CASES
1.) Strait vs. Secretary Angelo Reyes
Subject: Courts may decide cases otherwise moot and academic; Locus Standi of petitioners
Resident Marine Mammals and Stewards; Former President Arroyo cannot be impleaded as an
unwilling co-petitioner; Service Contracts are allowed under the 1987 Constitution; Agreements
Involving Technical or Financial Assistance are Service Contracts with Safeguards; SC-46 is null and
void for noncompliance with the requirements of the 1987 Constitution; General Law on Oil
Exploration (PD No. 87 not repealed by the enactment of the present 1987 Constitution); President
was not the signatory to SC-46 and the same was not submitted to Congress (alter-ego doctrine
does not apply since the requirements are not mere formalities but constitutionally placed
safeguards); Service Contract No. 46 in violation of NIPAS Act and PD 1586 (non- compliance with
EIA and ECC for protected areas); Requirement of a law passed by Congress specifically allowing
exploration in the Tanon Strait, a NIPAS area
Facts:
In G.R. No. 180771, the “Resident Marine Mammals” ,as petitioners, are the toothed whales,
dolphins, porpoises, and other cetacean species, which inhabit the waters in and around the Tañon
Strait, a narrow passage of water situated between the islands of Negros and Cebu. They are joined
by Gloria Estenzo Ramos and Rose-Liza Eisma-Osorio , to be collectively known as “the Stewards”
who allegedly seek the protection of the aforementioned marine species. Also impleaded as an
unwilling co-petitioner is former President Gloria Macapagal-Arroyo, for her express declaration and
undertaking in the ASEAN Charter to protect the Tañon Strait, among others
In G.R. No. 181527, petitioners are the Central Visayas Fisherfolk Development Center (FIDEC), a
non-stock, non-profit, non-governmental organization, established for the welfare of the marginal
fisherfolk, and other individuals representing the subsistence fisherfolk of the municipalities of
Aloguinsan and Pinamungajan, Cebu.
On June 13, 2002, the Government of the Philippines, acting through the Department of Energy
(DOE), entered into a Geophysical Survey and Exploration Contract-102 (GSEC-102) with Japan
Petroleum Exploration Co., Ltd. (JAPEX), a Japanese company. This contract involved geological and
geophysical studies of the Tañon Strait.
On December 21, 2004, DOE and JAPEX formally converted GSEC-102 into Service Contract No. 46
(SC -46), which allowed the exploration, development, and exploitation of petroleum resources in a
block covering approximately 2,850 square kilometers offshore the Tañon Strait.
From May 9 to 18, 2005, JAPEX conducted seismic surveys in and around the Tañon Strait. JAPEX
committed to drill one exploration well during the second sub-phase of the project. Since the well
was to be drilled in the marine waters of Aloguinsan and Pinamungajan, where the Tañon Strait was
declared a protected seascape in 1988, JAPEX agreed to comply with the Environmental Impact
Assessment(EIA) requirements pursuant to Presidential Decree No. 1586.
Having obtained the required Environmental Compliance Certificate (ECC) from the Environmental
Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR), JAPEX
began to drill an exploratory well, with a depth of 3,150 meters, near Pinamungajan town in the
western Cebu Province. The drilling began onNovember 16, 2007 and lasted until February 8, 2008.
Petitioners filed the present Petitions for Certiorari, Mandamus, and Injunction to enjoin respondents
from implementing SC-46 and to have it nullified for willful and gross violation of the 1987
Constitution and certain international and municipal laws.
Supply Oilfield Services, Inc. (SOS) filed a Motion to Strike its name as a respondent on the ground
that it is not the Philippine agent of JAPEX. SOS claimed that it had acted as a mere logistics
contractor for JAPEX in its oil and gas exploration activities in the Philippines.
JAPEX PH, branch office of JAPEX (Japan) alleged that it had already stopped exploration activities in
the Tañon Strait way back in 2008, rendering this case moot.
The various issues raised by the petitioners may be condensed into two primary issues: (1)
Procedural Issue: Locus Standi of the Resident Marine Mammals and Stewards, petitioners in G.R.
No. 180771; and (2) Main Issue: Legality of Service Contract No. 46.
