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VOL. 388, SEPTEMBER 12, 2002 691

Republic vs. City of Davao

*
G.R. No. 148622. September 12, 2002.

REPUBLIC OF THE PHILIPPINES, represented by HON.

HEHERSON T. ALVAREZ, in his capacity as Secretary of
the DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR), CLARENCE L. BAGUILAT, in his
capacity as the Regional Executive Director of DENR-
Region XI and ENGR. BIENVENIDO L. LIPAYON, in his
capacity as the Regional Director of the DENR-
ENVIRONMENTAL MANAGEMENT BUREAU (DENR-
EMB), Region XI, petitioners, vs. THE CITY OF DAVAO,
represented by BENJAMIN C. DE GUZMAN, City Mayor,
respondent.

Administrative Law; Local Government Code; Local

Government Unit Defined.Section 15 of Republic Act 7160,
otherwise known as the Local Government Code, defines a local
government unit as a body politic and corporate endowed with
powers to be exercised by it in conformity with law. As such, it
performs dual functions, governmental and proprietary.
Governmental functions are those that concern the health, safety
and the advancement of the public good or welfare as affecting the
public generally. Proprietary functions are those that seek to
obtain special corporate benefits or earn pecuniary profit and
intended for private advantage and benefit. When exercising
governmental powers and performing governmental duties, an
LGU is an agency of the national government. When engaged in
corporate activities, it acts as an agent of the community in the
administration of local affairs.
Same; Same; Same; Local government units are not excluded
from the coverage of PD 1586.Section 4 of PD 1586 clearly states
that no person, partnership or corporation shall undertake or
operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate
issued by the President or his duly authorized representative.
The Civil Code defines a person as either natural or juridical. The
state and its political subdivisions, i.e., the local government units

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are juridical persons. Undoubtedly therefore, local government

units are not excluded from the coverage of PD 1586.

PETITION for review on certiorari of a decision of the

Regional Trial Court of Davao City, Br. 33.

_______________

* FIRST DIVISION.

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692 SUPREME COURT REPORTS ANNOTATED

Republic vs. City of Davao

The facts are stated in the opinion of the Court.

The Solicitor General for petitioner.

YNARES-SANTIAGO, J.:
1
Before us2
is a petition for review on certiorari assailing the
decision dated May 28, 2001 of the Regional Trial Court of
Davao City, Branch 33, which granted the writ of
mandamus and injunction in favor of respondent, the City
of Davao, and against petitioner, the Republic, represented
by the Department of Environment and Natural Resources
(DENR). The trial court also directed petitioner to issue a
Certificate of Non-Coverage in favor of respondent.
The antecedent facts of the case are as follows:
On August 11, 2000, respondent filed an application for
a Certificate of Non-Coverage (CNC) for its proposed
project, the Davao City Artica Sports Dome, with the
Environmental Management Bureau (EMB), Region XI.
Attached to the application were the required documents
for its issuance, namely, a) detailed location map of the
project site; b) brief project description; and c) a
certification from the City Planning and Development
Office that the project is not located in an environmentally
critical area (EGA). The EMB Region XI denied the
application after finding that the proposed project was
within an environmentally critical area and ruled that,
pursuant to Section 2, Presidential Decree No. 1586,
otherwise known as the Environmental Impact Statement
System, in relation to Section 4 of Presidential Decree No.
1151, also known as the Philippine Environment Policy,
the City of Davao must undergo the environmental impact
assessment (EIA) process to secure an Environmental

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Compliance Certificate (ECO, before it can proceed with

the construction of its project.
Believing that it was entitled to a Certificate of Non-
Coverage, respondent filed a petition for mandamus and
injunction with the Regional Trial Court of Davao,
docketed as Civil Case No. 28,133-2000. It alleged that its
proposed project was neither an environ-

_______________

1 Rollo, pp. 9-30.

2 Ibid., pp. 31-43.

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Republic vs. City of Davao

mentally critical project nor within an environmentally

critical area; thus it was outside the scope of the EIS
system. Hence, it was the ministerial duty of the DENR,
through the EMB-Region XI, to issue a CNC in favor of
respondent upon submission of the required documents.
The Regional Trial Court rendered judgment in favor of
respondent, the dispositive portion of which reads as
follows:

