High court upholds Aussie mining project

REPORT FROM BUSINESSWORLD Farmers and indigenous communities to be affected by large-scale mining operations in the provinces of Nueva Vizcaya and Quirino have lost a case against an Australian mining firm, with the Supreme Court citing safeguards provided by Republic Act 7942, or the Philippine Mining Act of 1995, and upholding anew this landmark law’s constitutionality as well. In a 39-page decision, the high court junked the suit filed by the Didipio Earth-Savers’ Multi-purpose Association, Inc. (DESAMA) which questioned the validity of a Financial and Technical Assistance Agreement (FTAA) the government forged with Australian-led Arimco Mining Corp. The firm, later renamed Climax-Arimco Mining Corp. (CAMC) -- with 99% of its stockholders being Australian -- executed the FTAA with the Ramos administration in June 1994 covering at least 37,000 hectares of the Nueva Vizcaya and Quirino provinces. The petitioners argued that the Mining Act and its implementing rules and regulations (IRR): "allowed the unjust and unlawful taking of property without payment of just compensation"; and "are void and unconstitutional for sanctioning an unconstitutional administrative process of determining just compensation." The high court dismissed the petitioners’ claims that the deal had ceded over to the Australian firm full control and management of mining enterprises, to the detriment of affected communities’ rights. Citing a precedent case, the La Bugal-B’laan Tribal Association, Inc. v. Ramos, the court noted that RA 7942 has provided safety nets in foreign-funded large-scale mining operations. The La Bugal decision, handed down on Dec. 1, 2004, junked the claims of left-wing and tribal groups that the local mining industry did not need foreign capital to revive the moribund mining sector. "RA 7942 [and its IRR] vest in the government more than a sufficient degree of control and supervision over the conduct of mining operations," the high court reiterated in its latest decision. The tribunal ruled that there was no basis for the claims of DESAMA that the Mining Act failed to provide for the payment of just compensation for properties expropriated in the course of the exploration projects. The group earlier argued that the government could not take away their land without payment of just compensation. "Section 76 of RA 7942 and Section 107 of [RA 7942’s IRR] provide for the payment of just compensation," read the ruling. It stressed that determination of just compensation lies with the courts, despite having a panel or arbitrators or a mines adjudication board doing the same task. "Even as the executive department or the legislature may make initial determinations, the same cannot prevail over the court’s findings," the high court ruled. It reiterated its ruling in the La Bugal case where it noted that the Constitution expressly allows service contracts in the large-scale exploration, development, and utilization of minerals, petroleum, and mineral oils via "agreements with foreign-owned corporations involving either technical or financial assistance," as provided by law. The La Bugal decision, penned by then Associate Justice Artemio V. Panganiban, is considered the longest ruling in the court’s 104-year history. Mr. Panganiban was named chief justice by President Gloria Macapagal Arroyo to replace Hilario G. Davide, Jr. who retired in December last year. And to lay to rest the recurring question on the landmark law’s legality, the ruling read in part that RA 7942 and its IRR " insofar as they relate to financial and technical assistance agreements are not unconstitutional." The revival of the moribund mining sector was said to be one of the Arroyo government’s key tools to sustaining economic growth. -Maria Eloisa I. Calderon / Business World