FACTS:

The case involves the validity of two Administrative Orders issued by the Secretary of the Department of Environment and Natural Resources (DENR) to implement certain Executive Orders issued by the President regarding the exploration, development, and utilization of natural resources. The changes introduced by Article XII, Section 2 of the 1987 Constitution transformed the system of utilization of inalienable lands of public domain. The President issued Executive Order No. 211 prescribing interim procedures for mining applications, and Executive Order No. 279 authorizing the DENR Secretary to negotiate and conclude agreements for the exploration, development, and utilization of mineral resources. In order to implement these executive orders, the DENR Secretary promulgated Administrative Order Nos. 57 and 82, which are being challenged for their validity and constitutionality in this petition.

Executive Order No. 211 authorized the DENR Secretary to negotiate and enter into agreements for the exploration, development, and utilization of mineral resources with Filipino citizens.

DENR Administrative Order No. 57 provided guidelines for converting existing mining leases or agreements into production-sharing agreements within one year from its effectivity, except for small-scale mining leases and those pertaining to sand and gravel and quarry resources covering 20 hectares or less.

DENR Administrative Order No. 82 specified the procedural guidelines on the award of mineral production sharing agreements through negotiation. It required certain individuals or entities to submit letter of intent and mineral production sharing agreement within two years from the effectivity of DENR Administrative Order No. 57, or until July 17, 1991. Failure to do so would result in the abandonment of mining, quarry, and sand and gravel claims.

The Miners Association of the Philippines, Inc. filed a petition questioning the validity and constitutionality of Administrative Order Nos. 57 and 82, arguing that the DENR Secretary exceeded his rule-making power and that the orders violated the non-impairment of contract provision.

The court issued a temporary restraining order enjoining the implementation of DENR Administrative Order Nos. 57 and 82.

Continental Marble Corporation sought to intervene in the case, arguing that the temporary restraining order prevented the renewal of its Mines Temporary Permit. It joined the petitioner in seeking to annul Administrative Order Nos. 57 and 82 and requested the issuance of a Mines Temporary Permit during the pendency of the suit.

The public respondents were required to comment on Continental Marble Corporation's petition for intervention. The petitioner contended that Administrative Order Nos. 57 and 82 repealed or abrogated existing mining laws not inconsistent with Executive Order No. 279. The petitioner argued that the DENR Administrative Orders exceeded the DENR Secretary's rule-making power and contravened the provisions of Executive Orders Nos. 211 and 279.

The court disagreed with the petitioner, stating that the power of administrative officials to promulgate rules and regulations is limited to carrying the provisions of the legislative enactment. It cited previous cases to support the principle that administrative regulations must be in harmony with the law and cannot amend an act of Congress.

ISSUES:

1. Whether the power of administrative officials to promulgate rules and regulations is limited to carrying into effect what is provided in the legislative enactment.

2. Whether the administrative regulations contravene the provisions of the basic law.

3. Whether or not the DENR Secretary exceeded his rule-making power in issuing the questioned administrative orders.

4. Whether or not the administrative orders violate the non-impairment of contract doctrine guaranteed under the 1987 Constitution.

5. Whether or not existing mining leases can be automatically converted into production-sharing agreements.

6. Whether the mining leases or agreements granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211, can be amended, modified, or altered by a statute passed by Congress.

7. Whether Order No. 279 provided legal basis for the DENR Secretary to carry out the mandate of the 1987 Constitution.

8. Whether Administrative Order No. 57 authorizes the automatic conversion of mining leases and agreements granted after the effectivity of the 1987 Constitution.

9. Whether intervention by Continental Marble Corporation is proper.

RULING:

1. The power of administrative officials to promulgate rules and regulations is limited to carrying into effect what is provided in the legislative enactment. The rules and regulations must be in harmony with the provisions of the law and should be for the sole purpose of carrying into effect its general provisions. They cannot amend an act of Congress or extend the law itself.

2. The administrative regulations do not contravene the provisions of the basic law. The provisions of Presidential Decree No. 463, as amended, pertaining to the old system of exploration, development, and utilization of natural resources through "license, concession or lease," have been repealed by Article XII, Section 2 of the 1987 Constitution and its implementing law, Executive Order No. 279. The regulations are in line with the constitutional mandate and its implementing law.