WHEREFORE, finding the petition to be meritorious, judgment

granting the writ of mandamus and injunction is hereby rendered
in favor of the petitioner City of Davao and against respondents
Department of Environment and Natural Resources and the other
respondents by:

1) directing the respondents to issue in favor of the petitioner

City of Davao a Certificate of Non-Coverage, pursuant to
Presiden tial Decree No. 1586 and related laws, in
connection with the con struction by the City ofDavao of
the Artica Sports Dome;
2) making the preliminary injunction issued on December 12,
2000 permanent.

Costs de oficio. 3
SO ORDERED.

The trial court ratiocinated that there is nothing in PD

1586, in relation to PD 1151 and Letter of Instruction No.
1179 (prescribing guidelines for compliance with the EIA
system), which requires local government units (LGUs) to
comply with the EIS law. Only agencies and
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instrumentalities of the national government, including

government owned or controlled corporations, as well as
private corporations, firms and entities are mandated to go
through the EIA process for their proposed projects which
have significant effect on the quality of the environment. A
local government unit, not being an agency or
instrumentality of the National Government, is deemed
excluded under the principle of expressio unius est exclusio
alterius.
The trial court also declared, based on the certifications
of the DENR-Community Environment and Natural
Resources Office (CENRO)-West, and the data gathered
from the Philippine Institute of Volcanology and
Seismology (PHIVOLCS), that the site for

_______________

3 Ibid., p. 42.

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Republic vs. City of Davao

the Artica Sports Dome was not within an environmentally

critical area. Neither was the project an environmentally
critical one. It therefore becomes mandatory for the DENR,
through the EMB Region XI, to approve respondents
application for CNC after it has satisfied all the
requirements for its issuance. Accordingly, petitioner can
be compelled by a writ of mandamus to issue the CNC, if it
refuses to do so.
Petitioner filed a motion for reconsideration, however,
the same was denied. Hence, the instant petition for
review.
With the supervening change of administration,
respondent, in lieu of a comment, filed a manifestation
expressing its agreement with petitioner that, indeed, it
needs to secure an ECC for its proposed project. It thus
rendered the instant petition moot and academic. However,
for the guidance of the implementors of the EIS law and
pursuant
4
to our symbolic function to educate the bench and
bar, we are inclined to address the issue raised in this
petition. 5
Section 15 of Republic Act 7160, otherwise known as the
Local Government Code, defines a local government unit as
a body politic and corporate endowed with powers to be
exercised by it in conformity with law. As such, it performs
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dual functions, governmental and proprietary.

Governmental functions are those that concern the health,
safety and the advancement of the
6
public good or welfare as
affecting the public generally. Proprietary functions are
those that seek to obtain special corporate benefits or earn
pecuniary
7
profit and intended for private advantage and
benefit. When exercising governmental powers and
performing governmental

_______________

4 Gonzales v. Chavez, 205 SCRA 816, 830 (1992); Consolidated Bank

and Trust Corporation v. Court of Appeals, 193 SCRA 158, 176 (1991).
5 RA 7160, Section 15. Political and Corporate Nature of Local
Government Units. Every local government unit created or recognized
under this Code is a body politic and corporate endowed with powers to be
exer cised by it in conformity with law. As such, it shall exercise powers as
a political subdivision of the National Government and as a corporate
entity representing the inhabitants of its territory.
6 Department of Public Services Labor Unions v. Court of Industrial
Relations, 1 SCRA 316, 319 (1961).
7 Blaquera v. Alcala, 295 SCRA 366, 425 (1998).

