Professional Documents
Culture Documents
SUPREME COURT
Manila
EN BANC
G.R. No. 175368
The Small-Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-00305 of Eduardo D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B005-05 of Lucila S. Valdez are declared NULL AND VOID. Consequently, the said
permits are hereby CANCELLED.15
Hence, petitioner League of Provinces filed this petition.
Petitioner is a duly organized league of local governments incorporated under
R.A. No. 7160. Petitioner declares that it is composed of 81 provincial
governments, including the Province of Bulacan. It states that this is not an
action of one province alone, but the collective action of all provinces through
the League, as a favorable ruling will not only benefit one province, but all
provinces and all local governments.
Petitioner raises these issues:
I
WHETHER OR NOT SECTION 17(B)(3)(III) OF THE, 1991 LOCAL GOVERNMENT
CODE AND SECTION 24 OF THE PEOPLE'S SMALL-SCALE MINING ACT OF 1991
ARE UNCONSTITUTIONAL FOR PROVIDING FOR EXECUTIVE CONTROL AND
INFRINGING UPON THE LOCAL AUTONOMY OF PROVINCES.
II
WHETHER OR NOT THE ACT OF RESPONDENT [DENR] IN NULLIFYING, VOIDING
AND CANCELLING THE SMALL-SCALE MINING PERMITS AMOUNTS TO EXECUTIVE
CONTROL, NOT MERELY SUPERVISION AND USURPS THE DEVOLVED POWERS OF
ALL PROVINCES.16
To start, the Court finds that petitioner has legal standing to file this petition
because it is tasked under Section 504 of the Local Government Code of 1991
to promote local autonomy at the provincial level;17 adopt measures for the
promotion of the welfare of all provinces and its officials and employees;18 and
exercise such other powers and perform such other duties and functions as the
league may prescribe for the welfare of the provinces.19
Before this Court determines the validity of an act of a co-equal and coordinate
branch of the Government, it bears emphasis that ingrained in our
jurisprudence is the time-honored principle that a statute is presumed to be
valid.20This presumption is rooted in the doctrine of separation of powers which
enjoins upon the three coordinate departments of the Government a becoming
courtesy for each other's acts.21 This Court, however, may declare a law, or
portions thereof, unconstitutional where a petitioner has shown a clear and
unequivocal breach of the Constitution,22 leaving no doubt or hesitation in the
mind of the Court.23
In this case, petitioner admits that respondent DENR Secretary had the
authority to nullify the Small-Scale Mining Permits issued by the Provincial
Governor of Bulacan, as the DENR Secretary has control over the PMRB, and
the implementation of the Small-Scale Mining Program is subject to control by
respondent DENR.
Control of the DENR/DENR Secretary over small-scale mining in the provinces is
granted by three statutes: (1) R.A. No. 7061 or The Local Government Code of
1991; (2) R.A. No. 7076 or the People's Small Scale Mining Act of 1991; and (3)
R.A. No. 7942, otherwise known as the Philippine Mining Act of 1995. 24 The
pertinent provisions of law sought to be declared as unconstitutional by
petitioner are as follows:
R.A. No. 7061 (The Local Government Code of 1991)
SEC. 17. Basic Services and Facilities. - (a) Local government units shall
endeavor to be self-reliant and shall continue exercising the powers and
discharging the duties and functions currently vested upon them. They shall
also discharge the functions and responsibilities of national agencies and
offices devolved to them pursuant to this Code. Local government units shall
likewise exercise such other powers and discharge such other functions and
responsibilities as are necessary, appropriate, or incidental to efficient and
effective provision of the basic services and facilities enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the
following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to supervision, control and review
of the DENR, enforcement of forestry laws limited to community-based forestry
projects, pollution control law, small-scale mining law, and other laws on the
protection of the environment; and mini-hydro electric projects for local
purposes; x x x25
R.A. No. 7076 (People's Small-Scale Mining Act of 1991)
Sec. 24. Provincial/City Mining Regulatory Board. - There is hereby created
under the direct supervision and control of the Secretary a provincial/city
mining regulatory board, herein called the Board, which shall be the
implementing agency of the Department, and shall exercise the following
powers and functions, subject to review by the Secretary:
(a) Declare and segregate existing gold-rush areas for small-scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
Petitioner contends that the foregoing provisions of the Constitution and the
Local Government Code of 1991 show that the relationship between the
President and the Provinces or respondent DENR, as the alter ego of the
President, and the Province of Bulacan is one of executive supervision, not one
of executive control. The term "control" has been defined as the power of an
officer to alter or modify or set aside what a subordinate officer had done in the
performance of his/her duties and to substitute the judgment of the former for
the latter, while the term "supervision" is the power of a superior officer to see
to it that lower officers perform their function in accordance with law.29
Petitioner argues that respondent DENR Secretary went beyond mere executive
supervision and exercised control when he nullified the small-scale mining
permits granted by the Provincial Governor of Bulacan, as the former
substituted the judgment of the latter.
Petitioner asserts that what is involved here is a devolved power.
Under the Local Government Code of 1991, the power to regulate small-scale
mining has been devolved to all provinces. In the exercise of devolved powers,
departmental approval is not necessary. 30
Petitioner contends that if the provisions in Section 24 of R.A. No. 7076 and
Section 17 (b)(3)(iii) of the Local Government Code of 1991 granting the power
of control to the DENR/DENR Secretary are not nullified, nothing would stop the
DENR Secretary from nullifying, voiding and canceling the small-scale mining
permits that have been issued by a Provincial Governor.
Petitioner submits that the statutory grant of power of control to respondents is
unconstitutional, as the Constitution only allows supervision over local
governments and proscribes control by the executive departments.
In its Comment, respondents, represented by the Office of the Solicitor General,
stated that contrary to the assertion of petitioner, the power to implement the
small-scale mining law is expressly limited in Section 17 (b)(3)(iii) of the Local
Government Code, which provides that it must be carried out "pursuant to
national policies and subject to supervision, control and review of the DENR."
Moreover, the fact that the power to implement the small-scale mining law has
not been fully devolved to provinces is further amplified by Section 4 of the
People's Small-Scale Mining Act of 1991, which provides, among others, that
the People's Small-Scale Mining Program shall be implemented by the DENR
Secretary.
The petition lacks merit.
Paragraph 1 of Section 2, Article XII (National Economy and Patrimony) of the
Constitution31 provides that "the exploration, development and utilization of
natural resources shall be under the full control and supervision of the State."
xxxx
Sec. 4. People's Small-Scale Mining Program. - For the purpose of carrying out
the declared policy provided in Section 2 hereof, there is hereby established a
People's Small-Scale Mining Program to be implemented by the Secretary of the
Department of Environment and Natural Resources, hereinafter called the
Department, in coordination with other concerned government agencies,
designed to achieve an orderly, systematic and rational scheme for the smallscale development and utilization of mineral resources in certain mineral areas
in order to address the social, economic, technical, and environmental
problems connected with small-scale mining activities.
xxxx
Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created
under the direct supervision and control of the Secretary a provincial/city
mining regulatory board, herein called the Board, which shall be the
implementing agency of the Department, and shall exercise the following
powers and functions, subject to review by the Secretary:
(a) Declare and segregate existing gold-rush areas for small-scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to small-scale
mining;
(e) Settle disputes, conflicts or litigations over conflicting claims within a
peoples small-scale mining area, an area that is declared a small-mining;
and
(f) Perform such other functions as may be necessary to achieve the
goals and objectives of this Act.42
DENR Administrative Order No. 34, series of 1992, containing the Rules and
Regulations to implement R.A. No. 7076, provides:
SEC. 21. Administrative Supervision over the People's Small-Scale Mining
Program. The following DENR officials shall exercise the following supervisory
functions in the implementation of the Program:
21.1 DENR Secretrary direct supervision and control over the program
and activities of the small-scale miners within the people's small-scale
mining area;
21.2 Director the Director shall:
DENR Administrative Order No. 23, otherwise known as the Implementing Rules
and Regulations of R.A. No. 7942, otherwise known as the Philippine Mining Act
of 1995, adopted on August 15, 1995, provides under Section 12344thereof that
small-scale mining applications should be filed with the PMRB45 and the
corresponding permits shall be issued by the Provincial Governor, except smallscale mining applications within the mineral reservations.
Thereafter, DENR Administrative Order No. 96-40, otherwise known as the
Revised Implementing Rules and Regulations of R.A. No. 7942, otherwise known
as the Philippine Mining Act of 1995, adopted on December 19, 1996, provides
that applications for Small-Scale Mining Permits shall be filed with the Provincial
Governor/City Mayor through the concerned Provincial/City Mining Regulatory
Board for areas outside the Mineral Reservations and with the Director though
the Bureau for areas within the Mineral Reservations.46 Moreover, it provides
that Local Government Units shall, in coordination with the Bureau/ Regional
Offices and subject to valid and existing mining rights, "approve applications
for small-scale mining, sand and gravel, quarry x x x and gravel permits not
exceeding five (5) hectares."47
Petitioner contends that the Local Government Code of 1991, R.A. No. 7076,
DENR Administrative Orders Nos. 95-23 and 96-40 granted the DENR Secretary
the broad statutory power of control, but did not confer upon the respondents
DENR and DENR Secretary the power to reverse, abrogate, nullify, void, cancel
the permits issued by the Provincial Governor or small-scale mining contracts
entered into by the Board.
The contention does not persuade.
The settlement of disputes over conflicting claims in small-scale mining is
provided for in Section 24 of R.A. No. 7076, thus:
Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created
under the direct supervision and control of the Secretary a provincial/city
mining regulatory board, herein called the Board, which shall be the
implementing agency of the Department, and shall exercise the following
powers and functions, subject to review by the Secretary:
xxxx
(e) Settle disputes, conflicts or litigations over conflicting claims within a
people's small-scale mining area, an area that is declared a small mining area;
xxx
Section 24, paragraph (e) of R.A. No. 7076 cited above is reflected in Section
22, paragraph 22.5 of the Implementing Rules and Regulations of R.A. No.
7076, to wit:
Hence, the decision of the DENR Secretary, declaring that the Application for
Exploration Permit of AMTC was valid and may be given due course, and
canceling the Small-Scale Mining Permits issued by the Provincial Governor,
emanated from the power of review granted to the DENR Secretary under R.A.
No. 7076 and its Implementing Rules and Regulations. The DENR Secretary's
power to review and, therefore, decide, in this case, the issue on the validity of
the issuance of the Small-Scale Mining Permits by the Provincial Governor as
recommended by the PMRB, is a quasi-judicial function, which involves the
determination of what the law is, and what the legal rights of the contending
parties are, with respect to the matter in controversy and, on the basis thereof
and the facts obtaining, the adjudication of their respective rights.53 The DENR
Secretary exercises quasi-judicial function under R.A. No. 7076 and its
Implementing Rules and Regulations to the extent necessary in settling
disputes, conflicts or litigations over conflicting claims. This quasi-judicial
function of the DENR Secretary can neither be equated with "substitution of
judgment" of the Provincial Governor in issuing Small-Scale Mining Permits nor
"control" over the said act of the Provincial Governor as it is a determination of
the rights of AMTC over conflicting claims based on the law.
In determining whether Section 17 (b)(3)(iii) of the Local Government Code of
1991 and Section 24 of R.A. No. 7076 are unconstitutional, the Court has been
guided by Beltran v. The Secretary of Health, 54 which held:
The fundamental criterion is that all reasonable doubts should be resolved in
favor of the constitutionality of a statute. Every law has in its favor the
presumption of constitutionality. For a law to be nullified, it must be shown that
there is a clear and unequivocal breach of the Constitution. The ground for
nullity must be clear and beyond reasonable doubt. Those who petition this
Court to declare a law, or parts thereof, unconstitutional must clearly establish
the basis therefor. Otherwise, the petition must fail. 55
In this case, the Court finds that the grounds raised by petitioner to challenge
the constitutionality of Section 17 (b )(3)(iii) of the Local Government Code of
1991 and Section 24 'of R.A. No.7076 failed to overcome the constitutionality of
the said provisions of law.
WHEREFORE, the petition is DISMISSED for lack of merit.
No costs.
SO ORDERED.
to the sound discretion of the competent body or agency, in this case the
[Securities and Exchange Commission]. In the interest of orderly procedure and
administrative efficiency, it is imperative that the DENR, including the Panel,
accord full faith and confidence to the contents of Appellants Articles of
Incorporation, which have undergone thorough evaluation and scrutiny by the
SEC. Unless the SEC or the courts promulgate a ruling to the effect that the
Appellant corporations are not Filipino corporations, the Board cannot conclude
otherwise. This proposition is borne out by the legal presumptions that official
duty has been regularly performed, and that the law has been obeyed in the
preparation and approval of said documents.16
Redmont then filed with the Court of Appeals a petition for review under Rule
43 of the 1997 Rules on Civil Procedure. This petition was docketed as CA-G.R.
SP No. 109703.
In a decision dated October 1, 2010,17 the Court of Appeals, through its Seventh
Division, reversed the MAB and sustained the findings of the POA. 18
The Court of Appeals noted that the "pivotal issue before the Court is whether
or not respondents McArthur, Tesoro and Narra are Philippine nationals under
Philippine laws, rules and regulations."19 Noting that doubt existed as to their
foreign equity ownerships, the Court of Appeals, Seventh Division, asserted
that such equity ownerships must be reckoned via the Grandfather
Rule.20 Ultimately, it ruled that Narra, Tesoro, and McArthur "are not Philippine
nationals, hence, their MPSA applications should be recommended for rejection
by the Secretary of the DENR."21
On the matter of the Panel of Arbitrators jurisdiction, the Court of Appeals,
Seventh Division, referred to this courts declarations in Celestial Nickel Mining
Exploration Corp. v. Macroasia Corp.22 and considered these pronouncements
as "clearly support[ing the conclusion] that the POA has jurisdiction to resolve
the Petitions filed by x x x Redmont."23
The motion for reconsideration of Narra, Tesoro, and McArthur was denied by
the Court of Appeals through a resolution dated February 15, 2011.24
Hence, this present petition was filed and docketed as G.R. No. 195580.
Apart from these proceedings before the POA, the MAB and the Court of
Appeals, Redmont also filed three (3) separate actions before the Securities
and Exchange Commission, the Regional Trial Court of Quezon City, and the
Office of the President:
First action: On August 14, 2008, Redmont filed a complaint for revocation of
the certificates of registration of Narra, Tesoro, and McArthur with the Securities
and Exchange Commission (SEC).25 This complaint became the subject of
another case (G.R. No. 205513), which was consolidated but later deconsolidated with the present petition, G.R. No. 195580.
On January 22, 2013, the Court of Appeals, Former Tenth Division, issued a
resolution35 denying Redmonts motion for reconsideration.
Aggrieved, Redmont filed the petition for review on certiorari which became the
subject of G.R. No. 205513, initially lodged with this courts First Division.
Through a November 27, 2013 resolution, G.R. No. 205513 was consolidated
with G.R. No. 195580. Subsequently however, this courts Third Division deconsolidated the two (2) cases.
Second Action: On September 8, 2008, Redmont filed a complaint for injunction
(of the MAB proceedings pending the resolution of the complaint before the
SEC) with application for issuance of a temporary restraining order (TRO)
and/or writ of preliminary injunction with the Regional Trial Court, Branch 92,
Quezon City.36 The Regional Trial Court issued a TRO on September 16, 2008. By
then, however, the MAB had already ruled in favor of Narra, Tesoro, and
McArthur.37
Third Action: On May 7, 2010, Redmont filed with the Office of the President a
petition seeking the cancellation of the financial or technical assistance
agreement (FTAA) applications of Narra, Tesoro, and McArthur. In a decision
dated April 6, 2011,38 the Office of the President ruled in favor of Redmont. In a
resolution dated July 6, 2011,39 the Office of the President denied the motion for
reconsideration of Narra, Tesoro, and McArthur. As noted by the ponencia,
Narra, Tesoro, and McArthur then filed an appeal with the Court of Appeals. As
this appeal has been denied, they filed another appeal with this court, which
appeal is pending in another division.40
The petition for review on certiorari subject of G.R. No. 195580 is an appeal
from the Court of Appeals October 1, 2010 decision in CA-G.R. SP No. 109703
reversing the MAB and sustaining the POAs findings that Narra, Tesoro, and
McArthur are foreign corporations disqualified from entering into MPSAs. The
petition also questions the February 15, 2011 resolution of the Court of Appeals
denying the motion for reconsideration of Narra, Tesoro, and McArthur.
To reiterate, G.R. No. 195580 was consolidated with another petition G.R. No.
205513 through a resolution of this court dated November 27, 2013. G.R. No.
205513 is an appeal from the Court of Appeals, Former Tenth Divisions May 23,
2012 decision and January 22, 2013 resolution in CA-G.R. SP No. 113523.
Subsequently however, G.R. No. 195580 and G.R. No. 205513 were deconsolidated.
Apart from G.R. Nos. 195580 and 205513, a third petition has been filed with
this court. This third petition is an offshoot of the petitions filed by Redmont
with the Office of the President seeking the cancellation of the FTAA
applications of Narra, Tesoro, and McArthur.
The main issue in this case relates to the ownership of capital in Narra, Tesoro,
and McArthur, i.e., whether they have satisfied the required Filipino equity
ownership so as to be qualified to enter into MPSAs.
In addition to this, Narra, Tesoro, and McArthur raise procedural issues: (1) the
POAs jurisdiction over the subject matter of Redmonts petitions; (2) the
supposed mootness of Redmonts petitions before the POA considering that
Narra, Tesoro, and McArthur have pursued applications for FTAAs; and (3)
Redmonts supposed engagement in forum shopping.41
Governing laws
Mining is an environmentally sensitive activity that entails the exploration,
development, and utilization of inalienable natural resources. It falls within the
broad ambit of Article XII, Section 2 as well as other sections of the 1987
Constitution which refers to ancestral domains42 and the environment.43
More specifically, Republic Act No. 7942 or the Philippine Mining Act, its
implementing rules and regulations, other administrative issuances as well as
jurisprudence govern the application for mining rights among others. Smallscale mining44 is governed by Republic Act No. 7076, the Peoples Small-scale
Mining Act of 1991. Apart from these, other statutes such as Republic Act No.
8371, the Indigenous Peoples Rights Act of 1997 (IPRA), and Republic Act No.
7160, the Local Government Code (LGC) contain provisions which delimit the
conduct of mining activities.
Republic Act No. 7042, as amended by Republic Act No. 8179, the Foreign
Investments Act (FIA) is significant with respect to the participation of foreign
investors in nationalized economic activities such as mining. In the 2012
resolution ruling on the motion for reconsideration in Gamboa v. Teves,45 this
court stated that "The FIA is the basic law governing foreign investments in the
Philippines, irrespective of the nature of business and area of investment." 46
Commonwealth Act No. 108, as amended, otherwise known as the Anti-Dummy
Law, penalizes those who "allow [their] name or citizenship to be used for the
purpose of evading"47 "constitutional or legal provisions requir[ing] Philippine or
any other specific citizenship as a requisite for the exercise or enjoyment of a
right, franchise or privilege".48
Batas Pambansa Blg. 68, the Corporation Code, is the general law that
"provide[s] for the formation, organization, [and] regulation of private
corporations."49 The conduct of activities relating to securities, such as shares
of stock, is regulated by Republic Act No. 8799, the Securities Regulation Code
(SRC).
DENRs Panel of Arbitrators
has no competence over the
petitions filed by Redmont
The DENR Panel of Arbitrators does not have the competence to rule on the
issue of whether the ownership of the capital of the corporations Narra, Tesoro,
and McArthur meet the constitutional and statutory requirements. This alone is
ample basis for granting the petition.
Section 77 of the Mining Act provides for the matters falling under the exclusive
original jurisdiction of the DENR Panel of Arbitrators, as follows:
Section 77. Panel of Arbitrators x x x Within thirty (30) working days, after the
submission of the case by the parties for decision, the panel shall have
exclusive and original jurisdiction to hear and decide on the following:
(a) Disputes involving rights to mining areas;
(b) Disputes involving mineral agreements or permit;
(c) Disputes involving surface owners, occupants and claimholders /
concessionaires; and
(d) Disputes pending before the Bureau and the Department at the date
of the effectivity of this Act.
In 2007, this courts decision in Celestial Nickel Mining Exploration Corporation
v. Macroasia Corp.50 construed the phrase "disputes involving rights to mining
areas" as referring "to any adverse claim, protest, or opposition to an
application for mineral agreement."51
Proceeding from this courts statements in Celestial, the ponencia states:
Accordingly, as We enunciated in Celestial, the POA unquestionably has
jurisdiction to resolve disputes over MPSA applications subject of Redmonts
petitions. However, said jurisdiction does not include either the approval or
rejection of the MPSA applications which is vested only upon the Secretary of
the DENR. Thus, the finding of the POA, with respect to the rejection of the
petitioners MPSA applications being that they are foreign corporation [sic], is
valid.52
An earlier decision of this court, Gonzales v. Climax Mining Ltd.,53 ruled on the
jurisdiction of the Panel of Arbitrators as follows:
We now come to the meat of the case which revolves mainly around the
question of jurisdiction by the Panel of Arbitrators: Does the Panel of Arbitrators
have jurisdiction over the complaint for declaration of nullity and/or termination
of the subject contracts on the ground of fraud, oppression and violation of the
Constitution? This issue may be distilled into the more basic question of
whether the Complaint raises a mining dispute or a judicial question.
A judicial question is a question that is proper for determination by the courts,
as opposed to a moot question or one properly decided by the executive or
legislative branch. A judicial question is raised when the determination of the
question involves the exercise of a judicial function; that is, the question
involves the determination of what the law is and what the legal rights of the
parties are with respect to the matter in controversy.
On the other hand, a mining dispute is a dispute involving (a) rights to mining
areas, (b) mineral agreements, FTAAs, or permits, and (c) surface owners,
occupants and claimholders/concessionaires. Under Republic Act No. 7942
(otherwise known as the Philippine Mining Act of 1995), the Panel of Arbitrators
has exclusive and original jurisdiction to hear and decide these mining
disputes. The Court of Appeals, in its questioned decision, correctly stated that
the Panels jurisdiction is limited only to those mining disputes which raise
questions of fact or matters requiring the application of technological
knowledge and experience.54 (Emphasis supplied)
Moreover, this courts decision in Philex Mining Corp. v. Zaldivia, 55 which was
also referred to in Gonzales, explained what "questions of fact" are appropriate
for resolution in a mining dispute:
We see nothing in sections 61 and 73 of the Mining Law that indicates a
legislative intent to confer real judicial power upon the Director of Mines. The
very terms of section 73 of the Mining Law, as amended by Republic Act No.
4388, in requiring that the adverse claim must "state in full detail the nature,
boundaries and extent of the adverse claim" show that the conflicts to be
decided by reason of such adverse claim refer primarily to questions of fact.
This is made even clearer by the explanatory note to House Bill No. 2522, later
to become Republic Act 4388, that "sections 61 and 73 that refer to the
overlapping of claims are amended to expedite resolutions of mining conflicts *
* *." The controversies to be submitted and resolved by the Director of Mines
under the sections refer therfore [sic] only to the overlapping of claims and
administrative matters incidental thereto.56 (Emphasis supplied)
The pronouncements in Celestial cited by the ponencia were made to address
the assertions of Celestial Nickel and Mining Corporation (Celestial Nickel) and
Blue Ridge Mineral Corporation (Blue Ridge) that the Panel of Arbitrators had
the power to cancel existing mineral agreements pursuant to Section 77 of the
Mining Act.57 Thus:
Clearly, POAs jurisdiction over "disputes involving rights to mining areas" has
nothing to do with the cancellation of existing mineral agreements.58
These pronouncements did not undo or abandon the distinction, clarified in
Gonzales, between judicial questions and mining disputes. The former are
cognizable by regular courts of justice, while the latter are cognizable by the
DENR Panel of Arbitrators.
As has been repeatedly acknowledged by the ponencia,59 the Court of
Appeals,60 and the Mines Adjudication Board,61 the present case, and the
petitions filed by Redmont before the DENR Panel of Arbitrators boil down to
the "pivotal issue x x x [of] whether or not [Narra, Tesoro, and McArthur] are
Philippine nationals."
This is a matter that entails a consideration of the law. It is a question that
relates to the status of Narra, Tesoro, and McArthur and the legal rights (or
inhibitions) accruing to them on account of their status. This does not entail a
consideration of the specifications of mining arrangements and operations.
Thus, the petitions filed by Redmont before the DENR Panel of Arbitrators relate
to judicial questions and not to mining disputes. They relate to matters which
are beyond the jurisdiction of the Panel of Arbitrators.
Furthermore nowhere in Section 77 of the Republic Act No. 7942 is there a
grant of jurisdiction to the Panel of Arbitrators over the determination of the
qualification of applicants. The Philippine Mining Act clearly requires the
existence of a "dispute" over a mining area,62 a mining agreement,63 with a
surface owner,64 or those pending with the Bureau or the Department65 upon
the laws promulgation. The existence of a "dispute" presupposes that the party
bringing the suit has a colorable or putative claim more superior than that of
the respondent in the arbitration proceedings. After all, the Panel of Arbitrators
is supposed to provide binding arbitration which should result in a binding
award either in favor of the petitioner or the respondent. Thus, the Panel of
Arbitrators is a qualified quasi-judicial agency. It does not perform all judicial
functions in lieu of courts of law.
The petition brought by respondent before the Panel of Arbitrators a quo could
not have resulted in any kind of award in its favor. It was asking for a judicial
declaration at first instance of the qualification of the petitioners to hold mining
agreements in accordance with the law. This clearly was beyond the jurisdiction
of the Panel of Arbitrators and eventually also of the Mines Adjudication Board
(MAB).
The remedy of Redmont should have been either to cause the cancellation of
the registration of any of the petitioners with the Securities and Exchange
Commission or to request for a determination of their qualifications with the
Secretary of the Department of Environment and Natural Resources. Should
either the Securities and Exchange Commission (SEC) or the Secretary of
Environment and Natural Resources rule against its request, Redmont could
have gone by certiorari to a Regional Trial Court.
Having brought their petitions to an entity without jurisdiction, the petition in
this case should be granted.
Mining as a nationalized
economic activity
The determination of who may engage in mining activities is grounded in the
1987 Constitution and the Mining Act.
Article XII, Section 2 of the 1987 Constitution reads:
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
(aq) "Qualified person" means any citizen of the Philippines with capacity to
contract, or a corporation, partnership, association, or cooperative organized or
authorized for the purpose of engaging in mining, with technical and financial
capability to undertake mineral resources development and duly registered in
accordance with law at least sixty per centum (60%) of the capital of which is
owned by citizens of the Philippines: Provided, That a legally organized foreignowned corporation shall be deemed a qualified person for purposes of granting
an exploration permit, financial or technical assistance agreement or mineral
processing permit. (Emphasis supplied)
In addition, Section 3 (t) defines a "foreign-owned corporation" as follows:
(t) "Foreign-owned corporation" means any corporation, partnerships,
association, or cooperative duly registered in accordance with law in which less
than fifty per centum (50%) of the capital is owned by Filipino citizens.
Under the Mining Act, nationality requirements are relevant for the following
categories of mining contracts and permits: first, exploration permits (EP);
second, mineral agreements (MA); third, financial or technical assistance
agreements (FTAA); and fourth, mineral processing permits (MPP).
In Section 20 of the Mining Act, "[a]n exploration permit grants the right to
conduct exploration for all minerals in specified areas." Section 3 (q) defines
exploration as the "searching or prospecting for mineral resources by
geological, geochemical or geophysical surveys, remote sensing, test pitting,
trenching, drilling, shaft sinking, tunneling or any other means for the purpose
of determining the existence, extent, quantity and quality thereof and the
feasibility of mining them for profit." DENR Administrative Order No. 2005-15
characterizes an exploration permit as the "initial mode of entry in mineral
exploration."68
In Section 26 of the Mining Act, "[a] mineral agreement shall grant to the
contractor the exclusive right to conduct mining operations and to extract all
mineral resources found in the contract area."
There are three (3) forms of mineral agreements:
1. Mineral production sharing agreement (MPSA) "where the Government
grants to the contractor the exclusive right to conduct mining operations
within a contract area and shares in the gross output [with the]
contractor x x x provid[ing] the financing, technology, management and
personnel necessary for the implementation of [the MPSA]";69
2. Co-production agreement (CA) "wherein the Government shall provide
inputs to the mining operations other than the mineral resource"; 70 and
3. Joint-venture agreement (JVA) "where a joint-venture company is
organized by the Government and the contractor with both parties having
uses other than the development of water power, in which cases beneficial use
may be the measure and the limit of the grant. (Emphasis supplied)
Likewise, Article XIV, Section 9 of the 1973 Constitution states:
Section 9. The disposition, exploration, development, of exploitation, or
utilization of any of the natural resources of the Philippines shall be limited to
citizens of the Philippines, or to corporations or association at least sixty per
centum of the capital of which is owned by such citizens. The Batasang
Pambansa, in the national interest, may allow such citizens, corporations, or
associations to enter into service contracts for financial, technical,
management, or other forms of assistance with any foreign person or entity for
the exploitation, development, exploitation, or utilization of any of the natural
resources. Existing valid and binding service contracts for financial, the
technical, management, or other forms of assistance are hereby recognized as
such. (Emphasis supplied)
The rationale for nationalizing the exploration, development, and utilization of
natural resources was explained by this court in Register of Deeds of Rizal v.
Ung Siu Si Temple74 as follows:
The purpose of the sixty per centum requirement is obviously to ensure that
corporations or associations allowed to acquire agricultural land or to exploit
natural resources shall be controlled by Filipinos; and the spirit of the
Constitution demands that in the absence of capital stock, the controlling
membership should be composed of Filipino citizens.75 (Emphasis supplied)
On point are Dean Vicente Sincos words, cited with approval by this court in
Republic v. Quasha:76
It should be emphatically stated that the provisions of our Constitution which
limit to Filipinos the rights to develop the natural resources and to operate the
public utilities of the Philippines is one of the bulwarks of our national integrity.
The Filipino people decided to include it in our Constitution in order that it may
have the stability and permanency that its importance requires. It is written in
our Constitution so that it may neither be the subject of barter nor be impaired
in the give and take of politics. With our natural resources, our sources of
power and energy, our public lands, and our public utilities, the material basis
of the nation's existence, in the hands of aliens over whom the Philippine
Government does not have complete control, the Filipinos may soon find
themselves deprived of their patrimony and living as it were, in a house that no
longer belongs to them.77 (Emphasis supplied)
Article XII, Section 2 of the 1987 Constitution ensures the effectivity of the
broad economic policy, spelled out in Article II, Section 19 of the 1987
Constitution, of "a self-reliant and independent national economy effectively
controlled by Filipinos" and the collective aspiration articulated in the 1987
Constitutions Preamble of "conserv[ing] and develop[ing] our patrimony."
In this case, Narra, Tesoro, and McArthur are corporations of which a portion of
their equity is owned by corporations and individuals acknowledged to be
foreign nationals. Moreover, they have each sought to enter into a Mineral
Production Sharing Agreement (MPSA). This arrangement requires that
foreigners own, at most, only 40% of the capital.
Notwithstanding that they have moved to obtain FTAAs which are permitted
for wholly owned foreign corporations Redmont still asserts that Narra,
Tesoro, and McArthur are in violation of the nationality requirements of the
1987 Constitution and of the Mining Act.78
Narra, Tesoro, and McArthur argue that the Grandfather Rule should not be
applied as there is no legal basis for it. They assert that Section 3 (a) of the
Foreign Investments Act (FIA) provides exclusively for the Control Test as the
means for reckoning foreign equity in a corporation and, ultimately, the
nationality of a corporation engaged in or seeking to engage in an activity with
nationality restrictions. They fault the Court of Appeals for relying on DOJ
Opinion No. 20, series of 2005, a mere administrative issuance, as opposed to
the Foreign Investments Act, a statute, for applying the Grandfather Rule. 79
Standards for reckoning
foreign equity participation in
nationalized economic
activities
The broad and long-standing nationalization of certain sectors and industries
notwithstanding, an apparent confusion has persisted as to how foreign equity
holdings in a corporation engaged in a nationalized economic activity shall be
reckoned. As have been proffered by the myriad cast of parties and
adjudicative bodies involved in this case, there have been two means: the
Control Test and the Grandfather Rule.
Paragraph 7 of the 1967 Rules of the Securities and Exchange Commission,
dated February 28, 1967, states:
Shares belonging to corporations or partnerships at least 60% of the capital of
which is owned by Filipino citizens shall be considered as of Philippine
nationality, but if the percentage of Filipino ownership in the corporation or
partnership is less than 60%, only the number of shares corresponding to such
percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares
are registered in the name of a corporation or partnership at least 60% of the
capital stock or capital respectively, of which belong to a Filipino citizens, all of
the said shares shall be recorded as owned by Filipinos. But if less than 60%,
or, say, only 50% of the capital stock or capital of the corporation or
partnership, respectively belongs to Filipino citizens, only 50,000 shares shall
be counted as owned by Filipinos and the other 50,000 shares shall be recorded
as belonging to aliens.80
Department of Justice (DOJ) Opinion No. 20, series of 2005, explains that the
1967 SEC Rules provide for the Control Test and the Grandfather Rule as the
means for reckoning foreign and Filipino equity ownership in an "investee"
corporation:
The above-quoted SEC Rules provide for the manner of calculating the Filipino
interest in a corporation for purposes, among others of determining compliance
with nationality requirements (the "Investee Corporation"). Such manner of
computation is necessary since the shares of the Investee Corporation may be
owned both by individual stockholders ("Investing Individuals") and by
corporations and partnerships ("Investing Corporation"). The determination of
nationality depending on the ownership of the Investee Corporation and in
certain instances, the Investing Corporation.
Under the above-quoted SEC Rules, there are two cases in determining the
nationality of the Investee Corporation. The first case is the liberal rule, later
coined by the SEC as the Control Test in its 30 May 1990 Opinion, and pertains
to the portion in said Paragraph 7 of the 1967 SEC Rules which states, (s)hares
belonging to corporations or partnerships at least 60% of the capital of which is
owned by Filipino citizens shall be considered as of Philippine nationality. Under
the liberal Control Test, there is no need to further trace the ownership of the
60% (or more) Filipino stockholdings of the Investing Corporation since a
corporation which is at least 60% Filipino-owned is considered as Filipino.
