APEX MINING CO., INC., MT. DIWATA EXPLORATION AND MINING CORPORATION, CAMILO BANAD, PRUDENCIO SUAREZ, AURORA SUAREZ, RODOLFO BOLO, LEONILA VILLAFLOR, MAURICIA AMACIO, ANITA BITA…

Apex Mining versus Marcopper Mining

The Case

This is a petition for certiorari brought by Apex Mining Company and its co-petitioners against Marcopper Mining Corporation, asking the Supreme Court to nullify the decision of the Office of the President which upheld the rulings of the Department of Environment and Natural Resources. The dispute is a contest over conflicting mining claims inside a timberland area in Moncayo, Davao del Norte and Cateel, Davao Oriental, covering 4,941 hectares. The case matters because it settles how mining rights may be validly acquired inside a forest reserve, and it illustrates the deference courts owe to the factual findings of administrative agencies of the Executive Branch.

Procedural History

Marcopper filed with the Bureau of Mines and Geo-Sciences a petition for cancellation of the mining claims and small scale mining permits of Apex. On December 9, 1986, the Bureau of Mines and Geo-Sciences granted the motion to dismiss filed by Apex and declared Marcopper's Permit to Explore Number 133 null and void. Marcopper appealed to the Department of Environment and Natural Resources. On April 15, 1987, the Department reversed the Bureau, declared Permit to Explore Number 133 valid and subsisting, declared the mining claims and small scale mining permits of Apex null and void or inoperative, and directed the cancellation of the registered claims and the revocation of the small scale mining permits. Apex moved for reconsideration, which the Department denied on January 4, 1988. Apex then appealed to the Office of the President. On July 27, 1989, the Office of the President dismissed the appeal for lack of merit and affirmed the Department's decision and order. Apex's motion for reconsideration was denied on November 16, 1989. Hence, this petition for certiorari with a prayer for a writ of preliminary injunction or restraining order. The Supreme Court gave due course to the petition on August 7, 1990.

Facts

Marcopper was one of the first mining claimants in the disputed area. It registered sixteen claims on January 19 and 20, 1984 by filing declarations of location under Presidential Decree Number 463, the Mineral Resources Development Decree. It later learned from the central office of the Bureau of Forest Development that the area lay within an existing forest reservation known as the Agusan-Davao-Surigao Forest Reserve, established by Proclamation Number 369 on February 27, 1931 by Governor General Dwight F. Davis. Realizing that its mining claims were invalid because it had availed of the wrong procedure, Marcopper abandoned its sixteen claims and instead applied for a prospecting permit with the Bureau of Forest Development on April 11, 1984, covering the same 4,941 hectares.

On July 1, 1985, the Bureau of Forest Development issued to Marcopper Permit to Prospect Number 755-123185. After discovering strong evidence of mineral deposits, Marcopper applied for a permit to explore with the Bureau of Mines and Geo-Sciences, and on March 10, 1986, it was issued Permit to Explore Number 133. Upon verification, however, Marcopper found that the area covered by its permit was also the subject of several claims and declarations of Apex. On August 11, 1986, Marcopper filed a petition for cancellation of mining claims and small scale mining permits against Apex, alleging that the area is within an established forest reservation and that Apex's claims are invalid under Presidential Decree Number 463 because mining rights within a forest reserve are acquired through a permit to prospect with the Bureau of Forest Development, not through registration of declarations of location with the Bureau of Mines and Geo-Sciences.

Apex moved to dismiss, arguing that its claims are not within any forest reserve and that Marcopper's permits are inoperative. The Bureau of Mines and Geo-Sciences granted the motion and voided Marcopper's permit, but the Department of Environment and Natural Resources reversed, and the Office of the President affirmed the reversal.

Issues

• Whether or not the disputed area is within an established and existing forest reservation.
• Whether or not the mining claims and small scale mining permits of Apex were validly acquired.
• Whether or not the findings of the administrative agencies should be respected by the reviewing court.

Applicable Provisions

Section 8 of Act Number 2874, the former Public Land Act, which was the basis of Proclamation Number 369, provides:

Section 8. Only those lands shall be declared open to disposition or concession which have been officially delimited and classified and, when practicable, surveyed, and which have not been reserved for public or quasi-public uses, nor appropriated by the Governor, nor in any manner become private property, not those on which a private right authorized and recognized by this Act or any other valid law may be claimed, or which, having been reserved or appropriated, have ceased to do so. However, the Governor-General may, for reasons of public interest, declare lands of the public domain open to disposition before the same have had their boundaries established or been surveyed, or may, for the same reasons, suspend their concession or disposition by proclamation duly published or by Act of Legislature.

