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GR 180771

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G.R. No.

180771               April 21, 2015

RESIDENT MARINE MAMMALS OF THE PROTECTED SEASCAPE TAÑON STRAIT, e.g.,


TOOTHED WHALES, DOLPHINS, PORPOISES, AND OTHER CETACEAN SPECIES, Joined in
and Represented herein by Human Beings Gloria Estenzo Ramos and Rose-Liza Eisma-
Osorio, In Their Capacity as Legal Guardians of the Lesser Life-Forms and as Responsible
Stewards of God's Creations, Petitioners,
vs.
SECRETARY ANGELO REYES, in his capacity as Secretary of the Department of Energy
(DOE), SECRETARY JOSE L. ATIENZA, in his capacity as Secretary of the Department of
Environment and Natural Resources (DENR), LEONARDO R. SIBBALUCA, DENR Regional
Director-Region VII and in his capacity as Chairperson of the Tañon Strait Protected
Seascape Management Board, Bureau of Fisheries and Aquatic Resources (BFAR),
DIRECTOR MALCOLM J. SARMIENTO, JR., BFAR Regional Director for Region VII ANDRES
M. BOJOS, JAPAN PETROLEUM EXPLORATION CO., LTD. (JAPEX), as represented by its
Philippine Agent, SUPPLY OILFIELD SERVICES, INC. Respondents.

Facts:

The Government of the Philippines, acting through the DOE, entered into a Geophysical Survey and
Exploration Contract-I 02 (GSEC-102) with JAPEX. This contract involved geological and
geophysical studies of the Tañon Strait. The studies included surface geology, sample analysis, and
reprocessing of seismic and magnetic data. JAPEX, assisted by DOE, also conducted geophysical
and satellite surveys, as well as oil and gas sampling in Tañon Strait.

SOS filed a Motion to Strike its name as a respondent on the ground that it is not the Philippine
agent of JAPEX. In support of its motion, it submitted the branch office application of JAPEX,
wherein the latter's resident agent was clearly identified. SOS claimed that it had acted as a mere
logistics contractor for JAPEX in its oil and gas exploration activities in the Philippines.

Petitioners Resident Marine Mammals and Stewards opposed SOS' s motion on the ground that it
was premature, it was pro-forma, and it was patently dilatory. They claimed that SOS admitted that
"it is in law privy to JAPEX" since it did the drilling and other exploration activities in Tañon Strait
under the instructions of its principal, JAPEX. They argued that it would be premature to drop SOS
as a party as JAPEX had not yet been joined in the case; and that it was "convenient" for SOS to
ask the Court to simply drop its name from the parties when what it should have done was to either
notify or ask JAPEX to join it in its motion to enable proper substitution. At this juncture, petitioners
Resident Marine Mammals and Stewards also asked the Court to" implead JAPEX Philippines as a
correspondent or as a substitute for its parent company, JAPEX.

Issue:

Whether or not Service Contract No. 46 is violative of the 1987 Philippine Constitution And Statutes.
Held:

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens. The
Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well
as cooperative fish farming, with priority to subsistence fishermen and fish workers in rivers, lakes,
bays, and lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical
or financial assistance for large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and conditions provided by law,
based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and technical
resources.

The Court has previously settled the issue of whether service contracts are still allowed under the
1987 Constitution. The Court 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 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, to wit: Summation of the

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