THREE mining companies have been disqualified by the Supreme Court (SC) from exploiting the country’s natural resources for violating the 60-40 ownership limit dictated by the law.
The tribunal’s Third Division, through a decision penned by Associate Justice Presbitero Velasco Jr., ruled that Narra Nickel Mining and Development Corp., Tesoro Mining and Development Inc. and McArthur Mining Inc. are disqualified from operating in the Philippines in view of their violation of the 60-40 percent ownership limit for foreign mining companies.
The three mining firms are owned by MBMI Resources Inc., a 100-percent Canadian company.
Under the law, companies engaged in exploration and development of natural resources should be 60 percent owned by Filipino citizens or corporations.
The ruling was concurred in by Justices Diosdado Peralta, Jose Catral Mendoza and then- Justice Roberto Abad. Justice Marvic Mario Victor Leonen dissented. Abad retired in May this year.
The mining permit given to Narra, Tesoro and McArthur in 2006 covers about 12,100 hectares in Palawan.
“We of this court note that a grave violation of the Constitution, specifically Section 2 of Article XII, is being committed by a foreign corporation right under our country’s nose through a myriad of corporate layering under different, allegedly, Filipino corporations,” the tribunal said.
“The intricate corporate layering utilized by the Canadian company, MBMI, is of exceptional character and involves paramount public interest since it undeniably affects the exploitation of our country’s natural resources,” it pointed out.
“Finally, the instant case is capable of repetition yet evading review, since the Canadian company, MBMI, can keep on utilizing dummy Filipino corporations through various schemes of corporate layering and conversion of applications to skirt the constitutional prohibition against foreign mining on Philippines soil,” the ruling said.
In antecedents of the case, Redmont Consolidated Mines Corp. in 2006 sought to explore some areas in Palawan but it was found out that these areas had pending applications for Mineral Production Sharing Agreement (MPSA) under Narra, Tesoro and McArthur.
Redmont then lodged a case before arbitrators of the Department of Environment and Natural Resources (DENR) against the three mining companies in view of an existing constitutional prohibition against foreign firms.
The DENR arbitrators ruled on December 14, 2007 that Narra, Tesoro and McArthur are disqualified from engaging in mining activities in the country. The MPSAs of the three firms were then invalidated and Redmont’s application for exploration permit was recognized.
The three companies elevated the case to judicial courts in 2008.
“After a scrutiny of the evidence extant on record, the court finds that this case calls for the application of the Grandfather Rule since, as ruled by the [arbitrators]and affirmed by the [Office of the President], doubt prevails and persists in the corporate ownership of petitioners,” the High Court said.
“Also as found by the Court of Appeals, doubt is present in the 60-40 Filipino equity ownership of petitioners Narra, Tesoro and McArthur, since their common investor, the 100 percent Canadian corporation–MBMI–funded them,” the SC said.