The second case is the Strict Rule or the Grandfather Rule Proper and pertains
to the portion in said Paragraph 7 of the 1967 SEC Rules which states, but if
the percentage of Filipino ownership in the corporation or partnership is less
than 60%, only the number of shares corresponding to such percentage shall
be counted as of Philippine nationality. Under the Strict Rule or Grandfather
Rule Proper, the combined totals in the Investing Corporation and the Investee
Corporation must be traced (i.e., grandfathered) to determine the total
percentage of Filipino ownership.81
DOJ Opinion No. 20, series of 2005, then concluded as follows:
[T]he Grandfather Rule or the second part of the SEC Rule applies only when
the 60-40 Filipino-foreign equity ownership is in doubt (i.e., in cases where the
joint venture corporation with Filipino and foreign stockholders with less than
60% Filipino stockholdings [or 59%] invests in another joint venture corporation
which is either 60-40% Filipino-alien or 59% less Filipino. Stated differently,
where the 60-40 Filipino-foreign equity ownership is not in doubt, the
Grandfather Rule will not apply.82 (Emphasis supplied)
The conclusion that the Grandfather Rule "applies only when the 60-40 Filipinoforeign equity ownership is in doubt"83 is borne by that opinions consideration
of an earlier DOJ opinion (i.e., DOJ Opinion No. 18, series of 1989). DOJ Opinion
No. 20, series of 2005s quotation of DOJ Opinion No. 18, series of 1989, reads:
x x x. It is quite clear x x x that the "Grandfather Rule", which was evolved and
applied by the SEC in several cases, will not apply in cases where the 60-40
Filipino-alien equity ownership in a particular natural resource corporation is
not in doubt.84
A full quotation of the same portion of DOJ Opinion No. 18, series of 1989,
reveals that the statement quoted above was made in a very specific context
(i.e., a prior DOJ opinion) that necessitated a clarification:
Opinion No. 84, s. 1988 cited in your query is not meant to overrule the
aforesaid SEC rule.85 There is nothing in said Opinion that precludes the
application of the said SEC rule in appropriate cases. It is quite clear from said
SEC rule that the Grandfather Rule, which was evolved and applied by the SEC
in several cases, will not apply in cases where the 60-40 Filipino-alien equity
ownership in a particular natural resource corporation is not in doubt. 86
DOJ Opinion No. 18, series of 1989, addressed the query made by the Chairman
of the Securities and Exchange Commission (SEC) "on whether or not it may
give due course to the application for incorporation of Far Southeast Gold
Resources Inc., (FSEGRI) to engage in mining activities in the Philippines in the
light of [DOJ] Opinion No. 84, s. 1988 applying the so-called Grandfather Rule
x x x."87
DOJ Opinion No. 84, series of 1988, applied the Grandfather Rule. In doing so, it
noted that the DOJ has been "informed that in the registration of corporations
with the [SEC], compliance with the sixty per centum requirement is being
monitored with the Grandfather Rule"88 and added that the Grandfather Rule
is "applied specifically in cases where the corporation has corporate
stockholders with alien stockholdings."89
Prior to applying the Grandfather Rule to the specific facts subject of the inquiry
it addressed, DOJ Opinion No. 84, series of 1988, first cited the SECs
application of the Grandfather Rule in a May 30, 1987 opinion rendered by its
Chair, Julio A. Sulit, Jr.90
This SEC opinion resolved the nationality of the investee corporation, Silahis
International Hotel (Silahis). 31% of Silahis capital stock was owned by Filipino
stockholders, while 69% was owned by Hotel Properties, Inc. (HPI). HPI, in turn,
was 47% Filipino-owned and 53% alien-owned. Per the Grandfather Rule, the
47% indirect Filipino stockholding in Silahis through HPI combined with the 31%
direct Filipino stockholding in Silahis translated to an aggregate 63.43% Filipino
stockholding in Silahis, in excess of the requisite 60% Filipino stockholding
required so as to be able to engage in a partly nationalized business.91
In noting that compliance with the 60% requirement has (thus far) been
monitored by SEC through the Grandfather Rule and that the Grandfather Rule
has been applied whenever a "corporation has corporate stockholders with
alien stockholdings,"92 DOJ Opinion No. 84, series of 1988, gave the impression
that the Grandfather Rule is all-encompassing. Hence, the clarification in DOJ
Opinion No. 18, series of 1989, that the Grandfather Rule "will not apply in
cases where the 60-40 Filipino-alien equity ownership x x x is not in
doubt."93 This clarification was affirmed in DOJ Opinion No. 20, series of 2005,
albeit rephrased positively as against DOJ Opinion No. 19, series of 1989s
negative syntax (i.e., "not in doubt"). Thus, DOJ Opinion No. 20, series of 2005,
declared, that the Grandfather Rule "applies only when the 60-40 Filipinoforeign equity ownership is in doubt."94
Following DOJ Opinion No. 18, series of 1989, the SEC in its May 30, 1990
opinion addressed to Mr. Johnny M. Araneta stated:
[T]the Commission En Banc, on the basis of the Opinion of the Department of
Justice No. 18, S. 1989 dated January 19, 1989 voted and decided to do away
with the strict application/computation of the so-called "Grandfather Rule" Re:
Far Southeast Gold Resources, Inc. (FSEGRI), and instead applied the so-called
"Control Test" method of determining corporate nationality. 95 (Emphasis
supplied)
The SECs May 30, 1990 opinion related to the ownership of shares in Jericho
Mining Corporation (Jericho) which was then wholly owned by Filipinos. Two (2)
corporations wanted to purchase a total of 60% of Jerichos authorized capital
stock: 40% was to be purchased by Gold Field Asia Limited (GFAL), an
Australian corporation, while 20% was to be purchased by Gold Field Philippines
Corporation (GFPC). GFPC was itself partly foreign-owned. It was 60% Filipinoowned, while 40% of its equity was owned by Circular Quay Holdings, an
Australian corporation.96
Applying the Control Test, the SECs May 30, 1990 opinion concluded that:
GFPC, which is 60% Filipino owned, is considered a Filipino company.
Consequently, its investment in Jericho is considered that of a Filipino. The 60%
Filipino equity requirement therefore would still be met by Jericho.
Considering that under the proposed set-up Jericho's capital stock will be
owned by 60% Filipino, it is still qualified to hold mining claims or rights or
enter into mineral production sharing agreements with the Government. 97
Some two years after DOJ Opinion No. 18, series of 2009, Republic Act No.
7042, otherwise known as the Foreign Investments Act (FIA), was enacted.
Section 3 (a) of the Foreign Investments Act defines a "Philippine National" as
follows:
SEC. 3. Definitions. - As used in this Act:
a) the term "Philippine National" shall mean a citizen of the Philippines or a
domestic partnership or association wholly owned by citizens of the Philippines;
or a corporation organized under the laws of the Philippines of which at least
sixty percent (60%) of the capital stock outstanding and entitled to vote is
owned and held by citizens of the Philippines or a corporation organized abroad
and registered as doing business in the Philippine under the Corporation Code
of which one hundred percent (100%) of the capital stock outstanding and
entitled to vote is wholly owned by Filipinos or a trustee of funds for pension or
other employee retirement or separation benefits, where the trustee is a
Philippine national and at least sixty percent (60%) of the fund will accrue to
the benefit of Philippine nationals: Provided, That where a corporation and its
non-Filipino stockholders own stocks in a Securities and Exchange Commission
(SEC) registered enterprise, at least sixty percent (60%) of the capital stock
outstanding and entitled to vote of each of both corporations must be owned
and held by citizens of the Philippines and at least sixty percent (60%) of the
members of the Board of Directors of each of both corporations must be
citizens of the Philippines, in order that the corporation shall be considered a
Philippine national; (as amended by R.A. 8179). (Emphasis supplied)
Thus, under the Foreign Investments Act, a "Philippine national" is any of the
following:
1. a citizen of the Philippines;
2. a domestic partnership or association wholly owned by citizens of the
Philippines;
3. a corporation organized under the laws of the Philippines, of which at
least 60% of the capital stock outstanding and entitled to vote is owned
and held by citizens of the Philippines;
4. a corporation organized abroad and registered as doing business in the
Philippines under the Corporation Code, of which 100% of the capital
stock outstanding and entitled to vote is wholly owned by Filipinos; or
5. a trustee of funds for pension or other employee retirement or
separation benefits, where the trustee is a Philippine national and at least
60% of the fund will accrue to the benefit of Philippine nationals.
The National Economic and Development Authority (NEDA) formulated the
implementing rules and regulations (IRR) of the Foreign Investments Act. Rule I,
Section 1 (b) of these IRR reads:
RULE I
DEFINITIONS
SECTION 1. DEFINITION OF TERMS. For the purposes of these Rules and
Regulations:
xxxx
b. Philippine national shall mean a citizen of the Philippines or a domestic
partnership or association wholly owned by the citizens of the Philippines; or a
corporation organized under the laws of the Philippines of which at least sixty
percent (60%) of the capital stock outstanding and entitled to vote is owned
and held by citizens of the Philippines; or a corporation organized abroad and
registered as doing business in the Philippines under the Corporation Code of
which 100% of the capital stock outstanding and entitled to vote is wholly
owned by Filipinos; or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine national and
at least sixty percent (60%) of the fund will accrue to the benefits of the
Philippine nationals; Provided, that where a corporation and its non-Filipino
stockholders own stocks in Securities and Exchange Commission (SEC)
registered enterprise, at least sixty percent (60%) of the capital stock
outstanding and entitled to vote of each of both corporations must be owned
and held by citizens of the Philippines and at least sixty percent (60%) of the
members of the Board of Directors of each of both corporation must be citizens
of the Philippines, in order that the corporation shall be considered a Philippine
national. The Control Test shall be applied for this purpose.
Compliance with the required Filipino ownership of a corporation shall be
determined on the basis of outstanding capital stock whether fully paid or not,
but only such stocks which are generally entitled to vote are considered.
For stocks to be deemed owned and held by Philippine citizens or Philippine
nationals, mere legal title is not enough to meet the required Filipino equity. Full
beneficial ownership of the stocks, coupled with appropriate voting rights is
essential. Thus, stocks, the voting rights of which have been assigned or
transferred to aliens cannot be considered held by Philippine citizens or
Philippine nationals.
Individuals or juridical entities not meeting the aforementioned qualifications
are considered as non-Philippine nationals. (Emphasis supplied)
The Foreign Investments Acts implementing rules and regulations are clear
and unequivocal in declaring that the Control Test shall be applied to determine
the nationality of a corporation in which another corporation owns stocks.
From around the time of the issuance of the SECs May 30, 1990 opinion
addressed to Mr. Johnny M. Araneta where the SEC stated that it "decided to do
away with the strict application/computation of the so-called Grandfather Rule
x x x, and instead appl[y] the so-called Control Test",98 the SEC "has
consistently applied the control test".99 This is a matter expressly
acknowledged by Justice Presbitero J. Velasco in his dissent in Gamboa v.
Teves:100
It is settled that when the activity or business of a corporation falls within any
of the partly nationalized provisions of the Constitution or a special law, the
"control test" must also be applied to determine the nationality of a corporation
on the basis of the nationality of the stockholders who control its equity.
The control test was laid down by the Department of Justice (DOJ) in its Opinion
No. 18 dated January 19, 1989. It determines the nationality of a corporation
with alien equity based on the percentage of capital owned by Filipino citizens.
It reads:
Shares belonging to corporations or partnerships at least 60% of the capital of
which is owned by Filipino citizens shall be considered as Philippine nationality,
but if the percentage of Filipino ownership in the corporation or partnership is
less than 60% only the number of shares corresponding to such percentage
shall be counted as of Philippine nationality.
In a catena of opinions, the SEC, "the government agency tasked with the
statutory duty to enforce the nationality requirement prescribed in Section 11,
Article XII of the Constitution on the ownership of public utilities," has
consistently applied the control test.
The FIA likewise adheres to the control test. This intent is evident in the May
21, 1991 deliberations of the Bicameral Conference Committee (Committees on
Economic Affairs of the Senate and House of Representatives), to wit:
CHAIRMAN TEVES. x x x. On definition of terms, Ronnie, would you like anything
to say here on the definition of terms of Philippine national?
HON. RONALDO B. ZAMORA. I think weve we have already agreed that we
are adopting here the control test. Wasnt that the result of the
CHAIRMAN PATERNO. No. I thought that at the last meeting, I have made it
clear that the Senate was not able to make a decision for or against the
grandfather rule and the control test, because we had gone into caucus and we
had voted but later on the agreement was rebutted and so we had to go back
to adopting the wording in the present law which is not clearly, by its language,
a control test formulation.
HON. ANGARA. Well, I dont know. Maybe I was absent, Ting, when that
happened but my recollection is that we went into caucus, we debated [the]
pros and cons of the control versus the grandfather rule and by actual vote the
control test bloc won. I dont know when subsequent rejection took place, but
anyway even if the we are adopting the present language of the law I think by
interpretation, administrative interpretation, while there may be some
differences at the beginning, the current interpretation of this is the control
test. It amounts to the control test.
CHAIRMAN TEVES. Thats what I understood, that we could manifest our
decision on the control test formula even if we adopt the wordings here by the
Senate version.
xxxx
CHAIRMAN PATERNO. The most we can do is to say that we have explained is
to say that although the House Panel wanted to adopt language which would
make clear that the control test is the guiding philosophy in the definition of [a]
Philippine national, we explained to them the situation in the Senate and said
that we would be was asked them to adopt the present wording of the law
cognizant of the fact that the present administrative interpretation is the
control test interpretation. But, you know, we cannot go beyond that.
MR. AZCUNA. May I be clarified as to that portion that was accepted by the
Committee. [sic]
MR. VILLEGAS. The portion accepted by the Committee is the deletion of the
phrase "voting stock or controlling interest."
This intent is even more apparent in the Implementing Rules and Regulations
(IRR) of the FIA. In defining a "Philippine national," Section 1(b) of the IRR of the
FIA categorically states that for the purposes of determining the nationality of a
corporation the control test should be applied.
The cardinal rule in the interpretation of laws is to ascertain and give effect to
the intention of the legislator. Therefore, the legislative intent to apply the
control test in the determination of nationality must be given
effect.101(Emphasis supplied)
The Foreign Investments Act and its implementing rules notwithstanding, the
Department of Justice, in DOJ Opinion No. 20, series of 2005, still posited that
the Grandfather Rule is still applicable, albeit "only when the 60-40 Filipinoforeign equity ownership is in doubt."102
Anchoring itself on DOJ Opinion No. 20, series of 2005, the SEC En Banc found
the Grandfather Rule applicable in its March 25, 2010 decision in Redmont
Consolidated Mines Corp. v. McArthur Mining Corp. (subject of the petition in
G.R. No. 205513).103 It asserted that there was "doubt" in the compliance with
the requisite 60-40 Filipino-foreign equity ownership:
Such doubt, we believe, exists in the instant case because the foreign investor,
MBMI, provided practically all the funds of the remaining appelleecorporations.104
On December 9, 2010, the SEC Office of the General Counsel (OGC) rendered
an opinion (SEC-OGC Opinion No. 10-31) effectively abandoning the Control
Test in favor of the Grandfather Rule:
We are aware of the Commission's prevailing policy of applying the so-called
"Control Test" in determining the extent of foreign equity in a corporation. Since
the 1990s, the Commission En Banc, on the basis of DOJ Opinion No. 18, series
of 1989 dated January 19, 1989, voted and decided to do away with the strict
application/computation of the "Grandfather Rule," and instead applied the
"Control Test" method of determining corporate nationality. x x x105
However, we now opine that the Control Test must not be applied in
determining if a corporation satisfies the Constitution's citizenship
requirements in certain areas of activities. x x x.106
Central to the SEC-OGCs reasoning is a supposed distinction between
Philippine "citizens" and Philippine "nationals". It emphasized that Article XII,
Section 2 of the 1987 Constitution used the term "citizen" (i.e., "corporations or
associations at least 60 per centum of whose capital is owned by such
citizens") and that this terminology was reiterated in Section 3 (aq) of the
Mining Act (i.e., "at least sixty per centum (60%) of the capital of which is
owned by citizens of the Philippines").107
It added that the enumeration of who the citizens of the Philippines are in
Article III, Section 1 of the 1987 Constitution is exclusive and that "only natural
persons are susceptible of citizenship".108
Finding support in this courts ruling in the 1966 case of Palting v. San Jose
Petroleum,109 the SEC-OGC asserted that it was necessary to look into the
"citizenship of the individual stockholders, i.e., natural persons of [an] investorcorporation in order to determine if the [c]onstitutional and statutory
restrictions are complied with."110 Thus, "if there are layers of intervening
corporations x x x we must delve into the citizenship of the individual
stockholders of each corporation."111 As the SEC-OGC emphasized, "[t]his is the
strict application of the Grandfather Rule."112
Between the Grandfather Rule and the Control Test, the SEC-OGC opined that
the framers of the 1987 Constitution intended to apply the Grandfather Rule
and that the Control Test ran counter to their intentions:
Indeed, the framers of the Constitution intended for the "Grandfather Rule" to
apply in case a 60%-40% Filipino-Foreign equity corporation invests in another
corporation engaging in an activity where the Constitution restricts foreign
participation.113
xxxx
The Control Test creates a legal fiction where if 60% of the shares of an
investing corporation are owned by Philippine citizens then all of the shares or
100% of that corporation's shares are considered Filipino owned for purposes of
determining the extent of foreign equity in an investee corporation engaging in
an activity restricted to Philippine citizens.114
The SEC-OGC reasoned that the invalidity of the Control Test rested on the
matter of citizenship:
In other words, Philippine citizenship is being unduly attributed to foreign
individuals who own the rest of the shares in a 60% Filipino equity corporation
investing in another corporation. Thus, applying the Control Test effectively
circumvents the Constitutional mandate that corporations engaging in certain
activities must be 60% owned by Filipino citizens. The words of the Constitution
clearly provide that we must look at the citizenship of the individual/natural
person who ultimately owns and controls the shares of stocks of the
corporation engaging in the nationalized/partly-nationalized activity. This is
what the framers of the constitution intended. In fact, the Mining Act strictly
adheres to the text of the Constitution and does not provide for the application
of the Control Test. Indeed, the application of the Control Test has no
constitutional or statutory basis. Its application is only by mere administrative
fiat.115 (Emphasis supplied)
This court must now put to rest the seeming tension between the Control Test
and the Grandfather Rule.
This courts 1952 ruling in Davis Winship v. Philippine Trust Co.116 cited its 1951
ruling in Filipinas Compania de Seguros v. Christern, Huenefeld and Co.,
Inc.117 and stated that "the nationality of a private corporation is determined by
the character or citizenship of its controlling stockholders."118
Filipinas Compania de Seguros, for its part, specifically used the term "Control
Test" (citing a United States Supreme Court decision119) in ruling that the
respondent in that case, Christern, Huenefeld and Co., Inc. the majority of the
stockholders of which were German subjects "became an enemy corporation
upon the outbreak of the war."120
Their pronouncements and clear reference to the Control Test notwithstanding,
Davis Winship and Filipinas Compania de Seguros do not pertain to nationalized
economic activities but rather to corporations deemed to be of a belligerent
nationality during a time of war.
In and of itself, this courts 1966 decision in Palting had nothing to do with the
Control Test and the Grandfather Rule. Palting, which was relied upon by SECOGC in Opinion No. 10-31, was promulgated in 1966, months before the 1967
SEC Rules and its bifurcated paragraph 7 were adopted.
Likewise, Palting was promulgated before Republic Act No. 5186, the
Investments Incentive Act, was adopted in 1967. The Investments Incentive Act
was adopted with the declared policy of "accelerat[ing] the sound development
of the national economy in consonance with the principles and objectives of
economic nationalism,"121 thereby effecting the (1935) Constitutions
nationalization objectives.
It was through the Investments Incentive Act that a definition of a "Philippine
national" was established.122 This definition has been practically reiterated in
Presidential Decree No. 1789, the Omnibus Investments Code of
1981;123 Executive Order No. 226, the Omnibus Investments Code of
1987;124 and the present Foreign Investments Act.125
the applicability of the Control Test and/or the Grandfather Rule. Moreover, the
2012 resolution acknowledges that:
[T]he opinions of the SEC en banc, as well as of the DOJ, interpreting the law
are neither conclusive nor controlling and thus, do not bind the Court. It is
hornbook doctrine that any interpretation of the law that administrative or
quasi-judicial agencies make is only preliminary, never conclusive on the Court.
The power to make a final interpretation of the law, in this case the term
"capital" in Section 11, Article XII of the 1987 Constitution, lies with this Court,
not with any other government entity.133
The Grandfather Rule is not
enshrined in the Constitution
In ruling that the Grandfather Rule must apply, the ponencia relies on the
deliberations of the 1986 Constitutional Commission. The ponencia states that
these discussions "shed light on how a citizenship of a corporation will be
determined."134
The ponencia cites an exchange between Commissioners Bernardo F. Villegas
and Jose N. Nolledo:135
MR. NOLLEDO: In Sections 3, 9 and 15, the Committee stated local or Filipino
equity and foreign equity; namely, 60-40 in Section 3, 60-40 in Section 9, and
2/3-1/3 in Section 15.
MR. VILLEGAS: That is right.
MR. NOLLEDO: In teaching law, we are always faced with this question: "Where
do we base the equity requirement, is it on the authorized capital stock, on the
subscribed capital stock, or on the paid-up capital stock of a corporation"? Will
the Committee please enlighten me on this?
MR. VILLEGAS: We have just had a long discussion with the members of the
team from the UP Law Center who provided us a draft. The phrase that is
contained here which we adopted from the UP draft is "60 percent of voting
stock."
MR. NOLLEDO: That must be based on the subscribed capital stock, because
unless declared delinquent, unpaid capital stock shall be entitled to vote.
MR. VILLEGAS: That is right.
MR. NOLLEDO: Thank you.
With respect to an investment by one corporation in another corporation, say, a
corporation with 60-40 percent equity invests in another corporation which is
permitted by the Corporation Code, does the Committee adopt the Grandfather
Rule?
In the final analysis, the records of the Constitutional Commission do not bind
this court. As Charles P. Curtis, Jr. said on the role of history in constitutional
exegesis:146
The intention of the framers of the Constitution, even assuming we could
discover what it was, when it is not adequately expressed in the Constitution,
that is to say, what they meant when they did not say it, surely that has no
binding force upon us. If we look behind or beyond what they set down in the
document, prying into what else they wrote and what they said, anything we
may find is only advisory. They may sit in at our councils. There is no reason
why we should eavesdrop on theirs.147 (Emphasis provided)
The Control Test is
established by congressional
dictum
The Foreign Investments Act addresses the gap. As this court has
acknowledged, "[t]he FIA is the basic law governing foreign investments in the
Philippines, irrespective of the nature of business and area of investment." 148
The Foreign Investments Act applies to nationalized economic activities under
the Constitution. Section 8 of the Foreign Investments Act149 provides that there
shall be two (2) component lists, A and B, with List A pertaining to "the areas of
activities reserved to Philippine nationals by mandate of the Constitution and
specific laws."
To reiterate, Section 3 (a) of the Foreign Investments Act defines a "Philippine
national" as including "a corporation organized under the laws of the
Philippines of which at least sixty per cent (60%) of the capital stock
outstanding and entitled to vote is owned and held by citizens of the
Philippines." This is a definition that is consistent with the first part of
paragraph 7 of the 1967 SEC Rules, which, as proffered by DOJ Opinion No. 20,
series of 2005, articulates the Control Test: "[s]hares belonging to corporations
or partnerships at least 60 per cent of the capital of which is owned by Filipino
citizens shall be considered as of Philippine nationality."
Moreover, the Foreign Investments Act admits of situations where a corporation
invests in another corporation by owning shares of the latter. Thus, the proviso
in Section 3 (a) of the Foreign Investments Act reads:
Provided, That where a corporation and its non-Filipino stockholders own stocks
in a Securities and Exchange Commission (SEC) registered enterprise, at least
sixty percent (60%) of the capital stock outstanding and entitled to vote of
each of both corporations must be owned and held by citizens of the
Philippines and at least sixty percent (60%) of the members of the Board of
Directors of each of both corporations must be citizens of the Philippines, in
order that the corporation shall be considered a Philippine national[.]
Supplementing this is the last sentence of the first paragraph of Rule I, Section
1 (b) of the implementing rules and regulations of the Foreign Investments Act:
"The Control Test shall be applied for this purpose."
As such, by congressional dictum, which is properly interpreted by
administrative rule making, the Control Test must govern in reckoning foreign
equity ownership in corporations engaged in nationalized economic activities. It
is through the Control Test that these corporations minimum qualification to
engage in nationalized economic activities adjudged.
DOJ Opinion No. 20, series of
2005, provides a qualifier, not
a mere example
The ponencia states that "this case calls for the application of the grandfather
rule since, x x x, doubt prevails and persists in the corporate ownership of
herein petitioners."150 This position is borne by the ponencias consideration of
DOJ Opinion No. 20, series of 2005, which states:
[T]he Grandfather Rule or the second part of the SEC Rule applies only when
the 60-40 Filipino-foreign equity ownership is in doubt (i.e., in cases where the
joint venture corporation with Filipino and foreign stockholders with less than
60% Filipino stockholdings [or 59%] invests in another joint venture corporation
which is either 60-40% Filipino-alien or 59% less Filipino. Stated differently,
where the 60-40 Filipino-foreign equity ownership is not in doubt, the
Grandfather Rule will not apply.151 (Emphasis supplied)
As is clear from the quoted portion of DOJ Opinion No. 20, series of 2005, the
phrase "in doubt" is followed by a qualifying clause: "i.e., in cases where the
joint venture corporation with Filipino and foreign stockholders with less than
60% Filipino stockholdings [or 59%] invests in another joint venture corporation
which is either 60-40% Filipino-alien or 59% less Filipino."
The ponencia states that this clause "only made an example of an instance
where doubt as to the ownership of a corporation exists"152 and is, thus, not
controlling.
This construction is erroneous. The abbreviation "i.e." is an acronym for the
Latin "id est", which translates to "that is".153 It is used not to cite an example
but "to add explanatory information or to state something in different
words."154 Whatever follows "i.e." is a paraphrasing or an alternative way of
stating the word/s that preceded it. The words succeeding "i.e.", therefore,
refer to the very conception of the words preceding "i.e.".
Had DOJ Opinion No. 20, series of 2005, intended to cite an example or to make
an illustration, it should have instead used "e.g." This stands for the Latin
"exempli gratia", which translates to "for example."155
Thus, all that DOJ Opinion No. 20, series of 2005, meant was that "doubt" as to
Filipino-foreign equity ownership exists when Filipino stockholdings is less than
sixty percent (60%). Indeed, there is no doubt where Filipino stockholdings
amount to at least sixty percent (60%).
Pursuant to Section 3 (a) of the Foreign Investments Act, a corporation is then
already deemed to be of Philippine nationality.
The Control Test serves the
rationale for nationalizing the
exploration, development,
and utilization of natural
resources
The application of the Control Test is by no means antithetical to the avowed
policy of a "national economy effectively controlled by Filipinos." 156 The Control
Test promotes this policy.
It is a matter of transitivity157 that if Filipino stockholders control a corporation
which, in turn, controls another corporation, then the Filipino stockholders
control the latter corporation, albeit indirectly or through the former
corporation.
An illustration is apt.
Suppose that a corporation, "C", is engaged in a nationalized activity requiring
that 60% of its capital be owned by Filipinos and that this 60% is owned by
another corporation, "B", while the remaining 40% is owned by stockholders,
collectively referred to as "Y". Y is composed entirely of foreign nationals. As for
B, 60% of its capital is owned by stockholders collectively referred to as "A",
while the remaining 40% is owned by stockholders collectively referred to as
"X". The collective A, is composed entirely of Philippine nationals, while the
collective X is composed entirely of foreign nationals. (N.b., in this illustration,
capital is understood to mean "shares of stock entitled to vote in the election of
directors," per the definition in Gamboa158). Thus:
Name
Nationali Number of
ty
Shares
Amount
Subscribed
Amount
Paid
5,997
P
P
5,997,000.00 1,667,000.
00
Canadia
n
3,996
P
P
3,996,000.00 1,116,000.
00
Higinio C. Mendoza,
Jr.
Filipino
P 1,000.00 P 1,000.00
Henry E. Fernandez
Filipino
P 1,000.00 P 1,000.00
Filipino
P 1,000.00 P 1,000.00
Michael T. Mason
America
n
P 1,000.00 P 1,000.00
Robert L. McCurdy
Canadia
n
P 1,000.00 P 1,000.00
Manuel A. Agcaoili
Filipino
P 1,000.00 P 1,000.00
Bayani H. Agabin
Filipino
P 1,000.00 P 1,000.00
Total
10,000
P
P
10,000,000.0 2,800,000.
0
00
Nationali
ty
Number of
Shares
Amount
Subscribed
Amount
Paid
>Palawan Alpha
South
Resource
Development Corp.
Filipino
6,596
P
6,596,000.00
P0
MBMI Resources,
Inc.
Canadia
n
3,396
P
3,396,000.00
P
2,796,000.
00
P 1,000.00
P 1,000.00
Fernando B.
Esguerra
Filipino
P 1,000.00
P 1,000.00
Henry E. Fernandez
Filipino
P 1,000.00
P 1,000.00
Lauro L. Salazar
Filipino
P 1,000.00
P 1,000.00
Michael T. Mason
America
n
P 1,000.00
P 1,000.00
Kenneth Cawkel
Canadia
n
P 1,000.00
P 1,000.00
Manuel A. Agcaoili
Filipino
P 1,000.00
P 1,000.00
Bayani H. Agabin
Filipino
P 1,000.00
P 1,000.00
Total
10,000
P
10,000,000.00
P
2,804,000.
00
Nationali
ty
Number of
Shares
Amount
Subscribed
Amount
Paid
Sara Marie
Mining, Inc.
Filipino
5,997 P 5,997,000.00
P
825,000.00
MBMI Resources,
Inc.
Canadia
n
3,998 P 3,998,000.00
P
1,878,174.
60
Lauro L. Salazar
Filipino
P 1,000.00
P 1,000.00
Fernando B.
Filipino
P 1,000.00
P 1,000.00
Esguerra
Manuel A.
Agcaoili
Filipino
P 1,000.00
P 1,000.00
Michael T. Mason
America
n
P 1,000.00
P 1,000.00
Kenneth Cawkel
Canadia
n
P 1,000.00
P 1,000.00
10,000
P
10,000,000.00
P
2,708,174.
60
Total
Sara Marie Mining, Inc. (SMMI) also has P 10 Million in capital stock, divided into
10,000 shares at P 1,000.00 per share, subscribed to as follows: 173
Name
Nationali Number of
ty
Shares
Amount
Subscribed
Amount
Paid
Filipino
6,663
P
6,663,000.00
Canadia
n
3,331
P
P
3,331,000.00 2,794,000.
00
Amanti Limson
Filipino
P 1,000.00 P 1,000.00
Fernando B. Esguerra
Filipino
P 1,000.00 P 1,000.00
Lauro Salazar
Filipino
P 1,000.00 P 1,000.00
Emmanuel G.
Hernando
Filipino
P 1,000.00 P 1,000.00
Michael T. Mason
America
n
P 1,000.00 P 1,000.00
Kenneth Cawkel
Canadia
n
P 1,000.00 P 1,000.00
10,000
P
P
10,000,000.0 2,809,900.
0
00
Total
P0
Nationali
ty
Number of
Shares
Amount
Subscribed
Amount
Paid
Madridejos Mining
Corp.
Filipino
5,997 P 5,997,000.00
P
825,000.00
MBMI Resources,
Inc.
Canadia
n
3,998 P 3,998,000.00
P
1,878,174.
60
Lauro L. Salazar
Filipino
P 1,000.00
P 1,000.00
Fernando B.
Esguerra
Filipino
P 1,000.00
P 1,000.00
P 1,000.00
P 1,000.00
Michael T. Mason
America
n
P 1,000.00
P 1,000.00
Kenneth Cawkel
Canadia
n
P 1,000.00
P 1,000.00
10,000
P
10,000,000.00
P
2,708,174.
60
Total
Nationali Number of
ty
Shares
Filipino
6,663
Amount
Subscribed
P
6,663,000.00
Amount
Paid
P0
Canadia
n
3,331
P
P
3,331,000.00 2,803,900.
00
Amanti Limson
Filipino
P 1,000.00 P 1,000.00
Fernando B. Esguerra
Filipino
P 1,000.00 P 1,000.00
Lauro Salazar
Filipino
P 1,000.00 P 1,000.00
Emmanuel G.
Hernando
Filipino
P 1,000.00 P 1,000.00
Michael T. Mason
America
n
P 1,000.00 P 1,000.00
Kenneth Cawkel
Canadia
n
P 1,000.00 P 1,000.00
10,000
P
P
10,000,000.0 2,809,900.
0
00
Total
regarding how 60% Filipino equity ownership is but a minimum and how the
Grandfather Rule may be applied to further examine actual Filipino ownership
could yield an entirely different conclusion. In fact, Redmont has asserted that
such a situation avails.
However, the contingencies of this case must restrain the courts consideration
of Redmonts claims. Redmont sought relief from a body without jurisdiction
the Panel of Arbitrators and has engaged in blatant forum shopping. It has
taken liberties with and ran amok of rules that define fair play. It is, therefore,
bound by its lapses and indiscretions and must bear the consequences of its
imprudence.
Redmont has been engaged in blatant forum shopping
The concept of and rationale against forum shopping was explained by this
court in Top Rate Construction and General Services, Inc. v. Paxton
Development Corporation:178
Forum shopping is committed by a party who institutes two or more suits in
different courts, either simultaneously or successively, in order to ask the
courts to rule on the same or related causes or to grant the same or
substantially the same reliefs, on the supposition that one or the other court
would make a favorable disposition or increase a party's chances of obtaining a
favorable decision or action. It is an act of malpractice for it trifles with the
courts, abuses their processes, degrades the administration of justice and adds
to the already congested court dockets. What is critical is the vexation brought
upon the courts and the litigants by a party who asks different courts to rule on
the same or related causes and grant the same or substantially the same
reliefs and in the process creates the possibility of conflicting decisions being
rendered by the different for a upon the same issues, regardless of whether the
court in which one of the suits was brought has no jurisdiction over the
action.179 (Emphasis supplied)
Equally settled is the test for determining forum shopping.1wphi1 As this court
explained in Yap v. Court of Appeals:180
To determine whether a party violated the rule against forum shopping, the
most important factor to ask is whether the elements of litis pendentia are
present, or whether a final judgment in one case will amount to res judicata in
another; otherwise stated, the test for determining forum shopping is whether
in the two (or more) cases pending, there is identity of parties, rights or causes
of action, and reliefs sought.181
Litis pendentia "refers to that situation wherein another action is pending
between the same parties for the same cause of action, such that the second
action becomes unnecessary and vexatious."182 It requires the concurrence of
three (3) requisites: (1) the identity of parties, or at least such as representing
the same interests in both actions; (2) the identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and (3) the identity of
the two cases such that judgment in one, regardless of which party is
successful, would amount to res judicata in the other. 183
In turn, prior judgment or res judicata bars a subsequent case when the
following requisites concur: (1) the former judgment is final; (2) it is rendered
by a court having jurisdiction over the subject matter and the parties; (3) it is a
judgment or an order on the merits; (4) there is between the first and the
second actions identity of parties, of subject matter, and of causes of
action.184
Redmont has taken at least four (4) distinct routes all seeking substantially the
same remedy. Stripped of their verbosity and legalese, Redmonts petitions
before the DENR Panel of Arbitrators, complaint before the Regional Trial Court,
complaint before the Securities and Exchange Commission, and petition before
the Office of the President all seek to prevent Narra, Tesoro, and McArthur as
well as their co-respondents and/or co-defendants from engaging in mining
operations. Moreover, these are all grounded on the same cause (i.e., that they
are disqualified from doing so because they fail to satisfy the requisite Filipino
equity ownership) and premised on the same facts or circumstances.
Redmont has created a situation where multiple tribunals must rule on the
extent to which the parties adverse to Redmont have met the requisite Filipino
equity ownership. It is certainly possible that conflicting decisions will be issued
by the various tribunals over which Redmonts various applications for relief
have been lodged. It is, thus, glaring that the very evil sought to be prevented
by the rule against forum shopping is being foisted by Redmont.
