POLITICAL LAW AND PUBLIC INTERNATIONAL LAW
VII. NATIONAL ECONOMY AND PATRIMONY
D. Exploration, Development, and Utilization of Natural Resources
This section of Philippine law is primarily governed by Article XII, Sections 2 and 3 of the 1987 Constitution, as well as various laws, regulations, and jurisprudence. It reflects the guiding principles of national patrimony and economic sovereignty, aiming to ensure that the exploitation of the country's natural wealth benefits Filipinos first and foremost.
Below is a detailed exposition of this topic:
Constitutional Provisions
1. Article XII, Section 2 of the 1987 Philippine Constitution
This is the cornerstone provision that governs the exploration, development, and utilization (EDU) of natural resources in the Philippines:
State Ownership: All lands of the public domain, waters, minerals, coal, petroleum, and other natural resources are owned by the State. This principle is known as regalian doctrine, which asserts that all natural resources in the country belong to the State.
Control and Supervision by the State: The State has full control and supervision over the exploration, development, and utilization of natural resources. The purpose of this control is to protect and promote the interest of Filipinos.
Filipino-Only Ownership: The Constitution mandates that the utilization of natural resources is reserved to Filipino citizens, or corporations or associations that are at least 60% Filipino-owned. This is to ensure that Filipinos are the principal beneficiaries of the country’s natural wealth.
Exceptions to the Filipino-Only Rule:
- Financial or Technical Assistance Agreements (FTAAs): The Constitution provides an exception to the general rule that only Filipino citizens or corporations may exploit natural resources. Under Section 2, the President may enter into agreements with foreign-owned corporations involving either financial or technical assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils. However, this agreement must be done under the following conditions:
- Concurrence of Congress.
- Determined by law to be necessary for the national interest.
- Financial or Technical Assistance Agreements (FTAAs): The Constitution provides an exception to the general rule that only Filipino citizens or corporations may exploit natural resources. Under Section 2, the President may enter into agreements with foreign-owned corporations involving either financial or technical assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils. However, this agreement must be done under the following conditions:
Small-Scale Utilization by Filipino Citizens: The Constitution allows Filipino citizens to utilize natural resources through:
- Small-scale utilization.
- Sub-leases or rights to small-scale use under the laws of the State.
Priority for Filipino Citizens: Whenever possible, the State should give priority to Filipino citizens and entities. This applies particularly to the ownership and utilization of natural resources, in line with the nationalist provisions of the Constitution.
Ecological Protection and Sustainable Development: The Constitution recognizes the need to balance economic development with environmental protection. It emphasizes sustainable development and requires that the utilization of natural resources should consider the environmental impact, and restore and enhance ecological balance.
2. Article XII, Section 3 of the 1987 Philippine Constitution
This section addresses the classification of alienable and disposable lands:
Lands of the Public Domain: The lands of the public domain are classified into:
- Agricultural.
- Forest or timber.
- Mineral.
- National parks.
Only agricultural lands are alienable and disposable, meaning that they can be transferred or sold to private individuals or corporations.
Corporate Land Holdings: Private corporations, regardless of nationality, can hold alienable lands of the public domain, but only up to a maximum of 1,024 hectares.
Individual Land Holdings: Filipino citizens may hold a maximum of 12 hectares of alienable public lands through homestead or free patents.
Key Laws and Jurisprudence Governing Natural Resources
1. Republic Act No. 7942 (Philippine Mining Act of 1995)
This act governs the exploration, development, utilization, and conservation of mineral resources. It outlines the following key provisions:
Ownership of Mineral Resources: All mineral resources are owned by the State, and no person may undertake exploration or utilization without a mining contract, permit, or lease from the government.
Types of Mining Agreements:
- Mineral Production Sharing Agreement (MPSA): The contractor provides the necessary capital and technology, but the State retains ownership of the mineral resources.
- Co-Production Agreement (CA): The State and the contractor share resources and production costs.
- Joint Venture Agreement (JVA): The State and the contractor form a joint venture company, and both contribute equity.
Financial or Technical Assistance Agreements (FTAAs): These are agreements with foreign-owned corporations for large-scale mining operations, as authorized under the Constitution.
Environmental Safeguards: The Mining Act requires all mining activities to consider the protection of the environment, including rehabilitation of mined areas and social equity programs for affected communities.
2. Republic Act No. 8371 (Indigenous Peoples' Rights Act of 1997)
This law recognizes and promotes the rights of Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) to their ancestral lands and natural resources. The following provisions are particularly relevant:
Ancestral Domain and Natural Resources: Indigenous peoples have a priority right to the resources within their ancestral domains. Any exploration, development, and utilization of resources in these areas require the Free, Prior, and Informed Consent (FPIC) of the IPs.
Recognition of ICC/IP Traditions: In cases involving natural resources in ancestral domains, the customs and traditions of indigenous peoples take precedence, subject to limitations by national law.
3. Presidential Decree No. 705 (Revised Forestry Code)
This law governs the conservation and management of forest lands in the Philippines. Its key provisions include:
Regalian Doctrine: All forest lands and natural resources within forest lands belong to the State.
Forest Land Classification: Forest lands cannot be alienated or disposed of, meaning private individuals or corporations cannot own them.
Agreements for Resource Utilization: Utilization of resources in forest lands is governed by permits or agreements issued by the State, such as timber license agreements, and forest land management agreements.
Jurisprudence
1. La Bugal-B’laan Tribal Association, Inc. vs. Ramos (2004)
This landmark case affirmed the constitutionality of Republic Act No. 7942 and the Financial or Technical Assistance Agreements (FTAAs) under the 1987 Constitution. The Supreme Court ruled that:
- The FTAAs are constitutional because they only involve technical or financial assistance and do not grant ownership or control of natural resources to foreign entities.
- The participation of foreign corporations in the EDU of mineral resources is limited to large-scale activities and must be approved by the President with congressional concurrence.
This decision reinforced the regalian doctrine while allowing foreign participation in the country’s mining industry under strict constitutional safeguards.
2. Oposa vs. Factoran (1993)
This case established the doctrine of intergenerational responsibility, emphasizing the right of future generations to a balanced and healthful ecology. The Supreme Court recognized the importance of environmental conservation and sustainable development in the EDU of natural resources.
Key Concepts and Principles
1. Regalian Doctrine
The regalian doctrine, enshrined in the Constitution, dictates that all natural resources belong to the State. It underscores the importance of ensuring that the utilization of these resources is done in a way that primarily benefits the Filipino people.
2. Sustainable Development
The principle of sustainable development mandates that natural resources be utilized in a way that preserves the environment for future generations, ensuring that economic development does not compromise ecological integrity.
3. National Patrimony
The constitutional provisions on national economy and patrimony emphasize that the country's resources must be primarily reserved for the benefit of Filipinos. However, certain sectors may be opened to foreign investors under controlled circumstances to promote national interest.
4. Environmental Protection and Social Justice
Philippine laws and jurisprudence consistently emphasize that the exploration, development, and utilization of natural resources should promote social equity and environmental protection, particularly concerning marginalized sectors such as indigenous peoples.
Conclusion
The exploration, development, and utilization of natural resources in the Philippines are governed by a complex set of constitutional provisions, laws, and jurisprudence aimed at balancing economic development, environmental protection, and the promotion of national sovereignty. The Filipino people are recognized as the primary beneficiaries of the country's natural resources, while provisions exist to allow foreign involvement under strict conditions to enhance technological and financial capacities for large-scale ventures.
This framework ensures that natural resources contribute to national growth while being managed responsibly for future generations.