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DTI chief tagged as signatory to ZTE Diwalwal mining deal

By Benjamin B. Pulta

04/28/2008

It was Trade and Industry Secretary Peter Favila who signed a memorandum of understanding (MoU) with a mining unit of Chinese telecommunications supplier ZTE to explore gold mines in Mt. Diwalwal despite a court injunction issued at that time on the project.

A local paper producer informed the Supreme Court (SC) that the government entered into a deal with ZTE to tap the Diwalwal Gold Rush area, despite a subsisting court injunction at that time.

In a manifestation before the Supreme Court, Picop Resources Inc. Favila signed the agreement with ZTE to explore the Diwalwal Gold Rush site despite a decision and mandatory injunction issued by a local court.

The said order handed by the Quezon City Regional Trial Court (QC RTC) Branch 20 had ordered the Palace to respect its contract with Picop over forest reserves which included the Diwalwal area.

The said order of the QC RTC had been in connection with Picop’s Timber License Agreement (TLA) and was upheld by the Court of Appeals (CA) on Feb. 14, 2004.

A ruling by the SC’s Third Division through Associate Justice Minita Chico-Nazario on Nov. 26, 2006 subsequently reversed the RTC and the CA on the matter, three months after the MoU between the national government and ZTE was signed on July 12, 2006.

“But because the national government-ZTE MoU on the Diwalwal Project is a proscribed and legally impermissible agreement in view of the RTC mandatory injunction then valid at the time of the signing of the NG-ZTE MoU on July 12, 2006, the reversal of the CA decision by the Nov. 29, 2006 decision may be speculated upon as having been done in order that the inclusion of the Diwalwal project in the MoU will not be the subject of the mandatory injunction or would not be questioned,” Picop said, in its motion.

In reversing the CA decision that affirmed that the government’s presidential warranty for Picop is a valid and subsisting contract, the SC’s Nov. 29, 2006 decision questioned and described the motive for the issuance of the warranty as preposterous.

“This reverses the doctrine that it is not for the judiciary to inquire into the motives that impelled the exercise of presidential or congressional power.” Picop’s lawyers said, pointing out that “In going against the doctrine and questioning the motive of then President Marcos when he invoked public interest as basis for approving the contract with warranty and the close proximity of the decision with the signing on July 12, 2006 of the MoU which includes the Diwalwal project, the Court may have unwittingly opened itself to unfair speculation that the ruling may have something to do with the ZTE MoU.”

Picop is asking the SC to consider taking up the case en banc citing that long standing legal doctrines had been reversed by the SC division in its 2006 decision which can only be validly done by the SC en banc.

Earlier this month, a ruling by the Court in another case has agreed to take up en banc court a plea to reconsider a 2006 SC division ruling that canceled all mining rights and operations of Filipino firms in the Diwalwal Gold Rush Area.

That 2006 ruling had paved the way for Favila to negotiate the deal with controversial Chinese firm, ZTE Corp., to mine gold in the 8,100-hectare mining site instead of the local firms while the appeal of local firms involved in the case was still pending.

Acting on the urgency of the issue, the SC decided to take up the motion filed by one of the local firms, the Southeast Mindanao Gold Mining Corp. for elevation of its case to the full court.