNOTATED customary laws governing property rights and relations in determining the ownership and
Cruz vs.Secretaryof Environmentand Natural Resources extent of the ancestral domains.” Notably, the use of customary laws under IPRA is not
member of such communities and one who is not a member, as well as over disputes in absolute, for the law speaks merely of primacy of use. The IPRA prescribes the application
176

the delineation of ancestral domains. Petitioners clarify that they do not claim that the
171
of such customary laws where these
members of the NCIP are incapable of being fair and impartial judges. They merely contend
that the NCIP will not appear to be impartial, because a party who is not a member of an _______________
indigenous cultural community “who must defend his case against [one who is] before
Sec. 65. Primacy of Customary Laws and Practices.—When disputes involve ICCs/IPs, customary laws and
judges who are all members of [indigenous peoples] cannot but harbor a suspicion that
174

practices shall bemused to resolve thedispute.

they do not have thecoldneutrality of an impartial judge.” In addition, petitioners claim
172
Memorandum of Petitioners, Rollo, pp. 875-876.
175

that IPRA prescribes that customary laws shall be applied first in disputes involving R.A. 8371 states:
176

Sec. 65. Primacy of Customary Laws and Practices.—When disputes involve ICCs/IPs, customary laws and practices shall be used to
property, succession and land, and that such laws shall likewise be used in
173
resolve the dispute.
308
_______________
308 SUPREME COURT REPORTS ANNOTATED
certification shall be a condition precedent to the filing of a petition with the NCIP. Cruz vs.Secretaryof Environmentand Natural Resources
present a workable solution acceptable to the parties, who are members of the same
indigenous group. This interpretation is supported by Section 1, Rule IX of the
Implementing Rules which states:
RULE IX. JURISDICTION AND PROCEDURES FOR
ENFORCEMENT OF RIGHTS
Section 1. Primacy of Customary Law.—All conflicts related to ancestral domains and lands, involving
ICCs/IPs, such as but not limited to conflicting claims and boundary disputes, shall be resolved by the
concerned parties through the application of customary laws in the area where the disputed ancestral
domain or land is located.
All conflicts related to the ancestral domains or lands where one of the parties is a non-ICC/IP or
where the dispute could not be resolved through customary law shall be heard and adjudicated in
accordance with the Rules on Pleadings, Practice and Procedures before the NCIP to be adopted
hereafter. (Emphasis supplied.)
The application of customary law is limited to disputes concerning property rights or
relations in determining the ownership and extent of the ancestral domains, where all the
177
parties involved are members of indigenous peoples, specifically, of the same indigenous
178
group. It therefore follows that when one of the parties to a dispute is a non-member of an
indigenous group, or when the indigenous peoples involved belong to different groups, the
applicationof customary law isnot required.
Like any other law, the objective of IPRA in prescribing the primacy of customary law
in disputes concerning ancestral lands and domains where all parties involved are
indigenous peoples is justice. The utilization of customary laws is in line with the
constitutional policy of recognizing the application thereof through legislation passed by
Congress.
Furthermore, the recognition and use of customary law is not a novel idea in this
jurisdiction. Under the Civil Code, use of customary law is sanctioned, as long as it is
proved as a fact according to
_______________
See Secs. 62and 63, R.A. 8371.
177
xxx
Part II: NCIP as an Independent Agency Under the Office of the President
_______________
179 The Civil Code provides:
Article 12. A custom must be proved as a fact, according to the rules of evidence.
180 The Civil Code provides:
Article 11. Customs which are contrary to law, public order or public policyshall not be countenanced.
181 R.A. No. 7160 reads:
Sec. 399. Lupong Tagapamayapa.—
xxx
(f) In barangays where majority of the inhabitants are members of indigenous peoples, local systems of settling disputes of
indigenous peoples, local systems of settling disputes through their councils of datus or elders shall be recognized without prejudice to
theapplicable provisions of this Code.
310
310 SUPREME COURT REPORTS ANNOTATED
Cruz vs.Secretaryof Environmentand Natural Resources
Section 1. The NCIP is the primary agency of government for the formulation and implementation of
policies, plans and programs to recognize, promote and protect the rights and well-being of
indigenous peoples. It shall be an independent agency under the Office of the President. As such, the
administrative relationship of the NCIP to the Office of the President is characterized as a lateral but
autonomous relationship for purposes of policy and program coordination. This relationship shall be
carried out through a system of periodic reporting. Matters of day-to-day administration or all those
pertaining to internal operations shall be left to the discretion of the Chairperson of the Commission,
as the Chief Executive Officer.
Petitioners asseverate that the aforecited rule infringes upon the power of control of the
President over the NCIP by characterizing the relationship of the NCIP to the Office of the
President as “lateral but autonomous . . . for purposes of policy and program coordination.”
Although both Section 40 of the IPRA and Section 1, Part II, Rule VII of the
Implementing Rules characterize the NCIP as an independent agency under the Office of
the President, such characterization does not remove said body from the President’s
control and supervision.
The NCIP has been designated under IPRA as the primary government agency
responsible for the formulation and implementation of policies, plans and programs to

Sec. 65, R.A.8371.

178
promote and protect the rights and well being of the indigenous peoples and the
309 recognition of their ancestral domain as well as their rights thereto. It has been granted 182

VOL. 347, DECEMBER 6, 2000 309 administrative, quasi-legislative and quasi-judicial powers to carry out its mandate.
183 184 185

The diverse nature of the NCIP’s functions renders it impossible to place said agency
Cruz vs.Secretaryof Environmentand Natural Resources entirely under the control of only one branch of government and this, apparently, is the
the rules of evidence, and it is not contrary to law, public order or public
179
reason for its characterization by Congress as an independent agency. An “independent
policy. Moreover, the Local Government Code of 1991 calls for the recognition and
180
agency” is defined as
application of customary laws to the resolution of issues involving members of indigenous
peoples. This law admits the operation of customary laws in the settling of disputes if such _______________
are ordinarily used in barangays where majority of the inhabitants are membersof
indigenouspeoples. 181
Sec. 38, R.A.8371.
182

Sec. 44 (a), (b), (c), (d), (f), (g), (h), (i), (j), (k), (1), (m), (n), (p), (q), R.A. 8371.
183

B. Section 1, Part II, Rule VII of the Implementing Rules of IPRA does not infringe upon the Sec. 44 (o), R.A. 8371.
184

Secs. 44 (e),51-54, 62, R.A.8371.

President’s power of control over the Executive Department
185

311
The second corollary issue is whether the Implementing Rules of IPRA violate Section 17,
Article VII of the Constitution, which provides that: VOL. 347, DECEMBER 6, 2000 311
The President shall have control of all the executive departments, bureaus, and offices. He shallensure Cruz vs.Secretaryof Environmentand Natural Resources
that the laws be faithfully executed.
The assailedprovision of the ImplementingRules provides:
Rule VII. The National Commission on Indigenous Peoples (NCIP)
an administrative body independent of the executive branch or one not subject to a
superior head of department, as distinguished from a “subordinate agency” or an
administrative body whose action is subjectto administrative review or revision.
That Congress did not intend to place the NCIP under the control of the President in
all instances is evident in the IPRA itself, which provides that the decisions of the NCIP in
the exercise of its quasi-judicial functions shall be appealable to the Court of Appeals, like
indigenous peoples for the utilization of natural resources within their ancestral domains
merely amplify what has been earlier granted to them under the aforesaid laws;
186
3. (3)While the IPRA recognizes the rights of indigenous peoples with regard to their
ancestral lands and domains, it also protects the vested rights of persons, whether
indigenous or non-indigenous peoples, who may have acquired rights of ownership lands
or rights to explore and exploit natural resources within the ancestral lands and
187
domains; 198

those of the National Labor Relations Commission (NLRC) and the Securities and Exchange
Commission (SEC). Nevertheless, the NCIP, although independent to a certain degree, was _______________
placed by Congress “under the office of the President” and, as such, is still subject to the
President’s power of control and supervision granted under Section 17, Article VII of the Supranote 75.
195

Constitution with respect to its performance of administrative functions, such as the

188
R.A. 7076.
196

following: (1) the NCIP must secure the President’s approval in obtaining loans to finance R.A. 7942.
197

Section 56, R.A. 8371.

its projects; (2) it must obtain the President’s approval for any negotiation for funds and
198
189

313
for the acceptance of gifts and/or properties in whatever form and from whatever
source; (3) the NCIP shall submit annual reports of its operations and achievements to
190
VOL. 347, DECEMBER 6, 2000 313
the President, and advise the latter on all matters relating to the indigenous peoples; and 191
Cruz vs. Secretary of Environmentand Natural Resources
(4) it shall exercise such other powers as may be directed by the President. The President 192

is also given the power to appoint the Commissioners of the NCIP as well as to remove
1. (4)The Due Process Clause of the Constitution is not violated by the provisions (Sections
193

them from office for cause motu proprio or upon the recommendation of any indigenous
40, 51-54, 62, 63, 65 and 66) of the IPRA which, among others, establish the composition
community. 194
of the NCIP, and prescribe the application of customary law in certain disputes involving
indigenous peoples. The fact the NCIP is composed wholly of indigenous peoples does not
_______________ mean that it is incapable of being impartial. Moreover, the use of customary laws is
sanctioned by paragraph 2, Section 5 ofArticle XII ofthe Constitution;and
1 AM JUR 2D, Administrative Law, § 55.
186 2. (5)The provision of the Implementing Rules characterizing the NCIP as an independent
Sec. 62, R.A.8371.
187
agency under the Office of the President does not infringe upon the President’s power of
Sec. 17. The President shall have control of all the executive departments, bureaus, and offices. He shall
188
control under Section 17, Article VII of the Constitution, since said provision as well as
ensure that the laws be faithfully executed.
Section 40 of the IPRA expressly places the NCIP under the Office of the President, and
Sec. 44 (f), R.A. 8371.
189

Sec. 44 (g), R.A. 8371.

190
therefore under the President’s control and supervision with respect to its administrative
Sec. 44 (j), RA. 8371.
191 functions. However, insofar as the decisions of the NCIP in the exercise of its quasi-
Sec. 44 (p), R.A. 8371.
192 judicial powers are concerned, the same are reviewable by the CourtofAppeals, like those
Sec. 40, R.A.8371.
193 of the NLRC and the SEC.
Sec. 42, R.A.8371.
194

312
In viewof theforegoing, I vote to DISMISS thepetition.
312 SUPREME COURT REPORTS ANNOTATED
SEPARATE OPINION
Cruz vs.Secretaryof Environmentand Natural Resources
To recapitulate:
MENDOZA, J.:

1. (1)The provisions of the IPRA (specifically Sections 3, paragraphs [a] and [b], 5, 6, 7, and
8) affirming the ownership by the indigenous peoples of their ancestral lands and
domains by virtue of native title do not diminish the State’s ownership of lands of the
public domain, because said ancestral lands and domains are considered as private land,
and never to have been part of the public domain, following the doctrine laid down
in Cariño vs. Insular Government; 195
2. (2)The constitutional provision vesting ownership over minerals, mineral lands and other
natural resources in the State is not violated by Sections 3, 5, 7, 56, 57, 58 and 59 of the
IPRA which grant certain rights to the indigenous peoples over the natural resources
found within the ancestral domains, e.g., to benefit from and share in the profits from the
This suit was instituted to determine the constitutionality of certain provisions of R.A. No.
8371, otherwise known as the Indigenous Peoples Rights Act. Petitioners do not complain
of any injury as a result of the application of the statute to them. They assert a right to seek
an adjudication of constitutional questions as citizens and taxpayers, upon the plea that
the questions raised are of “transcendental importance.”
The judicial power vested in this Court by Art. VIII, §1 extends only to cases and
controversies for the determination of such proceedings as are established by law for the
protection or enforcement of rights, or the prevention, redress or punishment of
wrongs. In this case, the purpose of the suit is not to enforce a
1

allocation and utilization of the same, as well as priority rights in the harvesting,
extraction, development or exploitation thereof. The State retains full control over the
_______________
exploration, development and utilization of natural resources even with the grant of said
rights to the indigenous peoples, through the imposition of requirements and conditions
for the utilization of natural resources under existing laws, such as the Small-Scale Mining 1Lopez v. Roxas, 17 SCRA 756, 761 (1966).
314
Act of 1991 and the Philippine Mining Act of 1995. Moreover, the rights granted to
196 197
314 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
property right of petitioners against the government and other respondents or to demand
compensation for injuries suffered by them as a result of the enforcement of the law, but
only to settle what they believe to be the doubtful character of the law in question. Any
judgment that we render in this case will thus not conclude or bind real parties in the
future, when actual litigation will bring to the Court the question of the constitutionality
of such legislation. Such judgment cannot be executed as it amounts to no more than an
expression of opinion upon the validity of the provisions of the law in question. 2
I do not conceive it to be the function of this Court under Art. VIII, §1 of the
Constitution to determine in the abstract whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the legislative and
executive departments in enacting the IPRA. Our jurisdiction is confined to cases or
controversies. No one reading Art. VIII, §5 can fail to note that, in enumerating the matters
placed in the keeping of this Court, it uniformly beginswith the phrase “all cases . . .”
The statement that the judicial power includes the duty to determine whether there
has been a grave abuse of discretion was inserted in Art. VIII, §1 not really to give the
judiciary a roving commission to right any wrong it perceives but to preclude courts from
invoking the political question doctrine in order to evade the decision of certain cases even
where violations of civil liberties are alleged.
The statement is based on the ruling of the Court in Lansang v. Garcia, in which this
3
Court, adopting the submission of the Solicitor General, formulated the following test of its
jurisdiction in such cases:
[J]udicial inquiry into the basis of the questioned proclamation can go no further than to satisfy the
Court not that the President’s decision is correct and that public safety was endangered by the
rebellion and justified the suspension of the writ, but that in suspending the writ, the President did
not act arbitrarily.
_______________
Muskrat v. United States, 279 U.S. 346, 55 L.Ed. 246 (1911).
2
342 SCRA 448, 481 (1971) (emphasis on the original).
315
VOL. 347, DECEMBER 6, 2000 315
Cruz vs. Secretary of Environment and Natural Resources
That is why Art. VII, §18 now confers on any citizen standing to question the proclamation
of martial law or the suspension of the privilege of the writ of habeas corpus. It is
noteworthy that Chief Justice Roberto Concepcion, who chaired the Committee on the
Judiciary of the Constitutional Commission, was the author of the opinions of the Court
in Lopez v. Roxas and Lansang v. Garcia.
Indeed, the judicial power cannot be extended to matters which do not involve actual
cases or controversies without upsetting the balance of power among the three branches
of the government and erecting, as it were, the judiciary, particularly the Supreme Court,
as a third branch of Congress, with power not only to invalidate statutes but even to
rewrite them. Yet that is exactly what we would be permitting in this case were we to
assume jurisdiction and decide wholesale the constitutional validity of the IPRA contrary
to the established rule that a party can question the validity of a statute only if, as applied
to him, it is unconstitutional. Here the IPRA is sought to be declared void on its face.
The only instance where a facial challenge to a statute is allowed is when it operates
in the area of freedom of expression. In such instance, the overbreadth doctrine permits a
party to challenge the validity of a statute even though as applied to him it is not
unconstitutional but it might be if applied to others not before the Court whose activities
are constitutionally protected. Invalidation of the statute “on its face” rather than “as
applied” is permitted in the interest of preventing a “chilling” effect on freedom of
expression. But in other cases, even if it is found that a provision of a statute is
unconstitutional, courts will decree only partial invalidity unless the invalid portion is so
far inseparable from the rest of the statute that a declaration of partial invalidity is not
possible.
For the Court to exercise its power of review when there is no case or controversy is
not only to act without jurisdiction but also to run the risk that, in adjudicating abstract or
hypothetical questions, its decision will be based on speculation rather than experience.
Deprived of the opportunity to observe the impact of the law, the Court is likely to equate
questions of constitutionality with questions of wisdom and is thus likely to intrude into
the domain of legislation. Constitutional adjudication, it cannot be too often repeated,
cannot take place in a vacuum.
316
316 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
Some of the brethren contend that not deciding the constitutional issues raised by
petitioners will be a “galling cop out” or an “advocacy of timidity, let alone
4
isolationism.” To decline the exercise of jurisdiction in this case is no more a “cop out” or
5
a sign of “timidity” than it was for Chief Justice Marshall in Marbury v. Madison to hold that
6
petitioner had the right to the issuance of his commission as justice of the peace of the
District of Columbia only to declare in the end that after all mandamus did not lie, because
§13 of the Judiciary Act of 1789, which conferred original jurisdiction on the United States
Supreme Court to issue the writ of mandamus, was unconstitutional as the court’s
jurisdiction is mainly appellate.
Today Marbury v. Madison is remembered for the institution of the power of judicial
review, and so that there can be no doubt of this power of our Court, we in this country
have enshrined its principle in Art. VIII, §1. Now, the exercise of judicial review can result
either in the invalidation of an act of Congress or in upholding it. Hence, the checking and
legitimating functions of judicial review so well mentioned in thedecisions of this Court.
7
To decline, therefore, the exercise of jurisdiction where there is no genuine
controversy is not to show timidity but respect for the judgment of a coequal department
of government whose acts, unless shown to be clearly repugnant to the fundamental law,
are presumed to be valid. The polestar of constitutional adjudication was set forth by
Justice Laurel in the Angara case when he said that “this power of judicial review is limited
to actual cases and controversies to be exercised after full opportunity of argument by the
parties, and limited further to the constitutional question raised or the very lis
mota,presented.” For the exercise of this power is legitimate only in the last resort, and as
8
a necessity in the
_______________
Panganiban, J., Separate Opinion, p. 2.
4
Vitug, J., Separate Opinion, p. 1.
5
1 Cranch 137, 2 L.Ed. 60 (1803).
6
Occena v. Commission on Elections; Gonzales v. The National Treasurer, 104 SCRA 1 (1981); Mitra v.
7
Commission on Elections, 104 SCRA 59 (1981).
Angara v. Electoral Commission, 63 Phil. 139, 158 (1936).
8
317
 VOL. 347, DECEMBER 6, 2000
Cruz vs. Secretary of Environmentand Natural Resources
determination of real, earnest, and vital controversy between individuals. Until, therefore,
9
an actual case is brought to test the constitutionality of the IPRA, the presumption of
constitutionality, which inheres in every statute, must be accorded to it.
Justice Kapunan, on the other hand, cites the statement in Severino v. Governor
General, reiterated in Tañada v. Tuvera, that “when the question is one of public right and
10 11
the object of mandamus to procure the enforcement of a public duty, the people are
regarded as the real party in interest, and the relator at whose instigation the proceedings
are instituted need not show that he has any legal or special interest in the result, it being
sufficient that he is a citizen and as such is interested in the execution of the laws.” On the
basis of this statement, he argues that petitioners have standing tobring
theseproceedings.
12
In Severino v. Governor General, the question was whether mandamus lay to compel
13
the Governor General to call a special election on the ground that it was his duty to do so.
The ruling was that he did not have such a duty. On the other hand, although mandamus
was issued in Tañada v. Tuvera, it was clear that petitioners had standing to bring the suit,
because the public has a right to know and the failure of respondents to publish all decrees
and other presidential issuances in the Official Gazette placed petitioners in danger of
violating those decrees and issuances. But, in this case, what public right is there for
petitioners to enforce when the IPRA does not apply to them except in general and in
common withother citizens?
For the foregoing reasons I vote to dismiss the petition in this case.
_______________
9Philippine Association of Colleges and Universities v. Secretary of Education, 97 Phil. 806 (1955).
16 Phil. 366 (1913).
10
136 SCRA 27 (1985).
11
Kapunan, J., Separate Opinion, pp. 21-23.
12
Supranote 10.
13
318
318 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
SEPARATE
(CONCURRING AND DISSENTING)
PANGANIBAN, J.:
I concur with the draft ponencia of Mr. Justice Santiago M. Kapunan in its well-crafted
handling of the procedural or preliminary issues. In particular, I agree that petitioners
have shown an actual case or controversy involving at least two constitutional questions
of transcendental importance, which deserve judicious disposition on the merits directly
1 Philippines.
by the highest court of the land. Further, I am satisfied that the various aspects of this
2
controversy have been fully presented and impressively argued by the parties. Moreover,
prohibition and mandamus are proper legal remedies to address the problems raised by
3
petitioners. In any event, this Court has given due course to the Petition, heard oral
arguments and required the submission of memoranda. Indeed, it would then be a galling
copout for us to dismiss it on mere technical or procedural grounds.
317 Protectionof Indigenous Peoples’ Rights Must Be Within the Constitutional Framework
With due respect, however, I dissent from the ponencia’sresolution of the two main
substantive issues, which constitute the core of this case. Specifically, I submit that
Republic Act (RA) No. 8371, otherwise known as the Indigenous Peoples’ Rights Act (IPRA)
of 1997, violates and contravenes the Constitution of the Philippines insofar as—
_______________
Kilosbayan v. Morato, 250 SCRA 130, 140, November 16, 1995; Association of Small Landowners v. Secretary of
1
Agrarian Reform, 175 SCRA 343, 365, July 14, 1989; Antonio v. Dinglasan, 84 Phil. 368 (1949).
Tañada v. Angara, 272 SCRA 18, 46, May 2, 1997; Santiago v. Comelec, 270 SCRA 106, 123-124, March 19,
2
1997; Basco v. PAGCOR, 197 SCRA 52, 60, May 14, 1991.
Tañada v. Angara, ibid.
3
319
VOL. 347, DECEMBER 6, 2000 319
Cruz vs. Secretary of Environmentand Natural Resources
1. 1.It recognizes or, worse, grants rights of ownership over lands of the public domain,
waters, xxx and other natural resources” which, under Section 2, Article XII of the
Constitution, “are owned by the State” and “shall not be alienated.” I respectfully reject
the contention that “ancestral lands and ancestral domains are not public lands and have
never been owned by the State.” Such sweeping statement places substantial portions of
Philippine territory outside the scope of the Philippine Constitution and beyond the
collective reach of the Filipino people. As will be discussed later, these real properties
constitute a third of the entire Philippine territory; and the resources, 80 percent of the
nation’s natural wealth.
2. 2.It defeats, dilutes or lessens the authority of the State to oversee the “exploration,
development, and utilization of natural resources,” which the Constitution expressly
requires to “be under the fullcontrol and supervisionof the State.”
True, our fundamental law mandates the protection of the indigenous cultural
communities’ right to their ancestral lands, but such mandate is “subject to the provisions
of this Constitution.”4 I concede that indigenous cultural communities and indigenous
peoples (ICCs/IPs) may be accorded preferential rights to the beneficial use of public
domains, as well as priority in the exploration, development and utilization of natural
resources. Such privileges, however, must be subject to the fundamental law.
OPINION
Consistent with the social justice principle of giving more in law to those who have
less in life, Congress in its wisdom may grant preferences and prerogatives to our
marginalized brothers and sisters, subject to the irreducible caveat that the Constitution
must be respected. I personally believe in according every benefit to the poor, the
oppressed and the disadvantaged, in order to empower them to equally enjoy the
blessings of nationhood. I cannot, however, agree to legitimize perpetual inequality of
access to the nation’s wealth or to stamp the Court’s imprimatur on a law that offends and
degrades the repository of the very authority of this Court—the Constitution of the
_______________
4§5, Art. XII, 1987 Constitution.
320
320 SUPREME COURT REPORTS ANNOTATED
 Cruz vs. Secretary of Environmentand Natural Resources
The Constitution Is a Compact
My basic premise is that the Constitution is the fundamental law of the land, to which all
other laws must conform. It is the people’s quintessential act of sovereignty, embodying
5
the principles upon which the State and the government are founded. Having the status of
6
a supreme and all-encompassing law, it speaks for all the people all the time, not just for
the majority or for the minority at intermittent times. Every constitution is a compact
made by and among the citizens of a State to govern themselves in a certain manner. Truly,
7
the Philippine Constitution is a solemn covenant made by all the Filipinos to govern
themselves. No group, however blessed, and no sector, however distressed, is exempt from
its compass.
RA 8371, which defines the rights of indigenous cultural communities and indigenous
peoples, admittedly professes a laudable intent. It was primarily enacted pursuant to the
state policy enshrined in our Constitution to “recognize and promote the rights of
indigenous cultural communities within the framework of national unity and
development.” Though laudable and well-meaning, this statute, however, has provisions
8
that run directly afoul of our fundamental law from which it claims origin and authority.
More specifically, Sections 3(a) and (b), 5, 6, 7(a) and (b), 8 and other related provisions
contravene the Regalian Doctrine—the basic foundationof the State’s property regime.
Public Domains and NaturalResources Are Ownedbythe State and Cannot Be Alienatedor
Ceded
Jura regalia was introduced into our political system upon the “discovery” and the
“conquest” of our country in the sixteenth century. Under this concept, the entire earthly
territory known as the
_______________
516 CJS §3.
616 Am Jur 2d §2.
7Ibid.
8§22, Art. II of the Constitution.
321
VOL. 347, DECEMBER 6, 2000 321
Cruz vs. Secretary of Environmentand Natural Resources
Philippine Islands was acquired and held by the Crown of Spain. The King, as then head of
State, had the supreme power or exclusive dominion over all our lands, waters, minerals
and other natural resources. By royal decrees, though, private ownership of real property
was recognized upon the showing of (1) a title deed; or (2) ancient possession in the
concept of owner, according to which a title could be obtained by prescription. Refusal to
9
abide by the system and its implementing laws meant the abandonment or waiver of
ownership claims.
By virtue of the 1898 Treaty of Paris, the Philippine archipelago was ceded to the
United States. The latter assumed administration of the Philippines and succeeded to the
property rights of the Spanish Crown. But under the Philippine Bill of 1902, the US
Government allowed and granted patents to Filipino and US citizens for the “free and open
xxx exploration, occupation and purchase [of mines] and the land in which they are
found.” To a certain extent, private individuals were entitled to own, exploit and dispose
10
of mineral resources and other rights arising from mining patents.
This US policy was, however, rejected by the Philippine Commonwealth in 1935 when
it crafted and ratified our first Constitution. Instead, the said Constitution embodied the
Regalian Doctrine, which more definitively declared as belonging to the State all lands of
the public domain, waters, minerals and other natural resources. Although respecting 11
mining patentees under the Philippine Bill of 1902, it restricted the further exploration,
development and utilization of natural resources, both as to who might be entitled to
undertake such activities and for how long. The pertinent provision reads:
_______________
Abaoag v. Director of Lands, 45 Phil. 518 (1923), cited in petitioners’ Memorandum.
9
Soledad M. Cagampang-de Castro, The Economic Policies on Natural Resources Under the 1987 Constitution
10
Revisited,” Journal of the Integrated Bar of the Philippines,Vol. XXV, Nos. 3 & 4 (1999), p. 51.
In a republican system of government, the concept of jura regalia is stripped of royal overtones; ownership
11
is vested in the State, instead. (Joaquin G. Bernas, SJ, The Constitution of the Republic of the Philippines: A
Commentary, 1996 ed.,pp. 1009-1010.)
322
322 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
“SECTION 1. [Art. XIII]. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural
resources of the Philippines belong to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines, or to corporations or associations at least
sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant,
lease, or concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated,
and license, concession, or lease for the exploitation, development, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-
five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than
the development of water power, in which cases beneficial use may be the measure and the limit of
the grant.”
The concept was carried over in the 1973 and the 1987 Constitutions. Hence, Sections 8
and 9, Article XIV of the 1973 Constitution, state:
“SEC. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to
the State. With the exception of agricultural, industrial or commercial, residential, and resettlement
lands of the public domain, natural resources shall not be alienated and no license, concession, or
lease for the exploration, development, exploitation, utilization of any of the natural resources shall
be granted for a period exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and the limit of the
grant.
SEC. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural
resources of the Philippines shall be limited to citizens of the Philippines, or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens. The National
Assembly, in the national interest, may allow such citizens, corporations, or associations to enter into
service contracts for financial, technical, management, or other forms of assistance with any foreign
person or entity for the exploration, development, exploitation, or utilization of any of the natural
resources. Existing valid and binding service
323
VOL. 347, DECEMBER 6, 2000 323
Cruz vs. Secretary of Environment and Natural Resources
contracts for financial, technical, management, or other forms of assistance are hereby recognized as
such.”
Similarly, Section 2, Article XII of the 1987 Constitution, provides:
“SEC. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural resources
shall not be alienated. The exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly undertake such activities,
or it may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizen, or corporations or associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be the measure and limit of the grant.
“The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
“The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens,
as well as cooperative fish farming, with priority to subsistence fishermen and fish workers in rivers,
lakes, bays and lagoons.
“The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and conditions provided by law,
based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and technical
resources.
‘The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.”
The adoption of the Regalian Doctrine by the Philippine Commonwealth was initially
impelled by the desire to preserve the
324
324 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
nation’s wealth in the hands of the Filipinos themselves. Nationalism was fervent at the
time, and our constitutional framers decided to embody the doctrine in our fundamental
law. Charging the State with the conservation of the national patrimony was deemed
necessary for Filipino posterity. The arguments in support of the provision are
encapsulated by Aruego as follows: “[T]he natural resources, particularly the mineral
resources which constituted a great source of wealth, belonged not only to the generation
then but also to the succeeding generation and consequently should be conserved for
them.” 12
Thus, after expressly declaring that all lands of the public domain, waters, minerals,
all forces of energy and other natural resources belonged to the Philippine State, the
Commonwealth absolutely prohibited the alienation of these natural resources. Their
disposition, exploitation, development and utilization were further restricted only to
Filipino citizens and entities that were 60 percent Filipino-owned. The present
Constitution even goes further by declaring that such activities “shall be under the full
control and supervision of the State.” Additionally, it enumerates land classifications and
expressly states that only agricultural lands of the public domain shall be alienable. We
quote below the relevant provision:
13
“SEC. 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and
national parks. Agricultural lands of the public domain may be further classified by law according to
the uses to which they may be devoted. Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and not to exceed one thousand hectares in area. x x x.”
Mr. Justice Kapunan upholds private respondents and intervenors in their claim that all
ancestral domains and lands are outside
_______________
II Aruego, The Framing of the Philippine Constitution 603, quoted in Bernas,supra,p. 1010.
12
§3, Art. XII, 1987 Constitution.
13
325
VOL. 347, DECEMBER 6, 2000 325
Cruz vs. Secretary of Environmentand Natural Resources
the coverage of public domain; and that these properties—including forests, bodies of
water, minerals and parks found therein—are private and have never been part of the
public domain, because they have belonged to the indigenous people’s ancestors since
time immemorial.
I submit, however, that all Filipinos, whether indigenous or not, are subject to the
Constitution. Indeed, no one is exempt from its all-encompassing provisions. Unlike the
1935 Charter, which was subject to “any existing right, grant, lease or concession,” the
1973 and the 1987 Constitutions spoke in absolute terms. Because of the State’s
implementation of policies considered to be for the common good, all those concerned
have to give up, under certain conditions, evenvested rights of ownership.
In Republic v. Court of Appeals, this Court said that once minerals are found even in
14
private land, the State may intervene to enable it to extract the minerals in the exercise of
its sovereign prerogative. The land is converted into mineral land and may not be used by
any private person, including the registered owner, for any other purpose that would
impede the mining operations. Such owner would be entitled to just compensation for the
loss sustained.
In Atok Big-Wedge Mining Company v. IAC, the Court clarified that while mining claim
15
holders and patentees have the exclusive right to the possession and enjoyment of the
located claim, their rights are not absolute or strictly one of ownership. Thus, failure to
comply with the requirements of pertinent mining laws was deemed an abandonment or
awaiverof the claim.
Verily, as petitioners undauntedly point out, four hundred years of Philippine political
history cannot be set aside or ignored by IPRA, however well-intentioned it may be. The
perceived lack of understanding of the cultural minorities cannot be remedied by
conceding the nation’s resources to their exclusive advantage. They cannot be more
privileged simply because they have chosen to ignore state laws. For having chosen not to
be enfolded by statutes
_______________
160 SCRA 228, 239, April 15, 1988.
14
261 SCRA 528, September 9,1996.
15
326
326 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
on perfecting land titles, ICCs/IPs cannot now maintain their ownership of lands and
domains by insisting on their concept of “native title” thereto. It would be plain injustice
to the majority of Filipinos who have abided by the law and, consequently, deserve equal
opportunity to enjoy the country’s resources.
 Respondent NCIP claims that IPRA does not violate the Constitution, because it does
not grant ownership of public domains and natural resources to ICCs/IPs. “Rather, it
recognizes and mandates respect for the rights of indigenous peoples over their ancestral
lands and domains that had never been lands of the public domain.” I say, however, that
16
such claim finds no legal support. Nowhere in the Constitution is there a provision that
exempts such lands and domains from its coverage. Quite the contrary, it declares
that all lands of the public domain and natural resources “are owned by the State”; and
“with the exception of agricultural lands, all other natural resources shallnotbe alienated.”
As early as Oh Cho v. Director of Lands, the Court declared as belonging to the public
17
domain all lands not acquired from the government, either by purchase or by grant under
laws, orders or decrees promulgated by the Spanish government; or by possessory
information under Act 496 (MortgageLaw).
On the other hand, Intervenors Flavier, et al. differentiate the concept of ownership of
18
ICCs/IPs from that which is defined in Articles 427 and 428 of the Civil Code. They
maintain that “[t]here are variations among ethnolinguistic groups in the Cordillera, but a
fair synthesis of these refers to 'xxx the tribal right to use the land or to territorial control
xxx, a collective right to freely use the particular territory x x x [in]the concept
oftrusteeship.’”
In other words, the “owner” is not an individual. Rather, it is a tribal community that
preserves the property for the common but nonetheless exclusive and perpetual benefit
of its members, without the attributes of alienation or disposition. This concept, however,
still perpetually withdraws such property from the control of
_______________
NCIP’s Memorandum, p. 24.
16
75 Phil. 890, 892, August 31, 1946.
17
Intervenors’Memorandum, pp; 33 et seq.
18
327
VOL. 347, DECEMBER 6, 2000 327
Cruz vs. Secretary of Environmentand Natural Resources
the State and from its enjoyment by other citizens of the Republic. The perpetual and
exclusive character of private respondents’ claims simplymakes them repugnant to basic
fairness andequality.
Private respondents and intervenors trace their “ownership” of ancestral domains and
lands to the pre-Spanish conquest. I should say that, at the time, their claims to such lands
and domains was limited to the surfaces thereof since their ancestors were agriculture-
based. This must be the continuing scope of the indigenous groups’ ownership claims:
limited to land, excluding the natural resources found within.
In any event, if all that the ICCs/IPs demand is preferential use—not ownership—of
ancestral domains, then I have no disagreement. Indeed, consistent with the Constitution
is IPRA’s Section 57 —without the too-broad definitions under Section 3 (a) and (b)—
19
insofar as it grants them priority rights in harvesting, extracting, developing or exploiting
natural resources within ancestral domains.
The concerted effort to malign the Regalian Doctrine as a vestige of the colonial past
must fail. Our Constitution vests the ownership of natural resources, not in colonial
masters, but in all the Filipino people. As the protector of the Constitution, this Court has the
sworn duty to uphold the tenets of that Constitution—not to dilute, circumventorcreate
exceptions to them.
Cariño v. InsularGovernment Was Modified by the Constitution
In this connection, I submit that Cariño v. Insular Government has been modified or 20
superseded by our 1935, 1973 and 1987 Constitutions. Its ratio should be understood as
referring only to a means by which public agricultural land may be acquired by citizens. I
must also stress that the claim of Petitioner Cariño refers to
_______________
“SEC. 57. Natural Resources within Ancestral Domains.—The ICCs/IPs shall have priority rights in the
19
harvesting, extraction, development or exploitation of any natural resources within the ancestral domains, x x x.
41 Phil. 935, February 23, 1909.
20
328
328 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
land ownership only, not to the natural resources underneath or to the aerial and cosmic
space above.
Significantly, in Director of Land Management v. Court of Appeals, a Decision handed 21
down after our three Constitutions had taken effect, the Court rejected a cultural minority
member’s registration of land under CA 141, Section 48 (c). The reason was that the
22
property fell within the Central Cordillera Forest Reserve. This Court quoted with favor
the solicitor general’s following statements:
“3. The construction given by respondent Court of Appeals to the particular provision of law involved,
as to include even forest reserves as susceptible to private appropriation, is to unconstitutionally
apply such provision. For, both the 1973 and present Constitutions do not include timber or forest
lands as alienable. Thus, Section 8, Article XIV of 1973 Constitution states that Svith the exception of
agricultural, industrial or commercial, residential and resettlement lands of the public domain,
natural resources shall not be alienated.’ The new Constitution, in its Article XII, Section 2, also
expressly states that “with the exception of agricultural lands, all other natural resources shall not be
alienated.’”
Just recently, in Gordula v. Court of Appeals, the Court also stated that “forest land is
23
incapable of registration, and its inclusion in a title nullifies that title. To be sure, the
defense of indefeasibility of a certificate of title issued pursuant to a free patent does not
lie against the state in an action for reversion of the land covered thereby when such land
is a part of a public forest or of a forest reservation, the patent covering forest land being
void ab initio.”
_______________
172 SCRA 455, 463, April 18, 1989, per Gutierrez, Jr., J.
21
(c) Members of the national cultural minorities who by themselves or through their predecessors-in-interest
22
have been in open, continuous, exclusive and notorious possession and occupation of lands of the public domain
suitable to agriculture, whether disposable or not, under a bona fide claim of ownership for at least 30 years shall
be entitled to the rights granted in subsection (b) hereof. (As amended by R.A. No. 3872, section 1, approved June
18, 1964).”
284 SCRA 617, 633, January22, 1998, per Puno,J.
23
329
VOL. 347, DECEMBER 6, 2000 329
Cruz vs. Secretary of Environmentand Natural Resources
RA 8371 Violates the Inalienability ofNatural Resources and of Public Domains
The ponencia theorizes that RA 8371 does not grant to ICCs/IPs ownership of the natural
resources found within ancestral domains. However, a simple reading of the very
wordings of the law belies this statement.
 Section 3 (a) defines and delineates ancestral domains as “all areas generally
24
belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural
resourcestherein, held under a claim of ownership, occupied or possessed by ICCs/IPs, by
themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by war, force
majeure or displacement x xx. It shall include ancestral lands, forests, pasture, residential,
agricultural, and other lands individually owned whether alienable and disposable or
otherwise, hunting grounds x x x bodies of water, mineral and other natural resources x x
x.” (Emphasis ours.)
Clearly, under the above-quoted provision of IPRA, ancestral domains of ICCs/IPs
encompass the natural resources found
_______________
“a) Ancestral Domains—Subject to Section 56 hereof, refers to all areas generally belonging to ICCs/IPs
24
comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim of ownership,
occupied or possessed by ICCs/IPs, by themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by war, force majeureor displacement by force,
deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by
government and private individuals/corporations, and which are necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands individually owned whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas, bodies of water, mineral and other natural resources, and lands
which may no longer be exclusively occupied by ICCs/IPs but from which they traditionally had access to for their
subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or
shiftingcultivators.”
330
330 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environmentand Natural Resources
therein. And Section 7 guarantees recognition and protection of their rightsofownership
andpossessionover such domains.
The indigenous concept of ownership, as defined under Section 5 of the law, “holds
that ancestral domains are the ICC’s/IP’s private but community property which belongs
to all generations and therefore cannot be sold, disposed or destroyed.” Simply put, the
law declares that ancestral domains, including the natural resources found therein,
are owned by ICCs/IPs and cannot be sold, disposed or destroyed. Not only does it vest
ownership, as understood under the Civil Code; it adds perpetual exclusivity. This means
that while ICCs/IPs could own vast ancestral domains, the majority of Filipinos who are
not indigenous can never own any part thereof.
On the other hand, Section 3 (b) of IPRA defines ancestral lands as referring to ‘lands
25
occupied, possessed and utilized by individuals, families and clans of the ICCs/IPs since
time immemorial x x x, under claims of individual or traditional group ownership, x x x
including, but not limited to, residential lots, rice terraces or paddies, private forests,
swidden farms and tree lots.” Section 8 recognizes and protects “the right of ownership
and possession of ICCs/IPs to their ancestral lands.” Such ownership need not be by virtue
of a certificate of title, but simply by possession since time immemorial.
I believe these statutory provisions directly contravene Section 2, Article XII of the
Constitution, more specifically the declaration that the State owns all lands of the public
domain, minerals and natural resources—none of which, except agricultural lands, can be
_______________
“b) Ancestral Lands—Subject to Section 56 hereof, refers to lands occupied, possessed and utilized by
25
individuals, families and clans who are members of the ICCs/IPs since time immemorial, by themselves or through
their predecessors-in-interest, under claims of individual or traditional group ownership, continuously, to the
present except when interrupted by war, force majeure or displacement by force, deceit, stealth, or as a consequence
of government projects and other voluntary dealings entered into by government and private
individuals/corporations, including, but not limited to, residential lots, rice terraces or paddies, private forests,
swiddenfarms and tree lots.”
331
VOL. 347, DECEMBER 6, 2000 331
Cruz vs. Secretary of Environment and Natural Resources
alienated. In several cases, this Court has consistently held that non-agricultural land must
first be reclassified and converted into alienable or disposable land for agricultural
purposes by a positive act of the government. Mere possession or utilization thereof,
26
however long, does not automatically convert them into private properties. The 27
presumption is that “all lands not appearing to be clearly within private ownership are
presumed to belong to the State. Hence, x xx all applicants in land registration proceedings
have the burden of overcoming the presumption that the land thus sought to be registered
forms part of the public domain. Unless the applicant succeeds in showing by clear and
convincing evidence that the property involved was acquired by him or his ancestors
either by composition title from the Spanish Government or by possessory information
title, or any other means for the proper acquisition of public lands, the property must be
held to be part of the public domain. The applicant must present competent and persuasive
proof to substantiate his claim; he may not rely on general statements, or mere conclusions
of law other than factual evidenceof possession and title.” 28
Respondents insist, and the ponencia agrees, that paragraphs (a) and (b) of Section 3
are merely definitions and should not be construed independently of the other provisions
of the law. But, precisely, a definition is “a statement of the meaning of a word or word
group.” It determines or settles the nature of the thing or person defined. Thus, after
29 30
defining a term as encompassing several items, one cannot thereafter say that the same
term should be interpreted as excluding one or more of the enumerated items in its
_______________
Director of Lands and Director of Forest Development v. Intermediate Appellate Court, March 2, 1993, 219 SCRA
26
339; Director of Lands v. Aquino, 192 SCRA 296, December 17, 1990; Sunbeam Convenience Foods, Inc.v. Court of
Appeals, January29, 1990, 181 SCRA 443.
Ibid.; Margolles v. Court of Appeals, February 14, 1994, 230 SCRA 97; Gordula v. Court of Appeals, supra.
27
Republic v. Sayo, October 31, 1990, 191 SCRA 71, per Narvasa, J.(laterCJ). See also Republic v. Court of Appeals,
28
supra.
Webster’s Third New International Dictionary; Petitioners’ Memorandum, p. 41.
29
Ibid.
30
332
332 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
bound by the law. In other words, since RA 8371 defines ancestral domains as including
the natural resources found therein and further states that ICCs/IPs own these ancestral
domains, then it means that ICCs/IPs canownnatural resources.
In fact, Intervenors Flavier, et al. submit that everything above and below these
ancestral domains, with no specific limits, likewise belongs to ICCs/IPs. I say that this
theory directly contravenes the Constitution. Such outlandish contention further
disregards international law which, by constitutional fiat, has been adopted as part of the
law of the land. 31
No Land Area Limits Are Specified by RA 8371
Under Section 3, Article XII of the Constitution, Filipino citizens may acquire no more than
12 hectares of alienable public land, whether by purchase, homestead or grant. More than
that, but not exceeding 500 hectares, they may hold by lease only.
RA 8371, however, speaks of no area or term limits to ancestral lands and domains. In
fact, by their mere definitions, they could cover vast tracts of the nation’s territory. The
properties under the assailed law cover everything held, occupied or possessed “by
themselves or through their ancestors, communally or individually since time
immemorial.” It also includes all “lands which may no longer be exclusively occupied by
[them] but from which they traditionally had access to for their subsistence and traditional
activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators.”
Nomadic groups have no fixed area within which they hunt or forage for food. As soon
as they have used up the resources of a certain area, they move to another place or go back
to one they used to occupy. From year to year, a growing tribe could occupy and use
enormous areas, to which they could claim to have had “traditional access.” If nomadic
ICCs/IPs succeed in acquiring title to their enlarging ancestral domain or land, several
thousands of
_______________
§2, Art. II of the Constitution.
31
333
VOL. 347, DECEMBER 6, 2000
Cruz vs. Secretary of Environment and Natural Resources
hectares of land may yet be additionally delineated as their private property.
Similarly, the Bangsa Moro people’s claim to their ancestral land is not based on
compounded or consolidated title, but “on a collective stake to the right to claim what their
forefathers secured for them when they first set foot on our country.” They trace their 32
right to occupy what they deem to be their ancestral land way back to their ancient sultans
and datus, who had settled in many islands that have become part of Mindanao. This long
history of occupation is the basisof their claim to their ancestral lands.
33
Already, as of June 1998, over 2.5 million hectares have been claimed by various
ICCs/IPs as ancestral domains; and over 10 thousand hectares, as ancestral lands. Based
on ethnographic surveys, the solicitor general estimates that ancestral domains cover 80
percent of our mineral resources and between 8 and 10 million of the 30 million hectares
of land in the country. This means that four fifths of its natural resources and one third of
35
the country’s land will be concentrated among 12 million Filipinos constituting 110
ICCs, while over 60 million other Filipinos constituting the overwhelming majority will have
36
to share the remaining. These figures indicate a violation of the constitutional principle of
a “more equitable distribution of opportunities, income, and wealth” among Filipinos.
_______________
Cecilio R. Laurente, ‘The King’s Hand: The Regalian Doctrine as a Contributing Factor in the Mindanao
32
Conflict,” Human Rights Agenda,Vol. 5, Issue No. 7, July & August 2000, pp. 6-7.
Ibid.
33
Solicitor General’s Memorandum, p. 3; rollo, p. 651.
34
Ibid., pp. 4-5.
35
Ibid. See also Datu Vic Saway, indigenous Peoples and the Uplands: A Situatfoner,” Proceedings of the 6th
36
Upland NGO Consultative Conference, 23-27 August 1998, p. 30.
334
334 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
RA 8371 Abdicates the StateDuty to Take Full Control and Supervision ofNatural Resources
Section 2, Article XII of the Constitution, further provides that “[t]he exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State.” The State may (1) directly undertake such activities; or (2) enter
into co-production, joint yenture or production-sharing agreements with Filipino citizens
or entities, 60 percent of whose capital is owned by Filipinos. Such agreements, however,
37
shall not exceed 25 years, renewable for the same period and under terms and
conditionsas may be providedby law.
But again, RA 8371 relinquishes this constitutional power of full control in favor of
ICCs/IPs, insofar as natural resources found within their territories are concerned.
Pursuant to their rights of ownership and possession, they may develop and manage the
natural resources, benefit from and share in the profits from the allocation and the
utilization thereof. And they may exercise such right without any time limit, unlike non-
38
ICCs/IPs who may do so only for a period not exceeding 25 years, renewable for a like
period. Consistent with the Constitution, the rights of ICCs/IPs to exploit, develop and
39
utilize natural resources must also be limited to such period.
In addition, ICCs/IPs are given the right to negotiate directly the terms and conditions
for the exploration of natural resources, a right vested by the Constitution only in the
40
State. Congress, through IPRA, has in effect abdicated in favor of a minority group the
333 State’s power of ownership and full control over a substantial
_______________
Or (3) in case of large-scale exploration, development and utilization of minerals, enter—through the
37
President—into “agreements with foreign-owned corporations involving either technical or financial assistance.”
(Miners Association of the Philippines v. Factoran, Jr., 240 SCRA 100, January 16, 1995.)
§7(b), RA 7381.
38
§57, ibid.
39
§7(b), ibid.
40
335
34
VOL. 347, DECEMBER 6, 2000 335
Cruz vs. Secretary of Environment and Natural Resources
part of the national patrimony, in contravention of our most fundamental law.
I make clear, however, that to the extent that ICCs/IPs may undertake small-scale
utilization of natural resources and cooperative fish farming, I absolutely have no
objection. These undertakings are certainly allowed under the third paragraph of Section
2, Article XII of the Constitution.
Having already disposed of the two major constitutional dilemmas wrought by RA
8371—(1) ownership of ancestral lands and domains and the natural resources therein;
and (2) the ICCs/IPs’ control of the exploration, development and utilization of such
resources—I believe I should no longer tackle the following collateral issues petitioners
have brought up:
1. 1.Whether the inclusion of private lands within the coverage of ancestral domains amounts
to undue deprivation of private property
2. 2.Whether ICCs/IPs may regulate the entry/exit of migrants
3. 3.Whether ancestral domains are exempt from real property taxes, special levies and other
forms of exaction
 4. 4.Whether customary laws and traditions of ICCs/IPs should first be applied in the Rather, the law must help the powerless by enabling them to take advantage of
settlements of disputes over their rights and claims opportunities and privileges that are open to all and by preventing the powerful from
5. 5.Whether the composition and the jurisdiction of the National Commission of Indigenous exploiting and oppressing them. This is the essence of social justice—empowering and
Peoples (NCIP) violate the due process and equal protection clauses
enabling the poor to be able to compete with the rich and, thus, equally enjoy the blessings of
6. 6.Whether members of the ICCs/IPs may be recruited into the armed forces against their
will prosperity, freedom and dignity.
WHEREFORE, I vote to partially GRANT the Petition and to DECLARE as
UNCONSTITUTIONAL Sections 3(a) and (b), 5, 6, 7(a) and (b), 8 and related provisions of
I believe that the first three of the above collateral issues have been rendered academic or, RA 8371.
at least, no longer of “transcendental importance,” in view of my contention that the two Petition dismissed.
major IPRA propositions are based on unconstitutional premises. On the other hand, I
think that in the case of the last three, it is best to await specific cases filed by those whose
rights may have been injured by specific provisions of RA 8371.
336
336 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Secretary of Environment and Natural Resources
Epilogue
Section 5,Article XII ofthe Constitution, provides:
“SEC. 5. The State, subject to the provisions of this Constitution and national development policies and
programs, shall protect the rights of indigenous cultural communities to their ancestral lands to
ensure their economic, social, andcultural well being.
“The Congress may provide for the applicability of customary laws governing properly rights and
relations in determining the ownership and extent of ancestral domain.”
Clearly, there are two parameters that must be observed in the protection of the rights of
ICCs/IPs: (1) the provisions of the 1987 Constitution and(2)national development policies
andprograms.
Indigenous peoples may have long been marginalized in Philippine politics and
society. This does not, however, give Congress any license to accord them rights that the
Constitution withholds from the rest of the Filipino people. I would concede giving
them priority in the use, the enjoyment and the preservation of their ancestral lands and
domains. But to grant perpetual ownership and control of the nation’s substantial wealth
41

