Chavez vs NHA

G.R. No. 164527, August 15, 2007

Facts:

On March 1, 1988, then-President Cory Aquino issued

Memorandum order No. (MO) 161 approving and directing implementation of the
Comprehensive and Integrated Metropolitan Manila Waste Management Plan. As
presented in MO 161, NHA prepared feasibility studies to turn the dumpsite into
low-cost housing project, thus, Smokey Mountain Development and Reclamation
Project (SMDRP), came into place. RA 6957 (Build-Operate-Transfer Law) was
passed on July 1990 declaring the importance of private sectors as contractors in
government projects. Thereafter, Aquino proclaimed MO 415 applying RA 6957
to SMDRP, among others. The same MO also established EXECOM and
TECHCOM in the execution and evaluation of the plan, respectively, to be
assisted by the Public Estates Authority (PEA).

Notices of public bidding to become NHAs venture partner for

SMDRP were published in newspapers in 1992, from which R-II Builders, Inc.
(RBI) won the bidding process. Then President Ramos authorized NHA to enter
into a Joint Venture Agreement with RBI.

The SMDRP shall consist of Phase I and Phase II. Phase I of the
project involves clearing, levelling-off the dumpsite, and construction of
temporary housing units for the current residents on the cleared and levelled
site. Phase II involves the construction of a fenced incineration area for the onsite disposal of the garbage at the dumpsite.

Subsequently, the Clean Air Act was passed by the legislature

which made the establishment of an incinerator illegal, making the off-site
dumpsite at Smokey Mountain necessary.

On August 27, 2003, the NHA and RBI executed a Memorandum of

Agreement whereby both parties agreed to terminate the JVA and subsequent
agreements. During this time, NHA reported that 34 temporary housing
structures and 21 permanent housing structures had been turned over by RBI.

On August 5, 2004, former Solicitor General Francisco Chavez,

filed an instant petition raising constitutional issues on the JVA entered by
National Housing Authority and R-II Builders, Inc.

Issues:
1.
Whether respondents NHA and RBI have been granted the power
and authority to reclaim lands of the public domain as this power is vested
exclusively in PEA as claimed by petitioner
2.
Whether respondents NHA and RBI were given the power and
authority by DENR to reclaim foreshore and submerged lands
3.
Whether respondent RBI can acquire reclaimed foreshore and
submerged lands considered as alienable and outside the commerce of man
4.
Whether respondent RBI can acquire reclaimed lands when there
was no declaration that said lands are no longer needed for public use
5.
6.
bidding

Whether there is a law authorizing sale of reclaimed lands

Whether the transfer of reclaimed lands to RBI was done by public

7.
Whether RBI, being a private corporation, is barred by the
Constitution to acquire lands of public domain
8.
Whether respondents can be compelled to disclose all information
related to the SMDRP
9.

Whether the operative fact doctrine applies to the instant position

Held:
1.
Executive Order 525 reads that the PEA shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for
and on behalf of the National Government. This does not mean that it shall be
responsible for all. The requisites for a valid and legal reclamation project are
approval by the President (which were provided for by MOs), favourable
recommendation of PEA (which were seen as a part of its recommendations to
the EXECOM), and undertaken either by PEA or entity under contract of PEA or
by the National Government Agency (NHA is a government agency whose
authority to reclaim lands under consultation with PEA is derived under PD 727
and RA 7279).
2.
Notwithstanding the need for DENR permission, the DENR is
deemed to have granted the authority to reclaim in the Smokey Mountain Project

for the DENR is one of the members of the EXECOM which provides reviews for
the project. ECCs and Special Patent Orders were given by the DENR which are
exercises of its power of supervision over the project. Furthermore, it was the
President via the abovementioned MOs that originally authorized the
reclamation. It must be noted that the reclamation of lands of public domain is
reposed first in the Philippine President.
3.
The reclaimed lands were classified alienable and disposable via
MO 415 issued by President Aquino and Proclamation Nos. 39 and 465 by
President Ramos.
4.
Despite not having an explicit declaration, the lands have been
deemed to be no longer needed for public use as stated in Proclamation No. 39
that these are to be disposed to qualified beneficiaries. Furthermore, these
lands have already been necessarily reclassified as alienable and disposable
lands under the BOT law.
5.
Letter I of Sec. 6 of PD 757 clearly states that the NHA can acquire
property rights and interests and encumber or otherwise dispose of them as it
may deem appropriate.
6.
There is no doubt that respondent NHA conducted a public bidding
of the right to become its joint venture partner in the Smokey Mountain Project. It
was noted that notices were published in national newspapers. The bidding
proper was done by the Bids and Awards Committee on May 18, 1992.
7.
RA 6957 as amended by RA 7718 explicitly states that a contractor
can be paid a portion as percentage of the reclaimed land subject to the
constitutional requirement that only Filipino citizens or corporation with at least
60% Filipino equity can acquire the same. In addition, when the lands were
transferred to the NHA, these were considered Patrimonial lands of the state, by
which it has the power to sell the same to any qualified person.
8.
This relief must be granted. It is the right of the Filipino people to
information on matters of public concerned as stated in Article II, Sec. 28, and
Article III, Sec. 7 of the 1987 Constitution.
9.
When the petitioner filed the case, the JVA had already been
terminated by virtue of MOA between RBI and NHA. The properties and rights in
question after the passage of around 10 years from the start of the projects
implementation cannot be disturbed or questioned. The petitioner, being the
Solicitor General at the time SMDRP was formulated, had ample opportunity to
question the said project, but did not do so. The moment to challenge has
passed.