G.R. No. 149638 and G.R. No. 149916, December 10, 2014.
Case Parties: MONCAYO INTEGRATED SMALL-SCALE MINERS ASSOCIATION, INC. (MISSMA), Petitioner, vs. SOUTHEAST MINDANAO GOLD MINING CORP., JB. MGT. MINING CORP., PICOP RESOURCES, INC., MT. DIWATA UPPER ULIP MANDAYA TRIBAL COUNCIL, INC. AND BALITE INTEGRATED SMALL-SCALE MINING CORP., (BISSMICO), Respondents. ( G.R. No. 149638 ) and HON. ANTONIO H. CERILLES, IN HIS CAPACITY AS SECRETARY OF DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, Petitioner, vs. SOUTHEAST MINDANAO GOLD MINING CORPORATION (SMGMC) AND BALITE INTEGRATED SMALL-SCALE MINING CORP., (BISSMICO), Respondents. (G.R. No. 149916).

FACTS

The cases involve the “Diwalwal Gold Rush Area” in Mt. Diwata, Mindanao. On July 1, 1985, Marcopper Mining Corporation was issued a prospecting permit covering 4,941 hectares within the Agusan-Davao-Surigao Forest Reserve. On March 10, 1986, Marcopper was issued an Exploration Permit (EP 133) for the same area, which it assigned to Southeast Mindanao Gold Mining Corporation (SMGMC) on February 16, 1994. SMGMC later applied for a Mineral Production Sharing Agreement (MPSA No. 128) for the 4,941 hectares. Several parties, including Moncayo Integrated Small-Scale Miners Association, Inc. (MISSMA), filed adverse claims against the MPSA application, anchored on DENR Administrative Order No. 66 (1991), which declared 729 hectares of the forest reserve as open for small-scale mining. A panel of arbitrators dismissed all adverse claims on June 13, 1997, but the Mines Adjudication Board (MAB), in its January 6, 1998 decision, vacated that decision. The MAB ordered that SMGMC’s MPSA application be given due course, but that the area covered by DAO No. 66, actually occupied and actively mined by small-scale miners on or before August 1, 1987, be excluded from SMGMC’s application. It also imposed a moratorium on mining activities and encouraged negotiations between SMGMC and the small-scale miners. Both SMGMC and the adverse claimants questioned the MAB decision before the Supreme Court in other petitions.
Meanwhile, the Provincial Mining Regulatory Board (PMRB) of Davao, proceeding independently, moved to declare a People’s Small Scale Mining Area per the MAB decision. After publication and oppositions from SMGMC and others, the PMRB, on March 30, 1999, dismissed the oppositions and declared the 729-hectare area as a People’s Small Scale Mining Area. Then DENR Secretary Antonio H. Cerilles, in a decision dated September 20, 1999, affirmed the PMRB decision with modifications, including delineating two specific blocks within the 729 hectares for different groups of small-scale miners. SMGMC filed a petition before the Court of Appeals. The Court of Appeals initially denied the petition on July 31, 2000, but in an amended decision dated August 27, 2001, granted SMGMC’s motion for reconsideration, annulling and setting aside the DENR Secretary’s decision for having been issued with grave abuse of discretion. The Court of Appeals found that the DENR Secretary’s outright delineation of the area contravened the MAB decision and the People’s Small Scale Mining Act, as it disenfranchised SMGMC and other miners who may apply after fulfilling necessary conditions. MISSMA and Secretary Cerilles filed these consolidated petitions for review assailing the Court of Appeals’ amended decision.

ISSUE

The core issue revolves around the propriety of the DENR Secretary’s decision affirming the PMRB’s declaration of a People’s Small Scale Mining Area and delineating specific portions within it, and whether the Court of Appeals correctly annulled that decision for grave abuse of discretion.

RULING

The Supreme Court declared the petitions moot and academic due to supervening events. The Court noted that the controversy focused on the 729-hectare portion excluded from SMGMC’s MPSA application and declared as a People’s Small Scale Mining Area. However, subsequent developments, including the enactment of Republic Act No. 7942 (The Philippine Mining Act of 1995) and the establishment of the Diwalwal Mineral Reservation by virtue of Proclamation No. 297 on November 25, 2002, had altered the legal landscape. The Court cited its ruling in “Apex Mining Co, Inc. v. Southeast Mindanao Gold Mining Corp.” (2009), which held that upon the proclamation of a mineral reservation, the area is withdrawn from entry into any mineral agreement, including applications for MPSA and small-scale mining contracts, and mining operations therein shall be undertaken by the DENR or through a contractor. These supervening events rendered the immediate issues in the present petitions academic, as the authority to manage and contract mining operations in the Diwalwal Mineral Reservation now resides with the national government, through the DENR Secretary, pursuant to the Mining Act.