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VOL. 388, SEPTEMBER 12, 2002 691

Republic vs. City of Davao
*
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.

Administrative Law; Local Government Code; Local

Government Unit Defined.—Section 15 of Republic Act 7160,
otherwise known as the Local Government Code, defines a local
government unit as a body politic and corporate endowed with
powers to be exercised by it in conformity with law. As such, it
performs dual functions, governmental and proprietary.
Governmental functions are those that concern the health, safety
and the advancement of the public good or welfare as affecting the
public generally. Proprietary functions are those that seek to obtain
special corporate benefits or earn pecuniary profit and intended for
private advantage and benefit. When exercising governmental
powers and performing governmental duties, an LGU is an agency
of the national government. When engaged in corporate activities, it
acts as an agent of the community in the administration of local
affairs.
Same; Same; Same; Local government units are not excluded
from the coverage of PD 1586.—Section 4 of PD 1586 clearly states
that “no person, partnership or corporation shall undertake or
operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate

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issued by the President or his duly authorized representative.” The

Civil Code defines a person as either natural or juridical. The state
and its political subdivisions, i.e., the local government units are
juridical persons. Undoubtedly therefore, local government units are
not excluded from the coverage of PD 1586.

PETITION for review on certiorari of a decision of the

Regional Trial Court of Davao City, Br. 33.

_______________

* FIRST DIVISION.

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692 SUPREME COURT REPORTS ANNOTATED

Republic vs. City of Davao

The facts are stated in the opinion of the Court.

     The Solicitor General for petitioner.

YNARES-SANTIAGO, J.:
1
Before us2
is a petition for review on certiorari assailing the
decision dated May 28, 2001 of the Regional Trial Court of
Davao City, Branch 33, which granted the writ of
mandamus and injunction in favor of respondent, the City
of Davao, and against petitioner, the Republic, represented
by the Department of Environment and Natural Resources
(DENR). The trial court also directed petitioner to issue a
Certificate of Non-Coverage in favor of respondent.
The antecedent facts of the case are as follows:
On August 11, 2000, respondent filed an application for a
Certificate of Non-Coverage (CNC) for its proposed project,
the Davao City Artica Sports Dome, with the
Environmental Management Bureau (EMB), Region XI.
Attached to the application were the required documents for
its issuance, namely, a) detailed location map of the project
site; b) brief project description; and c) a certification from
the City Planning and Development Office that the project
is not located in an environmentally critical area (EGA).
The EMB Region XI denied the application after finding
that the proposed project was within an environmentally
critical area and ruled that, pursuant to Section 2,
Presidential Decree No. 1586, otherwise known as the

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Environmental Impact Statement System, in relation to

Section 4 of Presidential Decree No. 1151, also known as the
Philippine Environment Policy, the City of Davao must
undergo the environmental impact assessment (EIA)
process to secure an Environmental Compliance Certificate
(ECO, before it can proceed with the construction of its
project.
Believing that it was entitled to a Certificate of Non-
Coverage, respondent filed a petition for mandamus and
injunction with the Regional Trial Court of Davao, docketed
as Civil Case No. 28,133-2000. It alleged that its proposed
project was neither an environ-

_______________

1 Rollo, pp. 9-30.

2 Ibid., pp. 31-43.

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Republic vs. City of Davao

mentally critical project nor within an environmentally

critical area; thus it was outside the scope of the EIS system.
Hence, it was the ministerial duty of the DENR, through the
EMB-Region XI, to issue a CNC in favor of respondent upon
submission of the required documents.
The Regional Trial Court rendered judgment in favor of
respondent, the dispositive portion of which reads as follows:

“WHEREFORE, finding the petition to be meritorious, judgment

granting the writ of mandamus and injunction is hereby rendered
in favor of the petitioner City of Davao and against respondents
Department of Environment and Natural Resources and the other
respondents by:

1) directing the respondents to issue in favor of the petitioner

City of Davao a Certificate of Non-Coverage, pursuant to
Presiden tial Decree No. 1586 and related laws, in
connection with the con struction by the City ofDavao of the
Artica Sports Dome;
2) making the preliminary injunction issued on December 12,
2000 permanent.

