The Supreme Court declared Service Contract No. 46 (SC-46), which allowed oil exploration in the Tañon Strait, null and void. The Court emphasized that the President’s direct involvement in such agreements is constitutionally mandated, safeguarding the nation’s natural resources. This ruling underscores the importance of adhering to environmental laws and ensuring that the President personally approves contracts exploiting national resources, especially in protected areas. The decision reinforces environmental protection and upholds constitutional requirements for resource management, setting a precedent for future agreements affecting the Philippines’ natural heritage.

Tañon Strait’s Marine Mammals vs. Oil Exploration: A Clash of Rights and Constitutional Mandates

The consolidated cases of Resident Marine Mammals of the Protected Seascape Tañon Strait vs. Secretary Angelo Reyes, G.R. Nos. 180771 and 181527, presented a significant environmental law question: Can oil exploration be permitted in a protected seascape without strict adherence to constitutional and environmental safeguards? This issue arose from Service Contract No. 46 (SC-46), granted to Japan Petroleum Exploration Co., Ltd. (JAPEX) for petroleum exploration in the Tañon Strait, a vital marine habitat between Negros and Cebu. Petitioners, including resident marine mammals represented by legal guardians, challenged the legality of SC-46, arguing it violated the 1987 Constitution and environmental laws.

The Supreme Court’s analysis began by addressing the procedural issue of locus standi, particularly regarding the resident marine mammals. While initially questionable, the Court recognized the legal standing of the human petitioners based on the Rules of Procedure for Environmental Cases, which allow any Filipino citizen to file actions enforcing environmental laws. This “citizen suit” provision, reflecting the principle that humans are stewards of nature, eliminated the need to establish direct individual injury.

Moving to the central issue, the Court examined the legality of SC-46 concerning Section 2, Article XII of the 1987 Constitution, which governs the exploration, development, and utilization of natural resources. The Constitution allows the State to directly undertake such activities or enter into agreements with Filipino citizens or corporations with at least 60% Filipino ownership. However, it also permits the President to enter into agreements with foreign-owned corporations involving technical or financial assistance for large-scale projects.

The Court clarified that these agreements must adhere to a general law and involve real contributions to the country’s economic growth. Furthermore, the President must notify Congress of every contract within thirty days of its execution. Petitioners argued that SC-46 violated these provisions because JAPEX is a 100% foreign-owned company and the contract did not meet the constitutional requirements for technical or financial assistance agreements. Public respondents countered that SC-46 fell under the exception in paragraph 4 of Section 2, Article XII.

The Supreme Court referred to its previous ruling in La Bugal-B’laan Tribal Association, Inc. v. Ramos, where it held that the deletion of “service contracts” in the 1987 Constitution did not amount to a ban on them per se. Instead, such agreements, involving technical or financial assistance, were permissible but subject to safeguards to prevent abuses. These safeguards include crafting the contract in accordance with a general law, presidential approval, and congressional notification.

In this case, while Presidential Decree No. 87, or the Oil Exploration and Development Act of 1972, could serve as the general law, the Court found that SC-46 did not comply with all constitutional requirements. Specifically, the President did not sign SC-46, and Congress was not notified of the contract. This was a critical point in the Court’s decision. The constitution requires that the President herself be the signatory of service agreements with foreign-owned corporations involving the exploration, development, and utilization of our minerals, petroleum, and other mineral oils. The Court emphasized that this power cannot be taken lightly.

The absence of presidential involvement and congressional notification rendered SC-46 unconstitutional. Moreover, the Court highlighted that SC-46 covered activities beyond mere information gathering. It also provided for extraction and petroleum production if oil were found in commercial quantities. Since the Tañon Strait is a protected seascape under the National Integrated Protected Areas System (NIPAS) Act, any exploitation and utilization of energy resources required a law passed by Congress, which did not exist.

The Court also found that SC-46 violated the NIPAS Act and Presidential Decree No. 1586, which established the Environmental Impact Statement System. Although exploration for energy resources is allowed under Section 14 of the NIPAS Act, it is not exempt from undergoing an Environmental Impact Assessment (EIA) under Section 12. The Court emphasized that surveying for energy resources 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.

In this case, respondents only secured an Environmental Compliance Certificate (ECC) prior to the second sub-phase of SC-46, which required the drilling of an oil exploration well. This meant that no environmental impact evaluation was done when seismic surveys were conducted in the Tañon Strait. The respondents’ subsequent compliance with the Environmental Impact Assessment System for the second sub-phase of SC-46 could not cure this violation. The Court concluded that the absence of an EIA for the initial seismic surveys violated environmental laws.

FAQs

What was the key issue in this case?	The key issue was whether Service Contract No. 46 (SC-46), allowing oil exploration in the Tañon Strait, was constitutional and complied with environmental laws, particularly concerning presidential authority and the protection of a protected seascape.
What is the significance of Section 2, Article XII of the 1987 Constitution?	This section governs the exploration, development, and utilization of natural resources in the Philippines, outlining the conditions under which the State may enter into agreements with foreign entities for such activities. It emphasizes the need for presidential approval, adherence to general laws, and contributions to economic growth.
Why did the Supreme Court declare SC-46 null and void?	The Court declared SC-46 null and void because it violated the 1987 Constitution (specifically Section 2, Article XII) and environmental laws such as the NIPAS Act and Presidential Decree No. 1586. The Court found that the president herself did not sign SC-46, that Congress was not properly notified of the contract, and that no environmental impact evaluation was done.
What is a “citizen suit” in environmental cases?	A “citizen suit,” as defined in the Rules of Procedure for Environmental Cases, allows any Filipino citizen to file an action to enforce environmental laws, even without demonstrating direct personal injury. This concept is rooted in the idea that humans are stewards of nature.
What is the role of Presidential Decree No. 87 in this case?	Presidential Decree No. 87, or the Oil Exploration and Development Act of 1972, was invoked as the general law upon which SC-46 could be authorized. However, the Court found that SC-46 did not comply with all the requirements outlined in this law, including presidential involvement and congressional notification.
What is the impact of the Tañon Strait being a protected seascape?	Because the Tañon Strait is a protected seascape under the National Integrated Protected Areas System (NIPAS) Act, any exploitation and utilization of energy resources require a law passed by Congress specifically for that purpose. Since no such law existed, SC-46 was deemed illegal.
What is the Environmental Impact Assessment (EIA) System?	The Environmental Impact Assessment (EIA) System, established under Presidential Decree No. 1586, requires that projects with potential environmental impacts undergo a thorough evaluation process. The Tañon Strait is classified as a protected area under the EIA.
What are the potential consequences for violating the NIPAS Act?	Violations of the NIPAS Act can result in fines ranging from P5,000 to P500,000, imprisonment for one to six years, or both, depending on the severity of the offense. Offenders may also be required to restore damaged areas and face eviction.

In conclusion, the Supreme Court’s decision in the Tañon Strait case reinforces the importance of presidential involvement and adherence to environmental regulations in agreements concerning the nation’s natural resources. This ruling serves as a critical reminder that exploiting resources in protected areas requires stringent safeguards and explicit congressional authorization.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Resident Marine Mammals of the Protected Seascape Tañon Strait vs. Secretary Angelo Reyes, G.R. Nos. 180771 & 181527, April 21, 2015