REPUBLIC OF THE PHILIPPINES REPRESENTED BY THE ENVIRONMENTAL MANAGEMENT BUREAU, REGION VII, AND NOEL C. EMPLEO, REGIONAL DIRECTOR, PETITIONERS, VS. O.G. HOLDINGS CORPORATION, RE…

Republic of the Philippines versus O.G. Holdings Corporation

The Case

This is a petition for review filed by the Republic of the Philippines, represented by the Environmental Management Bureau, Region 7, and its Regional Director, against O.G. Holdings Corporation, the owner and operator of the Panglao Island Nature Resort in Bohol. The Republic asks the Supreme Court to reverse the Court of Appeals, which had annulled the orders of the Environmental Management Bureau suspending the resort's Environmental Compliance Certificate. The case matters because it teaches when the extraordinary writ of certiorari may be used against an administrative agency, and it reminds every Bar candidate that a motion for reconsideration is, as a rule, an indispensable precondition to certiorari.

Procedural History

The Environmental Management Bureau, Region 7, issued two orders suspending the Environmental Compliance Certificate of the resort, dated 6 July 2006 and 7 February 2007. Instead of appealing to the Secretary of the Department of Environment and Natural Resources, O.G. Holdings filed a special civil action for certiorari before the Court of Appeals, insisting that the exceptions to the rule on exhaustion of administrative remedies applied. The Court of Appeals granted the petition. It annulled and set aside both orders, relieved O.G. Holdings of complying with Condition No. 2.2 of the certificate, and instead required it to submit proof of registration of the reclaimed off-shore area once granted by the Philippine Reclamation Authority. The Bureau moved for reconsideration, but the Court of Appeals denied it in a resolution dated 11 August 2009. The Republic then elevated the matter to the Supreme Court through a petition for review under Rule 45 of the Rules of Court.

Facts

On 26 July 2002, the Environmental Management Bureau, Region 7, issued an Environmental Compliance Certificate to the Panglao Island Nature Resort Corporation for its beach resort project in Barangay Bingag, Dauis, Panglao Island, Bohol. The certificate carried several conditions, among them Condition No. 2.2, which required the proponent to secure a foreshore lease or other lawful purposes permit from the Department of Environment and Natural Resources for any development in the foreshore area. O.G. Holdings then developed and operated the resort, spending millions of pesos.

Compliance monitoring in December 2003, April 2004, and March 2005 showed that the proponent had failed to comply with Condition No. 2.2, among others. O.G. Holdings explained that the Municipality of Dauis could not give a favorable endorsement because a municipal ordinance prohibited development on the municipal shorelines. It later submitted a marine study, complying with Condition No. 6, and applied instead with the Philippine Reclamation Authority for special registration of its man-made island, praying that this be considered substantial compliance.

On 6 July 2006, the Bureau suspended the certificate for failure to submit the foreshore lease or permit, and directed the proponent to cease and desist from project expansion. O.G. Holdings moved for reconsideration. After further monitoring, during which a guardhouse was reported to be under construction within the foreshore area, the Bureau issued a second order on 7 February 2007. This order gave the proponent seventy-two hours to submit the required tenurial instrument, failing which the cease and desist order would be implemented immediately. O.G. Holdings did not move for reconsideration of this second order. It went straight to the Court of Appeals on certiorari.

Issues

• Whether or not the Court of Appeals erred in granting the petition for certiorari despite the failure of O.G. Holdings to move for reconsideration of the second suspensive order.
• Whether or not the Court of Appeals erred in ruling that the Environmental Management Bureau acted in grave abuse of discretion amounting to lack or excess of jurisdiction in suspending the Environmental Compliance Certificate.

Applicable Provisions

Section 1 of Rule 65 of the Rules of Court, on the special civil action for certiorari, provides:

When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

This is the very remedy O.G. Holdings invoked, and its requirement of grave abuse of discretion is the standard the Court measures the Bureau's orders against.

Section 9 of Presidential Decree No. 1586, the Philippine Environmental Impact Statement System, as reflected in the certificate itself, provides:

Non-Compliance with any of the above stipulations will be sufficient cause for the suspension or cancellation of this Certificate and/or imposition of a fine in an amount not to exceed Fifty Thousand Pesos for every violation thereof, at the discretion of this Office.

This provision supplies the legal basis for the Bureau's power to suspend the certificate upon non-compliance with its conditions.

Ruling

On the first issue, the Court ruled in favor of the Republic. A motion for reconsideration is an indispensable condition before an aggrieved party can resort to the special civil action for certiorari under Rule 65. This rule affords the public respondent an opportunity to correct any actual or fancied error. O.G. Holdings moved for reconsideration only of the first order, but not of the second order of 7 February 2007, which was the operative order it challenged. Its direct resort to certiorari was therefore premature, and the Court of Appeals erred in entertaining the petition.

On the second issue, the Court held that the Court of Appeals likewise erred in finding grave abuse of discretion. The suspension rested on a clear legal basis, namely Section 9 of Presidential Decree No. 1586 and the express terms of the certificate, which made non-compliance with any condition sufficient cause for suspension. The Bureau had given the proponent repeated notices and opportunities to comply, and the proponent had failed to secure the required tenurial instrument over a considerable period. The Court also rejected the appellate court's conclusion that the foreshore lease could simply be dispensed with, since the condition was a valid requirement the proponent had committed to comply with.

Doctrine

First, a motion for reconsideration is, as a general rule, an indispensable precondition to the filing of a special civil action for certiorari under Rule 65 of the Rules of Court. The exceptions are narrow, and a party who skips this step without justification files a premature petition.

Second, an administrative agency does not act with grave abuse of discretion when it suspends an Environmental Compliance Certificate upon a proponent's failure to comply with its conditions, where the suspension is expressly authorized by Section 9 of Presidential Decree No. 1586 and by the terms of the certificate itself. Grave abuse of discretion means a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, not a mere error of judgment.

Disposition

The Supreme Court granted the petition of the Republic, reversed the Court of Appeals, and upheld the orders of the Environmental Management Bureau suspending the Environmental Compliance Certificate.

Remember This

Memorize this line: a motion for reconsideration is an indispensable condition before resorting to certiorari under Rule 65. Examiners use this case to test the requisites of certiorari, the doctrine of exhaustion of administrative remedies, and the power of the Environmental Management Bureau to suspend an Environmental Compliance Certificate under Presidential Decree No. 1586.