to them, to the exclusion of other Filipino citizens who have chosen to live and abide by
our previous and present Constitutions, would be not only unjust but also subversive of
therule of law.
In giving ICCs/IPs rights in derogation of our fundamental law, Congress is effectively
mandating “reverse discrimination.” In seeking to improve their lot, it would be doing so
at the expense of the majority of the Filipino people. Such short-sighted and misplaced
generosity will spread the roots of discontent and, in the long term, fan the fires of turmoil
to a conflagration of national proportions.
Peace cannot be attained by brazenly and permanently depriving the many in order to
coddle the few, however disadvantaged they may have been. Neither can a just society be
approximated by maiming the healthy to place them at par with the injured. Nor can

_______________

As stated earlier, Sec. 57 of IPRA, insofar as it grants them such priority, is constitutional.
41

337
VOL. 347, DECEMBER 6, 2000 337
Cruz vs. Secretary of Environment and Natural Resources
the nation survive by enclaving its wealth for the exclusive benefit of favored minorities.
 G.R. No. 127882. January 27, 2004.
LA BUGAL-B’LAAN TRIBAL ASSOCIATION, INC., represented by its Chairman F’LONG
MIGUEL M. LUMAYONG, WIGBERTO E. TAÑADA, PONCIANO BENNAGEN, JAIME TADEO,
RENATO R. CONSTANTINO, JR., F’LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM
L. DABIE, SIMEON H. DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN, MARCELO L.
GUSANAN, QUINTOL A. LABUAYAN, LOMINGGES D. LAWAY, BENITA P. TACUAYAN,
minors JOLY L. BUGOY, represented by his father UNDERO D. BUGOY, ROGER M. DADING,
represented by his father ANTONIO L. DADING, ROMY M. LAGARO, represented by his
father TOTING A. LAGARO, MIKENY JONG B. LUMAYONG, represented by his father
MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by his mother EDITHA T. MIGUEL,
ALDEMAR L. SAL, represented by his father DANNY M. SAL, DAISY RECARSE, represented
by her mother LYDIA S. SANTOS, EDWARD M. EMUY, ALAN P. MAM
_______________
*EN BANC.
149
VOL. 421, JANUARY 27, 2004
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
PARAIR, MARIO L. MANGCAL, ALDEN S. TUSAN, AMPARO S. YAP, VIRGILIO CULAR,
MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN CARLO CULAR, VIRGILIO CULAR, JR.,
represented by their father VIRGILIO CULAR, PAUL ANTONIO P. VILLAMOR, represented
by his parents JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR, ANA GININA R. TALJA,
represented by her father MARIO JOSE B. TALJA, SHARMAINE R. CUNANAN, represented
by her father ALFREDO M. CUNANAN, ANTONIO JOSE A. VITUG III, represented by his
mother ANNALIZA A. VITUG, LEAN D. NARVADEZ, represented by his father MANUEL E.
NARVADEZ, JR., ROSERIO MARALAG LINGATING, represented by her father RIO OLIMPIO
A. LINGATING, MARIO JOSE B. TALJA, DAVID E. DE VERA, MARIA MILAGROS L. SAN JOSE,
SR,, SUSAN O. BOLANIO, OND, LOLITA G. DEMONTEVERDE, BENJIE L. NEQUINTO, ROSE
LILIA S. ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C. REYES, LEAN LOUEL A.
PERIA, represented by his father ELPIDIO V. PERIA, GREEN FORUM PHILIPPINES, GREEN
2
FORUM WESTERN VISAYAS, (GF-WV), ENVIRONMENTAL LEGAL ASSISTANCE CENTER
(ELAC), PHILIPPINE KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT
REPORMANG PANSAKAHAN (KAISAHAN), KAISAHAN TUNGO SA KAUNLARAN NG
3
KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR
AGRARIAN REFORM and RURAL DEVELOPMENT SERVICES, INC. (PARRDS), PHILIPPINE
PARTNERSHIP FOR THE DEVELOPMENT OF HUMAN RESOURCES IN THE RURAL AREAS,
INC. (PHILDHRRA), WOMEN’S LEGAL BUREAU (WLB), CENTER FOR ALTERNATIVE
DEVELOPMENT INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT INSTITUTE (UDI),
KINAIYAHAN FOUNDATION, INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL
(SALIGAN), LEGAL RIGHTS AND NATURAL RESOURCES
_______________
Appears as “Nequito” in the caption of the Petition by “Nequinto” in the body. (Rollo, p. 12.)
1
As appears in the body of the Petition. (Id., at p. 13.) The caption of the petition does not include Louel A. Peria
2
as one of the petitioners but the name of his father Elpidio V. Peria appears therein.
Appears as “Kaisahan Tungo sa Kaunlaran ng Kanayunan at Repormang Pansakahan (KAISAHAN)” in the
3
caption of the Petition by “Philippine Kaisahan Tungo sa Kaunlaran ng Kanayunan at Repormang Pansakahan
(KAISAHAN)” in the body. (Id., at p. 14.)
150
* 150 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
CENTER, INC. (LRC), petitioners, vs. VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES (DENR), HORACIO RAMOS, DIRECTOR,
MINES AND GEOSCIENCES BUREAU (MGB-DENR), RUBEN TORRES; EXECUTIVE
SECRETARY, and WMC (PHILIPPINES), INC., respondents.
4
Judicial Review; Requisites.—When an issue of constitutionality is raised, this Court can
exercise its power of judicial review only if the following requisites are present: (1) The existence of
an actual and appropriate case; (2) A personal and substantial interest of the party raising the
constitutional question; (3) The exercise of judicial review is pleaded at the earliest opportunity; and
(4) The constitutional question is the lis mota of the case.
Same; Same; Words and Phrases; An actual case or controversy means an existing case or
controversy that is appropriate or ripe for determination, not conjectural or anticipatory.—An actual
case or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the decision of the court would amount to an
advisory opinion. The power does not extend to hypothetical questions since any attempt at
abstraction could only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities.
149 Same; Same; Same; Locus Standi; “Legal standing” or locus standi has been defined as a personal
and substantial interest in the case such that the party has sustained or will sustain direct injury as a
result of the governmental act that is being challenged, alleging more than a generalized grievance.—
“Legal standing” or locus standi has been defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act that
is being challenged, alleging more than a generalized grievance. The gist of the question of standing
is whether a party alleges “such personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions.” Unless a person is injuriously affected in any of his
constitutional rights by the operation of statute or ordinance, he has no standing.
_______________
1
4 Erroneously designated in the Petition as “Western Mining Philippines Corporation.” (Id., at p. 212.) Subsequently, WMC
(Philippines), Inc. was renamed “Tampakan Mineral Resources Corporation.” (Id., at p. 778.)
151
VOL. 421, JANUARY 27, 2004 151
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Same; Same; As the case involves constitutional questions, this Court is not concerned with
whether petitioners are real parties in interest, but with whether they have legal standing.—The present
action is not merely one for annulment of contract but for prohibition and mandamus. Petitioners
allege that public respondents acted without or in excess of jurisdiction in implementing the FTAA,
which they submit is unconstitutional. As the case involves constitutional questions, this Court is not
concerned with whether petitioners are real parties in interest, but with whether they have legal
standing. As held in Kilosbayan v. Morato: x x x. “It is important to note . . . that standing because of its
constitutional and public policy underpinnings, is very different from questions relating to whether a
particular plaintiff is the real party in interest or has capacity to sue. Although all three requirements
are directed towards ensuring that only certain parties can maintain an action, standing restrictions
require a partial consideration of the merits, as well as broader policy concerns relating to the proper
role of the judiciary in certain areas.[”] (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328
[1985]) Standing is a special concern in constitutional law because in some cases suits are brought
not by parties who have been personally injured by the operation of a law or by official action taken,
but by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence, the
question in standing is whether such parties have “alleged such a personal stake in the outcome of
the controversy as to assure that concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult constitutional questions.” (Baker
v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)
 Same; Same; The third requisite for judicial review should not be taken to mean that the question
of constitutionality must be raised immediately after the execution of the state action complained of—
that the question of constitutionality has not been raised before is not a valid reason for refusing to allow
it to be raised later.—Misconstruing the application of the third requisite for judicial review—that the
exercise of the review is pleaded at the earliest opportunity—WMCP points out that the petition was
filed only almost two years after the execution of the FTAA, hence, not raised at the earliest
opportunity. The third requisite should not be taken to mean that the question of constitutionality
must be raised immediately after the execution of the state action complained of. That the question of
constitutionality has not been raised before is not a valid reason for refusing to allow it to be raised
later. A contrary rule would mean that a law, otherwise unconstitutional, would lapse into
constitutionality by the mere failure of the proper party to promptly file a case to challenge the same.
Same; Prohibition; Words and Phrases; Prohibition is a preventive remedy; While the execution
of the contract itself may be fait accompli, its implementation is not.—Prohibition is a preventive
remedy. It seeks a
152
152 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
judgment ordering the defendant to desist from continuing with the commission of an act
perceived to be illegal. The petition for prohibition at bar is thus an appropriate remedy. While the
execution of the contract itself may be fait accompli, its implementation is not. Public respondents, in
behalf of the Government, have obligations to fulfill under said contract. Petitioners seek to prevent
them from fulfilling such obligations on the theory that the contract is unconstitutional and, therefore,
void.
Same; Hierarchy of Courts; The repercussions of the issues in this case on the Philippine mining
industry, if not the national economy, as well as the novelty thereof, constitute exceptional and
compelling circumstances to justify resort to the Supreme Court in the first instance.—The
repercussions of the issues in this case on the Philippine mining industry, if not the national economy,
as well as the novelty thereof, constitute exceptional and compelling circumstances to justify resort
to this Court in the first instance. In all events, this Court has the discretion to take cognizance of a
suit which does not satisfy the requirements of an actual case or legal standing when paramount
public interest is involved. When the issues raised are of paramount importance to the public, this
Court may brush aside technicalities of procedure.
National Economy and Patrimony; Regalian Doctrine; The first sentence of Section 2, Article XII
of the Constitution, embodies the Regalian doctrine or jura regalia; Introduced by Spain into these
Islands, this feudal concept is based on the State’s power of dominium, which is the capacity of the State
to own or acquire property.—The first sentence of Section 2 embodies the Regalian doctrine or jura
regalia. Introduced by Spain into these Islands, this feudal concept is based on the State’s power
of dominium, which is the capacity of the State to own or acquire property. In its broad sense, the term
“jura regalia” refers to royal rights, or those rights which the King has by virtue of his prerogatives. In
Spanish law, it refers to a right which the sovereign has over anything in which a subject has a right
of property or propriedad. These were rights enjoyed during feudal times by the king as the sovereign.
The theory of the feudal system was that title to all lands was originally held by the King, and while
the use of lands was granted out to others who were permitted to hold them under certain conditions,
the King theoretically retained the title. By fiction of law, the King was regarded as the original
proprietor of all lands, and the true and only source of title, and from him all lands were held. The
theory of jura regalia was therefore nothing more than a natural fruit of conquest.
Same; Same; The Regalian doctrine extends not only to land but also to “all natural wealth that
may be found in the bowels of the earth.”—The Philippines having passed to Spain by virtue of
discovery and conquest, earlier Spanish decrees declared that “all lands were held from the
153
VOL. 421, JANUARY 27, 2004 153
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Crown.” The Regalian doctrine extends not only to land but also to “all natural wealth that may
be found in the bowels of the earth.” Spain, in particular, recognized the unique value of natural
resources, viewing them, especially minerals, as an abundant source of revenue to finance its wars
against other nations. Mining laws during the Spanish regime reflected this perspective.
Same; Same; Unlike Spain, the United States considered natural resources as a source of wealth
for its nationals and saw fit to allow both Filipino and American citizens to explore and exploit minerals
in public lands, and to grant patents to private mineral lands; The Regalian doctrine and the American
system, therefore, differ in one essential respect—under the Regalian theory, mineral rights are not
included in a grant of land by the state while under the American doctrine, mineral rights are included
in a grant of land by the government.—Unlike Spain, the United States considered natural resources
as a source of wealth for its nationals and saw fit to allow both Filipino and American citizens to
explore and exploit minerals in public lands, and to grant patents to private mineral lands. A person
who acquired ownership over a parcel of private mineral land pursuant to the laws then prevailing
could exclude other persons, even the State, from exploiting minerals within his property. Thus,
earlier jurisprudence held that: A valid and subsisting location of mineral land, made and kept up in
accordance with the provisions of the statutes of the United States, has the effect of a grant by the
United States of the present and exclusive possession of the lands located, and this exclusive right of
possession and enjoyment continues during the entire life of the location. x x x x x x. The discovery of
minerals in the ground by one who has a valid mineral location, perfect his claim and his location, not
only against third persons but also against the Government. x x x. [Italics in the original.] The Regalian
doctrine and the American system, therefore, differ in one essential respect. Under the Regalian
theory, mineral rights are not included in a grant of land by the state; under the American doctrine,
mineral rights are included in a grant of land by the government.
Same; Same; Concession System; Words and Phrases; Under the concession system, the
concessionaire makes a direct equity investment for the purpose of exploiting a particular natural
resource within a given area—the concession amounts to complete control by the concessionaire over
the country’s natural resource, for it is given exclusive and plenary rights to exploit a particular resource
at the point of extraction.—Section 21 also made possible the concession (frequently styled “permit,”
“license” or “lease”) system. This was the traditional regime imposed by the colonial administrators
for the exploitation of natural resources in the extractive sector (petroleum, hard minerals,
timber, etc.). Under the concession system, the concessionaire makes a direct equity investment for
the purpose of exploiting a particular natural resource within a given area. Thus, the
154
154 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
concession amounts to complete control by the concessionaire over the country’s natural
resource, for it is given exclusive and plenary rights to exploit a particular resource at the point of
extraction. In consideration for the right to exploit a natural resource, the concessionaire either pays
rent or royalty, which is a fixed percentage of the gross proceeds.
Same; Same; Same; As adopted in a republican system, the medieval concept of jura regalia is
stripped of royal overtones and ownership of the land is vested in the State.—The 1935 Constitution
adopted the Regalian doctrine, declaring all natural resources of the Philippines, including mineral
lands and minerals, to be property belonging to the State. As adopted in a republican system, the
medieval concept of jura regalia is stripped of royal overtones and ownership of the land is vested in
the State.
Same; Same; Same; Nationalization; Objectives of Nationalization; The nationalization and
conservation of the natural resources of the country was one of the fixed and dominating objectives of
the 1935 Constitutional Convention.—The nationalization and conservation of the natural resources
of the country was one of the fixed and dominating objectives of the 1935 Constitutional Convention.
The nationalization of the natural resources was intended (1) to insure their conservation for Filipino
posterity; (2) to serve as an instrument of national defense, helping prevent the extension to the
country of foreign control through peaceful economic penetration; and (3) to avoid making the
Philippines a source of international conflicts with the consequent danger to its internal security and
independence.
Same; Same; Same; Same; Parity Amendments; The swell of nationalism that suffused the 1935
Constitution was radically diluted when in November 1946, the Parity Amendment, which came in the
form of an “Ordinance Appended to the Constitution,” was ratified in a plebiscite.—The swell of
nationalism that suffused the 1935 Constitution was radically diluted when on November l946, the
Parity Amendment, which came in the form of an “Ordinance Appended to the Constitution,” was
ratified in a plebiscite. The Amendment extended, from July 4, 1946 to July 3, 1974, the right to utilize
and exploit our natural resources to citizens of the United States and business enterprises owned or
controlled, directly or indirectly, by citizens of the United States. The Parity Amendment was
subsequently modified by the 1954 Revised Trade Agreement, also known as the Laurel-Langley
Agreement, embodied in Republic Act No. 1355.
Same; Same; Service Contracts; The Oil Exploration and Development Act of 1972 (Presidential
Decree No. 87); Words and Phrases; The Oil Exploration and Development Act of 1972 signaled a
transformation from the concession system to the exploration for and production of indigenous
155
VOL. 421, JANUARY 27, 2004 155
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
petroleum through “service contracts”; “Service contracts” is a term that assumes varying
meanings to different people, and it has carried many names in different countries, like “work contracts”
in Indonesia, “concession agreements” in Africa, “production-sharing agreements” in the Middle East,
and “participation agreements” in Latin America.—The promulgation on December 31, 1972 of
Presidential Decree No. 87, otherwise known as THE OIL EXPLORATION AND DEVELOPMENT ACT
OF 1972 signaled such a transformation. P.D. No. 87 permitted the government to explore for and
produce indigenous petroleum through “service contracts.” “Service contracts” is a term that assumes
varying meanings to different people, and it has carried many names in different countries, like “work
contracts” in Indonesia, “concession agreements” in Africa, “production-sharing agreements” in the
Middle East, and “participation agreements” in Latin America. A functional definition of “service
contracts” in the Philippines is provided as follows: A service contract is a contractual arrangement
for engaging in the exploitation and development of petroleum, mineral, energy, land and other
natural resources by which a government or its agency, or a private person granted a right or privilege
by the government authorizes the other party (service contractor) to engage or participate in the
exercise of such right or the enjoyment of the privilege, in that the latter provides financial or technical
resources, undertakes the exploitation or production of a given resource, or directly manages the
productive enterprise, operations of the exploration and exploitation of the resources or the
disposition of marketing or resources.
Same; Same; Same; It has been opined, though, that, in the Philippines, the concept of a service
contract, at least in the petroleum industry, was basically a concession regime with a production-sharing
element.—Ostensibly, the service contract system had certain advantages over the concession regime.
It has been opined, though, that, in the Philippines, our concept of a service contract, at least in the
petroleum industry, was basically a concession regime with a production-sharing element.
Same; Same; Same; While Section 9, Article XIV of the 1973 Constitution maintained the Filipino-
only policy in the enjoyment of natural resources, it also allowed Filipinos, upon authority of the
Batasang Pambansa, to enter into service contracts with any person or entity for the exploration or
utilization of natural resources.—On January 17, 1973, then President Ferdinand E. Marcos
proclaimed the ratification of a new Constitution. Article XIV on the National Economy and Patrimony
contained provisions similar to the 1935 Constitution with regard to Filipino participation in the
nation’s natural resources. Section 8, Article XIV thereof provides: While Section 9 of the same Article
maintained the Filipino-only policy in the enjoyment of natural resources, it also allowed Filipinos,
upon authority of the Batasang Pambansa, to enter into service contracts
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with any person or entity for the exploration or utilization of natural resources.
Same; Same; Same; Conspicuously absent in Section 2, Article XII of the 1987 Constitution is the
provision in the 1935 and 1973 Constitutions authorizing the State to grant licenses, concessions, or
leases for the exploration, exploitation, development, or utilization of natural resources—by such
omission, the utilization of inalienable lands of public domain through “license, concession or lease” is
no longer allowed under the 1987 Constitution.—The 1987 Constitution retained the Regalian
doctrine. The first sentence of Section 2, Article XII states: “All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned by the State.” Like the 1935
and 1973 Constitutions before it, the 1987 Constitution, in the second sentence of the same provision,
prohibits the alienation of natural resources, except agricultural lands. The third sentence of the same
paragraph is new: “The exploration, development and utilization of natural resources shall be under
the full control and supervision of the State.” The constitutional policy of the State’s “full control and
supervision” over natural resources proceeds from the concept of jura regalia, as well as the
recognition of the importance of the country’s natural resources, not only for national economic
development, but also for its security and national defense. Under this provision, the State assumes
“a more dynamic role” in the exploration, development and utilization of natural resources.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions authorizing the
State to grant licenses, concessions, or leases for the exploration, exploitation, development, or
utilization of natural resources. By such omission, the utilization of inalienable lands of public domain
through “license, concession or lease” is no longer allowed under the 1987 Constitution.
Same; Same; Under the 1987 Constitution, the State itself may undertake the operation of a
concession or enter into joint ventures.—Having omitted the provision on the concession system,
Section 2 proceeded to introduce “unfamiliar language”: The State may directly undertake such
activities or it may enter into co-production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned
by such citizens. Consonant with the State’s “full supervision and control” over natural resources,
Section 2 offers the State two “options.” One, the State may directly undertake these activities itself;
or two, it may enter into coproduction, joint venture, or production-sharing agreements with Filipino
citizens, or entities at least 60% of whose capital is owned-by such citizens.
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Same; Same; Same; Limitations on Technical or Financial Assistance Agreements.—Although
Section 2 sanctions the participation of foreign-owned corporations in the exploration, development,
and utilization of natural resources, it imposes certain limitations or conditions to agreements with
such corporations. First, the parties to FTAAs. Only the President, in behalf of the State, may enter into
these agreements, and only with corporations. By contrast, under the 1973 Constitution, a Filipino
citizen, corporation or association may enter into a service contract with a “foreign person or entity.”
Second, the sizeof the activities: only large-scale exploration, development, and utilization is allowed.
The term “large-scale usually refers to very capital-intensive activities.” Third, the natural resources
subject of the activities is restricted to minerals, petroleum and other mineral oils, the intent being to
limit service contracts to those areas where Filipino capital may not be sufficient. Fourth, consistency
with the provisions of statute. The agreements must be in accordance with the terms and conditions
provided by law.Fifth, Section 2 prescribes certain standards for entering into such agreements. The
agreements must be based on real contributions to economic growth and general welfare of the
country. Sixth, the agreements must contain rudimentary stipulations for the promotion of the
development and use of local scientific and technical resources. Seventh,
the notificationrequirement. The President shall notify Congress of every financial or technical
assistance agreement entered into within thirty days from its execution. Finally, the scope of the
agreements. While the 1973 Constitution referred to “service contracts for financial, technical,
management, or other forms of assistance” the 1987 Constitution provides for “agreements . . .
involving either financial or technical assistance.” It bears noting that the phrases “service contracts”
and “management or other forms of assistance” in the earlier constitution have been omitted.
Same; Same; Same; Modes by Which the State May Explore, Develop and Utilize Natural
Resources.—The State, being the owner of the natural resources, is accorded the primary power and
responsibility in the exploration, development and utilization thereof. As such, it may undertake these
activities through four modes: The State may directly undertake such activities. (2) The State may
enter into co-production, joint venture or production-sharing agreements with Filipino citizens or
qualified corporations. (3) Congress may, by law, allow small-scale utilization of natural resources by
Filipino citizens. (4) For the large-scale exploration, development and utilization of minerals,
petroleum and other mineral oils, the President may enter into agreements with foreign-owned
corporations involving technical or financial assistance. Except to charge the Mines and Geosciences
Bureau of the DENR with performing researches and surveys, and a passing mention of government-
owned or controlled corporations, R.A. No. 7942 does not specify how the State should go about the
first mode. The third mode, on the other hand, is governed by Republic Act No.
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7076 (the People’s Small-Scale Mining Act of 1991) and other pertinent laws. R.A. No. 7942
primarily concerns itself with the second and fourth modes.
Same; Same; Same; Words and Phrases; “Production Sharing Agreements,” “Co-Production
Agreements,” and “Joint Venture Agreements,” Explained.—Mineral production sharing, co-production
and joint venture agreements are collectively classified by R.A. No. 7942 as “mineral agreements.” The
Government participates the least in a mineral production sharing agreement (MPSA). In an MPSA,
the Government grants the contractor the exclusive right to conduct mining operations within a
contract area and shares in the gross output. The MPSA contractor provides the financing, technology,
management and personnel necessary for the agreement’s implementation. The total government
share in an MPSA is the excise tax on mineral products under Republic Act No. 7729, amending Section
151 (a) of the National Internal Revenue Code, as amended. In a co-production agreement (CA), the
Government provides inputs to the mining operations other than the mineral resource, while in a joint
venture agreement (JVA), where the Government enjoys the greatest participation, the Government
and the JVA contractor organize a company with both parties having equity shares. Aside from
earnings in equity, the Government in a JVA is also entitled to a share in the gross output. The
Government may enter into a CA or JVA with one or more contractors.
Same; Statutes; Statutory Construction; Executive Order (E.O.) No. 279; There is nothing in E.O.
No. 200 that prevents a law from taking effect on a date other than—even before—the 15-day period
after its publication; Where a law provides for its own date of effectivity, such date prevails over that
prescribed by E.O. No. 200.—It bears noting that there is nothing in E.O. No. 200 that prevents a law
from taking effect on a date other than—even before—the 15-day period after its publication. Where
a law provides for its own date of effectivity, such date prevails over that prescribed by E.O. No. 200.
Indeed, this is the very essence, of the phrase “unless it is otherwise provided” in Section 1 thereof.
Section 1, E.O. No. 200, therefore, applies only when a statute does not provide for its own date of
effectivity. What ismandatory under E.O. No. 200, and what due process requires, as this Court held
in Tañada v. Tuvera, is the publication of the law for without such notice and publication, there would
be no basis for the application of the maxim “ignorantia legis n[eminem] excusat.” It would be the
height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he
had no notice whatsoever, not even a constructive one.
Same; Same; Same; From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200,
and Tañada v. Tuvera, this Court holds that E.O. No. 279 became effective immediately upon its
publication in the
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Official Gazette on 3 August 1987.—While the effectivity clause of E.O. No. 279 does not require
its publication, it is not a ground for its invalidation since the Constitution, being the fundamental,
paramount and supreme law of the nation,” is deemed written in the law. Hence, the due process
clause, which, so Tañada held, mandates the publication of statutes, is read into Section 8 of E.O. No.
279. Additionally, Section 1 of E.O. No. 200 which provides for publication “either in the Official
Gazette or in a newspaper of general circulation in the Philippines,” finds suppletory application. It is
significant to note that E.O. No. 279 was actually published in the Official Gazette on August 3, 1987.
From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Tañada v. Tuvera, this
Court holds that E.O. No. 279 became effective immediately upon its publication in the Official Gazette
on August 3, 1987.
Same; Same; Same; The convening of the first Congress merely precluded the exercise of
legislative powers by President Aquino—it did not prevent the effectivity of laws she had previously
enacted.—That such effectivity took place after the convening of the first Congress is irrelevant. At
the time President Aquino issued E.O. No. 279 on July 25, 1987, she was still validly exercising
legislative powers under the Provisional Constitution. Article XVIII (Transitory Provisions) of the
1987 Constitution explicitly states: SEC. 6. The incumbent President shall continue to exercise
legislative powers until the first Congress is convened. The convening of the first Congress merely
precluded the exercise of legislative powers by President Aquino; it did not prevent the effectivity of
laws she had previously enacted. There can be no question, therefore, that E.O. No. 279 is an effective,
and a validly enacted, statute.
Same; Same; It is a cardinal rule in the interpretation of constitutions that the instrument must
be so construed as to give effect to the intention of the people who adopted it; Following the literal text
of the Constitution, assistance accorded by foreign-owned corporations in the large-scale exploration,
development, and utilization of petroleum, minerals and mineral oils should be limited to “technical” or
“financial” assistance only.—It is a cardinal rule in the interpretation of constitutions that the
instrument must be so construed as to give effect to the intention of the people who adopted it. This
intention is to be sought in the constitution itself, and the apparent meaning of the words is to be
taken as expressing it, except in cases where that assumption would lead to absurdity, ambiguity, or
contradiction. What the Constitution says according to the text of the provision, therefore, compels
