Province of Occidental Mindoro v. Agusan Petroleum and Mineral Corporation
REITERATIONFacts
The Antecedents: The Province of Occidental Mindoro enacted Provincial Ordinance No. 34-09, and the Municipality of Abra de Ilog enacted Municipal Ordinance No. 106-2008. Both ordinances imposed a 25-year moratorium on all large-scale exploration and mining activities within their respective territories. These ordinances were enacted to protect the environment and the health and safety of their constituents. Agusan Petroleum and Mineral Corporation (Agusan Petroleum), a contractor holding a Financial or Technical Assistance Agreement (FTAA) with the Republic of the Philippines for large-scale mining, challenged these ordinances, asserting they infringed upon its rights under the FTAA and contravened national law. Procedural History: Agusan Petroleum filed a Petition for Declaratory Relief with the Regional Trial Court (RTC) of Mamburao, Occidental Mindoro, seeking to invalidate the provincial and municipal ordinances. The RTC, in an August 8, 2018 Order, granted Agusan Petroleum's motion for summary judgment and declared the ordinances unconstitutional and contrary to law. A subsequent motion for reconsideration filed by the Province of Occidental Mindoro and the Municipality of Abra de Ilog was denied by the RTC in its July 30, 2019 Order. The Province of Occidental Mindoro, through its provincial legal officer, then filed the present Petition for Review on Certiorari with the Supreme Court. The Petition: The Province of Occidental Mindoro, through its provincial legal officer, filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioner argues that the ordinances were a valid exercise of police power to protect the environment and the people's right to health, and that the term "law" in Republic Act No. 7942 (Philippine Mining Act of 1995) includes local ordinances, thus prohibiting mining in areas covered by such ordinances. Petitioner also contends that the non-impairment clause must yield to police power and that the ordinances enjoy a presumption of constitutionality. Respondent Agusan Petroleum counters that the provincial legal officer lacks the authority to file the petition without OSG deputation, that the ordinances are void for contravening Republic Act No. 7942 and usurping the State's exclusive control over mineral resources, and that they constitute an unreasonable prohibition rather than regulation of a legitimate business.
Issue(s)
Whether the Provincial Legal Officer has the authority to represent the Province of Occidental Mindoro before the Supreme Court. Whether the 25-year moratorium on large-scale mining is a valid exercise of police power by the local government units. Whether the term 'law' in Section 19(d) of Republic Act No. 7942 includes local ordinances.
Ruling
The Petition is DENIED. The August 8, 2018 Order of the Regional Trial Court is AFFIRMED. The assailed Ordinances and Resolutions are declared INVALID.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that while Section 481 of the Local Government Code (LGC) allows a provincial legal officer to represent the LGU in civil actions, this authority is limited to lower courts. Under Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987, the Office of the Solicitor General (OSG) has the primary and mandatory responsibility to represent the Government and its officers in the Supreme Court and the Court of Appeals. Applying the ruling in Commissioner of Internal Revenue v. La Suerte Cigar & Cigarette Factory, the Court emphasized that the OSG is the principal law officer of the Government in appellate proceedings. However, the Court resolved to relax this rule and decide the case on the merits due to the novelty of the issues and the OSG's subsequent manifestation adopting the petitioner's position. On Issue 2: The Court held that the ordinances are not a valid exercise of police power because they are ultra vires and contravene national law. LGUs are mere agents of the national government and cannot negate the will of the legislature; as established in Magtajas v. Pryce Properties, a delegate cannot be superior to the principal. Republic Act No. 7942 (RA 7942) expressly allows and regulates large-scale mining as a legal activity under State control. While LGUs have the power to protect the environment and must be consulted under Sections 26 and 27 of the LGC, they cannot impose a blanket prohibition. The power to 'regulate' is not synonymous with the power to 'prohibit' or 'suppress,' as clarified in City of Manila v. Laguio. LGUs may reject specific mining projects based on individual social acceptability and environmental impact, but they cannot ban the entire industry for 25 years. On Issue 3: The Court clarified that the term 'law' in Section 19(d) of RA 7942, which refers to 'areas expressly prohibited by law' from mining applications, does not include local ordinances. Legislative power is primarily lodged in Congress, and local ordinances are merely derivative and subservient to national statutes. Had Congress intended to include local ordinances in the exceptions to mining areas, it would have expressly stated so. Interpreting 'law' to include ordinances would allow LGUs to effectively repeal or negate the national policy on mineral resource development, which is a power they do not possess. The Court emphasized that municipal corporations are 'tenants at will of the legislature' and must conform to the general policy of the State.
Main Doctrine
Local government units (LGUs) are agents of the national government and exercise only delegated legislative powers. Consequently, an ordinance cannot contravene a statute, as the delegate cannot be superior to the principal. While LGUs enjoy local autonomy to protect the environment under the General Welfare Clause, this power must be exercised in a manner consistent with national policies and laws, such as the Philippine Mining Act of 1995 (RA 7942). A blanket moratorium or total ban on large-scale mining by an LGU is ultra vires because it prohibits a legitimate activity that the State, through the national legislature, has expressly allowed and regulated.