G.R. No. 162243, G.R. No. 164516, G.R. No. 171875; December 3, 2009.
HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources, Petitioner, vs. PICOP RESOURCES, INC., Respondent. (G.R. No. 162243)

PICOP RESOURCES, INC., Petitioner, vs. HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources, Respondent. (G.R. No. 164516)
THE HON. ANGELO T. REYES (formerly Hon. Elisea G. Gozun), in his capacity as Secretary of the Department of Environment and Natural Resources (DENR), Petitioner, vs. PAPER INDUSTRIES CORP. OF THE PHILIPPINES (PICOP), Respondent. (G.R. No. 171875)

FACTS

PICOP Resources, Inc. (PICOP) filed an application with the Department of Environment and Natural Resources (DENR) to convert its Timber License Agreement (TLA) No. 43 into an Integrated Forest Management Agreement (IFMA). During the processing, PICOP ceased attending DENR meetings and instead filed a Petition for Mandamus before the Regional Trial Court (RTC) of Quezon City on September 2, 2002, against then DENR Secretary Heherson T. Alvarez. PICOP sought to compel the DENR Secretary to sign, execute, and deliver an IFMA to PICOP, issue an IFMA assignment number, issue a permit to harvest timber, and honor the government’s warranties and contractual obligations under a July 29, 1969 Document (Presidential Warranty) signed by then President Ferdinand Marcos in favor of PICOP’s predecessor-in-interest. The RTC granted the Petition for Mandamus on October 11, 2002, ordering the DENR Secretary to execute the IFMA and honor the 1969 agreement, and also awarded damages. The DENR Secretary’s Motion for Reconsideration was denied. The Court of Appeals affirmed the RTC Decision on February 19, 2004, but deleted the award of damages. Both parties filed Petitions for Review with the Supreme Court. On November 29, 2006, the Supreme Court rendered a Decision granting the DENR’s petition, reversing the Court of Appeals Decision affirming the grant of mandamus, and denying PICOP’s petition seeking reinstatement of damages. PICOP filed a Motion for Reconsideration.

ISSUE

The primary issues are: (1) Whether the July 29, 1969 Document is a contract enforceable under the Non-Impairment Clause of the Constitution, thereby making the signing of an IFMA a ministerial duty compellable by mandamus; and (2) Whether PICOP complied with all legal and constitutional requirements for the issuance of an IFMA.

RULING

The Supreme Court, in its Resolution, denied PICOP’s Motion for Reconsideration and affirmed its earlier Decision.
1. The July 29, 1969 Document is not a contract protected by the constitutional non-impairment clause. It is a mere permit or license, which does not create a vested property right. The Document itself contains a proviso that its terms are subject to compliance with the laws and the Constitution. A timber license is a privilege granted by the state, which can be validly withdrawn in accordance with law. Therefore, the DENR Secretary’s act of signing an IFMA is a discretionary function, not a ministerial duty compellable by mandamus.
2. PICOP failed to comply with all legal and constitutional requirements for the issuance of an IFMA. The Court found that PICOP did not submit the required Five-Year Forest Protection Plan and Seven-Year Reforestation Plan for the years under review. PICOP also failed to fully pay its forest charges. Furthermore, PICOP did not secure the necessary certification from the National Commission on Indigenous Peoples (NCIP) that the area does not overlap with any ancestral domain, nor did it obtain prior consultation with and approval from the concerned Sanggunian as required by the Local Government Code. PICOP also failed to secure social acceptability under Presidential Decree No. 1586. The Court held that the DENR Secretary’s refusal to sign the IFMA was a valid exercise of discretion based on PICOP’s non-compliance with these prerequisites.