acceptance and negates the power of the courts to alter it, based on the postulate that the framers and
the people mean what they say. Accordingly, following the literal text of the Constitution, assistance
accorded by foreign-owned corporations in the large-scale exploration, development, and utilization
of petroleum, minerals and mineral oils should be limited to “technical” or “financial” assistance only.
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Same; Same; The management or operation of mining activities by foreign contractors, which is
the primary feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution
sought to eradicate.—As priorly pointed out, the phrase “management or other forms of assistance”
in the 1973 Constitution was deleted in the 1987 Constitution, which allows only “technical or
financial assistance.” Casus omisus pro omisso habendus est. A person, object or thing omitted from an
enumeration must be held to have been omitted intentionally. As will be shown later, the management
or operation of mining activities by foreign contractors, which is the primary feature of service
contracts, was precisely the evil that the drafters of the 1987 Constitution sought to eradicate.
Same; Same; Service Contracts; If the Constitutional Commission intended to retain the concept
of service contracts under the 1973 Constitution, it could have simply adopted the old terminology
(“service contracts”) instead of employing new and unfamiliar terms (“agreements . . . involving either
technical or financial assistance”).—As earlier noted, the phrase “service contracts” has been deleted
in the 1987 Constitution’s Article on National Economy and Patrimony. If the CONCOM intended to
retain the concept of service contracts under the 1973 Constitution, it could have simply adopted the
old terminology (“service contracts”) instead of employing new and unfamiliar terms (“agreements .
. . involving either technical or financial assistance”). Such a difference between the language of a
provision in a revised constitution and that of a similar provision in the preceding constitution is
viewed as indicative of a difference in purpose. If, as respondents suggest, the concept of “technical
or financial assistance” agreements is identical to that of “service contracts,” the CONCOM would not
have bothered to fit the same dog with a new collar. To uphold respondents’ theory would reduce the
first to a mere euphemism for the second and render the change in phraseology meaningless. An
examination of the reason behind the change confirms that technical or financial assistance
agreements are not synonymous to service contracts. [T]he Court in construing a Constitution should
bear in mind the object sought to be accomplished by its adoption, and the evils, if any, sought to be
prevented or remedied. A doubtful provision will be examined in light of the history of the times, and
the condition and circumstances under which the Constitution was framed. The object is to ascertain
the reason which induced the framers of the Constitution to enact the particular provision and the
purpose sought to be accomplished thereby, in order to construe the whole as to make the words
consonant to that reason and calculated to effect that purpose.
Same; Same; Same; The insights of the proponents of the U.P. Law Draft are instructive in
interpreting the phrase “technical or financial assistance.”—It appears that Proposed Resolution No.
496, which was the draft Article on National Economy and Patrimony, adopted the concept of
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“agreements . . . involving either technical or financial assistance” contained in the “Draft of the
1986 U.P. Law Constitution Project” (U.P. Law draft) which was taken into consideration during the
deliberation of the CONCOM. The former, as well as Article XII, as adopted, employed the same
terminology, x x x The insights of the proponents of the U.P. Law draft are, therefore, instructive in
interpreting the phrase “technical or financial assistance.”
Same; Same; Same; The U.P. Law draft proponents viewed service contracts under the 1973
Constitution as grants of beneficial ownership of the country’s natural resources to foreign owned
corporations.—The U.P. Law draft proponents viewed service contracts under the 1973 Constitution
as grants of beneficial ownership of the country’s natural resources to foreign owned corporations.
While, in theory, the State owns these natural resources—and Filipino citizens, their beneficiaries—
service contracts actually vested foreigners with the right to dispose, explore for, develop, exploit,
and utilize the same. Foreigners, not Filipinos, became the beneficiaries of Philippine natural
resources. This arrangement is clearly incompatible with the constitutional ideal of nationalization of
natural resources, with the Regalian doctrine, and on a broader perspective, with Philippine
sovereignty.
Same; Same; Same; The replacement of “service contracts” with “agreements . . . involving either
technical or financial assistance,” as well as the deletion of the phrase “management or other forms of
assistance,” assumes greater significance when note is taken that the U.P. Law draft proposed other
equally crucial changes that were obviously heeded by the CONCOM; In light of the deliberations of the
CONCOM, the text of the Constitution, and the adoption of other proposed changes, there is no doubt that
the framers considered and shared the intent of the U.P. Law proponents in employing the phrase
“agreements . . . involving either technical or financial assistance.”—The proponents nevertheless
acknowledged the need for capital and technical know-how in the large-scale exploitation,
development and utilization of natural resources—the second paragraph of the proposed draft itself
being an admission of such scarcity. Hence, they recommended a compromise to reconcile the
nationalistic provisions dating back to the 1935 Constitution, which reserved all natural resources
exclusively to Filipinos, and the more liberal 1973 Constitution, which allowed foreigners to
participate in these resources through service contracts. Such a compromise called for the adoption
of a new system in the exploration, development, and utilization of natural resources in the form of
technical agreements or financial agreements which, necessity, are distinct concepts from service
contracts. The replacement of “service contracts” with “agreements . . . involving either technical or
financial assistance,” as well as the deletion of the phrase “management or other forms of assistance,”
assumes greater significance when note is taken that the
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U.P. Law draft proposed other equally crucial changes that were obviously heeded by the
CONCOM. These include the abrogation of the concession system and the adoption of new “options”
for the State in the exploration, development, and utilization of natural resources. The proponents
deemed these changes to be more consistent with the State’s ownership of, and its “full control and
supervision” (a phrase also employed by the framers) over, such resources. In light of the
deliberations of the CONCOM, the text of the Constitution, and the adoption of other proposed
changes, there is no doubt that the framers considered and shared the intent of the U.P. Law
proponents in employing the phrase “agreements . . . involving either technical or financial
assistance.”
Same; Same; Same; Loose statements of some of the Commissioners in the CONCOM do not
necessarily translate to the adoption of the 1973 Constitution provision allowing service contracts.—
While certain commissioners may have mentioned the term “service contracts” during the CONCOM
deliberations, they may not have been necessarily referring to the concept of service contracts under
the 1973 Constitution. As noted earlier, “service contracts” is a term that assumes different meanings
to different people. The commissioners may have been using the term loosely, and not in its technical
and legal sense, to refer, in general, to agreements concerning natural resources entered into by the
Government with foreign corporations. These loose statements do not necessarily translate to the
adoption of the 1973 Constitution provision allowing service contracts.
Same; Same; Same; Administrative Law; When an administrative or executive agency renders an
opinion or issues a statement of policy, it merely interprets a pre-existing law; and the administrative
interpretation of the law is at best advisory, for it is the courts that finally determine what the law
means.—WMCP cites Opinion No. 75, s. 1987, and Opinion No. 175, s. 1990 of the Secretary of Justice,
expressing the view that a financial or technical assistance agreement “is no different in concept” from
the service contract allowed under the 1973 Constitution. This Court is not, however, bound by this
interpretation. When an administrative or executive agency renders an opinion or issues a statement
of policy, it merely interprets a preexisting law; and the administrative interpretation, of the law is at
best advisory, for it is the courts that finally determine what the law means.
Same; Same; Same; The President may enter into FTAAs with foreign-owned corporation in the
exploitation of our natural resources.—In any case, the constitutional provision allowing the President
to enter into FTAAs with foreign-owned corporations is an exception to the rule that participation in
the nation’s natural resources is reserved exclusively to Filipinos. Accordingly, such provision must
be construed strictly against their enjoyment by non-Filipinos. As Commissioner Villegas emphasized,
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the provision is “very restrictive.” Commissioner Nolledo also remarked that “entering into
service contracts is an exception to the rule on protection of natural resources for the interest of the
nation and, therefore, being an exception, it should be subject, whenever possible, to stringent rules.”
Indeed, exceptions should be strictly but reasonably construed; they extend only so far as their
language fairly warrants and all doubts should be resolved in favor of the general provision rather
than the exception.
Same; Same; Same; Philippine Mining Act of 1995 (Republic Act No. 7942); With the foregoing
discussion in mind, this Court finds that R.A. No. 7942 is invalid insofar as said Act authorizes service
contracts.—With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is invalid insofar
as said Act authorizes service contracts. Although the statute employs the phrase “financial and
technical agreements” in accordance with the 1987 Constitution, it actually treats these agreements
as service contracts that grant beneficial ownership to foreign contractors contrary to the
fundamental law.
Same; Same; Same; Same; The underlying assumption in all some of the provisions of R.A. No.
7942 is that the foreign contractor manages the mineral resources, just like the foreign contractor in a
service contract; By allowing foreign contractors to manage or operate all the aspects of the mining
operation, the above-cited provisions of R.A. No. 7942 have in effect conveyed beneficial ownership over
the nation’s mineral resources to these contractors, leaving the State with nothing but bare title
thereto.—The underlying assumption in all these provisions is that the foreign contractor manages
the mineral resources, just like the foreign contractor in a service contract. Furthermore, Chapter XII
of the Act grants foreign contractors in FTAAs the same auxiliary mining rights that it grants
contractors in mineral agreements (MPSA, CA and JV). Parenthetically, Sections 72 to 75 use the term
“contractor,” without distinguishing between FTAA and mineral agreement contractors. And so does
“holders of mining rights” in Section 76. A foreign contractor may even convert its FTAA into a mineral
agreement if the economic viability of the contract area is found to be inadequate to justify large-scale
mining operations, provided that it reduces its equity in the corporation, partnership, association or
cooperative to forty percent (40%). Finally, under the Act, an FTAA contractor warrants that it “has
or has access to all the financing, managerial, and technical expertise . . . .” This suggests that an FTAA
contractor is bound to provide some managementassistance—a form of assistance that has been
eliminated and, therefore, proscribed by the present Charter. By allowing foreign contractors to
manage or operate all the aspects of the mining operation, the above-cited provisions of R.A. No. 7942
have in effect conveyed beneficial ownership over the nation’s mineral resources to these contractors,
leaving the State with nothing but bare title thereto.
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Same; Same; Same; Same; Provisions of R.A. No. 7942 Violative of Section 2, Article XII of the
Constitution.—In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of
Section 2, Article XII of the Constitution: (1) The proviso in Section 3 (aq), which defines “qualified
person,” to wit: Provided, That a legally organized foreign-owned corporation shall be deemed a
qualified person for purposes of granting an exploration permit, financial or technical assistance
agreement or mineral processing permit. (2) Section 23, which specifies the rights and obligations of
an exploration permittee, insofar as said section applies to a financial or technical assistance
agreement; (3) Section 33, which prescribes the eligibility of a contractor in a financial or technical
assistance agreement; (4) Section 35, which enumerates the terms and conditions for every financial
or technical assistance agreement; (5) Section 39, which allows the contractor in a financial and
technical assistance agreement to convert the same into a mineral production-sharing agreement;
Section 37, which prescribes the procedure for filing and evaluation of financial or technical
assistance agreement proposals; Section 38, which limits the term of financial or technical assistance
agreements; Section 40, which allows the assignment or transfer of financial or technical assistance
agreements; Section 41, which allows the withdrawal of the contractor in an FTAA; The second and
third paragraphs of Section 81, which provide for the Government’s share in a financial and technical
assistance agreement; and Section 90, which provides for incentives to contractors in FTAAs insofar
as it applies to said contractors;
Same; Same; Same; Same; When the parts of the statute are so mutually dependent and
connected as conditions, considerations, inducements, or compensations for each other, as to warrant a
belief that the legislature intended them as a whole, and that if all could not be carried into effect, the
legislature would not pass the residue independently, then, if some parts are unconstitutional, all the
provisions which are thus dependent, conditional, or connected, must fall with them.—When the parts
of the statute are so mutually dependent and connected as conditions, considerations, inducements,
or compensations for each other, as to warrant a belief that the legislature intended them as a whole,
and that if all could not be carried into effect, the legislature would not pass the residue independently,
then, if some parts are unconstitutional, all the provisions which are thus dependent, conditional, or
connected, must fall with them.
Same; International Law; Treaties; Equal Protection Clause; The annulment of the FTAA would
not constitute a breach of the Agreement on the Promotion and Protection of Investments between the
Philippine and Australian Governments, for the decision herein invalidating the subject FTAA forms part
of the legal system of the Philippines, and the equal protection clause guarantees that such decision shall
apply to all contracts belonging to the same class, hence, upholding rather than violating, the “fair and
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equitable treatment” stipulation in said treaty.—The invalidation of the subject FTAA, it is
argued, would constitute a breach of said treaty which, in turn, would amount to a violation of Section
3, Article II of the Constitution adopting the generally accepted principles of international law as part
of the law of the land. One of these generally accepted principles is pacta sunt servanda, which
requires the performance in good faith of treaty obligations. Even assuming arguendo that WMCP is
correct in its interpretation of the treaty and its assertion that “the Philippines could not . . . deprive
an Australian investor (like [WMCP]) of fair and equitable treatment by invalidating [WMCP’s] FTAA
without likewise nullifying the service contracts entered into before the enactment of RA 7942 . . .,”
the annulment of the FTAA would not constitute a breach of the treaty invoked. For this decision
herein invalidating the subject FTAA forms part of the legal system of the Philippines. The equal
protection clause guarantees that such decision shall apply to all contracts belonging to the same
class, hence, upholding rather than violating, the “fair and equitable treatment” stipulation in said
treaty.
Same; Statutory Construction; A constitution is not to be interpreted as demanding the
impossible or the impracticable—and unreasonable or absurd consequences, if possible, should be
avoided—courts are not to give words a meaning that would lead to absurd or unreasonable
consequences and a literal interpretation is to be rejected if it would be unjust or lead to absurd results.—
One other matter requires clarification. Petitioners contend that, consistent with the provisions of
Section 2, Article XII of the Constitution, the President may enter into agreements involving
“either technical or financial assistance” only. The agreement in question, however, is a
technical andfinancial assistance agreement. Petitioners’ contention does not lie. To adhere to the
literal language of the Constitution would lead to absurd consequences. As WMCP correctly put it: x x
x such a theory of petitioners would compel the government (through the President) to enter into
contract with two (2) foreign-owned corporations, one for financial assistance agreement and with
the other, for technical assistance over one and the same mining area or land; or to execute two (2)
contracts with only one foreign-owned corporation which has the capability to provide both financial
and technical assistance, one for financial assistance and another for technical assistance, over the
same mining area. Such an absurd result is definitely not sanctioned under the canons of
constitutional construction. [Italics in the original.] Surely, the framers of the 1987 Charter did not
contemplate such an absurd result from their use of “either/or.” A constitution is not to be interpreted
as demanding the impossible or the impracticable; and unreasonable or absurd consequences, if
possible, should be avoided. Courts are not to give words a meaning that would lead to absurd or
unreasonable consequences and a literal interpretation is to be rejected if it would be unjust or lead
to absurd results. That
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is a strong argument against its adoption. Accordingly, petitioners’ interpretation must be
rejected.
VITUG, J., Separate Opinion:
National Economy and Patrimony; Statutory Construction; It could not have been the object of
the framers of the Charter to limit the contracts which the President may enter into, to mere “agreements
for financial and technical assistance; The Constitution has not prohibited the State from itself exploring,
developing, or utilizing the country’s natural resources, and, for this purpose, it may, enter into the
necessary agreements with individuals or entities in the pursuit of a feasible operation.”—The majority
would cite the emphatic statements of Commissioners Villegas and Davide that the country’s natural
resources are exclusively reserved for Filipino citizens and that, according to Commissioner Villegas,
“the deletion of the phrase ‘service contracts’ (is the) first attempt to avoid some of the abuses in the
past regime in the use of service contracts to go around the 60-40 arrangement.” These declarations
do not necessarily mean that the Government may no longer enter into service contracts with foreign
entities. In order to uphold and strengthen the national policy of preserving and developing the
country’s natural resources exclusively for the Filipino people, the present Constitution indeed has
provided for safeguards to prevent the execution of service contracts of the old regime, but not of
service contracts per se. It could not have been the object of the framers of the Charter to limit the
contracts which the President may enter into, to mere “agreements for financial and technical
assistance.” One would take it that the usual terms and conditions recognized and stipulated in
agreements of such nature have been contemplated. Basically, the financier and the owner of know-
how would understandably satisfy itself with the proper implementation and the profitability of the
project. It would be abnormal for the financier and owner of the know-how not to assure itself that
all the activities needed to bring the project into fruition are properly implemented, attended to, and
carried out. Needless to say, no foreign investor would readily lend financial or technical assistance
without the proper incentives, including fair returns, therefor. The Constitution has not prohibited
the State from itself exploring, developing, or utilizing the country’s natural resources, and, for this
purpose, it may, I submit, enter into the necessary agreements with individuals or entities in the
pursuit of a feasible operation.
Same; Supreme Court; Judicial Review; Separation of Powers; While I cannot ignore an
impression of the business community that the Supreme Court is wont, at times, to interfere with the
economic decisions of Congress and the government’s economic managers, I must hasten to add,
however, that in so voting as above, I have not been unduly overwhelmed by that perception.—Just a
word. While I cannot ignore an impression of the busi-
167
VOL. 421, JANUARY 27, 2004 167
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
 ness community that the Court is wont, at times, to interfere with the economic decisions of
Congress and the government’s economic managers, I must hasten to add, however, that in so voting
as above, I have not been unduly overwhelmed by that perception. Quite the contrary, the Court has
always proceeded with great caution, such as now, in resolving cases that could inextricably involve
policy questions thought to be best left to the technical expertise of the legislative and executive
departments.
PANGANIBAN, J., Separate Opinion:
Moot and Academic Issues; I believe that the Court should dismiss the Petition on the ground of
mootness—a decision on the constitutionality issue should await the wisdom of a new day when the
Court would have a live case before it.—With due respect, I believe that the Court should dismiss the
Petition on the ground of mootness. I submit that a decision on the constitutionality issue should await
the wisdom of a new day when the Court would have a live case before it. The nullity of the FTAA is
unarguably premised upon the contractor being a foreign corporation. Had the FTAA been originally
issued to a Filipino-owned corporation, we would have had no constitutionality issue to speak of.
Upon the other hand, conveyance of the FTAA to a Filipino corporation can be likened to the sale of
land to a foreigner who subsequently acquires Filipino citizenship, or who later re-sells the same land
to a Filipino citizen. The conveyance would be validated, as the property in question would no longer
be owned by a disqualified vendee. Since the FTAA is now to be implemented by a Filipino
corporation, how can the Court still declare it unconstitutional? The CA case is a dispute between two
Filipino companies (Sagittarius and Lepanto) both claiming the right to purchase the foreign shares
in WMCP. So regardless of which side eventually wins, the FTAA would still be in the hands of a
qualified Filipino company.
National Economy and Patrimony; Statutory Construction; If the intention of the drafters were
strictly to confine foreign corporations to financial or technical assistance and nothing more, their
language would have been unmistakably restrictive and stringent.—First, the drafters’ choice of
words—their use of the phrase “agreements x x x involving x x x technical or financial assistance”—
does not absolutely indicate the intent to exclude other modes of assistance. Rather, the phrase
signifies the possibility of the inclusion of other activities, provided they bear some reasonable
relationship to and compatibility with financial or technical assistance. If the intention of the drafters
were strictly to confine foreign corporations to financial or technical assistance and nothing more, I
am certain that their language would have been unmistakably restrictive and stringent. They would
have said, for example: “Foreign corporations are prohibited from providing management or other
forms of assistance,” or words to that effect. The conscious avoidance of restrictive wording bespeaks
an intent
168
168 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
not to employ—in an exclusionary, inflexible and limiting manner—the expression
“agreements involving technical or financial assistance.”
Same; Same; Service Contracts; The present Constitution still recognizes and allows service
contracts (and has not rendered them taboo), albeit subject to several restrictions and modifications
aimed at avoiding the pitfalls of the past.—Second, I believe the foregoing position is supported by the
fact that our present Constitution still recognizes and allows service contracts (and has not rendered
them taboo), albeit subject to several restrictions and modifications aimed at avoiding the pitfalls of the
past. Below are some excerpts from the deliberations of the Constitutional Commission (Concom),
showing that its members discussed “technical or financial agreements” in the same breath as “service
contracts” and used the terms interchangeably.
Same; Same; Same; In the minds of the commissioners, the concept of technical and financial
assistance agreements did not exist at all apart from the concept of service contracts duly modified to
prevent abuses—“technical and financial agreements” were understood by the delegates to include
service contracts duly modified to prevent abuses.—The foregoing is but a small sampling of the lengthy
discussions of the constitutional commissioners on the subject of service contracts and technical and
financial assistance agreements. Quoting the rest of their discussions would have taken up several
more pages, and these have thus been omitted for the sake of brevity. In any event, it would appear
that the members of the Concom actually had in mind the Marcos era service contracts that they were
familiar with(but which they duly modified and restricted so as to prevent abuses), when they were
crafting and polishing the provisions dealing with financial and/or technical assistance agreements.
These provisions ultimately became the fourth and the fifth paragraphs of Section 2 of Article XII of the
1987 Constitution. Put differently, “technical and financial assistance agreements” were understood
by the delegates to include service contracts duly modified to prevent abuses. Since the drafters were
referring only to service contracts to be granted to foreigners and to nothing else, this fact necessarily
implies that we ought not treat the idea of “agreements involving either technical or financial
assistance” as having any significance or existence apart from service contracts. In other words, in the
minds of the commissioners, the concept of technical and financial assistance agreements did not exist
at all apart from the concept of service contracts duly modified to prevent abuses.
Same; Same; Same; Current business practices often require borrowers seeking huge loans to
allow creditors access to financial records and other data, and probably a seat or two on the former’s
board of directors, or at least some participation in certain management decisions that may have an
impact on the financial health or long-term viability of the debtor,
169
VOL. 421, JANUARY 27, 2004 169
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
which of course will directly affect the latter’s capacity to repay its loans.—Tantamount to
closing one’s eyes to reality is the insistence that the term “agreements involving technical or financial
assistance” refers only to purely technical or financial assistance to be rendered to the State by a
foreign corporation (and must perforce exclude management and other forms of assistance).
Nowadays, securing the kind of financial assistancerequired by large-scale explorations, which
involve hundreds of millions of dollars, is not just a matter of signing a simple promissory note in favor
of a lender. Current business practices often require borrowers seeking huge loans to allow creditors
access to financial records and other data, and probably a seat or two on the former’s board of
directors; or at least some participation in certain management decisions that may have an impact on
the financial health or long-term viability of the debtor, which of course will directly affect the latter’s
capacity to repay its loans. Prudent lending practices necessitate a certain degree of involvement in the
borrower’s management process.
Same; Same; Same; If the Supreme Court closes its doors to international realities and
unilaterally sets up its own concepts of strict technical and financial assistance, then it may unwittingly
make the country a virtual hermit—an economic isolationist—in the real world of finance.—Given the
modern-day reality that even the World Bank (WB) and the International Monetary Fund (IMF) do
not lend on the basis merely of bare promissory notes, but on some conditionalities designed to assure
the borrowers’ financial viability, I would like to hear in an Oral Argument in a live, not a
moot, case what these international practices are and how they impact on our constitutional
restrictions. This is not to say that we should bend our basic law; rather, we should find out what kind
of FTAA provisions are realistic vis-à-vis these international standards and our constitutional
protection. Unless there is a live FTAA, the Court would not be able to analyze the provisions vis-à-
vis the Constitution, the Mining Law and these modern day lending practices. I mentioned the WB and
the IMF, not necessarily because I agree with their oftentimes stringent policies, but because they set
the standards that international and multinational financial institutions often take bearings from. The
WB and IMF are akin (though not equivalent) to the Bangko Sentral, which all Philippine banks must
abide by. If this Court closes its doors to these international realities and unilaterally sets up its own
concepts of strict technical and financial assistance, then it may unwittingly make the country a virtual
hermit—an economic isolationist—in the real world of finance.
Constitutions; Statutory Construction; The commissioners fully realized that their work would
have to withstand the test of time, that the Charter, though crafted with the wisdom born of past
experiences and lessons painfully learned, would have to be a living document that would answer the
needs of the nation well into the future.—I believe that the
170
170 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
 Concom did not mean to tie the hands of the President and restrict the latter only to capital in a single mining unit project of at least Fifty Million Dollars in United States
agreements on rigid financial and technical assistance and nothing else. The commissioners fully currency (US $50,000,000.00). 7

realized that their work would have to withstand the test of time; that the Charter, though crafted On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to “govern
with the wisdom born of past experiences and lessons painfully learned, would have to be a living
the exploration, development, utilization and processing of all mineral resources.” R.A. No.
document that would answer the needs of the nation well into the future. Thus, the unerring emphasis
8

on flexibility and adaptability. 7942 defines the modes of mineral agreements for mining operations, outlines the 9

procedure for their filing and approval, assignment/transfer and withdrawal, and fixes
10 11 12

their terms. Similar provisions govern financial or technical assistance agreements.

SPECIAL CIVIL ACTION in the Supreme Court. Mandamus and Prohibition.
13 14

The law prescribes the qualifications of contractors and grants them certain rights,
15

including timber, water and ease- 16 17

The facts are stated in the opinion of the Court.

Marivic M.V.F. Leonen, Edgar DL Bernal, Ingrid Rosalie L. Gorre and Emily L. _______________
Manuel for petitioners.
Ma. Paz G. Luna for petitioner David de Vera, et al. Sharing Agreements for the Exploration, Development and Utilization of Mineral Resources, and Prescribing
Magistrado A. Mendoza for petitioner KAISAHAN. the Guidelines for such Agreements and those Agreements involving Technical or Financial Assistance by Foreign-
The Solicitor General for public respondents. Owned Corporations for Large-Scale Exploration, Development and Utilization of Minerals.
Exec. Order No. 279 (1987), sec. 4.
Factoran and Associates Law Office; Belo, Gozon, Elma, Parel,
7

Rep. Act No. 7942 (1995), sec. 15.

