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.

FACTS

On August 11, 2000, the City of Davao filed an application for a Certificate of Non-Coverage (CNC) for its proposed Davao City Artica Sports Dome project with the Environmental Management Bureau (EMB), Region XI. The EMB denied the application, finding the proposed project was within an environmentally critical area and ruling that the City must undergo the environmental impact assessment (EIA) process to secure an Environmental Compliance Certificate (ECC) pursuant to Presidential Decree No. 1586 (the EIS law). The City of Davao filed a petition for mandamus and injunction with the Regional Trial Court (RTC), alleging its project was neither an environmentally critical project nor within an environmentally critical area, and it was thus the ministerial duty of the DENR to issue a CNC. The RTC granted the petition, directing the DENR to issue the CNC and making the preliminary injunction permanent. The RTC reasoned that local government units (LGUs) are not mandated to comply with the EIS law, as they are not agencies or instrumentalities of the national government, and found based on submitted certifications that the project site was not within an environmentally critical area. The Republic, through the DENR, filed a petition for review. During the pendency of the case, the City of Davao filed a manifestation expressing agreement with the petitioner that it needs to secure an ECC, rendering the petition moot, but the Supreme Court decided to address the issue for guidance.

ISSUE

Whether a local government unit (the City of Davao) is exempt from the coverage of Presidential Decree No. 1586 (the Environmental Impact Statement System) and is entitled to a Certificate of Non-Coverage for its proposed project.

RULING

No. The Supreme Court held that local government units are not excluded from the coverage of PD 1586. The Court explained that an LGU, as a body politic and corporate, performs dual functions—governmental and proprietary. When exercising governmental powers, an LGU is an agency of the national government. Section 16 of the Local Government Code imposes upon LGUs the duty to promote the people’s right to a balanced ecology, which aligns with the objectives of PD 1586. Furthermore, Section 4 of PD 1586 states that “no person, partnership or corporation” shall undertake an environmentally critical project without an ECC. Under the Civil Code, a “person” includes juridical persons, and the State and its political subdivisions (including LGUs) are juridical persons. Therefore, LGUs are encompassed by the law. The Court also emphasized that the law’s intent to achieve a balance between socio-economic development and environmental protection requires a comprehensive program involving all government sectors, including LGUs. However, the Court ultimately upheld the RTC’s factual finding, which was fully supported by evidence, that the specific Artica Sports Dome project was not an environmentally critical project nor located within an environmentally critical area, as shown by certifications from the City Planning Office, the CENRO, and PHIVOLCS. Since factual findings of the trial court, when supported by evidence, are binding, the denial of the petition was sustained on this basis, notwithstanding the correct interpretation of the law’s coverage.