SAN BEDA UNIVERSITY – COLLEGE OF LAW

Nat Res and Envi Law (27 July 2018)

Natural Resources, meaning;

1) Resources occurring in nature that can be used to create wealth

2) Natural wealth of a country

3) Asset or material that constitute the natural capital of a nation

4) Naturally occurring substance that are considered valuable in their

relatively unmodified form

For purposes of our discussions, we will adopt the definition of Narciso Pena, an
expert on the law of natural resources – natural resources refer to material
objects of economic value and utility to man produced by nature. They
constitute the patrimony of the nation

Importance of Natural Resources

The importance of natural resources to a nation cannot be overemphasized. In

the Philippines we look to our natural resources as our exclusive heritage and
we are called upon to preserve them for ourselves and to our posterity

It is worth quoting a passage from the speech of Enrique J.C. Montilla, one of the
Delegates that crafted the 1935 Constitution, to wit;

“Lands and natural resources are immovable and as such can be

compared to the vital organs of a person’s body, the lack of possession of which
may cause instant death or the shortening of life. If we do not completely
nationalize these two of our most important belongings, I am afraid that the time
will come when we shall be sorry for the time we were born. Our independence
will be just a mockery, for what kind of independence are we going to have it a
part of our country is not in our hands but in those of foreigners”

PREAMBLE OF THE 1987 CONSTITUTION

We, the sovereign Filipino people, imploring the aid of Almighty God, in
order to build a just and humane society and establish a Government that shall
embody our ideals and aspirations, promote the common good, conserve and
develop our patrimony, and secure to ourselves and our posterity the blessings
of independence and democracy under the rule of law and a regime of truth,
justice, freedom, love, equality, and peace, do ordain and promulgate this
Constitution

Q– In the Preamble, it states – conserve and develop our patrimony, what is

your concept of the word – “patrimony” as mentioned in the preamble?

A– Meaning of patrimony – property inherited from the father

National patrimony means – the store of wealth or accumulated reserves

of a national economy from natural resources. The National Patrimony
embraces practically everything that belongs to the Filipino people, the
tangible and the material, as well as, the intangible and the spiritual assets
and possessions

Q- Are the natural resources found in the Philippines part of our national
patrimony?

A- It refers principally to the natural resources of our country which, under

the Constitution, include all lands of the public domain, water, minerals,
coal, petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and all marine wealth
in its archipelagic waters, territorial sea, and exclusive marine zone

N.B. – in the celebrated case of Manila Prince Hotel Corp vs GSIS, 267 SCRA
408, the Supreme Court declared – the Patrimony of the Nation that should be
conserved and developed refers not only to our rich natural resources but also to
the cultural heritage of our race. It also refers to our intelligence in arts, sciences
and letters.

Q- In section 19 of Article II – it mentioned national economy, what is your

understanding of these two words – “national economy”, is this similar to
national patrimony?

A- The National Economy mentioned in section 19, Article II, refers to the
entire structure of economic life in a country. It encompasses all the
activities relating to or concerned with the production, distribution, and
consumption of goods and services, and what are called “factors of
production” which are labor or human resources, all natural resources,
and capital, all of which are utilized to carry out economic activities

Q- What is the general economic policy of the Government under the 1987
Constitution?

A– 1) More equitable distribution of opportunities, income, and wealth

 2) A sustained increase in the amount of goods and services produced by
the nation for the benefit of the people

3) Expanding productivity as the key to raising the quality of life for all,
especially the underprivileged

4) State shall promote industrialization and full employment based on

sound agricultural development and agrarian reform (Art. XII, sec 1)

Q– Beautiful words, but how would the government attained these

objectives?

A– 1) In the pursuit of these goals, all sectors of the economy and all regions
of the country shall be given optimum opportunity to develop

2) Private enterprises, including corporations, cooperatives, and similar

collective organizations, shall be encourage to broaden the base of their
ownership (Art XII, sec 1)

Q– How would the government promote industrialization?

A– Through industries that make full and efficient use of human and natural
resources, and which are competitive in both domestic and foreign
markets

Q- What are the three-fold goals of the national economy?

A- 1) Equity – more equitable distribution of opportunities, income and

wealth

2) Growth – sustained increase in the amount of goods and services

produced by the nation for the benefit of the people

3) Productivity – expanding productivity as the key to raising the quality

of life for all, especially the under-privilege

Q- What are the guidelines in the development of the national economy?