8

Asuncion and Lucila; and Azcuna, Yorac, Sarmiento, Arroyo & Chua for private Id., sec. 26 (a)-(c).
9

respondent WMC (Phils.). Id., sec. 29.

10

Mario C.V. Jalandoni co-counsel for WMC (Phils.). Id., sec. 30.
11

Id., sec. 31.

12

Id., sec. 32.

13

CARPIO-MORALES, J.: Id., ch. VI.

14

Id., secs. 27 and 33 in relation to sec. 3 (aq).

15

Id., sec. 72.

16

The present petition for mandamus and prohibition assails the constitutionality of Id., sec. 73.
17

Republic Act No. 7942, otherwise known as the PHILIPPINE MINING ACT OF 1995, along
5 172
with the Implementing Rules and Regulations issued pursuant thereto, Department of 172 SUPREME COURT REPORTS ANNOTATED
Environment and Natural Resources (DENR) Administrative Order 96-40, and of the
Financial and Technical Assistance Agreement (FTAA) entered into on March 30, 1995 by La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a corporation ment rights, and the right to possess explosives. Surface owners, occupants, or
18 19

organized under Philippine laws. concessionaires are forbidden from preventing holders of mining rights from entering
On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. private lands and concession areas. A procedure for the settlement of conflicts is likewise
20

279 authorizing the DENR Secretary to

6
provided for. 21

The Act restricts the Conditions for exploration, quarry and other permits. It 22 23 24

_______________ regulates the transport, sale and processing of minerals, and promotes the development
25

of mining communities, science and mining technology, and safety and environmental26

An Act Instituting A New System of Mineral Resources Exploration, Development, Utilization and
5 protection. 27

Conservation. The government’s share in the agreements is spelled out and allocated, taxes and fees 28

Authorizing the Secretary of Environment and Natural Resources to Negotiate and Conclude Joint Venture,
6
are imposed, incentives granted. Aside from penalizing certain acts, the law likewise
29 30 31

Co-Production, or Production-
171 specifies grounds for the cancellation, revocation and termination of agreements and
permits.
VOL. 421, JANUARY 27, 2004 171
32

On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos Manila Times, two newspapers of general circulation, R.A. No. 7942 took effect. 33

accept, consider and evaluate proposals from foreign-owned corporations or foreign Shortly before the effectivity of R.A. No. 7942, however, or on March 30, 1995, the
investors for contracts of agreements involving either technical or financial assistance for President entered into an FTAA with WMCP covering 99,387 hectares of land in South
large-scale exploration, development, and utilization of minerals, which, upon appropriate Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. 34

recommendation of the Secretary, the President may execute with the foreign proponent.
In entering into such proposals, the President shall consider the real contributions to the _______________
economic growth and general welfare of the country that will be realized, as well as the
development and use of local scientific and technical resources that will be promoted by 18 Id., sec. 75.
Id., sec. 74.
the proposed contract or agreement. Until Congress shall determine otherwise, large-scale
19

20 Id., sec. 76.

mining, for purpose of this Section, shall mean those proposals for contracts or agreements 21 Id., ch. XIII.
for mineral resources exploration, development, and utilization involving a committed 22 Id., secs. 20-22.
 Id., secs. 43, 45.
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
23

Id., secs. 46-49, 51-52.

24

Id., ch. IX.

25

Id., ch. X.
III
26

Id., ch. XI.

27

Id., ch. XIV.

28

Id., ch. XV.

29 x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Id., ch. XVI.
30
Act No. 7942, the latter being unconstitutional in that it violates Sec. 1, Art. III of the Constitution;
Id., ch. XIX
31

Id., ch. XVII.

32

Section 116, R.A. No. 7942 provides that the Act “shall take effect thirty (30) days following its complete
33 IV
publication in two (2) newspapers of general circulation in the Philippines.”
WMCP FTAA, sec. 4.1.
34
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
173
Act No. 7942, the latter being unconstitutional in that it allows enjoyment by foreign citizens as well
VOL. 421, JANUARY 27, 2004 173 as fully foreign owned corporations of the nation’s marine wealth contrary to Section 2, paragraph 2
of Article XII of the Constitution;
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative V
Order (DAO) No. 95-23, s. 1995, otherwise known as the Implementing Rules and
Regulations of R.A. No. 7942. This was later repealed by DAO No. 96-40, s. 1996 which was x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
adopted on December 20, 1996. Act No. 7942, the latter being unconstitutional in that it allows priority to foreign and fully foreign
On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary owned corporations in the exploration, development and utilization of mineral resources contrary to
demanding that the DENR stop the implementation of R.A. No, 7942 and DAO No. 96- Article XII of the Constitution;
40, giving the DENR fifteen days from receipt to act thereon. The DENR, however, has yet
35 36

to respond or act on petitioners’ letter. 37

VI
Petitioners thus filed the present petition for prohibition and mandamus, with a
prayer for a temporary restraining order. They allege that at the time of the filing of the x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
petition, 100 FTAA applications had already been filed, covering an area of 8.4 million hec- Act No. 7942, the latter being unconstitutional in that it allows the inequitable sharing of wealth
tares, 64 of which applications are by fully foreign-owned corporations covering a total of
38 contrary to Sections [sic] 1, paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the Constitution;
5.8 million hectares, and at least one by a fully foreign-owned mining company over
offshore areas. 39 VII
Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:
x x x in recommending approval of and implementing the Financial and Technical Assistance
I Agreement between the President of the Republic of the Philippines and Western Mining Corporation
Philippines, Inc. because the same is illegal and unconstitutional. 40

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act They pray that the Court issue an order:
No. 7942, the latter being unconstitutional in that it allows fully foreign owned corporations to
explore, develop, utilize and exploit mineral resources in a manner contrary to Section 2, paragraph 1. (a)Permanently enjoining respondents from acting on any application for Financial or
4, Article XII of the Constitution; Technical Assistance Agreements;
2. (b)Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as
II unconstitutional and null and void;
3. (c)Declaring the Implementing Rules and Regulations of the Philippine Mining Act
contained in DENR Administrative Order No. 96-40 and all other similar administrative
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
issuances as unconstitutional and null and void; and
Act No. 7942, the latter being unconstitutional in that it allows the taking of private property without
the determination of public use and for just compensation;
_______________
_______________
Id., at pp. 23-24.
40

35 Rollo, p. 22. 175

36 Ibid.

37 Ibid. VOL. 421, JANUARY 27, 2004 175

38 Ibid. The number has since risen to 129 applications when the petitioners filed their Reply. (Rollo, p. 363.)

39 Id., at p. 22. La Bugal-B’Laan Tribal Association, Inc. vs. Ramos

174
174 SUPREME COURT REPORTS ANNOTATED 1. (d)Cancelling the Financial and Technical Assistance Agreement issued to Western Mining
Philippines, Inc. as unconstitutional, illegal and null and void. 41
Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor _______________
O. Ramos, the then DENR Secretary, and Horacio Ramos, Director of the Mines and
Geosciences Bureau of the DENR. Also impleaded is private respondent WMCP, which 48Id., at pp. 761-763.
Id., at pp. 764-776.
entered into the assailed FTAA with the Philippine Government. WMCP is owned by WMC
49

50Id., at pp. 782-786.

Resources International Pty., Ltd. (WMC), “a wholly owned subsidiary of Western Mining
Corporation Holdings Limited, a publicly listed major Australian mining andexploration
company.” By WMCP’s information, “it is a 100% owned subsidiary of WMC LIMITED.”
42
51Docketed as C.A.-G.R. No. 74161.
52G.R. No. 153885, entitled Lepanto Consolidated Mining Company v. WMC Resources International Pty. Ltd., et
al., decided September 24, 2003, 412 SCRA 101 and G.R. No. 156214, entitled Lepanto Mining Company v. WMC
43

Respondents, aside from meeting petitioners’ contentions, argue that the requisites
for judicial inquiry have not been met and that the petition does not comply with the
criteria for prohibition and mandamus. Additionally, respondent WMCP argues that there
has been a violation of the rule on hierarchy of courts.
After petitioners filed their reply, this Court granted due course to the petition. The
parties have since filed their respective memoranda.
WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on
January 23, 2001 WMC sold all its shares in WMCP to Sagittarius Mines, Inc. (Sagittarius),
a corporation organized under Philippine laws. WMCP was subsequently renamed
44
“Tampakan Mineral Resources Corporation.” WMCP claims that at least 60% of the equity
45
of Sagittarius is owned by Filipinos and/or Filipino-owned corporations while about 40%
Resources International Pty. Ltd., WMC (Philippines), Inc., Southcot Mining Corporation, Tampakan Mining
Corporation and Sagittarius Mines, Inc., decided September 23, 2003.
53Section 12, Rule 43 of the Rules of Court, invoked by private respondent, states, “The appeal shall not stay the
award, judgment, final order or resolution sought to be reviewed unless the Court of Appeals shall direct otherwise
upon such terms as it may deem just.”
54WMCP’s Reply (dated May 6, 2003) to Petitioners’ Comment (to the Manifestation and Supplemental
Manifestation), p. 3.
177
VOL. 421, JANUARY 27, 2004 177
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
awarded in 1994, albeit their respective mineral claims were subsumed in the WMCP
FTAA; and that these three companies are the same companies that consolidated their
55

is owned by Indophil Resources NL, an Australian company. It further claims that by such
46
interests in Sagittarius to whom WMC sold its 100% equity in WMCP. WMCP concludes 56

sale and transfer of shares, “WMCP has ceased to be connected in any way with WMC.” 47
that in the event that the FTAA is invalidated, the MPSAs of the three corporations would
be revived and the mineral claims would revert to their original claimants. 57

_______________ These circumstances, while informative, are hardly significant in the resolution of this
case, it involving the validity of the FTAA, not the possible consequences of its invalidation.
Id., at pp. 52-53. Emphasis and italics supplied.
41 Of the above-enumerated seven grounds cited by petitioners, as will be shown later,
WMCP FTAA, p. 2.
42 only the first and the last need be delved into; in the latter, the discussion shall dwell only
Rollo, p. 220.
43
insofar as it questions the effectivity of E.O. No. 279 by virtue of which order the
Id., at p. 754.
questioned FTAA was forged.
44

Vide Note 4.
45

Rollo, p. 754.
46

Id., at p. 755.
47
I
176
176 SUPREME COURT REPORTS ANNOTATED Before going into the substantive issues, the procedural questions posed by respondents
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos shall first be tackled.
By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, Requisites For Judicial Review
2001, approved the transfer and registration of the subject FTAA from WMCP to
48
When an issue of constitutionality is raised, this Court can exercise its power of judicial
Sagittarius. Said Order, however, was appealed by Lepanto Consolidated Mining Co. review only if the following requisites are present:
(Lepanto) to the Office of the President which upheld it by Decision of July 23, 2002. Its49

motion for reconsideration having been denied by the Office of the President by Resolution 1. (1)The existence of an actual and appropriate case;
of November 12, 2002, Lepanto filed a petition for review before the Court of Appeals.
50 51
2. (2)A personal and substantial interest of the party raising the constitutional question;
Incidentally, two other petitions for review related to the approval of the transfer and 3. (3)The exercise of judicial review is pleaded at the earliest opportunity; and
registration of the FTAA to Sagittarius were recently resolved by this Court. 52
4. (4)The constitutional question is the lis mota of the case. 58

It bears stressing that this case has not been rendered moot either by the transfer and
registration of the FTAA to a Filipino-owned corporation or by the non-issuance of a _______________
temporary restraining order or a preliminary injunction to stay the above-said July 23,
2002 decision of the Office of the President. The validity of the transfer remains in dispute
53
Ibid.
55

and awaits final judicial determination. This assumes, of course, that such transfer cures Ibid.
56

WMCP’s Reply (dated May 6, 2003) to Petitioners’ Comment (to the Manifestation and Supplemental
the FTAA’s alleged unconstitutionality, on which question judgment is reserved. 57

Manifestation), p. 4.
WMCP also points out that the original, claimowners of the major mineralized areas Philippine Constitution Association v. Enriquez, 235 SCRA 506(1994); National Economic Protectionism
58

included in the WMCP FTAA, namely, Sagittarius, Tampakan Mining Corporation, and Association v. Ongpin, 171 SCRA 657 (1989); Dumlao v. Commission on Elections, 95 SCRA 392 (1980).
Southcot Mining Corporation, are all Filipino-owned corporations, each of which was a
54
178
holder of an approved Mineral Production Sharing Agreement 178 SUPREME COURT REPORTS ANNOTATED
 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Respondents claim that the first three requisites are not present.
Section 1, Article VIII of the Constitution states that “(j)udicial power includes the duty
of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable.” The power of judicial review, therefore, is limited to the
determination of actual cases and controversies.
59
An actual case or controversy means an existing case or controversy that is
appropriate or ripe .for determination, not conjectural or anticipatory, lest the decision of
60
the court would amount to an advisory opinion. The power does not extend to
61
hypothetical questions since any attempt at abstraction could only lead to dialectics and
62
barren legal questions and to sterile conclusions unrelated to actualities.
“Legal standing” or locus standi has been defined as a personal and substantial interest
in the case such that the party has sustained or will sustain direct injury as a result of the
governmental act that is being challenged, alleging more than a generalized
64
grievance. The gist of the question of standing is whether a party alleges “such personal
65
stake in the outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of
difficult constitutional questions.” Unless a person is injuriously affected in any of his
66
constitutional rights by the operation of statute or ordinance, he has no standing.
Petitioners traverse a wide range of sectors. Among them are La Bugal B’laan Tribal
Association, Inc., a farmers and indigenous
_______________
Dumlao v. Commission on Elections, supra.
59
Board of Optometry v. Colet, 260 SCRA 88 (1996).
60
Dumlao v. Commission on Elections, supra.
61
Subic Bay Metropolitan Authority v. Commission on Elections, 262 SCRA 492 (1996).
62
Angara v. Electoral Commission, 63 Phil. 139 (1936).
63
Integrated Bar of the Philippines v. Zamora, 338 SCRA 81, 100 (2000); Dumlao v. Commission on Elections,
64
supra; People v. Vera, 65 Phil. 56 (1937).
Dumlao v. Commission on Elections, supra.
65
Integrated Bar of the Philippines v. Zamora, supra.
66
Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, 21 SCRA 449 (1967).
67
179
VOL. 421, JANUARY 27, 2004
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
people’s cooperative organized under Philippine laws representing a community actually
affected by the mining activities of WMCP, members of said cooperative, as well as other
residents of areas also affected by the mining activities of WMCP. These petitioners have
69
standing to raise the constitutionality of the questioned FTAA as they allege a personal and
substantial injury. They claim that they would suffer “irremediable displacement” as a
result of the implementation of the FTAA allowing WMCP to conduct mining activities in
their area of residence. They thus meet the appropriate case requirement as they assert
an interest adverse to that of respondents who, on the other hand, insist on the FTAA’s
validity.
In view of the alleged impending injury, petitioners also have standing to assail the
validity of E.O. No. 279, by authority of which the FTAA was executed.
Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue
either or both contracting parties to annul it. In other words, they contend that petitioners
71
are not real parties in interest in an action for the annulment of contract.
Public respondents’ contention fails. The present action is not merely one for
annulment of contract but for prohibition and mandamus. Petitioners allege that public
respondents acted without or in excess of jurisdiction in implementing the FTAA, which
they submit is unconstitutional. As the case involves constitutional questions, this Court is
not concerned with whether petitioners are real parties in interest, but with whether they
have legal standing. As held in Kilosbayan v. Morato:
72
x x x. “It is important to note . . . that standing because of its constitutional and public policy
underpinnings, is very different from questions relating to whether a particular plaintiff is the real
party in interest or has
_______________
63
68 Petitioners Roberto P. Amloy, Raqim L. Dabie, Simeon H. Dolojo, Imelda Gandon, Leny B. Gusanan, Marcelo L. Gusanan, Quintal
A. Labuayan, Lomingges Laway, and Benita P. Tacuayan.
69 Petitioners F’long Agustin M. Dabie, Mario L. Mangcal, Alden S. Tusan, Sr. Susuan O. Bolanio, OND, Lolita G. Demonteverde, Benjie
L. Nequinto, Rose Lilia S. Romano and Amparo S. Yap.
70 Rollo, p. 6.
71 Id., at p. 337, citing Malabanan v. Gaw Ching, 181 SCRA 84 (1990).
72 246 SCRA 540 (1995).
180
180 SUPREME COURT REPORTS ANNOTATED
67
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
capacity to sue. Although all three requirements are directed towards ensuring that only certain
parties can maintain an action, standing restrictions require a partial consideration of the merits, as
well as broader policy concerns relating to the proper role of the judiciary in certain areas.[”]
(FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328 [1985])
Standing is a special concern in constitutional law because in some cases suits are brought not
by parties who have been personally injured by the operation of a law or by official action taken, but
by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence, the question
in standing is whether such parties have “alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions.” (Baker v.
Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)
As earlier stated, petitioners meet this requirement.
The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise
fulfills the requisites of justiciability. Although these laws were not in force when the
subject FTAA was entered into, the question as to their validity is ripe for adjudication.
179 The WMCP FTAA provides:
14.3 Future Legislation
Any term and condition more favourable to Financial & Technical Assistance Agreement contractors resulting from
repeal or amendment of any existing law or regulation or from the enactment of a law, regulation or administrative
68
order shall be considered a part of this Agreement.
It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more
favorable to WMCP, hence, these laws, to the extent that they are favorable to WMCP,
70 govern the FTAA.
In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing
agreements.
SEC. 112. Non-impairment of Existing Mining/Quarrying Rights.—x x x That the provisions of Chapter
XIV on government share in mineral production-sharing agreement and of Chapter XVI on incentives
of this Act shall immediately govern and apply to a mining lessee or contractor unless the mining
lessee or contractor indicates his intention to the secretary in writing not to avail of said provisions x
x x Provided, finally,
181
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That such leases, production-sharing agreements, financial or technical assistance agreements shall
comply with the applicable provisions of this Act and its implementing rules and regulations.
As there is no suggestion that WMCP has indicated its intention not to avail of the
provisions of Chapter XVI of R.A. No. 7942, it can safely be presumed that they apply to the
WMCP FTAA.
Misconstruing the application of the third requisite for judicial review—that the
exercise of the review is pleaded at the earliest opportunity—WMCP points out that the
petition was filed only almost two years after the execution of the FTAA, hence, not raised
at the earliest opportunity.
The third requisite should not be taken to mean that the question of constitutionality
must be raised immediately after the execution of the state action complained of. That the
question of constitutionality has not been raised before is not a valid reason for refusing
to allow it to be raised later. A contrary rule would mean that a law, otherwise
73
unconstitutional, would lapse into constitutionality by the mere failure of the proper party
to promptly file a case to challenge the same.
Propriety of Prohibition and Mandamus
Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule
65 read:
SEC. 2. Petition for prohibition.—When the proceedings of any tribunal, corporation, board, or person,
whether exercising functions judicial or ministerial, are without or in excess of its or his jurisdiction,
or with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
proper court alleging the facts with certainty and praying that judgment be rendered commanding
the defendant to desist from proceeding in the action or matter specified therein.
Prohibition is a preventive remedy. It seeks a judgment ordering the defendant to desist
74
from continuing with the commission of an act perceived to be illegal. 75
_______________
People v. Vera, supra.
73
Militante v. Court of Appeals, 330 SCRA 318 (2000).
74
Ibid.
75
182
182 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The petition for prohibition at bar is thus an appropriate remedy. While the execution of
the contract itself may be fait accompli, its implementation is not. Public respondents, in
behalf of the Government, have obligations to fulfill under said contract. Petitioners seek
to prevent them from fulfilling such obligations on the theory that the contract is
unconstitutional and, therefore, void.
The propriety of a petition for prohibition, being upheld, discussion of the propriety
of the mandamus aspect of the petition is rendered unnecessary.
Hierarchy of Courts
The contention that the filing of this petition violated the rule on hierarchy of courts does
not likewise lie. The rule has been explained thus:
Between two courts of concurrent original jurisdiction, it is the lower court that should initially pass
upon the issues of a case. That way, as a particular case goes through the hierarchy of courts, it is
shorn of all but the important legal issues or those of first impression, which are the proper subject
of attention to the appellate court. This is a procedural rule borne of experience and adopted to
improve the administration of justice.
This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this
Court has concurrent jurisdiction with the Regional Trial Courts and the Court of Appeals to issue
writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give a party unrestricted freedom of choice of court forum. The resort to this
Court’s primary jurisdiction to issue said writs shall be allowed only where the redress desired cannot
be obtained in the appropriate courts or where exceptional and compelling circumstances justify such
invocation. We held in People v. Cuaresma that:
A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary
writs against first level (“inferior”) courts should be filed with the Regional Trial Court, and those against the latter,
with the Court of Appeals. A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should
be allowed only where there are special and important reasons therefor, clearly and specifically set out in the petition.
This is established policy. It is a policy necessary to prevent inordinate demands upon the Court’s time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to pre
183
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
vent further over-crowding of the Court’s docket x x x. [Emphasis supplied.]
76
The repercussions of the issues in this case on the Philippine mining industry, if not the
national economy, as well as the novelty thereof, constitute exceptional and compelling
circumstances to justify resort to this Court in the first instance.
In all events, this Court has the discretion to take cognizance of a suit which does not
satisfy the requirements of an actual case or legal standing when paramount public
interest is involved. When the issues raised are of paramount importance to the public,
77
this Court may brush aside technicalities of procedure. 78
II
Petitioners contend that E.O. No. 279 did not take effect because its supposed date of
effectivity came after President Aquino had already lost her legislative powers under the
Provisional Constitution.
And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O.
No. 279, violates Section 2, Article XII of the Constitution because, among other reasons:
1. (1)It allows foreign-owned companies to extend more than mere financial or technical
assistance to the State in the exploitation, development, and utilization of minerals,
petroleum, and other mineral oils, and even permits foreign owned companies to
“operate and manage mining activities.”
2. (2)It allows foreign-owned companies to extend both technical and financial assistance,
instead of “eithertechnical or financial assistance.”
To appreciate the import of these issues, a visit to the history of the pertinent
constitutional provision, the concepts contained therein, and the laws enacted pursuant
thereto, is in order.
Section 2, Article XII reads in full:
_______________
Cruz v. Secretary, of Environment and Natural Resources, 347 SCRA 128 (2000), Kapunan, J., Separate Opinion.
76
[Emphasis supplied.]
Joya v. Presidential Commission on Good Government, 225 SCRA 568 (1993).
77
Integrated Bar of the Philippines v. Zamora, supra.
78
184
184 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural resources
shall not be alienated. The exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly undertake such activities
or it may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and conditions as may be provided by law. In case
of water rights for irrigation, water supply, fisheries, or industrial uses other than the development
of water power, beneficial use may be the measure and limit of the grant.
The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens,
as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in rivers,
lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and conditions provided by law,
based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and technical
resources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.
The Spanish Regime and the Regalian Doctrine
The first sentence of Section 2 embodies the Regalian doctrine or jura regalia. Introduced
by Spain into these Islands, this feudal concept is based on the State’s power of dominium,
which is the capacity of the State to own or acquire property. 79
_______________
J. Bernas, S.J., The 1987 Constitution of the Philippines: A Commentary 1009 (1996).
79
185
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
In its broad sense, the term “jura regalia” refers to royal rights, or those rights which the King has by
virtue of his prerogatives. In Spanish law, it refers to a right which the sovereign has over anything in
which a subject has a right of property or propriedad. These were rights enjoyed during feudal times
by the king as the sovereign.
The theory of the feudal system was that title to all lands was originally held by the King, and
while the use of lands was granted out to others who were permitted to hold them under certain
conditions, the King theoretically retained the title. By fiction of law, the King was regarded as the
original proprietor of all lands, and the true and only source of title, and from him all lands were held.
The theory of jura regalia was therefore nothing more than a natural fruit of conquest. 80
The Philippines having passed to Spain by virtue of discovery and conquest, earlier
Spanish decrees declared that “all lands were held from the Crown.” 82
The Regalian doctrine extends not only to land but also to “all natural wealth that may
be found in the bowels of the earth.” 83
_______________
80 Cruz v. Secretary of Environment and Natural Resources, supra, Kapunan, J., Separate Opinion.
81 Id., Puno, J., Separate Opinion, and Panganiban, J., Separate Opinion.
Cariño v. Insular Government, 212 US 449, 53 L.Ed. 595 (1909). For instance, Law 14, Title 12, Book 4 of
82
the Recopilacion de Leyes de las Indias proclaimed:
We having acquired full sovereignty over the Indies, and all lands, territories, and possessions not heretofore ceded away by our royal
predecessors, or by us, or in our name, still pertaining to the royal crown and patrimony, it is our will that all lands which are held
without proper and true deeds of grant be restored to us according as they belong to us, in order that after reserving before all what to
us or to our viceroys, audiencias, and governors may seem necessary for public squares, ways, pastures, and commons in those places
which are peopled, taking into consideration not only their present condition, but also their future and their probable increase, and
after distributing to the natives what may be necessary for tillage and pasturage, confirming them in what they now have and giving
them more if necessary, all the rest of said lands may remain free and unencumbered for us to dispose of as we may wish.
Republic v. Court of Appeals, 160 SCRA 228 (1988). It has been noted, however, that “the prohibition in the
83
[1935] Constitution against alienation by the state of mineral lands and minerals is not properly a part of the
Regalian doctrine but a separate national policy designed to
186
186 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Spain, in particular, recognized the unique value of natural resources, viewing them,
especially minerals, as an abundant source of revenue to finance its wars against other
nations. Mining laws during the Spanish regime reflected this perspective.
84 85
_______________
conserve our mineral resources and prevent the state from being deprived of such minerals as are essential to
national defense.” (A. Noblejas, Philippine Law on Natural Resources 126-127 [1959 ed.], citing V. Francisco, The New
Mining Law.)
Cruz v. Secretary of Environment and Natural Resources, supra, Kapunan, J., Separate Opinion, citing A.
84
Noblejas, Philippine Law on Natural Resources 6 (1961). Noblejas continues:
Thus, they asserted their right of ownership over mines and minerals or precious metals, golds, and silver as distinct from the right of
ownership of the land in which the minerals were found. Thus, when on a piece of land mining was more valuable than agriculture, the
sovereign retained ownership of mines although the land has been alienated to private ownership. Gradually, the right to the ownership
of minerals was extended to base metals. If the sovereign did not exploit the minerals, they grant or sell it as a right separate from the
land. (Id., at p. 6.)
In the unpublished case of Lawrence v. Garduño (L-10942, quoted in V. FRANCISCO, Philippine Law on Natural
85
Resources 14-15 [1956]), this Court observed:
The principle underlying Spanish legislation on mines is that these are subject to the eminent domain of the state. The Spanish law of
July 7, 1867, amended by the law of March 4, 1868, in article 2 says: “The ownership of the substances enumerated in the preceding
article (among them those of inflammable nature), belong[s] to the state, and they cannot be disposed of without the government
authority.”
The first Spanish mining law promulgated for these Islands (Decree of Superior Civil Government of January 28, 1964), in its
Article I, says: “The supreme ownership of mines throughout the kingdom belong[s] to the crown and to the king. They shall not be
185 exploited except by persons who obtained special grant from this superior government and by those who may secure it thereafter,
subject to this regulation.”
Article 2 of the royal decree on ownership of mines in the Philippine Islands, dated May 14, 1867, which was the law in force at
the time of the cession of these Islands to the Government of the United States, says: “The ownership of the substances enumerated in
the preceding article (among them those of inflammable nature)
187
VOL. 421, JANUARY 27, 2004 187
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The American Occupation and The Concession Regime
By the Treaty of Paris of December 10, 1898, Spain ceded “the archipelago known as the
Philippine Islands” to the United States. The Philippines was hence governed by means of
81
organic acts that were in the nature of charters serving as a Constitution of the occupied
territory from 1900 to 1935. Among the principal organic acts of the Philippines was the
86
Act of Congress of July 1, 1902, more commonly known as the Philippine Bill of 1902,
through which the United States Congress assumed the administration of the Philippine
Islands. Section 20 of said Bill reserved the disposition of mineral lands of the public
87
domain from sale. Section 21 thereof allowed the free and open exploration, occupation
and purchase of mineral deposits not only to citizens of the Philippine Islands but to those
of the United States as well:
Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and Section 21 also made possible the concession (frequently styled “permit,” “license” or
unsurveyed, are hereby declared to be free and open to exploration, occupation and purchase, and “lease”) system. This was the traditional regime imposed by the colonial administrators
92 93

the land on for the exploitation of natural resources in the extractive sector (petroleum, hard minerals,
timber, etc.). 94

_______________
Under the concession system, the concessionaire makes a direct equity investment for
belongs to the state, and they cannot be disposed of without an authorization issued by the Superior Civil Governor.”
the purpose of exploiting a particular natural resource within a given area. Thus, the 95

Furthermore, all those laws contained provisions regulating the manner of prospecting, locating and exploring mines in private
property by persons other than the owner of the land as well as the granting of concessions, which goes to show that private land did
not include, without express grant, the mines that might be found therein.
Analogous provisions are found in the Civil Code of Spain determining the ownership of mines. In its Article 339 (Article 420,
concession amounts to complete control by the concessionaire over the country’s natural
resource, for it is given exclusive and plenary rights to exploit a particular resource at the
point of extraction. In consideration for the right to exploit a natural resource, the
96

New Civil Code) enumerating properties of public ownership, the mines are included until specially granted to private individuals. In
its article 350 (Art. 437, New Civil Code) declaring that the proprietor of any parcel of land is the owner of its surface and of everything
concessionaire either pays rent or royalty, which is a fixed percentage of the gross
under it, an exception is made as far as mining laws are concerned. Then in speaking of minerals, the Code in its articles 426 and 427 proceeds. 97

(Art. 519, New Civil Code) provides rules governing the digging of pits by third persons on private-owned lands for the purpose of
prospecting for minerals.
Later statutory enactments by the legislative bodies set up in the Philippines adopted
86 Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, 261 SCRA 528(1996). the contractual framework of the concession. For instance, Act No. 2932, approved on
98 99

87 Ibid.
August 31, 1920, which provided for the exploration, location, and lease of lands
188
containing petroleum and other mineral oils and gas in the Philippines, and Act No.
188 SUPREME COURT REPORTS ANNOTATED 2719, approved on May 14, 1917, which provided for the leasing and development of coal
100

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos lands in the Philippines, both utilized the concession system. 101

which they are found, to occupation and purchase, by citizens of the United States or of said
Islands: Provided, That when on any lands in said Islands entered and occupied as agricultural lands _______________
under the provisions of this Act, but not patented, mineral deposits have been found, the working of
such mineral deposits is forbidden until the person, association, or corporation who or which has V.M.A. Dimagiba, Service Contract Concepts in Energy, 57 PHIL. L. J. 307, 313 (1982).
92

entered and is occupying such lands shall have paid to the Government of said Islands such additional P.A. Agabin, Service Contracts: Old Wine in New Bottles?, in II DRAFT PROPOSAL OF THE 1986 U.P. Law
93

sum or sums as will make the total amount paid for the mineral claim or claims in which said deposits Constitution Project 3.
are located equal to the amount charged by the Government for the same as mineral claims. Id., at pp. 2-3.
94

Id., at p. 3.
Unlike Spain, the United States considered natural resources as a source of wealth for its
95

Ibid.
96

nationals and saw fit to allow both Filipino and American citizens to explore and exploit Ibid.
97

minerals in public lands, and to grant patents to private mineral lands. A person who 88
Ibid.
98

An Act to Provide for the Exploration, Location and Lease of Lands Containing Petroleum and other Mineral
acquired ownership over a parcel of private mineral land pursuant to the laws then
99

Oils and Gas in the Philippine Islands.

prevailing could exclude other persons, even the State, from exploiting minerals within his An Act to Provide for the Leasing and Development of Coal Lands in the Philippine Islands.
100

property. Thus, earlier jurisprudence held that:

89 90 Agabin, supra, at p. 3.
101

A valid and subsisting location of mineral land, made and kept up in accordance with the provisions 190
of the statutes of the United States, has the effect of a grant by the United States of the present and 190 SUPREME COURT REPORTS ANNOTATED
exclusive possession of the lands located, and this exclusive right of possession and enjoyment
continues during the entire life of the location. x x x. La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
x x x.
The 1935 Constitution and the Nationalization
The discovery of minerals in the ground by one who has a valid mineral location, perfect his claim
and his location, not only against third persons but also against the Government. x x x. [Italics in the of Natural Resources
original.] By the Act of United States Congress of March 24, 1934, popularly known as the Tydings-
The Regalian doctrine and the American system, therefore, differ in one essential respect. McDuffie Law, the People of the Philippine Islands were authorized to adopt a
Under the Regalian theory, mineral rights are not included in a grant of land by the state; constitution. On July 30, 1934, the Constitutional Convention met for the purpose of
102

under the American doctrine, mineral rights are included in a grant of land by the drafting a constitution, and the Constitution subsequently drafted was approved by the
government. 91
Convention on February 8, 1935. The Constitution was submitted to the President of the
103

United States on March 18, 1935. On March 23, 1935, the President of the United States
104

_______________ certified that the Constitution conformed substantially with the provisions of the Act of
Congress approved on March 24, 1934. On May 14, 1935, the Constitution was ratified by
105

Cruz v. Secretary of Environment and Natural Resources, supra, Kapunan, J., Separate Opinion.
88
the Filipino people. 106

Ibid.
89

McDaniel v. Apacible and Cuisia, 42 Phil. 749 (1922).