695

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Republic vs. City of Davao

8
duties, an LGU is an agency of the national government.
When engaged in corporate activities, it acts as an agent
9
of
the community in the administration of local affairs.
Found in Section 16 of the Local Government Code is the
duty of the LGUs 10
to promote the peoples right to a
balanced ecology. Pursuant to this, an LGU, like the City
of Davao, can not claim exemption from the coverage of PD
1586. As a body politic endowed with governmental
functions, an LGU has the duty to ensure the quality of the
environment, which is the very same objective of PD 1586.
Further, it is a rule of statutory construction that every
part of a statute must be interpreted with reference to the
context, i.e., that every part must be considered with other
parts, and 11kept subservient to the general intent of the
enactment. The trial court, in declaring local government
units as exempt from the coverage
12
of the EIS law, failed to
relate Section 2 of PD 1586 to the following provisions of
the same law:

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WHEREAS, the pursuit of a comprehensive and integrated

environmental protection program necessitates the establishment
and institutionalization of a system whereby the exigencies of
socio-economic under-

_______________

8 Tiu San v. Republic, 96 Phil. 817, 820 (1955).

9 Lidasan v. Commission on Elections, 21 SCRA 496, 506 (1967).
10 General Welfare.Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and
support, among other things, the preservation and enrichment of culture, promote
health and safety, enhance the right of the people to a balanced ecology, encourage
and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants.
11 Philippine Airlines, Inc. v. National Labor Relations Commission, 295 SCRA
89, 96 (1998).
12 Supra.

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Republic vs. City of Davao

takings can be reconciled with the requirements of environmental

quality; x x x
Section 1. Policy.It is hereby declared the policy of the State
to attain and maintain a rational and orderly balance between
socioeconomic growth and environmental protection.
x x x x x x x x x
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 of areas in the country as
environmentally critical. No person, partnership or corporation
shall undertake or operate any such declared environmentally
critical project or area without first securing an Environmental
Compliance Certificate issued by the President or his duly
authorized representative. For the proper management of said
critical project or area, the President may by his proclamation
reorganize such government offices, agencies, institutions,
corporations or instrumentalities including the realignment of

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government personnel, and their specific functions and

responsibilities.

Section 4 of PD 1586 clearly states that no person,

partnership or corporation shall undertake or operate any
such declared environmentally critical project or area
without first securing an Environmental Compliance
Certificate issued
13
by the President or his duly authorized
representative. The Civil Code defines a person as either
natural or juridical. The state and14 its political subdivisions,
15
i.e., the local government units are juridical persons.
Undoubtedly therefore, local government units are not
excluded from the coverage of PD 1586.
Lastly, very clear in Section 1 of PD 1586 that said law
intends to implement the policy of the state to achieve a
balance between socio-economic development and
environmental protection, which

_______________

13 Supra.
14 Administrative Code of 1987, Section 2(3). Local Government refers
to the political subdivisions established by or in accordance with the
Constitution.
15 Civil Code of the Philippines, Book 1, Chapter 3, Art. 44. The
following are juridical persons:
(1) The State and its political subdivisions; x x x

697

VOL. 388, SEPTEMBER 12, 2002 697

Republic vs. City of Davao

are the twin goals of sustainable development. The above-

quoted first paragraph of the Whereas clause stresses that
this can only be possible if we adopt a comprehensive and
integrated environmental protection program where all the
sectors of the community are involved, i.e., the government
and the private sectors. The local government units, as part
of the machinery of the government, cannot 16therefore be
deemed as outside the scope of the EIS system.
The foregoing arguments, however, presuppose that a
project, for which an Environmental Compliance
Certificate is necessary, is environmentally critical or
within an environmentally critical area. In the case at bar,
respondent has sufficiently shown that the Artica Sports
Dome will not have a significant negative environmental
impact because it is not an environmentally critical project
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and it is not located in an environmentally critical area. In

support of this contention, respondent submitted the
following:

1. Certification from the City Planning and

Development Office that the project is not located in
an environmentally critical area;
2. Certification from the Community Environment
and Natural Resources Office (CENRO-West) that
the project area is within the 18-30% slope, is
outside the scope of the NIPAS (R.A. 7586), and not
within a declared watershed area; and
3. Certification from PHILVOCS that the project site
is thirty-seven (37) kilometers southeast of the
southernmost extension of the Davao River Fault
and forty-five (45) kilometers west of the Eastern
Mindanao Fault; and is outside the required
minimum buffer zone of five (5) meters from a fault
zone.