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Costs de oficio. 3
SO ORDERED.”

The trial court ratiocinated that there is nothing in PD

1586, in relation to PD 1151 and Letter of Instruction No.
1179 (prescribing guidelines for compliance with the EIA
system), which requires local government units (LGUs) to
comply with the EIS law. Only agencies and
instrumentalities of the national government, including
government owned or controlled corporations, as well as
private corporations, firms and entities are mandated to go
through the EIA process for their proposed projects which
have significant effect on the quality of the environment. A
local government unit, not being an agency or
instrumentality of the National Government, is deemed
excluded under the principle of expressio unius est exclusio
alterius.
The trial court also declared, based on the certifications
of the DENR-Community Environment and Natural
Resources Office (CENRO)-West, and the data gathered
from the Philippine Institute of Volcanology and Seismology
(PHIVOLCS), that the site for

_______________

3 Ibid., p. 42.

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Republic vs. City of Davao

the Artica Sports Dome was not within an environmentally

critical area. Neither was the project an environmentally
critical one. It therefore becomes mandatory for the DENR,
through the EMB Region XI, to approve respondent’s
application for CNC after it has satisfied all the
requirements for its issuance. Accordingly, petitioner can be
compelled by a writ of mandamus to issue the CNC, if it
refuses to do so.
Petitioner filed a motion for reconsideration, however, the
same was denied. Hence, the instant petition for review.
With the supervening change of administration,
respondent, in lieu of a comment, filed a manifestation
expressing its agreement with petitioner that, indeed, it
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needs to secure an ECC for its proposed project. It thus

rendered the instant petition moot and academic. However,
for the guidance of the implementors of the EIS law and
pursuant
4
to our symbolic function to educate the bench and
bar, we are inclined to address the issue raised in this
petition. 5
Section 15 of Republic Act 7160, otherwise known as the
Local Government Code, defines a local government unit as
a body politic and corporate endowed with powers to be
exercised by it in conformity with law. As such, it performs
dual functions, governmental and proprietary.
Governmental functions are those that concern the health,
safety and the advancement of the 6
public good or welfare as
affecting the public generally. Proprietary functions are
those that seek to obtain special corporate benefits or earn
pecuniary
7
profit and intended for private advantage and
benefit. When exercising governmental powers and
performing governmental

_______________

4 Gonzales v. Chavez, 205 SCRA 816, 830 (1992); Consolidated Bank

and Trust Corporation v. Court of Appeals, 193 SCRA 158, 176 (1991).
5 RA 7160, Section 15. Political and Corporate Nature of Local
Government Units. Every local government unit created or recognized
under this Code is a body politic and corporate endowed with powers to be
exer cised by it in conformity with law. As such, it shall exercise powers
as a political subdivision of the National Government and as a corporate
entity representing the inhabitants of its territory.
6 Department of Public Services Labor Unions v. Court of Industrial
Relations, 1 SCRA 316, 319 (1961).
7 Blaquera v. Alcala, 295 SCRA 366, 425 (1998).

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Republic vs. City of Davao
8
duties, an LGU is an agency of the national government.
When engaged in corporate activities, it acts as an agent
9
of
the community in the administration of local affairs.
Found in Section 16 of the Local Government Code is the
duty of the
10
LGUs to promote the people’s right to a balanced
ecology. Pursuant to this, an LGU, like the City of Davao,
can not claim exemption from the coverage of PD 1586. As a
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body politic endowed with governmental functions, an LGU

has the duty to ensure the quality of the environment,
which is the very same objective of PD 1586.
Further, it is a rule of statutory construction that every
part of a statute must be interpreted with reference to the
context, i.e., that every part must be considered with other
parts, and 11kept subservient to the general intent of the
enactment. The trial court, in declaring local government
units as exempt from the coverage
12
of the EIS law, failed to
relate Section 2 of PD 1586 to the following provisions of
the same law:

