G.R. No. 157882 ; March 30, 2006
Didipio Earth-Savers’ Multi-Purpose Association, Incorporated (DESAMA), et al., Petitioners, vs. Elisea Gozun, in her capacity as Secretary of the DENR, et al., Respondents.

FACTS

Petitioners, an association and numerous residents of Barangay Didipio, Kasibu, Nueva Vizcaya, filed this petition for prohibition and mandamus. They assail the constitutionality of Republic Act No. 7942 (the Philippine Mining Act of 1995) and its Implementing Rules and Regulations (DENR Administrative Order No. 96-40), as well as the Financial and Technical Assistance Agreement (FTAA) executed between the Republic and Arimco Mining Corporation (later Climax-Arimco Mining Corporation or CAMC), a corporation owned by Australian nationals. The FTAA covers 37,000 hectares, including their barangay.
The petitioners, through counsel, sent demand letters to the DENR Secretary and the Office of the President seeking the cancellation of the CAMC FTAA, primarily on the ground that the Mining Act and its rules are unconstitutional. Their demands were referred to administrative bodies and eventually rejected by the Mines and Geosciences Bureau in a letter dated 19 February 2003. Having failed to obtain the desired administrative action, petitioners directly filed the instant petition with the Supreme Court, praying for the issuance of a restraining order, a declaration of unconstitutionality, and the cancellation of the FTAA.

ISSUE

The principal issue is whether the Supreme Court should take cognizance of the petition, which directly assails the constitutionality of the Philippine Mining Act of 1995 and the FTAA granted to CAMC, despite the petitioners’ failure to exhaust administrative remedies and the existence of a prior, related case.

RULING

The Supreme Court DISMISSED the petition. The Court ruled that the petitioners failed to observe the doctrine of exhaustion of administrative remedies. Their demand letters to the DENR and the Office of the President were mere preliminary steps and did not constitute the proper administrative appeal or review process mandated by the Mining Act and its implementing rules. The MGB’s letter of rejection was an appealable order to the Panel of Arbitrators, a quasi-judicial body. By skipping this level and coming directly to the Court, petitioners deprived the administrative agency of the opportunity to correct its own errors.
Furthermore, the Court found the petition to be an improper collateral attack on the constitutionality of the Mining Act. The constitutionality of the same law and the provisions governing FTAAs had already been squarely addressed and upheld by the Court en banc in the landmark case of La Bugal-B’Laan Tribal Association, Inc. v. Ramos ( G.R. No. 127882 , December 1, 2004). In that decision, the Court definitively ruled that the Mining Act and the FTAA system are constitutional, and that the State may enter into such agreements with fully foreign-owned corporations for the large-scale exploration, development, and utilization of minerals. The present petition essentially re-litigates these settled issues. The Court emphasized that once a statute has been declared constitutional, that decision is binding on all and cannot be collaterally attacked in subsequent proceedings.