_______________

16 Administrative Code of 1987, Section 2 (1) Government of the

Republic of the Philippines refers to the corporate governmental entity
through which the functions of the government are exercised throughout
the Philippines, including, save as the contrary appears from the context,
the various arms through which political authority is made effective in the
Philippines, whether pertaining to the autonomous regions, the provincial,
city, municipality or barangay subdivisions or other forms of local
government.

698

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Republic vs. City of Davao

The trial court, after a consideration of the evidence, found

that the Artica Sports Dome is not within an
environmentally critical area. Neither is it an
environmentally critical project. It is axiomatic that factual
findings of the trial court, when fully supported by the
evidence on record, are binding
17
upon this Court and will
not be 18
disturbed on appeal. This Court is not a trier of
facts.
There are exceptional instances when this Court may
disregard factual findings of the trial court, namely: a)
when the conclusion is a finding grounded entirely on

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speculations, surmises, or conjectures; b) when the

inference made is manifestly mistaken, absurd, or
impossible; c) where there is a grave abuse of discretion; d)
when the judgment is based on a misapprehension of facts;
e) when the findings of fact are conflicting; f) when the
Court of Appeals, in making its findings, went beyond the
issues of the case and the same are contrary to the
admissions of both appellant and appellee; g) when the
findings of the Court of Appeals are contrary to those of the
trial court; h) when the findings of fact are conclusions
without citation of specific evidence on which they are
based; i) when the finding of fact of the Court of Appeals is
premised on the supposed absence of evidence but is
contradicted by the evidence on record; and j) when the
Court of Appeals manifestly overlooked certain relevant
facts not disputed by the parties and which, if19 properly
considered, would justify a different conclusion. None of
these exceptions, however, obtain in this case.
The Environmental Impact Statement System, which
ensures environmental protection and regulates certain
government activities affecting the environment, was
established by Presidential Decree No. 1586. Section 2
thereof states:

There is hereby established an Environmental Impact Statement

System founded and based on the environmental impact
statement required under Section 4 of Presidential Decree No.
1151, of all agencies and

_______________

17 MOF Company, Inc. v. Enriquez, G.R. No. 149280, May 9, 2002, 382 SCRA
248.
18 Jacutin v. People of the Philippines, G.R. No. 140604, March 6, 2002, 378
SCRA 453.
19 Herbosa v. Court of Appeals, G.R. No. 119087, January 25, 2002, 374 SCRA
578.

699

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Republic vs. City of Davao

instrumentalities of the national government, including

government-owned or controlled corporations, as well as private
corporations, firms and entities, for every proposed project and
undertaking which significantly affect the quality of the
environment.

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Section 4 of PD 1151, on the other hand, provides:

Environmental Impact Statements.Pursuant to the above

enunciated policies and goals, all agencies and instrumentalities
of the national government, including government-owned or
controlled corporations, as well as private corporations, firms and
entities shall prepare, file and include in every action, project or
undertaking which significantly affects the quality of the
environment a detailed statement on

(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 en hancement of the long-term productivity of the
same; and
(e) whenever a proposal involves the use of depletable or
nonrenewable resources, a finding must be made that
such use and commitment are warranted.

Before an environmental impact statement is issued by a lead

agency, all agencies having jurisdiction over, or special expertise
on, the subject matter involved shall comment on the draft
environmental impact statement made by the lead agency within
thirty (30) days from receipt of the same.