90
The 1935 Constitution adopted the Regalian doctrine, declaring all natural resources
NOBLEJAS, supra, at p. 5.
91 of the Philippines, including mineral lands and minerals, to be property belonging to the
189 State. As adopted in a republican system, the medieval concept of jura regalia is stripped
107

VOL. 421, JANUARY 27, 2004 189 of royal overtones and ownership of the land is vested in the State. 108

Section 1, Article XIII, on Conservation and Utilization of Natural Resources, of the

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos 1935 Constitution provided:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall
be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of
the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession
at the time of the inauguration of the Government established
_______________
102 People v. Linsangan, 62 Phil. 646 (1935).
103 Ibid.
104 Ibid.
105 Ibid.
106 Ibid.
107 Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, supra.
108 BERNAS, S.J., supra, at pp. 1009-1010, citing Lee Hong Hok v. David, 48 SCRA 372 (1972).
191
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
under this Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or utilization of any
of the natural resources shall be granted for a period exceeding twenty-five years, except as to water
rights for irrigation, water supply, fisheries, or industrial uses other than the development of water
power, in which cases beneficial use may be the measure and limit of the grant.
The nationalization and conservation of the natural resources of the country was one of
the fixed and dominating objectives of the 1935 Constitutional Convention. One delegate 109
relates:
There was an overwhelming sentiment in the Convention in favor of the principle of state ownership
of natural resources and the adoption of the Regalian doctrine. State ownership of natural resources
was seen as a necessary starting point to secure recognition of the state’s power to control their
disposition, exploitation, development, or utilization. The delegates of the Constitutional Convention
very well knew that the concept of State ownership of land and natural resources was introduced by
the Spaniards, however, they were not certain whether it was continued and applied by the
Americans. To remove all doubts, the Convention approved the provision in the Constitution affirming
the Regalian doctrine.
The adoption of the principle of state ownership of the natural resources and of the Regalian
doctrine was considered to be a necessary starting point for the plan of nationalizing and conserving
the natural resources of the country. For with the establishment of the principle of state ownership
of the natural resources, it would not be hard to secure the recognition of the power of the State to
control their disposition, exploitation, development or utilization. 110
The nationalization of the natural resources was intended (1) to insure their conservation
for Filipino posterity; (2) to serve as an instrument of national defense, helping prevent
the extension to the country of foreign control through peaceful economic penetration;
and (3) to avoid making the Philippines a source of international conflicts with the
consequent danger to its internal security and independence. 111
_______________
II J. Aruego, The Framing of the Philippine Constitution 592 (1949).
109
Id., at pp. 600-601.
110
Id., at p. 604. Delegate Aruego expounds: At the time of the framing of the Philippine Constitution, Filipino
111
capital had been known to be rather shy. Filipinos hesitated as
192
192 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The same Section 1, Article XIII also adopted the concession system, expressly permitting
the State to grant licenses, concessions, or leases for the exploitation, development, or
utilization of any of the natural resources. Grants, however, were limited to Filipinos or
entities at least 60% of the capital of which is owned by Filipinos.
The swell of nationalism that suffused the 1935 Constitution was radically diluted
when on November l946, the Parity Amendment, which came in the form of an “Ordinance
Appended to the
_______________
a general rule to invest a considerable sum of their capital for the development, exploitation, and utilization of
the natural resources of the country. They had not as yet been so used to corporate enterprises as the peoples of the
West. This general apathy, the delegates knew, would mean the retardation of the development of the natural
resources, unless foreign capital would be encouraged to come in and help in that development. They knew that the
nationalization of the natural resources would certainly not encourage the investment of foreign capital into them.
191 But there was a general feeling in the Convention that it was better to have such development retarded or even
postponed altogether until such time when the Filipinos would be ready and willing to undertake it rather than
permit the natural resources to be placed under the ownership or control of foreigners in order that they might be
immediately developed, with the Filipinos of the future serving not as owners but at most as tenants or workers
under foreign masters. By all means, the delegates believed, the natural resources should be conserved for Filipino
posterity.
The nationalization of natural resources was also intended as an instrument of national defense. The
Convention felt that to permit foreigner to own or control the natural resources would be to weaken the national
defense. It would be making possible the gradual extension of foreign influence into our politics, thereby increasing
the possibility of foreign control. x x x.
Not only these. The nationalization of the natural resources, it was believed, would prevent making the
Philippines a source of international conflicts with the consequent danger to its internal security and independence.
For unless the natural resources were nationalized, with the nationals of foreign countries having the opportunity
to own or control them, conflicts of interest among them might arise inviting danger to the safety and independence
of the nation. (Id., at pp. 605-606.)
193
VOL. 421, JANUARY 27, 2004 193
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Constitution,” was ratified in a plebiscite. The Amendment extended, from July 4, 1946 to
112
July 3, 1974, the right to utilize and exploit our natural resources to citizens of the United
States and business enterprises owned or controlled, directly or indirectly, by citizens of
the United States: 113
Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen, of
the foregoing Constitution, during the effectivity of the Executive Agreement entered into by the
President of the Philippines with the President of the United States on the fourth of July, nineteen
hundred and forty-six, pursuant to the provisions of Commonwealth Act Numbered Seven hundred
and thirty-three, but in no case to extend beyond the third of July, nineteen hundred and seventy-four,
the disposition, exploitation, development, and utilization of all agricultural, timber, and mineral
lands of the public domain, waters, minerals, coals, petroleum, and other mineral oils, all forces and
sources of potential energy, and other natural resources of the Philippines, and the operation of public
utilities, shall, if open to any person, be open to citizens of the United States and to all forms of
business enterprise owned or controlled, directly or indirectly, by citizens of the United States in the
same manner as to, and under the same conditions imposed upon, citizens of the Philippines or
corporations or associations owned or controlled by citizens of the Philippines.
The Parity Amendment was subsequently modified by the 1954 Revised Trade Agreement,
also known as the Laurel-Langley Agreement, embodied in Republic Act No. 1355. 114
_______________
Palting v. San Jose Petroleum Inc., 18 SCRA 924 (1966); Republic v. Quasha, 46 SCRA 160 (1972).
112
113 Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, supra.
 114 Article VI thereof provided: Concessionaires were required to submit information as maybe required by the
1. The disposition, exploitation, development and utilization of all agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum and other mineral oils, all forces and of sources of potential energy, and other natural resources of either Secretary of Agriculture and Natural Resources, including reports of geological and
Party, and the operation of public utilities, shall, if open to any person, be open to citizens of the other Party and to all forms of business geophysical examinations, as well as production reports. Exploration and 125 126

enterprise owned or controlled directly or indirectly, by citizens of such other Party in the same manner as to and under the same
conditions imposed upon citizens or corporations or associations owned or controlled by citizens of the Party granting the right. exploitation concessionaires were also required to submit work programs.
127

194
194 SUPREME COURT REPORTS ANNOTATED _______________

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos 119 Id., art. 31. The same provision recognized the rights of American citizens under the Parity Amendment:
During the effectivity and subject to the provisions of the ordinance appended to the Constitution of the Philippines, citizens of the
The Petroleum Act of 1949 and United States and all forms of business enterprises owned and controlled, directly or indirectly, by citizens of the United States shall
enjoy the same rights and obligations under the provisions of this Act in the same manner as to, and under the same conditions imposed
The Concession System upon, citizens of the Philippines or corporations or associations owned or controlled by citizens of the Philippines.
In the meantime, Republic Act No. 387, also known as the Petroleum Act of 1949, was
115
Id., art. 10.
120

Id., art 3.
approved on June 18, 1949. The Petroleum Act of 1949 employed the concession system
121

Id., art. 9.
122

for the exploitation of the nation’s petroleum resources. Among the kinds of concessions Ibid.
123

it sanctioned were exploration and exploitation concessions, which respectively granted Rep. Act No. 387 (1949), as amended, art. 8.
124

to the concessionaire the exclusive right to explore for or develop petroleum within 116 117
Id., art. 25.
125

Id., art. 47.

126

specified areas. Id., art. 60.

127

Concessions may be granted only to duly qualified persons who have sufficient 118
196
finances, organization, resources, technical compe- 196 SUPREME COURT REPORTS ANNOTATED
_______________ La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Exploitation concessionaires, in particular, were obliged to pay an annual exploitation
2. The rights provided for in Paragraph 1 may be exercised x x x in the case of citizens of the United States, with tax, the object of which is to induce the concessionaire to actually produce petroleum, and
128

respect to natural resources in the public domain in the Philippines, only through the medium of a corporation not simply to sit on the concession without developing or exploiting it. These 129

organized under the laws of the Philippines and at least 60% of the capital stock of which is owned and controlled
by citizens of the United States x x x.
3. The United States of America reserves the rights of the several States of the United States to limit the extent
to which citizens or corporations or associations owned or controlled by citizens of the Philippines may engage in
concessionaires were also bound to pay the Government royalty, which was not less than
12 1/2% of the petroleum produced and saved, less that consumed in the operations of
the concessionaire. Under Article 66, R.A. No. 387, the exploitation tax may be credited
130

the activities specified in this article. The Republic of the Philippines reserves the power to deny and of the rights
against the royalties so that if the concessionaire shall be actually producing enough oil, it
specified in this Article to citizens of the United States who are citizens of States, or to corporations or associations
at least 60% of whose capital stock or capital is owned or controlled by citizens of States, which deny like rights to would not actually be paying the exploitation tax. 131

citizens of the Philippines, or to corporations or associations which are owned or controlled by citizens of the Failure to pay the annual exploitation tax for two consecutive years, or the royalty 132

Philippines x x x. due to the Government within one year from the date it becomes due, constituted grounds 133

An Act to Promote the Exploration, Development, Exploitation, and Utilization of the Petroleum Resources of
for the cancellation of the concession. In case of delay in the payment of the taxes or royalty
115

the Philippines; to Encourage the Conservation of such Petroleum Resources; to Authorize the Secretary of
Agriculture and Natural Resources to Create an Administration Unit and a Technical Board in the Bureau of Mines; imposed by the law or by the concession, a surcharge of 1% per month is exacted until the
to Appropriate Funds therefor; and for other purposes. same are paid. 134

Rep. Act No. 387 (1949), as amended, art. 10 (b).

116
As a rule, title rights to all equipment and structures that the concessionaire placed on
Id., art. 10 (c).
117

Id., art. 5.
118
the land belong to the exploration or exploitation concessionaire. Upon termination of 135

195 such concession, the concessionaire had a right to remove the same. 136

VOL. 421, JANUARY 27, 2004 195 The Secretary of Agriculture and Natural Resources was tasked with carrying out the
provisions of the law, through the Director of Mines, who acted under the Secretary’s
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos immediate supervision and control. The Act granted the Secretary the authority to
137

tence, and skills necessary to conduct the operations to be under-taken. 119

inspect any operation of the concessionaire and to examine all the books
Nevertheless, the Government reserved the right to undertake such work itself. This 120

proceeded from the theory that all natural deposits or occurrences of petroleum or natural _______________
gas in public and/or private lands in the Philippines belong to the State. Exploration and 121

exploitation concessions did not confer upon the concessionaire ownership over the Id., art. 64. Article 49, R.A. No. 387 originally imposed an annual exploration tax on exploration
128

petroleum lands and petroleum deposits. However, they did grant concessionaires the
122
concessionaires but this provision was repealed by Section 1, R.A. No. 4304.
Francisco, supra, at p. 103.
right to explore, develop, exploit, and utilize them for the period and under the conditions
129

Rep. Act No. 387 (1949), as amended, art. 65.

130

determined by the law. 123

Francisco, supra, at p.103.
131

Concessions were granted at the complete risk of the concessionaire; the Government Rep. Act No. 387 (1949), as amended, art. 90 (b) 3.
132

did not guarantee the existence of petroleum or undertake, in any case, title warranty. 124
Id., art. 90 (b) 4.
133

Id., art. 93-A.

134

Id., art. 93.

135
 Ibid.
136
embodied in our Constitution that natural resources belong to the State and shall not be alienated,
Rep. Act No. 387 (1949), as amended, art. 94.
137
not to mention the fact that the concession was the bedrock of the colonial system in the exploitation
197 of natural resources. 143

VOL. 421, JANUARY 27, 2004 197 Eventually, the concession system failed for reasons explained by Dimagiba:
Notwithstanding the good intentions of the Petroleum Act of 1949, the concession system could not
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos have properly spurred sustained oil exploration activities in the country, since it assumed that such a
and accounts pertaining to operations or conditions related to payment of taxes and capital-intensive, high risk venture could be successfully undertaken by a single individual or a small
royalties. 138 company. In effect, concessionaires’ funds were easily exhausted. Moreover, since the concession
The same law authorized the Secretary to create an Administration Unit and a system practically closed its doors to interested foreign investors, local capital was stretched to the
Technical Board. The Administration Unit was charged, inter alia, with the enforcement
139
limits. The old system also failed to consider the highly sophisticated technology and expertise
of the provisions of the law. The Technical Board had, among other functions, the duty to
140
required, which would be available only to multinational companies. 144

check on the performance of concessionaires and to determine whether the obligations A shift to a new regime for the development of natural resources thus seemed imminent.
imposed by the Act and its implementing regulations were being complied with. 141

_______________
Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy Development,
analyzed the benefits and drawbacks of the concession system insofar as it applied to the
Contracts in the Indonesian Petroleum Industry, pp. 101-102, sections 13C.24 and 13C.25 (1972).
petroleum industry: Agabin, supra, at p. 4.
143

Advantages of Concession. Whether it emphasizes income tax or royalty, the most positive aspect of Dimagiba, supra, at p. 318.
144

the concession system is that the State’s financial involvement is virtually risk-free and 199
administration is simple and comparatively low in cost. Furthermore, if there is a competitive
allocation of the resource leading to substantial bonuses and/or greater royalty coupled with a
VOL. 421, JANUARY 27, 2004 199
relatively high level of taxation, revenue accruing to the State under the concession system may La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
compare favorably with other financial arrangements.
Disadvantages of Concession. There are, however, major negative aspects to this system. Because Presidential Decree No. 87, The 1973 Constitution
the Government’s role, in the traditional concession is passive, it is at a distinct disadvantage in and the Service Contract System
managing and developing policy for the nation’s petroleum resource. This is true for several reasons.
The promulgation on December 31, 1972 of Presidential Decree No. 87, otherwise known
First, even though most concession agreements contain covenants requiring diligence in operations
145

and production, this establishes only an indirect and passive control of the host country in resource as THE OIL EXPLORATION AND DEVELOPMENT ACT OF 1972 signaled such a
development. Second, and more importantly, the fact that the host country does not directly transformation. P.D. No. 87 permitted the government to explore for and produce
participate in resource management decisions inhibits its ability to train and employ its nationals in indigenous petroleum through “service contracts.” 146

petroleum development. This factor could delay or prevent the country from effectively engaging in “Service contracts” is a term that assumes varying meanings to different people, and
the development of its resources. Lastly, a direct role in management is usually necessary in order to it has carried many names in different countries, like “work contracts” in Indonesia,
obtain a knowledge of the international petroleum industry which is important to an appreciation of “concession agreements” in Africa, “production-sharing agreements” in the Middle East,
the host country’s resources in relation to those of other countries. 142

and “participation agreements” in Latin America. A functional definition of “service

147

contracts” in the Philippines is provided as follows:

_______________ A service contract is a contractual arrangement for engaging in the exploitation and development of
petroleum, mineral, energy, land and other natural resources by which a government or its agency,
Id., art. 106.
138
or a private person granted a right or privilege by the government authorizes the other party (service
Id., art. 95.
139
contractor) to engage or participate in the exercise of such right or the enjoyment of the privilege, in
Ibid.
that the latter provides financial or technical resources, undertakes the exploitation or production of
140

Rep. Act No. 387 (1949), as amended, art. 95 (e).

141

Dimagiba, supra, at p. 315, citing Fabrikant, Oil Discovery and Technical Change in Southeast Asia, Legal
142
a given resource, or directly manages the productive enterprise, operations of the exploration and
Aspects of Production Sharing exploitation of the resources or the disposition of marketing or resources. 148

198 In a service contract under P.D. No. 87, service and technology are furnished by the service
198 SUPREME COURT REPORTS ANNOTATED contractor for which it shall be entitled to the stipulated service fee. The contractor must 149

be technically competent and financially capable to undertake the operations required in

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos the contract. 150

Other liabilities of the system have also been noted:

x x x there are functional implications which give the concessionaire great economic power arising _______________
from its exclusive equity holding. This includes, first, appropriation of the returns of the undertaking,
subject to a modest royalty; second, exclusive management of the project; third, control of production Amending Presidential Decree No. 8 issued on October 2, 1972, and Promulgating an Amended Act to
145

in the natural resource, such as volume of production, expansion, research and development; and Promote the Discovery and Production of Indigenous Petroleum and Appropriate Funds Therefor.
fourth, exclusive responsibility for downstream operations, like processing, marketing, and Pres. Decree No. 87 (1972), sec. 4.
146

distribution. In short, even if nominally, the state is the sovereign and owner of the natural resource Agabin, supra, at p. 6.
147

being exploited, it has been shorn of all elements of control over such natural resource because of the M. Magallona, Service Contracts in Philippine Natural Resources, 9 WORLD BULL. 1, 4 (1993).
148

exclusive nature of the contractual regime of the concession. The concession system, investing as it Pres. Decree No. 87 (1972), sec. 6.
149

does ownership of natural resources, constitutes a consistent inconsistency within the principle Id., sec. 4.
150

200
 In the royalty system, the concessionaire may be discouraged to produce more for the reason that since the royalty paid to the
200 SUPREME COURT REPORTS ANNOTATED host country is closely linked to the volume of production, the greater the produce, the more amount or royalty would be allocated to
the Government. This is not so in the production sharing system. The share of the Government depends largely on the net proceeds of
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos production after reimbursing the service contractor of its recoverable expenses. As a general rule, the Government plays a passive role
in the
Financing is supposed to be provided by the Government to which all petroleum produced concession system, more particularly, interested in receiving royalties from the concessionaire. In the production-sharing
belongs. In case the Government is unable to finance petroleum exploration operations,
151 arrangement, the Government plays a more active role in the management and monitoring of oil operations and requires the service
contractor entertain obligations designed to bring more economic and technological benefits to the host country. (Dimagiba, supra, at
the contractor may furnish services, technology and financing, and the proceeds of sale of pp. 330-331.)
the petroleum produced under the contract shall be the source of funds for payment of the Agabin, supra, at p. 6.
160

service fee and the operating expenses due the contractor. The contractor shall 152
The antecedents leading to the Proclamation are narrated in Javellana v. Executive Secretary, 50 SCRA
161

55 (1973):
undertake, manage and execute petroleum operations, subject to the government On March 16, 1967, Congress of the Philippines passed Resolution No. 2, which was amended by Resolution No. 4, of said body,adopted
overseeing the management of the operations. The contractor provides all necessary
153 on June 17, 1967, calling a convention to propose amend
202
services and technology and the requisite financing, performs the exploration work
obligations, and assumes all exploration risks such that if no petroleum is produced, it will 202 SUPREME COURT REPORTS ANNOTATED
not be entitled to reimbursement. Once petroleum in commercial quantity is discovered,
154

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos

the contractor shall operate the field on behalf of the government.
National Economy and Patrimony contained provisions similar to the 1935 Constitution
155

P.D. No. 87 prescribed minimum terms and conditions for every service contract. It
with regard to Filipino participation in the nation’s natural resources. Section 8, Article
156

also granted the contractor certain privileges, including exemption from taxes and
XIV thereof provides:
payment of tariff duties, and permitted the repatriation of capital and retention of profits
157

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
abroad. 158
forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to
Ostensibly, the service contract system had certain advantages over the concession the State. With the exception of agricultural, industrial or commercial, residential and resettlement
regime. It has been opined, though, that, in
159 lands of the public domain, natural resources shall not be alienated, and no license, concession, or
lease for the exploration, development, exploitation, or utilization of any of the natural resources shall
_______________ be granted for a period exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the
Id., sec. 6.
151
development of water power, in which cases beneficial use may be the measure and limit of the grant.
Id., sec. 7.
152 While Section 9 of the same Article maintained the Filipino-only policy in the enjoyment
Id., sec. 8.
153
of natural resources, it also allowed Filipinos, upon authority of the Batasang Pambansa,
Ibid.
to enter into service contracts with any person or entity for the exploration or utilization
154

Ibid.
155

Pres. Decree No. 87 (1972), sec. 9.

156
of natural resources.
Id., sec. 12.
157

Id., sec. 13.

158
_______________
Dimagiba draws the following comparison between the service contract scheme and the concession system:
159

In both the concession system and the service contract scheme, work and financial obligations are required of the
developer. Under Republic Act No. 387 and Presidential Decree No. 87, the concessionaire and the service
contractors are extracted certain taxes in favor of the government. In both arrangements, the
explorationist/developer is given incentives in the form of tax exemptions in the importation or disposition of
machinery, equipment, materials and spare parts needed in petroleum operations.
201
VOL. 421, JANUARY 27, 2004
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
the Philippines, our concept of a service contract, at least in the petroleum industry, was
basically a concession regime with a production-sharing element. On January 17, 1973, 160
ments to the Constitution of the Philippines. Said Resolution No. 2, as amended, was implemented by Republic
Act No. 6132 approved on August 24, 1970, pursuant to the provisions of which the election of delegates to said
convention was held on November 10, 1970, and the 1971 Convention began to perform its functions on June 1,
1971. While the Convention was in session on September 21, 1972, the President issued Proclamation No. 1081
placing the entire Philippines under Martial Law. On November 29, 1972, the President of the Philippines issued
Presidential Decree No. 73, submitting to the Filipino people for ratification or rejection the Constitution of the
201 Republic of the Philippines proposed by the 1971 Constitutional Convention, and appropriating funds therefor, as
well as setting the plebiscite for such ratification on January 15, 1973. On January 17, 1973, the President issued
Proclamation No. 1102 certifying and proclaiming that the Constitution proposed by the 1971 Constitutional
Convention “has been ratified by an overwhelming majority of all the votes cast by the members of all the Barangays
(Citizens Assemblies) throughout the Philippines, and has thereby come into effect.”

203
then President Ferdinand E. Marcos proclaimed the ratification of a new
Constitution. Article XIV on the
161
VOL. 421, JANUARY 27, 2004 203
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
_______________ Sec. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural
resources of the Philippines shall be limited to citizens, or to corporations or associations at least
The concessionaire and the service contractor are required to keep in their files valuable data and information and may be sixty per centum of which is owned by such citizens. The Batasang Pambansa, in the national interest,
required to submit needed technological or accounting reports to the Government. Duly authorized representatives of the Government
could, under the law, inspect or audit the books of accounts of the contract holder.
may allow such citizens, corporations or associations to enter into service contracts for financial,
In both systems, signature, discovery or production bonuses may be given by the developer to the host Government. The technical, management, or other forms of assistance with any person or entity for the exploration, or
concession system, however, differs considerably from the service contract system in important areas of the operations. In the utilization of any of the natural resources. Existing valid and binding service contracts for financial,
concession system, the Government merely receives fixed royalty which is a certain percentage of the crude oil produced or other units
of measure, regardless of whether the concession holder makes profits or not. This is not so in the service contract system. A certain
technical, management, or other forms of assistance are hereby recognized as such. [Emphasis
percentage of the gross production is set aside for recoverable expenditures by the contractor. Of the net proceeds the parties are supplied.]
entitled percentages of share that will accrue to each of them.
The concept of service contracts, according to one delegate, was borrowed from the Pres. Decree No. 151 (1973), sec. 1.
168

Providing for A Modernized System of Administration and Disposition of Mineral Lands and to Promote and
methods followed by India, Pakistan and especially Indonesia in the exploration of
169

Encourage the Development and Exploitation thereof.

petroleum and mineral oils. The provision allowing such contracts, according to another,
162
Revising and Consolidating All Laws and Decrees Affecting Fishing and Fisheries.
170

was intended to “enhance the proper development of our natural resources since Filipino Pres. Decree No. 704 (1975), sec. 21.
171

citizens lack the needed capital and technical know-how which are essential in the proper Revising Presidential Decree No. 389, otherwise known as The Forestry Reform Code of the Philippines.
172

Pres. Decree No. 705 (1975), sec. 62.

173

exploration, development and exploitation of the natural resources of the country.” 163
205
The original idea was to authorize the government, not private entities, to enter into
service contracts with foreign entities. As finally approved, however, a citizen or private
164
VOL. 421, JANUARY 27, 2004 205
entity could be allowed by the National Assembly to enter into such service contract. The 165 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
prior approval of the National Assembly was deemed sufficient to protect the national Yet another law allowing service contracts, this time for geothermal resources, was
interest. Notably, none of the laws allowing service contracts were passed by the
166
Presidential Decree No. 1442, which was signed into law on June 11, 1978. Section 1
174

Batasang Pambansa. Indeed, all of them were enacted by presidential decree. thereof authorized the Government to enter into service contracts for the exploration,
On March 13, 1973, shortly after the ratification of the new Constitution, the President exploitation and development of geothermal resources with a foreign contractor who
promulgated Presidential Decree No. 151. The law allowed Filipino citizens or entities
167
must be technically and financially capable of undertaking the operations required in the
which have service contract.
Thus, virtually the entire range of the country’s natural resources—from petroleum
_______________ and minerals to geothermal energy, from public lands and forest resources to fishery
products—was well covered by apparent legal authority to engage in the direct
BERNAS, S.J., supra, at p. 1016, Note 28, citing Session of November 25, 1972.
162
participation or involvement of foreign persons or corporations (otherwise disqualified)
Agabin, supra, at p. 1, quoting Sanvictores, The Economic Provisions in the 1973 Constitution, in Espiritu, 1979
in the exploration and utilization of natural resources through service contracts.
163

Philconsa Reader on Constitutional and Policy Issues 449.

175

BERNAS, S.J., supra, at p. 1016, Note 28, citing Session of November 25, 1972.
164
The 1987 Constitution and Technical or
Ibid.
165

Ibid.
166
Financial Assistance Agreements
Allowing Citizens of the Philippines or Corporations or Associations at least Sixty Per Centum of the Capital
167
After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins of power under
of which is Owned by such Citizens to Enter into Service Contracts with Foreign Persons, Corpora
204 a revolutionary government. On March 25, 1986, President Aquino issued Proclamation
No. 3, promulgating the Provisional Constitution, more popularly referred to as the
204 SUPREME COURT REPORTS ANNOTATED
176

Freedom Constitution. By authority of the same Proclamation, the President created a

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos Constitutional Commission (CONCOM) to draft a new constitution, which took effect on
acquired lands of the public domain or which own, hold or control such lands to enter into the date of its ratification on February 2, 1987. 177

service contracts for financial, technical, management or other forms of assistance with The 1987 Constitution retained the Regalian doctrine. The first sentence of Section 2,
any foreign persons or entity for the exploration, development, exploitation or utilization Article XII states: “All lands of the public domain, waters, minerals, coal, petroleum, and
of said lands. 168 other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife,
Presidential Decree No. 463, also known as THE MINERAL RESOURCES
169

DEVELOPMENT DECREE OF 1974, was enacted on May 17, 1974. Section 44 of the decree, _______________
as amended, provided that a lessee of a mining claim may enter into a service contract with
a qualified domestic or foreign contractor for the exploration, development and An Act to Promote the Exploration and Development of Geothermal Resources.
174

Magallona, supra, at p. 6.
exploitation of his claims and the processing and marketing of the product thereof.
175

Declaring a National Policy to Implement the Reforms Mandated by the People, Protecting their Basic Rights,
176

Presidential Decree No. 704 (THE FISHERIES DECREE OF 1975), approved on May
170
Adopting a Provisional Constitution, and Providing for an Orderly Transition to a Government under a New
16, 1975, allowed Filipinos engaged in commercial fishing to enter into contracts for Constitution.
CONST., art. XVIII, sec. 27; De Leon v. Esguerra, 153 SCRA 602(1987).
financial, technical or other forms of assistance with any foreign person, corporation or 177

entity for the production, storage, marketing and processing of fish and fishery/aquatic
products. Presidential Decree No. 705 (THE REVISED FORESTRY CODE OF THE
171 172
PHILIPPINES), approved on May 19, 1975, allowed “forest products licensees, lessees, or
permitees to enter into service contracts for financial, technical, management, or other
forms of assistance . . . with any foreign person or entity for the exploration, development,
exploitation or utilization of the forest resources.” 173
_______________
tions for the Exploration, Development, Exploitation or Utilization of Lands of the Public Domain, Amending
for the purpose certain provisions of Commonwealth Act No. 141.
206
206 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
flora and fauna, and other natural resources are owned by the State.”
Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the second
sentence of the same provision, prohibits the alienation of natural resources, except
agricultural lands.
The third sentence of the same paragraph is new: “The exploration, development and
utilization of natural resources shall be under the full control and supervision of the State.”
The constitutional policy of the State’s “full control and supervision” over natural
resources proceeds from the concept of jura regalia, as well as the recognition of the
importance of the country’s natural resources, not only for national economic
development, but also for its security and national defense. Under this provision, the State
178
assumes “a more dynamic role” in the exploration, development and utilization of natural
resources. 179
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions
authorizing the State to grant licenses, concessions, or leases for the exploration,
exploitation, development, or utilization of natural resources. By such omission, the
utilization of inalienable lands of public domain through “license, concession or lease” is
no longer allowed under the 1987 Constitution. 180
Having omitted the provision on the concession system, Section 2 proceeded to
introduce “unfamiliar language”: 181
The State may directly undertake such activities or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or associations at least
sixty per centum of whose capital is owned by such citizens.
Consonant with the State’s “full supervision and control” over natural resources, Section 2
offers the State two “options.” One, the State may directly undertake these activities itself;
182
or two, it
_______________
Miners Association of the Philippines, Inc. v. Factoran, Jr., 240 SCRA 100 (1995).
178
Ibid.
179
Ibid.
180
J. Bernas, S.J., The Intent of the 1986 Constitution Writers 812 (1995).
181
Miners Association of the Philippines, Inc. v. Factoran, Jr., supra.
182
207
VOL. 421, JANUARY 27, 2004 207
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
may enter into co-production, joint venture, or production-sharing agreements with
Filipino citizens, or entities at least 60% of whose capital is owned by such citizens.
A third option is found in the third paragraph of the same section:
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as
well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in rivers,
lakes, bays, and lagoons.
While the second and third options are limited only to Filipino citizens or, in the case of
the former, to corporations or associations at least 60% of the capital of which is owned
by Filipinos, a fourth allows the participation of foreign-owned corporations. The fourth
and fifth paragraphs of Section 2 provide:
The President may enter into agreements with foreign-owned corporations involving either technical
or financial assistance for large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and conditions provided by law,
based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and technical
resources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.
Although Section 2 sanctions the participation of foreign-owned corporations in the
exploration, development, and utilization of natural resources, it imposes certain
limitations or conditions to agreements with such corporations.
First, the parties to FTAAs. Only the President, in behalf of the State, may enter into
these agreements, and only with corporations. By contrast, under the 1973 Constitution,
a Filipino citizen, corporation or association may enter into a service contract with a
“foreign person or entity.”
Second, the size of the activities: only large-scaleexploration, development, and
utilization is allowed. The term “large-scale usually refers to very capital-intensive
activities.” 183
_______________
III Records of the Constitutional Commission 255.
183
208
208 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Third, the natural resources subject of the activities is restricted to minerals, petroleum and
other mineral oils, the intent being to limit service contracts to those areas where Filipino
capital may not be sufficient. 184
Fourth, consistency with the provisions of statute. The agreements must be in
accordance with the terms and conditions provided by law.
Fifth, Section 2 prescribes certain standards for entering into such agreements. The
agreements must be based on real contributions to economic growth and general welfare of
the country.
Sixth, the agreements must contain rudimentary stipulations for the promotion of the
development and use of local scientific and technical resources.
Seventh, the notification requirement. The President shall notify Congress of every
financial or technical assistance agreement entered into within thirty days from its
execution.
Finally, the scope of the agreements. While the 1973 Constitution referred to “service
contracts for financial, technical, management, or other forms of assistance” the 1987
Constitution provides for “agreements . . . involving either financial or technical assistance.”
It bears noting that the phrases “service contracts” and “management or other forms of
assistance” in the earlier constitution have been omitted.
By virtue of her legislative powers under the Provisional Constitution, President 185
Aquino, on July 10, 1987, signed into law E.O. No. 211 prescribing the interim procedures
in the processing and approval of applications for the exploration, development and
utilization of minerals. The omission in the 1987 Constitution of the term “service
contracts” notwithstanding, the said E.O. still referred to them in Section 2 thereof:
Sec. 2. Applications for the exploration, development and utilization of natural resources, including
renewal applications and applications for approval of operating agreements and mining
service contracts, shall be accepted and processed and may be approved x x x. [Emphasis supplied.]
_______________
Id., at pp. 355-356.
184
Const. (1986), art. II, sec. 1.
185
209
VOL. 421, JANUARY 27, 2004 209
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The same law provided in its Section 3 that the “processing, evaluation and approval of all
mining applications . . . operating agreements and service contracts. . . shall be governed by
Presidential Decree No. 463, as amended, other existing mining laws, and their
implementing rules and regulations. . . .”
 As earlier stated, on the 25th also of July 1987, the President issued E.O. No. 279 by An Act Creating A People’s Small-Scale Mining Program and for other purposes.
189

Rep. Act No. 7942 (1995), sec. 42.

authority of which the subject WMCP FTAA was executed on March 30, 1995.
190

Id., secs. 3 (ab) and 26.

191

On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section 15 thereof “Contractor” means a qualified person acting alone or in consortium who is a party to a mineral agreement
192

declares that the Act “shall govern the exploration, development, utilization, and or to a financial or technical assistance agreement. (Id., sec. 3[g].)
processing of all mineral resources.” Such declaration notwithstanding, R.A. No. 7942 does “Contract area” means land or body of water delineated for purposes of exploration, development, or
193

utilization of the minerals found therein. (Id., sec. 3[f].)

not actually cover all the modes through which the State may undertake the exploration, “Gross output” means the actual market value of minerals or mineral products from its mining area as defined
194

development, and utilization of natural resources. in the National Internal Revenue Code (Id., sec. 3[v]).
The State, being the owner of the natural resources, is accorded the primary power Id., sec. 26 (a).
195

196 An Act Reducing Excise Tax Rates on Metallic and Non-Metallic Minerals and Quarry Resources, amending
and responsibility in the exploration, development and utilization thereof. As such, it may for the purpose Section 151 (a) of the National Internal Revenue Code, as amended.
undertake these activities through four modes: Rep. Act No. 7942 (1995), sec. (80).
197

211
1. (1)The State may directly undertake such activities. VOL. 421, JANUARY 27, 2004 211
2. (2)The State may enter into co-production, joint venture or production-sharing
agreements with Filipino citizens or qualified corporations. La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
3. (3)Congress may, by law, allow small-scale utilization of natural resources by Filipino In a co-production agreement (CA), the Government provides inputs to the mining
198

citizens. operations other than the mineral resource, while in a joint venture agreement (JVA),
199

4. (4)For the large-scale exploration, development and utilization of minerals, petroleum and where the Government’s enjoys the greatest participation, the Government and the JVA
other mineral oils, the President may enter into agreements with foreign-owned contractor organize a company with both parties having equity shares. Aside from 200

corporations involving technical or financial assistance. 186

earnings in equity, the Government in a JVA is also entitled to a share in the gross
output. The Government may enter into a CA or JVA with one or more contractors. The
201 202 203

Except to charge the Mines and Geosciences Bureau of the DENR with performing Government’s share in a CA or JVA is set out in Section 81 of the law:
researches and surveys, and a passing mention of government-owned or controlled
187 The share of the Government in co-production and joint venture agreements shall be negotiated by
corporations, R.A. 188
the Government and the contractor taking into consideration the: (a) capital investment of the project,
(b) the risks involved, (c) contribution to the project to the economy, and (d) other factors that will
provide for a fair and equitable sharing between the Government and the contractor. The Government
_______________
shall also be entitled to compensations for its other contributions which shall be agreed upon by the
parties, and shall consist, among other things, the contractor’s income tax, excise tax, special
Cruz v. Secretary of Environment and Natural Resources, supra, Puno, J., Separate Opinion.
allowance, withholding tax due from the contractor’s foreign stockholders arising from dividend or
186

Rep. Act No. 7942 (1995), sec. 9.