A- Self-reliant economy – self-reliant simply means that the Philippines must

have the ability to cope with its economic problems or to implement its
development programs by the use of its own resources with a minimum of
dependence from foreign governments, investors or financing institutions
for loans, investments, or aid
 Independent economy – the national economy must be free from undue
foreign control or intervention. This is especially true in such vital or
strategic industries as the development of natural resources and public
utilities where foreign interference could cause incalculable harm to the
nation

Economy effectively controlled by Filipino – the principal responsibility

for development belongs to Filipino citizens. They must be the principal
determinants as well as the chief beneficiaries of economic progress.
While foreign capital is allowed to come in, the Constitution limits their
participation to major industries but insuring that majority control must
belong to Filipinos

Q- In section 1 of Article XII, it states that – the State shall protect Filipino
enterprises against unfair foreign competition and trade practices,
how would the State protect the Filipino enterprises?

A- The government may grant protection through high tariffs or even import
controls, quantitative restrictions, quarantine regulations for agricultural
products, and standards regulations for industrial products

N.B. – It has to be emphasized the clear intention of the law but improperly
applied – the clear intention of the framers of the 1987 Constitution was to
protect both the Filipino producer and the Filipino consumer

The Filipino producer must be protected from unfair foreign competition

and trade practices, and the Filipino consumer must be protected against a flood
of cheap but poor quality products or goods. But take a look at the reality on the
ground with regards to rice and other agricultural products, rice is very cheap in
Vietnam, Cambodia, and Thailand, but in order to protect the Filipino farmers,
the government imposed a “quantitative restrictions,” which means, importation
of rice is restricted and only the government thru the National Food Authority or
the Farmers cooperative may import rice

NFA is already saddled with a huge debt (P163 Billion) while the private
traders smuggle in rice and sell it as commercial rice, so instead of a cheaper rice,
we have a situation where the prices of rice and other agricultural products, such
garlic and onions, keep rising everyday, which we all know are very cheap in
China

Another law the went wrong was R.A. No. 1180, aka The Retail Trade
Nationalization Act (1954), where the law specifically reserved the retail
business to Filipino citizens. Since Aliens are no longer allowed by law to
engaged in retail business, they introduced the middle man practice, where the
manufacturers or producers would no longer allowed to sell directly to the
consumers, but only to forwarders or distributors, and in turn the forwarders or
distributors would sell the goods to the retailers and the retailers would then sell
the goods to the consumers

However, in the year 2000, the Eleventh Congress, with the advent of
trade globalization, enacted R.A. No. 8762, aka the Retail Trade Liberalization
Act, which is an open policy. But sad to admit, 18 years had passed and it did not
improve the situation

Q- Now lets move to Section 2, what are the natural resources found in the
Philippines?

A- Article XII, 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.

Q- Who owns the natural resources?

A- All the natural resources are owned by the State

Q- What is the historical basis of the claim of the State that all natural
resources are owned the State?

A- The historical basis is the Julia Regalia Doctrine – everything found in the
kingdom is owned by the crown/king. In the 1935 Constitution,
particularly Section 1 of Article XIII – it provides that “ all agricultural,
timber, and mineral lands of the public domain, water, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other
natural resources of the Philippines belong to the State

N.B. – in the 1935 Constitution it provides that all natural resources belong to the
Filipino people, however, in the 1973 Constitution, influenced by then President
Marcos, specifically Section 8 of Article XIV – it provides that “all lands of the
public domain and all other natural resources of the Philippines belong to the
State

Q– What is the legal basis of the framers of the 1987 Constitution to change
the word “belong” to “owned” by the State?
A- The framers used the term “owned” not “belong,” while apparently the
purpose is to give more emphasis on ownership, but the main intention is to
made it clear that all the natural resources are own but the State and does not
belong to the Filipino people, so that the people cannot complain when the State
begin to utilize the natural resources of the nation

N.B. - Before we move further, it is important to know the national territory of

the Philippines since it is the Philippine State that owned the natural
resources

Article 1, 1987 Constitution enumerates the Philippine territory -

a) Comprises the Philippine archipelago, with all the islands and waters
embraced therein;

b) All other territories over which the Philippine has sovereignty or

jurisdiction consisting of its terrestrial, fluvial, aerial domains,
territorial sea, seabed, subsoil, insular shelves, submarine areas;

c) The waters around, between and connecting the islands of the

archipelago, regardless of their breadth and dimensions, form part of
the internal waters of the Philippines.