This provision empowered the Governor-General not only to open lands of the public domain to disposition but also to suspend their concession or disposition, which is how a forest reserve is established.

Section 8 of Presidential Decree Number 463, as amended by Presidential Decree Number 1385, provides:

Section 8. Prospecting, Exploration and Exploitation of Minerals in Reserved Lands. Prospecting, exploration and exploitation of minerals in reserved lands other than mineral reservations may be undertaken by the proper Government agencies. In the event that said agencies cannot undertake the prospecting, exploration and exploitation of mineral in reserved lands, qualified persons may be permitted to undertake such prospecting, exploration and exploitation in accordance with the rules and regulations promulgated by the Secretary. The right to exploit the minerals found therein shall be awarded by the President under such terms and conditions as recommended by the Director and approved by the Secretary: Provided, That the party who undertook prospecting, exploration and exploitation of said area shall be given priority.

Notwithstanding the provisions of the preceding paragraph, a special permit may be issued by the Director to the exploration permittee to extract, remove and dispose of minerals in limited quantities as verified by the Bureau of Mines.

This provision governs how mining rights in reserved lands may be acquired, which is through government agencies or qualified persons permitted under rules, not through ordinary registration of claims.

Section 13 of Presidential Decree Number 463, as amended, provides:

Section 13. Areas Closed to Mining Location. No prospecting and exploration shall be allowed:

a) In military, or other Government reservations except when authorized by the proper Government agency concerned;

This provision closes government reservations, including forest reserves, to mining location, which is why Apex's claims within the reserve are invalid.

Ruling

On the first issue, the Court held that the disputed area is within an established and existing forest reservation. The Court reasoned that Proclamation Number 369 was issued on the basis of Section 8 of Act Number 2874, which empowered the Governor-General to suspend the concession or disposition of lands of the public domain. The Court noted that the proclamation's last paragraph stated that from the reserve shall be considered automatically excluded all areas certified as non-forest lands, and that President Carlos P. Garcia confirmed the existence of the reserve when he issued Proclamation Number 583 on May 8, 1959, excluding certain parcels from the operation of Proclamation Number 369 and declaring them open to disposition under the Mining Act, a proclamation concurred in by Congress through Concurrent Resolution Number 17.

On the second issue, the Court held that the mining claims and small scale mining permits of Apex are invalid. Since the area is within a forest reserve, it is not open to mining location. Under Presidential Decree Number 463, as amended, one can acquire mining rights within forest reserves only by initially applying for a permit to prospect with the Bureau of Forest Development and subsequently for a permit to explore with the Bureau of Mines and Geo-Sciences. Marcopper complied with these requisites after discovering that its claims were within the reserve, while Apex's claims and permits, being located within the reserve, violated the law and failed to validly acquire mining rights.

On the third issue, the Court held that the findings of fact of administrative agencies must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant. The Court emphasized that it is not for the reviewing court to weigh conflicting evidence, determine the credibility of witnesses, or substitute its own judgment for that of the administrative agency on the sufficiency of the evidence. An administrative decision within the executive jurisdiction can only be set aside on proof of gross abuse of discretion, fraud, or error of law.

Doctrine

A forest reserve established by proclamation of the Governor-General under Section 8 of Act Number 2874 is a government reservation closed to mining location under Section 13 of Presidential Decree Number 463. Mining rights within a forest reserve may be acquired only by applying for a permit to prospect with the Bureau of Forest Development and then for a permit to explore with the Bureau of Mines and Geo-Sciences, as required by Section 8 of Presidential Decree Number 463. Registration of declarations of location with the Bureau of Mines and Geo-Sciences does not validly acquire mining rights inside a forest reserve. In reviewing administrative decisions, the factual findings of the administrative agency, if supported by substantial evidence, are controlling on the courts and will not be disturbed absent gross abuse of discretion, fraud, or error of law.

Disposition

The Supreme Court affirmed the appealed decision of the Office of the President and dismissed the petition for certiorari. Marcopper won.

Remember This

Inside a forest reserve, mining rights are acquired through a permit to prospect with the Bureau of Forest Development followed by a permit to explore with the Bureau of Mines and Geo-Sciences, never through registration of declarations of location. Examiners use this case to test the closed areas under Presidential Decree Number 463 and the deference courts give to the factual findings of administrative agencies supported by substantial evidence.