La Bugal-B’laan Tribal Association, Inc. Vs Ramos

Natural Resources and Environmental Laws

G.R. No. 127882;  January 27, 2004

FACTS:
This petition for prohibition and mandamus challenges the constitutionality of Republic Act No. 7942 (The Philippine Mining Act of 1995), its implementing rules and regulations and the Financial and Technical Assistance Agreement (FTAA) dated March 30, 1995 by the government with Western Mining Corporation(Philippines) Inc. (WMCP).
Accordingly, the FTAA violated the 1987 Constitution in that it is a service contract and is antithetical to the principle of sovereignty over our natural resources, because they allowed foreign control over the exploitation of our natural resources, to the prejudice of the Filipino nation.

ISSUE:
What is the proper interpretation of the phrase “Agreements involving Either Technical or Financial Assistance” contained in paragraph 4, Section 2, Article XII of the Constitution.

HELD:
The Supreme Court upheld the constitutionality of the Philippine Mining Law, its implementing rules and regulations – insofar as they relate to financial and technical agreements as well as the subject Financial and Technical Assistance Agreement.
Full control is not anathematic to day-to-day management by the contractor, provided that the State retains the power to direct overall strategy; and to set aside, reverse or modify plans and actions of the contractor. The idea of full control is similar to that which is exercised by the board of directors of a private corporation, the performance of managerial, operational, financial, marketing and other functions may be delegated to subordinate officers or given to contractual entities, but the board retains full residual control of the business.