The consequences of willful forum shopping are clear. Rule 7, Section 5 of the
1997 Rules of Civil Procedure provides:
Section 5. Certification against forum shopping. The plaintiff or principal
party shall certify under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such other action or
claim is pending therein; (b) if there is such other pending action or claim, a
complete statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for
the dismissal of the case without prejudice, unless otherwise provided, upon
motion and after hearing. The submission of a false certification or noncompliance with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding administrative and
criminal actions. If the acts of the party or his counsel clearly constitute willful
and deliberate forum shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct contempt, as well as a cause
for administrative sanctions. (n)
It strains credulity to accept that Redmonts actions have not been willful. By
filing petitions with the DENR Panel of Arbitrators, Redmont started the .entire
series of events that have culminated in: first, the present petition; second, the
de-consolidated G.R. No. 205513; and third, at least one (1) more petition filed
with this court.186
Following the adverse decision of the Panel of Arbitrators, Narra, Tesoro, and
McArthur pursued appeals before the Mines Adjudication Board. This is all but
a logical consequence of the POA's adverse decision. While the appeal before
the MAB was pending, Redmont filed a complaint with the SEC and then filed a
complaint with the Regional Trial Court to enjoin the MAB from proceeding.
Redmont seems to have conveniently forgotten that it was its own actions that
gave rise to the proceedings before the MAB in the first place. Moreover, even
as all these were pending and in various stages of ap.peal and/or review,
Redmont still filed a petition before the Office of the President.
Consistent with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, the
actions subject of these consolidated petitions must be dismissed with
prejudice.
It should also not escape this court's attention that the vexatious actions of
Redmont would not have been possible were it not for the permissiveness of
Redmont's counsels. To reiterate, willful forum shopping leads not only to an
action's dismissal with prejudice but "shall [also] constitute direct contempt,
[and is] a cause for administrative sanctions."187 Redmont's counsels should be
reminded that the parameters established by judicial (and even administrative)
proceedings, such as the rule against forum shopping, are not to be trifled with.
ACCORDINGLY, I vote to GRANT the petition for review on certiorari subject of
G.R. No. 195580. The assailed decision dated October 1, 2010 and the assailed
resolution dated February 15, 2011 of the Court of Appeals, Seventh Division, in
CA-G.R. SP No. 109703, which reversed and set aside the September 10, 2008
and July 1, 2009 orders of the Mines Adjudication Board (MAB) should be SET
ASIDE AND DECLARED NULL AND VOID. The September 10, 2008 order of the
Mines Adjudication Board dismissing the petitions filed by Redmont
Consolidated Mines with the DENR Panel of Arbitrators must be REINSTATED.
MARVIC MARIO VICTOR F. LEONEN
Associate Justice
FIRST DIVISION
reconsideration.
Thus, on June 15, 2011, respondent moved for the issuance of a writ of
execution, to which no comment/opposition was filed by petitioner despite the
RTCs directive therefor. In an Order37 dated September 12, 2011, the RTC
granted respondents motion.38cralawred
Petitioner moved to quash39 the writ of execution, positing that respondent was
not entitled to its monetary claims. It also claimed that the issuance of said writ
was premature since the RTC should have first resolved its May 19, 2010
Motion for Reconsideration and June 1, 2010 Manifestation and Motion, and not
merely noted them, thereby violating its right to due process.40cralawred
The RTC Ruling
In an Order41 dated July 9, 2012, the RTC denied petitioners motion to quash.
It found no merit in petitioners contention that it was denied due process,
ruling that its May 19, 2010 Motion for Reconsideration was a prohibited
pleading under Section 17.2,42 Rule 17 of the CIAC Rules. It explained that the
available remedy to assail an arbitral award was to file a motion for correction
of final award pursuant to Section 17.143 of the CIAC Rules, and not a motion for
reconsideration of the said award itself.44 On the other hand, the RTC found
petitioners June 1, 2010 Manifestation and Motion seeking the resolution of its
May 19, 2010 Motion for Reconsideration to be defective for petitioners failure
to observe the three-day notice rule.45 Having then failed to avail of the
remedies attendant to an order of confirmation, the Arbitral Award had become
final and executory.46cralawred
On July 12, 2012, petitioner received the RTCs Order dated July 9, 2012
denying its motion to quash.47cralawred
Dissatisfied, it filed on September 10, 2012 a petition for certiorari48 before
the CA, docketed as CA-G.R. SP No. 126458, averring in the main that the RTC
acted with grave abuse of discretion in confirming and ordering the execution
of the Arbitral Award.chanroblesvirtuallawlibrary
The CA Ruling
In a Decision49 dated March 26, 2014, the CA dismissed the certiorari petition
on two (2) grounds, namely: (a) the petition essentially assailed the merits
of the Arbitral Award which is prohibited under Rule 19.750 of the Special
ADR Rules;51 and (b) the petition was filed out of time, having been filed way
beyond 15 days from notice of the RTCs July 9, 2012 Order, in violation of Rule
19.2852 in relation to Rule 19.853 of said Rules which provide that a special civil
action for certiorari must be filed before the CA within 15 days from notice
of the judgment, order, or resolution sought to be annulled or set
aside (or until July 27, 2012).
ADR Rules have either been included and incorporated in these Special ADR
Rules orspecifically referred to herein.79 Besides, Rule 1.13 thereof provides
that [i]n situations where no specific rule is provided under the Special ADR
Rules, the court shall resolve such matter summarily and be guided by the
spirit and intent of the Special ADR Rules and the ADR Laws.
As above-mentioned, the petition for certiorari permitted under the Special ADR
Rules must be filed within a period of fifteen (15) days from notice of the
judgment, order or resolution sought to be annulled or set aside.80 Hence, since
petitioners filing of its certiorari petition in CA-G.R. SP No. 126458 was made
nearly two months after its receipt of the RTCs Order dated July 9, 2012, or on
September 10, 2012,81 said petition was clearly dismissible.82cralawred
III.
Discounting the above-discussed procedural considerations, the Court still finds
that the certioraripetition had no merit.
Indeed, petitioner cannot be said to have been denied due process as the
records undeniably show that it was accorded ample opportunity to ventilate its
position. There was clearly nothing out of line when the Arbitral Tribunal denied
petitioners motions for extension to file its submissions having failed to show a
valid reason to justify the same or in rendering the Arbitral Award sans
petitioners draft decision which was filed only on the day of the scheduled
promulgation of final award on May 7, 2010. 83 The touchstone of due process is
basically the opportunity to be heard. Having been given such opportunity,
petitioner should only blame itself for its own procedural blunder.
On this score, the petition for certiorari in CA-G.R. SP No. 126458 was likewise
properly dismissed.chanroblesvirtuallawlibrary
IV.
Nevertheless, while the Court sanctions the dismissal by the CA of the petition
for certiorari due to procedural infirmities, there is a need to explicate the
matter of execution of the confirmed Arbitral Award against the petitioner, a
government agency, in the light of Presidential Decree No. (PD)
144584otherwise known as the Government Auditing Code of the Philippines.
Section 26 of PD 1445 expressly provides that execution of money judgment
against the Government or any of its subdivisions, agencies and
instrumentalities is within the primary jurisdiction of the COA, to
wit:chanRoblesvirtualLawlibrary
SEC. 26. General jurisdiction. The authority and powers of the
Commission shall extend to and comprehend all matters relating
to auditing procedures, systems and controls, the keeping of the general
accounts of the Government, the preservation of vouchers pertaining thereto
for a period of ten years, the examination and inspection of the books,
records, and papers relating to those accounts; and the audit and
settlement of the accounts of all persons respecting funds or property
received or held by them in an accountable capacity, as well as the
examination, audit, and settlement of all debts and claims of any sort
due from or owing to the Government or any of its subdivisions,
agencies and instrumentalities. The said jurisdiction extends to all
government-owned or controlled corporations, including their subsidiaries, and
other self-governing boards, commissions, or agencies of the Government, and
as herein prescribed, including non-governmental entities subsidized by the
government, those funded by donation through the government, those required
to pay levies or government share, and those for which the government has put
up a counterpart fund or those partly funded by the government. (Emphases
supplied)
cralawlawlibrary
From the foregoing, the settlement of respondents money claim is still subject
to the primary jurisdiction of the COA despite finality of the confirmed arbitral
award by the RTC pursuant to the Special ADR Rules.85 Hence, the respondent
has to first seek the approval of the COA of their monetary claim. This appears
to have been complied with by the latter when it filed a Petition for
Enforcement and Payment of Final and Executory Arbitral Award 86 before the
COA. Accordingly, it is now the COA which has the authority to rule on this
latter petition.
WHEREFORE, the petition is DENIED. The Decision dated March 26, 2014 of
the Court of Appeals in CA-G.R. SP No. 126458 which dismissed the petition
for certiorari filed by petitioner the Department of Environment and Natural
Resources is hereby AFFIRMED.
SO ORDERED.cralawlawlibrary
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Perez,
JJ., concur.
EN BANC
G.R. No. 180771, April 21, 2015
RESIDENT MARINE MAMMALS OF THE PROTECTED SEASCAPE TANON
STRAIT, E.G., TOOTHED WHALES, DOLPHINS, PORPOISES, AND OTHER
CETACEAN SPECIES, JOINED IN AND REPRESENTED HEREIN BY HUMAN
BEINGS GLORIA ESTENZO RAMOS AND ROSE-LIZA EISMA-OSORIO, IN
THEIR CAPACITY AS LEGAL GUARDIANS OF THE LESSER LIFE-FORMS
AND AS RESPONSIBLE STEWARDS OF GOD'S
CREATIONS, Petitioners, v. SECRETARY ANGELO REYES, IN HIS CAPACITY
AS SECRETARY OF THE DEPARTMENT OF ENERGY (DOE), SECRETARY
JOSE L. ATIENZA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT
OF ENVIRONMENT AND NATURAL RESOURCES (DENR), LEONARDO R.
SIBBALUCA, DENR REGIONAL DIRECTOR-REGION VII AND IN HIS
CAPACITY AS CHAIRPERSON OF THE TANON STRAIT PROTECTED
SEASCAPE MANAGEMENT BOARD, BUREAU OF FISHERIES AND AQUATIC
RESOURCES (BFAR), DIRECTOR MALCOLM I. SARMIENTO, JR., BFAR
REGIONAL DIRECTOR FOR REGION VII ANDRES M. BOJOS, JAPAN
PETROLEUM EXPLORATION CO., LTD. (JAPEX), AS REPRESENTED BY ITS
PHILIPPINE AGENT, SUPPLY OILFIELD SERVICES, INC., Respondents.
G.R. No. 181527
CENTRAL VISAYAS FISHERFOLK DEVELOPMENT CENTER (FIDEC),
CERILO D. ENGARCIAL, RAMON YANONG, FRANCISCO LABID, IN THEIR
PERSONAL CAPACITY AND AS REPRESENTATIVES OF THE SUBSISTENCE
FISHERFOLKS OF THE MUNICIPALITIES OF ALOGUINSAN AND
PINAMUNGAJAN, CEBU, AND THEIR FAMILIES, AND THE PRESENT AND
FUTURE GENERATIONS OF FILIPINOS WHOSE RIGHTS ARE SIMILARLY
AFFECTED, Petitioners,v. SECRETARY ANGELO REYES, IN HIS CAPACITY
AS SECRETARY OF THE DEPARTMENT OF ENERGY (DOE), JOSE L.
ATIENZA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES (DENR), LEONARDO R.
SIBBALUCA, IN HIS CAPACITY AS DENR REGIONAL DIRECTOR-REGION
VII AND AS CHAIRPERSON OF THE TAON STRAIT PROTECTED
SEASCAPE MANAGEMENT BOARD, ALAN ARRANGUEZ, IN HIS CAPACITY
AS DIRECTOR ENVIRONMENTAL MANAGEMENT BUREAU-REGION VII,
DOE REGIONAL DIRECTOR FOR REGION VIII1 ANTONIO LABIOS, JAPAN
PETROLEUM EXPLORATION CO., LTD. (JAPEX), AS REPRESENTED BY ITS
PHILIPPINE AGENT, SUPPLY OILFIELD SERVICES, INC.,Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before Us are two consolidated Petitions filed under Rule 65 of the 1997 Rules
of Court, concerningService Contract No. 46 (SC-46), which allowed the
exploration, development, and exploitation of petroleum resources within Taon
Strait, a narrow passage of water situated between the islands of Negros and
Cebu.2
The Petition docketed as G.R. No. 180771 is an original Petition
for Certiorari, Mandamus, and Injunction, which seeks to enjoin respondents
from implementing SC-46 and to have it nullified for willful and gross violation
of the 1987 Constitution and certain international and municipal laws.3
Likewise, the Petition docketed as G.R. No. 181527 is an original Petition
for Certiorari, Prohibition, andMandamus, which seeks to nullify the
Environmental Compliance Certificate (ECC) issued by the Environmental
Management Bureau (EMB) of the Department of Environment and Natural
Resources (DENR), Region VII in connection with SC-46; to prohibit respondents
from implementing SC-46; and to compel public respondents to provide
petitioners access to the pertinent documents involving the Taon Strait Oil
Exploration Project.4
ANTECEDENT FACTS AND PROCEEDINGS
Petitioners in G.R. No. 180771, collectively referred to as the "Resident Marine
Mammals" in the petition, are the toothed whales, dolphins, porpoises, and
other cetacean species, which inhabit the waters in and around the Taon
Strait. They are joined by Gloria Estenzo Ramos (Ramos) and Rose-Liza EismaOsorio (Eisma-Osorio) as their legal guardians and as friends (to be collectively
known as "the Stewards") who allegedly empathize with, and seek the
protection of, the aforementioned marine species. Also impleaded as an
unwilling co-petitioner is former President Gloria Macapagal-Arroyo, for her
express declaration and undertaking in the ASEAN Charter to protect the Taon
Strait, among others.5
Petitioners in G.R. No. 181527 are the Central Visayas Fisherfolk Development
Center (FIDEC), a non-stock, non-profit, non-governmental organization,
established for the welfare of the marginal fisherfolk in Region VII; and Cerilo D.
Engarcial (Engarcial), Ramon Yanong (Yanong) and Francisco Labid (Labid), in
their personal capacities and as representatives of the subsistence fisherfolk of
the municipalities of Aloguinsan and Pinamungajan, Cebu.
Named as respondents in both petitions are the late Angelo T. Reyes, as then
Secretary of the Department of Energy (DOE); Jose L. Atienza, as then
Secretary of the DENR; Leonardo R. Sibbaluca, as then DENR-Regional Director
for Region VII and Chairman of the Taon Strait Protected Seascape
Management Board; Japan Petroleum Exploration Co., Ltd. (JAPEX), a company
organized and existing under the laws of Japan with a Philippine branch office;
and Supply Oilfield Services, Inc. (SOS), as the alleged Philippine agent of
JAPEX.
resident agent was clearly identified. SOS claimed that it had acted as a mere
logistics contractor for JAPEX in its oil and gas exploration activities in the
Philippines.
Petitioners Resident Marine Mammals and Stewards opposed SOS's motion on
the ground that it was premature, it was pro-forma, and it was patently dilatory.
They claimed that SOS admitted that "it is in law a (sic) privy to JAPEX" since it
did the drilling and other exploration activities in Taon Strait under the
instructions of its principal, JAPEX. They argued that it would be premature to
drop SOS as a party as JAPEX had not yet been joined in the case; and that it
was "convenient" for SOS to ask the Court to simply drop its name from the
parties when what it should have done was to either notify or ask JAPEX to join
it in its motion to enable proper substitution. At this juncture, petitioners
Resident Marine Mammals and Stewards also asked the Court to implead JAPEX
Philippines as a corespondent or as a substitute for its parent company,
JAPEX.19
On April 8, 2008, the Court resolved to consolidate G.R. No. 180771 and G.R.
No. 181527.
On May 26, 2008, the FIDEC manifested20 that they were adopting in toto the
Opposition to Strike with Motion to Implead filed by petitioners Resident Marine
Mammals and Stewards in G.R. No. 180771.
On June 19, 2008, public respondents filed their Manifestation21 that they were
not objecting to SOS's Motion to Strike as it was not JAPEX's resident agent.
JAPEX during all this time, did not file any comment at all.
Thus, on February 7, 2012, this Court, in an effort to ensure that all the parties
were given ample chance and opportunity to answer the issues herein, issued a
Resolution directing the Court's process servicing unit to again serve the
parties with a copy of the September 23, 2008 Resolution of the Court, which
gave due course to the petitions in G.R. Nos. 180771 and 181527, and which
required the parties to submit their respective memoranda. The February 7,
2012 Resolution22 reads as follows:chanroblesvirtuallawlibrary
G.R. No. 180771 (Resident Marine Mammals of the Protected Seascape Taon
Strait,e.g., Toothed Whales, Dolphins, Porpoises and Other Cetacean Species, et
al. vs. Hon. Angelo Reyes, in his capacity as Secretary of the Department of
Energy, et al.) and G.R. No. 181527 (Central Visayas Fisherfolk Development
Center, et al. vs. Hon. Angelo Reyes, et al.). - The Court Resolved to direct the
Process Servicing Unit to RE-SEND the resolution dated September 23, 2008 to
the following parties and counsel, together with this
resolution:chanroblesvirtuallawlibrary
Atty. Aristeo
20th Floor Pearlbank Centre
O. Cario
Counsel for
Respondent
146 Valero Street
Supply
Oilfield
Salcedo Village, Makati City
Services, Inc.
JAPEX
Philippines
Ltd.
JAPEX
Philippines
19th Floor Pearlbank Centre
Ltd.
c/o Atty. Maria
146 Valero Street
Farah Z.G.
NicolasSalcedo Village, Makati City
Suchianco
Atty. Maria
Suite 2404 Discovery Centre
Farah Z.G.
Nicolas25 ADB Avenue
Suchianco
Resident Agent
Ortigas Center, Pasig City
of JAPEX
Philippines Ltd.
This Resolution was personally served to the above parties, at the above
addresses on February 23, 2012. On March 20, 2012, JAPEX Philippines, Ltd.
(JAPEX PH), by way of special appearance, filed a Motion to Admit 23 its Motion
for Clarification,24 wherein JAPEX PH requested to be clarified as to whether or
not it should deem the February 7, 2012 Resolution as this Court's Order of its
inclusion in the case, as it has not been impleaded. It also alleged that JAPEX
PH had already stopped exploration activities in the Taon Strait way back in
2008, rendering this case moot.
On March 22, 2012, JAPEX PH, also by special appearance, filed a Motion for
Extension of Time25 to file its Memorandum. It stated that since it received the
February 7, 2012 Resolution on February 23, 2012, it had until March 22, 2012
to file its Memorandum. JAPEX PH then asked for an additional thirty days,
supposedly to give this Court some time to consider its Motion for Clarification.
On April 24, 2012, this Court issued a Resolution26 granting JAPEX PH's Motion
to Admit its Motion for Clarification. This Court, addressing JAPEX PH's Motion
for Clarification, held:chanroblesvirtuallawlibrary
With regard to its Motion for Clarification (By Special Appearance) dated March
19, 2012, this Court considers JAPEX Philippines. Ltd. as a real party-in-interest
in these cases. Under Section 2, Rule 3 of the 1997 Rules of Court, a real partyin-interest is the party who stands to be benefited or injured by the judgment in
the suit, or the party entitled to the avails of the suit. Contrary to JAPEX
Philippines, Ltd.'s allegation that it is a completely distinct corporation, which
should not be confused with JAPEX Company, Ltd., JAPEX Philippines, Ltd. is a
mere branch office, established by JAPEX Company, Ltd. for the purpose of
carrying out the latter's business transactions here in the Philippines. Thus,
JAPEX Philippines, Ltd., has no separate personality from its mother foreign
corporation, the party impleaded in this case.
Moreover, Section 128 of the Corporation Code provides for the responsibilities
and duties of a resident agent of a foreign
corporation:chanroblesvirtuallawlibrary
SECTION 128. Resident agent; service of process. The Securities and
Exchange Commission shall require as a condition precedent to the issuance of
the license to transact business in the Philippines by any foreign corporation
that such corporation file with the Securities and Exchange Commission a
written power of attorney designating some person who must be a resident of
the Philippines, on whom any summons and other legal processes may be
served in all actions or other legal proceedings against such corporation, and
consenting that service upon such resident agent shall be admitted and held as
valid as if served upon the duly authorized officers of the foreign corporation at
its home office. Any such foreign corporation shall likewise execute and file with
the Securities and Exchange Commission an agreement or stipulation,
executed by the proper authorities of said corporation, in form and substance
as follows:
"The (name of foreign corporation) does hereby stipulate and agree, in
consideration of its being granted by the Securities and Exchange Commission
a license to transact business in the Philippines, that if at any time said
corporation shall cease to transact business in the Philippines, or shall be
without any resident agent in the Philippines on whom any summons or other
legal processes may be served, then in any action or proceeding arising out of
any business or transaction which occurred in the Philippines, service of any
summons or other legal process may be made upon the Securities and
Exchange Commission and that such service shall have the same force and
effect as if made upon the duly-authorized officers of the corporation at its
home office."
Whenever such service of summons or other process shall be made upon the
Securities and Exchange Commission, the Commission shall, within ten (10)
days thereafter, transmit by mail a copy of such summons or other legal
process to the corporation at its home or principal office. The sending of such
copy by the Commission shall be a necessary part of and shall complete such
service. All expenses incurred by the Commission for such service shall be paid
in advance by the party at whose instance the service is made.
In case of a change of address of the resident agent, it shall be his or its duty to
immediately notify in writing the Securities and Exchange Commission of the
new address.
It is clear from the foregoing provision that the function of a resident agent is to
receive summons or legal processes that may be served in all actions or other
legal proceedings against the foreign corporation. These cases have been
prosecuted in the name of JAPEX Company, Ltd., and JAPEX Philippines Ltd., as
its branch office and resident agent, had been receiving the various resolutions
project in Taflon Strait, only copies of the PAMB-Taon Strait Resolution and the
ECC were given to the fisherfolk.35
Public Respondents' Counter-Allegations
Public respondents, through the Solicitor General, contend that petitioners
Resident Marine Mammals and Stewards have no legal standing to file the
present petition; that SC-46 does not violate the 1987 Constitution and the
various laws cited in the petitions; that the ECC was issued in accordance with
existing laws and regulations; that public respondents may not be compelled
by mandamus to furnish petitioners copies of all documents relating to SC-46;
and that all the petitioners failed to show that they are entitled to injunctive
relief. They further contend that the issues raised in these petitions have been
rendered moot and academic by the fact that SC-46 had been mutually
terminated by the parties thereto effective June 21, 2008. 36
ISSUES
The following are the issues posited by petitioners Resident Marine Mammals
and Stewards in G.R. No. 180771:chanroblesvirtuallawlibrary
I.
II.
III.
IV.
Meanwhile, in G.R. No. 181527, petitioner FIDEC presented the following issues
for our consideration:chanroblesvirtuallawlibrary
I.
II.
III.
IV.
V.
In these consolidated petitions, this Court has determined that the various
issues raised by the petitioners may be condensed into two primary issues:
I.
II.
At the outset, this Court makes clear that the '"moot and academic principle' is
not a magical formula that can automatically dissuade the courts in resolving a
case." Courts have decided cases otherwise moot and academic under the
following exceptions:
1) There is a grave violation of the Constitution;
2) The exceptional character of the situation and the paramount public interest
is involved;
3) The constitutional issue raised requires formulation of controlling principles
to guide the bench, the bar, and the public; and
4) The case is capable of repetition yet evading review. 39
In this case, despite the termination of SC-46, this Court deems it necessary to
resolve these consolidated petitions as almost all of the foregoing exceptions
are present in this case. Both petitioners allege that SC-46 is violative of the
Constitution, the environmental and livelihood issues raised undoubtedly affect
the public's interest, and the respondents' contested actions are capable of
repetition.chanRoblesvirtualLawlibrary
Procedural Issues
Locus Standi of Petitioners Resident Marine Mammals and Stewards
The Resident Marine Mammals, through the Stewards, "claim" that they have
the legal standing to file this action since they stand to be benefited or injured
by the judgment in this suit.40 Citing Oposa v. Factoran, Jr.,41 they also assert
their right to sue for the faithful performance of international and municipal
environmental laws created in their favor and for their benefit. In this regard,
they propound that they have the right to demand that they be accorded the
benefits granted to them in multilateral international instruments that the
Philippine Government had signed, under the concept of stipulationpour
autrui.42
For their part, the Stewards contend that there should be no question of their
right to represent the Resident Marine Mammals as they have stakes in the
case as forerunners of a campaign to build awareness among the affected
residents of Taon Strait and as stewards of the environment since the primary
steward, the Government, had failed in its duty to protect the environment
pursuant to the public trust doctrine.43
Petitioners Resident Marine Mammals and Stewards also aver that this Court
may lower the benchmark in locus standi as an exercise of epistolary
jurisdiction.44
In opposition, public respondents argue that the Resident Marine Mammals
have no standing because Section 1, Rule 3 of the Rules of Court requires
parties to an action to be either natural or juridical
persons, viz.:chanroblesvirtuallawlibrary
Section 1. Who may be parties; plaintiff and defendant. - Only natural or
juridical persons, or entities authorized by law may be parties in a civil action.
The term "plaintiff may refer to the claiming party, the counter-claimant, the
cross-claimant, or the third (fourth, etc.)-party plaintiff. The term "defendant"
may refer to the original defending party, the defendant in a counterclaim, the
cross-defendant, or the third (fourth, etc.)-party defendant.
The public respondents also contest the applicability of Oposa, pointing out
that the petitioners therein were all natural persons, albeit some of them were
still unborn.45
As regards the Stewards, the public respondents likewise challenge their claim
of legal standing on the ground that they are representing animals, which
cannot be parties to an action. Moreover, the public respondents argue that the
Stewards are not the real parties-in-interest for their failure to show how they
stand to be benefited or injured by the decision in this case.46
Invoking the alter ego principle in political law, the public respondents claim
that absent any proof that former President Arroyo had disapproved of their
acts in entering into and implementing SC-46, such acts remain to be her
own.47
The public respondents contend that since petitioners Resident Marine
Mammals and Stewards' petition was not brought in the name of a real party-
Sec. 2. Parties in interest. - A real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit. Unless otherwise authorized by law or these Rules, every
action must be prosecuted or defended in the name of the real party in
interest.
Sec. 3. Representatives as parties. - Where the action is allowed to be
prosecuted or defended by a representative or someone acting in a fiduciary
capacity, the beneficiary shall be included in the title of the case and shall be
deemed to be the real party in interest. A representative may be a trustee of an
express trust, a guardian, an executor or administrator, or a party authorized
by law or these Rules. An agent acting in his own name and for the benefit of
an undisclosed principal may sue or be sued without joining the principal
except when the contract involves things belonging to the principal.
It had been suggested by animal rights advocates and environmentalists that
not only natural and juridical persons should be given legal standing because of
the difficulty for persons, who cannot show that they by themselves are real
parties-in-interests, to bring actions in representation of these animals or
inanimate objects. For this reason, many environmental cases have been
dismissed for failure of the petitioner to show that he/she would be directly
injured or affected by the outcome of the case. However, in our
jurisdiction, locus standi in environmental cases has been given a more
liberalized approach. While developments in Philippine legal theory and
jurisprudence have not progressed as far as Justice Douglas's paradigm of legal
standing for inanimate objects, the current trend moves towards simplification
of procedures and facilitating court access in environmental cases.
Recently, the Court passed the landmark Rules of Procedure for
Environmental Cases,51 which allow for a "citizen suit," and permit any
Filipino citizen to file an action before our courts for violations of our
environmental laws:chanroblesvirtuallawlibrary
SEC. 5. Citizen suit. - Any Filipino citizen in representation of others,
including minors or generations yet unborn, may file an action to
enforce rights or obligations under environmental laws. Upon the filing
of a citizen suit, the court shall issue an order which shall contain a brief
description of the cause of action and the reliefs prayed for, requiring all
interested parties to manifest their interest to intervene in the case within
fifteen (15) days from notice thereof. The plaintiff may publish the order once in
a newspaper of a general circulation in the Philippines or furnish all affected
barangays copies of said order.
Citizen suits filed under R.A. No. 8749 and R.A. No. 9003 shall be governed by
their respective provisions.52 (Emphasis ours.)
Explaining the rationale for this rule, the Court, in the Annotations to the Rules
of Procedure for Environmental Cases, commented:chanroblesvirtuallawlibrary
Citizen suit. To further encourage the protection of the environment, the Rules
enable litigants enforcing environmental rights to file their cases as citizen
suits. This provision liberalizes standing for all cases filed enforcing
environmental laws and collapses the traditional rule on personal and direct
NIPAS75 area.
2. President was not the signatory to SC-46 and the same was not
submitted to Congress
While the Court finds that Presidential Decree No. 87 is sufficient to satisfy the
requirement of a general law, the absence of the two other conditions, that the
President be a signatory to SC-46, and that Congress be notified of such
contract, renders it null and void.
As SC-46 was executed in 2004, its terms should have conformed not only to
the provisions of Presidential Decree No. 87, but also to those of the 1987
Constitution. The Civil Code provides:chanroblesvirtuallawlibrary
ARTICLE 1306. The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy. (Italics
ours.)
In Heirs of San Miguel v. Court of Appeals,76 this Court held
that:chanroblesvirtuallawlibrary
It is basic that the law is deemed written into every contract. Although a
contract is the law between the parties, the provisions of positive law which
regulate contracts are deemed written therein and shall limit and govern the
relations between the parties, x x x. (Citations omitted.)
Paragraph 4, Section 2, Article XII of the 1987 Constitution requires that the
President himself enter into any service contract for the exploration of
petroleum. SC-46 appeared to have been entered into and signed only by the
DOE through its then Secretary, Vicente S. Perez, Jr., contrary to the said
constitutional requirement. Moreover, public respondents have neither shown
nor alleged that Congress was subsequently notified of the execution of such
contract.
Public respondents' implied argument that based on the "alter ego principle,"
their acts are also that of then President Macapagal-Arroyo's, cannot apply in
this case. In Joson v. Torres,77 we explained the concept of the alter ego
principle or the doctrine of qualified political agency and its limit in this
wise:chanroblesvirtuallawlibrary
Under this doctrine, which recognizes the establishment of a single executive,
all executive and administrative organizations are adjuncts of the Executive
Department, the heads of the various executive departments are assistants
and agents of the Chief Executive, and, except in cases where the Chief
Executive is required by the Constitution or law to act in person or the
exigencies of the situation demand that he act personally, the
multifarious executive and administrative functions of the Chief Executive are
performed by and through the executive departments, and the acts of the
Secretaries of such departments, performed and promulgated in the regular
course of business, are, unless disapproved or reprobated by the Chief
Executive presumptively the acts of the Chief Executive. (Emphasis ours,
citation omitted.)
The public respondents invoke the rules on statutory construction and argue
that Section 14 of the NIPAS Act is a more particular provision and cannot be
deemed to have been repealed by the more general prohibition in Section 27 of
Republic Act No. 9147. They aver that Section 14, under which SC-46 falls,
should instead be regarded as an exemption to Section 27.84
Addressing the claim of petitioners in G.R. No. 180771 that there was a
violation of Section 27 of Republic Act No. 9147, the public respondents assert
that what the section prohibits is the exploration of minerals, which as defined
in the Philippine Mining Act of 1995, exclude energy materials such as coal,
petroleum, natural gas, radioactive materials and geothermal energy. Thus,
since SC-46 involves oil and gas exploration, Section 27 does not apply. 85
The public respondents defend the validity of SC-46 and insist that it does not
grant exclusive fishing rights to JAPEX; hence, it does not violate the rule on
preferential use of municipal waters. Moreover, they allege that JAPEX has not
banned fishing in the project area, contrary to the FIDEC's claim. The public
respondents also contest the attribution of the declining fish catch to the
seismic surveys and aver that the allegation is unfounded. They claim that
according to the Bureau of Fisheries and Aquatic Resources' fish catch data, the
reduced fish catch started in the 1970s due to destructive fishing practices.86
Ruling of the Court
On the legality of Service Contract No. 46 vis-a-vis Other Laws
Although we have already established above that SC-46 is null and void for
being violative of the 1987 Constitution, it is our duty to still rule on the legality
of SC-46 vis-a-vis other pertinent laws, to serve as a guide for the Government
when executing service contracts involving not only the Taon Strait, but also
other similar areas. While the petitioners allege that SC-46 is in violation of
several laws, including international ones, their arguments focus primarily on
the protected status of the Taon Strait, thus this Court will concentrate on
those laws that pertain particularly to the Taon Strait as a protected seascape.
The Taon Strait is a narrow passage of water bounded by the islands of Cebu
in the East and Negros in the West. It harbors a rich biodiversity of marine life,
including endangered species of dolphins and whales. For this reason, former
President Fidel V. Ramos declared the Taon Strait as a protected seascape in
1998 by virtue of Proclamation No. 1234 - Declaring the Taon Strait situated in
the Provinces of Cebu, Negros Occidental and Negros Oriental as a Protected
Area pursuant to the NIP AS Act and shall be known as Taon Strait Protected
Seascape. During former President Joseph E. Estrada's time, he also constituted
the Taon Strait Commission via Executive Order No. 76 to ensure the optimum
and sustained use of the resources in that area without threatening its marine
life. He followed this with Executive Order No. 177,87 wherein he included the
mayor of Negros Occidental Municipality/City as a member of the Taon Strait
Commission, to represent the LGUs concerned. This Commission, however, was
subsequently abolished in 2002 by then President Gloria Macapagal-Arroyo, via
Executive Order No. 72.88
True to the constitutional policy that the "State shall protect and advance the
right of the people to a balanced and healthful ecology in accord with the
rhythm and harmony of nature,"89 Congress enacted the NIPAS Act to secure
the perpetual existence of all native plants and animals through the
establishment of a comprehensive system of integrated protected areas. These
areas possess common ecological values that were incorporated into a holistic
plan representative of our natural heritage. The system encompasses
outstandingly remarkable areas and biologically important public lands that are
habitats of rare and endangered species of plants and animals, biogeographic
zones and related ecosystems, whether terrestrial, wetland, or marine.90 It
classifies and administers all the designated protected areas to maintain
essential ecological processes and life-support systems, to preserve genetic
diversity, to ensure sustainable use of resources found therein, and to maintain
their natural conditions to the greatest extent possible.91 The following
categories of protected areas were established under the NIPAS
Act:chanroblesvirtuallawlibrary
a. Strict nature reserve;
b. Natural park;
c. Natural monument;
d. Wildlife sanctuary;
e. Protected landscapes and seascapes;
f. Resource reserve;
g. Natural biotic areas; and
h. Other categories established by law, conventions or international
Under Section 4 of the NIPAS Act, a protected area refers to portions of land
and water, set aside due to their unique physical and biological significance,
managed to enhance biological diversity and protected against human
exploitation.
