MEMORANDUM ORDER No

Republic of the PhilippinesSupreme CourtBaguio City

Public Information Office

PRESS BRIEFING21 April 2015

The Supreme Court En Banc, during its session today, acted on the following matters in its Agenda, among others:

1. In the matter of G.R. No. 217126-27 (Conchita Carpio Morales vs. Court of Appeals and Jejomar Erwin Binay), the following Justices have voluntarily inhibited themselves from further participation in this case:

a) Associate Justice Presbitero J. Velasco Jr.;b) Associate Justice Arturo D. Brion;c) Associate Justice Francis H. Jardeleza;

Associate Justice Diosdado M. Peralta had previously recused himself from participation in this case and did not sit during the first session of the oral arguments in this case.

The oral argument in this case will resume today at 2 PM, with the Court hearing the respondents arguments.

2. In the matter of G.R. No. 216098 (Bishop Broderick Pabillo, et al. v. Comelec, et al.) and G.R. No. 216562 (Integrated Bar of the Philippines, et al. v. Comelec, et al.), the Court voting unanimously (as per Perlas-Bernabe, J.) rendered the following judgment:

The Court, in these cases, addressed consolidated petitions for certiorari and prohibition challenging Comelec Resolution No. 9922 dated December 23, 2014, which approved a direct contracting arrangement with respondent Smartmatic-TIM Corporation (Smartmatic-TIM) for the diagnostics, maintenance, repair and replacement of the Comelecs Precinct Count Optical Scan (PCOS) machines, as well as the resulting contract thereof, the Extended Warranty (Program 1) dated January 30, 2015. As formulated by the Court:

The Court ruled that the Comelec failed to justify its resort to direct contracting with Smartmatic-TIM; it had not shown that any of the conditions under Section 50, Article XVI of the GPRA existed; further, its claims of impracticality were not supported by independently verifiable data and its perceived warranty extension is, in reality, a circumvention of the procurement law. It is clear that the Comelec committed grave abuse of discretion and, thus, its Resolution No. 9922 and the Extended Warranty Program (Part 1) should be stricken down and, necessarily, all amounts paid to Smartmatic-TIM pursuant to said contract, if any, being public funds should be returned to the government.

3. In the matter of G.R. No. 180771 (Resident Marine Mammals of the Protected Seascape Taon Strait, et al. v. Secretary Angelo Reyes, et al.), G.R. No. 181527 (Central Visayan Fisherfolk Development Center, et al. v. Secretary Angelo Reyes, et al.), the Court (as per Leonardo-De Castro, J.), voting unanimously, declared as unconstitutional Service Contract No. 46 (SC-46) which allowed the exploration, development, and exploitation of petroleum resources within Taon Strait,[footnoteRef:1] a narrow passage of water situated between the Islands of Negros (in the West) and Cebu (in the East). The judgment of the Court, contained in its dispositive portion, reads: [1: The Taon Strait harbors a rich biodiversity of marine life, including endangered species of dolphins and whales. It was declared a protected seascape in 1998 by President Fidel V. Ramos through Proclamatoion No. 1234. President Joseph E. Estrada constituted the Taon Strait Commission through Executive Order No. 76 to ensure the optimum and sustained use of the resources in the area without threatening its marine life; this was followed by Executive Order No. 177, where the Mayor of a Negros Occidental Municipality/City was included as a member of the Taon Strait Commission representing the LGUs concerned (this Commission was later abolished by President Gloria Macapagal-Arroyo through Executive Order No. 72).]

WHEREFORE, the Petitions in G.R. Nos. 180771 and 181527 are GRANTED, Service Contract No. 46 is hereby declared NULL AND VOID for violating the 1987 Constitution, Republic Act No. 7586, and Presidential Decree No. 1586.

The Court considered the legality of SC-46 in relation to Section 2, Article XII of the 1987 Constitution.[footnoteRef:2] While affirming the permissibility of entering into service contracts under the 1987 Constitution, the Court noted that SC-46 failed to comply with the safeguards required under Paragraph 4, Section 2, Article XII of the 1987 Constitution which required that the service contract be (a) authorized by a general law; (b) signed by the President, and, (c) reported to Congress. [2: Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixtyper centumof whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.The State shall protect the nations 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 fishworkers 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 President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution]

The Court noted that while there is a general law on exploration, Presidential Decree No. 87, which remains in effect, SC-46 was entered into in 2004 only between the Department of Energy and Japan Petroleum Exploration Co., Ltd. (JAPEX) and was signed only by the then-Secretary of Energy and not by the President. The Court also noted that SC-46 was never submitted to Congress. For these reasons, SC-46 violated the Constitution and is unconstitutional.

The Court also considered that SC-46 violated RA 7586 or the National Integrated Protected Areas System (NIPAS) Act of 1992 because Taon Strait is, by virtue of Proclamation No. 2146, an environmentally critical area, thus, any activity outside the scope of ots management plan may only be implemented pursuant to an Environmental Compliance Certificate (ECC) secured after undergoing an Environmental Impact Assessment (EIA) to determine the effects of such activity on its ecological system. These were not complied with under SC-46; for this reason, the Court also considered that SC-46 violated the NIPAS Act. Moreover, because Taon Strait is a NIPAS area, the exploitation and utilization of this energy resource may be allowed only through a law passed by Congress; while PD 87 may serve as a general basis for authorizing a service contract for petroleum exploration and extraction, the NIPAS Act specifically requires a law passed by Congress before exploitation in a NIPAS area may be done.

The Court also noted that only humans have personality to sue.

4. In the matter of G.R. No. 217456 (Marilou S. Laude and Mesehilda S. Laude v. Hon. Roline M. Jinez-Jabalde, The Executive Secretary, The Secretary of Foreign Affairs, The Chief of Staff, Armed Forces of the Philippines, the Chief City Prosecutor of Olongapo City and L/CPL Joseph Scott Pemberton), the Court required respondents to comment within ten (10) days from notice on the Petition for Certiorari with Prayer for the Issuance of Mandatory Injunction dated April 16, 2015, seeking to annul the Orders dated December 23, 2014 and February 16, 2015 of respondent RTC Judge.

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