187

SEC. 82. Allocation of Government Share.—The Government share as referred to in the preceding sections
188
interest payments to the said foreign stockholders, in case of a foreign national, and all such other
shall be shared and allocated in accordance with Sections 290 and 292 of Republic Act No. 7160 other taxes, duties and fees as provided for under existing laws.
210 All mineral agreements grant the respective contractors the exclusive right to conduct
210 SUPREME COURT REPORTS ANNOTATED mining operations and to extract all mineral resources found in the contract area. A 204

“qualified person” may enter into any of the mineral agreements with the Government. A 205

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos “qualified person” is

No. 7942 does not specify how the State should go about the first mode. The third mode, any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or
on the other hand, is governed by Republic Act No. 7076 (the People’s Small-Scale Mining
189 cooperative organized or authorized for the purpose of engaging in mining, with technical and
Act of 1991) and other pertinent laws. R.A. No. 7942 primarily concerns itself with the
190 financial capability to undertake mineral resources development and duly registered in accor-
second and fourth modes.
Mineral production sharing, co-production and joint venture agreements are _______________

collectively classified by R.A. No. 7942 as “mineral agreements.” The Government 191

Id., Sec. 26 (b).

participates the least in a mineral production sharing agreement (MPSA). In an MPSA, the
198

199 “Mineral resource” means any concentration of minerals/rocks with potential economic value. (Id., sec. 3[ad].)
Government grants the contractor the exclusive right to conduct mining operations
192
200 Id., sec. 26 (c).
201 Ibid.

within a contract area and shares in the gross output. The MPSA contractor provides the
193 194
202 Id., sec. 3 (h).

financing, technology, management and personnel necessary for the agreement’s 203 Id., sec. 3 (x).

204 Id., sec. 26, last par.

implementation. The total government share in an MPSA is the excise tax on mineral
195
205 Id., sec. 27.

products under Republic Act No. 7729, amending Section 151 (a) of the National Internal
196 212
Revenue Code, as amended. 197
212 SUPREME COURT REPORTS ANNOTATED
_______________ La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
dance with law at least sixty per centum (60%) of the capital of which is owned by citizens of the
wise known as the Local Government Code of 1991. In case the development and utilization of mineral Philippines x x x. 206

resources is undertaken by a government-owned or controlled corporation, the sharing and allocation shall be in The fourth mode involves “financial or technical assistance agreements.” An FTAA is
accordance with Sections 291 and 292 of the said Code. defined as “a contract involving financial or technical assistance for large-scale
exploration, development, and utilization of natural resources.” Any qualified person 207
_______________
with technical and financial capability to undertake large-scale exploration, development,
and utilization of natural resources in the Philippines may enter into such agreement 1. (2)For partnerships, cooperatives, associations, or corporations five hundred (500) blocks; and
directly with the Government through the DENR. For the purpose of granting an FTAA, a
208
2. (3)For the exclusive economic area, a larger area to be determined by the Secretary.
legally organized foreign-owned corporation (any corporation, partnership, association,
or cooperative duly registered in accordance with law in which less than 50% of the capital The maximum areas mentioned above that a contractor may hold under a mineral agreement shall not include
mining/quarry areas under operating agreements between the contractor and a
is owned by Filipino citizens) is deemed a “qualified person.”
209 210

claimowner/lessee/permittee/licensee entered into under Presidential Decree No. 463.

Other than the difference in contractors’ qualifications, the principal distinction On the other hand, Section 34, which governs the maximum area for FTAAs provides:
between mineral agreements and FTAAs is the maximum contract area to which a SEC. 34. Maximum Contract Area.—The maximum contract area that may be granted per qualified person,
qualified person may hold or be granted. “Large-scale” under R.A. No. 7942 is determined
211
subject to relinquishment shall be:
(a) 1,000 meridional blocks onshore;
by the (b) 4,000 meridional blocks offshore; or
(c) Combinations of (a) and (b) provided that it shall not exceed the maximum limits for onshore and offshore
_______________ areas.
Id., sec. 33.
212

Id., sec. 81.

213

206 Id., sec. 3 (aq). 214

207 Id., sec. 3 (r).
208 Id., sec. 33. 214 SUPREME COURT REPORTS ANNOTATED
209 Id., sec. 3 (t).
210 Id., sec. 3 (aq). Id., sec. 3 (aq). La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
211 The maximum areas in cases of mineral agreements are prescribed in Section 28 as follows:
SEC. 28. Maximum Areas for Mineral Agreement.—The maximum area that a qualified person may hold at any time under a mineral The Effectivity of Executive Order No. 279
agreement shall be: Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA was executed,
(a) Onshore, in any one province—
did not come into effect.
E.O. No. 279 was signed into law by then President Aquino on July 25, 1987, two days
1. (1)For individuals, ten (10) blocks; and
2. (2)For partnerships, cooperatives, associations, or corporations, one hundred (100) blocks. before the opening of Congress on July 27, 1987. Section 8 of the E.O. states that the same
214

“shall take effect immediately.” This provision, according to petitioners, runs counter to
(b) Onshore, in the entire Philippines— Section 1 of E.O. No. 200, which provides:
215

SECTION 1. Laws shall take effect after fifteen days following the completion of their publication either
1. (1)For individuals, twenty (20) blocks; and
in the Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise
2. (2)For partnerships, cooperatives, associations, or corporations, two hundred (200) blocks. provided. [Emphasis supplied.]
216

On that premise, petitioners contend that E.O. No. 279 could have only taken effect fifteen
(c) Offshore, in the entire Philippines— days after its publication at which time Congress had already convened and the President’s
power to legislate had ceased.
1. (1)For individuals, fifty (50) blocks; Respondents, on the other hand, counter that the validity of E.O. No. 279 was settled
in Miners Association of the Philippines v. Factoran, supra. This is of course incorrect for the
213 issue in Miners Association was not the validity of E.O. No. 279 but that of DAO Nos. 57 and
82 which were issued pursuant thereto.
VOL. 421, JANUARY 27, 2004 213
Nevertheless, petitioners’ contentions have no merit.
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos It bears noting that there is nothing in E.O. No. 200 that prevents a law from taking
size of the contract area, as opposed to the amount invested (US$50,000,000.00), which effect on a date other than—even before—the 15-day period after its publication. Where
was the standard under E.O. 279. a law provides for its own date of effectivity, such date prevails over that prescribed by
Like a CA or a JVA, an FTAA is subject to negotiation. The Government’s contributions,
212 E.O. No. 200. Indeed, this is the very essence, of the phrase “unless it is otherwise provided”
in the form of taxes, in an FTAA is identical to its contributions in the two mineral in Section 1 thereof. Section 1, E.O. No.
agreements, save that in an FTAA:
The collection of Government share in financial or technical assistance agreement shall commence _______________
after the financial or technical assistance agreement contractor has fully recovered its pre-operating
expenses, exploration, and development expenditures, inclusive. 213
Kapatiran v. Tan, 163 SCRA 371 (1988).
214

Providing for the Publication of Laws either in the Official Gazette or in a Newspaper of General Circulation
215

in the Philippines as a Requirement for their Effectivity.

III Section 1, E.O. No. 200 was subsequently incorporated in the Administrative Code of 1987 (Executive Order
216

No. 292 as Section 18, Chapter 5 (Operation and Effect of Laws), Book 1 (Sovereignty and General Administration).
Having examined the history of the constitutional provision and statutes enacted pursuant 215
thereto, a consideration of the substantive issues presented by the petition is now in order. VOL. 421, JANUARY 27, 2004 215

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
200, therefore, applies only when a statute does not provide for its own date of effectivity.
What is mandatory under E.O. No. 200, and what due process requires, as this Court
held in Tañada v. Tuvera, is the publication of the law for
217
without such notice and publication, there would be no basis for the application of the maxim
“ignorantia legis n[eminem] excusat.” It would be the height of injustice to punish or otherwise
burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a
constructive one.
While the effectivity clause of E.O. No. 279 does not require its publication, it is not a
ground for its invalidation since the Constitution, being the fundamental, paramount and
supreme law of the nation,” is deemed written in the law. Hence, the due process
218
clause, which, so Tañada held, mandates the publication of statutes, is read into Section 8
219
of E.O. No. 279. Additionally, Section 1 of E.O. No. 200 which provides for publication
“either in the Official Gazette or in a newspaper of general circulation in the Philippines,”
finds suppletory application. It is significant to note that E.O. No. 279 was actually
published in the Official Gazette on August 3, 1987.
220
From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Tañada
v. Tuvera, this Court holds that E.O. No. 279 became effective immediately upon its
publication in the Official Gazette on August 3, 1987.
That such effectivity took place after the convening of the first Congress is irrelevant.
At the time President Aquino issued E.O. No. 279 on July 25, 1987, she was still validly
exercising legislative powers under the Provisional Constitution. Article XVIII (Transitory
221
Provisions) of the 1987 Constitution explicitly states:
SEC. 6. The incumbent President shall continue to exercise legislative powers until the first Congress
is convened.
_______________
136 SCRA 27 (1985).
217
Manila Prince Hotel v. Government Service Insurance System, 267 SCRA 408 (1997).
218
CONST., art. 3, sec. 1.
219
83 O.G. (Suppl.) 3528-115 to 3528-117 (August 1987).
220
Miners Association of the Philippines, Inc. v. Factoran, Jr., supra.
221
216
216 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The convening of the first Congress merely precluded the exercise of legislative powers by
President Aquino; it did not prevent the effectivity of laws she had previously enacted.
There can be no question, therefore, that E.O. No. 279 is an effective, and a validly
enacted, statute.
The Constitutionality of the WMCP FTAA
Petitioners submit that, in accordance with the text of Section 2, Article XII of the
Constitution, FTAAs should be limited to “technical or financial assistance” only. They
observe, however, that, contrary to the language of the Constitution, the WMCP FTAA
allows WMCP, a fully foreign-owned mining corporation, to extend more than mere
financial or technical assistance to the State, for it permits WMCP to manage and operate
every aspect of the mining activity.
222
_______________
Petitioners note in their Memorandum that the FTAA: x x x guarantees that wholly foreign owned [WMCP]
222
entered into the FTAA in order to facilitate “the large scale exploration, development and commercial exploitation
of mineral deposits that may be found to exist within the Contract area.” [Section 1.1] As a contractor it also has the
“exclusive right to explore, exploit, utilize, process and dispose of all mineral products and by-products thereof that
may be derived or produced from the Contract Area.” [Section 1.3] Thus, it is divided into an “exploration and
feasibility phase” [Section 3.2 (a)] and a “construction, development and production phase.” [Section 3. 2 (b).]
Thus, it is this wholly foreign owned corporation that, among other things:
1. (a)operates within a prescribed contract area [Section 4],
2. (b)opts to apply for a Mining Production Sharing Agreement [Section 4.2],
3. (c)relinquishes control over portions thereof at their own choice [Section 4.6],
4. (d)submits work programs, incurs expenditures, and makes reports during the exploration period
[Section 5],
5. (e)submits a Declaration of Mining Feasibility [Sections 5.4 and 5.5],
6. (f)during the development period, determines the timetable, submits work programs, provides the
reports and
217
VOL. 421, JANUARY 27, 2004 217
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Petitioners’ submission is well-taken. It is a cardinal rule in the interpretation of
constitutions that the instrument must be so construed as to give effect to the intention of
the people who adopted it. This intention is to be sought in the constitution itself, and the
223
apparent meaning of the words is to be taken as expressing it, except in cases where that
assumption would lead to absurdity, ambiguity, or contradiction. What the Constitution 224
says according to the text of the provision, therefore, compels acceptance and negates the
power of the courts to alter it, based on the postulate that the framers and the people mean
what they say. Accordingly, following the literal text of the Constitution, assistance
225
accorded by foreign-owned corporations in the large-scale exploration, development, and
utilization of petroleum, minerals and mineral oils should be limited to “technical” or
“financial” assistance only.
WMCP nevertheless submits that the word “technical” in the fourth paragraph of
Section 2 of E.O. No. 279 encompasses a ‘broad number of possible services,” perhaps,
“scientific and/or technological in basis.” It thus posits that it may also well include “the
226
area of management or operations . . . so long as such assistance requires specialized
knowledge or skills, and are related to the exploration, development and utilization of
mineral resources.” 227
_______________
1. determines and executes expansions, modifications, improvements and replacements of new mining
facilities within the area [Section 6],
2. (g)complies with the conditions for environmental protection and industrial safety, posts the necessary
bonds and makes representations and warranties to the government [Section 10.5].
The contract subsists for an initial term of twenty-five (25) years from the date of its effectivity [Section 3.1] and renewable for a further
period of twenty-five years under the same terms and conditions upon application by private respondent [Section 3.3]. (Rollo, pp. 458-
459.)
H. C. Black, Handbook on the Construction and Interpretation of the Laws § 8.
223
Ibid.
224
J.M. Tuason & Co., Inc. v. Land Tenure Association, 31 SCRA 413(1970).
225
Rollo, p. 580.
226
Ibid. Emphasis supplied.
227
218
218 SUPREME COURT REPORTS ANNOTATED

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
This Court is not persuaded. As priorly pointed out, the phrase “management or other
forms of assistance” in the 1973 Constitution was deleted in the 1987 Constitution, which
allows only “technical or financial assistance.” Casus omisus pro omisso habendus est. A
person, object or thing omitted from an enumeration must be held to have been omitted
intentionally. As will be shown later, the management or operation of mining activities by
228
foreign contractors, which is the primary feature of service contracts, was precisely the
evil that the drafters of the 1987 Constitution sought to eradicate.
Respondents insist that “agreements involving technical or financial assistance” is just
another term for service contracts. They contend that the proceedings of the CONCOM
indicate “that although the terminology ‘service contract’ was avoided [by the
Constitution], the concept it represented was not.” They add that “[t]he concept is
embodied in the phrase ‘agreements involving financial or technical assistance.’” And
point out how members of the CONCOM referred to these agreements as “service
contracts.” For instance:
SR. TAN. Am I correct in thinking that the only difference between these future service
contracts and the past service contracts under Mr. Marcos is the general law to be
enacted by the legislature and the notification of Congress by the President? That is
the only difference, is it not?
MR. VILLEGAS. That is right.
SR. TAN. So those are the safeguards?
MR. VILLEGAS. Yes. There was no law at all governing service contracts before.
SR. TAN. Thank you, Madam President. [Emphasis supplied.]
230
WMCP also cites the following statements of Commissioners Gascon, Garcia, Nolledo and
Tadeo who alluded to service contracts as they explained their respective votes in the
approval of the draft Article:
_______________
People v. Manantan, 115 Phil. 657; 5 SCRA 684 (1962); Commission on Audit of the Province of Cebu v. Province
228
of Cebu, 371 SCRA 196 (2001).
Rollo, p. 569.
229
III Record of the Constitutional Commission pp. 351-352.
230
219
VOL. 421, JANUARY 27, 2004
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
MR. GASCON. Mr. Presiding Officer, I vote no primarily because of two reasons: One, the provision on
service contracts. I felt that if we would constitutionalize any provision on service contracts, this should
always be with the concurrence of Congress and not guided only by a general law to be promulgated
by Congress. x x x. [Emphasis supplied.]
231
x x x.
MR. GARCIA. Thank you.
I vote no. x x x.
Service contracts are given constitutional Iegitimization in Section 3, even when they have been
proven to be inimical to the interests of the nation, providing as they do the legal loophole for the
exploitation of our natural resources for the benefit of foreign interests. They constitute a serious
negation of Filipino control on the use and disposition of the nation’ natural resources, especially with
regard to those which are nonrenewable. [Emphasis supplied.]
232
xxx
MR. NOLLEDO. While there are objectionable provisions in the Article on National Economy and
Patrimony, going over said provisions meticulously, setting aside prejudice and personalities will
reveal that the article contains a balanced set or provisions. I hope the forthcoming Congress will
implement such provisions taking into account that Filipinos should have real control over our
economy and patrimony, and if foreign equity is permitted, the same must be subordinated to the
imperative demands of the national interest.
x x x.
It is also my understanding that service contracts involving foreign corporations or entities are
resorted to only when no Filipino enterprise or Filipino-controlled enterprise could possibly undertake
the exploration or exploitation of our natural resources and that compensation under such contracts
cannot and should not equal what should pertain to ownership of capital. In other words, the service
contract should not be an instrument to circumvent the basic provision, that the exploration and
exploitation of natural resources should be truly for the benefit of Filipinos.
Thank you, and I vote yes. [Emphasis supplied.]
233
x x x.
MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.
Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin, pangunahin ang salitang
229 “imperyalismo.” Ang ibig sabihin nito ay ang
_______________
V Record of the Constitutional Commission 844.
231
232 Id., at p. 841.
233 Id., at p. 842.
220
220 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
sistema ng lipunang pinaghaharian ng iilang monopolyong kapitalista at ang salitang “imperyalismo”
ay buhay na buhay sa National Economy and Patrimony na nating ginawa. Sa pamamagitan ng salitang
“based on,” naroroon na ang free trade sapagkat tayo ay mananatiling tagapagluwas ng hilaw na
sangkap at tagaangkat ng yaring produkto. Pangalawa, naroroon pa rin ang parity rights, ang service
contract, ang 60-40 equity sa natural resources. Habang naghihirap ang sambayanang Pilipino,
ginagalugad naman ng mga dayuhan, ang ating likas na yaman. Kailan man ang Article on National
Economy and Patrimony ay hindi nagpaalis sa pagkaalipin ng ating ekonomiya sa kamay ng mga
dayuhan. Ang solusyon sa suliranin ng bansa ay dalawa lamang: ang pagpapatupad ng tunay na
reporma sa lupa at ang national industrialization. Ito ang tinatawag naming pagsikat ng araw sa
Silangan. Ngunit ang mga landlords and big businessmen at ang mga komprador ay nagsasabi na ang
free trade na ito, ang kahulugan para sa amin, ay ipinipilit sa ating sambayanan na ang araw ay sisikat
sa Kanluran. Kailan man hindi puwedeng sumikat ang araw sa Kanluran. I vote no. [Emphasis 234
supplied.]
219 This Court is likewise not persuaded.
As earlier noted, the phrase “service contracts” has been deleted in the 1987
Constitution’s Article on National Economy and Patrimony. If the CONCOM intended to
retain the concept of service contracts under the 1973 Constitution, it could have simply
adopted the old terminology (“service contracts”) instead of employing new and
unfamiliar terms (“agreements . . . involving either technical or financial assistance”). Such
a difference between the language of a provision in a revised constitution and that of a
similar provision in the preceding constitution is viewed as indicative of a difference in
purpose. If, as respondents suggest, the concept of “technical or financial assistance”
235
agreements is identical to that of “service contracts,” the CONCOM would not have
bothered to fit the same dog with a new collar. To uphold respondents’ theory would
reduce the first to a mere euphemism for the second and render the change in phraseology
meaningless.
An examination of the reason behind the change confirms that technical or financial
assistance agreements are not synonymous to service contracts.
_______________
 Id., at p. 844.
234
Vide Cherey v. Long Beach, 282 NY 382, 26 NE 2d 945, 127 ALR 1210 (1940), cited in 16 Am Jur 2d
235
Constitutional Law §79.
221
VOL. 421, JANUARY 27, 2004 221
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
[T]he Court in construing a Constitution should bear in mind the object sought to be accomplished by
its adoption, and the evils, if any, sought to be prevented or remedied. A doubtful provision will be
examined in light of the history of the times, and the condition and circumstances under which the
Constitution was framed. The object is to ascertain the reason which induced the framers of the
Constitution to enact the particular provision and the purpose sought to be accomplished thereby, in
order to construe the whole as to make the words consonant to that reason and calculated to effect
that purpose. 236
As the following question of Commissioner Quesada and Commissioner Villegas’ answer
shows, the drafters intended to do away with service contracts which were used to
circumvent the capitalization (60%-40%) requirement:
MS. QUESADA. The 1973 Constitution used the words “service contracts.” In this
particular Section 3, is there a safeguard against the possible control of foreign
interests if the Filipinos go into co-production with them?
MR. VILLEGAS. Yes. In fact, the deletion of the phrase “service contracts” was our first
attempt to avoid some of the abuses in the past regime in the use of service contracts to
go around the 60-40 arrangement. The safeguard has been introduced—and this, of
course can be refined—is found in Section 3, lines 25 to 30, where Congress will have
to concur with the President on any agreement entered into between a foreign-owned
corporation and the government involving technical or financial assistance for large-
scale exploration, development and utilization of natural resources. [Emphasis 237
supplied.]
In a subsequent discussion, Commissioner Villegas allayed the fears of Commissioner
Quesada regarding the participation of foreign interests in Philippine natural resources,
which was supposed to be restricted to Filipinos.
MS. QUESADA. Another point of clarification is the phrase “and utilization of natural
resources shall be under the full control and supervision of the State.” In the 1973
Constitution, this was limited to citizens of the Philippines; but it was removed and
substituted by “shall be under the full control and supervision of the State.” Was the
concept changed so that these particular resources would be limited to citizens of the
Philippines?
_______________
Civil Liberties Union v. Executive Secretary, 194 SCRA 317, 325 (1991).
236
III Record of the Constitutional Commission 278.
237
222
222 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Or would these resources only be under the full control and supervision of the State; meaning,
noncitizens would have access to these natural resources? Is that the understanding?
MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads the next sentence, it states:
Such activities may be directly undertaken by the State, or it may enter into co-production, joint venture, production-
sharing agreements with Filipino citizens.
So we are still limiting it only to Filipino citizens.
x x x.
MS. QUESADA. Going back to Section 3, the section suggest that:
The exploration, development, and utilization of natural resources . . . may be directly undertaken
by the State, or it may enter into coproduction, joint venture, production-sharing agreements with . .
. corporations or associations at least sixty percent of whose voting stock or controlling interest is
owned by such citizens.
Lines 25 to 30, on the other hand, suggest that in the large-scale exploration, development and
utilization of natural resources, the President with the concurrence of Congress may enter into
agreements with foreign-owned corporations even for technical or financial assistance.
I wonder if this part of Section 3 contradicts the second part. I am raising this point for fear that
foreign investors will use their enormous capital resources to facilitate the actual exploitation or
exploration, development and effective disposition of our natural resources to the detriment of
Filipino investors. I am not saying that we should not consider borrowing money from foreign
sources. What I refer to is that foreign interest should be allowed to participate only to the extent that
they lend us money and give us technical assistance with the appropriate government permit. In this
way, we can insure the enjoyment of our natural resources by our own people.
MR. VILLEGAS. Actually, the second provision about the President does not permit foreign investors
to participate. It is only technical or financial assistance—they do not own anything—but on conditions
that have to be determined by law with the concurrence of Congress. So, it is very restrictive.
If the Commissioner will remember, this removes the possibility for service contracts which we said
yesterday were avenues used in the previous regime to go around the 60-40 requirement. [Emphasis238
supplied.]
_______________
Id., at pp. 316-317.
238
223
VOL. 421, JANUARY 27, 2004 223
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The present Chief Justice, then a member of the CONCOM, also referred to this limitation
in scope in proposing an amendment to the 60-40 requirement:
MR. DAVIDE. May I be allowed to explain the proposal?
MR. MAAMBONG. Subject to the three-minute rule, Madam President.
MR. DAVIDE. It will not take three minutes.
The Commission had just approved the Preamble. In the Preamble we clearly stated that the
Filipino people are sovereign and that one of the objectives for the creation or establishment of a
government is to conserve and develop the national patrimony. The implication is that the national
patrimony or our natural resources are exclusively reserved for the Filipino people. No alien must be
allowed to enjoy, exploit and develop our natural resources. As a matter of fact, that principle proceeds
from the fact that our natural resources are gifts from God to the Filipino people and it would be a breach
of that special blessing from God if we will allow aliens to exploit our natural resources.
I voted in favor of the Jamir proposal because it is not really exploitation that we granted to the
alien corporations but only for them to render financial or technical assistance. It is not for them to enjoy
our natural resources. Madam President, our natural resources are depleting; our population is
increasing by leaps and bounds. Fifty years from now, if we will allow these aliens to exploit our
natural resources, there will be no more natural resources for the next generations of Filipinos. It may
last long if we will begin now. Since 1935 the aliens have been allowed to enjoy to a certain extent the
exploitation of our natural resources, and we became victims of foreign dominance and control. The
aliens are interested in coming to the Philippines because they would like to enjoy the bounty of
nature exclusively intended for Filipinos by God.
And so I appeal to all, for the sake of the future generations, that if we have to pray in the
Preamble “to preserve and develop the national patrimony for the sovereign Filipino people and for
the generations to come,” we must at this time decide once and for all that our natural resources must
be reserved only to Filipino citizens.
Thank you. [Emphasis supplied.]
239
The opinion of another member of the CONCOM is persuasive and leaves no doubt as to
240
the intention of the framers to eliminate service contracts altogether. He writes:
_______________
DRAFT OF THE UP LAW PROPOSED RESOLUTION NO. ARTICLE XII OF THE 1987
III Record of the Constitutional Commission 358-359.
239 CONSTITUTION PROJECT 496 OF THE CONSTITUTIONAL CONSTITUTION
Vera v. Avelino, 77 Phil. 192 (1946).
240

224 COMMISSION
224 SUPREME COURT REPORTS ANNOTATED natural resources of the resources are owned by the wildlife, flora and fauna, and

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos Philippines are owned by the State. With the exception of other natural resources are
Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly technological undertakings for State. With the exception of agricultural lands, all other owned by the State. With the
which the President may enter into contracts with foreign-owned corporations, and enunciates strict
conditions that should govern such contracts. x x x. agricultural lands, all other natural resources shall not be exception of agricultural
This provision balances the need for foreign capital and technology with the need to maintain the natural resources shall not be alienated. The exploration, lands, all other natural
national sovereignty. It recognizes the fact that as long as Filipinos can formulate their own terms in
their own territory, there is no danger of relinquishing; sovereignty to foreign interests. alienated. The exploration, development, and utilization of resources shall not be
Are service contracts allowed under the new Constitution? No. Under the new Constitution, foreign development and utilization natural resources shall be under alienated. The exploration,
investors (fully alien-owned) can NOT participate in Filipino enterprises except to provide: (1) Technical
Assistance for highly technical enterprises; and (2) Financial Assistance for large-scale enterprises. of natural resources shall be the full control and supervision development, and utilization
The intent of this provision, as well as other provisions on foreign investments, is to prevent the under the full control and of the State. Such activities may of natural resources shall be
practice (prevalent in the Marcos government) of skirting the 60/40 equation using the cover of service
contracts. [Emphasis supplied.]
241 supervision of the State. Such be directly undertaken by the under the full control and
Furthermore, it appears that Proposed Resolution No. 496, which was the draft Article on
242

activities may be directly State, or it may enter into co- supervision of the State. The
National Economy and Patrimony, adopted the concept of “agreements . . . involving either
technical or financial assistance” contained in the “Draft of the 1986 U.P. Law Constitution undertaken by the state, or it production, joint venture, State may directly undertake
Project” (U.P. Law draft) which was taken into consideration during the deliberation of the may enter into co- production-sharing agreements such activities or it may enter
CONCOM. The for-
production, joint venture, with Filipino citizens or into co-production, joint
243

_______________ production sharing corporations or associations at venture, or production-

agreements with Filipino least sixty percent of whose sharing agreements with
J. Nolledo, The New Constitution of the Philippines Annotated 924-926 (1990).
241

Resolution to Incorporate in the New Constitution an Article on National Economy and Patrimony.
242 citizens or corporations or voting stock or controlling Filipino citizens, or
The Chair of the Committee on National Economy and Patrimony, alluded to it in the discussion on the
243

