Basiana v. Department of Environment and Natural Resources
REITERATIONFacts
The Antecedents: Basiana Mining Exploration Corporation (BMEC), through its President Rodney O. Basiana, applied for a Mineral Production Sharing Agreement (MPSA) on July 31, 1997, for an area covering 6,642 hectares in Agusan del Norte. BMEC subsequently assigned its rights to Manila Mining Corporation, which in turn assigned them to SR Metals Inc. (SRMI). SRMI, using BMEC's application, applied for its own MPSA for a smaller area. Mining operations commenced under SRMI, but were later halted by a cease and desist order from the DENR Secretary and advice from the Minerals Development Council due to alleged violations of production, capitalization, and labor cost to equipment utilization limits. This led to Basiana filing a complaint for rescission of contract and damages against SRMI, and BMEC (later known as BMDC) filing a separate complaint for breach of trust, accounting, and damages against SRMI and others. Procedural History: While BMEC and Basiana's complaints were pending, the Director of the Mines and Geosciences Bureau (MGB) recommended the approval of SRMI's application. BMEC and Basiana protested this recommendation before the MGB Panel of Arbitrators (MGB-POA). Despite the pending protest, the Republic of the Philippines, represented by the DENR Secretary, entered into MPSA No. 261-2008-XIII with SRMI. Petitioners then filed a petition for review with the Court of Appeals (CA), assailing the issuance of this MPSA. The CA initially granted the petition, declaring the MPSA null and void, finding that the DENR Secretary lacked authority to approve the application while the protest was pending before the MGB-POA. However, upon motions for reconsideration by the DENR Secretary and SRMI, the CA reversed its decision, dismissing the petition. The CA ruled that the DENR Secretary's action was administrative, not quasi-judicial, and that the petition was premature and constituted forum shopping. The Petition: Petitioners Basiana Mining Exploration Corporation, Basiana Mining Development Corporation, and Rodney O. Basiana are before the Supreme Court via a petition for review on certiorari under Rule 45, assailing the CA's Amended Decision. They argue that the CA erred in reversing its initial ruling and in finding that the DENR Secretary's approval of the MPSA was not a quasi-judicial function. Petitioners contend that the DENR Secretary's determination of SRMI's qualifications and compliance with the law, especially in light of a pending protest, involved the exercise of quasi-judicial power. They also dispute the CA's reliance on the Celestial Nickel Mining case and argue that their recourse to the CA was proper, as the issues involved questions of law and the DENR Secretary's actions were tainted with grave abuse of discretion. SRMI maintains the DENR Secretary acted within his authority, and the OSG supports the CA's dismissal on grounds of forum shopping.
Issue(s)
Whether the act of the DENR Secretary in approving SRMI's application and entering into MPSA No. 261-2008-XIII is an exercise of quasi-judicial power reviewable by the Court of Appeals. Whether the petitioners failed to exhaust administrative remedies by directly filing a petition for review with the Court of Appeals instead of pursuing remedies within the DENR and the Office of the President. Whether the petitioners committed forum shopping.
Ruling
The Supreme Court dismissed the petition, affirming the Amended Decision of the Court of Appeals. The Court held that the act of the DENR Secretary in approving SRMI's application and entering into MPSA No. 261-2008-XIII is purely administrative and not quasi-judicial, thus not subject to review by the CA via petition for review or certiorari. The Court also found that the petitioners failed to exhaust administrative remedies, as they should have first sought cancellation of the MPSA with the DENR Secretary and then appealed to the Office of the President before resorting to judicial action.
Ratio Decidendi
On the nature of the DENR Secretary's act, primary jurisdiction, exhaustion of administrative remedies, and applicability of Celestial Nickel Mining: The Court reiterated that administrative agencies possess administrative, quasi-legislative, and quasi-judicial powers. The power to approve and enter into an MPSA is an administrative function derived from the DENR's mandate to control and supervise natural resources. This function does not involve determining the rights of adversarial parties, which is characteristic of quasi-judicial power. The process involves initial evaluation by MGB offices and the MGB Director, followed by final evaluation and approval by the DENR Secretary. The Court cited Republic of the Philippines v. Express Telecommunication Co., Inc., stating that granting of licenses, permits, leases, and contracts are executive and administrative in nature, and purely administrative functions may not be interfered with by the courts. The Court emphasized that the DENR Secretary has the primary jurisdiction to approve and cancel mining agreements. Therefore, petitioners should have sought the cancellation of MPSA No. 261-2008-XIII with the DENR Secretary first, not directly with the courts. The doctrine of primary jurisdiction requires that relief must first be obtained from the administrative body with expertise before resorting to courts. Furthermore, the doctrine of exhaustion of administrative remedies bars premature judicial intervention. The petitioners should have appealed to the Office of the President under A.O. No. 18, series of 1987, after exhausting remedies within the DENR, instead of directly filing a petition for review with the CA. The Court clarified that in Celestial Nickel Mining, the issue was the authority to cancel existing mineral agreements, which was correctly placed with the DENR Secretary. The present case involves the approval of a new MPSA, which is also an administrative act within the DENR Secretary's purview. The petitioners' prayer for cancellation of the MPSA implicitly falls under the DENR Secretary's power to cancel mining agreements, as affirmed in Celestial Nickel Mining. The Court found no error in the CA's reliance on this case to underscore the DENR Secretary's authority over mining agreements. On the failure to exhaust administrative remedies: The Court emphasized that the DENR Secretary has the primary jurisdiction to approve and cancel mining agreements. Therefore, petitioners should have sought the cancellation of MPSA No. 261-2008-XIII with the DENR Secretary first, not directly with the courts. The doctrine of primary jurisdiction requires that relief must first be obtained from the administrative body with expertise before resorting to courts. Furthermore, the doctrine of exhaustion of administrative remedies bars premature judicial intervention. The petitioners should have appealed to the Office of the President under A.O. No. 18, series of 1987, after exhausting remedies within the DENR, instead of directly filing a petition for review with the CA. On forum shopping: While the Court dismissed the petition on procedural grounds, it noted the CA's finding of forum shopping, as the petition for review was filed despite the pendency of the protest with the MGB-POA. This indicates a disregard for the proper procedural hierarchy and an attempt to obtain a favorable ruling from multiple forums simultaneously.
Main Doctrine
The act of the DENR Secretary in approving an MPSA and entering into such agreement is an administrative function, not a quasi-judicial one, and therefore cannot be reviewed by the Court of Appeals via a petition for review or certiorari. Recourse must first be made to the DENR Secretary for cancellation of the agreement, and thereafter, to the Office of the President, before judicial recourse is permitted.