G.R. No. 191705, March 07, 2016
BASIANA MINING EXPLORATION CORPORATION, BASIANA MINERALS DEVELOPMENT CORPORATION AND RODNEY O. BASIANA, IN HIS OWN PERSONAL CAPACITY AS PRESIDENT AND DULY AUTHORIZED REPRESENTATIVE OF BASIANA MINING EXPLORATION CORPORATION AND BASIANA MINING DEVELOPMENT CORPORATION, PETITIONERS, VS. HONORABLE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, AND SR METALS INC. (SRMI), RESPONDENTS.

FACTS

Petitioner Basiana Mining Exploration Corporation (BMEC), through its President Rodney O. Basiana, applied for a Mineral Production Sharing Agreement (MPSA) with the DENR in 1997. Pending approval, BMEC assigned its rights to Manila Mining Corporation in 2000, which in turn assigned them to respondent SR Metals, Inc. (SRMI) in 2005. Basiana and SRMI then executed a Memorandum of Agreement for SRMI to undertake operations on the site. SRMI subsequently applied for its own MPSA using BMEC’s original application. The DENR later issued cease and desist orders against SRMI’s mining operations for violations. Basiana and BMEC (later known as Basiana Mining Development Corporation or BMDC) filed separate civil cases against SRMI. On January 10, 2008, the MGB Director recommended approval of SRMI’s MPSA application. The petitioners then filed a protest with the MGB Panel of Arbitrators (MGB-POA). While this protest was pending, the DENR Secretary entered into MPSA No. 261-2008-XIII with SRMI. The petitioners filed a petition for review with the Court of Appeals assailing the issuance of the MPSA. The CA initially granted the petition and declared the MPSA null and void, but upon reconsideration, reversed itself and dismissed the petition, prompting this appeal.

ISSUE

Whether the Court of Appeals erred in dismissing the petitioners’ challenge to MPSA No. 261-2008-XIII, specifically on the grounds of the propriety of their recourse (petition for review/certiorari) and the jurisdiction of the DENR Secretary to approve the MPSA while a protest was pending before the MGB-POA.

RULING

The Supreme Court DISMISSED the petition. It held that the petitioners’ recourse to the Court of Appeals was erroneous.
1. The DENR Secretary’s act was not quasi-judicial: The approval of the MPSA and the execution of the mining agreement by the DENR Secretary is an executive or administrative function, not a quasi-judicial one. It is part of the Secretary’s duty to administer and dispose of natural resources. Since no quasi-judicial function was exercised, the act could not be reviewed by the CA via a petition for review under Rule 43 or a special civil action for certiorari under Rule 65.
2. Exhaustion of Administrative Remedies and Prematurity: The petitioners failed to exhaust administrative remedies. Their proper course of action was to await the resolution of their pending protest before the MGB-POA. The MGB-POA has primary jurisdiction over mining disputes, including the protest filed by the petitioners which raised issues on the validity of SRMI’s application and its qualifications. Only after an adverse decision from the MGB-POA, and subsequent appeals to the DENR Secretary and the Office of the President, could judicial recourse be made.
3. Forum Shopping: The Supreme Court found that the petitioners committed forum shopping by simultaneously pursuing their protest before the MGB-POA and filing a petition for review with the CA, both seeking the same relief—to nullify SRMI’s MPSA application/agreement.
The Court clarified that it was not ruling on the validity of MPSA No. 261-2008-XIII itself, but was dismissing the petition solely on procedural grounds—the erroneous mode of appeal and failure to exhaust administrative remedies.