WHEREAS, the pursuit of a comprehensive and integrated

environmental protection program necessitates the establishment
and institutionalization of a system whereby the exigencies of socio-
economic under-

_______________

8 Tiu San v. Republic, 96 Phil. 817, 820 (1955).

9 Lidasan v. Commission on Elections, 21 SCRA 496, 506 (1967).
10 General Welfare.—Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance,
and those which are essential to the promotion of the general welfare. Within
their respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of culture,
promote health and safety, enhance the right of the people to a balanced
ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full employment among their
residents, maintain peace and order, and preserve the comfort and convenience
of their inhabitants.
11 Philippine Airlines, Inc. v. National Labor Relations Commission, 295
SCRA 89, 96 (1998).
12 Supra.

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Republic vs. City of Davao

takings can be reconciled with the requirements of environmental

quality; x x x
Section 1. Policy.—It is hereby declared the policy of the State to

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attain and maintain a rational and orderly balance between

socioeconomic growth and environmental protection.
x x x      x x x      x x x
Section 4. Presidential Proclamation of Environmentally Critical
Areas and Projects.—The President of the Philippines may, on his
own initiative or upon recommendation of the National
Environmental Protection Council, by proclamation declare certain
projects, undertakings of areas in the country as environmentally
critical. No person, partnership or corporation shall undertake or
operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate
issued by the President or his duly authorized representative. For
the proper management of said critical project or area, the President
may by his proclamation reorganize such government offices,
agencies, institutions, corporations or instrumentalities including
the realignment of government personnel, and their specific
functions and responsibilities.

Section 4 of PD 1586 clearly states that “no person,

partnership or corporation shall undertake or operate any
such declared environmentally critical project or area
without first securing an Environmental Compliance
Certificate issued
13
by the President or his duly authorized
representative.” The Civil Code defines a person as either
natural or juridical. The state and14 its political subdivisions,
15
i.e., the local government units are juridical persons.
Undoubtedly therefore, local government units are not
excluded from the coverage of PD 1586.
Lastly, very clear in Section 1 of PD 1586 that said law
intends to implement the policy of the state to achieve a
balance between socio-economic development and
environmental protection, which

_______________

13 Supra.
14 Administrative Code of 1987, Section 2(3). Local Government refers
to the political subdivisions established by or in accordance with the
Constitution.
15 Civil Code of the Philippines, Book 1, Chapter 3, Art. 44. The
following are juridical persons:
(1) The State and its political subdivisions; x x x

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Republic vs. City of Davao

are the twin goals of sustainable development. The above-

quoted first paragraph of the Whereas clause stresses that
this can only be possible if we adopt a comprehensive and
integrated environmental protection program where all the
sectors of the community are involved, i.e., the government
and the private sectors. The local government units, as part
of the machinery of the government, cannot16 therefore be
deemed as outside the scope of the EIS system.
The foregoing arguments, however, presuppose that a
project, for which an Environmental Compliance Certificate
is necessary, is environmentally critical or within an
environmentally critical area. In the case at bar, respondent
has sufficiently shown that the Artica Sports Dome will not
have a significant negative environmental impact because
it is not an environmentally critical project and it is not
located in an environmentally critical area. In support of
this contention, respondent submitted the following:

1. Certification from the City Planning and

Development Office that the project is not located in
an environmentally critical area;
2. Certification from the Community Environment and
Natural Resources Office (CENRO-West) that the
project area is within the 18-30% slope, is outside the
scope of the NIPAS (R.A. 7586), and not within a
declared watershed area; and
3. Certification from PHILVOCS that the project site is
thirty-seven (37) kilometers southeast of the
southernmost extension of the Davao River Fault
and forty-five (45) kilometers west of the Eastern
Mindanao Fault; and is outside the required
minimum buffer zone of five (5) meters from a fault
zone.