Ad Lib – Territories claimed by the Philippines;

1) Spratly Islands and Paracel Islands (Kalayaan Group of Islands)

2) Scarborough shoals or Panatag Shoals (Bajo de Masinloc, Zambales)

3) Palmas or Miangap Islands

1935 Constitution, Article I – The Philippines comprises all the territory ceded to
the United States by the Treaty of Paris concluded between the United
States and Spain on the Tenth day of December, eighteen hundred and
ninety-eight (Dec 10, 1898), the limits of which are set forth in Article III
of said treaty together with all the islands embraced in the treaty
concluded at Washington, between the United States and Spain on the
seventh day of November, nineteen hundred (Nov 7, 1900), and in the
treaty concluded between the United States and Great Britain on the
second day of January, nineteen hundred and thirty (Jan 2, 1930), and all
the territory over which the present Government of the Philippine Islands
exercises jurisdiction
1973 Constitution, Article I – The national territory comprises the Philippine
archipelago, with all the islands and water embraced therein, and all other
territories belonging to the Philippines by historic right or legal title,
including the territorial sea, the air space, the subsoil, the seabed, the
insular shelves, and the other submarine areas over which the Philippines
has sovereignty or jurisdiction. The waters around, between, an
connecting the islands of the archipelago, irrespective of their breath and
dimensions, form part of the internal waters of the Philippines

Q– In the 1935 Constitution, there was no mention of archipelago, but in the

1973, as well as, the 1987 constitution, there is now mention archipelago,
what is the meaning of archipelago? And why was it now mentioned both
in the 1973 and 1987 constitution?

A– An archipelago may be defined either as 1) a cluster of islands forming a

territorial unity; or 2) unit of water studded with islands

In the first definition, the waters are adjuncts to the land area and their
extent is determined by the reference to the land are; while the second
definition, the land area is everything that comes within the water area.

Again for purposes of this course, we will adopt the definition provided in the
1982 Convention of the Law of the Seas – Archipelago means a group of islands,
interconnecting waters and other natural features which are so closely
interrelated that such islands, waters and other natural features form an
intrinsic geographical, economic and political entity, or which historically have
been regarded as such.

Q– What is the meaning of territorial sea of a State?

A– The territorial sea of a State, as distinct from its inland and internal
waters, consist of a marginal belt of maritime waters adjacent to the base
lines extending twelve nautical miles outward.

Q– Why is it important to know the territorial sea of a State?

A– Because under the law of the seas, a State the exercises sovereignty over
the territorial sea must ask permission to the innocent passage of their
vessel

Q- What is an Exclusive Economic Zone?

A- Exclusive Economic Zone is a sea zone prescribed by the United Nations
Convention on the Law of Seas over which a State has special rights
regarding the exploration and utilization of marine resources, including
energy production from water and wind. It stretches from the baseline
out to 200 nautical miles from its coast

Ex – Benham rise at the Pacific Ocean, now named by President Duterte as

Philippine Rise on May 23, 2017. The United Nation Commission on the
Limits of the Continental Shelf has declared in 2012 that Benham Rise is a
part of the Philippine Continental Shelf where the Philippine has
sovereign right over the marine resources below the surface of the sea

Q- What is the difference between a territorial sea and exclusive economic

zone?

A- The difference is that territorial sea confers full sovereignty over the
waters, while exclusive economic zone confers only a “sovereign right”
which refers to the coastal state’s rights below the surface of the sea (over
marine resources below the surface of the sea. The surface waters are
considered International waters)

Two methods are used for fixing the starting point or baseline from which the
territorial belt is measured;

1. The normal baseline method, under which the breadth of the

territorial sea is measured from the low water-line;

2. The straight baseline method, under which a straight line is drawn

connecting appropriate points on the coast.

Terrestrial domain includes all surfaces of land above the sea. Fluvial domain
includes the inland waters, bays and rivers, streams, as well as, the internal
waters. Aerial domain includes the air directly above its terrestrial and fluvial
domains