Held:
I. Procedural Issues
Courts may decide cases otherwise moot and academic
1. This Court makes clear that the “‘moot and academic principle’ is not a magical formula that can
automatically dissuade the courts in resolving a case.” Courts have decided cases otherwise moot
and academic under the following exceptions:
(a) There is a grave violation of the Constitution;
(b) The exceptional character of the situation and the paramount public interest is involved;
(c) The constitutional issue raised requires formulation of controlling principles to guide the bench,
the bar, and the public; and
(d) The case is capable of repetition yet evading review
2. In this case, despite the termination of SC-46, this Court deems it necessary to resolve these
consolidated petitions as almost all of the foregoing exceptions are present in this case. Both
petitioners allege that SC-46 is violative of the Constitution, the environmental and livelihood issues
raised undoubtedly affect the public’s interest, and the respondents’ contested actions are capable of
repetition.
Locus Standi of petitioners Resident Marine Mammals and Stewards
3. The primary reason animal rights advocates and environmentalists seek to give animals and
inanimate objects standing is due to the need to comply with the strict requirements in bringing a
suit to court. The 1997 Rules of Court demand that parties to a suit be either natural or juridical
persons, or entities authorized by law. It further necessitates the action to be brought in the name of
the real party-in-interest, even if filed by a representative.
4. In our jurisdiction, locus standi in environmental cases has been given a more liberalized
approach. While developments in Philippine legal theory and jurisprudence have not progressed as
far as [granting] legal standing for inanimate objects, the current trend moves towards simplification
of procedures and facilitating court access in environmental cases. [For instance], the Court
[recently] passed the landmark Rules of Procedure for Environmental Cases, which allow for a
“citizen suit,” and permit any Filipino citizen to file an action before our courts for violations of our
environmental laws.
5. Although this petition was filed in 2007, years before the effectivity of the Rules of Procedure for
Environmental Cases, it has been consistently held that rules of procedure “may be retroactively
applied to actions pending and undetermined at the time of their passage and will not violate any
right of a person who may feel that he is adversely affected, inasmuch as there is no vested rights in
rules of procedure.”
6. In light of the foregoing, the need to give the Resident Marine Mammals legal standing has been
eliminated by our Rules, which allow any Filipino citizen, as a steward of nature, to bring a suit to
enforce our environmental laws. It is worth noting that the Stewards are joined as real parties in the
Petition and not just in representation of the named cetacean species. The Stewards, Ramos and
Eisma-Osorio, having shown in their petition that there may be possible violations of laws concerning
the habitat of the Resident Marine Mammals, are therefore declared to possess the legal standing to
file this petition.
Former President Arroyo cannot be impleaded as an unwilling co-petitioner
7. Section 10, Rule 3 of the Rules of Court provides:
Sec. 10. Unwilling co- plaintiff. - If the consent of any party who should be joined as plaintiff can not
be obtained, he may be made a defendant and the reason therefor shall be stated in the complaint.
8. When the consent of a party who should be joined as a plaintiff cannot be obtained, he or she
may be made a party defendant to the case. This will put the unwilling party under the jurisdiction of
the Court, which can properly implead him or her through its processes. The unwilling party’s name
cannot be simply included in a petition, without his or her knowledge and consent, as such would be
a denial of due process.
9. Moreover, the reason cited by the petitioners Stewards for including former President Arroyo in
their petition, is not sufficient to implead her as an unwilling co-petitioner. Impleading the former
President as an unwilling co-petitioner, for an act she made in the performance of the functions of
her office, is contrary to the public policy against embroiling the President in suits , “to assure the
exercise of Presidential duties and functions free from any hindrance or distraction, considering that
being the Chief Executive of the Government is a job that, aside from requiring all of the office
holder’s time, also demands undivided attention. Therefore, former President Macapagal-Arroyo
cannot be impleaded as one of the petitioners in this suit. Thus, her name is stricken off the title of
this case.
II. Substantive Issues
Service Contracts are allowed under the 1987 Constitution
10. This Court has previously settled the issue of whether service contracts are still allowed under
the 1987 Constitution. In La Bugal-B’laan Tribal Association, Inc. v. Ramos, we held that the deletion
of the words “service contracts” in the 1987 Constitution did not amount to a ban on them per se. In
fact, in that decision, we quoted in length, portions of the deliberations of the members of the
Constitutional Commission (ConCom) to show that in deliberating on paragraph 4, Section 2, Article
XII, they were actually referring to service contracts as understood in the 1973 Constitution, albeit
with safety measures to eliminate or minimize the abuses prevalent during the martial law regime.
