587 Phil. 42
NACHURA, J.:
The presiding officer started with the mango plantation in the Noran, Langapod side. That out of the estimated number of seedlings planted of about 2,008 hills, within an equivalent area of 20 hectares, the result or finding of the inventory conducted at 100% intensity is only 98 hills of seedlings survived including the doubtful and badly deformed. The species planted along trails are Gmelina and Mahogany species. The said foot trail planted with the aforementioned species starts from the entrance of the IFMA are where the notice billboard is posted up to the only existing look-out tower. The estimated average of percent survival for Gmelina is more or less 30%. There are also portions where higher percentage of survival is recorded at 56% and lower at 14%. There are areas planted declared by Kagawad Cerning Becagas of Barangay Cogonan now covered by CSC. The areas covered by CSC, a waiver is needed to be issued by the IFMA holder.After the presentation, Mangaya-ay asked Santiago if he had comments, suggestions, or questions regarding the matter and the manner of the conduct of the evaluation and assessment by the Evaluation Team. Santiago said he had none, but requested a copy of the report of the Evaluation Team. Mangaya-ay informed him that it was only RED Mendoza who may furnish him a copy of the report.
CENR Officer Maximo O. Dichoso commented that during a meeting held before, the IFMA holder was willing to give up the said areas.
The presiding officer continued that on the courtesy call made to the Barangay Chairman of Barangay Cogonan, Mr. Roberto Palaran recounted the assistance extended by the IFMA holder to his barangay as Community Assistance/service which includes electric generator, handheld radio and laborers for the repair of Noburan - Cogonan road and the repair of the hanging bridge at Sitio Tialaic to which the said Barangay Chairman issued a duly signed certification to this effect.
With regards, the seedling stock within the nursery, there are approximately a total number of about 44,460 seedlings of Gmelina species. That the infrastructure implemented or constructed, there exist only one look-out tower of the reported 4 look-out towers constructed. Moreover, the team had also noted only 1 bunkhouse and 1 stockroom or shedhouse. There is also 1 Multi-purpose shed and 1 dilapidated or neglected notice billboard poster at the entrance trail leading to the IFMA area. That with regards the concrete monument, there are only 2 recorded. The other corners visible are those located at junctions of creeks and rivers. But the others cannot be visibly or never planted for the same cannot be pinpointed or shown to the team allegedly for lack of knowledge by the representative of the IFMA holder. Finally, the presiding officer reminded the herein IFMA representative Mr. Inocencio Santiago that per actual survey, inspection and ground verification, the team believes that the other reported areas planted are located outside the designated IFMA area particularly the Noburan and Langapod sides.[6]
In compliance with Regional Special Order No. 217, Series of 1998, please be informed that the herein information is the result or findings of the team for the conduct of evaluation and assessment following the guidelines setforth under Department Administrative Order (DAO) No. 11, Series of 1995 of Pagadian Timber Co., Inc. under IFMA No. R9-040 against their actual accomplishment as mandated under the terms and conditions of the IFMA including other applicable laws, rules and regulations of the department on the matter.On the basis of such findings, the Evaluation Team made the following recommendations -
At the onset, the team conducted a briefing conference and dialogue with the IFMA holder, the CENR Officer of Pagadian City and personnel concerned for the proper and orderly implementation and conduct of the evaluation and assessment (please see attached).
The team was composed of the Regional Evaluating Team, the CENRO and PENRO representatives and the representatives of the IFMA holder. The team proceeded to the western portion of the area of the herein IFMA particularly Barangay Cogonan, Labangan, Zamboanga del Sur. The evaluation and assessment was then conducted on the main nursery, the established plantation, the look-out towers, the boundary of ISF and claimed or occupied areas, natural or residual forest, the IFMA boundary, monuments planted, foot trails, other improvements introduced and the billboard and signboard posted. The inspection, evaluation and assessment conducted were all undertaken in the presence of the IFMA holder, representatives, laborers and other personnel on the area. (please see attached report, tall sheets, pictorials and map).
In the conduct of the same, the IFMA representatives or laborers that assisted the team could only show the subject area under evaluation but the other areas alluded to as accomplished or undertaken by the company appeared upon actual verification and inspection to be negative and non-existent thus dispelling their allegation.
With regard the information and dissemination conducted by the IFMA holder including other services extended to the communities within the IFMA area and vicinities, it is noteworthy for recognition the donations made by the company. (Please see attached minutes of the dialogue with the barangay officials of Barangay Cogonan and pictorials).
The evaluation conducted on the nursery operations show that the facilities and other necessary implements were generally below par. An inventory of the seedlings stock of pure Gmelina species have already lapsed its plantability or have overgrown in the seedbed with an average grand total of about 44,460 within the established 2-hectare main nursery area. There was no other subsidiary nursery established in the area. Also noted is the enrichment planting conducted along both sides of the foot-trail which extends approximately 18 kms. From the entrance of the IFMA area going to the lookout tower of the four (4) lookout towers reported, only one (1) has been noted remaining in the area and the rest were destroyed or burned (pls. see attached pictorials). The signboard posted was unattended and in the state of disrepair. There were no monument planted or any marking along the IFMA boundary and in residual forest except the monuments found in the ISF boundaries within the IFMA area (please see attached pictorials). The plantation established is composed of Gmelina species with 4 x 4 spacing over a total of about 10.18 hectares. Basing on 5% estimate inventory, the result is 43% seedling survival.