capitalization requirement: associations sixty percent of interest is owned by such citi- corporations or associations
MR. VILLEGAS. We just had a long discussion with the members of the team from the UP Law Center who provided us a draft. The
phrase that is contained here which we adopted from the UP draft is “60 percent of voting stock.” (III Record of the Constitutional
whose voting stock or at least sixty per centum of
Commission 255.)
Likewise, in explaining the reasons for the deletion of the term “exploitation”:
controlling interest is owned whose capital is owned by
MR. VILLEGAS. Madam President, following the recommendation in the UP draft, we omitted “exploitation” first of all because it is
believed to be subsumed under “development” and secondly because it has a derogatory connotation. (Id., at p. 358.)
by such citizens for a period such citizens. Such
225 of not more than twenty-five agreements may be for a
VOL. 421, JANUARY 27, 2004 225 years, renewable for not period not ex-
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos more than twenty-five years
mer, as well as Article XII, as adopted, employed the same terminology, as the comparative 226
table below shows: 226 SUPREME COURT REPORTS ANNOTATED
DRAFT OF THE UP LAW PROPOSED RESOLUTION NO. ARTICLE XII OF THE 1987 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
CONSTITUTION PROJECT 496 OF THE CONSTITUTIONAL CONSTITUTION
and under such terms zens. Such agreements shall ceeding twenty-five years, renewable
COMMISSION
and conditions as may be for a period of twenty-five for not more than twenty-five years,
Sec. 1. All lands of the Sec. 3. All lands of the public Sec. 2. All lands of the
be provided by law. In years, renewable for not and under such terms and conditions
public domain, waters, domain, waters, minerals, coal, public domain, waters,
case as to water rights more than twenty-five years, as may be provided by law. In case of
minerals, coal, petroleum and petroleum and other mineral minerals, coal, petroleum,
for irrigation, water and under such terms and water rights for irrigation, water,
other mineral oils, all forces oils, all forces of potential and other mineral oils, all
supply, fisheries, or conditions as may be supply, fisheries, or industrial uses
of potential energy, fisheries, energy, fisheries,forests, flora forces of potential energy,
industrial uses other provided by law. In cases of other than the development of water
flora and fauna and other and fauna, and other natural fisheries, forests or timber,
than the development of
water power, beneficial
use may be the measure
and limit of the grant.
The National
Assembly may by law
allow small-scale
utilization of natural
resources by Filipino
citizens.
The National
Assembly, may by two-
thirds vote of all its
members by special law
provide the terms and
conditions under which
a foreign-owned corpo
227
VOL. 421, JANUARY 27, 2004
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
ration may enter into
agreements with the
government
involving either technical
or financial assistancefor
large-scale exploration,
development, or utilizat
ion of natural resources.
[Emphasis supplied.]
water rights for irrigation,
water supply, fisheries or
industrial uses other than the State shall protect the nation’s
development for water
power, beneficial use may be
the measure and limit of the
grant.
The Congress may by law
allow small-scale utilization
of natural resources by
Filipino citizens, as well as
cooperative fish farming in
rivers, lakes, bays, and
lagoons.
The President with the
concurrence of Congress, by
special law, shall provide the
terms and conditions under
which a foreign-
owned corporation may
enter into agreements
with the government
involving either technical
or financial assistance for
large-scale exploration,
development, and
utilization of natural
resources. [Emphasis
supplied.]
power, beneficial use may be the
measure and limit of the grant. The
marine wealth in its archipelagic
waters, territorial sea, and exclusive
economic zone, and reserve its use
and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow
small-scale utilization of natural
resources by Filipino citizens, as well
as cooperative fish farming, with
priority to subsistence fishermen
and fish-workers in rivers, lakes,
bays, and lagoons.
The President may enter into
agreements with foreign owned
corporations involving either
technical or financial assistance for
large-scale explo
227
ration, development, and utilization of
minerals, petroleum, and other
mineral oils according to the general
terms and conditions provided by law,
based on real contributions to the
economic growth and general welfare
of the country. In such agreements, the
State shall promote the development
and use of local scientific and technical
resources. [Emphasis supplied.] The
President shall notify the Congress of
every contract entered into in
accordance with this provision, within
thirty days from its execution.
The insights of the proponents of the U.P. Law draft are, therefore, instructive in
interpreting the phrase “technical or financial assistance.”
In his position paper entitled Service Contracts: Old Wine in New Bottles?, Professor
Pacifico A. Agabin, who was a member of the working group that prepared the U.P. Law
draft, criticized service contracts for they “lodge exclusive management and control of the
enterprise to the service contractor, which is reminiscent of the old concession regime.
Thus, notwithstanding the provision of the Constitution that natural resources belong to
the State, and that these shall not be alienated, the service contract system renders
nugatory the constitutional provisions cited.” He elaborates:
244
Looking at the Philippine model, we can discern the following ves-tiges of the concession regime, thus:
_______________
244 Id., at p. 12.
228
228 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
1. Bidding of a selected area, or leasing the choice of the area to the interested party and then
negotiating the terms and conditions of the contract; (Sec. 5, P.D. 87)
2. Management of the enterprise vested on the contractor, including operation of the field if
petroleum is discovered; (Sec. 8, P.D. 87)
3. Control of production and other matters such as expansion and development; (Sec. 8)
4. Responsibility for downstream operations—marketing, distribution, and processing may be with
the contractor (Sec. 8);
5. Ownership of equipment, machinery, fixed assets, and other properties remain with contractor
(Sec. 12, P.D. 87);
6. Repatriation of capital and retention of profits abroad guaranteed to the contractor (Sec. 13,
P.D. 87); and
7. While title to the petroleum discovered may nominally be in the name of the government, the
contractor has almost unfettered control over its disposition and sale, and even the domestic
requirements of the country is relegated to a pro rata basis (Sec. 8).
In short, our version of the service contract is just a rehash of the old concession regime x x x.
Some people have pulled an old rabbit out of a magician’s hat, and foisted it upon us as a new and
different animal.
The service contract as we know it here is antithetical to the principle of sovereignty over our
natural resources restated in the same article of the [1973] Constitution containing the provision for
service contracts. If the service contractor happens to be a foreign corporation, the contract would also
run counter to the constitutional provision on nationalization or Filipinization, of the exploitation of our
natural resources. [Emphasis supplied. Italics in the original.]
245
Professor Merlin M. Magallona, also a member of the working group, was harsher in his
reproach of the system:
x x x the nationalistic phraseology of the 1935 [Constitution] was retained by the [1973] Charter, but
the essence of nationalism was reduced to hollow rhetoric. The 1973 Charter still provided that the
exploitation or development of the country’s natural resources be limited to Filipino citizens or
corporations owned or controlled by them. However, the martial law Constitution allowed them, once
these resources are in their name, to enter into service contracts with foreign investors for financial,
technical, management, or other forms of assistance. Since foreign investors have the capital
resources, the actual exploitation and development, as well as the effective disposition, of the
country’s natural resources, would be under
_______________
 245 Id., at pp. 15-16.
229
VOL. 421, JANUARY 27, 2004
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
their direction, and control, relegating the Filipino investors to the role of second-rate partners in
joint ventures.
Through the instrumentality of the service contract, the 1973 Constitution had legitimized at the
highest level of state policy that which was prohibited under the 1973 Constitution, namely: the
exploitation of the country’s natural resources by foreign nationals. The drastic impact of [this]
constitutional change becomes more pronounced when it is considered that the active party to any
service contract may be a corporation wholly owned or foreign interests. In such a case, the citizenship
requirement is completely set aside, permitting foreign corporations to obtain actual possession, control,
and [enjoyment] of the country’s natural resources. [Emphasis supplied.]
246
Accordingly, Professor Agabin recommends that:
Recognizing the service contract for what it is, we have to expunge it from the Constitution and reaffirm
ownership over our natural resources. That is the only way we can exercise effective control over our
natural resources.
This should not mean complete isolation of the country’s natural resources from foreign
investment. Other contract forms which are less derogatory to our sovereignty and control over natural
resources—like technical assistance agreements, financial assistance [agreements], co-production
agreements, joint ventures, production-sharing—could still be utilized and adopted without violating
constitutional provisions. In other words, we can adopt contract forms which recognize and assert our
sovereignty and ownership over natural resources, and where the foreign entity is just a pure contractor
instead of the beneficial owner of our economic resources. [Emphasis supplied.]
247
Still another member of the working group, Professor Eduardo Labitag, proposed that:
2. Service contracts as practiced under the 1973 Constitution should be discouraged, instead the
government may be allowed, subject to authorization by special law passed by an extraordinary majority
to enter into either technical or financial assistance. This is justified by the fact that as presently
worded in the 1973 Constitution, a service contract gives full control over the contract area to the
service contractor, for him to work, manage and dispose of the proceeds or production. It was a
subterfuge to
_______________
246 M. Magallona, Nationalism and Its Subversion in the Constitution 5, in II DRAFT PROPOSAL OF THE 1986 U.P. Law Constitution
Project.
Agabin, supra, at p. 16.
247
230
230 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
get around the nationality requirement of the constitution. [Emphasis supplied.] 248
In the annotations on the proposed Article on National Economy and Patrimony, the U.P.
Law draft summarized the rationale therefor, thus:
5. The last paragraph is a modification of the service contract provision found in Section 9, Article XIV
of the 1973 Constitution as amended. This 1973 provision shattered the framework of nationalism in
our fundamental law (see Magallona, “Nationalism and its Subversion in the Constitution”). Through
the service contract, the 1973 Constitution had legitimized that which was prohibited under the 1935
constitution—the exploitation of the country’s natural resources by foreign nationals. Through the
service contract, acts prohibited by the Anti-Dummy Law were recognized as legitimate
arrangements. Service contracts lodge exclusive management and control of the enterprise to the service
contractor, not unlike the old concession regime where the concessionaire had complete control over the
country’s natural resources, having been given exclusive and plenary rights to exploit a particular
resource and, in effect, having been assured of ownership of that resource at the point of extraction (see
Agabin, “Service Contracts: Old Wine in New Bottles”). Service contracts, hence, are antithetical to the
principle of sovereignty over our natural resources, as well as the constitutional provision on
nationalization or Filipinization of the exploitation of our natural resources.
229 Under the proposed provision, only technical assistance or financial assistance agreements may
be entered into, and only for large-scale activities. These are contract forms which recognize and
assert our sovereignty and ownership over natural resources since the foreign entity is just a pure
contractor and not a beneficial owner of our economic resources. The proposal recognizes the need
for capital and technology to develop our natural resources without sacrificing our sovereignty and
control over such resources by the safeguard of a special law which requires two-thirds vote of all the
members of the Legislature. This will ensure that such agreements will be debated upon exhaustively
and thoroughly in the National Assembly to avert prejudice to the nation. [Emphasis supplied.]
249
The U.P. Law draft proponents viewed service contracts under the 1973 Constitution as
grants of beneficial ownership of the
_______________
E. Labitag, Philippine Natural Resources: Some Problems and Perspectives 17 in II DRAFT PROPOSAL of the
248
1986 U.P. Law Constitution Project.
I Draft Proposal of the 1986 U.P. Law Constitution Project 11-13.
249
231
VOL. 421, JANUARY 27, 2004 231
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
country’s natural resources to foreign owned corporations. While, in theory, the State
owns these natural resources—and Filipino citizens, their beneficiaries—service
contracts actually vested foreigners with the right to dispose, explore for, develop, exploit,
and utilize the same. Foreigners, not Filipinos, became the beneficiaries of Philippine
natural resources. This arrangement is clearly incompatible with the constitutional ideal
of nationalization of natural resources, with the Regalian doctrine, and on a broader
perspective, with Philippine sovereignty.
The proponents nevertheless acknowledged the need for capital and technical know-
how in the large-scale exploitation, development and utilization of natural resources—the
second paragraph of the proposed draft itself being an admission of such scarcity. Hence,
they recommended a compromise to reconcile the nationalistic provisions dating back to
the 1935 Constitution, which reserved all natural resources exclusively to Filipinos, and
the more liberal 1973 Constitution, which allowed foreigners to participate in these
resources through service contracts. Such a compromise called for the adoption of a new
system in the exploration, development, and utilization of natural resources in the form of
technical agreements or financial agreements which, necessity, are distinct concepts from
service contracts.
The replacement of “service contracts” with “agreements . . . involving either technical
or financial assistance,” as well as the deletion of the phrase “management or other forms
of assistance,” assumes greater significance when note is taken that the U.P. Law draft
proposed other equally crucial changes that were obviously heeded by the CONCOM.
These include the abrogation of the concession system and the adoption of new “options”
for the State in the exploration, development, and utilization of natural resources. The
proponents deemed these changes to be more consistent with the State’s ownership of,
and its “full control and supervision” (a phrase also employed by the framers) over, such
resources. The Project explained:
3. In line with the State ownership of natural resources, the State should take a more active role in the
exploration, development, and utilization of natural resources, than the present practice of granting
licenses, concessions, or leases—hence the provision that said activities shall be under the full control
and supervision of the State. There are three major schemes by which the State could undertake these
activities: first, directly
232
232 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
by itself; second, by virtue of co-production, joint venture, production sharing agreements with
Filipino citizens or corporations or associations sixty percent (60%) of the voting stock or controlling
interests of which are owned by such citizens; or third, with a foreign-owned corporation, in cases of
large-scale exploration, development, or utilization of natural resources through agreements
involving either technical or financial assistance only. x x x.
At present, under the licensing concession or lease schemes, the government benefits from such
benefits only through fees, charges, ad valorem taxes and income taxes of the exploiters of our natural
resources. Such benefits are very minimal compared with the enormous profits reaped by theses
licensees, grantees, concessionaires. Moreover, some of them disregard the conservation of natural
resources and do not protect the environment from degradation. The proposed role of the State will
enable it to a greater share in the profits—it can also actively husband its natural resources and
engage in developmental programs that will be beneficial to them.
4. Aside from the three major schemes for the exploration, development, and utilization of our
natural resources, the State may, by law, allow Filipino citizens to explore, develop, utilize natural
resources in small-scale. This is in recognition of the plight of marginal fishermen, forest dwellers,
gold panners, and others similarly situated who exploit our natural resources for their daily
sustenance and survival. 250
Professor Agabin, in particular, after taking pains to illustrate the similarities between the
two systems, concluded that the service contract regime was but a “rehash” of the
concession system. “Old wine in new bottles,” as he put it. The rejection of the service
contract regime, therefore, is in consonance with the abolition of the concession system.
In light of the deliberations of the CONCOM, the text of the Constitution, and the
adoption of other proposed changes, there is no doubt that the framers considered and
shared the intent of the U.P. Law proponents in employing the phrase “agreements . . .
involving either technical or financial assistance.”
_______________
Id., at pp. 9-11. Professor Labitag also suggests that: x x x. The concession regime of natural resources
250
disposition should be discontinued. Instead the State shall enter into such arrangements and agreements like co-
production, joint ventures, etc. as shall bring about effective control and a larger share in the proceeds, harvest or
production. (Labitag, supra, at p. 17.)
233
VOL. 421, JANUARY 27, 2004 233
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
While certain commissioners may have mentioned the term “service contracts” during the
CONCOM deliberations, they may not have been necessarily referring to the concept of
service contracts under the 1973 Constitution. As noted earlier, “service contracts” is a
term that assumes different meanings to different people. The commissioners may have
251
been using the term loosely, and not in its technical and legal sense, to refer, in general, to
agreements concerning natural resources entered into by the Government with foreign
corporations. These loose statements do not necessarily translate to the adoption of the
1973 Constitution provision allowing service contracts.
It is true that, as shown in the earlier quoted portions of the proceedings in CONCOM,
in response to Sr. Tan’s question, Commissioner Villegas commented that, other than
congressional notification, the only difference between “future” and “past” “service
contracts” is the requirement of a general law as there were no laws previously
authorizing the same. However, such remark is far outweighed by his more categorical
252
statement in his exchange with Commissioner Quesada that the draft article “does not
permit foreign investors to participate” in the nation’s natural resources—which was
exactly what service contracts did—except to provide “technical or financial assistance.” 253
In the case of the other commissioners, Commissioner Nolledo himself clarified in his
work that the present charter prohibits service contracts. Commissioner Gascon was not
254
totally averse to foreign participation, but favored stricter restrictions in the form of
majority congressional concurrence. On the other hand, Commis-
255
_______________
Vide Note 147.
251
Vide Note 230. The question was posed before the Jamir amendment and subsequent proposals introducing
252
other limitations. Comm. Villegas’ response that there was no requirement in the 1973 Constitution for a law to
govern service contracts and that, in fact, there were then no such laws is inaccurate. The 1973 Charter required
similar legislative approval, although it did not specify the form it should take: “The Batasang Pambansa, in the
national interest, may allow such citizens . . . to enter into service contracts . . . .” As previously noted, however, laws
authorizing service contracts were actually enacted by presidential decree.
Vide Note 238.
253
Vide Note 241.
254
Vide Note 231.
255
234
234 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
sioners Garcia and Tadeo may have veered to the extreme side of the spectrum and their
objections may be interpreted as votes against any foreign participation in our natural
resources whatsoever.
WMCP cites Opinion No. 75, s. 1987, and Opinion No. 175, s. 1990 of the Secretary of
256 257
Justice, expressing the view that a financial or technical assistance agreement “is no
different in concept” from the service contract allowed under the 1973 Constitution. This
Court is not, however, bound by this interpretation. When an administrative or executive
agency renders an opinion or issues a statement of policy, it merely interprets a
preexisting law; and the administrative interpretation, of the law is at best advisory, for it
is the courts that finally determine what the law means. 258
In any case, the constitutional provision allowing the President to enter into FTAAs
with foreign-owned corporations is an exception to the rule that participation in the
nation’s natural resources is reserved exclusively to Filipinos. Accordingly, such provision
must be construed strictly against their enjoyment by non-Filipinos. As Commissioner
Villegas emphasized, the provision is “very restrictive.” Commissioner Nolledo also 259
remarked that “entering into service contracts is an exception to the rule on protection of
natural resources for the interest of the nation and, therefore, being an exception, it should
be subject, whenever possible, to stringent rules.” Indeed, exceptions should be strictly
260
but reasonably construed; they extend only so far as their language fairly warrants and all
doubts should be resolved in favor of the general provision rather than the exception. 261
With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is invalid
insofar as said Act authorizes service contracts. Although the statute employs the phrase
“financial and technical agreements” in accordance with the 1987 Constitution, it actually
treats these agreements as service contracts that grant beneficial ownership to foreign
contractors contrary to the fundamental law.
_______________
Dated July 28, 1987.
256
257 Dated October 3, 1990.
258 Peralta v. Civil Service Commission, 212 SCRA 425 (1992).
 Vide Note 238.
259
The underlying assumption in all these provisions is that the foreign contractor
III Record of the Constitutional Commission 354.
manages the mineral resources, just like the foreign contractor in a service contract.
260

Salaysay v. Castro, 98 Phil. 364 (1956).

261

235 Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the same
auxiliary mining rights that it grants contractors in mineral agreements (MPSA, CA and
VOL. 421, JANUARY 27, 2004 235
JV). Parenthetically,
276

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos

Section 33, which is found under Chapter VI (Financial or Technical Assistance _______________
Agreement) of R.A. No. 7942 states:
SEC. 33. Eligibility.—Any qualified person with technical and financial capability to undertake large- Id., secs. 3 (aq) and 56.
270

scale exploration, development, and utilization of mineral resources in the Philippines may enter into a Id., sec. 3 (y).
271

financial or technical assistance agreement directly with the Government through the Department. Id., sec. 35 (g).
272

Id., sec. 35 (h).

[Emphasis supplied.]
273

Id., sec. 35 (1).

274

“Exploration,” as defined by R.A. No. 7942, Id., sec. 3 (af).

275

means the searching or prospecting for mineral resources by geological, geochemical or geophysical SEC. 72. Timber Rights.—Any provision of the law to the contrary notwithstanding, a contractor may be
276

surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means granted a right to cut trees or timber within his mining areas as may be necessary for his mining operations subject
for the purpose of determining the existence, extent, quantity and quality thereof and the feasibility to forestry laws, rules and regulations: Provided, That if the land covered by the mining area is already covered by
of mining them for profit. 262
exiting timber concessions, the volume of timber needed and the manner of cutting and removal thereof shall be
determined by the mines regional director, upon consultation with the contractor, the timber
A legally organized foreign-owned corporation may be granted an exploration concessionaire/permittee and the Forest Management Bureau of the Department: Provided, further, That in case of
permit, which vests it with the right to conduct exploration for all minerals in specified
263
disagreement between the contractor and the timber concessionaire, the matter shall be submitted to the Secretary
areas, i.e., to enter, occupy and explore the same. Eventually, the foreign-owned
264 265 whose decision shall be final. The contractor shall perform reforestation work within his mining area in accordance
with forestry laws, rules and regulations. [Emphasis supplied.]
corporation, as such permittee, may apply for a financial and technical assistance
SEC. 73. Water Rights.—A contractor shall have water rights for
agreement. 266
mining operations upon approval of application with the appropriate gov
“Development” is 237
the work undertaken to explore and prepare an ore body or a mineral deposit for hiring, including
VOL. 421, JANUARY 27, 2004 237
the construction of necessary infrastructure and related facilities. 267

“Utilization” “means the extraction or disposition of minerals.” A stipulation that the268 La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
proponent shall disposeof the minerals and byproducts produced at the highest price and Sections 72 to 75 use the term “contractor,” without distinguishing between FTAA and
more advantageous terms and conditions as provided for under the implementing rules mineral agreement contractors. And so does “holders of mining rights” in Section 76. A
and regulations is required to be incorporated in every FTAA. 269 foreign contractor may even convert its FTAA into a mineral agreement if the economic

_______________ _______________

Rep. Act No. 7942 (1995), sec. 3 (q).

262
ernment agency in accordance with existing water laws, rules and regulations promulgated
Id., sec. 3 (aq).
263
thereunder: Provided, That water rights already granted or vested through long use, recognized and acknowledged
Id., sec. 20.
264
by local customs, laws and decisions of courts shall not thereby be impaired: Provided, further, That the Government
Id., sec. 23, first par.
265
reserves the right to regulate water rights and the reasonable and equitable distribution of water supply so as to
Id., sec. 23, last par.
266
prevent the monopoly of the use thereof. [Emphasis supplied.]
Id., sec. 3 (j).
267
SEC. 74. Right to Possess Explosives.—A contractor/exploration permittee shall have the right to possess and use
Id., sec. 3 (az).
268
explosives within his contract/permit area as may be necessary for his mining operations upon approval of an
Id., sec. 35 (m).
269
application with the appropriate government agency in accordance with existing laws, rules and regulations
236 promulgated thereunder: Provided, That the Government reserves the right to regulate and control the explosive
accessories to ensure safe mining operations. [Emphasis supplied.]
236 SUPREME COURT REPORTS ANNOTATED SEC. 75. Easement Rights.—When mining areas are so situated that for purposes of more convenient mining
operations it is necessary to build, construct or install on the mining areas or lands owned, occupied or leased by
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos other persons, such infrastructure as roads, railroads, mills, waste dump sites, tailings ponds, warehouses, staging
A foreign-owned/controlled corporation may likewise be granted a mineral processing or storage areas and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines,
permit. “Mineral processing” is the milling, beneficiation or upgrading of ores or minerals
270 dams and their normal flood and catchment areas, sites for water wells, ditches, canals, new river beds, pipelines,
flumes, cuts, shafts, tunnels, or mills the contractor, upon payment of just compensation, shall be entitled to enter
and rocks or by similar means to convert the same into marketable products. 271

and occupy said mining areas or lands. [Emphasis supplied.]

An FTAA contractor makes a warranty that the mining operations shall be conducted
in accordance with the provisions of R.A. No. 7942 and its4 implementing rules and for
work programs and minimum expenditures and commitments. And it obliges itself to 273
furnish the Government records of geologic, accounting, and other relevant data for its
mining operation. 274
“Mining operation,” as the law defines it, means mining activities involving exploration,
feasibility, development, utilization, and processing. 275
SEC. 76. Entry into Private Lands and Concession Areas.—Subject to prior notification, holders of mining
272 rights shall not be prevented from entry into private lands and concession areas by surface owners, occupants, or
concessionaires’ when conducting mining operations therein: Provided, That any damage done to the property of
the surface owner, occupant, or concessionaire as a consequence of such operations shall be properly compensated
as may be provided for in the implementing rules and regulations: Provided, further, That to guarantee such
compensation, the person authorized to conduct mining operation shall, prior thereto, post a bond with the regional
director based on the type of properties, the prevailing prices in and around the area where the mining operations
are to be conducted, with surety or sureties satisfactory to the regional director. [Emphasis supplied.]
 238 sary qualifications and the terms and conditions of any such agreement: Provided That the exploration period
covered by the exploration period of the mineral agreement or financial or technical assistance agreement.
238 SUPREME COURT REPORTS ANNOTATED SEC. 35. Terms and Conditions.—The following terms, conditions, and warranties shall be incorporated in the
281

financial or technical assistance agreement, to wit:

La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
viability of the contract area is found to be inadequate to justify large-scale mining
1. (a)A firm commitment in the form of sworn statement, of an amount corresponding to the expenditure
operations, provided that it reduces its equity in the corporation, partnership, association
277

or cooperative to forty percent (40%). 278
Finally, under the Act, an FTAA contractor warrants that it “has or has access to all the
financing, managerial, and technical expertise . . . .” This suggests that an FTAA contractor
279
is bound to provide some managementassistance—a form of assistance that has been
eliminated and, therefore, proscribed by the present Charter.
By allowing foreign contractors to manage or operate all the aspects of the mining
operation, the above-cited provisions of R.A. No. 7942 have in effect conveyed beneficial
ownership over the nation’s mineral resources to these contractors, leaving the State with
nothing but bare title thereto.
Moreover, the same provisions, whether by design or inadvertence, permit a
circumvention of the constitutionally ordained 60%-40% capitalization requirement for
corporations or associations engaged in the exploitation, development and utilization of
Philippine natural resources.
In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of
Section 2, Article XII of the Constitution:
obligation that will be invested in the contract area: Provided, That such amount shall be subject to
changes as may be provided for in the rules and regulations of this act;
2. (b)A financial guarantee bond shall be posted in favor of the Government in an amount equivalent to
the expenditure obligation of the applicant for any year;
3. (c)Submission of proof of technical competence, such as, but not limited to, its track record in mineral
resource exploration, development, and utilization; details of technology to be employed in the
proposed operation; and details of technical personnel to undertake the operation;
4. (d)Representations and warranties that the applicant has all the qualifications and none of the
disqualifications for entering into the agreement;
5. (e)Representations and warranties that the contractor has or has access to all the financing managerial
and technical expertise and, if circumstances demand, the technology required to promptly and
effectively carry out the objectives of the agreement with the understanding to timely deploy these
resources under its supervision pursuant to the periodic work programs and related budgets, when
proper, providing an exploration period up to two (2) years, extendible for another two (2) years but
subject to annual review by the Secretary in accordance with the implementing rules and regulations
of this Act, and further, subject to the relinquishment obligations;
6. (f)Representations and warranties that, except for payments for dispositions for its equity, foreign
investments in local enterprises which are qualified for repatriation, and local supplier’s credits and
such other generally accepted and permissible financial schemes for raising funds for valid business
purposes, the contractor

1. (1)The proviso in Section 3 (aq), which defines “qualified person,” to wit: 240
240 SUPREME COURT REPORTS ANNOTATED
Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person for
purposes of granting an exploration permit, financial or technical assistance agreement or mineral La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
processing permit. (5) Section 39, which allows the contractor in a financial and technical assistance
282

agreement to convert the same into a mineral production-sharing agreement;

1. (2)Section 23, which specifies the rights and obligations of an exploration permittee,
280

_______________
insofar as said section applies to a financial or technical assistance agreement;

1. shall not raise any form of financing from domestic sources of funds, whether in Philippine or foreign
_______________
currency, for conducting its mining operations for and in the contract area;
2. (g)The mining operations shall be conducted in accordance with the provisions of this Act and its
Id., sec. 39, first par.
277 implementing rules and regulations;
Id., sec. 39, second par.
278 3. (h)Work programs and minimum expenditures commitments;
Id., sec. 35 (e).
279
4. (i)Preferential use of local goods and services to the maximum extent practicable;
SEC. 23. Rights and Obligations of the Permittee.—x x x. The permittee may apply for a mineral production
280 5. (j)A stipulation that the contractors are obligated to give preference to Filipinos in all types of mining
sharing agreement, joint venture agreement, co-production agreement or financial or technical assistance employment for which they are qualified and that technology shall be transferred to the same;
agreement over the permit area, which application shall be granted if the permittee meets the neces 6. (k)Requiring the proponent to effectively use appropriate anti-pollution technology and facilities to
239 protect the environment and to restore or rehabilitate mined out areas and other areas affected by
mine tailings and other forms of pollution or destruction;
VOL. 421, JANUARY 27, 2004 239 7. (l)The contractors shall furnish the Government records of geologic, accounting, and other relevant data
for its mining operation, and that book of accounts and records shall be open for inspection by the
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos government;
8. (m)Requiring the proponent to dispose of the minerals and byproducts produced under a financial or
technical assistance agreement at the highest price and more advantageous terms and conditions as
1. (3)Section 33, which prescribes the eligibility of a contractor in a financial or technical provided for under the rules and regulations of this Act;
assistance agreement; 9. (n)Provide for consultation and arbitration with respect to the interpretation and implementation of
2. (4)Section 35, which enumerates the terms and conditions for every financial or technical
281
the terms and conditions of the agreements; and
assistance agreement; 10. (o)Such other terms and conditions consistent with the Constitution and with this Act as the Secretary
may deem to be for the best interest of the State and the welfare of the Filipino people.

_______________
SEC. 39. Option to Convert into Mineral Agreement.—The contractor has the option to convert the financial or
282

technical assistance agreement to a mineral agreement at any time during the term of the agreement, if the economic
viability of the contract area is found to be inadequate to justify large-scale mining operations, after proper notice proposal: Provided, That existing mineral agreements, financial or technical assistance agreements and other mining
to the Secretary as provided for under the implementing rules and regula- rights are not impaired or prejudiced thereby. The Secretary shall recommend its approval to the President.
241 SEC. 38. Term of Financial or Technical Assistance Agreement.—A financial or technical assistance agreement
288

shall have a term not exceeding twenty-five (25) years to start from the execution thereof, renewable for not more
VOL. 421, JANUARY 27, 2004 241 than twenty-five (25) years under such terms and conditions as may be provided by law.
SEC. 40. Assignment/Transfer.—A financial or technical assistance agreement may be assigned or
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
289

(6) Section 56, which authorizes the issuance of a mineral processing permit to a
283
contractor in a financial and technical assistance agreement;
The following provisions of the same Act are likewise void as they are dependent on
transferred, in whole or in part, to a qualified person subject to the prior approval of the President: Provided, That
the President shall notify Congress of every financial or technical assistance agreement assigned or converted in
accordance with this provision within thirty (30) days from the date of the approval thereof.
SEC. 41. Withdrawal from Financial or Technical Assistance Agreement.—The contractor shall manifest in
290

writing to the Secretary his intention to withdraw from the agreement, if in his judgment the mining project is no
the foregoing provisions and cannot stand on their own: longer economically feasible, even after he has exerted reasonable diligence to remedy the cause or the situation.
(1) Section 3 (g), which defines the term “contractor,” insofar as it applies to a
284 The Secretary may accept the withdrawal: Provided, That the contractor has complied or satisfied all his financial,
financial or technical assistance agreement. fiscal or legal obligations.
SEC. 81. Government Share in Other Mineral Agreements.—
Section 34, which prescribes the maximum contract area in a financial or technical
291

x x x.
285

assistance agreements; 243

Section 36, which allows negotiations for financial or technical assistance
286

VOL. 421, JANUARY 27, 2004 243

agreements;
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
_______________ Section 90, which provides for incentives to contractors in FTAAs insofar as it applies to
292

tions; Provided, That the mineral agreement shall only be for the remaining period of the original agreement.
In the case of a foreign contractor, it shall reduce its equity to forty percent (40%) in the corporation,
partnership, association, or cooperative. Upon compliance with this requirement by the contractor, the Secretary
shall approve the conversion and execute the mineral production-sharing agreement.
SEC. 56. Eligibility of Foreign-owned/-controlled Corporation.—A foreign owned/-controlled corporation
283
may be granted a mineral processing permit.
SEC. 3. Definition of Terms.—As used in and for purposes of this Act, the following terms, whether in singular
284
said contractors;
When the parts of the statute are so mutually dependent and connected as conditions,
considerations, inducements, or compensations for each other, as to warrant a belief that
the legislature intended them as a whole, and that if all could not be carried into effect, the
legislature would not pass the residue independently, then, if some parts are
unconstitutional, all the provisions which are thus dependent, conditional, or connected,
must fall with them.
293

or plural, shall mean:

xxx There can be little doubt that the WMCP FTAA itself is a service contract.
(g) “Contractor” means a qualified person acting alone or in consortium who is a party to a mineral agreement or to a financial Section 1.3 of the WMCP FTAA grants WMCP “the exclusive right to explore, exploit,
or technical assistance agreement.
SEC. 34. Maximum Contract Area.—The maximum contract area that may be granted per qualified person,
285
utilise[,] process and dispose of all Minerals products and by-products thereof that may be
subject to relinquishment shall be: produced from the Contract Area.” The FTAA also imbues WMCP with the following
294

(a) 1,000 meridional blocks onshore;

(b) 4,000 meridional blocks offshore; or
rights:
(c) Combinations of (a) and (b) provided that it shall not exceed the maximum limits for onshore and offshore areas.
SEC. 36. Negotiations.—A financial or technical assistance agreement shall be negotiated by the Department
286
_______________
and executed and approved by the President. The President shall notify Congress of all financial or technical
assistance agreements within thirty (30) days from execution and approval thereof.
The Government share in financial or technical assistance agreement shall consist of, among other things, the contractor’s corporate
242
income tax, excise tax, special allowance, withholding tax due from the contractor’s foreign stockholders arising from dividend or
242 SUPREME COURT REPORTS ANNOTATED interest payments to the said foreign stockholder in case of a foreign national and all such other taxes, duties and fees as provided for
under existing laws.
The collection of Government share in financial or technical assistance agreement shall commence after the financial or technical
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos assistance agreement contractor has fully recovered its pre-operating expenses, exploration, and development expenditures, inclusive.
Section 37, which prescribes the procedure for filing and evaluation of financial or
287 SEC. 90. Incentives.—The contractors in mineral agreements, and financial or technical assistance
292

technical assistance agreement proposals; agreements shall be entitled to the applicable fiscal and non-fiscal incentives as provided for under Executive Order
No. 226, otherwise known as the Omnibus Investments Code of 1987: Provided, That holders of exploration permits
Section 38, which limits the term of financial or technical assistance agreements;
288
may register with the Board of Investments and be entitled to the Fiscal incentives granted under the said Code for
Section 40, which allows the assignment or transfer of financial or technical
289
the duration of the permits or extensions thereof: Provided, further, That mining activities shall always be included
assistance agreements; in the investment priorities plan.
Lidasan v. Commission on Elections, 21 SCRA 496 (1967).
Section 41, which allows the withdrawal of the contractor in an FTAA;
293
290

Vide also WMCP FTAA, sec. 10.2 (a).

294

The second and third paragraphs of Section 81, which provide for the Government’s
291
244
share in a financial and technical assistance agreement; and
244 SUPREME COURT REPORTS ANNOTATED
_______________ La Bugal-B’Laan Tribal Association, Inc. vs. Ramos

SEC. 37. Filing and Evaluation of Financial or Technical Assistance Agreement Proposals.—All financial or
1. (b)to extract and carry away any Mineral samples from the Contract area for the purpose
287

technical assistance agreement proposals shall be filed with the Bureau after payment of the required processing
fees. If the proposal is found to be sufficient and meritorious in form and substance after evaluation, it shall be of conducting tests and studies in respect thereof;
recorded with the appropriate government agency to give the proponent the prior right to the area covered by such
 2. (c)to determine the mining and treatment processes to be utilized during the
Development/Operating Period and the project facilities to be constructed during the
Development and Construction Period;
3. (d)have the right of possession of the Contract Area, with full right of ingress and egress
and the right to occupy the same, subject to the provisions of Presidential Decree No. 512
(if applicable) and not be prevented from entry into private lands by surface owners
and/or occupants thereof when prospecting, exploring and exploiting for minerals
therein;
xxx
1. (f)to construct roadways, mining, drainage, power generation and transmission facilities
and all other types of works on the Contract Area;
2. (g)to erect, install or place any type of improvements, supplies, machinery and other
equipment relating to the Mining Operations and to use, sell or otherwise dispose of,
modify, remove or diminish any and all parts thereof;
3. (h)enjoy, subject to pertinent laws, rules and regulations and the rights of third Parties,
easement rights and the use of timber, sand, clay, stone, water and other natural
resources in the Contract Area without cost for the purposes of the Mining Operations;
xxx
1. (l)have the right to mortgage, charge or encumber all or part of its interest and obligations
under this Agreement, the plant, equipment and infrastructure and the Minerals
produced from the Mining Operations;
x x x. 295
All materials, equipment, plant and other installations erected or placed on the
Contract Area remain the property of WMCP, which has the right to deal with and remove
such items within twelve months from the termination of the FTAA. 296
Pursuant to Section 1.2 of the FTAA, WMCP shall provide [all] financing, technology,
management and personnel necessary for the Mining Operations.” The mining company
binds itself to “perform all Mining Operations . . . providing all necessary services,
_______________
WMCP, sec. 10.2.
295
Id., sec. 11.
296
245
VOL. 421, JANUARY 27, 2004 245
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
technology and financing in connection therewith,” and to “furnish all materials, labour,
297
equipment and other installations that may be required for carrying on all Mining
Operations.” WMCP may make expansions, improvements and replacements of the
298
mining facilities and may add such new facilities as it considers necessary for the mining
operations. 299
These contractual stipulations, taken together, grant WMCP beneficial ownership over
natural resources that properly belong to the State and are intended for the benefit of its
citizens. These stipulations are abhorrent to the 1987 Constitution. They are precisely the
vices that the fundamental law seeks to avoid, the evils that it aims to suppress.
Consequently, the contract from which they spring must be struck down.
In arguing against the annulment of the FTAA, WMCP invokes the Agreement on the
Promotion and Protection of Investments between the Philippine and Australian
Governments, which was signed in Manila on January 25, 1995 and which entered into
force on December 8, 1995.
x x x. Article 2 (1) of said treaty states that it applies to investments whenever made and thus the fact
that [WMCP’s] FTAA was entered into prior to the entry into force of the treaty does not preclude the
Philippine Government from protecting [WMCP’s] investment in [that] FTAA. Likewise, Article 3 (1)
of the treaty provides that “Each Party shall encourage and promote investments in its area by investors
of the other Party and shall [admit] such investments in accordance with its Constitution, Laws,
regulations and investment policies” and in Article 3 (2), it states that “Each Party shall ensure that
investments are accorded fair and equitable treatment.” The latter stipulation indicates that it was
intended to impose an obligation upon a Party to afford fair and equitable treatment to the
investments of the other Party and that a failure to provide such treatment by or under the laws of
the Party may constitute a breach of the treaty. Simply stated, the Philippines could not, under said
treaty, rely upon the inadequacies of its own laws to deprive an Australian investor (like [WMCP]) of
fair and equitable treatment by invalidating [WMCP’s] FTAA without likewise nullifying the service
contracts entered into before the enactment of RA 7942 such as those mentioned in PD 87 or EO 279.
_______________
297 Id., sec. 10.1 (a).
Id., sec. 10.1 (c).
298
299 Id., sec. 6.4.
246
246 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
This becomes more significant in the light of the fact that [WMCP’s] FTAA was executed not by a
mere Filipino citizen, but by the Philippine Government itself, through its President no less, which, in
entering into said treaty is assumed to be aware of the existing Philippine laws on service contracts
over the exploration, development and utilization of natural resources. The execution of the FTAA by
the Philippine Government assures the Australian Government that the FTAA is in accordance with
existing Philippine laws. [Emphasis and italics by private respondents.]
300
The invalidation of the subject FTAA, it is argued, would constitute a breach of said treaty
which, in turn, would amount to a violation of Section 3, Article II of the Constitution
adopting the generally accepted principles of international law as part of the law of the
land. One of these generally accepted principles is pacta sunt servanda, which requires the
performance in good faith of treaty obligations.
Even assuming arguendo that WMCP is correct in its interpretation of the treaty and
its assertion that “the Philippines could not . . . deprive an Australian investor (like
[WMCP]) of fair and equitable treatment by invalidating [WMCP’s] FTAA without likewise
nullifying the service contracts entered into before the enactment of RA 7942 . . .,” the
annulment of the FTAA would not constitute a breach of the treaty invoked. For this
decision herein invalidating the subject FTAA forms part of the legal system of the
Philippines. The equal protection clause guarantees that such decision shall apply to all
301 302
contracts belonging to the same class, hence, upholding rather than violating, the “fair and
equitable treatment” stipulation in said treaty.
One other matter requires clarification. Petitioners contend that, consistent with the
provisions of Section 2, Article XII of the Constitution, the President may enter into
agreements involving “either technical or financial assistance” only. The agreement in
question, however, is a technical and financial assistance agreement.
_______________
 Rollo, pp. 563-564.
300
SO ORDERED.
Civil Code, Art. 8.
Davide, Jr. (C.J.), Puno, Quisumbing, Carpio, Corona, Callejo, Sr. and Tinga,
301

Const., Art III, Sec. 1.