Agreements Involving Technical or Financial Assistance are Service Contracts with
Safeguards
11. The phrase “agreements involving either technical or financial assistance”, referred to in
paragraph 4, Section 2, Article XII of the 1987 Constitution are in fact service contracts. But unlike
those of the 1973 variety, the new ones are between foreign corporations acting as contractors on
the one hand; and on the other, the government as principal or “owner” of the works. In the new
service contracts, the foreign contractors provide capital, technology and technical know-how, and
managerial expertise in the creation and operation of large-scale mining/extractive enterprises; and
the government, through its agencies (DENR, MGB), actively exercises control and supervision over
the entire operation.
12. Such service contracts may be entered into only with respect to minerals, petroleum and other
mineral oils. The grant thereof is subject to several safeguards, among which are these
requirements:
(i) The service contract shall be crafted in accordance with a general law that will set standard or
uniform terms, conditions and requirements, presumably to attain a certain uniformity in provisions
and avoid the possible insertion of terms disadvantageous to the country.
(ii) The President shall be the signatory for the government because, supposedly before an
agreement is presented to the President for signature, it will have been vetted several times over at
different levels to ensure that it conforms to law and can withstand public scrutiny.
(iii) Within thirty days of the executed agreement, the President shall report it to Congress to give
that branch of government an opportunity to look over the agreement and interpose timely
objections, if any.
SC-46 is null and void for noncompliance with the requirements of the 1987 Constitution
13. While the Court finds that Presidential Decree No. 87 is sufficient to satisfy the requirement of a
general law, the absence of the two other conditions, that the President be a signatory to SC-46, and
that Congress be notified of such contract, renders it null and void.
(a) General Law on Oil Exploration (PD No. 87 not repealed by the enactment of the
present 1987 Constitution)
14. The disposition, exploration, development, exploitation, and utilization of indigenous petroleum
in the Philippines are governed by Presidential Decree No. 87 or the Oil Exploration and Development
Act of 1972. This was enacted by then President Ferdinand Marcos to promote the discovery and
production of indigenous petroleum through the utilization of government and/or local or foreign
private resources to yield the maximum benefit to the Filipino people and the revenues to the
Philippine Government. PD No. 87, although enacted in 1972, before the adoption of the 1987
Constitution, remains to be a valid law unless otherwise repealed.
15. Likewise, the Court could not simply assume that PD No. 87 had been impliedly repealed.
Implied repeals are not lightly presumed. It is a settled rule that when laws are in conflict with one
another, every effort must be exerted to reconcile them. Moreover, in cases where the statute seems
to be in conflict with the Constitution, but a construction that it is in harmony with the Constitution is
also possible, that construction should be preferred.
16. Consequently, we find no merit in petitioners’ contention that SC-46 is prohibited on the ground
that there is no general law prescribing the standard or uniform terms, conditions, and requirements
for service contracts involving oil exploration and extraction.
17. However, while PD No. 87 may serve as the general law upon which a service contract for
petroleum exploration and extraction may be authorized, the exploitation and utilization of this
energy resource in the present case may be allowed only through a law passed by Congress, since
the Tañon Strait is a NIPAS area.
(b) President was not the signatory to SC-46 and the same was not submitted to Congress
(alter-ego doctrine does not apply since the requirements are not mere formalities but
constitutionally placed safeguards)
18. As SC-46 was executed in 2004, its terms should have conformed not only to the provisions of
Presidential Decree No. 87, but also to those of the 1987 Constitution. It is basic that the law is
deemed written into every contract. Although a contract is the law between the parties,
the provisions of positive law which regulate contracts are deemed written therein and shall limit and
govern the relations between the parties. (see Heirs of San Miguel v. Court of Appeals)
19. Paragraph 4, Section 2, Article XII of the 1987 Constitution requires that the President himself
enter into any service contract for the exploration of petroleum. SC -46 appeared to have been
entered into and signed only by the DOE through its then Secretary, Vicente S. Perez, Jr., contrary to
the said constitutional requirement. Moreover, public respondents have neither shown nor alleged
that Congress was subsequently notified of the execution of such contract.
20. The argument that, based on the “alter ego principle,” the [Energy Secretary's] acts are also
that of then President Macapagal-Arroyo’s, cannot apply in this case.
21. The alter ego principle or the doctrine of qualified political agency recognizes the
establishment of a single executive, all executive and administrative organizations are adjuncts of the
Executive Department, the heads of the various executive departments are assistants and agents of
the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or
law to act in person or the exigencies of the situation demand that he act personally, the multifarious
executive and administrative functions of the Chief Executive are performed by and through the
executive departments, and the acts of the Secretaries of such departments, performed and
promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief
Executive presumptively the acts of the Chief Executive.
