Cited Laws
TL;DR — Ruling
WHEREFORE , Commission on Audit Regional Office No. XIII Decision No. 2017-012 dated June 30, 2017, on the appeals filed by Mr. Dominador M.
WHEREFORE , Commission on Audit Regional Office No. XIII Decision No. 2017-012 dated June 30, 2017, on the appeals filed by Mr. Dominador M. Gomez, former Acting Regional Director, et al., all of the [NCIP], Regional Office No. XIII, is hereby DISAPPROVED . Accordingly, [ND] Nos. 2016-001(2014), 2016-002(2013), 2016-003(2013), 2016-004(2013)[,] and 2016-005(2013), all dated May 26, 2016, on the payments for administrative and operating expenses charged against the financial assistance given by [TMC] and [THPAL], in the total amount of [PHP] 1,573,227.83, are AFFIRMED . [16] Hence, this Petition. Petitioners argue that the COA Proper erred in applying Republic Act No. 7942. For petitioners, Republic Act No. 8371 of the Indigenous Peoples Rights Act (IPRA), not Republic Act No. 7942 or the mining regulation law, should govern this case since the IPRA specifically protects IP's rights. Petitioners even contend that the IPRA, being a later enactment, has repealed Republic Act No. 7942. Petitioners then invoke NCIP Administrative Order (AO) No. 3, series of 2012, which was issued by virtue of the NCIP's mandate under the IPRA. Particularly, petitioners cite Section 62 of NCIP AO No. 3, which allows the use of royalty payments for any purpose, other than for socio-economic projects, that will redound to the well-being and benefit of the ICCs/IPs. Petitioners also contend that the disallowed amounts are not royalty payments contemplated in Section 17 of Republic Act No. 7942. Rather, they form part of the financial assistance given to the Mamanwa Tribes of Barangay Taganito and Urbiztondo. Hence, petitioners maintain that Republic Act No. 7942 should not be applied. Petitioners further assert that, should the disallowances be upheld, they ought to be exempted from liability as no determination of bad faith has been made against them. Issue Whether the COA Proper committed grave abuse of discretion in affirming the NDs. The Court's Ruling The Petition is partly meritorious. Distinction between royalty payments and financial assistance Sections 16 [17] of Republic Act No. 7942 requires the consent of the IP/ICC concerned before mining operations may be allowed in any ancestral land. When such consent is obtained, Section 17 [18] of Republic Act No. 7942 requires the payment of royalties, which shall form part of a trust fund for the socio-economic well-being of the IP/ICC. Under Section 16 [19] of the Department of Environment and Natural Resources AO No. 96-40, [20] royalty payments should not be less than one percent of the gross output. These terms and conditions shall be embodied in a MOA to be executed between the IPs/ICCs, the mining companies, and the NCIP. [21] Accordingly, the Mamanwa Tribes of Barangay Taganito and Urbiztondo, TMC and THPAL, and the NCIP executed a MOA, which states: 4.1. Royalty. Under the MOA, TMC is currently obligated to pay to the Concerned IPs a ONE PERCENT (1%) Royalty based on gross revenue on the extraction and sales of