3. The DENR Secretary did not exceed his rule-making power in issuing the questioned administrative orders. Section 6 of Executive Order No. 279 specifically authorizes the DENR Secretary to promulgate supplementary rules and regulations necessary to effectively implement the provisions of the executive order. The subject matter of the orders is germane to the objectives and purposes of Executive Order No. 279, which was issued to carry out the mandate of Article XII, Section 2 of the 1987 Constitution.

4. The administrative orders do not violate the non-impairment of contract doctrine. Article XII, Section 2 of the 1987 Constitution does not apply retroactively to licenses, concessions, or leases granted by the government before the effectivity of the 1987 Constitution. The intent of the Constitutional Commission was for the provision not to be applied retroactively. Therefore, existing mining leases granted before February 2, 1987, are still valid and not subject to automatic conversion or termination.

5. Existing mining leases cannot be automatically converted into production-sharing agreements. Administrative Order No. 57 only applies to existing mining leases or agreements granted after the effectivity of the 1987 Constitution. It does not contemplate the automatic conversion of mining leases. The power to regulate and enter into mining agreements does not include the power to preterminate existing mining lease agreements.

6. Yes, the mining leases or agreements granted after the effectivity of the 1987 Constitution can be amended, modified, or altered by a statute passed by Congress. Executive Order No. 279, issued by President Corazon C. Aquino, has the force and effect of a statute or law passed by Congress. This executive order validly modified or altered the privileges granted, as well as the terms and conditions of mining leases and agreements under Executive Order No. 211 after the effectivity of the 1987 Constitution. The non-impairment of contract clause under Article III, Section 10 of the 1987 Constitution does not apply to these mining leases or agreements. The State, in the exercise of its police power, has the authority to alter, modify, and amend these contracts.

7. Order No. 279 provided legal basis for the DENR Secretary to carry out the mandate of the 1987 Constitution.

8. Administrative Order No. 57 does not authorize automatic conversion of mining leases and agreements. The use of the term "production-sharing agreement" implies negotiation between the government and the applicants.

9. Intervention by Continental Marble Corporation is denied for lack of legal interest in the matter in litigation.

PRINCIPLES:

• The power of administrative officials to promulgate rules and regulations is limited to carrying into effect what is provided in the legislative enactment.

• Administrative regulations must be in harmony with the provisions of the law and should be for the sole purpose of carrying into effect its general provisions.

• Administrative agencies cannot amend an act of Congress.

• The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted.

• In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails because the rule or regulations cannot go beyond the terms and provisions of the basic law.

• The provisions of Presidential Decree No. 463, as amended, pertaining to the exploration, development, and utilization of natural resources through "license, concession or lease" have been repealed by Article XII, Section 2 of the 1987 Constitution and its implementing law, Executive Order No. 279.

• Rule-making power of the DENR Secretary - Section 6 of Executive Order No. 279 authorizes the DENR Secretary to promulgate supplementary rules and regulations necessary to effectively implement the provisions of the executive order.

• Non-impairment of contract doctrine - Article XII, Section 2 of the 1987 Constitution does not apply retroactively to licenses, concessions, or leases granted before the effectivity of the 1987 Constitution. Existing contracts are still valid and not subject to automatic conversion or termination.

• The non-impairment of contract clause does not apply to mining leases or agreements granted after the effectivity of the 1987 Constitution. They can be amended, modified, or altered by a statute passed by Congress to achieve the purposes of Article XII, Section 2 of the 1987 Constitution.

• Mining leases or agreements granted by the State are subject to alterations through a reasonable exercise of the police power of the State.

• Obligations of contracts must yield to a proper exercise of the police power when such power is exercised to preserve the security of the State and the means adopted are reasonably adapted to the accomplishment of that end and are not arbitrary or oppressive.

• The exploration, development, and utilization of the country's natural resources are matters vital to the public interest and the general welfare of the people. The State, in the exercise of its police power, may alter, modify, and amend mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant to Executive Order No. 211.

• Administrative orders must be reasonably directed to accomplish the purposes of the law under which they were issued.

• The constitutionality and validity of administrative orders must be upheld if they are in line with the public interest, economic growth, and welfare.

• Intervention in a case is proper when the intervenor has a legal interest in the matter in litigation or in the success of either party, or when they are adversely affected by the disposition of property in the custody of the court.