22. While the requirements in executing service contracts in paragraph 4, Section 2 of Article XII of
the 1987 Constitution seem like mere formalities, they, in reality, take on a much bigger role. As we
have explained in La Bugal, they are the safeguards put in place by the framers of the Constitution to
“eliminate or minimize the abuses prevalent during the martial law regime.” Thus, they are not just
mere formalities, which will only render a contract unenforceable but not void, if not complied with.
They are requirements placed, not just in an ordinary statute, but in the fundamental law, the non
-observance of which will nullify the contract.
23. Our Constitution requires that the President himself be the signatory of service agreements with
foreign- owned corporations involving the exploration, development, and utilization of our minerals,
petroleum, and other mineral oils. This power cannot be taken lightly. In contrast, under PD No. 87,
it is required that the Petroleum Board, now the DOE, obtain the President’s approval for the
execution of any contract under said statute. Even if we were inclined to relax the requirement in La
Bugal, it must be shown that the government agency or subordinate official has been authorized by
the President to enter into such service contract for the government. Otherwise, it should be at least
shown that the President subsequently approved of such contract explicitly. None of these
circumstances is evident in the case at bar.
Service Contract No. 46 in violation of NIPAS Act and PD 1586 (non- compliance with EIA
and ECC for protected areas)
24. True to the constitutional policy that the “State shall protect and advance the right of the people
to a balanced and healthful ecology in accord with the rhythm and harmony of nature” Congress
enacted the National Integrated Protected Areas System Act of 1992 (NIPAS Act) to establish a
comprehensive system of integrated protected areas.
25. Under Section 4 of the NIPAS Act, a protected area refers to portions of land and water, set
aside due to their unique physical and biological significance, managed to enhance biological diversity
and protected against human exploitation. The Tañon Strait, pursuant to Proclamation No. 1234, was
set aside and declared a protected area under the category of Protected Seascape. A management
plan was designed to protect and enhance the permanent preservation of its natural conditions.
Consequently, an Environmental Impact Assessment (EIA) is required prior to undertaking any
activity outside the scope of the management plan. Unless an Environmental Compliance Certificate
(ECC) under the EIA system is obtained, no activity inconsistent with the goals of the NIPAS Act shall
be implemented.
26. The Environmental Impact Statement System (EISS) was established in 1978 under Presidential
Decree No. 1586. It prohibits any person, partnership or corporation from undertaking or operating
in any declared environmentally critical project or areas without first securing an ECC issued by the
President or his duly authorized representative. Under Proclamation No. 2146, the Tañon Strait is an
environmentally critical area, having been declared as a protected area in 1998; therefore, any
activity outside the scope of its management plan may only be implemented pursuant to an ECC
secured after undergoing an EIA to determine the effects of such activity on its ecological system.
27. It is true that the restrictions found under the NIPAS Act are not without exceptions. However,
while an exploration done for the purpose of surveying for energy resources is allowed under Section
14 of the NIPAS Act, this does not mean that it is exempt from the requirement to undergo an EIA
under Section 12. Stated differently, surveying for energy resources under Section 14 is not an
exemption from complying with the EIA requirement in Section 12— instead, Section 14 provides for
additional requisites before any exploration for energy resources may be done in protected areas.
28. The public respondents themselves admitted that JAPEX only started to secure an ECC prior to
the second sub-phase of SC-46, which required the drilling of an oil exploration well. This means
that when the seismic surveys were done in the Tañon Strait, no such environmental impact
evaluation was done. Unless seismic surveys are part of the management plan of the Tañon Strait,
such surveys were done in violation of Section 12 of the NIPAS Act and Section 4 of PD No. 1586.
29. The respondents’ subsequent compliance with the EISS for the second sub-phase of SC-46
cannot and will not cure this violation.
Requirement of a law passed by Congress specifically allowing exploration in the Tanon
Strait, a NIPAS area
30. SC-46 was not executed for the mere purpose of gathering information on the possible energy
resources in the Tañon Strait as it also provides for the parties’ rights and obligations relating to
extraction and petroleum production should oil in commercial quantities be found to exist in the
area. While Presidential Decree No. 87 may serve as the general law upon which a service contract
for petroleum exploration and extraction may be authorized, the exploitation and utilization of this
energy resource in the present case may be allowed only through a law passed by Congress, since
the Tañon Strait is a NIPAS [Link] there is no such law specifically allowing oil exploration and/or
extraction in the Tañon Strait, no energy resource exploitation and utilization may be done in said
protected seascape.