The Taon Strait, pursuant to Proclamation No. 1234, was set aside and
declared a protected area under the category of Protected Seascape. The NIPAS
Act defines a Protected Seascape to be an area of national significance
characterized by the harmonious interaction of man and land while providing
opportunities for public enjoyment through recreation and tourism within the
normal lifestyle and economic activity of this areas;93 thus a management plan
for each area must be designed to protect and enhance the permanent
preservation of its natural conditions.94 Consistent with this endeavor is the
requirement that an Environmental Impact Assessment (EIA) be made prior to
undertaking any activity outside the scope of the management plan. Unless an
ECC under the EIA system is obtained, no activity inconsistent with the goals of
EN BANC
G.R. No. 207257, February 03, 2015
HON. RAMON JESUS P. PAJE, IN HIS CAPACITY AS SECRETARY OF THE
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
(DENR), Petitioner, v. HON. TEODORO A. CASIO, HON. RAYMOND V.
PALATINO, HON. RAFAEL V. MARIANO, HON. EMERENCIANA A. DE
JESUS, CLEMENTE G. BAUTISTA, JR., HON. ROLEN C. PAULINO, HON.
EDUARDO PIANO, HON. JAMES DE LOS REYES, HON. AQUILINO Y.
CORTEZ, JR., HON. SARAH LUGERNA LIPUMANO-GARCIA, NORAIDA
VELARMINO, BIANCA CHRISTINE GAMBOA ESPINOS, CHARO SIMONS,
GREGORIO LLORCA MAGDARAOG, RUBELH PERALTA, ALEX CORPUS
HERMOSO, RODOLFO SAMBAJON, REV. FR. GERARDO GREGORIO P.
JORGE, CARLITO A. BALOY, OFELIA D. PABLO, MARIO ESQUILLO, ELLE
LATINAZO, EVANGELINE Q. RODRIGUEZ, JOHN CARLO DELOS
REYES,Respondents.
[G.R. NO. 207257]
REDONDO PENINSULA ENERGY, INC., Petitioner, v. HON. TEODORO A.
CASIO, HON. RAYMOND V. PALATINO, HON. RAFAEL V. MARIANO, HON.
Before this Court are consolidated Petitions for Review on Certiorari1 assailing
the Decision2 dated January 30, 2013 and the Resolution3 dated May 22, 2013
of the Court of Appeals (CA) in CA-G.R. SP No. 00015, entitled Hon. Teodoro A.
Casio, et al. v. Hon. Ramon Jesus P. Paje, et al.
Factual Antecedents
In February 2006, Subic Bay Metropolitan Authority (SBMA), a government
agency organized and established under Republic Act No. (RA) 7227, 4 and
Taiwan Cogeneration Corporation (TCC) entered into a Memorandum of
Understanding (MOU) expressing their intention to build a power plant in Subic
Bay which would supply reliable and affordable power to Subic Bay Industrial
Park (SBIP).5chanRoblesvirtualLawlibrary
On July 28, 2006, SBMA and TCC entered into another MOU, whereby TCC
undertook to build and operate a coal-fired power plant.6 In the said MOU, TCC
identified 20 hectares of land at Sitio Naglatore, Mt. Redondo, Subic Bay
Freeport Zone (SBFZ) as the suitable area for the project and another site of
approximately 10 hectares to be used as an ash pond.7 TCC intends to lease the
property from SBMA for a term of 50 years with rent fixed at $3.50 per square
meter, payable in 10 equal 5-year installments.8chanRoblesvirtualLawlibrary
On April 4, 2007, the SBMA Ecology Center issued SBFZ Environmental
Compliance Certificate (ECC) No. EC-SBFZ-ECC-69-21-500 in favor of Taiwan
Cogeneration International Corporation (TCIC), a subsidiary of TCC, 9 for the
construction, installation, and operation of 2x150-MW Circulating Fluidized Bed
(CFB) Coal-Fired Thermal Power Plant
at Sitio Naglatore.10chanRoblesvirtualLawlibrary
On June 6, 2008, TCC assigned all its rights and interests under the MOU dated
July 28, 2006 to Redondo Peninsula Energy, Inc. (RP Energy), 11 a corporation
duly organized and existing under the laws of the Philippines with the primary
purpose of building, owning, and operating power plants in the Philippines,
among others.12 Accordingly, an Addendum to the said MOU was executed by
SBMA and RP Energy.13chanRoblesvirtualLawlibrary
RP Energy then contracted GHD Pty, Ltd. (GHD) to prepare an Environmental
Impact Statement (EIS) for the proposed coal-fired power plant and to assist RP
Energy in applying for the issuance of an ECC from the Department of
Environment and Natural Resources (DENR).14chanRoblesvirtualLawlibrary
On August 27, 2008, the Sangguniang Panglungsod of Olongapo City issued
Resolution No. 131, Series of 2008, expressing the city governments objection
to the coal-fired power plant as an energy source and urging the proponent to
consider safer alternative sources of energy for Subic
Bay.15chanRoblesvirtualLawlibrary
On December 22, 2008, the DENR, through former Secretary Jose L. Atienza, Jr.,
issued an ECC for the proposed 2x150-MW coal-fired power
plant.16chanRoblesvirtualLawlibrary
Sometime thereafter, RP Energy decided to include additional components in
its proposed coal-fired power plant. Due to the changes in the project design,
which involved the inclusion of a barge wharf, seawater intake breakwater,
subsea discharge pipeline, raw water collection system, drainage channel
improvement, and a 230kV double-circuit transmission line, 17 RP Energy
requested the DENR Environmental Management Bureau (DENR-EMB) to amend
its ECC.18 In support of its request, RP Energy submitted to the DENR-EMB an
Environmental Performance Report and Management Plan (EPRMP), which was
prepared by GHD.19chanRoblesvirtualLawlibrary
On June 8, 2010, RP Energy and SBMA entered into a Lease and Development
Agreement (LDA) over a 380,004.456-square meter parcel of land to be used
for building and operating the coal-fired power
plant.20chanRoblesvirtualLawlibrary
On July 8, 2010, the DENR-EMB issued an amended ECC (first amendment)
allowing the inclusion of additional components, among
others.21chanRoblesvirtualLawlibrary
Several months later, RP Energy again requested the DENR-EMB to amend the
ECC.22 Instead of constructing a 2x150-MW coal-fired power plant, as originally
planned, it now sought to construct a 1x300-MW coal-fired power plant.23 In
support of its request, RP Energy submitted a Project Description Report (PDR)
to the DENR-EMB.24chanRoblesvirtualLawlibrary
On May 26, 2011, the DENR-EMB granted the request and further amended the
ECC (second amendment).25chanRoblesvirtualLawlibrary
On August 1, 2011, the Sangguniang Panglalawigan of Zambales issued
Resolution No. 2011-149, opposing the establishment of a coal-fired thermal
power plant at Sitio Naglatore, Brgy. Cawag, Subic,
Zambales.26chanRoblesvirtualLawlibrary
On August 11, 2011, the Liga ng mga Barangay of Olongapo City issued
Resolution No. 12, Series of 2011, expressing its strong objection to the coalfired power plant as an energy source.27chanRoblesvirtualLawlibrary
On July 20, 2012, Hon. Teodoro A. Casio, Hon. Raymond V. Palatino, Hon.
Rafael V. Mariano, Hon. Emerenciana A. De Jesus, Clemente G. Bautista, Jr.,
Hon. Rolen C. Paulino, Hon. Eduardo Piano, Hon. James de los Reyes, Hon.
Aquilino Y. Cortez, Jr., Hon. Sarah Lugerna Lipumano-Garcia, Noraida Velarmino,
Bianca Christine Gamboa Espinos, Charo Simons, Gregorio Llorca Magdaraog,
Rubelh Peralta, Alex Corpus Hermoso, Rodolfo Sambajon, Rev. Fr. Gerardo
Gregorio P. Jorge, Carlito A. Baloy, Ofelia D. Pablo, Mario Esquillo, Elle Latinazo,
Evangeline Q. Rodriguez, and John Carlo delos Reyes (Casio Group) filed
before this Court a Petition for Writ of kalikasan against RP Energy, SBMA, and
Hon. Ramon Jesus P. Paje, in his capacity as Secretary of the
DENR.28chanRoblesvirtualLawlibrary
On July 31, 2012, this Court resolved, among others, to: (1) issue a Writ
of kalikasan; and (2) refer the case to the CA for hearing and reception of
evidence and rendition of judgment.29chanRoblesvirtualLawlibrary
While the case was pending, RP Energy applied for another amendment to its
ECC (third amendment) and submitted another EPRMP to the DENR-EMB,
proposing the construction and operation of a 2x300-MW coal-fired power
plant.30chanRoblesvirtualLawlibrary
On September 11, 2012, the Petition for Writ of kalikasan was docketed as CAG.R. SP No. 00015 and raffled to the Fifteenth Division of the CA.31 In the
Petition, the Casio Group alleged, among others, that the power plant project
would cause grave environmental damage;32 that it would adversely affect the
health of the residents of the municipalities of Subic, Zambales, Morong,
Hermosa, and the City of Olongapo;33 that the ECC was issued and the LDA
entered into without the prior approval of the concerned sanggunians as
required under Sections 26 and 27 of the Local Government Code (LGC); 34that
the LDA was entered into without securing a prior certification from the
National Commission on Indigenous Peoples (NCIP) as required under Section
59 of RA 8371 or the Indigenous Peoples Rights Act of 1997 (IPRA Law);35 that
Section 8.3 of DENR Administrative Order No. 2003-30 (DAO 2003-30) which
allows amendments of ECCs is ultra vires because the DENR has no authority to
decide on requests for amendments of previously issued ECCs in the absence
of a new EIS;36 and that due to the nullity of Section 8.3 of DAO 2003-30, all
amendments to RP Energys ECC are null and
void.37chanRoblesvirtualLawlibrary
On October 29, 2012, the CA conducted a preliminary conference wherein the
parties, with their respective counsels, appeared except for Hon. Teodoro A.
Casio, Hon. Rafael V. Mariano, Hon. Emerencia A. De Jesus, Clemente G.
Bautista, Mario Esquillo, Elle Latinazo, Evangeline Q. Rodriguez, and the
SBMA.38 The matters taken up during the preliminary conference were
embodied in the CAs Resolution dated November 5, 2012, to
wit:chanroblesvirtuallawlibrary
I. ISSUES
A. Petitioners (Casio Group)
1. Whether x x x the DENR Environmental Compliance Certificate (ECC x
x x) in favor of RP Energy for a 2x150 MW Coal-Fired Thermal Power Plant
Project (Power Plant, x x x ) and its amendment to 1x300 MW Power
Plant, and the Lease and Development Agreement between SBMA and RP
Energy complied with the Certification Precondition as required under
Section 59 of Republic Act No. 8371 or the Indigenous Peoples Rights Act
of 1997 (IPRA Law, x x x);
amendments as these were issued in accordance with DAO No. 2003-30. 83 The
DENR also insists that contrary to the view of the CA, a new EIS was no longer
necessary since the first EIS was still within the validity period when the first
amendment was requested, and that this is precisely the reason RP Energy was
only required to submit an EPRMP in support of its application for the first
amendment.84 As to the second amendment, the DENR-EMB only required RP
Energy to submit documents to support the proposed revision considering that
the change in configuration of the power plant project, from 2x150MW to
1x300MW, was not substantial.85 Furthermore, the DENR argues that no
permits, licenses, and/or clearances from other government agencies are
required in the processing and approval of the ECC.86 Thus, non-compliance
with Sections 26 and 27 of the LGC as well as Section 59 of the IPRA Law is not
a ground to invalidate the ECC and its amendments.87 The DENR further posits
that the ECC is not a concession, permit, or license but is a document certifying
that the proponent has complied with all the requirements of the EIS System
and has committed to implement the approved Environmental Management
Plan.88 The DENR invokes substantial justice so that the belatedly submitted
certified true copy of the ECC containing the signature of Mr. Aboitiz on the
Statement of Accountability may be accepted and accorded weight and
credence.89chanRoblesvirtualLawlibrary
SBMAs arguments
For its part, SBMA asserts that since the CA did not issue a Writ of kalikasan, it
should not have invalidated the LDA and that in doing so, the CA acted beyond
its powers.90 SBMA likewise puts in issue the legal capacity of the Casio Group
to impugn the validity of the LDA91 and its failure to exhaust administrative
remedies.92 In any case, SBMA contends that there is no legal basis to
invalidate the LDA as prior consultation under Sections 26 and 27 of the LGC is
not required in this case considering that the area is within the SBFZ.93 Under
RA 7227, it is the SBMA which has exclusive jurisdiction over projects and
leases within the SBFZ and that in case of conflict between the LGC and RA
7227, it is the latter, a special law, which must prevail.94 Moreover, the lack of
prior certification from the NCIP is also not a ground to invalidate a contract.95 If
at all, the only effect of non-compliance with the said requirement under
Section 59 of the IPRA Law is the stoppage or suspension of the
project.96 Besides, the subsequent issuance of a CNO has cured any legal defect
found in the LDA.97chanRoblesvirtualLawlibrary
RP Energys arguments
RP Energy questions the propriety of the reliefs granted by the CA considering
that it did not issue a writ of kalikasan in favor of the Casio Group.98 RP Energy
is of the view that unless a writ of kalikasan is issued, the CA has no power to
grant the reliefs prayed for in the Petition.99 And even if it does, the reliefs are
limited to those enumerated in Section 15, Rule 7 of the Rules of Procedure for
Environmental Cases and that the phrase such other reliefs in paragraph (e)
should be limited only to those of the same class or general nature as the four
other reliefs enumerated.100 As to the validity of the LDA, the ECC and its
that the reliefs granted by the appellate court, i.e. invalidating the ECC and its
amendments, are improper because it had denied the Petition for Writ
of kalikasan upon a finding that the Casio Group failed to prove the alleged
environmental damage, actual or threatened, contemplated under the Rules.
Ordinarily, no reliefs could and should be granted. But the question may be
asked, could not the appellate court have granted the Petition for Writ
of kalikasan on the ground of the invalidity of the ECC for failure to comply with
certain laws and rules?
This question is the starting point for setting up the framework of analysis
which should govern writ ofkalikasan cases.
In their Petition for Writ of kalikasan,113 the Casio Groups allegations, relative
to the actual or threatened violation of the constitutional right to a balanced
and healthful ecology, may be grouped into two.
The first set of allegations deals with the actual environmental damage that will
occur if the power plant project is implemented. The Casio Group claims that
the construction and operation of the power plant will result in (1) thermal
pollution of coastal waters, (2) air pollution due to dust and combustion gases,
(3) water pollution from toxic coal combustion waste, and (4) acid deposition in
aquatic and terrestrial ecosystems, which will adversely affect the residents of
the Provinces of Bataan and Zambales, particularly the Municipalities of Subic,
Morong and Hermosa, and the City of Olongapo.
The second set of allegations deals with the failure to comply with certain laws
and rules governing or relating to the issuance of an ECC and amendments
thereto. The Casio Group claims that the ECC was issued in violation of (1) the
DENR rules on the issuance and amendment of an ECC, particularly, DAO 200330 and the Revised Procedural Manual for DAO 2003-30 (Revised Manual), (2)
Section 59 of the IPRA Law, and (3) Sections 26 and 27 of the LGC. In addition,
it claims that the LDA entered into between SBMA and RP Energy violated
Section 59 of the IPRA Law.
As to the first set of allegations, involving actual damage to the environment, it
is not difficult to discern that, if they are proven, then the Petition for Writ
of kalikasan could conceivably be granted.
However, as to the second set of allegations, a nuanced approach is warranted.
The power of the courts to nullify an ECC existed even prior to the promulgation
of the Rules on the Writ of kalikasan for judicial review of the acts of
administrative agencies or bodies has long been recognized114 subject, of
course, to the doctrine of exhaustion of administrative
remedies.115chanRoblesvirtualLawlibrary
But the issue presented before us is not a simple case of reviewing the acts of
an administrative agency, the DENR, which issued the ECC and its
amendments. The challenge to the validity of the ECC was raised in the context
of a writ of kalikasan case. The question then is, can the validity of an ECC be
challenged via a writ of kalikasan?
We answer in the affirmative subject to certain qualifications.
As earlier noted, the writ of kalikasan is principally predicated on an actual or
threatened violation of the constitutional right to a balanced and healthful
ecology, which involves environmental damage of a magnitude that transcends
political and territorial boundaries. A party, therefore, who invokes the writ
based on alleged defects or irregularities in the issuance of an ECC must not
only allege and prove such defects or irregularities, but must also provide a
causal link or, at least, a reasonable connection between the defects or
irregularities in the issuance of an ECC and the actual or threatened violation of
the constitutional right to a balanced and healthful ecology of the magnitude
contemplated under the Rules. Otherwise, the petition should be dismissed
outright and the action re-filed before the proper forum with due regard to the
doctrine of exhaustion of administrative remedies. This must be so if we are to
preserve the noble and laudable purposes of the writ against those who seek to
abuse it.
An example of a defect or an irregularity in the issuance of an ECC, which could
conceivably warrant the granting of the extraordinary remedy of the writ
of kalikasan, is a case where there are serious and substantial
misrepresentations or fraud in the application for the ECC, which, if not
immediately nullified, would cause actual negative environmental impacts of
the magnitude contemplated under the Rules, because the government
agencies and LGUs, with the final authority to implement the project, may
subsequently rely on such substantially defective or fraudulent ECC in
approving the implementation of the project.
To repeat, in cases of defects or irregularities in the issuance of an ECC, it is not
sufficient to merely allege such defects or irregularities, but to show a causal
link or reasonable connection with the environmental damage of the magnitude
contemplated under the Rules. In the case at bar, no such causal link or
reasonable connection was shown or even attempted relative to the aforesaid
second set of allegations. It is a mere listing of the perceived defects or
irregularities in the issuance of the ECC. This would have been sufficient reason
to disallow the resolution of such issues in a writ of kalikasancase.
However, inasmuch as this is the first time that we lay down this principle, we
have liberally examined the alleged defects or irregularities in the issuance of
the ECC and find that there is only one group of allegations, relative to the ECC,
that can be reasonably connected to an environmental damage of the
magnitude contemplated under the Rules. This is with respect to the allegation
that there was no environmental impact assessment relative to the first and
second amendments to the subject ECC. If this were true, then the
implementation of the project can conceivably actually violate or threaten to
violate the right to a healthful and balanced ecology of the inhabitants near the
vicinity of the power plant. Thus, the resolution of such an issue could
conceivably be resolved in a writ of kalikasan case provided that the case does
not violate, or is an exception to the doctrine of exhaustion of administrative
remedies and primary jurisdiction.116chanRoblesvirtualLawlibrary
As to the claims that the issuance of the ECC violated the IPRA Law and LGC
and that the LDA, likewise, violated the IPRA Law, we find the same not to be
within the coverage of the writ of kalikasan because, assuming there was noncompliance therewith, no reasonable connection can be made to an actual or
threatened violation of the right to a balanced and healthful ecology of the
magnitude contemplated under the Rules.
To elaborate, the alleged lack of approval of the concerned sanggunians over
the subject project would not lead to or is not reasonably connected with
environmental damage but, rather, it is an affront to the local autonomy of
LGUs. Similarly, the alleged lack of a certificate precondition that the project
site does not overlap with an ancestral domain would not result in or is not
reasonably connected with environmental damage but, rather, it is an
impairment of the right of Indigenous Cultural Communities/Indigenous Peoples
(ICCs/IPs) to their ancestral domains. These alleged violations could be the
subject of appropriate remedies before the proper administrative bodies (like
the NCIP) or a separate action to compel compliance before the courts, as the
case may be. However, the writ ofkalikasan would not be the appropriate
remedy to address and resolve such issues.
Be that as it may, we shall resolve both the issues proper in a writ
of kalikasan case and those which are not, commingled as it were here,
because of the exceptional character of this case. We take judicial notice of the
looming power crisis that our nation faces. Thus, the resolution of all the issues
in this case is of utmost urgency and necessity in order to finally determine the
fate of the project center of this controversy. If we were to resolve only the
issues proper in a writ of kalikasan case and dismiss those not proper therefor,
that will leave such unresolved issues open to another round of protracted
litigation. In any case, we find the records sufficient to resolve all the issues
presented herein. We also rule that, due to the extreme urgency of the matter
at hand, the present case is an exception to the doctrine of exhaustion of
administrative remedies.117 As we have often ruled, in exceptional cases, we
can suspend the rules of procedure in order to achieve substantial justice, and
to address urgent and paramount State interests vital to the life of our
nation.cralawred
Issues
In view of the foregoing, we shall resolve the following issues:
1. Whether the Casio Group was able to prove that the construction and
operation of the power plant will cause grave environmental damage.
1.1 The alleged thermal pollution of coastal waters, air pollution due
.
to dust and combustion gases, water pollution from toxic coal
case.
We now rule on the above-mentioned issues in detail.cralawred
I.
Whether the Casio Group was able to prove that the construction and
operation of the power plant will cause grave environmental damage.
The alleged thermal pollution of
coastal waters, air pollution
due to dust and combustion
gases, water pollution from
toxic coal combustion waste,
and acid deposition in aquatic
and terrestrial ecosystems that
will be caused by the project.
As previously noted, the Casio Group alleged that the construction and
operation of the power plant shall adversely affect the residents of the
Provinces of Bataan and Zambales, particularly, the Municipalities of Subic,
Morong and Hermosa, and the City of Olongapo, as well as the sensitive
ecological balance of the area. Their claims of ecological damage may be
summarized as follows:
1. Thermal pollution of coastal waters. Due to the discharge of heated water
from the operation of the plant, they claim that the temperature of the
affected bodies of water will rise significantly. This will have adverse
effects on aquatic organisms. It will also cause the depletion of oxygen in
the water. RP Energy claims that there will be no more than a 3C
increase in water temperature but the Casio Group claims that a 1C to
2C rise can already affect the metabolism and other biological functions
of aquatic organisms such as mortality rate and reproduction.
2. Air pollution due to dust and combustion gases. While the Casio Group
admits that Circulating Fluidized Bed (CFB) Coal technology, which will be
used in the power plant, is a clean technology because it reduces the
emission of toxic gases, it claims that volatile organic compounds,
specifically, polycyclic aromatic hydrocarbons (PAHs) will also be emitted
under the CFB. PAHs are categorized as pollutants with carcinogenic and
mutagenic characteristics. Carbon monoxide, a poisonous gas, and
nitrous oxide, a lethal global warming gas, will also be produced.
3. Water pollution from toxic coal combustion waste. The waste from coal
combustion or the residues from burning pose serious environmental risk
because they are toxic and may cause cancer and birth defects. Their
release to nearby bodies of water will be a threat to the marine
ecosystem of Subic Bay. The project is located in a flood-prone area and
is near three prominent seismic faults as identified by Philippine Institute
exceptions to the hearsay rule under the Rules of Court, among which are
learned treatises under Section 46 of Rule 130, viz:ChanRoblesVirtualawlibrary
SEC. 46. Learned treatises. -A published treatise, periodical or pamphlet on a
subject of history, law, science, or art is admissible as tending to prove the
truth of a matter stated therein if the court takes judicial notice, or a witness
expert in the subject testifies, that the writer of the statement in the treatise,
periodical or pamphlet is recognized in his profession or calling as expert in the
subject.
The alleged scientific studies mentioned in the Petition cannot be classified as
learned treatises. We cannot take judicial notice of the same, and no witness
expert in the subject matter of this case testified, that the writers of the said
scientific studies are recognized in their profession or calling as experts in the
subject.
In stark contrast, respondent RP Energy presented several witnesses on the
CFB technology.
In his Judicial Affidavit, witness Wong stated that he obtained a Bachelor of
Science, Major in Mechanical Engineering from Worcester Polytechnic Institute;
he is a Consulting Engineer of Steam Generators of URS; he was formerly
connected with Foster Wheeler where he held the positions of site
commissioning engineer, testing engineer, instrumentation and controls
engineer, mechanical equipment department manager, director of boiler
performance and mechanical design engineering and pulverized coal product
director. He explained that: CFB stands for Circulating Fluidized Bed; it is a
process by which fuel is fed to the lower furnace where it is burned in an
upward flow of combustion air; limestone, which is used as sulfur absorbent, is
also fed to the lower furnace along with the fuel; the mixture of fuel, ash, and
the boiler bed sorbent material is carried to the upper part of the furnace and
into a cyclone separator; the heavier particles which generally consist of the
remaining uncombusted fuel and absorbent material are separated in the
cyclone separator and are recirculated to the lower furnace to complete the
combustion of any unburned particles and to enhance SO2 capture by the
sorbent; fly ash and flue gas exit the cyclone and the fly ash is collected in the
electrostatic precipitator; furnace temperature is maintained in the range of
800 to 900 C by suitable heat absorbing surface; the fuel passes through a
crusher that reduces the size to an appropriate size prior to the introduction
into the lower furnace along with the limestone; the limestone is used as a SO2
sorbent which reacts with the sulfur oxides to form calcium sulfate, an inert and
stable material; air fans at the bottom of the furnace create sufficient velocity
within the steam generator to maintain a bed of fuel, ash, and limestone
mixture; secondary air is also introduced above the bed to facilitate circulation
and complete combustion of the mixture; the combustion process generates
heat, which then heats the boiler feedwater flowing through boiler tube bundles
under pressure; the heat generated in the furnace circuit turns the water to
saturated steam which is further heated to superheated steam; this
superheated steam leaves the CFB boiler and expands through a steam
turbine; the steam turbine is directly connected to a generator that turns and
creates electricity; after making its way through the steam turbine, the low-
DR. OUANO:
Well, mammals have high tolerance because mammals are warm[-]blooded.
Now, when it comes to cold[-]blooded animals the tolerance is much lower. But
again when you are considering x x x fish [e]specially in open ocean you have
to remember that nature by itself is x x x very brutal x x x where there is
always the prey-predator relationship. Now, most of the fish that we have in
open sea [have] already a very strong adaptability mechanism. And in fact,
Kingman back in 1964 x x x studied the coal reef around the gulf of Oman
where the temperature variation on day to day basis varied not by 1 degree to
2 degrees but by almost 12 degrees centigrade. Now, in the Subic Bay area
which when youre looking at it between daytime variation, early dawn when it
is cold, the air is cold, the sea temperature, sea water is quite cold. Then by
3:00 oclock in the afternoon it starts to warm up. So the variation [in the] Subic
Bay area is around 2 to 4 degrees by natural variation from the sun as well as
from the current that goes around it. So when you are talking about what the
report has said of around 1 degree change, the total impact x x x on the fishes
will be minimal. x x x
ATTY. AZURA:
x x x So, you said, Dr. Ouano, that fish, while they have a much lower tolerance
for temperature variation, are still very adaptable. What about other sea life,
Dr. Ouano, for example, sea reptiles?
DR. OUANO:
Thats what I said. The most sensitive part of the marine ecology is physically
the corals because corals are non-migratory, they are fix[ed]. Second[ly] x x x
corals are also highly dependent on sunlight penetration. If they are exposed
out of the sea, they die; if they are so deep, they die. And that is why I cited
Kingman in his studies of coral adaptability [in] the sea of Oman where there
was a very high temperature variation, [they] survived.
ATTY. AZURA:
Would you be aware, Dr. Ouano, if Kingman has done any studies in Subic Bay?
DR. OUANO:
Not in Subic Bay but I have reviewed the temperature variation, natural
temperature variation from the solar side, the days side as well as the seasonal
variation. There are two types of variation since temperatures are very critical.
One is the daily, which means from early morning to around 3:00 oclock, and
the other one is seasonal variation because summer, December, January,
February are the cold months and then by April, May we are having warm
temperature where the temperature goes around 32-33 degrees; Christmas
time, it drops to around 18 to 20 degrees so it[']s a variation of around
seasonal variation of 14 degrees although some of the fish might even migrate
and that is why I was trying to put in corals because they are the ones that are
really fix[ed]. They are not in a position to migrate in this season.
ATTY. AZURA:
To clarify. You said that the most potentially sensitive part of the ecosystem
271. Q: What was the result of the Air Dispersion Modeling that was
conducted for RP Energy?
A: The Air Dispersion Modeling predicted that the Power Plant Project will
produce the following emissions, which [are] fully compliant with the standards
set by DENR:
SO2
NO2
CO
CO
SO2
NO2
SO2
NO2
CO
272. Q: What other findings resulted from the Air Dispersion Modeling,
if any?
A: It also established that the highest GLC to Clean Air Act Standards ratio
among possible receptors was located 1.6 km North NorthEast (NNE) of the
Power Plant Project. Further, this ratio was valued only at 0.434 or less than
half of the upper limit set out in the Clean Air Act. This means that the
highest air ambient quality disruption will happen only 1.6 km NNE of the
Power Plant Project, and that such disruption would still be compliant with the
standards imposed by the Clean Air Act.127
The Casio Group argued, however, that, as stated in the EIS, during upset
conditions, significant negative environmental impact will result from the
emissions. This claim was refuted by RP Energys witness during crossexamination:chanroblesvirtuallawlibrary
ATTY. AZURA:
If I may refer you to another page of the same annex, Ms. Mercado, thats page
202 of the same document, the August 2012. Fig. 2-78 appears to show, theres
a Table, Ms. Mercado, the first table, the one on top appears to show a
comparison in normal and upset conditions. I noticed, Ms. Mercado, that the
black bars are much higher than the bars in normal condition. Can you state
what this means?
MS. MERCADO:
It means there are more emissions that could potentially be released when it is
under upset condition.
ATTY. AZURA:
I also noticed, Ms. Mercado, at the bottom part of this chart there are Receptor
IDs, R1, R2, R3 and so forth and on page 188 of this same document, Annex 9Mercado, there is a list identifying these receptors, for example, Receptor 6,
Your Honor, appears to have been located in Olongapo City, Poblacion. Just so I
can understand, Ms. Mercado, does that mean that if upset condition[s] were to
occur, the Olongapo City Poblacion will be affected by the emissions?
MS. MERCADO:
All it means is that there will be higher emissions and a higher ground
concentration. But you might want to also pay attention to the y axis, it says
there GLC/CAA [Ground Level Concentration/Clean Air Act limit]. So it means
that even under upset conditions say for R6, the ground level concentration
for upset condition is still around .1 or 10% percent only of the Clean Air Act
limit. So its still much lower than the limit.
ATTY. AZURA:
But that would mean, would it not, Ms. Mercado, that in the event of upset
conditions[,] emissions would increase in the Olongapo City Poblacion?
MS. MERCADO:
Not emissions will increase. The emissions will be the same but the ground
level concentration, the GLC, will be higher if you compare normal versus
upset. But even if it[]s under upset conditions, it is still only around 10%
percent of the Clean Air Act Limit.
xxxx
J. LEAGOGO:
So you are trying to impress upon this Court that even if the plant is in an upset
condition, it will emit less than what the national standards dictate?
MS. MERCADO:
Yes, Your Honor.128chanRoblesvirtualLawlibrary
With respect to the claims that the power plant will release dangerous PAHs
and CO, Engr. Sarrki stated in his Judicial Affidavit
thus:ChanRoblesVirtualawlibrary
Q: In page 42, paragraph 102 of the Petition, the Petitioners alleged that Volatile
Organic Compounds (VOC) specifically Polycyclic Aromatic Hydrocarbon
(PAH) will be emitted even by CFB boilers. What can you say about this?
A: Actually, the study cited by the Petitioners does not apply to the present case
because it does not refer to CFB technology. The study refers to a laboratoryscale tubular Bubbling Fluidized Bed (BFB) test rig and not a CFB. CFB
boilers will emit PAHs but only in minimal amounts. Indeed, a BFB will
produce higher PAH emissions.
xxxx
Q: Why can the study cited by Petitioners not apply in the present case?
A: The laboratory-scale BFB used in the study only has one (1) air injection point
and does not replicate the staged-air combustion process of the CFB that RP
Energy will use. This staged-air process includes the secondary air. Injecting
secondary air into the system will lead to more complete combustion and
inhibits PAH production. There is a study entitled Polycyclic Aromatic
Hydrocarbon (PAH) Emissions from a Coal-Fired Pilot FBC System by Kunlei
Liu, Wenjun Han, Wei-Ping Pan, John T. Riley found in the Journal of Hazardous
Materials B84 (2001) where the findings are discussed.
Also, the small-scale test rig utilized in the study does not simulate the process
conditions (hydrodynamics, heat transfer characteristics, solid and gas mixing
behavior, etc.) seen in a large scale utility boiler, like those which would be
utilized by the Power Plant Project.
x
x
x
x
Q: Aside from residence time of particles and secondary air, what other factors,
if any, reduce PAH production?
A: Increase in the excess air ratio will also minimize PAH production.
Furthermore, decrease in Calcium to Sulfur moral ratio (Ca/S), as well as
decrease in the sulfur and chlorine contents of coal will likewise minimize
PAH production. This is also based on the study entitled Polycyclic Aromatic
Hydrocarbon (PAH) Emissions from a Coal-Fired Pilot FBC System by Kunlei
Liu, Wenjun Han, Wei-Ping Pan, John T. Riley.
In RP Energys Power Plant Project, the projected coal to be utilized has low
sulfur and chlorine contents minimizing PAH production. Also, due to optimum
conditions for the in-furnace SO2 capture, the Ca/S will be relatively low,
decreasing PAH production.
Q: In paragraph 104 of the Petition, it was alleged that Carbon monoxide (CO),
a poisonous, colorless and odorless gas is also produced when there is partial
oxidation or when there is not enough oxygen (O2) to form carbon dioxide
(CO2). What can you say about this?
A: CFB technology reduces the CO emissions of the Power Plant Project to safe
amounts. In fact, I understand that the projected emissions level of the Power
Plant Project compl[ies] with the International Finance Corporation (IFC)
standards. Furthermore, characteristics of CFB technology such as long
residence time, uniform temperature and high turbulence provide an
effective combustion environment which results [in] lower and safer CO
emissions.
Q: I have no further questions for you at the moment. Is there anything you wish
to add to the foregoing?
A: Yes. PAH is a natural product of ANY combustion process. Even ordinary
burning, such as cooking or driving automobiles, will have some emissions
that are not considered harmful. It is only when emissions are of a significant
level that damage may be caused.
Given that the Power Plant Project will utilize CFB technology, it will have
minimal PAH emissions. The high combustion efficiency of CFB technology, due
to the long residence time of particles inside the boiler, leads to the minimal
emissions of PAH. Furthermore, other factors such as increase in the excess air
ratio, decrease in Ca/S, as well as decrease in the sulfur and chlorine contents
of coal will likewise minimize PAH production. CFB does not cause emissions
beyond scientifically acceptable levels, and we are confident it will not result in
the damage speculated by the Petitioners.129
3. On water pollution from toxic coal combustion waste.
With regard to the claim that coal combustion waste produced by the plant will
endanger the health of the inhabitants nearby, Dr. Ouano stated in his Judicial
Affidavit thus:chanroblesvirtuallawlibrary
Q: In page 43, paragraph 110 of the Petition, it was alleged that: [s]olid coal
combustion waste is highly toxic and is said to cause birth defects and cancer
risks among others x x x. What is your expert opinion, if any, on this matter
alleged by the Petitioners?
