FIRST DIVISION

[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.

The Solicitor General for petitioner.

The City Legal Officer for respondent.
SYNOPSIS
Respondent led an application for a Certicate of Non-Coverage (CNC) for its
proposed project, the Davao City Artica Sports Dome, with the Environmental
Management Bureau (EMB), Region XI. The same, however, was denied on the
ground that the proposed project was within an environmentally critical area; that
the City of Davao must rst undergo the environmental impact assessment (EIA)
process to secure an Environmental Compliance Certicate (ECC). Respondent then
led a petition for mandamus with the Regional Trial Court (RTC), and the latter
ruled in favor of respondent.
As the project in issue is not classied as environmentally critical or within an
environmentally critical area, the DENR has no choice but to issue the CNC. It
becomes its ministerial duty, the performance of which can be compelled by writ of
mandamus, such as that issued herein by the trial court. The petition led by the
Republic was denied.
SYLLABUS
1.
POLITICAL LAW; ADMINISTRATIVE LAW; LOCAL GOVERNMENT CODE; LOCAL
GOVERNMENT UNIT; FUNCTIONS. Section 15 of Republic Act 7160, otherwise
known as the Local Government Code, denes 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 aecting the public generally.

Proprietary functions are those that seek to obtain special corporate benets or earn
pecuniary prot and intended for private advantage and benet. 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.
ASDTEa

2.
ID.; ID.; ID.; ID.; NOT EXCLUDED FROM THE COVERAGE OF PD 1586
(ENVIRONMENTAL IMPACT STATEMENT SYSTEM). Found in Section 16 of the
Local Government Code is the duty of the 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 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 kept subservient to the general intent of the enactment. 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 rst securing an
Environmental Compliance Certicate issued by the President or his duly authorized
representative." The Civil Code denes 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. 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 are the twin goals of sustainable
development. The rst paragraph of the Whereas clause of the law 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, cannot therefore be deemed as outside the scope of
the EIS system.
3.
REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE TRIAL COURT,
GENERALLY RESPECTED; EXCEPTIONS. 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 ndings of the trial court, when fully supported by the evidence on record,
are binding upon this Court and will not be disturbed on appeal. This Court is not a
trier of facts. There are exceptional instances when this Court may disregard factual
ndings of the trial court, namely: a) when the conclusion is a nding 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 ndings of fact are conicting; f) when the Court of Appeals, in making its
ndings, went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee; g) when the ndings of the Court of
Appeals are contrary to those of the trial court; h) when the ndings of fact are
conclusions without citation of specic evidence on which they are based; i) when

the nding 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, if properly considered, would justify a dierent conclusion. None of these
exceptions, however, obtain in this case.
4.
ID.; SPECIAL CIVIL ACTIONS; MANDAMUS; PROPER FOR THE PERFORMANCE
OF A MINISTERIAL DUTY. The Artica Sports Dome in Langub is not classied as
environmentally critical, or within an environmentally critical area. Consequently,
the DENR has no choice but to issue the Certicate 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.
DECISION
YNARES-SANTIAGO, J :
p