Under Article II, Section 1, of the Rules and Regulations

Implementing PD 1586, the declaration of certain projects
or areas as environmentally critical, and which shall fall
within the scope of the Environmental Impact Statement
System, shall be by Presidential Proclamation, in
accordance with Section 4 of PD 1586 quoted above.
Pursuant thereto, Proclamation No. 2146 was issued on
December 14, 1981, proclaiming the following areas and
types of projects as environmentally critical and within the
scope of the Environmental Impact Statement System
established under PD 1586:
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700 SUPREME COURT REPORTS ANNOTATED

Republic vs. City of Davao

A. Environmentally Critical Projects

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I. Heavy Industries

a. Non-ferrous metal industries

b. Iron and steel mills
c. Petroleum and petro-chemical industries including
oil and gas
d. Smelting plants

II. Resource Extractive Industries

a. Major mining and quarrying projects

b. Forestry projects

1. Logging
2. Major wood processing projects
3. Introduction of fauna (exotic-animals) in pub
lic/private forests
4. Forest occupancy
5. Extraction of mangrove products
6. Grazing

c. Fishery Projects

1. Dikes for/and fishpond development projects

III. Infrastructure Projects

a. Major dams
b. Major power plants (fossil-fueled, nuclear fueled,
hydroelectric or geothermal)
c. Major reclamation projects
d. Major roads and bridges

B. Environmentally Critical Areas

1. All areas declared by law as national parks,

watershed re serves, wildlife preserves and
sanctuaries;
2. Areas set aside as aesthetic potential tourist spots;
3. Areas which constitute the habitat for any
endangered or threatened species of indigenous
Philippine Wildlife (flora and fauna);
4. Areas of unique historic, archaeological, or scientific
interests;

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5. Areas which are traditionally occupied by cultural

communities or tribes;

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Republic vs. City of Davao

6. Areas frequently visited and/or hard-hit by natural

calamities (geologic hazards, floods, typhoons,
volcanic activity, etc.);
7. Areas with critical slopes;
8. Areas classified as prime agricultural lands;
9. Recharged areas of aquifers;
10. Water bodies characterized by one or any
combination of the following conditions;

a. tapped for domestic purposes

b. within the controlled and/or protected areas
declared by appropriate authorities
c. which support wildlife and fishery activities

11. Mangrove areas characterized by one or any

combination of the following conditions:

a. with primary pristine and dense young growth;

b. adjoining mouth of major river systems;
c. near or adjacent to traditional productive fry or
fishing grounds;
d. which act as natural buffers against shore erosion,
strong winds and storm floods;
e. on which people are dependent for their livelihood.

12. Coral reefs, characterized by one or any

combinations of the following conditions:

a. with 50% and above live coralline cover;

b. spawning and nursery grounds for fish;
c. which act as natural breakwater of coastlines.

In this connection, Section 5 of PD 1586 expressly states:

Environmentally Non-Critical Projects.All other projects,

undertakings and areas not declared by the President as
environmentally critical shall be considered as non-critical and

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shall not be required to submit an environmental impact

statement. The National Environmental Protection Council, thru
the Ministry of Human Settlements may however require non-
critical projects and undertakings to provide additional
environmental safeguards as it may deem necessary.

The Artica Sports Dome in Langub does not come close to

any of the projects or areas enumerated above. Neither is it
analogous to
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702 SUPREME COURT REPORTS ANNOTATED

Republic vs. City of Davao

any of them. It is clear, therefore, that the said project is

not classified as environmentally critical, or within an
environmentally critical area. Consequently, the DENR has
no choice but to issue the Certificate of Non-Coverage. It
becomes its ministerial duty, the performance of which can
be compelled by writ of mandamus, such as that issued by
the trial court in the case at bar.
WHEREFORE, in view of the foregoing, the instant
petition is DENIED. The decision of the Regional Trial
Court of Davao City, Branch 33, in Civil Case No. 28,133-
2000, granting the writ of mandamus and directing the
Department of Environment and Natural Resources to
issue in favor of the City of Davao a Certificate of Non-
Coverage, pursuant to Presidential Decree No. 1586 and
related laws, in connection with the construction of the
Artica Sports Dome, is AFFIRMED.
SO ORDERED.

Davide, Jr. (C.J., Chairman), Vitug and Carpio, JJ.,

concur.

Petition denied, judgment affirmed.

Note.Under the regime of the 1935 Constitution local

government units derived their tax powers under a limited
statutory authority. (Manila Electric Company vs. Province
of Laguna, 306 SCRA 750 [1999])

o0o

703

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