A: Coal is geologically compressed remains of living organisms that roamed the
earth several million years ago. In the process of compression, some of the
minerals in the soil, rocks or mud, the geologic media for compression, are
also imparted into the compressed remains. If the compressing media of
mud, sediments and rocks contain high concentration of mercury, uranium,
and other toxic substances, the coal formed will likewise contain high
concentration of those substances. If the compressing materials have low
concentration of those substances, then the coal formed will likewise have
low concentration of those substances. If the coal does not contain excessive
quantities of toxic substances, the solid residues are even used in agriculture
to supply micronutrients and improve the potency of fertilizers. It is used
freely as a fill material in roads and other construction activities requiring
large volume of fill and as additive in cement manufacture. After all,
diamonds that people love to hang around their necks and keep close to the
chest are nothing more than the result of special geologic action, as those in
volcanic pipes on coal.130
RP Energy further argued, a matter which the Casio Group did not rebut or
refute, that the waste generated by the plant will be properly handled, to
wit:chanroblesvirtuallawlibrary
4.1.49 When coal is burned in the boiler furnace, two by-products are
generated - bottom and fly ash. Bottom ash consists of large and fused
particles that fall to the bottom of the furnace and mix with the bed media. Fly
ash includes fine-grained and powdery particles that are carried away by flue
gas into the electrostatic precipitator, which is then sifted and collected. These
by-products are non-hazardous materials. In fact, a coal power plants Fly Ash,
Bottom Ash and Boiler Slag have consequent beneficial uses which generate
significant environmental, economic, and performance benefits. Thus, fly ash
generated during the process will be sold and transported to cement
manufacturing facilities or other local and international industries.
4.1.50 RP Energy shall also install safety measures to insure that waste from
burning of coal shall be properly handled and stored.
4.1.51 Bottom ash will be continuously collected from the furnace and
transferred through a series of screw and chain conveyors and bucket elevator
to the bottom ash silo. The collection and handling system is enclosed to
prevent dust generation. Discharge chutes will be installed at the base of the
bottom ash silo for unloading. Open trucks will be used to collect ash through
the discharge chutes. Bottom ash will be sold, and unsold ash will be stored in
ash cells. A portion of the bottom ash will be reused as bed material through
the installation of a bed media regeneration system (or ash recycle). Recycled
bottom ash will be sieved using a vibrating screen and transported to a bed
material surge bin for re-injection into the boiler.
4.1.52 Fly ash from the electrostatic precipitator is pneumatically removed from
the collection hopper using compressed air and transported in dry state to the
fly ash silo. Two discharge chutes will be installed at the base of the fly ash silo.
Fly ash can either be dry-transferred through a loading spout into an enclosed
lorry or truck for selling, re-cycling, or wet-transferred through a wet unloader
into open dump trucks and transported to ash cells. Fly ash discharge will
operate in timed cycles, with an override function to achieve continuous
discharge if required. Fly ash isolation valves in each branch line will prevent
leakage and backflow into non-operating lines.
4.1.53 Approximately 120,000m will be required for the construction of the ash
cell. Ash will be stacked along the sloping hill, within a grid of excavations (i.e.
It[]s not there in their report because it will depend on the supplier, the
equipment supplier.
J. LEAGOGO:
So it[]s not yet there?
DR. OUANO:
It[]s not yet there in the site but it is also covered in our Building Code what
are the intensities of earthquakes expected of the different areas in the
Philippines.
J. LEAGOGO:
Have you checked our geo-hazard maps in the Philippines to check on this
project site?
DR. OUANO:
Yes. It is included there in the EIA Report.
J. LEAGOGO:
It[]s there?
DR. OUANO:
It[]s there.132
4. On acid deposition in aquatic and terrestrial ecosystems.
Relative to the threat of acid rain, Dr. Ouano stated in his Judicial Affidavit,
thus:chanroblesvirtuallawlibrary
Q: In page 44, paragraph 114 of the Petition, it was alleged that the coal-fired
power plant will release 1,888 tons of nitrous oxides (NOx) per year and 886
tons of sulfur dioxide (SO2) per year. These oxides are the precursors to the
formation of sulfuric acid and nitric acid which are responsible for acid
deposition. What is your expert opinion on this matter alleged by the
Petitioners?
A: NO2 is found in the air, water and soil from natural processes such as
lightning, bacterial activities and geologic activities as well as from human
activities such as power plants and fertilizer usage in agriculture. SO2 is also
found in air, water and soil from bacterial, geologic and human activities.
NO2 and SO2 in the air are part of the natural nitrogen and sulfur cycle to
widely redistribute and recycle those essential chemicals for use by plants.
Without the NO2 and SO2 in the air, plant and animal life would be limited to
small areas of this planet where nitrogen and sulfur are found in abundance.
With intensive agricultural practices, nitrogen and sulfur are added in the soil
as fertilizers.
Acid rain takes place when the NO2 and SO2 concentration are excessive or
beyond those values set in the air quality standards. NO2 and SO2 in the air in
concentrations lower than those set in the standards have beneficial effect to
the environment and agriculture and are commonly known as micronutrients. 133
On clarificatory questions from the appellate court, the matter was further
dissected thus:chanroblesvirtuallawlibrary
J. LEAGOGO:
x x x The project will release 1,888 tons of nitrous oxide per year. And he said,
yes; that witness answered, yes, it will produce 886 tons of sulfur dioxide per
year. And he also answered yes, that these oxides are the precursors to the
formation of sulfuric acid and nitric acid. Now my clarificatory question is, with
this kind of releases there will be acid rain?
DR. OUANO:
No.
J. LEAGOGO:
Why?
DR. OUANO:
Because it[]s so dilute[d].
J. LEAGOGO:
It will?
DR. OUANO:
Because the acid concentration is so dilute[d] so that it is not going to cause
acid rain.
J. LEAGOGO:
The acid concentration is so diluted that it will not cause acid rain?
DR. OUANO:
Yes.
J. LEAGOGO:
What do you mean it[]s so diluted? How will it be diluted?
DR. OUANO:
Because it[]s going to be mixed with the air in the atmosphere; diluted in the
air in the atmosphere. And besides this 886 tons, this is not released in one go,
DR. OUANO:
SO2, we are talking about ... you wont mind if I go to my codigo. For sulfur
dioxide this acid rain most likely will start at around 7,000 milligrams per
standard cubic meter but then sorry, it[]s around 3,400 micrograms per
cubic meter. That is the concentration for sulfur dioxide, and in our plant it will
be around 45 micrograms per standard cubic meter. So the acid rain will start
at 3,400 and the emission is estimated here to result to concentration of 45.7
micrograms.
J. LEAGOGO:
That is what GHD said in their report.
DR. OUANO:
Yes. So that is the factor of x x x safety that we have.134
Apart from the foregoing evidence, we also note that the above and other
environmental concerns are extensively addressed in RP Energys
Environmental Management Plan or Program (EMP). The EMP is a section in
the EIS that details the prevention, mitigation, compensation, contingency and
monitoring measures to enhance positive impacts and minimize negative
impacts and risks of a proposed project or undertaking.135 One of the
conditions of the ECC is that RP Energy shall strictly comply with and
implement its approved EMP. The Casio Group failed to contest, with proof, the
adequacy of the mitigating measures stated in the aforesaid EMP.
In upholding the evidence and arguments of RP Energy, relative to the lack of
proof as to the alleged significant environmental damage that will be caused by
the project, the appellate court relied mainly on the testimonies of experts,
which we find to be in accord with judicial precedents. Thus, we ruled in one
case:chanroblesvirtuallawlibrary
Although courts are not ordinarily bound by testimonies of experts, they may
place whatever weight they choose upon such testimonies in accordance with
the facts of the case. The relative weight and sufficiency of expert testimony is
peculiarly within the province of the trial court to decide, considering the ability
and character of the witness, his actions upon the witness stand, the weight
and process of the reasoning by which he has supported his opinion, his
possible bias in favor of the side for whom he testifies, the fact that he is a paid
witness, the relative opportunities for study and observation of the matters
about which he testifies, and any other matters which serve to illuminate his
statements. The opinion of the expert may not be arbitrarily rejected; it is to be
considered by the court in view of all the facts and circumstances in the case
and when common knowledge utterly fails, the expert opinion may be given
controlling effects (20 Am. Jur., 1056-1058). The problem of the credibility of
the expert witness and the evaluation of his testimony is left to the discretion
of the trial court whose ruling thereupon is not reviewable in the absence of an
abuse of that discretion.136
Hence, we sustain the appellate courts findings that the Casio Group failed to
establish the alleged grave environmental damage which will be caused by the
construction and operation of the power plant.
In another vein, we, likewise, agree with the observations of the appellate court
that the type of coal which shall be used in the power plant has important
implications as to the possible significant negative environmental impacts of
the subject project.137 However, there is no coal supply agreement, as of yet,
entered into by RP Energy with a third-party supplier. In accordance with the
terms and conditions of the ECC and in compliance with existing environmental
laws and standards, RP Energy is obligated to make use of the proper coal type
that will not cause significant negative environmental impacts.
The alleged negative environmental
assessment of the project by experts
in a report generated during the social
acceptability consultations
The Casio Group also relies heavily on a report on the social acceptability
process of the power plant project to bolster its claim that the project will cause
grave environmental damage. We purposely discuss this matter in this
separate subsection for reasons which will be made clear shortly.
But first we shall present the pertinent contents of this report.
According to the Casio Group, from December 7 to 9, 2011, the SBMA
conducted social acceptability policy consultations with different stakeholders
on RP Energys proposed 600 MW coal plant project at the Subic Bay Exhibition
and Convention Center. The results thereof are contained in a document
prepared by SBMA entitled Final Report: Social Acceptability Process for RP
Energy, Inc.s 600-MW Coal Plant Project (Final Report). We note that SBMA
adopted the Final Report as a common exhibit with the Casio Group in the
course of the proceedings before the appellate court.
The Final Report stated that there was a clear aversion to the concept of a coalfired power plant from the participants. Their concerns included environmental,
health, economic and socio-cultural factors. Pertinent to this case is the alleged
assessment, contained in the Final Report, of the potential effects of the project
by three experts: (1) Dr. Rex Cruz (Dr. Cruz), Chancellor of the University of the
Philippines, Los Baos and a forest ecology expert, (2) Dr. Visitacion Antonio, a
toxicologist, who related information as to public health; and (3) Andre Jon
Uychiaco, a marine biologist.
The Final Report stated these experts alleged views on the project,
thus:chanroblesvirtuallawlibrary
IV. Experts Opinion
xxxx
The specialists shared the judgment that the conditions were not present to
merit the operation of a coal-fired power plant, and to pursue and carry out the
project with confidence and assurance that the natural assets and ecosystems
within the Freeport area would not be unduly compromised, or that irreversible
damage would not occur and that the threats to the flora and fauna within the
immediate community and its surroundings would be adequately addressed.
The three experts were also of the same opinion that the proposed coal plant
project would pose a wide range of negative impacts on the environment, the
ecosystems and human population within the impact zone.
The specialists likewise deemed the Environment Impact Assessment (EIA)
conducted by RPEI to be incomplete and limited in scope based on the
following observations:
i.
ii.
The EIA neglected to include other forests in the Freeport in its scope and
that there were no specific details on the protection of the endangered
flora and endemic fauna in the area. Soil, grassland, brush land, beach
forests and home gardens were also apparently not included in the study.
iii.
The sampling methods used in the study were limited and insufficient for
effective long-term monitoring of surface water, erosion control and
terrestrial flora and fauna.
Formation of acid rain, which would adversely affect the trees and
vegetation in the area which, in turn, would diminish forest cover. The
acid rain would apparently worsen the acidity of the soil in the Freeport.
ii.
Warming and acidification of the seawater in the bay, resulting in the bioaccumulation of contaminants and toxic materials which would
eventually lead to the overall reduction of marine productivity.
iii.
V. Findings
Based on their analyses of the subject matter, the specialists recommended
that the SBMA re-scrutinize the coal-fired power plant project with the following
goals in mind:
i.
ii.
iii.
iv.
The specialists also urged the SBMA to conduct a Comprehensive Cost And
Benefit Analysis Of The Proposed Coal Plant Project Relative To Each
Stakeholder Which Should Include The Environment As Provider Of Numerous
Environmental Goods And Services.
They also recommended an Integrated/Programmatic Environmental Impact
Assessment to accurately determine the environmental status of the Freeport
ecosystem as basis and reference in evaluating future similar projects. The
need for a more Comprehensive Monitoring System for the Environment and
Natural Resources was also reiterated by the panel.138
Of particular interest are the alleged key observations of Dr. Cruz on the EIS
prepared by RP Energy relative to the project:chanroblesvirtuallawlibrary
Key Observations and Recommendations on the EIS of Proposed RPE Project
Rex Victor O. Cruz
Based on SBMA SAP on December 7-9, 2011
1. The baseline vegetation analysis was limited only within the project site and
its immediate vicinity. No vegetation analysis was done in the brushland areas
in the peninsula which is likely to be affected in the event acid rain forms due
to emissions from the power plant.
2. The forest in the remaining forests in the Freeport was not considered as
impact zone as indicated by the lack of description of these forests and the
potential impacts the project might have on these forests. This appears to be a
key omission in the EIS considering that these forests are well within 40 to 50
km away from the site and that there are studies showing that the impacts of
sulphur emissions can extend as far as 40 to 50 km away from the source.
3. There are 39 endemic fauna and 1 endangered plant species (Molave) in the
proposed project site. There will be a need to make sure that these species are
protected from being damaged permanently in wholesale. Appropriate
measures such as ex situconservation and translocation if feasible must be
implemented.
4. The Project site is largely in grassland interspersed with some trees. These
plants if affected by acid rain or by sulphur emissions may disappear and have
consequences on the soil properties and hydrological processes in the area.
Accelerated soil erosion and increased surface runoff and reduced infiltration of
rainwater into the soil.
5. The rest of the peninsula is covered with brushland but were never included
as part of the impact zone.
6. There are home gardens along the coastal areas of the site planted to
ornamental and agricultural crops which are likely to be affected by acid rain.
7. There is also a beach forest dominated by aroma, talisai and agoho which
will likely be affected also by acid rain.
8. There are no Environmentally Critical Areas within the 1 km radius from the
project site. However, the Olongapo Watershed Forest Reserve, a protected
area is approximately 10 km southwest of the project site. Considering the
prevailing wind movement in the area, this forest reserve is likely to be affected
by acid rain if it occurs from the emission of the power plant. This forest
reserve is however not included as part of the potential impact area.
9. Soil in the project site and the peninsula is thin and highly acidic and
deficient in NPK with moderate to severe erosion potential. The sparse
vegetation cover in the vicinity of the project site is likely a result of the highly
acidic soil and the nutrient deficiency. Additional acidity may result from acid
rain that may form in the area which could further make it harder for the plants
to grow in the area that in turn could exacerbate the already severe erosion in
the area.
10. There is a need to review the proposal to ensure that the proposed project
is consistent with the vision for the Freeport as enunciated in the SBMA Master
Plan and the Protected Area Management Plan. This will reinforce the validity
and legitimacy of these plans as a legitimate framework for screening potential
locators in the Freeport. It will also reinforce the trust and confidence of the
stakeholders on the competence and authority of the SBMA that would
translate in stronger popular support to the programs implemented in the
Freeport.
11. The EGF and Trust Fund (Table 5.13) should be made clear that the amounts
are the minimum amount and that adequate funds will be provided by the
proponent as necessary beyond the minimum amounts. Furthermore the basis
for the amounts allocated for the items (public liability and rehabilitation) in
Trust Fund and in EGF (tree planting and landscaping, artificial reef
establishment) must be clarified. The specific damages and impacts that will be
covered by the TF and EGF must also be presented clearly at the outset to
avoid protracted negotiations in the event of actual impacts occurring in the
future.
12. The monitoring plan for terrestrial flora and fauna is not clear on the
frequency of measurement. More importantly, the proposed method of
measurement (sampling transect) while adequate for estimating the diversity
Group failed to comment on the subject Petitions before this Court, which led
this Court to eventually dispense with its comment.148 We must express our
disapproval over the way it has prosecuted its claims, bordering as it does on
trifling with court processes. We deem it proper, therefore, to admonish it to be
more circumspect in how it prosecutes its claims.
In sum, we agree with the appellate court that the Casio Group failed to
substantiate its claims that the construction and operation of the power plant
will cause environmental damage of the magnitude contemplated under the
writ of kalikasan. The evidence it presented is inadequate to establish the
factual bases of its claims.cralawred
II.
Whether the ECC is invalid for lack of signature of Mr. Luis Miguel Aboitiz (Mr.
Aboitiz), as representative of RP Energy, in the Statement of Accountability of
the ECC.
The appellate court ruled that the ECC is invalid because Mr. Aboitiz failed to
sign the Statement of Accountability portion of the ECC.
We shall discuss the correctness of this ruling on both procedural and
substantive grounds.
Procedurally, we cannot fault the DENR for protesting the manner by which the
appellate court resolved the issue of the aforesaid lack of signature. We agree
with the DENR that this issue was not among those raised by the Casio Group
in its Petition for Writ of kalikasan.149 What is more, this was not one of the
triable issues specifically set during the preliminary conference of this
case.150chanRoblesvirtualLawlibrary
How then did the issue of lack of signature arise?
A review of the voluminous records indicates that the matter of the lack of
signature was discussed, developed or surfaced only in the course of the
hearings, specifically, on clarificatory questions from the appellate court, to
wit:chanroblesvirtuallawlibrary
J. LEAGOGO:
I would also show to you your ECC, thats page 622 of the rollo. I am showing to
you this Environmental Compliance Certificate dated December 22, 2008
issued by Sec. Jose L. Atienza, Jr. of the DENR. This is your Exhibit 18. Would
you like to go over this? Are you familiar with this document?
MS. MERCADO:
Yes, it[]s my Annex 3, Your Honor.
J. LEAGOGO:
I would like to refer you to page 3 of the ECC dated December 22, 2008. Page 2
refers to the Environmental Compliance Certificate, ECC Ref. No. 0804-0114021. Thats page 2 of the letter dated December 22, 2008. And on page 3, Dr.
Julian Amador recommended approval and it was approved by Sec. Atienza. You
see that on page 3?
MS. MERCADO:
Yes, Your Honor.
J. LEAGOGO:
Okay. On the same page, page 3, theres a Statement of Accountability.
MS. MERCADO:
Yes, Your Honor.
J. LEAGOGO:
Luis, who is Luis Miguel Aboitiz?
MS. MERCADO:
During that time he was the authorized representative of RP Energy, Your
Honor.
J. LEAGOGO:
Now, who is the authorized representative of RP Energy?
MS. MERCADO:
It would be Mr. Aaron Domingo, I believe.
J. LEAGOGO:
Please tell the Court why this was not signed by Mr. Luis Miguel Aboitiz, the
Statement of Accountability?
Because the Statement of Accountability says, Mr. Luis Miguel Aboitiz,
Director, representing Redondo Peninsula Energy with office address located at
110 Legaspi Street, Legaspi Village, Makati City, takes full responsibility in
complying with all conditions in this Environmental Compliance Certificate
[ECC][.] Will you tell this Court why this was not signed?
MS. MERCADO:
It was signed, Your Honor, but this copy wasnt signed. My apologies, I was the
one who provided this, I believe, to the lawyers. This copy was not signed
because during.
J. LEAGOGO:
But this is your exhibit, this is your Exhibit 18 and this is not signed. Do you
agree with me that your Exhibit 18 is not signed by Mr. Aboitiz?
MS. MERCADO:
Thats correct, Your Honor.151
We find this line of questioning inadequate to apprise the parties that the lack
of signature would be a key issue in this case; as in fact it became decisive in
the eventual invalidation of the ECC by the appellate court.
Concededly, a court has the power to suspend its rules of procedure in order to
attain substantial justice so that it has the discretion, in exceptional cases, to
take into consideration matters not originally within the scope of the issues
raised in the pleadings or set during the preliminary conference, in order to
prevent a miscarriage of justice. In the case at bar, the importance of the
signature cannot be seriously doubted because it goes into the consent and
commitment of the project proponent to comply with the conditions of the ECC,
which is vital to the protection of the right to a balanced and healthful ecology
of those who may be affected by the project.
Nonetheless, the power of a court to suspend its rules of procedure in
exceptional cases does not license it to foist a surprise on the parties in a given
case. To illustrate, in oral arguments before this Court, involving sufficiently
important public interest cases, we note that individual members of the Court,
from time to time, point out matters that may not have been specifically
covered by the advisory (the advisory delineates the issues to be argued and
decided). However, a directive is given to the concerned parties to discuss the
aforesaid matters in their memoranda. Such a procedure ensures that, at the
very least, the parties are apprised that the Court has taken an interest in such
matters and may adjudicate the case on the basis thereof. Thus, the parties are
given an opportunity to adequately argue the issue or meet the issue head-on.
We, therefore, find that the appellate court should have, at the very least,
directed RP Energy and the DENR to discuss and elaborate on the issue of lack
of signature in the presentation of their evidence and memoranda, before
making a definitive ruling that the lack thereof invalidated the ECC. This is in
keeping with the basic tenets of due process.
At any rate, we shall disregard the procedural defect and rule directly on
whether the lack of signature invalidated the ECC in the interest of substantial
justice.
The laws governing the ECC, i.e., Presidential Decree No. (PD) 1151 and PD
1586, do not specifically state that the lack of signature in the Statement of
Accountability has the effect of invalidating the ECC. Unlike in wills or
donations, where failure to comply with the specific form prescribed by law
leads to its nullity,152 the applicable laws here are silent with respect to the
necessity of a signature in the Statement of Accountability and the effect of the
lack thereof. This is, of course, understandable because the Statement of
Accountability is a mere off-shoot of the rule-making powers of the DENR
relative to the implementation of PD 1151 and PD 1586. To determine,
therefore, the effect of the lack of signature, we must look at the significance
thereof under the Environmental Impact Assessment (EIA) Rules of the DENR
and the surrounding circumstances of this case.
To place this issue in its proper context, a helpful overview of the stages of the
EIA process, taken from the Revised Manual, is reproduced below:
Figure 1-3 Overview of Stages of the Philippine EIA Process 153
1.0 SCREENING
2.0 SCOPING
Screening determines if a
project is covered or not
covered by the PEISS.154 If a
project is covered, screening
further determines what
document type the project
should prepare to secure the
needed approval, and what
the rest of the requirements
are in terms of EMB office of
application, endorsing and
decision authorities, duration
of processing.
Scoping is a Proponent-driven
multi-sectoral formal process
of determining the focused
Terms of Reference of the EIA
Study. Scoping identifies the
most significant
issues/impacts of a proposed
project, and then, delimits the
extent of baseline information
to those necessary to evaluate
and mitigate the impacts. The
need for and scope of an
Environmental Risk
Assessment (ERA) is also done
during the scoping session.
Scoping is done with the local
community through Public
Scoping and with a third party
EIA Review Committee (EIARC)
through Technical Scoping,
both with the participation of
the DENR-EMB. The process
results in a signed Formal
Scoping Checklist by the
review team, with final
approval by the EMB Chief.
The EIA Study involves a
3.0 REPORT
PREPARATION
EIA REPORT
4.0 REPORT and
EVALUATION
5.0 DECISION
MAKING
MONITORING.
6.0 VALIDATION, and
EVALUATION/
AUDIT
evaluation of EIA
recommendations and the
draft decision document,
resulting to the issuance of an
ECC, CNC or Denial Letter.
When approved, a covered
project is issued its certificate
of Environmental Compliance
Commitment (ECC) while an
application of a non-covered
project is issued a Certificate
of Non-Coverage (CNC).
Endorsing and deciding
authorities are designated by
AO 42, and further detailed in
this Manual for every report
type.Moreover, the Proponent
signs a sworn statement of full
responsibility on
implementation of its
commitments prior to the
release of the ECC. The ECC is
then transmitted to concerned
LGUs and other GAs for
integration into their decisionmaking process. The
regulated part of EIA
Review is limited to the
processes within EMB
control. The timelines for
the issuance of decision
documents provided for in
AO 42 and DAO 2003-30
are applicable only from
the time the EIA Report is
accepted for substantive
review to the time a
decision is issued on the
application.
Monitoring, Validation and
Evaluation/Audit stage
assesses performance of the
Proponent against the ECC and
its commitments in the
Environmental Management
and Monitoring Plans to ensure
actual impacts of the project
are adequately prevented or
mitigated.
The signing of the Statement of Accountability takes place at the DecisionMaking Stage. After a favorable review of its ECC application, the project
proponent, through its authorized representative, is made to sign a sworn
statement of full responsibility on the implementation of its commitments prior
to the official release of the ECC.
The definition of the ECC in the Revised Manual highlights the importance of
the signing of the Statement of Accountability:chanroblesvirtuallawlibrary
Environmental Compliance Certificate (ECC) - a certificate of Environmental
Compliance Commitment to which the Proponent conforms with, after DENREMB explains the ECC conditions, by signing the sworn undertaking of full
responsibility over implementation of specified measures which are
necessary to comply with existing environmental regulations or to
operate within best environmental practices that are not currently
covered by existing laws. It is a document issued by the DENR/EMB after a
positive review of an ECC application, certifying that the Proponent has
complied with all the requirements of the EIS System and has committed to
implement its approved Environmental Management Plan. The ECC also
provides guidance to other agencies and to LGUs on EIA findings and
recommendations, which need to be considered in their respective decisionmaking process.157 (Emphasis supplied)
As can be seen, the signing of the Statement of Accountability is an integral
and significant component of the EIA process and the ECC itself. The evident
intention is to bind the project proponent to the ECC conditions, which will
ensure that the project will not cause significant negative environmental
impacts by the implementation of specified measures which are necessary to
comply with existing environmental regulations or to operate within best
environmental practices that are not currently covered by existing laws.
Indeed, the EIA process would be a meaningless exercise if the project
proponent shall not be strictly bound to faithfully comply with the conditions
necessary to adequately protect the right of the people to a healthful and
balanced ecology.
Contrary to RP Energys position, we, thus, find that the signature of the project
proponents representative in the Statement of Accountability is necessary for
the validity of the ECC. It is not, as RP Energy would have it, a mere formality
and its absence a mere formal defect.
The question then is, was the absence of the signature of Mr. Aboitiz, as
representative of RP Energy, in the Statement of Accountability sufficient
ground to invalidate the ECC?
note that the Statement of Accountability precisely serves to obviate any doubt
as to the consent and commitment of the project proponent to the ECC
conditions. At any rate, the aforesaid letter-requests do additionally indicate RP
Energys conformity to the ECC conditions and, thus, negate a pattern to
maliciously evade accountability for the ECC conditions or to intentionally
create a loophole in the ECC to be exploited in a possible future litigation
over non-compliance with the ECC conditions.
In sum, we rule that the appellate court erred when it invalidated the ECC on
the ground of lack of signature of Mr. Aboitiz in the ECCs Statement of
Accountability relative to the copy of the ECC submitted by RP Energy to the
appellate court. While the signature is necessary for the validity of the ECC, the
particular circumstances of this case show that the DENR and RP Energy were
not properly apprised of the issue of lack of signature in order for them to
present controverting evidence and arguments on this point, as the matter only
developed during the course of the proceedings upon clarificatory questions
from the appellate court. Consequently, RP Energy cannot be faulted for
submitting the certified true copy of the ECC only after it learned that the ECC
had been invalidated on the ground of lack of signature in the January 30, 2013
Decision of the appellate court.
The certified true copy of the ECC, bearing the signature of Mr. Aboitiz in the
Statement of Accountability portion, was issued by the DENR-EMB and remains
uncontroverted. It showed that the Statement of Accountability was signed by
Mr. Aboitiz on December 24, 2008. Although the signing was done two days
after the official release of the ECC on December 22, 2008, absent sufficient
proof, we are not prepared to rule that the procedure adopted by the DENR was
done with bad faith or inexcusable negligence. Thus, we rule that the signature
requirement was substantially complied with pro hac vice.cralawred
III.
Whether the first and second amendments to the ECC are invalid for failure to
undergo a new environmental impact assessment (EIA) because of the
utilization of inappropriate EIA documents.
Upholding the arguments of the Casio Group, the appellate court ruled that
the first and second amendments to the ECC were invalid because the ECC
contained an express restriction that any expansion of the project beyond the
project description shall be the subject of a new EIA. It found that both
amendments failed to comply with the appropriate EIA documentary
requirements under DAO 2003-30 and the Revised Manual. In particular, it
found that the Environmental Performance Report and Management Plan
(EPRMP) and Project Description Report (PDR), which RP Energy submitted to
the DENR, relative to the application for the first and second amendments,
respectively, were not the proper EIA document type. Hence, the appellate
court ruled that the aforesaid amendments were invalid.
Preliminarily, we must state that executive actions carry presumptive validity
so that the burden of proof is on the Casio Group to show that the procedure
adopted by the DENR in granting the amendments to the ECC were done with
grave abuse of discretion. More so here because the administration of the EIA
process involves special technical skill or knowledge which the law has
specifically vested in the DENR.
After our own examination of DAO 2003-30 and the Revised Manual as well as
the voluminous EIA documents of RP Energy appearing in the records of this
case, we find that the appellate court made an erroneous interpretation and
application of the pertinent rules.
We explain.
As a backgrounder, PD 1151 set the Philippine Environment Policy. Notably, this
law recognized the right of the people to a healthful environment. 160 Pursuant
thereto, in every action, project or undertaking, which significantly affects the
quality of the environment, all agencies and instrumentalities of the national
government, including government-owned or -controlled corporations, as well
as private corporations, firms, and entities were required to prepare, file and
include a statement (i.e.,Environmental Impact Statement or EIS) containing:
(a) the environmental impact of the proposed action, project or undertaking;
(b) any adverse environmental effect which cannot be avoided should the
proposal be implemented;
(c) alternative to the proposed action;
(d) a determination that the short-term uses of the resources of the
environment are consistent with the maintenance and enhancement of the
long-term productivity of the same; and
(e) whenever a proposal involves the use of depletable or non-renewable
resources, a finding must be made that such use and commitment are
warranted.161chanRoblesvirtualLawlibrary
To further strengthen and develop the EIS, PD 1586 was promulgated, which
established the Philippine Environmental Impact Statement System (PEISS).
The PEISS is a systems-oriented and integrated approach to the EIS system to
ensure a rational balance between socio-economic development and
environmental protection for the benefit of present and future
generations.162 The ECC requirement is mandated under Section 4
thereof:chanroblesvirtuallawlibrary
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and
Projects. The President of the Philippines may, on his own initiative or upon
recommendation of the National Environmental Protection Council, by
proclamation declare certain projects, undertakings or areas in the country as
environmentally critical. No person, partnership or corporation shall
On the other hand, the Revised Manual delineates when an EPRMP is the proper
EIA document type, thus:chanroblesvirtuallawlibrary
For operating projects with previous ECCs but planning or applying for
clearance to modify/expand or re-start operations, or for projects
operating without an ECCbut applying to secure one to comply with PD 1586
regulations, the appropriate document is not an EIS but an EIA Report
incorporating the projects environmental performance and its current
Environmental Management Plan. This report is x x x an x x
xEnvironmental Performance Report and Management Plan (EPRMP)
for single project applications x x x172 (Emphasis supplied)
In its Glossary, the Revised Manual defines an EPRMP
as:chanroblesvirtuallawlibrary
Environmental Performance Report and Management Plan (EPRMP) documentation of the actual cumulative environmental impacts and
effectiveness of current measures for single projects that are already
operating but without ECCs.173 (Emphasis supplied)
Finally, Table 1-4, in the Revised Manual, states that an EPRMP is required for
Item I-B: Existing Projects for Modification or Re-start up (subject to conditions
in Annex 2-1c) and I-C: Operating without ECC.
From these definitions and tables, an EPRMP is, thus, the required EIA
document type for an ECP-single project which is:chanroblesvirtuallawlibrary
1. Existing and to be expanded (including undertakings that have stopped
operations for more than 5 years and plan to re-start with or without
expansion);
2. Operating but without ECCs;
3. Operating projects with previous ECCs but planning or applying for clearance
to modify/expand or re-start operations; and
4. Existing projects for modification or re-start up.
It may be observed that, based from the above, DAO 2003-30 and the Revised
Manual appear to use the terms operating and existing interchangeably. In
the case at bar, the subject project has not yet been constructed although
there have been horizontal clearing operations at the project site.
On its face, therefore, the theory of the Casio Group, as sustained by the
appellate court that the EPRMP is not the appropriate EIA document type
seems plausible because the subject project is not: (1) operating/existing with a
previous ECC but planning or applying for modification or expansion, or (2)
operating but without an ECC. Instead, the subject project is an unimplemented
or a non-implemented, hence, non-operating project with a previous ECC but
1 [Start]
1[Start]
Within three (3) years from ECC issuance
(for projects not started) OR at any time
during project implementation, the
Proponent prepares and submits to the
ECC-endorsing DENR-EMB office aLETTERREQUEST for ECC amendments, including
data/information, reports or documents to
substantiate the requested revisions.
2
3?
4?
3?
ECC-endorsing Authority decides
on the Letter-Request, based on
CH recommendation
Maximum Processing Time to
Issuance of Decision
EMB CO
7 workdays
EMB RO
7 workdays
Noteworthy in the above, which is pertinent to the issue at hand, is that the
amendment process squarely applies to projects not started, such as the
subject project, based on the phrase [w]ithin three (3) years from ECC
issuance (for projects not started) x x x.
Annex 2-1c, in turn, provides a Decision Chart for Determination of
Requirements For Project Modification. We reproduce below the first three
columns of Annex 2-1c, as are pertinent to the issue at
hand:ChanRoblesVirtualawlibrary
ANNEX 2-1c
DECISION CHART FOR DETERMINATION OF REQUIREMENTS
FOR PROJECT MODIFICATION178chanRoblesvirtualLawlibrary
Resulting Decision
Document/Type of EIA
Report Required
Operational projects, or
those which have
stopped
for ? 5 years and plan
to re-start
For Groups I and II
EIS-based Projects with
an
ECC applying for
modification
1.
Expansion of
land/project area w/in
catchment or
environment
described in the
original EIA Report
2.
Expansion of
It is assumed the
land/project area
modification proposal
OUTSIDE catchment or may have significant
environment
potential impacts due
described in the
to absence of prior
ECC Amendment
/Environmental
Performance Report
and Management Plan
(EPRMP)
assessment as to how
the project may affect
the proposed
expansion area
3.
ECC Amendment
/Letter Request with brief
description of additional
capacity or component
4.
ECC Amendment
/Environmental
Performance Report and
Management
Plan (EPRMP)
Modification scenario
and decision process
are applicable to both
non-implemented and
operating projects with
or without issued ECCs
5.
Change/s in process
flow or technology
6.
on the environment.
However, to ensure
there is no component
in the modification
which fall under
covered project types,
EMB will require
disclosure of the
description of the
components and
process with which the
new product will be
developed.
Description Report
of new project
component and
integrated EMP
7.
Downgrade project
size or area or other
units of measure of
thresholds limits
No incremental
adverse impacts; may
result to lower project
threshold or may result
to non-coverage
8.
Conversion to new
project type (e.g.
bunker-fired plant to
gas-fired)
Considered new
New ECC
application but with
/EIS
lesser data
requirements since
most facilities are
established;
environmental
performance in the
past will serve as
baseline; However, for
operating projects,
there may be need to
request for Relief from
ECC Commitment prior
to applying for new
project type to ensure
no balance of
environmental
accountabilities from
the current project
9.