302

247 JJ., concur.

Vitug, J., Please see separate opinion.
VOL. 421, JANUARY 27, 2004 247
Panganiban, J., Please see separate opinion.
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos Ynares-Santiago, I join J. Panganiban’s separate opinion.
Petitioners’ contention does not lie. To adhere to the literal language of the Constitution Sandoval-Gutierrez, J., I join Mr. Justice Panganiban in his separate opinion.
would lead to absurd consequences. As WMCP correctly put it:
303 Austria-Martinez, J., I join Justice Panganiban in his separate opinion.
x x x such a theory of petitioners would compel the government (through the President) to enter into Azcuna, J., I take no part—one of the parties was a client.
contract with two (2) foreign-owned corporations, one for financial assistance agreement and with
the other, for technical assistance over one and the same mining area or land; or to execute two (2) SEPARATE OPINION
contracts with only one foreign-owned corporation which has the capability to provide both financial
and technical assistance, one for financial assistance and another for technical assistance, over the VITUG, J.:
same mining area. Such an absurd result is definitely not sanctioned under the canons of
constitutional construction. [Italics in the original.]
Petitioners, in the instant petition for prohibition and mandamus, assail the
304

Surely, the framers of the 1987 Charter did not contemplate such an absurd result from
constitutionality of Republic Act No. 7942, otherwise also known as the Philippine Mining
their use of “either/or.” A constitution is not to be interpreted as demanding the
Act of 1995, as well as its Implementing Rules and Regulations (Administrative Order
impossible or the impracticable; and unreasonable or absurd consequences, if possible,
[DAO] 96-40) issued by the Department of Environment and Natural Resources, and the
should be avoided. Courts are not to give words a meaning that would lead to absurd or
Financial and Technical Assistance Agreement (FTAA) entered into pursuant to Executive
305

unreasonable consequences and a literal interpretation is to be rejected if it would be

Order (EO) No. 279, by the Republic of the Philippines and Western Mining Corporation
unjust or lead to absurd results. That is a strong argument against its
(Philippines), Inc. (WMCP). WMCP is owned by WMC Resources International Pty., Ltd, a
306

adoption. Accordingly, petitioners’ interpretation must be rejected.

wholly owned subsidiary of Western Mining Corporation Holdings Limited, a publicly-
307

The foregoing discussion has rendered unnecessary the resolution of the other issues
listed major Australian mining and exploration company.
raised by the petition.
The premise for the constitutional challenge is Section 2, Article XII, of the 1987
WHEREFORE, the petition is GRANTED. The Court hereby declares unconstitutional
Constitution which provides:
and void: 249
(1) The following provisions of Republic Act No. 7942:
VOL. 421, JANUARY 27, 2004 249
1. (a)The proviso in Section 3 (aq), La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
2. (b)Section 23, “All lands of public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
3. (c)Section 33 to 41, potential energy, fisheries, forests or timber, wild life, flora and fauna, and other natural resources
4. (d)Section 56, are owned by the State. With the exception of agricultural lands, all other natural resources shall not
5. (e)The second and third paragraphs of Section 81, and be alienated. The exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. The State may directly undertake such activities, or it may enter
into co-production, joint venture, or production-sharing agreements with Filipino citizens, or
_______________
corporations or associations at least sixty per centum of whose capital is owned by such citizens. x x
x.
Vide Note 223.
303
“x x x x x x x x x.
Rollo, p. 243.
“The President may enter into agreements with foreign-owned corporations involving either
304

Civil Liberties Union v. Executive Secretary, supra.

305

Automotive Parts & Equipment Company, Inc. v. Lingad, 30 SCRA 248 (1969).
306
technical or financial assistance for large-scale exploration, development, and utilization of minerals,
Ibid.
307 petroleum, and other mineral oils according to the general terms and conditions provided by law,
248 based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and technical
248 SUPREME COURT REPORTS ANNOTATED resources.
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos “The President shall notify the Congress of every contract entered into in accordance with this
provision within thirty days from its execution.”
After a careful reading of the provisions of Republic Act No. 7942, I join the majority in
1. (f)Section 90. invalidating the following portions of the law: a) Section 3 (aq) which considers a foreign-
owned corporation itself qualified, not only to enter into financial or technical assistance
(2) All provisions of Department of Environment and Natural Resources Administrative agreements, but also for an exploration or mineral processing permit; b) Section 35 (g),
Order 96-40, s. 1996 which are not in conformity with this Decision, and (l), (m) which state the rights and obligations of a foreign-owned corporations pursuant
(3) The, Financial and Technical Assistance Agreement between the Government of to its “mining operations”; and c) Section 56 which provides that foreign-owned or
the Republic of the Philippines and WMC Philippines, Inc. controlled corporations are eligible to be granted a mineral processing permit.
 The ponencia, so eloquently expressed and so well ratiocinated, would also say that
the Philippine Mining Act and its implementing rules or decrees contain provisions which,
in effect, authorize the Government to enter into service contracts with foreign-owned
corporations, thereby granting beneficial ownership over natural resources to foreign
contractors in violation of the fundamental law. Thus, it would strike down Sections 3 (aq),
23, 33 to 41, 56, 81, and 90 of the statute and related sections in DAO 96-40. The FTAA
executed between the Government and WMCP is being invalidated for being in the nature
of a service contract. The ponencia posits
250
250 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
that the adoption of the terms “agreements x x x involving either technical or financial
assistance” in the 1987 Constitution, in lieu of “service contracts” found in the 1973
Charter, reflects the intention of the framers to disallow the execution of service contracts
with foreign entities for the exploration, development, exploitation and utilization of the
country’s natural resources.
The proposition is one that I, most respectfully, cannot fully share. The deliberations
of the Constitutional Commission do not disclose, in any evident manner, such intention
on the part of the drafters, viz.:
“MR. JAMIR. Yes, Madam President. With respect to the second paragraph of Section 3, my
amendment by substitution reads: THE PRESIDENT MAY ENTER INTO AGREEMENTS
WITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR
FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION, DEVELOPMENT AND
UTILIZATION OF NATURAL RESOURCES ACCORDING TO THE TERMS AND
CONDITIONS PROVIDED BY LAW.
“x x x
“MR. SUAREZ. Thank you, Madam President. Will Commissioner Jamir answer a few
clarificatory questions?
“MR. JAMIR. Yes, Madam President.
“MR. SUAREZ. This particular portion of the section has reference to what was popularly
known before as service contracts, among other things; is that correct?
“MR. JAMIR. Yes, Madam President.
“MR. SUAREZ. As it is formulated, the President may enter into service contracts but
subject to the guidelines that may be promulgated by Congress?
“MR. JAMIR. That is correct.
“MR. SUAREZ. Therefore, the aspect of negotiation and consummation will fall on the
President, not upon Congress?
“MR. JAMIR. That is also correct, Madam President.
“MR. SUAREZ. Except that all of these contracts, service or otherwise must be made
strictly in accordance with guidelines prescribed by Congress?
“MR. JAMIR. That is also correct.” 1
_______________
1III Record of the Constitutional Commission 348.
251
VOL. 421, JANUARY 27, 2004 251
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
The significance of the change in the terminology is clarified in the following exchanges
during the deliberations:
“SR. TAN. Am I correct in thinking that the only difference between these future service
contracts and the past service contracts under Mr. Marcos is the general law to be
enacted by the legislature and the notification of Congress by the President? That is
the only difference, is it not?
“MR. VILLEGAS. That is right.
“SR. TAN. So those are the safeguards.
“MR. VILLEGAS. Yes, there was no law at all governing service contracts before.” 2
The Constitutional Commission has also agreed to include the additional requirement that
said agreements must be “based on real contributions to the economic growth and general
welfare of the country.” Upon the suggestion of then Commissioner Davide, the scope of
“these service contracts” has likewise been limited to large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils. The then
Commissioner, explains: “And so, we believe that we should really, if we want to
grant service contracts at all, limit the same to only those particular areas where Filipino
capital may not be sufficient x x x.”3
The majority would cite the emphatic statements of Commissioners Villegas and
Davide that the country’s natural resources are exclusively reserved for Filipino
citizens and that, according to Commissioner Villegas, “the deletion of the phrase ‘service
4
contracts’ (is the) first attempt to avoid some of the abuses in the past regime in the use of
service contracts to go around the 60-40 arrangement.” These declarations do not
5
necessarily mean that the Government may no longer enter into service contracts with
foreign entities. In order to uphold and strengthen the national policy of preserving and
developing the country’s natural resources exclusively for the Filipino people, the present
Constitution indeed has provided for safeguards to prevent the execution of service
contracts of the old regime, but not of service contracts per se. It could
_______________
Id., p. 352.
2
Id., p. 355.
3
4Decision, pp. 69-71.
Id., p. 69.
5
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252 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
not have been the object of the framers of the Charter to limit the contracts which the
President may enter into, to mere “agreements for financial and technical assistance.” One
would take it that the usual terms and conditions recognized and stipulated in agreements
of such nature have been contemplated. Basically, the financier and the owner of know-
how would understandably satisfy itself with the proper implementation and the
profitability of the project. It would be abnormal for the financier and owner of the know-
how not to assure itself that all the activities needed to bring the project into fruition are
properly implemented, attended to, and carried out. Needless to say, no foreign investor
would readily lend financial or technical assistance without the proper incentives,
including fair returns, therefor.
The Constitution has not prohibited the State from itself exploring, developing, or
utilizing the country’s natural resources, and, for this purpose, it may, I submit, enter into
the necessary agreements with individuals or entities in the pursuit of a feasible operation.
The fundamental law is deemed written in every contract. The FTAA entered into by
the government and WMCP recognizes this vital principle. Thus, two of the agreement’s
whereas clauses provide:
“WHEREAS, the 1987 Constitution of the Republic of the Philippines provides in Article XII, Section 2
that all lands of the public domain, waters, minerals, coal, petroleum, and other natural resources are
owned by the State, and that the exploration, development and utilization of natural resources shall
be under the full control and supervision of the State; and
“WHEREAS, the Constitution further provides that the Government may enter into agreements
with foreign-owned corporations involving either technical or financial assistance for large scale
exploration, development and utilization of minerals.”
The assailed contract or its provisions must then be read in conformity with
abovementioned constitutional mandate. Hence, Section 10.2 (a) of the FTAA, for instance,
which states that “the Contractor shall have the exclusive right to explore for, exploit,
utilize, process, market, export and dispose of all minerals and products and by-products
thereof that may be derived or produced from the Contract Area and to otherwise conduct
Mining Operations in the Contract Area in accordance with the terms and conditions
hereof,
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
must be taken to mean that the foregoing rights are to be exercised by WMCP for and in
behalf of the State and that WMCP, as the Contractor, would be bound to carry out the
terms and conditions of the agreement acting for and in behalf of the State. In exchange for
the financial and technical assistance, inclusive of its services, the Contractor enjoys an
exclusivity of the contract and a corresponding compensation therefor.
Except as so expressed elsewhere above, I see, therefore, no constitutional impairment
in the enactment of Republic Act No. 7942, as well as its implementing rules, and in the
execution by the Government of the Financial and Technical Agreement with WMCP; and
I so vote accordingly.
Just a word. While I cannot ignore an impression of the business community that the
Court is wont, at times, to interfere with the economic decisions of Congress and the
government’s economic managers, I must hasten to add, however, that in so voting as
above, I have not been unduly overwhelmed by that perception. Quite the contrary, the
Court has always proceeded with great caution, such as now, in resolving cases that could
inextricably involve policy questions thought to be best left to the technical expertise of
the legislative and executive departments.
SEPARATE OPINION
PANGANIBAN, J.:
Petitioners challenge the constitutionality of (1) RA 7942 (The Philippine Mining Act of
1995), (2) its Implementing Rules and Regulations (DENR Administrative Order [DAO] 96-
40); and (3) the Financial and Technical Assistance Agreement (FTAA) dated March 30,
1995, by and between the government and Western Mining Corporation (Phils.), Inc.
(WMCP).
Crux of the Controversy
The crux of the controversy is the fact that WMCP, at the time it entered into the FTAA, was
wholly owned by WMC Resources International Pty., Ltd. (WMC), which in turn was a
wholly owned subsidiary of Western Mining Corporation Holdings, Ltd., a publicly listed
major Australian mining and exploration company.
254
254 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
Petitioners thus argue that the FTAA was executed in violation of Section 2 of Article XII
of the 1987 Constitution. Allegedly, according to the fourth paragraph thereof, FTAAs
entered into by the government with foreign-owned corporations are limited to
agreements involving merely technical or financial assistance to the State for large-scale
exploration, development and utilization of minerals, petroleum and other mineral oils.
The FTAA in question supposedly permits the foreign contractor to manage and control
the mining operations fully, and is therefore no different from the “service contracts” that
were prevalent under the martial law regime, and that are now disallowed by Section 2 of
Article XII of the present Constitution.
On January 23, 2001, all the shares of WMC in WMCP—according to the latter’s
Manifestation subsequently filed with this Court—had been sold to Sagittarius Mines, Inc.,
in which 60 percent of the equity is Filipino-owned. In the same Manifestation, the Court
was further informed that the assailed FTAA had likewise been transferred from WMCP to
Sagittarius.
The well-researched ponencia of esteemed justice Conchita Carpio-Morales
nevertheless declares that the instant case has not been rendered moot by the FTAA’s
transfer to and registration in the name of a Filipino-owned corporation, and that the
validity of that transfer remains in dispute and awaits final judicial determination. It then
1
proceeds to decide the instant case on the assumption that WMCP remains a foreign
corporation.
Controversy Now Moot
With due respect, I believe that the Court should dismiss the Petition on the ground of
mootness. I submit that a decision on the constitutionality issue should await the wisdom
of a new day when the Court would have a live case before it.
The nullity of the FTAA is unarguably premised upon the contractor being
a foreign corporation. Had the FTAA been originally issued to a Filipino-owned
corporation, we would have had no con-
_______________
That is, the Court of Appeals’ resolution of the petition for review—docketed as CA-G.R. No. 74161 and lodged
1
by Lepanto Consolidated Mining—of the Decision of the Office of the President, which upheld the Order of the DENR
secretary approving the transfer to, and the registration of the FTAA in the name of, Sagittarius Mines, Inc.
255
VOL. 421, JANUARY 27, 2004 255
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
stitutionality issue to speak of. Upon the other hand, conveyance of the FTAA to a Filipino
corporation can be likened to the sale of land to a foreigner who subsequently acquires
Filipino citizenship, or who later re-sells the same land to a Filipino citizen. The
conveyance would be validated, as the property in question would no longer be owned by
a disqualified vendee. 2
Since the FTAA is now to be implemented by a Filipino corporation, how can the Court
still declare it unconstitutional? The CA case is a dispute between two Filipino companies
(Sagittarius and Lepanto) both claiming the right to purchase the foreign shares in WMCP.
So regardless of which side eventually wins, the FTAA would still be in the hands of a
qualified Filipino company.
Furthermore, there being no more justiciable controversy, the plea to nullify the
Mining Law has become a virtual petition for declaratory relief, over which the Supreme
Court has no original jurisdiction. 3
 At bottom, I rely on the well-settled doctrine that this Court does not decide 257
constitutional issues, unless they are the very lis mota of the case. 4
VOL. 421, JANUARY 27, 2004 257
Not Limited to Technical or Financial Assistance Only La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
At any rate, following the literal text of the present Constitution, the ponencia limits to
5
THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED
strict technical or financial only the assistance to be provided to the State by foreign- CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR
owned corporations for the large-scale exploration, development and utilization of LARGE-SCALE EXPLORATION, DEVELOPMENT AND UTILIZATION OF NATURAL
minerals, petroleum, and mineral oils. Such assistance may not RESOURCES ACCORDING TO THE TERMS AND CONDITIONS PROVIDED BY LAW.
MR. VILLEGAS: The Committee accepts the amendment. Commissioner Suarez will give
_______________ the background x x x.
MR. SUAREZ: Thank you, Madam President x x x.
Chavez v. Public Estates Authority and Amari, G.R. No. 133250, July 9, 2002, 384 SCRA 152; May 6, 2003, 403
MR. JAMIR: Yes, Madam President.
2

SCRA 1, and November 11, 2003, 415 SCRA 403.

3United Residents of Dominican Hill, Inc. v. Commission on the Settlement of Land Problems, 353 SCRA 782, March
7, 2001; In Re: Saturnino V. Bermudez, 145 SCRA 163, October 24, 1986; Darnoc Realty Development Corp. v. Ayala
Corp., 202 Phil. 865; 117 SCRA 538, September 30, 1982; De la Llana v. Alba, 198 Phil. 1; 112 SCRA 294, March 12,
1982.
4Mirasol v. Court of Appeals, 351 SCRA 44, February 1, 2001; Lalican v. Hon. Vergara, 342 Phil. 485; 276 SCRA
518, July 31, 1997; Ty v. Trampe, 321 Phil. 103; 250 SCRA 500, December 1, 1995; People v. Vera, 65 Phil. 56,
November 16, 1937.
Par. 4, Sec. 2 of Art XII.
5
MR. SUAREZ: This particular portion of the section has reference to what was popularly
known before as service contracts, among other things, is that correct?
MR. JAMIR: Yes, Madam President.
MR. SUAREZ: As it is formulated, the President may enter into service contracts but
subject to the guidelines that may be promulgated by Congress?
MR. JAMIR: That is correct.
MR. SUAREZ: Therefore, that aspect of negotiation and consummation will fall on the

256
President, not upon Congress?
256 SUPREME COURT REPORTS ANNOTATED MR. JAMIR: That is also correct, Madam President.
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos MR. SUAREZ: Except that all of these contracts, service or otherwise, must be made strictly
include “management or other forms of assistance” or other activities associated with the in accordance with guidelines prescribed by Congress?
“service contracts” of the past unlamented regime. Precisely, “the management or MR. JAMIR: That is also correct.
operation of mining activities by foreign contractors, which is the primary feature of service MR. SUAREZ: And the Gentleman is thinking in terms of a law that uniformly covers
contracts, was x x x the evil that the drafters of the 1987 Constitution sought to eradicate.” situations of the same nature?
Again, because of the mootness problem, it would be risky to take a definitive position MR. JAMIR: That is 100 percent correct x x x
on this question. The Court would be speculating on the contents of the FTAA of a xxx xxx xxx
prospective foreign company. The requirements of “case and controversy” would be THE PRESIDENT: The amendment has been accepted by the Committee. May we first vote
lacking. Suffice it to say, at this point, that the issue even in a live case is not quite that easy on the last paragraph?
to tackle. MR. GASCON: Madam President, that is the point of my inquiry x x x Commissioner Jamir
First, the drafters’ choice of words—their use of the phrase “agreements x x had proposed an amendment with regard to special service contractswhich was
x involving x x x technical or financial assistance”—does not absolutely indicate the intent accepted by the Committee. Since the Committee has accepted it, I would like to ask
to exclude other modes of assistance. Rather, the phrase signifies the possibility of the some questions x x x As it is proposed now, such service contracts will be entered into
inclusion of other activities, provided they bear some reasonable relationship to and by the President with the guidelines of a general law on service contracts to be enacted
compatibility with financial or technical assistance. by Congress. Is that correct?
If the intention of the drafters were strictly to confine foreign corporations to financial MR. VILLEGAS: The Commissioner is right, Madam President.
258
or technical assistance and nothing more, I am certain that their language would have
been unmistakably restrictive and stringent. They would have said, for example: “Foreign 258 SUPREME COURT REPORTS ANNOTATED
corporations are prohibited from providing management or other forms of assistance,” or La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
words to that effect. The conscious avoidance of restrictive wording bespeaks an intent
MR. GASCON: According to the original proposal, if the President were to enter into a
not to employ—in an exclusionary, inflexible and limiting manner—the expression
particular agreement, he would need the concurrence of Congress. Now that it has
“agreements involving technical or financial assistance.”
been changed by the proposal of Commissioner Jamir in that Congress will set the
Second, I believe the foregoing position is supported by the fact that our present
general law to which the President shall comply, the President will, therefore, not need
Constitution still recognizes and allows service contracts (and has not rendered them
the concurrence of Congress every time he enters into service contracts. Is that
taboo), albeit subject to several restrictions and modifications aimed at avoiding the pitfalls
correct?
of the past. Below are someexcerpts from the deliberations of the Constitutional
MR. VILLEGAS: That is right.
Commission (Concom), showing that its members discussed “technical or financial
MR. GASCON: The proposed amendment of Commissioner Jamir is in direct contrast to my
agreements” in the same breath as “service contracts” and used the terms interchangeably:
proposed amendment, so I would like to object and present my proposed amendment
“MR. JAMIR: Yes, Madam President. With respect to the second paragraph of Section 3, my
to the body x x x.
amendment by substitution reads:
 xxx xxx xxx
MR. GASCON: Yes, it will be up to the body. I feel that the general law to be set by Congress
as regards service contract agreements which the President will enter into might be
too general or since we do not know the content yet of such a law, it might be that
certain agreements will be detrimental to the interest of the Filipinos. This is in direct
contrast to my proposal which provides that there be effective constraints in the
implementation of service contracts. So instead of a general law to be passed by
Congress to serve as a guideline to the President when entering into service contract
agreements, I propose that every service contractentered into by the President would
need the concurrence of Congress, so as to assure the Filipinos of their interests with
regard to the issue in Section 3 on all lands of the public domain. My alternative
amendment, which we will discuss later, reads: THAT THE PRESIDENT SHALL ENTER
INTO SUCH AGREEMENTS ONLY WITH THE CONCURRENCE OF TWO-THIRDS VOTE
OF ALL THE MEMBERS OF CONGRESS SITTING SEPARATELY x x x
MR. BENGZON: The reason we made that shift is that we realized the original proposal
could breed corruption. By the way, this is not just confined to service contracts but
also to financial assistance. If we are going to make every single contract subject to the
concurrence of Congress—which, according to the Commissioner’s amendment is the
concurrence of two-thirds of Congress voting separately—then (1) there is a very
great chance that each contract will be different from another; and (2) there is a great
temptation that it would breed corruption because of the great lobbying that is going
to happen. And we do not want to subject our legislature to that. x x x.
MR. GASCON: But my basic problem is that we do not know as of yet the contents of such
a general law as to how much con-
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La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
straints there will be in it. And to my mind, although the committee’s contention that
the regular concurrence from Congress would subject Congress to extensive lobbying, I
think that is a risk we will have to take since Congress is a body of representatives of the
people whose membership will be changing regularly as there will be changing
circumstances every time certain agreements are made. It would be best then to keep in
tab and attuned to the interest of the Filipino people, whenever the President enters into
any agreement with regard to such an important matter as technical or financial assistance
for large-scale exploration, development and utilization of natural resources or service
contracts, the people’s elected representatives should be on top of it x x x.
xxx xxx xxx
MR. OPLE: Madam President, we do not need to suspend the session. If Commissioner
Gascon needs a few minutes, I can fill up the remaining time while he completes his
proposed amendment. I just wanted to ask Commissioner Jamir whether he would
entertain a minor amendment to his amendment, and it reads as follows: THE
PRESIDENT SHALL SUBSEQUENTLY NOTIFY CONGRESS OF EVERY SERVICE
CONTRACT ENTERED INTO IN ACCORDANCE WITH THE GENERAL LAW. I think the
reason is, if I may state it briefly, as Commissioner Bengzon said, Congress can always
change the general law later on to conform to new perceptions of standards that
should be built into service contracts. But the only way Congress can do this is if there
were a notification requirement from the Office of the President that such service
contracts had been entered into, subject then to the scrutiny of the Members of
Congress. This pertains to a situation where the service contracts are already entered
into, and all that this amendment seeks is the reporting requirement from the Office
of the President. Will Commissioner Jamir entertain that?
MR. JAMIR: I will gladly do so, if it is still within my power.
MR.VILLEGAS: Yes, the Committee accepts the amendment.
xxx xxx xxx
SR. TAN: Madam President, may I ask a question? x x x Am I correct in thinking that the
only difference between these future service contracts and the past service
contracts under Mr. Marcos is the general law to be enacted by the legislature and the
notification of Congress by the President? That is the only difference, is it not?
MR. VILLEGAS: That is right.
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260 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
SR. TAN: So those are the safeguards.
MR. VILLEGAS: Yes. There was no law at all governing service contracts before. x x x.
xxx xxx xxx
MR. SARMIENTO: Maybe we can simplify my proposed amendment, so that it will read: IT
SHALL BE THE POLICY OF THE STATE TO PROMOTE, DEVELOP AND EMPLOY LOCAL
SCIENTIFIC AND TECHNOLOGICAL RESOURCES x x x.
MR. DAVIDE: Could it not be properly accommodated either in the Article on Declaration
of Principles and State Policies or in the Article on Human Resources because it would
not be germane to the Article on National Economy and Patrimony which we are now
treating?
MR. VILLEGAS: I think the intention here, if I understand the amendment to the
amendment, is to make sure that when these technical and scientific services are
rendered by foreigners there would be a deliberate attempt to develop local talents so
that we are not forever dependent on these foreigners. Am I right?
MR. DAVIDE: So it is in relation to the service contracts? x x x Can it not be stated that the
general law providing for service contracts shall give priority to the adjective of
Commissioner Sarmiento’s amendment? It should be in the law itself.
MR VILLEGAS: That is why it says, ‘IT SHALL BE THE POLICY OF THE STATE’ immediately
following the statement about Congress.
xxx xxx xxx
THE PRESIDENT: Does Commissioner Gascon insist on his proposed amendment?
MR. GASCON: I objected to that amendment and after listening to it again, I feel that I still
object on basic principles, that every service contract to be entered into by the
President should be with the concurrence of Congress. I had earlier presented a
proposed amendment of ‘CONCURRENCE OF TWO-THIRDS VOTE OF ALL THE
MEMBERS OF CONGRESS,’ but at this point in time, perhaps to simplify choices, since
basically the proposal of Commissioner Jamir is to set a general law with regard
to service contracts, my proposal is to require concurrence of Congress every time
a service contract is to be made.
THE PRESIDENT: That is clear now. So can we proceed to vote?
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MR. NOLLEDO: x x x Madam President, I have the permission of the Acting Floor Leader
to speak for only two minutes in favor of the amendment of Commissioner Gascon x x
x x With due respect to the members of the Committee and Commissioner Jamir, I am
 in favor of the objection of Commissioner Gascon. Madam President, I was one of those
who refused to sign the 1973 Constitution, and one of the reasons is that there were
many provisions in the Transitory Provisions therein that favored aliens. I was
shocked when I read a provision authorizing service contracts while we, in this
Constitutional Commission, provided for Filipino control of the economy. We are,
therefore, providing for exceptional instances where aliens may circumvent Filipino
control of our economy. And one way of circumventing the rule in favor of Filipino
control of the economy is to recognize service contracts. As far as I am concerned, if I
should have my own way, I am for the complete deletion of this provision. However,
we are presenting a compromise in the sense that we are requiring a two-thirds vote
of all the Members of Congress as a safeguard. I think we should not mistrust the future
Members of Congress by saying that the purpose of this provision is to avoid
corruption. We cannot claim that they are less patriotic than we are. I think the
Members of this Commission should know that entering into service contracts is an
exception to the rule on protection of natural resources for the interest of the nation,
and therefore, being an exception it should be subject whenever possible, to stringent
rules. It seems to me that we are liberalizing the rules in favor of aliens.
I say these things with a heavy heart, Madam President. I do not claim to be a
nationalist, but I love my country. Although we need investments, we must adopt
safeguards that are truly reflective of the sentiments of the people and not mere cosmetic
safeguards as they now appear in the Jamir amendment. (Applause) x x x.”
The foregoing is but a small sampling of the lengthy discussions of the constitutional
commissioners on the subject of service contracts and technical and financial assistance
agreements. Quoting the rest of their discussions would have taken up several more pages,
and these have thus been omitted for the sake of brevity. In any event, it would appear that
the members of the Concom actually had in mind the Marcos era service contracts that they
were familiar with (but which they duly modified and restricted so as to prevent
abuses), when they were crafting and polishing the provisions
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262 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
dealing with financial and/or technical assistance agreements. These provisions ultimately
became the fourth and the fifth paragraphs of Section 2 of Article XII of the 1987
Constitution. Put differently, “technical and financial assistance agreements” were
understood by the delegates to include service contracts duly modified to prevent abuses.
I respectfully submit that the statements of Commissioner Jose Nolledo, quoted above,
are especially pertinent, since they refer specifically to service contracts in favor of aliens.
From his perspective, it is clear to me that the Concom discussions in their entirety had to
do with service contracts that might be given to foreign-owned corporations as exceptions
to the general principle of Filipino control of the economy.
Commissioner Nolledo sums up these statements by saying: “We are, therefore,
providing for exceptional instances where aliens may circumvent Filipino control of our
economy. And one way of circumventing the rule in favor of Filipino control of the economy
is to recognize service contracts. As far as I am concerned, if I should have my own way, I am
for the complete deletion of this provision. However, we are presenting a compromise in the
sense that we are requiring a two-thirds vote of all the Members of Congress as a safeguard. x
x x x x x x x x. I think the Members of this Commission should know that entering into service
contracts is an exception to the rule on protection of natural resources for the interest of the
nation, and therefore, being an exception it should be subject whenever possible, to stringent
rules. It seems to me that we are liberalizing the rules in favor of aliens. x x x.”
Since the drafters were referring only to service contracts to be granted to foreigners
and to nothing else, this fact necessarily implies that we ought not treat the idea of
“agreements involving either technical or financial assistance” as having any significance
or existence apart from service contracts. In other words, in the minds of the
commissioners, the concept of technical and financial assistance agreements did not exist
at all apart from the concept of service contracts duly modified to prevent abuses.
Interpretation of the Constitution
in the Light of Present-Day Realities
Tantamount to closing one’s eyes to reality is the insistence that the term “agreements
involving technical or financial assistance”
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refers only to purely technical or financial assistance to be rendered to the State by a
foreign corporation (and must perforce exclude management and other forms of
assistance). Nowadays, securing the kind of financial assistance required by large-scale
explorations, which involve hundreds of millions of dollars, is not just a matter of signing a
simple promissory note in favor of a lender. Current business practices often require
borrowers seeking huge loans to allow creditors access to financial records and other data,
and probably a seat or two on the former’s board of directors; or at least some
participation in certain management decisions that may have an impact on the financial
health or long-term viability of the debtor, which of course will directly affect the latter’s
capacity to repay its loans. Prudent lending practices necessitate a certain degree of
involvement in the borrower’s management process.
Likewise, technical assistance, particularly in certain industries like mining and oil
exploration, would likely be from the industry’s leading players. It may involve the training
of personnel and some form of supervision and oversight with respect to the correct and
proper implementation of the technical assistance. The purpose is to ensure that the
technical assistance rendered will not go to waste, and that the lender's business
reputation and successful track record in the industry will be adequately safeguarded.
Thus the technical assistance arrangements often necessarily include interface with the
management process itself.
The mining industry is in the doldrums, precisely because of lack of technical and
financial resources in our country. If activated properly, the industry could meaningfully
contribute to our economy and lead to the employment of many of our jobless compatriots.
A hasty and premature decision on the constitutionality of the herein FTAA and the
Philippine Mining Act could unnecessarily burden the recovery of the industry and the
employment opportunities it would likely generate.
Oral Argument Needed
Given the modern-day reality that even the World Bank (WB) and the International
Monetary Fund (IMF) do not lend on the basis merely of bare promissory notes, but on
some conditionalities designed to assure the borrowers’ financial viability, I would like to
hear in an Oral Argument in a live, not a moot, case what these
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264 SUPREME COURT REPORTS ANNOTATED
La Bugal-B’Laan Tribal Association, Inc. vs. Ramos
international practices are and how they impact on our constitutional restrictions. This is
not to say that we should bend our basic law; rather, we should find out what kind of FTAA
provisions are realistic vis-à-vis these international standards and our constitutional
protection. Unless there is a live FTAA, the Court would not be able to analyze the
provisions vis-à-vis the Constitution, the Mining Law and these modern day lending
practices.
I mentioned the WB and the IMF, not necessarily because I agree with their oftentimes
stringent policies, but because they set the standards that international and multinational
financial institutions often take bearings from. The WB and IMF are akin (though not
equivalent) to the Bangko Sentral, which all Philippine banks must abide by. If this Court
closes its doors to these international realities and unilaterally sets up its own concepts of
strict technical and financial assistance, then it may unwittingly make the country a virtual
hermit—an economic isolationist—in the real world of finance.
I understand that a live case, challenging the Mining Law and an FTAA relevant
thereto, is pending before the Second Division of this Court, where it is docketed as G.R.
No. 157882 (Dipdio Earth Savers Multi-Purpose Association v. Hon. Elisea Gozun). Can we
not consolidate that case with the current one, call an Oral Argument, and then decide the
matter more definitively? During the Oral Argument, I believe that the Court should invite
as amici curiae (1) a lawyer versed in international finance like retired Justice Florentino
P. Feliciano, (2) a representative of the Banker’s Association of the Philippines, and (3) a
leader of the University of the Philippines Law Constitution Project.
Constitutional Interpretation and the
Vagaries of Contemporary Events
Finally, I believe that the Concom did not mean to tie the hands of the President and
restrict the latter only to agreements on rigid financial and technical assistance
and nothing else. The commissioners fully realized that their work would have to
withstand the test of time; that the Charter, though crafted with the wisdom born of past
experiences and lessons painfully learned, would have to be a living document that would
answer the needs of the nation well into the future. Thus, the unerring emphasis on
flexibility and adaptability.
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Commissioner Joaquin Bernas stressed that he voted in favor of the Article, “because it is
flexible enough to allow future legislators to correct whatever mistakes we may have
made.” Commissioner Felicitas Aquino noted that “unlike the other articles of this
6

Constitution, this article whether we like it or not would have to yield to flexibility and
elasticity which inheres in the interpretation of this provision. Why? Precisely because the
forces of economics are dynamic and are perpetually in motion.” 7

Along the same line, the Court, in Tañada v. Angara, stressed the need to interpret the
8

Constitution to cover “refreshing winds of change necessitated by unfolding events”:

“x x x. Constitutions are designed to meet not only the vagaries of contemporary events. They should
be interpreted to cover even future and unknown circumstances. It is to the credit of its drafters that
a Constitution can withstand the assaults of bigots and infidels but at the same time bend with the
refreshing winds of change necessitated by unfolding events.”
Accordingly, I vote to DISMISS the Petition.
Petition granted.