Petitioner O.G. Holdings Corporation is the owner and developer of Panglao Island Nature Resort (PINR) located at Dauis, Panglao Island, Bohol Province. One of its attractions is a man-made islet situated in front of the property.
On July 26, 2002, the Environmental Management Bureau, Region 7 (EMB-Region 7) issued an Environmental Compliance Certificate (ECC) to PINR but subject to several conditions.
On December 3, 2003, EMB-Region 7 conducted its first compliance monitoring on the property but found three (3) violations of the ECC namely: (1) non-compliance with the requirements that the project obtain a foreshore lease; (2) that it establish an Environmental Guarantee Fund in the amount of PHP 100,000; and (3) that it submit a marine study on the project’s primary impact area.
After repeated compliance monitoring activities conducted by the EMB-Region 7 and several Notices of Violation were sent, petitioner disclosed in a letter dated November 10, 2005 that acquiring a foreshore lease for the property was legally impossible due to Municipal Ordinance No. 03-1991 which prohibited any development on the municipal shorelines. It informed the EMB-Region 7 that it had filed an application with the Philippine Reclamation Authority (PRA) for the special registration of a man-made island located within the project. It prayed that the bureau consider the application with the PRA as substantial compliance with ECC Condition No. 2.2.
On July 2006, EMB-Region 7’s Environmental Impact Assessment (EIA) Division recommended the suspension of the ECC issued to PINR. On the following day, the Department of Tourism issued a Class “AA” accreditation on the resort. EMB-Region 7 then suspended the subject ECC for failure of PINR to submit the foreshore lease agreement and/or permit from PRA for the foreshore area of the project.
In the same month, OG Holdings submitted a motion for reconsideration and pleaded the suspension of the ECC would hinder its application with the PRA. Meanwhile, local fisherfolk reported to the bureau that a guardhouse was being built at the resort and that OG Holdings was condoning seawater at the project site.
Upon receipt of the second order for suspension, OG Holdings no longer filed a motion for reconsideration but instead filed a special civil action under Rule 65 of the Rules of Court before the Court of Appeals. It prayed for the annulment of the annulment of the suspension orders and that a “condition” in the subject ECC be annulled and/or modified.
The Court of Appeals found merit in OG Holding’s petition. It found that EMB-Region 7 and Arranguez had acted with grave abuse of discretion.
The appellate court characterized Condition No. 2.2 of the ECC as “presently unattainable” and the suspension of the ECC was arbitrary. It also opined that the required foreshore lease may be dispensed with due to municipal restrictions. The CA posits that there was a “gross misapprehension of facts” as the resort’s man-made island was located offshore. Hence, OG Holdings need not secure a foreshore lease. It also held that it was “unjust and inequitable” to insist on a foreshore lease for the beach resort even after its ECC had been suspended.
Issue:
Whether or not the Court of Appeals erred in ruling that EMB-Region 7 and Arranguez had acted in grave abuse of discretion amounting to lack of or excess of jurisdiction in suspending the subject Environmental Compliance Certificate, effectively disallowing the operations and further development of said resort
Ruling:
The petition was granted. The decision of the Court of Appeals was reversed and set aside. The suspensive orders issued by EMB-Region 7 were ordered reinstated.
The Court of Appeals erred in granting OG Holding’s petition when there was a failure to move for reconsideration before seeking certiorari. A motion for reconsideration is an indispensable condition before an aggrieved party can resort to the special civil action for certiorari under Rule 65 of the Rules of Court.
The Court of Appeals erred in granting OG Holding’s petition when they had failed to exhaust available administrative remedies before seeking certiorari.
The doctrine of exhaustion of administrative remedies requires that resort must first be made with the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts for review. If a remedy within the administrative machinery is still available, with a procedure pursuant to law for an administrative officer to decide a controversy, a party should first exhaust such remedy before going to court.
The Court of Appeals erred in making factual findings in a certiorari proceeding. Factual issues are not a proper subject for certiorari, which is limited to the issue of jurisdiction and grave abuse of discretion. OG Holdings should have elevated its factual issues on administrative appeal to the sound discretion of the DENR.
Lastly, the Court of Appeals erred in finding grave abuse of discretion amounting to lack or excess of jurisdiction in the suspension of the subject ECC. The flaws are two-fold namely (1) it was wrong to suppose that an application for the registration of a man-made island, or reclaimed land, may substitute for a foreshore lease agreement or permit; and (2) it was wrong to suppose that EMB-Region 7 and Arranquez had acted in grave abuse of discretion simply because they had practically rejected OG Holding’s proposed substitution for Condition No. 2.2.
Abuse of discretion is grave if it is so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.