Before us is a petition for review 1 on certiorari assailing the decision 2 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 led an application for a Certicate of NonCoverage (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 certication
from the City Planning and Development Oce that the project is not located in an
environmentally critical area (ECA). The EMB Region XI denied the application after
nding 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 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 Certicate (ECC), before it can proceed with
the construction of its project.
Believing that it was entitled to a Certicate of Non-Coverage, respondent led 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 environmentally 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, nding 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 Certicate of Non-Coverage, pursuant to Presidential
Decree No. 1586 and related laws, in connection with the construction
by the City of Davao of the Artica Sports Dome;
2)
making the preliminary injunction issued on December 12, 2000
permanent.
Costs de oficio.
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, rms
and entities are mandated to go through the EIA process for their proposed projects
which have signicant eect 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 certications of the DENR-Community
Environment and Natural Resources Oce (CENRO)-West, and the data gathered
from the Philippine Institute of Volcanology and Seismology (PHIVOLCS), that the
site for 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 satised 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 led 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,
led a manifestation expressing its agreement with petitioner that, indeed, it 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 to our symbolic function to educate the bench and bar, 4 we are inclined to
address the issue raised in this petition.
Section 15 of Republic Act 7160, 5 otherwise known as the Local Government Code,
denes 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
aecting the public generally. 6 Proprietary functions are those that seek to obtain
special corporate benets or earn pecuniary prot and intended for private
advantage and benet. 7 When exercising governmental powers and performing
governmental duties, an LGU is an agency of the national government. 8 When
engaged in corporate activities, it acts as an agent of the community in the
administration of local affairs. 9
Found in Section 16 of the Local Government Code is the duty of the LGUs to
promote the people's right to a balanced ecology. 10 Pursuant to this, an LGU, like
the City of Davao, can not claim exemption from the coverage of PD 1586. As a
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 kept subservient to the general intent of the enactment. 11
The trial court, in declaring local government units as exempt from the coverage of
the EIS law, failed to relate Section 2 of PD 1586 12 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 undertakings can be
reconciled with the requirements of environmental quality; . . . .
Section 1.
Policy. It is hereby declared the policy of the State to attain
and maintain a rational and orderly balance between socio-economic growth
and environmental protection.
xxx xxx xxx
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 or 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 rst securing an Environmental Compliance Certicate 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 oces, 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 rst securing an Environmental Compliance Certicate issued by the
President or his duly authorized representative." 13 The Civil Code denes a person
as either natural or juridical. The state and its political subdivisions, i.e., the local
government units 14 are juridical persons. 15 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 are the twin goals of sustainable development.
The above-quoted rst 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, cannot therefore be deemed as outside the scope of the EIS system. 16
The foregoing arguments, however, presuppose that a project, for which an
Environmental Compliance Certicate is necessary, is environmentally critical or
within an environmentally critical area. In the case at bar, respondent has
suciently shown that the Artica Sports Dome will not have a signicant 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.
Certication from the City Planning and Development Oce that the
project is not located in an environmentally critical area;
2.
Certication from the Community Environment and Natural Resources
Oce (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.
Certication from PHILVOCS that the project site is thirty-seven (37)
kilometers southeast of the southernmost extension of the Davao River
Fault and forty-ve (45) kilometers west of the Eastern Mindanao Fault; and
is outside the required minimum buer zone of ve (5) meters from a fault
zone.

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 ndings of the trial
court, when fully supported by the evidence on record, are binding upon this Court
and will not be disturbed on appeal. 17 This Court is not a trier of facts. 18
There are exceptional instances when this Court may disregard factual ndings of

the trial court, namely: a) when the conclusion is a nding 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 ndings of
fact are conicting; f) when the Court of Appeals, in making its ndings, went
beyond the issues of the case and the same are contrary to the admissions of both
appellant and appellee; g) when the ndings of the Court of Appeals are contrary to
those of the trial court; h) when the ndings of fact are conclusions without citation
of specic evidence on which they are based; i) when the nding 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, if properly considered,
would justify a dierent conclusion. 19 None of these exceptions, however, obtain in
this case.
The Environmental Impact Statement System, which ensures environmental
protection and regulates certain government activities aecting 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
instrumentalities of the national government, including government-owned
or controlled corporations, as well as private corporations, rms and
entities, for every proposed project and undertaking which signicantly
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, rms and entities shall prepare, le and include
in every action, project or undertaking which signicantly aects the quality
of the environment a detailed statement on
(a)
the environmental impact of the proposed action, project or
undertaking
(b)
any adverse environmental eect 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
enhancement of the long-term productivity of the same; and
(e)
whenever a proposal involves the use of depletable or
nonrenewable resources, a nding 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, 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:
A.
I.

II.

Environmentally Critical Projects

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

Resource Extractive Industries

a.

Major mining and quarrying projects

b.

Forestry projects

c.

1.

Logging

2.

Major wood processing projects

3.

Introduction of fauna (exotic-animals) in public/private

forests

4.

Forest occupancy

5.

Extraction of mangrove products

6.

Grazing

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 reserves,

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;

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;

11.

a.

tapped for domestic purposes

b.

within the controlled and/or protected areas declared by

appropriate authorities

c.

which support wildlife and fishery activities

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;

12.

d.

which act as natural buers against shore erosion, strong

winds and storm floods;

e.

on which people are dependent for their livelihood.

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 noncritical 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 any of them. It is clear,
therefore, that the said project is not classied as environmentally critical, or within
an environmentally critical area. Consequently, the DENR has no choice but to issue
the Certicate 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 Certicate of NonCoverage, 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., Vitug and Carpio, JJ., concur.

Footnotes
1.

Rollo, pp. 9-30.

2.

Ibid., pp. 31-43.

3
4.

Ibid., p. 42.
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 exercised 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).

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 ecient and eective 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 scientic 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.

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)

16.

The State and its political subdivisions; . . .

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 eective in the Philippines, whether pertaining to the
autonomous regions, the provincial, city, municipality or barangay subdivisions or
other forms of local government.

17.

MOF Company, Inc. v. Enriquez , G.R. No. 149280, May 9, 2002.

18.

Jacutin v. People of the Philippines , G.R. No. 140604, March 6, 2002.

19.

Herbosa v. Court of Appeals , G.R. No. 119087, January 25, 2002.