G.R. No. 191427; May 30, 2011
Universal Robina Corp. (Corn Division), Petitioner, vs. Laguna Lake Development Authority, Respondent.

FACTS

Universal Robina Corp. (petitioner) operates an animal feeds manufacturing plant in Pasig City. The Laguna Lake Development Authority (LLDA), respondent, conducted a laboratory analysis on March 14, 2000, of the wastewater from petitioner’s corn oil refinery plant and found it failed to comply with effluent standards under DENR Administrative Orders Nos. 34 and 35, series of 1990. The LLDA issued an Ex-Parte Order on May 30, 2000, requiring petitioner to explain why its operations should not cease due to discharging pollutive effluents into the Pasig River and for operating without an LLDA clearance/permit. A subsequent analysis on August 31, 2000, following a complaint, showed continued non-conformance. Hearings on the pollution case commenced on March 1, 2001. Despite monitoring, petitioner’s wastewater remained non-compliant. Petitioner notified LLDA in early 2003 of its plan to upgrade its wastewater treatment facility, which was completed in 2007. A re-sampling on May 9, 2007, at petitioner’s request, showed compliance. Petitioner later requested a reduction of penalties, submitting Daily Operation Reports and Certifications to argue that accrued daily penalties should cover only 560 days. The LLDA issued an Order to Pay dated January 21, 2008, computing penalties from March 14, 2000, to November 3, 2003 (932 days), and from March 15, 2006, to April 17, 2007 (448 days, later rectified to 342 days), for a total of 1,247 days (later corrected to 1,274 days), amounting to PHP 1,247,000. Petitioner moved for reconsideration, arguing the computation erroneously assumed daily operation and disregarded its documentary evidence of actual operating days (560 days). The LLDA denied the motion by Order dated July 11, 2008, explaining it deducted periods when its laboratory was under rehabilitation and computed based on a six-day operation week as per inspection reports, while deeming petitioner’s documents self-serving. Petitioner filed a petition for certiorari with the Court of Appeals, which affirmed the LLDA orders, finding them supported by substantial evidence and computed per DENR guidelines, and held the petition premature for failure to exhaust administrative remedies (appeal to the DENR Secretary). Petitioner’s motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in affirming the LLDA’s orders, specifically regarding: (1) the failure to exhaust administrative remedies before judicial action, and (2) the computation of the accumulated daily penalties.

RULING

The Supreme Court denied the petition. On the first issue, the Court upheld the doctrine of exhaustion of administrative remedies, emphasizing that courts should allow administrative agencies to perform their specialized functions. Executive Order No. 192 provides for an appeal from LLDA decisions to the DENR Secretary, a remedy petitioner should have availed of before seeking judicial intervention. Petitioner’s claim that an appeal would be futile was speculative. The Court also found no deprivation of due process, as petitioner was notified of the charges and given an opportunity to be heard, which satisfies administrative due process. On the second issue, the Court affirmed the LLDA’s computation of penalties. Under LLDA rules, penalties are computed from the date of initial discovery of the violation until the actual cessation of pollution, unless the respondent proves otherwise through verified documentary evidence. The LLDA’s computation, based on inspection reports indicating a six-day operation week and with deductions for periods like laboratory rehabilitation, was in accordance with these guidelines. The Court agreed with the LLDA and the Court of Appeals that petitioner’s submitted Daily Operation Reports and Certifications were self-serving and unverified, hence unreliable to alter the computation. Thus, the LLDA did not commit grave abuse of discretion, and its orders were supported by substantial evidence.