ECC Amendment
/Letter Request with
consolidated Project
Description Report
and integrated EMP
request/apply)
or an integrated ECC
(ECC conditions will be
harmonized across
projects; conditions
relating to
requirements within
other agencies
mandates will be
deleted)
10. Revision/
Reformatting of ECC
Conditions
Increase in capacity or
auxiliary component of
the original project which
will either exceed PDR
(non-covered project)
thresholds, or EMP & ERA
cannot address impacts
and risks arising from
modification
ECC
Amendment
/ Environmental
Performance
Report and
Management
Plan (EPRMP)182
That the proposed modifications in the subject project fall under this class or
type of amendment was a determination made by the DENR-EMB and, absent a
showing of grave abuse of discretion, the DENR-EMBs findings are entitled to
great respect because it is the administrative agency with the special
competence or expertise to administer or implement the EIS System.
The apparent confusion of the Casio Group and the appellate court is
understandable. They had approached the issue with a legal training mindset
or background. As a general proposition, the definition of terms in a statute or
rule is controlling as to its nature and scope within the context of legal or
judicial proceedings. Thus, since the procedure adopted by the DENR-EMB
seemed to contradict or go beyond the definition of terms in the relevant
issuances, the Casio Group and the appellate court concluded that the
procedure was infirm.
However, a holistic reading of DAO 2003-30 and the Revised Manual will show
that such a legalistic approach in its interpretation and application is
unwarranted. This is primarily because the EIA process is a system, not a set of
rigid rules and definitions. In the EIA process, there is much room for flexibility
in the determination and use of the appropriate EIA document type as the
foregoing discussion has shown.184 To our mind, what should be controlling is
the guiding principle set in DAO 2003-30 in the evaluation of applications for
amendments to ECCs, as stated in Section 8.3 thereof: [r]equirements for
processing ECC amendments shall depend on the nature of the request but
shall be focused on theinformation necessary to assess the environmental
impact of such changes.185chanRoblesvirtualLawlibrary
This brings us to the next logical question, did the EPRMP provide the
necessary information in order for the DENR-EMB to assess the environmental
impact of RP Energys request relative to the first amendment?
We answer in the affirmative.
In the first place, the Casio Group never attempted to prove that the subject
EPRMP, submitted by RP Energy to the DENR-EMB, was insufficient for purposes
of evaluating the environmental impact of the proposed modifications to the
original project design. There is no claim that the data submitted were falsified
or misrepresented. Neither was there an attempt to subpoena the review
process documents of the DENR to establish that the grant of the amendment
to the ECC was done with grave abuse of discretion or to the grave prejudice of
the right to a healthful environment of those who will be affected by the
project. Instead, the Casio Group relied solely on the definition of terms in
DAO 2003-30 and the Revised Manual, which approach, as previously
discussed, was erroneous.
At any rate, we have examined the contents of the voluminous EPRMP
submitted by RP Energy and we find therein substantial sections explaining the
proposed changes as well as the adjustments that will be made in the
environmental management plan in order to address the potential
Director192
because (1) there is no increase in capacity; (2) it does not constitute any
significant impact; and (3) its EMP and ERA as specified in the submitted EPRMP
remain the same.193 Relative to Annex 2-1c, the requested amendment was, in
turn, determined to fall under Item#3:chanroblesvirtuallawlibrary
3.
Increase in capacity or
auxiliary component of the
original project which will
either not entail
exceedance of PDR (noncovered project) thresholds
or EMP & ERA can still
address impacts & risks
arising from modification
Non-exceedance of PDR
(non covered project)
thresholds is assumed that
impacts are not
significant;
ECC
Amendment
/ Letter Request
with brief
description of
additional
capacity
or component
impact assessment of the effects of constructing and operating a single 300MW generating unit.196 However, to our dismay, as in their other serious
allegations in their Petition for Writ of kalikasan, the same is, likewise, baseless.
Apart from such a sweeping claim, the Casio Group has provided no evidence
or argument to back up the same.
An examination of the PDR readily reveals that it contains the details of the
proposed modifications197and an express finding that no significant
environmental impact will be generated by such modifications, as in fact it is
expected that the operation of the power plant will become more efficient as a
result of the change from 2 x 150 MW to 1 x 300 MW
configuration.198 Consequently, the PDR merely reiterates the same mitigating
measures that will presumably address the minor modifications to the project
design. Again, no evidence was presented to show substantial errors or
misrepresentations in these data or their inadequacy for providing the bases
for the DENR-EMB to assess the environmental impact of the proposed
modifications under the second amendment.
In fine, absent proof to the contrary, bearing in mind that allegations are not
proof, we sustain the procedure adopted by the DENR-EMB in requiring RP
Energy to submit a PDR and, on the basis thereof, approving the request for the
second amendment.
In another vein, we note that the appellate court proceeded from the erroneous
premise that the EIA is a document, when it repeatedly stated that the
amendments to the ECC require a new EIA, and not merely an EPRMP or PDR.
The appellate court relied on the proviso in the ECC, which stated that [a]ny
expansion of the project beyond the project description or any change in the
activity or transfer of location shall be subject to a new Environmental Impact
Assessment.199chanRoblesvirtualLawlibrary
However, as correctly pointed out by the DENR and RP Energy, the EIA is not a
document but a process:chanroblesvirtuallawlibrary
Environmental Impact Assessment (EIA) process that involves evaluating
and predicting the likely impacts of a project (including cumulative impacts) on
the environment during construction, commissioning, operation and
abandonment. It also includes designing appropriate preventive, mitigating and
enhancement measures addressing these consequences to protect the
environment and the community's welfare. The process is undertaken by,
among others, the project proponent and/or EIA Consultant, EMB, a Review
Committee, affected communities and other stakeholders.200(Emphasis
supplied)
When the proviso in the ECC, therefore, states that a new EIA shall be
conducted, this simply means that the project proponent shall be required to
submit such study or report, as warranted by the DENR Rules and
circumstances, which will sufficiently aid the DENR in making a new EIA and,
thus, determine whether to grant the proposed amendment (or project
modification). As we have seen, consistent with DAO 2003-30 and the Revised
Manual, the DENR required RP Energy to submit an EPRMP and a PDR relative
to the latters request involving the first and second amendments, respectively,
which led to the new EIA of the project in compliance with the proviso of the
ECC.
Verily, the various EIA documents, such as the EPRMP and PDR, are mere tools
used by the DENR to assess the environmental impact of a particular project.
These documents are flexibly used by the DENR, as the circumstances warrant,
in order to adequately assess the impacts of a new project or modifications
thereto. Being the administrative agency entrusted with the determination of
which EIA document type applies to a particular application for an amendment
to an ECC, falling as it does within its particular technical expertise, we must
accord great respect to its determination, absent a showing of grave abuse of
discretion or patent illegality.
In sum, we find that the appellate court erred when it ruled that the first and
second amendments to the subject ECC were invalid for failure to comply with
a new EIA and for violating DAO 2003-30 and the Revised Manual. The
appellate court failed to properly consider the applicable provisions in DAO
2003-30 and the Revised Manual on amendments to ECCs. Our examination of
the provisions on amendments to ECCs, as well as the EPRMP and PDR
themselves, shows that the DENR reasonably exercised its discretion in
requiring an EPRMP and a PDR for the first and second amendments,
respectively. Through these documents, which the DENR reviewed, a new EIA
was conducted relative to the proposed project modifications. Hence, absent
sufficient showing of grave abuse of discretion or patent illegality, relative to
both the procedure and substance of the amendment process, we uphold the
validity of these amendments.cralawred
IV.
Whether the Certificate of Non-Overlap (CNO), under Section 59 of the IPRA
Law, is a precondition to the issuance of an ECC and the lack of its prior
issuance rendered the ECC invalid.
The appellate court ruled that the ECC issued in favor of RP Energy on
December 22, 2008 is invalid because the CNO covering the subject project
was issued only on October 31, 2012 or almost four years from the time of
issuance of the ECC. Thus, the ECC was issued in violation of Section 59 of the
IPRA Law and its implementing rules which require that a CNO be obtained prior
to the issuance of a government agency of, among others, a license or permit.
In so ruling, the appellate court implicitly upheld the Casio Groups argument
that the ECC is a form of government license or permit pursuant to Section 4 of
PD 1586 which requires all entities to secure an ECC before (1) engaging in an
environmentally critical project or (2) implementing a project within an
environmentally critical area.
The DENR and RP Energy, however, argue that an ECC is not the license or
permit contemplated under Section 59 of the IPRA Law and its implementing
rules as may be deduced from the definition, nature and scope of an ECC under
DAO 2003-03 and the Revised Manual. The DENR explains that the issuance of
an ECC does not exempt the project proponent from securing other permits and
clearances as required under existing laws, including the CNO, and that the
final decision on whether a project will be implemented lies with the concerned
local government unit/s or the lead government agency which has sectoral
mandate to promote the government program where the project belongs.
We agree with the DENR and RP Energy.
Section 59, Chapter VIII of the IPRA Law provides:chanroblesvirtuallawlibrary
SEC. 59. Certification Precondition. All departments and other
governmental agencies shall henceforth be strictly enjoined from
issuing, renewing, or granting any concession, license or lease, or
entering into any production-sharing agreement, without prior certification
from the NCIP that the area affected does not overlap with any
ancestral domain. Such certification shall only be issued after a field-based
investigation is conducted by the Ancestral Domains Office of the area
concerned: Provided, That no certification shall be issued by the NCIP without
the free and prior informed and written consent of ICCs/IPs concerned:
Provided, further, That no department, government agency or governmentowned or -controlled corporation may issue new concession, license, lease, or
production sharing agreement while there is a pending application for a CADT:
Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in
accordance with this Act, any project that has not satisfied the requirement of
this consultation process. (Emphasis supplied)
While Section 9, Part II, Rule VIII of National Commission on Indigenous Peoples
(NCIP) Administrative Order No. 01-98201 states:chanroblesvirtuallawlibrary
SECTION 9. Certification Precondition Prior to Issuance of any Permits or
Licenses.
a. Need for Certification. No department of government or other agencies
shall issue, renew or grant any concession, license, lease, permit, or
enter into any production sharing agreement without a prior certification
from the NCIP that the area affected does not overlap any ancestral
domain.
b. Procedure for Issuance of Certification by NCIP.
1) The certification, above mentioned, shall be issued by the Ancestral Domain
Office, only after a field based investigation that such areas are not within any
certified or claimed ancestral domains.
2) The certification shall be issued only upon the free, prior, informed and
written consent of the ICCs/IPs who will be affected by the operation of such
Certificate. The release of the ECC allows the project to proceed to the
next stage of project planning, which is the acquisition of approvals
from other government agencies and LGUs, after which the project
can start implementation.
xxxx
6) The EIA Process in Relation to Other Agencies Requirements
It is inherent upon the EIA Process to undertake a comprehensive and
integrated approach in the review and evaluation of environment-related
concerns of government agencies (GAs), local government units (LGUs) and the
general public. The subsequent EIA findings shall provide guidance and
recommendations to these entities as a basis for their decision making process.
a)
b)
c)
xxxx
f)
The final decision whether a project will be implemented or not
lies either with the LGUs who have spatial jurisdiction over the
project or with the lead government agency who has sectoral
mandate to promote the government program where the
project belongs, e.g. DOE for energy projects; DENR-MGB for mining
projects. (Emphasis supplied)
As can be seen, the issuance of the ECC does not, by and of itself, authorize
the implementation of the project. Although it is indispensable before the
covered project can be commenced, as per Section 4 of PD 1586, the issuance
of the ECC does not, as of yet, result in the implementation of the project.
Rather, the ECC is intended to, among others, provide guidance or act as a
decision-making tool to other government agencies and LGUs which have the
final authority to grant licenses or permits, such as building permits or licenses
to operate, that will ultimately result in, or authorize the implementation of the
project or the conduct of specific activities.
As a consequence, we find that the CNO requirement under Section 59 of the
IPRA Law is not required to be obtained prior to the issuance of an ECC. As
previously discussed, Section 59 aims to forestall the implementation of a
project that may impair the right of ICCs/IPs to their ancestral domains, by
ensuring or verifying that a project will not overlap with any ancestral domain
prior to its implementation. However, because the issuance of an ECC does not
result in the implementation of the project, there is no necessity to secure a
CNO prior to an ECCs issuance as the goal or purpose, which Section 59 seeks
to achieve, is, at the time of the issuance of an ECC, not yet applicable.
In sum, we find that the ECC is not the license or permit contemplated under
Section 59 of the IPRA Law and its implementing rules. Hence, there is no
necessity to secure the CNO under Section 59 before an ECC may be issued
and the issuance of the subject ECC without first securing the aforesaid
certification does not render it invalid.cralawred
V.
Whether the Certificate of Non-Overlap (CNO), under Section 59 of the IPRA
Law, is a precondition to the consummation of the Lease and Development
Agreement (LDA) between SBMA and RP Energy and the lack of its prior
issuance rendered the LDA invalid.
We now turn to the applicability of Section 59 of the IPRA Law to the LDA
entered into between the SBMA and RP Energy on June 8, 2010. Similar to the
ECC, the LDA was entered into prior to the issuance of the CNO on October 31,
2012.
Before this Court, SBMA and RP Energy reiterate their arguments on why the
CNO is no longer necessary in the instant case, to wit:
1. Prior to entering into the LDA with RP Energy, SBMA entered into a lease
agreement with HHIC206-Philippines, Inc. and a CNO was already issued
therefor which, for all intents and purposes, is applicable to the area
leased by RP Energy being part of contiguous lots in Redondo Peninsula.
2. The site of the power plant project is very distant from the boundaries of
the lone area at the Subic Bay Freeport Zone covered by an Aeta
Communitys Certificate of Ancestral Domain Title (CADT).
3. There was no indigenous community within the vicinity of the project
area as stated in RP Energys EIS.
4. The land where the project is located was subsequently classified as
industrial by the SBMA.
5. The scoping/procedural screening checklist classified as not relevant
the issue of indigenous people.
6. Ms. Mercado, who was part of the team which prepared the EIS, testified
that she visited the project site ten or more times and did not see any
Aeta communities there.
7. Mr. Evangelista testified that the project site used to be a firing range of
the U.S. Armed Forces which would make it impossible to be a settlement
area of indigenous communities.
8. Atty. Rodriguez stated that the project site is not covered by a CADT and
that from the start of negotiations on the LDA, the SBMA Ecology Center
verified with the NCIP that there was no application for said area to be
covered by a CADT.
RP Energy further argues that, in any case, as a matter of prudence, it secured
a CNO from the NCIP. On October 31, 2012, the NCIP issued the subject CNO
over the project site, which should erase any doubt as to whether it overlaps
with an ancestral domain.
Upholding the arguments of the Casio Group, the appellate court ruled that
SBMA failed to comply with the CNO requirement and, thus, the LDA entered
into between SBMA and RP Energy is invalid. It rejected the reasons given by
SBMA and RP Energy, to wit:
1. RP Energys reliance on its own field investigation that no indigenous
community was found within the vicinity is unavailing because it was not
the field investigation by the NCIP required by the IPRA Law.
2. RP Energy acknowledged that Aetas were among the earliest settlers in
the municipality where the project will be built. Hence, it was not clearly
shown that in 2008, at the time the LDA was entered into, there were no
indigenous communities in the project site.
3. SBMAs representation that the project site is industrial relies on a letter
dated March 5, 2008 and the scoping checklist, which are hearsay
evidence.
and such other considerations that would help determine whether a CNO
should be first obtained prior to granting a concession, lease, license or permit,
or entering into a production-sharing agreement.
If there are circumstances that indicate that a claim of ownership by ICCs/IPs
may be present or a claim of ownership may be asserted in the future, no
matter how remote, the proper and prudent course of action is to obtain the
CNO. In case of doubt, the doubt should be resolved in favor of securing the
CNO and, thus, the government agency is under obligation to secure the
aforesaid certification in order to protect the interests and rights of ICCs/IPs to
their ancestral domains. This must be so if we are to accord the proper respect
due to, and adequately safeguard the interests and rights of, our brothers and
sisters belonging to ICCs/IPs in consonance with the constitutional policy 209 to
promote and protect the rights of ICCS/IPs as fleshed out in the IPRA Law and
its implementing rules.
In the case at bar, we find, applying this rule of action, that the SBMA should
have first secured a CNO before entering into the LDA with RP Energy for the
following reasons.
First, the Subic area is historically known to be the home of our brothers and
sisters belonging to the Aeta communities. In particular, the EIS210 itself of RP
Energy noted that Aeta communities originally occupied the proposed project
site of the power plant. Thus, even if we assume that, at the time of the ocular
inspection of the proposed project site in 2008, there were no Aeta
communities seen thereat, as claimed by RP Energy, the exercise of reasonable
prudence should have moved SBMA and RP Energy to secure a CNO in order to
rule out the possibility that the project site may overlap with an ancestral
domain. This is especially so, in view of the observation previously made, that
lack of actual occupation by an indigenous community of the area does not
necessarily mean that it is not a part of an ancestral domain because the latter
encompasses areas that are not actually occupied by indigenous communities
but are used for other purposes like hunting, worship or burial grounds.
Second, SBMA and RP Energy claim that the SBMA Ecology Center verified with
the NCIP that the project site does not overlap with an ancestral domain.
However, the person, who allegedly did the verification, and the officer from
the NCIP, who was contacted in this alleged verification, were not presented in
court. Assuming that this verification did take place and that the SBMA Ecology
Center determined that there is no pending application for a CADT covering the
project site and that the presently recognized CADT of Aeta communities is too
far away from the project site, it still does not follow that the CNO under
Section 59 should have been dispensed with.
The acts of individual members of a government agency, who allegedly
checked with the NCIP that the project site does not overlap with an ancestral
domain, cannot substitute for the CNO required by law. The reason is obvious.
Such posture would circumvent the noble and laudable purposes of the law in
providing the CNO as the appropriate mechanism in order to validly and
officially determine whether a particular project site does not overlap with an
ancestral domain. It would open the doors to abuse because a government
agency can easily claim that it checked with the NCIP regarding any application
for an ancestral domain over a proposed project site while stopping short of
securing a CNO. To reiterate, the legally mandated manner to verify if a project
site overlaps with an ancestral domain is the CNO, and not through personal
verification by members of a government agency with the NCIP.
Third, that the project site was formerly used as the firing range of the U.S.
Armed Forces does not preclude the possibility that a present or future claim of
ancestral domain may be made over the aforesaid site. The concept of an
ancestral domain indicates that, even if the use of an area was interrupted by
the occupation of foreign forces, it may still be validly claimed to be an
ancestral domain.211chanRoblesvirtualLawlibrary
Fourth, that the project site was subsequently classified by the SBMA as
forming part of an industrial zone does not exempt it from the CNO
requirement. The change in the classification of the land is not an exception to
the CNO requirement under the IPRA Law. Otherwise, government agencies can
easily defeat the rights of ICCs/IPs through the conversion of land use.
Fifth, SBMA argues that the CNO issued to HHIC should, for all intents and
purposes, be applicable to RP Energy. However, as correctly ruled by the
appellate court, the CNO issued to HHICs shipyard cannot be extended to RP
Energys project site because they involve two different locations although
found within the same land mass. The CNO issued in favor of HHIC clearly
states that the findings in the CNO are applicable only to the shipyard location
of HHIC.
Last, the steps taken by SBMA, in securing a CNO prior to its lease agreement
with HHIC, was the proper and prudent course of action that should have been
applied to the LDA with RP Energy. It does not matter that HHIC itself asked for
the CNO prior to entering into a lease agreement with SBMA, as claimed by
SBMA, while RP Energy did not make such a request because, as we have
discussed, SBMA had the obligation, given the surrounding circumstances, to
secure a CNO in order to rule out the possibility that the project site overlapped
with an ancestral domain.
All in all, we find, applying the foregoing rule of action, that SBMA should have
secured a CNO before entering into the LDA with RP Energy. Considering that
Section 59 is a prohibitory statutory provision, a violation thereof would
ordinarily result in the nullification of the contract.212 However, we rule that the
harsh consequences of such a ruling should not be applied to the case at bar.
The reason is that this is the first time that we lay down the foregoing rule of
action so much so that it would be inequitable to retroactively apply its effects
with respect to the LDA entered into between SBMA and RP Energy. We also
note that, under the particular circumstances of this case, there is no showing
that SBMA and RP Energy had a deliberate or ill intent to escape, defeat or
circumvent the mandate of Section 59 of the IPRA Law. On the contrary, they
appear to have believed in good faith,albeit erroneously, that a CNO was no
longer needed because of the afore-discussed defenses they raised herein.
When the matter of lack of a CNO relative to the LDA was brought to their
attention, through the subject Petition for Writ of kalikasan filed by the Casio
Group, RP Energy, with the endorsement of SBMA, promptly undertook to
secure the CNO, which was issued on October 31, 2012 and stated that the
project site does not overlap with any ancestral
domain.213chanRoblesvirtualLawlibrary
Thus, absent proof to the contrary, we are not prepared to rule that SBMA and
RP Energy acted in bad faith or with inexcusable negligence, considering that
the foregoing rule of action has not heretofore been laid down by this Court. As
a result, we hold that the LDA should not be invalidated due to equitable
considerations present here.
By so ruling, we clarify that we reject RP Energys claim that the belated
submission of the CNO is an over compliance on its part. Quite the contrary,
as we have discussed, the CNO should have been first secured given the
surrounding circumstances of this case.
In the same vein, we reject SBMAs argument that the belated application for,
and submission of the CNO cured whatever defect the LDA had. We have
purposely avoided a ruling to the effect that a CNO secured subsequent to the
concession, lease, license, permit or production-sharing agreement will cure
the defect. Such a ruling would lead to abuse of the CNO requirement since the
defect can be cured anyway by a subsequent and belated application for a
CNO. Government agencies and third parties, either through deliberate intent
or negligence, may view it as an excuse not to timely and promptly secure the
CNO, even when the circumstances warrant the application for a CNO under
the afore-discussed rule of action, to the damage and prejudice of ICCs/IPs.
Verily, once the concession, lease, license or permit is issued, or the agreement
is entered into without the requisite CNO, consequent damages will have
already occurred if it later turns out that the site overlaps with an ancestral
domain. This is so even if the ICCs/IPs can have the project stopped upon
discovery that it overlapped with their ancestral domain under the
last proviso214 of Section 59. To prevent this evil, compliance with the CNO
requirement should be followed through the afore-discussed rule of action.
In sum, we rule that a CNO should have been secured prior to the
consummation of the LDA between SBMA and RP Energy. However, considering
that this is the first time we lay down the rule of action appropriate to the
application of Section 59, we refrain from invalidating the LDA due to equitable
considerations.cralawred
VI.
Whether compliance with Section 27, in relation to Section 26, of the LGC (i.e.,
approval of the concerned sanggunian requirement) is necessary prior to the
the President of the Philippines. Within thirty (30) days after the approval of
this Act, each local government unit shall submit its resolution of concurrence
to join the Subic Special Economic Zone to the office of the President.
Thereafter, the President of the Philippines shall issue a proclamation defining
the metes and bounds of the Zone as provided herein.
Subsequently, the aforesaid sanggunians submitted their respective resolutions
of concurrence and the President issued Presidential Proclamation No. 532,
Series of 1995, defining the metes and bounds of the SSEZ.
In Executive Secretary v. Southwing Heavy Industries, Inc.,222 we described the
concept of SSEZ as a Freeport:chanroblesvirtuallawlibrary
The Freeport was designed to ensure free flow or movement of goods and
capital within a portion of the Philippine territory in order to attract investors to
invest their capital in a business climate with the least governmental
intervention. The concept of this zone was explained by Senator Guingona in
this wise:chanroblesvirtuallawlibrary
Senator Guingona. Mr. President, the special economic zone is successful in
many places, particularly Hong Kong, which is a free port. The difference
between a special economic zone and an industrial estate is simply expansive
in the sense that the commercial activities, including the establishment of
banks, services, financial institutions, agro-industrial activities, maybe
agriculture to a certain extent.
This delineates the activities that would have the least of government
intervention, and the running of the affairs of the special economic
zone would be run principally by the investors themselves, similar to a
housing subdivision, where the subdivision owners elect their
representatives to run the affairs of the subdivision, to set the
policies, to set the guidelines.
We would like to see Subic area converted into a little Hong Kong, Mr.
President, where there is a hub of free port and free entry, free duties
and activities to a maximum spur generation of investment and jobs.
While the investor is reluctant to come in the Philippines, as a rule, because of
red tape and perceived delays, we envision this special economic zone to be an
area where there will be minimum government interference.
The initial outlay may not only come from the Government or the Authority as
envisioned here, but from them themselves, because they would be
encouraged to invest not only for the land but also for the buildings and
factories. As long as they are convinced that in such an area they can do
business and reap reasonable profits, then many from other parts, both local
and foreign, would invest, Mr. President.223 (Emphasis in the original)
To achieve the above-mentioned purposes, the law created SBMA to administer
the SSEZ. In the process, SBMA was granted broad and enormous powers as
provided for under Section 13(b) of RA 7227:chanroblesvirtuallawlibrary
Sec. 13. The Subic Bay Metropolitan Authority.
xxxx
(b) Powers and functions of the Subic Bay Metropolitan Authority - The Subic
Bay Metropolitan Authority, otherwise known as the Subic Authority, shall have
the following powers and function:
(1) To operate, administer, manage and develop the ship repair and ship
building facility, container port, oil storage and refueling facility and Cubi Air
Base within the Subic Special Economic and Free-port Zone as a free market in
accordance with the policies set forth in Section 12 of this Act;
(2) To accept any local or foreign investment, business or enterprise,
subject only to such rules and regulations to be promulgated by the Subic
Authority in conformity with the policies of the Conversion Authority without
prejudice to the nationalization requirements provided for in the Constitution;
(3) To undertake and regulate the establishment, operation and
maintenance of utilities, other services and infrastructure in the Subic
Special Economic Zoneincluding shipping and related business, stevedoring
and port terminal services or concessions, incidental thereto and airport
operations in coordination with the Civil Aeronautics Board, and to fix just and
reasonable rates, fares charges and other prices therefor;
(4) To construct, acquire, own, lease, operate and maintain on its own
or through contract, franchise, license permits bulk purchase from the
private sector and build-operate transfer scheme or joint-venture the
required utilities and infrastructure in coordination with local government
units and appropriate government agencies concerned and in conformity with
existing applicable laws therefor;
(5) To adopt, alter and use a corporate seal; to contract, lease, sell, dispose,
acquire and own properties; to sue and be sued in order to carry out its duties
and functions as provided for in this Act and to exercise the power of eminent
domain for public use and public purpose;
(6) Within the limitation provided by law, to raise and/or borrow the necessary
funds from local and international financial institutions and to issue bonds,
promissory notes and other securities for that purpose and to secure the same
by guarantee, pledge, mortgage deed of trust, or assignment of its properties
held by the Subic Authority for the purpose of financing its projects and
programs within the framework and limitation of this Act;
(7) To operate directly or indirectly or license tourism related activities subject
to priorities and standards set by the Subic Authority including games and
amusements, except horse racing, dog racing and casino gambling which shall
continue to be licensed by the Philippine Amusement and Gaming Corporation
(PAGCOR) upon recommendation of the Conversion Authority; to maintain and
preserve the forested areas as a national park;
(8) To authorize the establishment of appropriate educational and medical
institutions;
(9) To protect, maintain and develop the virgin forests within the baselands,
which will be proclaimed as a national park and subject to a permanent total
log ban, and for this purpose, the rules and regulations of the Department of
Environment and Natural Resources and other government agencies directly
involved in the above functions shall be implemented by the Subic Authority;
(10) To adopt and implement measures and standards for environmental
pollution control of all areas within its territory, including but not limited to all
bodies of water and to enforce the same. For which purpose the Subic Authority
shall create an Ecology Center; and
(11) To exercise such powers as may be essential, necessary or incidental to
the powers granted to it hereunder as well as to carry out the policies and
objectives of this Act. (Emphasis supplied)
The Implementing Rules of RA 7227 further provide:chanroblesvirtuallawlibrary
Sec. 11. Responsibilities of the SBMA. Other than the powers and functions
prescribed in Section 10 of these Rules, the SBMA shall have the following
responsibilities:
(a) The SBMA shall exercise authority and jurisdiction over all economic activity
within the SBF224chanRoblesvirtualLawlibrary
xxxx
(f) Consistent with the Constitution, the SBMA shall have the following powers
to enforce the law and these Rules in the SBF:
xxxx
(8) to issue, alter, modify, suspend or revoke for cause, any permit, certificate,
license, visa or privilege allowed under the Act or these Rules;
xxxx
(11) to promulgate such other rules, regulations and circulars as may be
necessary, proper or incidental to carry out the policies and objectives of the
Act, these Rules, as well as the powers and duties of the SBMA thereunder. 225
As can be seen, the SBMA was given broad administrative powers over the
SSEZ and these necessarily include the power to approve or disapprove the
subject project, which is within its territorial jurisdiction. But, as previously
discussed, the LGC grants the concerned sanggunians the power to approve
and disapprove this same project. The SBMA asserts that its approval of the
project prevails over the apparent disapproval of the concerned sanggunians.
There is, therefore, a real clash between the powers granted under these two
laws.
Which shall prevail?
Section 12 of RA 7227 provides:ChanRoblesVirtualawlibrary
Sec. 12. Subic Special Economic Zone. x x x
The abovementioned zone shall be subjected to the following policies:
(a) Within the framework and subject to the mandate and limitations of the
Constitution and the pertinent provisions of the Local Government Code, the
Subic Special Economic Zone shall be developed into a self-sustaining,
industrial, commercial, financial and investment center to generate
employment opportunities in and around the zone and to attract and promote
productive foreign investments;
xxxx
(i) Except as herein provided, the local government units comprising the
Subic Special Economic Zone shall retain their basic autonomy and
identity. The cities shall be governed by their respective charters and the
municipalities shall operate and function in accordance with Republic Act No.
7160, otherwise known as the Local Government Code of 1991. (Emphasis
supplied)
This section sets out the basic policies underlying the creation of the SSEZ.
Indeed, as noted by the appellate court, Section 12(i) expressly recognizes the
basic autonomy and identity of the LGUs comprising the SSEZ. However, the
clause [e]xcept as herein provided unambiguously provides that the LGUs do
not retain their basic autonomy and identity when it comes to matters specified
by the law as falling under the powers, functions and prerogatives of the SBMA.
In the case at bar, we find that the power to approve or disapprove projects
within the SSEZ is one such power over which the SBMAs authority prevails
over the LGUs autonomy. Hence, there is no need for the SBMA to secure the
approval of the concerned sanggunians prior to the implementation of the
subject project.
This interpretation is based on the broad grant of powers to the SBMA over all
administrative matters relating to the SSEZ under Section 13 of RA 7227, as
afore-discussed. Equally important, under Section 14, other than those
involving defense and security, the SBMAs decision prevails in case of conflict
between the SBMA and the LGUs in all matters concerning the
SSEZ, viz.:chanroblesvirtuallawlibrary
Sec. 14. Relationship with the Conversion Authority and the Local Government
Units.
(a) The provisions of existing laws, rules and regulations to the
contrary notwithstanding, the Subic Authority shall exercise
administrative powers, rule-making and disbursement of funds over
the Subic Special Economic Zone in conformity with the oversight function
of the Conversion Authority.
(b) In case of conflict between the Subic Authority and the local
government units concerned on matters affecting the Subic Special
Economic Zone other than defense and security, the decision of the Subic
Authority shall prevail. (Emphasis supplied)
Clearly, the subject project does not involve defense or security, but rather
business and investment to further the development of the SSEZ. Such is in line
with the objective of RA 7227 to develop the SSEZ into a self-sustaining
industrial, commercial, financial and investment center. Hence, the decision of
the SBMA would prevail over the apparent objections of the
concerned sanggunians of the LGUs.
Significantly, the legislative deliberations on RA 7227, likewise, support and
confirm the foregoing interpretation. As earlier noted, Section 13 b(4) of RA
7227 provides:chanroblesvirtuallawlibrary
Sec. 13. The Subic Bay Metropolitan Authority.
xxxx
(b) Powers and functions of the Subic Bay Metropolitan Authority - The Subic
Bay Metropolitan Authority, otherwise known as the Subic Authority, shall have
the following powers and function:
xxxx
(4) To construct, acquire, own, lease, operate and maintain on its own or
through contract, franchise, license permits bulk purchase from the private
sector and build-operate transfer scheme or joint-venture the required utilities
and infrastructure in coordination with local government units and appropriate
government agencies concerned and in conformity with existing applicable
laws therefor;
In the Senate, during the period of amendments, when the provision which
would eventually become the afore-quoted Section 13 b(4) of RA 7227 was
under consideration, the following exchanges took
place:chanroblesvirtuallawlibrary
amendment that would make the power of the Subic Bay Metropolitan
Authority to construct, acquire, own, lease, operate and maintain on its own or
through contract, franchise, license, permits, bulk purchases from private
sector, build-operate-and-transfer scheme, or joint venture, the required
utilities and infrastructure, subject to approval by the appropriate Sanggunian
of the local government concerned.
This amendment to the amendment has been rejected by the Sponsor. So, we
are voting now on this amendment.
As many as are in favor of the Laurel amendment, say Aye. (Few Senators:
Aye.)
Those who are against the said amendment, say Nay. (Several Senators: Nay.)
Senator Laurel. Mr. President, may I ask for a nominal voting.
The President. A nominal voting should be upon the request of one-fifth of the
Members of the House, but we can accommodate the Gentleman by asking for
a division of the House.
Therefore, those in favor of the Laurel amendment, please raise their right
hands. (Few Senators raised their right hands.)
Senator Laurel. I was asking, Mr. President, for a nominal voting.
The President. A nominal voting can be had only upon motion of one-fifth of the
Members of the Body.
Senator Laurel. That is correct, Mr. President. But this is such an important
issue being presented to us, because this question is related to the other
important issue, which is: May an elected public official of a particular
government unit, such as a town or municipality, participate as a member of
the Board of Directors of this particular zone.
The President. The ruling of the Chair stands. The division of the House is
hereby directed.
As many as are in favor of the Laurel amendment, please raised (sic) their right
hands. (Few Senators raised their right hands.)
As many as are against the said amendment, please do likewise. (Several
Senators raised their right hands.)
The amendment is lost.226 (Emphasis supplied)
Indubitably, the legislature rejected the attempts to engraft Section 27s prior
approval of the concernedsanggunian requirement under the LGC into RA 7227.
Hence, the clear intent was to do away with the approval requirement of the
concerned LGUs to join the SSEZ; and the wisdom of the mechanism of
representation of the concerned LGUs in the decision-making process of the
SBMA are matters outside the scope of the power of judicial review. We can
only interpret and apply the law as we find it.
In sum, we find that the implementation of the project is not subject to the
prior approval of the concerned sanggunians, under Section 27 of the LGC, and
the SBMAs decision to approve the project prevails over the apparent
objections of the concerned sanggunians of the LGUs, by virtue of the clear
provisions of RA 7227. Thus, there was no infirmity when the LDA was entered
into between SBMA and RP Energy despite the lack of approval of the
concerned sanggunians.cralawred
VII.
Whether the validity of the third amendment to the ECC can be resolved by the
Court.
The Casio Group argues that the validity of the third amendment should have
been resolved by the appellate court because it is covered by the broad issues
set during the preliminary conference.
RP Energy counters that this issue cannot be resolved because it was expressly
excluded during the preliminary conference.
The appellate court sustained the position of RP Energy and ruled that this
issue was not included in the preliminary conference so that it cannot be
resolved without violating the right to due process of RP Energy.
We agree with the appellate court.
