Apex Mining Co., Inc. vs. Garcia

Mining rights within established forest reservations cannot be acquired through the mere registration of declarations of location with the Bureau of Mines; instead, the proper procedure requires the prior application for and issuance of a permit to prospect by the Bureau of Forest Development, as mandated by Presidential Decree No. 463.

The controversy arose from overlapping mining claims over a 4,941-hectare timberland area. Marcopper Mining Corporation initially registered mining claims in 1984 but later discovered the area was within the Agusan-Davao-Surigao Forest Reserve. It then abandoned those claims and properly applied for a permit to prospect with the Bureau of Forest Development (BFD), which was issued in 1985, followed by a permit to explore from the Bureau of Mines and Geo-Sciences (BMGS) in 1986. Apex Mining Co., Inc., and other individual claimants (Apex) had registered declarations of location and obtained small-scale mining permits for the same area from the BMGS. Marcopper petitioned for the cancellation of Apex's claims, initiating the administrative dispute.

• Nature of the Dispute: The case involved conflicting mining claims over a 4,941.0-hectare timberland area located in Moncayo, Davao del Norte, and Cateel, Davao Oriental.
• Marcopper's Actions: Marcopper registered 16 mining claims in January 1984 via declarations of location. Upon learning the area was within the Agusan-Davao-Surigao Forest Reserve (established by Proclamation No. 369 in 1931), it abandoned those claims. It then applied for and obtained a Permit to Prospect (No. 755-123185) from the BFD on July 1, 1985, and subsequently a Permit to Explore (No. 133) from the BMGS on March 10, 1986.
• Apex's Claims: Apex and the other individual petitioners had registered declarations of location and secured Small Scale Mining Permits (SSMPs) from the BMGS for the same area.
• Marcopper's Petition: On August 11, 1986, Marcopper filed a petition with the BMGS seeking cancellation of Apex's claims, arguing they were invalidly acquired within a forest reserve.
• Apex's Defense: Apex countered that the area was not within a forest reserve and that its mining rights were properly acquired through declarations of location.
• Lower Agency Rulings: The BMGS initially dismissed Marcopper's petition and voided its permit. The DENR reversed this, voiding Apex's claims and upholding Marcopper's permit. The Office of the President affirmed the DENR.

• Invalidity of Proclamation No. 369: Petitioners argued that Proclamation No. 369 did not establish a forest reserve but merely withdrew land from settlement under Section 8 of Act No. 2874 (Public Land Act), which only allowed for reclassification, not reservation. They emphasized the proclamation did not use the words "reserve" or "forest reserve."
• Proper Acquisition Method: Petitioners maintained that since the area was not a valid forest reserve, mining rights were properly acquired through the registration of declarations of location with the BMGS, not through a permit to prospect from the BFD.
• Invalidity of Marcopper's Permit: Petitioners contended that Marcopper's Permit to Explore was inoperative and of no legal force.

• Established Forest Reserve: Respondent Marcopper and the government agencies argued that the disputed area was conclusively within the Agusan-Davao-Surigao Forest Reserve established by Proclamation No. 369. This was supported by subsequent presidential proclamations and congressional resolutions that explicitly referred to Proclamation No. 369 as having "established" the reserve.
• Correct Procedure Followed: Respondents countered that Marcopper followed the correct legal procedure for acquiring mining rights within a forest reserve by first obtaining a permit to prospect from the BFD, as required by P.D. No. 463.
• Deference to Administrative Findings: Respondents argued that the findings of fact by the DENR and the Office of the President, which are the agencies tasked with implementing mining and land laws, should be respected and were supported by substantial evidence.

• Validity of the Forest Reservation: Whether the disputed area is within an established and existing forest reservation (the Agusan-Davao-Surigao Forest Reserve).
• Proper Method for Acquiring Mining Rights: Whether mining rights within such a reservation may be acquired through the registration of declarations of location with the Bureau of Mines, or whether a permit to prospect from the Bureau of Forest Development is required.

• Validity of the Forest Reservation: The disputed area is within the Agusan-Davao-Surigao Forest Reserve. Proclamation No. 369, issued under the authority of Section 8 of Act No. 2874, validly established the reserve. This conclusion is confirmed by the language of the proclamation itself and by subsequent official acts, including Proclamation No. 583 (1959) and Congressional Concurrent Resolution No. 17, which explicitly refer to Proclamation No. 369 as having established the reserve. The findings of the implementing agencies on this matter are controlling.
• Proper Method for Acquiring Mining Rights: Mining rights within forest reserves must be acquired through the procedure prescribed by P.D. No. 463. Sections 8 and 13 of the decree close such reserved areas to ordinary mining location. The proper method is to first apply for a permit to prospect with the BFD, and subsequently for a permit to explore with the BMGS. Apex's reliance on declarations of location was therefore invalid, while Marcopper's compliance with the correct procedure rendered its Permit to Explore valid.

• Administrative Construction of Statutes — The interpretation of statutes by the government agencies charged with their implementation is entitled to great weight and respect and will be upheld unless clearly erroneous. The Court deferred to the DENR's and Office of the President's consistent finding that Proclamation No. 369 established a forest reserve.
• Areas Closed to Mining Location — Under P.D. No. 463, forest reservations and other government reservations are closed to ordinary mining location (via declarations of location). Prospecting and exploration therein require special authorization from the proper government agency, which, for forest reserves, is obtained through a permit to prospect from the Bureau of Forest Development.

• "The disputed areas, being clearly within a forest reserve, are not open to mining location."
• "Pursuant to P.D. No. 463, as amended, one can acquire mining rights within forest reserves by initially applying for a permit to prospect with the Bureau of Forest and Development (BFD) and subsequently for a permit to explore with the Bureau of Mines and Geo-Sciences (BMGS)."

• Greenhills Mining Company v. Office of the President, 163 SCRA 350 (1988) — Cited for the principle that findings of government agencies regarding the construction of statutes they implement are controlling on the Court.
• Assistant Executive Secretary for Legal Affairs of the Office of the President v. Court of Appeals, 169 SCRA 27 (1989) — Cited for the rule that factual findings of administrative agencies, if supported by substantial evidence, are binding on reviewing courts and should not be disturbed absent gross abuse of discretion, fraud, or error of law.

• Section 8, Act No. 2874 (Public Land Act of 1919) — Empowered the Governor-General to declare lands open to disposition or to suspend their concession or disposition by proclamation. This was the cited legal basis for Proclamation No. 369.
• Sections 8 and 13, Presidential Decree No. 463 (Mineral Resources Development Decree) — Section 8 provides the procedure for prospecting, exploration, and exploitation in reserved lands. Section 13 explicitly closes military and other government reservations (including forest reserves) to mining location unless authorized by the proper agency.

Chief Justice Marcelo B. Fernan, Justices Andres R. Narvasa, Irene R. Melencio-Herrera, Hugo E. Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado, and Davide, Jr. Justice Gancayco was on leave.

N/A. The decision was unanimous.