GR 163509; (December, 2006) (Digest)
G.R. No. 163509, December 6, 2006
PICOP RESOURCES, INC., petitioner, vs. BASE METALS MINERAL RESOURCES CORPORATION, and THE MINES ADJUDICATION BOARD, respondents.
FACTS
Banahaw Mining held mining claims and a Mines Operating Agreement over areas within PICOP’s logging concession. The parties entered into a Memorandum of Agreement (MOA), with PICOP granting Banahaw an access right-of-way. In 1996, Banahaw assigned its rights over the mining claims, including those operated for CMMCI, to Base Metals. Base Metals subsequently amended the pending Mineral Production Sharing Agreement (MPSA) applications to substitute itself as the applicant.
PICOP filed an Adverse Claim and/or Opposition to Base Metals’ MPSA applications with the Mines and Geosciences Bureau. PICOP argued that granting the MPSA would violate the constitutional non-impairment clause, as it would impair PICOP’s rights under its MOA with Banahaw and its Presidential Warranty over the concession area. The Panel Arbitrator initially ruled in favor of PICOP and set aside Base Metals’ applications. This decision was reversed by the Mines Adjudication Board, a ruling affirmed by the Court of Appeals.
ISSUE
Whether the grant of an MPSA to Base Metals over areas within PICOP’s forest concession impairs PICOP’s contractual rights in violation of the Constitution.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic is anchored on the nature of PICOP’s rights. A timber license, including one covered by a Presidential Warranty, is not a contract but a mere privilege or license granted by the State. It is a revocable permit that does not confer absolute or exclusive rights to the licensee. Consequently, the constitutional non-impairment clause, which protects the obligation of contracts, does not apply to such licenses or privileges.
The Court emphasized that the State retains its sovereign power to control and supervise the exploration, development, and utilization of natural resources. The grant of a mining right over the same area covered by a forest license is a valid exercise of this power, as the State may allocate different resources (timber and minerals) within the same land to different entities. The MOA between PICOP and Banahaw, being merely an access agreement, did not grant PICOP exclusivity over the mineral resources. Therefore, Base Metals’ MPSA application, which remains subject to standard regulatory requirements, does not unlawfully impair any vested contractual right of PICOP.