Indeed, the issue of the validity of the third amendment to the ECC was not
part of the issues set during the preliminary conference, as it appears at that
time that the application for the third amendment was still ongoing. The
following clarificatory questions during the aforesaid conference confirm
this, viz.:chanroblesvirtuallawlibrary
J. LEAGOGO:
So what are you questioning in your Petition?
ATTY. RIDON:
We are questioning the validity of the amendment, Your Honor.
J. LEAGOGO:
Which amendment?
ATTY. RIDON:
From 2 x 150 to 1 x 300, Your Honor.
J. LEAGOGO:
Your Petition does not involve the 2 x 300 which is still pending with the DENR.
Because you still have remedies there, you can make your noise there, you can
question it to your heart[]s content because it is still pending
xxxx
J. LEAGOGO:
Atty. Ridon, I go back to my question. Were not yet talking of the legal points
here. Im just talking of what are you questioning. You are questioning the 1 x
300?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Because it was 2 x 150 and then 1 x 300?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Up to that point?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Because there is no amended ECC yet for the 2 x 300 or 600. Thats clear
enough for all of us.
ATTY. RIDON:
Yes, Your Honor.228
Given the invocation of the right to due process by RP Energy, we must sustain
the appellate courts finding that the issue as to the validity of the third
amendment cannot be adjudicated in this case.
Refutation of the Partial Dissent.
Justice Leonen partially dissents from the foregoing disposition on the following
grounds:
(a) Environmental cases, such as a petition for a writ of kalikasan, should not,
in general, be litigated viaa representative, citizen or class suit because of the
danger of misrepresenting the interests and thus, barring future action due
to res judicata of those not actually present in the prosecution of the case,
either because they do not yet exist, like the unborn generations, or because
the parties bringing suit do not accurately represent the interests of the group
Council, thru the Ministry of Human Settlements may however require noncritical projects and undertakings to provide additional environmental
safeguards as it may deem necessary. (Emphasis supplied)
These laws were, in turn, implemented by DAO 2003-30 and the Revised
Manual.
As correctly noted by Justice Leonen, Presidential Proclamation No. 2146 was
subsequently issued which, among others, classified fossil-fueled power plants
as environmentally critical projects.
In conformity with the above-quoted laws and their implementing issuances,
the subject project, a coal power plant, was classified by the DENR as an
environmentally critical project, new and single. Hence, RP Energy was required
to submit an EIS in support of its application for an ECC. RP Energy thereafter
complied with the EIS requirement and the DENR, after review, evaluation and
compliance with the other steps provided in its rules, issued an ECC in favor of
RP Energy. As can be seen, the EIS requirement was duly complied with.
Anent Justice Leonens argument that the subsequent amendments to the ECC
were void for failure to prepare and submit a new EIS relative to these
amendments, it is important to note that PD 1586 does not state the procedure
to be followed when there is an application for an amendment to a previously
issued ECC. There is nothing in PD 1586 which expressly requires an EIS for an
amendment to an ECC.
In footnote 174 of the ponencia, it is stated:chanroblesvirtuallawlibrary
Parenthetically, we must mention that the validity of the rules providing for
amendments to the ECC was challenged by the Casio Group on the ground
that it is ultra vires before the appellate court. It argued that the laws
governing the ECC do not expressly permit the amendment of an ECC.
However, the appellate court correctly ruled that the validity of the rules
cannot be collaterally attacked. Besides, the power of the DENR to issue rules
on amendments of an ECC is sanctioned under the doctrine of necessary
implication. Considering that the greater power to deny or grant an ECC is
vested by law in the President or his authorized representative, the DENR,
there is no obstacle to the exercise of the lesser or implied power to amend the
ECC for justifiable reasons. This issue was no longer raised before this Court
and, thus, we no longer tackle the same here.
Because PD 1586 did not expressly provide the procedure to be followed in
case of an application for an amendment to a previously issued ECC, the DENR
exercised its discretion, pursuant to its delegated authority to implement this
law, in issuing DAO 2003-30 and the Revised Manual.
Justice Leonens argument effectively challenges the validity of the provisions
in DAO 2003-30 and the Revised Manual relative to amendments to an ECC for
being contrary to PD 1151 and 1586.
We disagree.
First, to repeat, there is nothing in PD 1586 which expressly requires an EIS for
an amendment to an ECC.
Second, as earlier noted, the proposition would constitute a collateral attack on
the validity of DAO 2003-30 and the Revised Manual, which is not allowed
under the premises. The Casio Group itself has abandoned this claim before
this Court so that the issue is not properly before this Court for its resolution.
Third, assuming that a collateral attack on the validity of DAO 2003-30 and the
Revised Manual can be allowed in this case, the rules on amendments appear
to be reasonable, absent a showing of grave abuse of discretion or patent
illegality.
Essentially, the rules take into consideration the nature of the amendment in
determining the proper Environmental Impact Assessment (EIA) document type
that the project proponent will submit in support of its application for an
amendment to its previously issued ECC. A minor amendment will require a
less detailed EIA document type, like a Project Description Report (PDR), while a
major amendment will require a more detailed EIA document type, like an
Environmental Performance Report and Management Plan (EPRMP) or even an
EIS.230chanRoblesvirtualLawlibrary
The rules appear to be based on the premise that it would be unduly
burdensome or impractical to require a project proponent to submit a detailed
EIA document type, like an EIS, for amendments that, upon preliminary
evaluation by the DENR, will not cause significant environmental impact. In
particular, as applied to the subject project, the DENR effectively determined
that it is impractical to require RP Energy to, in a manner of speaking, start
from scratch by submitting a new EIS in support of its application for the first
amendment to its previously issued ECC, considering that the existing EIS may
be supplemented by an EPRMP to adequately evaluate the environmental
impact of the proposed modifications under the first amendment. The same
reasoning may be applied to the PDR relative to the second amendment.
As previously discussed, the Casio Group failed to prove that the EPRMP and
PDR were inadequate to assess the environmental impact of the planned
modifications under the first and second amendments, respectively. On the
contrary, the EPRMP and PDR appeared to contain the details of the planned
modifications and the corresponding adjustments to be made in the
environmental management plan or mitigating measures in order to address
the potential impacts of these planned modifications. Hence, absent sufficient
proof, there is no basis to conclude that the procedure adopted by the DENR
was done with grave abuse of discretion.
Justice Leonens proposition would effectively impose a stringent requirement
of an EIS for each and every proposed amendment to an ECC, no matter how
minor the amendment may be. While this requirement would seem ideal, in
order to ensure that the environmental impact of the proposed amendment is
fully taken into consideration, the pertinent laws do not, however, expressly
require that such a procedure be followed. As already discussed, the DENR
appear to have reasonably issued DAO 2003-30 and the Revised Manual
relative to the amendment process of an ECC, by balancing practicality vis--vis
the need for sufficient information in determining the environmental impact of
the proposed amendment to an ECC. In fine, the Court cannot invalidate the
rules which appear to be reasonable, absent a showing of grave abuse of
discretion or patent illegality.
We next tackle Justice Leonens argument that a petition for certiorari, and not
a writ of kalikasan, is the proper remedy to question a defect in an ECC.
In general, the proper procedure to question a defect in an ECC is to follow the
appeal process provided in DAO 2003-30 and the Revised Manual. After
complying with the proper administrative appeal process, recourse may be
made to the courts in accordance with the doctrine of exhaustion of
administrative remedies. However, as earlier discussed, in exceptional cases, a
writ of kalikasan may be availed of to challenge defects in the
ECC provided that (1) the defects are causally linked or reasonably connected
to an environmental damage of the nature and magnitude contemplated under
the Rules on Writ ofkalikasan, and (2) the case does not violate, or falls under
an exception to, the doctrine of exhaustion of administrative remedies and/or
primary jurisdiction.
As previously discussed, in the case at bar, only the allegation with respect to
the lack of an EIA relative to the first and second amendments to the subject
ECC may be reasonably connected to such an environmental damage. Further,
given the extreme urgency of resolving the issue due to the looming power
crisis, this case may be considered as falling under an exception to the doctrine
of exhaustion of administrative remedies. Thus, the aforesaid issue may be
conceivably resolved in a writ of kalikasancase.
More importantly, we have expressly ruled that this case is an exceptional
case due to the looming power crisis, so that the rules of procedure may be
suspended in order to address issues which, ordinarily, the Court would not
consider proper in a writ of kalikasan case. Hence, all issues, including those
not proper in a writ of kalikasan case, were resolved here in order to forestall
another round of protracted litigation relative to the implementation of the
subject project.
Conclusion
We now summarize our findings:
1. The appellate court correctly ruled that the Casio Group failed to
substantiate its claims that the construction and operation of the power plant
will cause environmental damage of the magnitude contemplated under the
may be issued, and the issuance of the subject ECC without first securing the
aforesaid certification does not render it invalid;
5. The appellate court erred when it invalidated the LDA between SBMA and RP
Energy for failure to comply with Section 59 of the IPRA Law. While we find that
a CNO should have been secured prior to the consummation of the LDA
between SBMA and RP Energy, considering that this is the first time we lay
down the rule of action appropriate to the application of Section 59, we refrain
from invalidating the LDA for reasons of equity;
6. The appellate court erred when it ruled that compliance with Section 27, in
relation to Section 26, of the LGC (i.e., approval of the concerned sanggunian
requirement) is necessary prior to issuance of the subject ECC. The issuance of
an ECC does not, by itself, result in the implementation of the project. Hence,
there is no necessity to secure prior compliance with the approval of the
concerned sanggunianrequirement, and the issuance of the subject ECC
without first complying with the aforesaid requirement does not render it
invalid. The appellate court also erred when it ruled that compliance with the
aforesaid requirement is necessary prior to the consummation of the LDA. By
virtue of the clear provisions of RA 7227, the project is not subject to the
aforesaid requirement and the SBMAs decision to approve the project prevails
over the apparent objections of the concerned sanggunians. Thus, the LDA
entered into between SBMA and RP Energy suffers from no infirmity despite the
lack of approval of the concerned sanggunians; and
7. The appellate court correctly ruled that the issue as to the validity of the
third amendment to the ECC cannot be resolved in this case because it was not
one of the issues set during the preliminary conference, and would, thus,
violate RP Energys right to due process.chanrobleslaw
WHEREFORE, the Court resolves to:
1. DENY the Petition in G.R. No. 207282; and
2. GRANT the Petitions in G.R. Nos. 207257, 207366 and 207276:
2.1. The January 30, 2013 Decision and May 22, 2013 Resolution of the
Court of Appeals in CA-G.R. SP No. 00015 are reversed and set aside;
2.2. The Petition for Writ of kalikasan, docketed as CA-G.R. SP No. 00015,
is denied for insufficiency of evidence;
2.3. The validity of the December 22, 2008 Environmental Compliance
Certificate, as well as the July 8, 2010 first amendment and the May
26, 2011 second amendment thereto, issued by the Department of
Environment and Natural Resources in favor of Redondo Peninsula
Energy, Inc., are upheld; and
2.4. The validity of the June 8, 2010 Lease and Development Agreement
between Subic Bay Metropolitan Authority and Redondo Peninsula
Energy, Inc. is upheld.
SO ORDERED.
Sereno, C.J., Carpio, Leonardo-De Castro, Peralta, Bersamin, Villarama, Jr.,
Perez, Mendoza, and Reyes, JJ., concur.
Velasco, Jr., J., please see concurring opinion.
Brion, J., on leave.
Perlas-Bernabe, J., I concur with the ponencia in denying the petition for writ of
kalikasan but asleft J. Leonen's view on the manner by which as ECC should be
assailed.
Leonen, J., see saparate concurring and dissenting opinion.
Jardeleza, J., no part.
EN BANC
G.R. No. 206510, September 16, 2014
MOST REV. PEDRO D. ARIGO, Vicar Apostolic of Puerto Princesa D.D.;
MOST REV. DEOGRACIAS S. INIGUEZ, JR., Bishop-Emeritus ofCaloocan,
FRANCES Q. QUIMPO, CLEMENTE G. BAUTISTA, JR., Kalikasan-PNE,
MARIA CAROLINA P. ARAULLO, RENATO M. REYES, JR.,
BagongAlyansang Makabayan, HON. NERI JAVIER COLMENARES,
Before us is a petition for the issuance of a Writ of Kalikasan with prayer for the
issuance of a Temporary Environmental Protection Order (TEPO) under Rule 7 of
A.M. No. 09-6-8-SC, otherwise known as theRules of Procedure for
Environmental Cases (Rules), involving violations of environmental laws and
regulations in relation to the grounding of the US military ship USS
Guardian over the Tubbataha Reefs.
Factual Background
The name Tubbataha came from the Samal (seafaring people of southern
Philippines) language which means long reef exposed at low tide. Tubbataha
is composed of two huge coral atolls the north atoll and the south atoll and
the Jessie Beazley Reef, a smaller coral structure about 20 kilometers north of
the atolls. The reefs of Tubbataha and Jessie Beazley are considered part of
Cagayancillo, a remote island municipality of Palawan.1cralawlawlibrary
In 1988, Tubbataha was declared a National Marine Park by virtue of
Proclamation No. 306 issued by President Corazon C. Aquino on August 11,
1988. Located in the middle of Central Sulu Sea, 150 kilometers southeast of
Puerto Princesa City, Tubbataha lies at the heart of the Coral Triangle, the
global center of marine biodiversity.
In 1993, Tubbataha was inscribed by the United Nations Educational Scientific
and Cultural Organization (UNESCO) as a World Heritage Site. It was recognized
as one of the Philippines oldest ecosystems, containing excellent examples of
pristine reefs and a high diversity of marine life. The 97,030-hectare protected
marine park is also an important habitat for internationally threatened and
endangered marine species. UNESCO cited Tubbatahas outstanding universal
value as an important and significant natural habitat for in situ conservation of
biological diversity; an example representing significant on-going ecological
and biological processes; and an area of exceptional natural beauty and
aesthetic importance.2cralawlawlibrary
On April 6, 2010, Congress passed Republic Act (R.A.) No. 10067, 3 otherwise
known as the Tubbataha Reefs Natural Park (TRNP) Act of 2009 to ensure the
protection and conservation of the globally significant economic, biological,
sociocultural, educational and scientific values of the Tubbataha Reefs into
perpetuity for the enjoyment of present and future generations. Under the
no-take policy, entry into the waters of TRNP is strictly regulated and many
human activities are prohibited and penalized or fined, including fishing,
gathering, destroying and disturbing the resources within the TRNP. The law
likewise created the Tubbataha Protected Area Management Board (TPAMB)
which shall be the sole policy-making and permit-granting body of the TRNP.
The USS Guardian is an Avenger-class mine countermeasures ship of the US
Navy. In December 2012, the US Embassy in the Philippines requested
diplomatic clearance for the said vessel to enter and exit the territorial waters
of the Philippines and to arrive at the port of Subic Bay for the purpose of
routine ship replenishment, maintenance, and crew liberty. 4 On January 6,
2013, the ship left Sasebo, Japan for Subic Bay, arriving on January 13, 2013
after a brief stop for fuel in Okinawa, Japan.
On January 15, 2013, the USS Guardian departed Subic Bay for its next port of
call in Makassar, Indonesia. On January 17, 2013 at 2:20 a.m. while transiting
the Sulu Sea, the ship ran aground on the northwest side of South Shoal of the
Tubbataha Reefs, about 80 miles east-southeast of Palawan. No one was injured
in the incident, and there have been no reports of leaking fuel or oil.
On January 20, 2013, U.S. 7th Fleet Commander, Vice Admiral Scott Swift,
expressed regret for the incident in a press statement.5 Likewise, US
Ambassador to the Philippines Harry K. Thomas, Jr., in a meeting at the
Department of Foreign Affairs (DFA) on February 4, reiterated his regrets over
the grounding incident and assured Foreign Affairs Secretary Albert F. del
Rosario that the United States will provide appropriate compensation for
damage to the reef caused by the ship.6 By March 30, 2013, the US Navy-led
salvage team had finished removing the last piece of the grounded ship from
the coral reef.
this Court ruled that not only do ordinary citizens have legal standing to sue for
the enforcement of environmental rights, they can do so in representation of
their own and future generations. Thus:chanRoblesvirtualLawlibrary
Petitioners minors assert that they represent their generation as well as
generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding generations,
file a class suit. Their personality to sue in behalf of the succeeding
generations can only be based on the concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology
is concerned. Such a right, as hereinafter expounded, considers the rhythm
and harmony of nature.Nature means the created world in its entirety. Such
rhythm and harmony indispensably include, inter alia, the judicious disposition,
utilization, management, renewal and conservation of the countrys forest,
mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources to the end that their exploration, development and utilization be
equitably accessible to the present as well as future generations. Needless to
say, every generation has a responsibility to the next to preserve that rhythm
and harmony for the full enjoyment of a balanced and healthful ecology. Put a
little differently, the minors assertion of their right to a sound environment
constitutes, at the same time, the performance of their obligation to ensure the
protection of that right for the generations to come.15 (Emphasis supplied.)
The liberalization of standing first enunciated in Oposa, insofar as it refers to
minors and generations yet unborn, is now enshrined in the Rules which allows
the filing of a citizen suit in environmental cases. The provision on citizen suits
in the Rules collapses the traditional rule on personal and direct interest, on
the principle that humans are stewards of nature.16cralawlawlibrary
Having settled the issue of locus standi, we shall address the more
fundamental question of whether this Court has jurisdiction over the US
respondents who did not submit any pleading or manifestation in this case.
The immunity of the State from suit, known also as the doctrine of sovereign
immunity or non-suability of the State,17 is expressly provided in Article XVI of
the 1987 Constitution which states:chanRoblesvirtualLawlibrary
Section 3. The State may not be sued without its consent.
In United States of America v. Judge Guinto,18 we discussed the principle of
state immunity from suit, as follows:chanRoblesvirtualLawlibrary
The rule that a state may not be sued without its consent, now expressed in
Article XVI, Section 3, of the 1987 Constitution, is one of the generally accepted
principles of international law that we have adopted as part of the law of our
land under Article II, Section 2. x x x.
Even without such affirmation, we would still be bound by the generally
accepted principles of international law under the doctrine of incorporation.
Under this doctrine, as accepted by the majority of states, such principles are
an individual but for the State, in whose service he is, under the maxim - par in
parem, non habet imperium - thatall states are sovereign equals and cannot
assert jurisdiction over one another. The implication, in broad terms, is that if
the judgment against an official would require the state itself to perform an
affirmative act to satisfy the award, such as the appropriation of the amount
needed to pay the damages decreed against him, the suit must be regarded as
being against the state itself, although it has not been formally
impleaded.21 (Emphasis supplied.)
In the same case we also mentioned that in the case of diplomatic immunity,
the privilege is not an immunity from the observance of the law of the
territorial sovereign or from ensuing legal liability; it is, rather, an immunity
from the exercise of territorial jurisdiction.22cralawlawlibrary
In United States of America v. Judge Guinto,23 one of the consolidated cases
therein involved a Filipino employed at Clark Air Base who was arrested
following a buy-bust operation conducted by two officers of the US Air Force,
and was eventually dismissed from his employment when he was charged in
court for violation of R.A. No. 6425. In a complaint for damages filed by the said
employee against the military officers, the latter moved to dismiss the case on
the ground that the suit was against the US Government which had not given
its consent. The RTC denied the motion but on a petition for certiorariand
prohibition filed before this Court, we reversed the RTC and dismissed the
complaint. We held that petitioners US military officers were acting in the
exercise of their official functions when they conducted the buy-bust operation
against the complainant and thereafter testified against him at his trial. It
follows that for discharging their duties as agents of the United States, they
cannot be directly impleaded for acts imputable to their principal, which has
not given its consent to be sued.
This traditional rule of State immunity which exempts a State from being sued
in the courts of another State without the formers consent or waiver has
evolved into a restrictive doctrine which distinguishes sovereign and
governmental acts (jure imperii) from private, commercial and proprietary acts
(jure gestionis). Under the restrictive rule of State immunity, State immunity
extends only to acts jure imperii. The restrictive application of State immunity
is proper only when the proceedings arise out of commercial transactions of the
foreign sovereign, its commercial activities or economic
affairs.24cralawlawlibrary
In Shauf v. Court of Appeals,25 we discussed the limitations of the State
immunity principle, thus:chanRoblesvirtualLawlibrary
It is a different matter where the public official is made to account in
his capacity as such for acts contrary to law and injurious to the rights
of plaintiff.As was clearly set forth by Justice Zaldivar in Director of the
Bureau of Telecommunications, et al. vs. Aligaen, etc., et al.: Inasmuch as the
State authorizes only legal acts by its officers, unauthorized acts of government
officials or officers are not acts of the State, and an action against the officials
or officers by one whose rights have been invaded or violated by such acts, for
the protection of his rights, is not a suit against the State within the rule of
immunity of the State from suit. In the same tenor, it has been said that an
action at law or suit in equity against a State officer or the director of a State
department on the ground that, while claiming to act for the State, he violates
or invades the personal and property rights of the plaintiff, under an
unconstitutional act or under an assumption of authority which he does not
have, is not a suit against the State within the constitutional provision that the
State may not be sued without its consent. The rationale for this ruling is that
the doctrine of state immunity cannot be used as an instrument for
perpetrating an injustice.
xxxx
The aforecited authorities are clear on the matter. They state that the
doctrine of immunity from suit will not apply and may not be invoked
where the public official is being sued in his private and personal
capacity as an ordinary citizen. The cloak of protection afforded the officers
and agents of the government is removed the moment they are sued in their
individual capacity. This situation usually arises where the public official acts
without authority or in excess of the powers vested in him. It is a well-settled
principle of law that a public official may be liable in his personal private
capacity for whatever damage he may have caused by his act done
with malice and in bad faith, or beyond the scope of his authority or
jurisdiction.26 (Emphasis supplied.)
In this case, the US respondents were sued in their official capacity as
commanding officers of the US Navy who had control and supervision over
the USS Guardian and its crew. The alleged act or omission resulting in the
unfortunate grounding of the USS Guardian on the TRNP was committed while
they were performing official military duties. Considering that the satisfaction
of a judgment against said officials will require remedial actions and
appropriation of funds by the US government, the suit is deemed to be one
against the US itself. The principle of State immunity therefore bars the
exercise of jurisdiction by this Court over the persons of respondents Swift, Rice
and Robling.
During the deliberations, Senior Associate Justice Antonio T. Carpio took the
position that the conduct of the US in this case, when its warship entered a
restricted area in violation of R.A. No. 10067 and caused damage to the TRNP
reef system, brings the matter within the ambit of Article 31 of the United
Nations Convention on the Law of the Sea (UNCLOS). He explained that while
historically, warships enjoy sovereign immunity from suit as extensions of their
flag State, Art. 31 of the UNCLOS creates an exception to this rule in cases
where they fail to comply with the rules and regulations of the coastal State
regarding passage through the latters internal waters and the territorial sea.
According to Justice Carpio, although the US to date has not ratified the
UNCLOS, as a matter of long-standing policy the US considers itself bound by
Article 197
Cooperation on a global or regional basis
States shall cooperate on a global basis and, as appropriate, on a regional
basis, directly or through competent international organizations, in formulating
and elaborating international rules, standards and recommended practices and
procedures consistent with this Convention, for the protection and preservation
of the marine environment, taking into account characteristic regional features.
In fine, the relevance of UNCLOS provisions to the present controversy is
beyond dispute. Although the said treaty upholds the immunity of warships
from the jurisdiction of Coastal States while navigating the latters territorial
sea, the flag States shall be required to leave the territorial sea immediately if
they flout the laws and regulations of the Coastal State, and they will be liable
for damages caused by their warships or any other government vessel
operated for non-commercial purposes under Article 31.
Petitioners argue that there is a waiver of immunity from suit found in the VFA.
Likewise, they invoke federal statutes in the US under which agencies of the US
have statutorily waived their immunity to any action. Even under the common
law tort claims, petitioners asseverate that the US respondents are liable for
negligence, trespass and nuisance.
We are not persuaded.
The VFA is an agreement which defines the treatment of United States troops
and personnel visiting the Philippines to promote common security interests
between the US and the Philippines in the region. It provides for the guidelines
to govern such visits of military personnel, and further defines the rights of the
United States and the Philippine government in the matter of criminal
jurisdiction, movement of vessel and aircraft, importation and exportation of
equipment, materials and supplies.36 The invocation of US federal tort laws and
even common law is thus improper considering that it is the VFA which governs
disputes involving US military ships and crew navigating Philippine waters in
pursuance of the objectives of the agreement.
As it is, the waiver of State immunity under the VFA pertains only to criminal
jurisdiction and not to special civil actions such as the present petition for
issuance of a writ of Kalikasan. In fact, it can be inferred from Section 17, Rule 7
of the Rules that a criminal case against a person charged with a violation of an
environmental law is to be filed separately:chanRoblesvirtualLawlibrary
Sec. 17. Institution of separate actions.The filing of a petition for the issuance
of the writ of kalikasan shall not preclude the filing of separate civil, criminal or
administrative actions.
In any case, it is our considered view thata ruling on the application or nonapplication of criminal jurisdiction provisions of the VFA to US personnel who
may be found responsible for the grounding of theUSS Guardian, would be
premature and beyond the province of a petition for a writ of Kalikasan. We also
find it unnecessary at this point to determine whether such waiver of State
immunity is indeed absolute. In the same vein, we cannot grant damages
which have resulted from the violation of environmental laws. The Rules allows
the recovery of damages, including the collection of administrative fines under
R.A. No. 10067, in a separate civil suit or that deemed instituted with the
criminal action charging the same violation of an environmental
law.37cralawlawlibrary
Section 15, Rule 7 enumerates the reliefs which may be granted in a petition
for issuance of a writ ofKalikasan, to wit:chanRoblesvirtualLawlibrary
Sec. 15. Judgment.Within sixty (60) days from the time the petition is
submitted for decision, the court shall render judgment granting or denying the
privilege of the writ ofkalikasan.
The reliefs that may be granted under the writ are the
following:chanRoblesvirtualLawlibrary
(a) Directing respondent to permanently cease and desist from committing acts
or neglecting the performance of a duty in violation of environmental laws
resulting in environmental destruction or damage;
(b) Directing the respondent public official, government agency, private person
or entity to protect, preserve,rehabilitate or restore the environment;
(c) Directing the respondent public official, government agency, private person
or entity to monitor strict compliance with the decision and orders of the court;
(d) Directing the respondent public official, government agency, or private
person or entity to make periodic reports on the execution of the final
judgment; and
(e) Such other reliefs which relate to the right of the people to a balanced and
healthful ecology or to the protection,preservation, rehabilitation or restoration
of the environment,except the award of damages to individual
petitioners. (Emphasis supplied.)
We agree with respondents (Philippine officials) in asserting that this petition
has become moot in the sense that the salvage operation sought to be
enjoined or restrained had already been accomplished when petitioners sought
recourse from this Court. But insofar as the directives to Philippine respondents
to protect and rehabilitate the coral reef structure and marine habitat adversely
affected by the grounding incident are concerned, petitioners are entitled to
these reliefs notwithstanding the completion of the removal of the USS
Guardian from the coral reef.
However, we are mindful of the fact that the US and Philippine governments
both expressed readiness to negotiate and discuss the matter of compensation
for the damage caused by the USS Guardian. The US Embassy has also
declared it is closely coordinating with local scientists and experts in assessing
the extent of the damage and appropriate methods of rehabilitation.
Exploring avenues for settlement of environmental cases is not proscribed by
the Rules. As can be gleaned from the following provisions, mediation and
settlement are available for the consideration of the parties, and which dispute
resolution methods are encouraged by the court, to
wit:chanRoblesvirtualLawlibrary
RULE 3
xxxx
Sec. 3. Referral to mediation.At the start of the pre-trial conference, the court
shall inquire from the parties if they have settled the dispute; otherwise, the
court shall immediately refer the parties or their counsel, if authorized by their
clients, to the Philippine Mediation Center (PMC) unit for purposes of mediation.
If not available, the court shall refer the case to the clerk of court or legal
researcher for mediation.
Mediation must be conducted within a non-extendible period of thirty (30) days
from receipt of notice of referral to mediation.
The mediation report must be submitted within ten (10) days from the
expiration of the 30-day period.
Sec. 4. Preliminary conference.If mediation fails, the court will schedule the
continuance of the pre-trial. Before the scheduled date of continuance, the
court may refer the case to the branch clerk of court for a preliminary
conference for the following purposes:chanRoblesvirtualLawlibrary
(a) To assist the parties in reaching a settlement;
xxxx
Sec. 5. Pre-trial conference; consent decree.The judge shall put the parties
and their counsels under oath, and they shall remain under oath in all pre-trial
conferences.
The judge shall exert best efforts to persuade the parties to arrive at a
settlement of the dispute. The judge may issue a consent decree approving the
agreement between the parties in accordance with law, morals, public order
and public policy to protect the right of the people to a balanced and healthful
ecology.
xxxx
Sec. 10. Efforts to settle.The court shall endeavor to make the parties to agree
EN BANC
G.R. No. 199199, August 27, 2013
MARICRIS D. DOLOT, CHAIRMAN OF THE BAGONG ALYANSANG
MAKABAYAN-SORSOGON, Petitioner, v. HON. RAMON PAJE, IN HIS
CAPACITY AS THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, REYNULFO A. JUAN, REGIONAL DIRECTOR,
MINES AND GEOSCIENCES BUREAU, DENR, HON. RAUL R. LEE,
GOVERNOR, PROVINCE OF SORSOGON, ANTONIO C. OCAMPO, JR.,
VICTORIA A. AJERO, ALFREDO M. AGUILAR, AND JUAN M. AGUILAR,
ANTONES ENTERPRISES, GLOBAL SUMMIT MINES DEV'T CORP., AND TR
ORE, Respondents.
DECISION
REYES, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court
assailing the Order2 dated September 16, 2011 and Resolution3 dated October
18, 2011 issued by the Regional Trial Court (RTC) of Sorsogon, Branch 53. The
assailed issuances dismissed Civil Case No. 2011-8338 for Continuing
Mandamus, Damages and Attorneys Fees with Prayer for the Issuance of a
Temporary Environment Protection Order.
Antecedent Facts
On September 15, 2011, petitioner Maricris D. Dolot (Dolot), together with the
parish priest of the Holy Infant Jesus Parish and the officers of Alyansa Laban sa
Mina sa Matnog (petitioners), filed a petition for continuing mandamus,
damages and attorneys fees with the RTC of Sorsogon, docketed as Civil Case
No. 2011-8338.4 The petition contained the following pertinent allegations: (1)
sometime in 2009, they protested the iron ore mining operations being
conducted by Antones Enterprises, Global Summit Mines Development
Corporation and TR Ore in Barangays Balocawe and Bon-ot Daco, located in the
Municipality of Matnog, to no avail; (2) Matnog is located in the southern tip of
Luzon and there is a need to protect, preserve and maintain the geological
foundation of the municipality; (3) Matnog is susceptible to flooding and
landslides, and confronted with the environmental dangers of flood hazard,
liquefaction, ground settlement, ground subsidence and landslide hazard; (4)
after investigation, they learned that the mining operators did not have the
required permit to operate; (5) Sorsogon Governor Raul Lee and his
predecessor Sally Lee issued to the operators a small-scale mining permit,
which they did not have authority to issue; (6) the representatives of the
Presidential Management Staff and the Department of Environment and Natural
Resources (DENR), despite knowledge, did not do anything to protect the
interest of the people of Matnog;5 and (7) the respondents violated Republic Act
(R.A.) No. 7076 or the Peoples Small-Scale Mining Act of 1991, R.A. No. 7942 or
the Philippine Mining Act of 1995, and the Local Government Code.6 Thus, they
prayed for the following reliefs: (1) the issuance of a writ commanding the
respondents to immediately stop the mining operations in the Municipality of
Matnog; (2) the issuance of a temporary environment protection order or TEPO;
(3) the creation of an inter-agency group to undertake the rehabilitation of the
mining site; (4) award of damages; and (5) return of the iron ore, among
others.7cralaw virtualaw library
The case was referred by the Executive Judge to the RTC of Sorsogon, Branch
53 being the designated environmental court.8 In the Order9 dated September
16, 2011, the case was summarily dismissed for lack of jurisdiction.
The petitioners filed a motion for reconsideration but it was denied in the
Resolution10 dated October 18, 2011. Aside from sustaining the dismissal of the
case for lack of jurisdiction, the RTC11 further ruled that: (1) there was no final
court decree, order or decision yet that the public officials allegedly failed to
act on, which is a condition for the issuance of the writ of
continuing mandamus; (2) the case was prematurely filed as the petitioners
therein failed to exhaust their administrative remedies; and (3) they also failed
to attach judicial affidavits and furnish a copy of the complaint to the
government or appropriate agency, as required by the rules.12cralaw virtualaw
library
Petitioner Dolot went straight to this Court on pure questions of law.
Issues
The main issue in this case is whether the RTC-Branch 53 has jurisdiction to
resolve Civil Case No. 2011-8338. The other issue is whether the petition is
dismissible on the grounds that: (1) there is no final court decree, order or
decision that the public officials allegedly failed to act on; (2) the case was
prematurely filed for failure to exhaust administrative remedies; and (3) the
petitioners failed to attach judicial affidavits and furnish a copy of the
complaint to the government or appropriate agency.
Ruling of the Court
Jurisdiction and Venue
In dismissing the petition for lack of jurisdiction, the RTC, in its Order dated
September 16, 2011, apparently relied on SC Administrative Order (A.O.) No. 7
defining the territorial areas of the Regional Trial Courts in Regions 1 to 12, and
Administrative Circular (Admin. Circular) No. 23-2008, 13 designating the
environmental courts to try and decide violations of environmental laws x x
x committed within their respective territorial jurisdictions.14 Thus, it
ruled that its territorial jurisdiction was limited within the boundaries of
Sorsogon City and the neighboring municipalities of Donsol, Pilar, Castilla,
Casiguran and Juban and that it was bereft of jurisdiction to entertain, hear
and decide [the] case, as such authority rests before another co-equal
court.15cralaw virtualaw library
Such reasoning is plainly erroneous. The RTC cannot solely rely on SC A.O. No. 7
and Admin. Circular No. 23-2008 and confine itself within its four corners in
determining whether it had jurisdiction over the action filed by the petitioners.
None is more well-settled than the rule that jurisdiction, which is the power and
authority of the court to hear, try and decide a case, is conferred by law.16 It
may either be over the nature of the action, over the subject matter, over the
person of the defendants or over the issues framed in the pleadings.17 By virtue
of Batas Pambansa (B.P.) Blg. 129 or the Judiciary Reorganization Act of 1980,
jurisdiction over special civil actions for certiorari, prohibition and mandamus is
vested in the RTC. Particularly, Section 21(1) thereof provides that the RTCs
shall exercise original jurisdiction
in the issuance of writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction which may be enforced in any part
of their respective regions. (Emphasis ours)
A.O. No. 7 and Admin. Circular No. 23-2008 was issued pursuant to Section 18
of B.P. Blg. 129, which gave the Court authority to define the territory over
which a branch of the RTC shall exercise its authority. These administrative
orders and circulars issued by the Court merely provide for the venue where an
action may be filed. The Court does not have the power to confer jurisdiction on
any court or tribunal as the allocation of jurisdiction is lodged solely in
Congress.18 It also cannot be delegated to another office or agency of the
Government.19Section 18 of B.P. Blg. 129, in fact, explicitly states that the
territory thus defined shall be deemed to be the territorial area of the branch
concerned for purposes of determining the venue of all suits,
proceedings or actions. It was also clarified in Office of the Court
Administrator v. Judge Matas20 that
Administrative Order No. 3 [defining the territorial jurisdiction of the Regional
Trial Courts in the National Capital Judicial Region] and, in like manner, Circular
Nos. 13 and 19, did notper se confer jurisdiction on the covered regional trial
courts or its branches, such that non-observance thereof would nullify their
judicial acts. The administrative order merely defines the limits of the
administrative area within which a branch of the court may exercise its
authority pursuant to the jurisdiction conferred by Batas Pambansa Blg.