_______________

16 Administrative Code of 1987, Section 2 (1) Government of the

Republic of the Philippines refers to the corporate governmental entity
through which the functions of the government are exercised throughout
the Philippines, including, save as the contrary appears from the context,
the various arms through which political authority is made effective in
the Philippines, whether pertaining to the autonomous regions, the
provincial, city, municipality or barangay subdivisions or other forms of
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local government.

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The trial court, after a consideration of the evidence, found

that the Artica Sports Dome is not within an
environmentally critical area. Neither is it an
environmentally critical project. It is axiomatic that factual
findings of the trial court, when fully supported by the
evidence on record, are 17binding upon this Court and will 18not
be disturbed on appeal. This Court is not a trier of facts.
There are exceptional instances when this Court may
disregard factual findings of the trial court, namely: a) when
the conclusion is a finding grounded entirely on
speculations, surmises, or conjectures; b) when the inference
made is manifestly mistaken, absurd, or impossible; c) where
there is a grave abuse of discretion; d) when the judgment is
based on a misapprehension of facts; e) when the findings of
fact are conflicting; f) when the Court of Appeals, in making
its findings, went beyond the issues of the case and the same
are contrary to the admissions of both appellant and
appellee; g) when the findings of the Court of Appeals are
contrary to those of the trial court; h) when the findings of
fact are conclusions without citation of specific evidence on
which they are based; i) when the finding of fact of the Court
of Appeals is premised on the supposed absence of evidence
but is contradicted by the evidence on record; and j) when
the Court of Appeals manifestly overlooked certain relevant
facts not disputed by the parties and which, if19 properly
considered, would justify a different conclusion. None of
these exceptions, however, obtain in this case.
The Environmental Impact Statement System, which
ensures environmental protection and regulates certain
government activities affecting the environment, was
established by Presidential Decree No. 1586. Section 2
thereof states:

There is hereby established an Environmental Impact Statement

System founded and based on the environmental impact statement
required under Section 4 of Presidential Decree No. 1151, of all
agencies and

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_______________

17 MOF Company, Inc. v. Enriquez, G.R. No. 149280, May 9, 2002, 382 SCRA
248.
18 Jacutin v. People of the Philippines, G.R. No. 140604, March 6, 2002, 378
SCRA 453.
19 Herbosa v. Court of Appeals, G.R. No. 119087, January 25, 2002, 374 SCRA
578.

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Republic vs. City of Davao

instrumentalities of the national government, including

government-owned or controlled corporations, as well as private
corporations, firms and entities, for every proposed project and
undertaking which significantly affect the quality of the
environment.

Section 4 of PD 1151, on the other hand, provides:

Environmental Impact Statements.—Pursuant to the above

enunciated policies and goals, all agencies and instrumentalities of
the national government, including government-owned or
controlled corporations, as well as private corporations, firms and
entities shall prepare, file and include in every action, project or
undertaking which significantly affects the quality of the
environment a detailed statement on—

(a) the environmental impact of the proposed action, project or

undertaking
(b) any adverse environmental effect which cannot be avoided
should the proposal be implemented
(c) alternative to the proposed action
(d) a determination that the short-term uses of the resources of
the environment are consistent with the maintenance and
en hancement of the long-term productivity of the same;
and
(e) whenever a proposal involves the use of depletable or
nonrenewable resources, a finding must be made that such
use and commitment are warranted.

Before an environmental impact statement is issued by a lead

agency, all agencies having jurisdiction over, or special expertise on,

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the subject matter involved shall comment on the draft

environmental impact statement made by the lead agency within
thirty (30) days from receipt of the same.

