G.R. No. 162243, G.R. No. 164516 & G.R. No. 171875; November 29, 2006
HON. HEHERSON ALVAREZ (substituted by HON. ELISEA G. GOZUN and HON. ANGELO T. REYES), in their capacity as Secretary of the DENR, Petitioner, vs. PICOP RESOURCES, INC., Respondent. (Consolidated Cases)

FACTS

Paper Industries Corporation of the Philippines (PICOP) was the holder of Timber License Agreement (TLA) No. 43, set to expire on 25 April 2002. Invoking DENR Administrative Order (DAO) No. 99-53, which governed the Integrated Forest Management Program (IFMP), PICOP formally signified its intent to convert its expiring TLA into an Integrated Forest Management Agreement (IFMA). The DENR, through its regional office, conducted a performance evaluation of PICOP’s TLA. The evaluation team’s report, forwarded to the DENR Secretary, indicated that PICOP had committed violations, including the non-submission of required forest protection and reforestation plans and the non-payment of certain forest charges.
Despite PICOP’s request and the regional office’s recommendation for evaluation for conversion, the DENR Secretary did not act on the application for conversion. Consequently, upon the expiration of TLA No. 43, the DENR declared the area open for other applicants and refused to allow PICOP to continue its operations. PICOP filed a Petition for Mandamus with the Regional Trial Court to compel the DENR Secretary to accept and process its application for conversion to an IFMA. The trial court granted the petition, a decision affirmed with modification by the Court of Appeals.

ISSUE

The principal issue is whether PICOP has a clear legal right to compel the DENR Secretary, via a writ of mandamus, to accept and process its application for the conversion of its expired TLA into an IFMA under DAO No. 99-53.

RULING

The Supreme Court ruled in favor of the DENR Secretary and dismissed PICOP’s Petition for Mandamus. The Court held that mandamus is a remedy only to compel the performance of a ministerial duty, not a discretionary one. The grant of an IFMA, or the acceptance and processing of an application for one, is not a ministerial duty of the DENR Secretary but a discretionary act imbued with the exercise of sound judgment.
DAO No. 99-53 does not confer an automatic right to conversion. Section 9 of the order states that a TLA holder “may be qualified to apply for conversion,” subject to evaluation and compliance with all existing laws and regulations. The Court emphasized that the DENR Secretary has the authority and responsibility to evaluate the applicant’s performance and compliance. PICOP’s alleged violations, including non-payment of forest charges and non-submission of mandatory plans, provided a valid basis for the DENR to withhold action on the application. Therefore, the Secretary’s inaction was a lawful exercise of discretion, not a refusal to perform a ministerial duty. Furthermore, a timber license is not a contract but a mere privilege, revocable by the state in the exercise of its police power and its paramount ownership over forest lands. PICOP possessed no vested right to a new IFMA upon the expiration of its TLA.