129.21cralaw virtualaw library
The RTC need not be reminded that venue relates only to the place of trial or
the geographical location in which an action or proceeding should be brought
and does not equate to the jurisdiction of the court. It is intended to
accord convenience to the parties, as it relates to the place of trial, and does
not restrict their access to the courts.22 Consequently, the RTCsmotu
proprio dismissal of Civil Case No. 2011-8338 on the ground of lack of
jurisdiction is patently incorrect.
At most, the error committed by the petitioners in filing the case with the RTC
of Sorsogon was that of improper venue. A.M. No. 09-6-8-SC or the Rules of
Procedure for Environmental Cases (Rules) specifically states that a special civil
action for continuing mandamus shall be filed with the [RTC] exercising
jurisdiction over the territory where the actionable neglect or omission
occurred x x x.23 In this case, it appears that the alleged actionable neglect or
omission occurred in the Municipality of Matnog and as such, the petition
should have been filed in the RTC of Irosin.24 But even then, it does not warrant
Under the Rules, after the court has rendered a judgment in conformity with
Rule 8, Section 7 and such judgment has become final, the issuing court still
retains jurisdiction over the case to ensure that the government agency
concerned is performing its tasks as mandated by law and to monitor the
effective performance of said tasks. It is only upon full satisfaction of the final
judgment, order or decision that a final return of the writ shall be made to the
court and if the court finds that the judgment has been fully implemented, the
satisfaction of judgment shall be entered in the court docket.34 A writ of
continuing mandamus is, in essence, a command of continuing compliance with
a final judgment as it permits the court to retain jurisdiction after judgment in
order to ensure the successful implementation of the reliefs mandated under
the courts decision.35cralaw virtualaw library
The Court, likewise, cannot sustain the argument that the petitioners should
have first filed a case with the Panel of Arbitrators (Panel), which has
jurisdiction over mining disputes under R.A. No. 7942.
Indeed, as pointed out by the respondents, the Panel has jurisdiction over
mining disputes.36 But the petition filed below does not involve a mining
dispute. What was being protested are the alleged negative environmental
impact of the small-scale mining operation being conducted by Antones
Enterprises, Global Summit Mines Development Corporation and TR Ore in the
Municipality of Matnog; the authority of the Governor of Sorsogon to issue
mining permits in favor of these entities; and the perceived indifference of the
DENR and local government officials over the issue. Resolution of these matters
does not entail the technical knowledge and expertise of the members of the
Panel but requires an exercise of judicial function. Thus, inOlympic Mines and
Development Corp. v. Platinum Group Metals Corporation,37 the Court stated
Arbitration before the Panel of Arbitrators is proper only when there is
a disagreement between the parties as to some provisions of the
contract between them, which needs the interpretation and the
application of that particular knowledge and expertise possessed by
members of that Panel. It is not proper when one of the parties repudiates
the existence or validity of such contract or agreement on the ground of fraud
or oppression as in this case. The validity of the contract cannot be subject of
arbitration proceedings. Allegations of fraud and duress in the execution of a
contract are matters within the jurisdiction of the ordinary courts of law. These
questions are legal in nature and require the application and
interpretation of laws and jurisprudence which is necessarily a judicial
function.38 (Emphasis supplied in the former and ours in the latter)
Consequently, resort to the Panel would be completely useless and
unnecessary.
The Court also finds that the RTC erred in ruling that the petition is infirm for
failure to attach judicial affidavits. As previously stated, Rule 8 requires that the
petition should be verified, contain supporting evidence and must be
SECOND DIVISION
G.R. No. 149638, December 10, 2014
4. Consistent with the spirit of RA 7076, the Board encourages SEM and all
small-scale miners to continue to negotiate in good faith and arrive at an
agreement beneficial to all. In the event of SEMs strict and full compliance with
all the requirements of the Mining Act and its Implementing Rules and
Regulations, and the concurrence of the small-scale miners actually occupying
and actively mining the area, SEM may apply for the inclusion of portions of the
areas segregated under paragraph 2 hereof, to its MPSA application. In this
light, subject to the preceding paragraph, the contract between JB and SEM is
hereby recognized.
SO ORDERED.11
Both SMGMC and the adverse claimants questioned the Mines Adjudication
Boards decision before this court. These petitions were remanded to the Court
of Appeals as CA-G.R. SP Nos. 61215-16, later elevated to this court as G.R. No.
152613, G.R. No. 152628, G.R. Nos 152619-20, and G.R. Nos. 15287071.12chanRoblesvirtualLawlibrary
Meanwhile, independent of the MAB decision and the appeals to the Court of
Appeals and this court, the Provincial Mining Regulatory Board of Davao
proposed to declare a Peoples Small Scale Mining Area in accordance with the
MAB decision.13chanRoblesvirtualLawlibrary
On February 24, 1992, the notice for the proposed declaration was approved
and issued for publication to notify any and all oppositors or protestors. 14 Those
who filed oppositions included SMGMC, Picop Resources Incorporated, Mt.
Diwata-Upper Ulip Mandaya Tribal Council, and JB Management Mining
Corporation.15chanRoblesvirtualLawlibrary
The Provincial Mining Regulatory Board (PMRB), in its decision16 dated March
30, 1999, dismissed the oppositions for lack of merit, then segregated and
declared the 729-hectare gold rush area as People's Small Scale Mining
Area:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing premises, the instant protest/opposition
of herein Oppositors are hereby DISMISSED for lack of merit. This Board hereby
segregates and declares the 729-hectare gold rush area in Mt. Diwalwal
actually occupied and actively mined on or before August 1, 1987 as Peoples
Small-Scale Mining Area. Thereafter, the concerned local government unit
through the recommendation of this Board shall issue/execute the necessary
small-scale mining contract to qualified applicants upon compliance of the
requisites for small scale mining under R.A. 7076 and its implementing rules
and regulations.
SO ORDERED.17
Then DENR Secretary Antonio H. Cerilles, in his decision dated September 20,
1999, affirmed with modification the Provincial Mining and Regulatory Board
decision:18chanRoblesvirtualLawlibrary
The Court of Appeals, in its amended decision23 dated August 27, 2001, granted
the motions for reconsideration and, consequently, set aside and annulled the
DENR Secretary's decision for having been issued with grave abuse of
discretion in excess of his jurisdiction.24chanRoblesvirtualLawlibrary
The Court of Appeals limited its discussion on the propriety of the DENR
Secretarys decision.
It cited at length a memorandum dated March 27, 1998 by then DENR
Undersecretary, Antonio La Via, to support its finding that SMGMC may apply
and be entitled to a particular area within the 729 hectares potential coverage
of the Peoples Small-Scale Mining Area, subject to the fulfilment of several
conditions.25chanRoblesvirtualLawlibrary
The Court of Appeals found that the DENR Secretarys outright delineation of
the subject area in favor of certain entities contravenes the mandate of the
MAB Decision and the purpose of RA 7076 (Peoples Small-Scale Mining Act of
1991), inasmuch as it disenfranchises the petitioner and other small-scale
miners who may apply for and be awarded small-scale mining contracts by the
local government units upon recommendation of the PMRB after the fulfilment
of necessary conditions set forth in the law.26chanRoblesvirtualLawlibrary
Hence, these two petitions for review were filed assailing the Court of Appeals'
amended decision.
Petitioner MISSMA27 argues that the Court of Appeals should not have amended
its decision considering it already found SMGMC guilty of forum shopping
and litis pendencia.28chanRoblesvirtualLawlibrary
Petitioner MISSMA contends that the petition docketed as G.R. No. 132475
assailing the portion of the MABs decision that excluded the 729-hectare area
covered by DAO No. 66 from SMGMCs Mines Production Sharing Agreement
application29 involves the same issues as the present cases. MISSMA submits
that the ultimate objective of the two cases is [SMGMC] to solely obtain all
mining rights over the subject 729 hectare gold rush area, to the exclusion of
MISSMA and other claimants thereon.30chanRoblesvirtualLawlibrary
Petitioner MISSMA also argues that [i]n carrying out the function of declaring
and segregating gold rush areas for small-scale mining purposes [pursuant to
Republic Act No. 7076], both the PMRB, and upon review, the DENR Secretary,
may well act independently of the MAB, which, on the other hand is a quasijudicial body tasked to settle mining conflicts, disputes or claims[.]31 Moreover,
the DENR Secretarys decision only delineated and identified areas available for
small-scale mining contract applications. The decision did not make actual
awards.32chanRoblesvirtualLawlibrary
Petitioner Hon. Antonio H. Cerilles, in his capacity as then DENR
Secretary,33 similarly argues that the Court of Appeals should have maintained
its earlier decision dismissing the case due to forum shopping and litis
pendencia.34chanRoblesvirtualLawlibrary
In any event, petitioner DENR Secretary argues that he acted within authority
in modifying the PMRBs decision, citing Sections 24 and 26 of Republic Act No.
7076 on the DENR Secretarys power of direct supervision and
control.35chanRoblesvirtualLawlibrary
Petitioner DENR Secretary adds that [t]he division into two areas of the
segregated portion of 729-hectares small-scale mining area does not
contravene the mandate of the MAB decision and the purpose of R.A. No. 7076,
since there is no award yet of any license or permit made to any qualified
small-scale miner.36chanRoblesvirtualLawlibrary
Lastly, petitioner DENR Secretary contends that these petitions have been
mooted by (1) then President Macapagal-Arroyos issuance of Proclamation No.
297 excluding an area from Proclamation No. 369 and declaring this as a
mineral reservation and as an environmentally critical area, and (2) this courts
decision dated June 23, 2006 in G.R. Nos. 152613, 152628, 152619-20,
152870-71 declaring DAO No. 66 as void, declaring EP 133 as expired, and
underscoring the Executives power of supervision and control over the
exploration, development, and utilization of the countrys mineral
resources.37chanRoblesvirtualLawlibrary
Respondent SMGMC counters that no forum shopping or litis pendencia exists
as the present petitions emanated from the decision of the PMRB declaring the
729 hectares of timberland as Peoples Small-Scale Mining Area, while G.R. No.
132475 emanated from the decision of the MAB on the MPSA Application of
[SMGMC].38 Records also show that the case docketed as G.R. No. 132475 was
made known to this court.39chanRoblesvirtualLawlibrary
Respondent SMGMC quoted at length DENR Undersecretary La Vias
memorandum on the scope of the MAB decision.40chanRoblesvirtualLawlibrary
Respondent SMGMC submits that the DENR Secretarys decision practically
abandoned the MAB decision and fashioned his own formula for disaster, such
as mentioning the Blucor and Helica groups which were never parties before
the PMRB.41chanRoblesvirtualLawlibrary
Respondent BISSMICO admits and adopts respondent SMGMCs
memorandum.42chanRoblesvirtualLawlibrary
Respondent PICOP discusses the difference between forest reserves and
forest reservations under Presidential Decree No. 705, 43 and pursuant to
Republic Act No. 309244 enacted on June 17, 1961, stating that a law should
now be passed by Congress in order to reclassify areas in forest reserve to
another use.45chanRoblesvirtualLawlibrary
Even Executive Order No. 318 issued on June 9, 2004 on guiding principles in
152870-71) ruling that EP 133 has expired by its non-renewal, that its transfer
to SMGMC was void, and that DAO No. 66 was illegal for having been issued in
excess of the DENR Secretarys authority. 56 On November 20, 2009, this court
En Banc denied reconsideration, and this decision became final and
executory.57chanRoblesvirtualLawlibrary
Respondent SMGMC also manifested that (a) the above decision and resolution,
(b) the issuance of Proclamation No. 297 dated November 25, 2002, excluding
8,100 hectares in Moncayo, Compostela Valley and proclaiming this area as a
mineral reservation and as an environmentally critical area, and (c) DAO No.
2002-18, are supervening developments that rendered moot and academic the
issues raised in the present petitions.58chanRoblesvirtualLawlibrary
Counsel for respondent MISSMA filed a manifestation stating that he has
exerted diligent efforts to communicate with MISSMA in relation to the March 4,
2013 resolution but this proved futile. Counsel is not in a position to manifest to
this court on subsequent developments, but he will continue his attempt to
communicate with MISSMA, and will submit the required manifestation should
he succeed.59chanRoblesvirtualLawlibrary
Counsel for respondent PICOP filed a similar
explanation/compliance.60chanRoblesvirtualLawlibrary
The issues for resolution may be summarized as
follows:chanroblesvirtuallawlibrary
I.
Whether the Court of Appeals can set aside the issue of forum shopping
and litis pendencia (SMGMC's petition in G.R. No. 132475), and dwell on
the merits;
II.
III.
Subsequent developments
Developments after these petitions had been filed in 2001 mooted this case.
The parties recognized these developments in their recent submissions.
Petitioner DENR Secretary raised that the petitions were mooted by (a) then
President Macapagal-Arroyos issuance of Proclamation No. 297, excluding an
area from Proclamation No. 369 and declaring this area as a mineral
reservation and as an environmentally critical area, and (b) this courts decision
dated June 23, 2006 in G.R. Nos. 152613, 152628, 152619-20, and 152870-71
WHEREAS, pursuant to the Philippine Mining Act of 1995 (RA 7942), the
President may, upon the recommendation of the Director of Mines and
Geosciences, through the Secretary of Environment and Natural Resources, and
when the national interest so requires, establish mineral reservations where
mining operations shall be undertaken by the Department directly or thru a
contractor;
WHEREAS, as a measure to attain and maintain a rational and orderly balance
between socio-economic growth and environmental protection, the President
may, pursuant to Presidential Decree No. 1586, as amended, proclaim and
declare certain areas in the country as environmentally critical;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines,
upon recommendation of the Department of Environment and Natural
Resources (DENR), and by virtue of the powers vested in me by law, do hereby
exclude certain parcel of land located in Monkayo, Compostela Valley, and
proclaim the same as mineral reservation and as environmentally critical area,
with metes and bound as defined by the following geographical
coordinates; . . . .
....
with an area of Eight Thousand One Hundred (8,100) hectares, more or less.
Mining operations in the area may be undertaken either by the DENR directly,
subject to payment of just compensation that may be due to legitimate and
existing claimants, or thru a qualified contractor, subject to existing rights, if
any.
The DENR shall formulate and issue the appropriate guidelines, including the
establishment of an environmental and social fund, to implement the intent
and provisions of this Proclamation.
Subsequently, DENR Administrative Order No. 2002-18 declared an emergency
situation on the Diwalwal gold rush area and ordered the stoppage of all mining
operations in the area.
Then President Macapagal-Arroyo issued Executive Order No. 217 dated June
17, 2003, creating the National Task Force Diwalwal to address the situation in
the Diwalwal gold rush area.
On June 23, 2006, this court promulgated Apex Mining v. SMGMC,63 ruling on
the petitions for review by Apex, Balite, and the MAB. This court declared that
EP 133 expired on July 7, 1994, and that its subsequent transfer to SMGMC on
February 16, 1994 was void.64 This court also affirmed the Court of Appeals
decision declaring DAO No. 66 as illegal for having been issued in excess of the
DENR Secretarys authority.65chanRoblesvirtualLawlibrary
On November 20, 2009, this court En Banc denied reconsideration in Apex
Mining v. SMGMC for lack of merit.66 This court reiterated that Marcoppers
assignment of EP 133 to SMGMC violated Section 97 of Presidential Decree No.
463 and the terms and conditions in the permit.67chanRoblesvirtualLawlibrary
This court also clarified that its June 23, 2006 decision did not overturn its July
16, 1991 decision inApex Mining v. Garcia68 for the following
reasons:69chanRoblesvirtualLawlibrary
First, the 1991 case of Apex Mining v. Garcia involved conflicting mining claims
between Apex and Marcopper over the 4,941 hectares disputed area in
Moncayo, Mindanao.70chanRoblesvirtualLawlibrary
This court in Apex Mining v. Garcia ruled that the disputed areas, being clearly
within a forest reserve, are not open to mining location,71 citing Sections 8 and
13 of Presidential Decree No. 463, as amended by Presidential Decree No.
1385.72 This court found that procedural requisites were complied with and
undertaken by MARCOPPER after it had ascertained that its mining claims were
found to be within the Agusan-Davao-Surigao Forest Reserve. On the other
hand, the mining claims and SSMPs of Apex being located within said forest
reserve are in violation of the law and therefore result in a failure to validly
acquire mining rights.73chanRoblesvirtualLawlibrary
Second, the 1991 Apex Mining v. Garcia case was decided on facts and issues
that were not attendant in [Apex Mining v. SMGMC], such as the expiration of
EP 133, the violation of the condition embodied in EP 133 prohibiting its
assignment, and the unauthorized and invalid assignment of EP 133 by
[Marcopper] to [SMGMC], since this assignment was effected without the
approval of the Secretary of DENR.74chanRoblesvirtualLawlibrary
This court also mentioned that in the November 26, 1992 resolution in Apex
Mining v. Garcia, this court clarified that its ruling was conclusive only
between the parties with respect to the particular issue herein raised and under
the set of circumstances herein prevailing[.] 75chanRoblesvirtualLawlibrary
Forum shopping and litis pendencia
Litis pendencia exists when the following elements are present: (a) the
identity of parties, or at least such as representing the same interests in both
actions; (b) the identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (c) the identity of the two cases such that
judgment in one, regardless of which party is successful, would amount to res
judicata in the other.76chanRoblesvirtualLawlibrary
The existence of litis pendencia also means that the rule against forum
shopping was violated.77chanRoblesvirtualLawlibrary
The Court of Appeals July 31, 2000 decision denied SMGMCs petition on the
ground of litis pendenciaand forum shopping considering the then pending case
docketed as G.R. No. 132475 assailing the January 6, 1998 MAB decision
declaring DAO No. 66 illegal for having been issued in excess of the DENR
Secretarys authority.
Consequently, the State, should it so desire, may now award mining operations
in the disputed area to any qualified entity it may determine. No costs.
SO ORDERED.88
This court denied the motions for reconsiderations, among others, in its 2009
resolution.89chanRoblesvirtualLawlibrary
Since this court declared that EP 133 expired and its transfer to SMGMC is void,
respondent SMGMC has no more basis to claim any right over the disputed 729
hectares in the Diwalwal gold rush area excluded from its MPSA.
Furthermore, since this court has declared that the DENR Secretary had no
authority to issue DAO No. 66 declaring 729 hectares of the Agusan-DavaoSurigao Forest Reserve as forest land open for small-scale mining purposes
subject to existing and valid private rights, both the PMRB decision, and the
DENR Secretarys decision affirming it with modification, are consequently
overturned for lack of basis in delineating the 729 hectares from the MPSA.
The 2009 resolution in Apex Mining v. SMGMC also ruled that the State,
through the Executive Department, should it so desire, may now award mining
operations in the disputed area to any qualified entities it may determine [and]
[t]he Mines and Geosciences Bureau may process exploration permits pending
before it, taking into consideration the applicable mining laws, rules and
regulations relative thereto.90chanRoblesvirtualLawlibrary
Indeed, then President Macapagal-Arroyo issued Proclamation No. 297
excluding an area in Moncayo, Compostela Valley, declaring this as a mineral
reservation and as an environmentally critical area. DENR Administrative Order
No. 2002-18 followed, declaring an emergency situation in this gold rush area
and ordering the stoppage of all mining operations. Executive Order No. 217
thereafter created the National Task Force Diwalwal.
Authority and functions
in mining activities
In any case, we discuss the powers of the different agencies in relation to
mining activities as laid down by the relevant laws.
Mines Adjudication Board
Chapter XIII (Settlement of Conflicts) of Republic Act No. 7942 known as the
Mining Act of 1995 provides for the powers of the panel of arbitrators and the
Mines Adjudication Board (MAB). Section 77 states that the panel shall have
exclusive and original jurisdiction to hear and decide on the
following:chanroblesvirtuallawlibrary
Section 78 provides for the MABs appellate jurisdiction over the decision or
order of the panel of arbitrators.92 Section 79 enumerates the MABs powers
and functions, including the power to conduct hearings on all matters within
its jurisdiction.93chanRoblesvirtualLawlibrary
Provincial Mining Regulatory Board
While the MABs jurisdiction covers the settlement of conflicts over mining
claims, the Provincial Mining Regulatory Board (PMRB) created under
Republic Act No. 7076 known as the Peoples Small-Scale Mining Act of 1991
granted powers that include functions more executive in nature such as
declaring and segregating areas for small-scale
mining.94chanRoblesvirtualLawlibrary
Section 24 of Republic Act No. 7076 provides for the PMRBs power to declare
and segregate existing gold-rich areas for small-scale mining but under the
direct supervision and control of the Secretary:chanroblesvirtuallawlibrary
Section 24. Provincial/ City Mining Regulatory Board. There is hereby created
under the direct supervision and control of the Secretary a provincial/city
mining regulatory board, herein called the Board, which shall be the
implementing agency of the Department, and shall exercise the following
powers and functions, subject to review by the Secretary:
(a)
(b)
(c)
(d)
Secretary[.]96chanRoblesvirtualLawlibrary
Section 6 of DAO No. 3492 also provides that [t]he Board created under RA
7076 shall have the authority to declare and set aside Peoples Small-Scale
Mining Areas in sites onshore suitable for small-scale mining operations subject
to review by the DENR Secretary thru the
Director[.]97chanRoblesvirtualLawlibrary
DENR Secretary
Section 26 of Republic Act No. 7076 reiterates the DENR Secretarys power of
control over the program and the activities of the small-scale miners within
the peoples small-scale mining area:chanroblesvirtuallawlibrary
Section 26. Administrative Supervision over the Peoples Small-scale Mining
Program. The Secretary through his representative shall exercise direct
supervision and control over the program and activities of the small-scale
miners within the peoples small-scale mining area.
The Secretary shall within ninety (90) days from the effectivity of this Act
promulgate rules and regulations to effectively implement the provisions of the
same. Priority shall be given to such rules and regulations that will ensure the
least disruption in the operations of the small-scale miners.98
Section 21.1 of DAO No. 3492, the implementing rules and regulations of
Republic Act No. 7076, states that the DENR Secretary has direct supervision
and control over the program and the activities of the small-scale miners within
the peoples small-scale mining area.99chanRoblesvirtualLawlibrary
This court has distinguished the power of control and the power of supervision
as follows:chanroblesvirtuallawlibrary
. . . In administrative law, supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. If
the latter fail or neglect to fulfill them, the former may take such action or step
as prescribed by law to make them perform their duties. Control, on the
other hand, means the power of an officer to alter or modify or nullify
or set aside what a subordinate officer ha[s] done in the performance of
his duties and to substitute the judgment of the former for that of the
latter.100 (Emphasis supplied)
League of Provinces v. DENR101 discussed that the Local Government Code did
not fully devolve the enforcement of the small-scale mining law to the
provincial government, as its enforcement is subject to the supervision, control
and review of the DENR, which is in charge, subject to law and higher authority,
of carrying out the States constitutional mandate to control and supervise the
exploration, development, utilization of the countrys natural
resources.102chanRoblesvirtualLawlibrary
by Republic Act No. 3092, thus, revocable.111 The validity of Proclamation No.
297, however, is not an issue in these cases. This subsequent development was
not litigated, and this is not the proper case to assail its validity.chanrobleslaw
WHEREFORE, in view of the foregoing, the petitions are DENIED for being
moot and academic.
WE CONCUR:
Carpio, (Chairperson), Del Castillo, Villarama, Jr.,* and Mendoza, JJ., concur.
FIRST DIVISION
[G.R. No. 180882, February 27, 2013]
THE BAGUIO REGREENING MOVEMENT, INC., REPRESENTED BY ATTY.
ERDOLFO V. BALAJADIA; CITY ENVIRONMENT AND PARKS
MANAGEMENT OFFICE, REPRESENTED BY ITS OFFICER-IN-CHARGE,
CORDELIA C. LACSAMANA; AND THE BUSOL FOREST RESERVATION
TASK FORCE, REPRESENTED BY ITS TEAM LEADER, VICTOR
DICTAG, Petitioners, v. ATTY. BRAIN MASWENG, IN HIS CAPACITY AS
REGIONAL HEARING OFFICER, NCIP-CAR; ELIZABETH MAT-AN, FOR
HERSELF AND AS REPRESENTATIVE OF THE HEIRS OF RAFAEL; JUDITH
MARANES, FOR HERSELF AND AS REPRESENTATIVE OF THE HEIRS OF
MOLINTAS; HELEN LUBOS, FOR HERSELF AND AS REPRESENTATIVE OF
THE HEIRS OF KALOMIS; MAGDALENA GUMANGAN QUE, FOR HERSELF
AND AS REPRESENTATIVE OF THE HEIRS OF GUMANGAN; SPOUSES
fences around and between the areas and premises of petitioners, ancestral
land claims, specifically identified in Proclamation No. 15 as Lot A with an area
of 143,190 square meters, included within the boundary lines, Lot B 77,855
square meters, included within the boundary lines, Lot C 121,115 square
meters, included within the boundary lines, Lot D 33,839 square meters,
included within the boundary lines, Lot E 87,903 square meters, included
within the boundary lines, Lot F 39,487 square meters, included within the
boundary lines, Lot G 11,620 square meters, included within the boundary
lines, Lot H 17,453 square meters, included within the boundary lines, Lot J
40,000 square meters, included within the boundary lines, all described and
embraced under Proclamation No. 15, the land embraced and described under
the approved plan No. 12064 of the then Director of Lands, containing an area
of 186, square meters surveyed for Gumangan, the land covered by LRC PSD
52910, containing an area of 77,849 square meters as surveyed for Emily
Kalomis, that land covered by survey plan 11935 Amd, containing an area of
263153 square meters as surveyed for Molintas, and that land covered by AP7489, containing an area of 155084 as surveyed for the heirs of Rafael.
This Restraining Order shall be effective for a period of twenty (20) days from
receipt hereof.
Meantime, the respondents are further ordered to show cause on November 5,
2002 (Tuesday) at 2:00 oclock in the afternoon, why petitioners prayer for the
issuance of a writ of preliminary injunction should not be granted.2
On November 6, 2002, Atty. Masweng denied petitioners motion to dissolve the
TRO, explaining that a TRO may be issued motu proprio where the matter is of
extreme urgency and the applicant will suffer grave injustice and irreparable
injury. He further stated that petitioners failed to comply with the procedure
laid down in Section 6, Rule 58 of the Rules of Court.
On November 12, 2002, Atty. Masweng issued an Order, the dispositive portion
of which states:
WHEREFORE, a writ of preliminary injunction is hereby issued against the
respondents, their agents, or persons acting for and in their behalves (sic),
ordering them to refrain, cease and desist from implementing their fencing
project during the pendancy (sic) of the above-entitled case in any portion of
petitioners ancestral land claims within the Busol Watershed Reservation. The
lands being identified under Proclamation No. 15 as lot[s] A, B, C, D, E,
F, G, H, and J, including the lands covered by Petitioners approved survey
plans as follows: that land identified and plotted under Survey Plan No. B.L.
FILE No. II-11836, September, 1916 surveyed for Gumangan; that land covered
by PSD-52910, May, 1921, surveyed for Emily Kalomis; that land covered by
survey plan II-11935 Amd, 1916, surveyed for Molintas; and that land covered
by Survey Plan No. AP 7489, March 1916, surveyed for the heirs of Rafael.
The writ of preliminary injunction shall be effective and shall be enforced only
constrained by the principle of stare decisis to grant the instant petition. The
Court explained the principle of stare decisis25 in Ting v. Velez-Ting26:
The principle of stare decisis enjoins adherence by lower courts to doctrinal
rules established by this Court in its final decisions. It is based on the principle
that once a question of law has been examined and decided, it should be
deemed settled and closed to further argument. Basically, it is a bar to any
attempt to relitigate the same issues, necessary for two simple reasons:
economy and stability. In our jurisdiction, the principle is entrenched in Article 8
of the Civil Code. (Citations omitted.)
We have also previously held that [u]nder the doctrine of stare decisis, once a
court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases where the facts are
substantially the same.27
However, even though the principal action in the case at bar is denominated as
a petition for injunction, the relief prayed for and granted by the NCIP partakes
of the nature of a preliminary injunction in the sense that its effectivity would
cease the moment the NCIP issues its decision in an appropriate action. The
conclusions of this Court in both the case at bar and that in G.R. No. 180206 as
regards private respondents ancestral land claim should therefore be
considered provisional, as they are based merely on the allegations in the
complaint or petition and not on evidence adduced in a full-blown proceeding
on the merits by the proper tribunal. Private respondents are therefore not
barred from proving their alleged ancestral domain claim in the appropriate
proceeding, despite the denial of the temporary injunctive relief prayed for.
WHEREFORE, the present Petition for Review on Certiorari is
hereby GRANTED. The Decision and Resolution of the Court of Appeals in CAG.R. SP No. 78570 dated April 30, 2007 and December 11, 2007, respectively,
are REVERSED and SET ASIDE.
SO ORDERED.
Sereno, C.J., (Chairperson), Bersamin, Villarama, Jr., and Reyes, JJ., concur.
SECOND DIVISION
G.R. No. 179669, June 04, 2014
SR METALS, INC., SAN R MINING AND CONSTRUCTION CORP. AND
GALEO EQUIPMENT AND MINING COMPANY, INC., Petitioner, v. THE
HONORABLE ANGELO T. REYES, IN HIS CAPACITY AS SECRETARY OF
DEPARTMENT ENVIRONMENT AND NATURAL RESOURCES
(DENR),Respondent.
DECISION
DEL CASTILLO, J.:
In this Petition for Review on Certiorari, SR Metals, Inc., SAN R Mining and
Construction Corp., and Galeo Equipment and Mining Co., Inc. (hereinafter
referred to as 'mini corporations') assail the Decision1and Resolution2 dated July
categorically concluded that the term ore should be confined only to Ni-Co,
that is, excluding soil and other materials that are of no economic value to the
mining corporations. This is considering that their ECCs explicitly specified
50,000 MTs of Ni-Co ore.
The mining corporations then filed before the CA a Petition for Certiorari with
prayer for Temporary Restraining Order and/or Preliminary Injunction, imputing
grave abuse of discretion on the part of DENR in issuing the CDO. Relying on
the rationalizations on the rationalization made by the DOJ in its November 30,
2006 Opinion, they vehemently denied having over-extracted Ni-Co.
The Office of the Solicitor General (OSG), for its part, claimed that the CDO was
issued for ecological and health reasons and is a preventive measure against
disaster arising from multiple acts of over-extraction such as landslides,
mudslides and flooding. Also to be respected is the DENRs finding of the
mining corporations over-extraction because being the agency mandated to
implement the laws affecting the countrys natural resources, the DENR
possesses the necessary expertise to come up with such determination. For
the same reason, the DENR's definition of small-scale mining particularly that
under Mines Administrative Order (MAO) No. MRD-41 series of 1984, 15 must
also be sustained.
Furthermore, the OSG averred that the mining corporations concept of how to
measure NI-CO ore is flawed as this contradicts Section 2 of MAO No. MRD-41
which confines the 50,000-MT limit to run-of-mine
ore, viz.:ChanRoblesVirtualawlibrary
SECTION 2 - Who May Qualify for the Issuance of a Small Scale Mining Permit Any qualified person as defined in Sec. 1 of these Regulations, preferably claim
owners and applicants for or holders of quarry permits and/or licenses may be
issued a small scale mining permit provided that their mining operations,
whether newly-opened, existing or rehabilitated, involve:
(a) a single mining unit having an annual production not exceeding 50,0000
metric tons of run-of-mine ore, either an open cast mine working or a
subsurface mine working which is driven to such distance as safety conditions
and pracatices will allow;
xxxx
The OSG emphasized that in measuring an extraction, the only deduction
allowed from an extracted mass of ore is the weight of water, not the soil. It
quoted a letter16 Horacio C. Ramos of the MGB Central Office dated April 30,
2007 addressed to the OSG, which explained the definition of the phrase
50,000-metric ton extraction limit," to wit:ChanRoblesVirtualawlibrary
traditionally, the production rate for nickel is based on dry since the
water or moisture content has no value; and
thus, if the ore is wet, the weight of water is deducted from the total
weight of ores in the determination of the production rate, or for
shipment purposes.17
The maximum annual production above shall include low-grade and/or marginal
ore, and/or minerals or rocks that are intended for sampling and/or
metallurgical testing purpose/s."
With the 50,000-MT limit likewise imposed on small-scale miners under RA
7076, the issue raised on the violation of the equal protection clause is moot.
The fact is, the DENR treats all small-scale miners equally as the production
limit applies to all of them. There is therefore no more reason for the mining
corporations to not recognize and comply with the said limitation. It must be
stressed that the DENR is the government agency tasked with the duty of
managing and conserving the countrys resources; it is also the agency vested
with the authority to promulgate rules and regulations for the implementation
of mining laws.
The DENR, being the agency mandated
to protect the environment and the country's
natural resources, is authoritative on
interpreting the 50,000- MT limit.
MAO No. MRD-41 specifies measuring the run-of-mine ore, meaning the ore as
it emerges from the mine, i.e., before treatment.27 As explained by the DENRMGB Director, the ore is weighed only in DMT, excluding the water or moisture
content. Simply stated, included in the measurement are other materials
lumped with the sought-after mineral.
This definition is congruent with RA 7942 or The Philippine Mining Act of 1995.
Said law defines ore as naturally occurring substance or material from which
a mineral or element can be mined and/or processed for profit. 28 Clearly, the
law refers to ore in its unprocessed form, i.e., before the valuable mineral is
separate from the ore itself.
Also in Section V of the earlier mentioned DMC-2007-07, the DENR clarified the
50,000-MT limit by differentiating the measurement of metallic minerals from
nonmetallic ones. Noticeably, the metallic minerals are conservatively
measured compared to nonmetallic or industrial minerals for a reason.
Compared to metallic minerals, nonmetals are easily available when mined in
their raw/natural state, like limestone. As nonmetallics are produced from
natural aggregates, the production limit of 50,000 DMTs will be easily met. On
the other hand, metallic minerals, like Ni-Co are not easily available in their
pure form since they are sourced from ores which are mined. To extract these
metals of economic value, the gangue lumped with them have to be removed
by metallurgy. And in order to produce a ton of a metallic mineral sought for,
big volumes of gangue will have to be removed. As indicated by the mining
corporations' Summary of Shipments,29 it took 151,612 DMTs of ore to extract
only 1,699. DMTs of Ni-Co. Thus, 149,912.34 DMTs of ore are considered
waste. This means that if we are to subscribe to the mining corporations
interpretation of how to measure mined ore by measuring only the Ni-Co and
excluding the gangue, small-scale miners are virtually given the license to
continuously collect large volumes of ore until the 50,000 DMTs of Ni-Co limit is