Under Article II, Section 1, of the Rules and Regulations

Implementing PD 1586, the declaration of certain projects
or areas as environmentally critical, and which shall fall
within the scope of the Environmental Impact Statement
System, shall be by Presidential Proclamation, in
accordance with Section 4 of PD 1586 quoted above.
Pursuant thereto, Proclamation No. 2146 was issued on
December 14, 1981, proclaiming the following areas and
types of projects as environmentally critical and within the
scope of the Environmental Impact Statement System
established under PD 1586:

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A. Environmentally Critical Projects

I. Heavy Industries

a. Non-ferrous metal industries

b. Iron and steel mills
c. Petroleum and petro-chemical industries including
oil and gas
d. Smelting plants

II. Resource Extractive Industries

a. Major mining and quarrying projects

b. Forestry projects

1. Logging
2. Major wood processing projects
3. Introduction of fauna (exotic-animals) in pub
lic/private forests
4. Forest occupancy
5. Extraction of mangrove products
6. Grazing
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c. Fishery Projects

1. Dikes for/and fishpond development projects

III. Infrastructure Projects

a. Major dams
b. Major power plants (fossil-fueled, nuclear fueled,
hydroelectric or geothermal)
c. Major reclamation projects
d. Major roads and bridges

B. Environmentally Critical Areas

1. All areas declared by law as national parks,

watershed re serves, wildlife preserves and
sanctuaries;
2. Areas set aside as aesthetic potential tourist spots;
3. Areas which constitute the habitat for any
endangered or threatened species of indigenous
Philippine Wildlife (flora and fauna);
4. Areas of unique historic, archaeological, or scientific
interests;
5. Areas which are traditionally occupied by cultural
communities or tribes;

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Republic vs. City of Davao

6. Areas frequently visited and/or hard-hit by natural

calamities (geologic hazards, floods, typhoons,
volcanic activity, etc.);
7. Areas with critical slopes;
8. Areas classified as prime agricultural lands;
9. Recharged areas of aquifers;
10. Water bodies characterized by one or any
combination of the following conditions;

a. tapped for domestic purposes

b. within the controlled and/or protected areas declared
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by appropriate authorities
c. which support wildlife and fishery activities

11. Mangrove areas characterized by one or any

combination of the following conditions:

a. with primary pristine and dense young growth;

b. adjoining mouth of major river systems;
c. near or adjacent to traditional productive fry or
fishing grounds;
d. which act as natural buffers against shore erosion,
strong winds and storm floods;
e. on which people are dependent for their livelihood.

12. Coral reefs, characterized by one or any

combinations of the following conditions:

a. with 50% and above live coralline cover;

b. spawning and nursery grounds for fish;
c. which act as natural breakwater of coastlines.

In this connection, Section 5 of PD 1586 expressly states:

Environmentally Non-Critical Projects.—All other projects,

undertakings and areas not declared by the President as
environmentally critical shall be considered as non-critical and shall
not be required to submit an environmental impact statement. The
National Environmental Protection Council, thru the Ministry of
Human Settlements may however require non-critical projects and
undertakings to provide additional environmental safeguards as it
may deem necessary.

The Artica Sports Dome in Langub does not come close to

any of the projects or areas enumerated above. Neither is it
analogous to

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any of them. It is clear, therefore, that the said project is not

classified as environmentally critical, or within an
environmentally critical area. Consequently, the DENR has
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no choice but to issue the Certificate of Non-Coverage. It

becomes its ministerial duty, the performance of which can
be compelled by writ of mandamus, such as that issued by
the trial court in the case at bar.
WHEREFORE, in view of the foregoing, the instant
petition is DENIED. The decision of the Regional Trial
Court of Davao City, Branch 33, in Civil Case No. 28,133-
2000, granting the writ of mandamus and directing the
Department of Environment and Natural Resources to issue
in favor of the City of Davao a Certificate of Non-Coverage,
pursuant to Presidential Decree No. 1586 and related laws,
in connection with the construction of the Artica Sports
Dome, is AFFIRMED.
SO ORDERED.

     Davide, Jr. (C.J., Chairman), Vitug and Carpio, JJ.,

concur.

Petition denied, judgment affirmed.

Note.—Under the regime of the 1935 Constitution local

government units derived their tax powers under a limited
statutory authority. (Manila Electric Company vs. Province
of Laguna, 306 SCRA 750 [1999])

——o0o——

703

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