MANILA -- The Supreme Court (SC) has ruled that the province of Palawan is not entitled to a share in the proceeds of the Camago-Malampaya natural gas project.
In a 94-page consolidated decision penned by Associate Justice Noel Tijam, the High Court granted the petition of the national government to reverse the December 16, 2005 decision of the Palawan Regional Trial Court Branch 95, declaring that Palawan “is entitled to the 40 percent share” of the government’s earnings derived from the natural gas project since October 16, 2001.
The SC decision also denied the petition filed by Bishop Arigo Pedro Dulay, which questioned the constitutionality of Executive Order 683 signed by former President Gloria Macapagal-Arroyo authorizing the release of funds for development projects in Palawan pursuant to the Provisional Implementation Agreement between Palawan and the national government for being violative of the Constitution and the Local Government Code (LGC).
The controversy stemmed from the deal entered into by the Department of Energy (DOE) in 1990, Service Contract No. 38 with contractors Shell Philippines Exploration B.V. and Occidental Philippines, Incorporated, for petroleum operations in the area.
Exploration of the area led to the drilling of the Camago-Malampaya natural gas reservoir about 80 kilometers from the main island of Palawan and 30 kilometers from the platform.
The nearest point of the Camago-Malampaya production area is at a distance of 93.264 kms or 50.3585 nautical miles to the Kalayaan Island Group; 55.476 kms or 29.9546 nautical miles to mainland Palawan's Nacpan Point, south of Patuyo Cove, Municipality of El Nido; and 48.843 kms or 26.9546 nautical miles to Palawan, northwest of Tapiutan Island, Municipality of El Nido.
The quantity of natural gas contained in the Camago-Malampaya was estimated to be sufficient to justify the pursuit of gas-to-power projects having an aggregate power-generating capacity of approximately 3,000 megawatts operating at baseload for 20 to 25 years.
The Court held that there is no debate that the natural resource in the Camago-Malampaya reservoir belongs to the State, noting that Palawan’s claim is anchored not on ownership of the reservoir but on a revenue-sharing scheme, under Section 7, Article X of the 1986 Constitution and Section 290 of the LGC, that allows local government units to share in the proceeds of the utilization of national wealth provided they are found within their respective areas.
It, however, found that existing laws do not include the Camago-Malampaya reservoir within the area or territorial jurisdiction of the Province of Palawan. It stressed that “As defined in its organic law, the province of Palawan comprises merely of islands. The continental shelf, where the Camago-Malamapaya reservoir is located, was clearly not included in its territory.
The Court also held that Presidential Decree 1596, which constituted Kalayaan as a separate municipality of Palawan, cannot be the basis for holding that the Camago-Malampaya reservoir forms part of Palawan’s territory.
It declared that the delineation of territory in PD 1596 refers to Kalayaan alone and that the inclusion of the seabed, subsoil, and continental margin in Kalayaan’s territory cannot by simple analogy be applied to Palawan.
Likewise, it held that the definition of “Palawan” under Republic Act 7611 should not be taken as a statement of territorial limits for purposes of Section 7, Article X of the 1987 Constitution, but in the context of RA 7611 which is aimed at environmental monitoring, research, and education.
The SC also rejected the argument of the province of Palawan that the national wealth, the proceeds from which the State is mandated to share with the LGUs, shall be wherever the local government exercises any degree of jurisdiction.
“An LGU’s territorial jurisdiction is not necessarily co-extensive with its exercise or assertion of powers. To hold otherwise may result in condoning acts that are clearly ultra vires. It may lead to, the words of the Republic, LGUs ‘rush(ing) to exercise its powers and functions in areas rich in natural resources even if outside its boundaries) with the intention of seeking a share in the proceeds of its exploration’ -- a situation that ‘would sow conflict not only among the local government units and the national government but worse, between and among local government units,” the High Court noted.
The SC also pointed out that Palawan never alleged in which of its municipalities or component cities and barangays the Camago-Malampay reservoir is located, militating against its claim that the area forms part of its territory. (PNA)