Thereafter, the team also conducted evaluation and assessment at the eastern portion particularly at Langapod, Labangan, Zamboanga del Sur. The team inspected and verified on the ground the reported 20 hectares mango plantation with a spacing of 10 x 10 meters at 100% intensity inventory. The accounted number of mango seedlings planted of about 2,008 hills, only 98 seedlings survived. Wherefore, it generally represents 5% seedling survival. (Please see attached)
Finally, the team conducted an exit conference with the CENR Officer, and the IFMA holder where the tentative and general findings of the evaluation and assessment was laid-out and presented to the body. (Please see attached)[8]
Acting on the Memorandum dated November 6, 1998, RED Antonio M. Mendoza, DENR-IX, Zamboanga City, submitted to the DENR Secretary a Memorandum[10] dated April 7, 1999 regarding the performance evaluation of IFMA No. R-9-040. The RED Memorandum reads -
- The lessee should be required to explain why they failed to develop their IFMA area (Plantation Development) in accordance with the approved Comprehensive Development and Management Plan (CDMP);
- The boundary and area coverage of IFMA No. R9-040 should be amended to exclude areas covered by Certificates of Stewardship Contracts (CSC) under the ISF Program with an area of 226.17 hectares, other areas previously identified as "occupied/claimed" and other conflict areas;
- The amended boundary should be delineated/surveyed on the ground with a precise instrument and all corners appropriately marked/monumented;
- The company should hire a full time forester.[9]
This has reference with the instruction to validate the performance/accomplishment of IFMAs of Region IX, Western Mindanao. Validation of IFMAs is in accordance with the existing policy of the DENR, to determine the capabilities of the holders to develop their Lease areas in consonance with their submitted and approved Comprehensive Development Management Plan.In the same Memorandum, RED Mendoza recommended to the DENR Secretary the cancellation of IFMA No. R-9-040. [11]
x x x x
On 6 November 1998, Foresters Isabelo C. Mangaya-ay and Philidor Lluisma, pursuant to Regional Special Order No. 217, Series of 1998, conducted the evaluation of the performance of IFMA No. R9-040 of Pagadian City Timber Company, Inc. located at Langapod and Cogonan, Municipality of Labangan and Datagan, Municipality of Sominot, all of Zamboanga del Sur. Result of the evaluation reveals that the holder violated the following DENR existing Rules and Regulations particularly Section 26 of DAO 97-04 GROUNDS FOR CANCELLATION of IFMA which provides that, "any of the following violations shall be sufficient grounds for the cancellation of IFMA."
- Paragraph 26.5, Section 26, DAO 97-04, Series of 1997, provides that failure to implement the approved Comprehensive Development and Management Plan.
As of 1998, the 4th year of existence of IFMA No. R9-040, the holder must have developed a total of 1,597.0 hectares as per approved CDMP. However, based on the report submitted by the Evaluation Team only 365.2 hectares was planted which are about 22.8%. During the evaluation, however, the IFMA representative could not even pinpoint the planted areas.
Per report of the Pagadian CENRO Composite Monitoring Team conducted on 21 August 1998 the plantation area was burned resulting to the damage of about 300 hectares leaving only about 20.0 hectares undamaged. No report had been submitted/received since then.
In infrastructure, the holder managed to put up one (1) out of four (4) programmed look-out towers; developed one (1) out of two (2) forest nurseries and constructed only 6 km. foot trail which is only about 27% accomplishment of the whole infrastructure.- Paragraph 26.8 of Section 26, DAO 97-04, specifically provides that failure to implement or adopt agreements made with communities and other relevant sectors.
Attached herewith, please find several petitions, sworn statements, affidavits and resolutions from various sectors particularly the Subanen Communities (IP's) within the area. The existence and approval of IFMA No. R9-040 contract is being protested and is demanding for its cancellation.
The primary complaint was a blatant disrespect to their rights as an Indigenous People and the non-peaceful co-existence between them and the holder of the IFMA R9-040. Accordingly, they were constantly threatened/harassed by armed men employed by the holder.
This has reference with the instruction to validate the performance/accomplishment of IFMAs of Region IX, Western Mindanao. Validation of IFMAs is in accordance with the existing policy of the DENR to determine the capabilities of the holders to develop their Lease areas in consonance with their approved Comprehensive Development and Management Plan.Acting on the latter Memorandum from RED Mendoza, then DENR Secretary Antonio H. Cerilles, on June 7, 1999, issued an Order[14] canceling IFMA No. R-9-040 for failure to implement the approved CDMP and for failure of the lessee to protect the area from forest fires. The dispositive portion of the Order reads:
In furtherance thereto, Foresters Isabelo C. Mangaya-ay and Philidor Lluisma, pursuant to Regional Special Order No. 217, Series of 1998, conducted the evaluation of the performance of IFMA No. R9-040 of Pagadian City Timber Company, Inc. located at the Municipalities of Labangan, Datagan and Sominot, all of Zamboanga del Sur, on November 6, 1998. Result of the evaluation revealed that the holder violated Rules and Regulations which are sufficient ground for cancellation as stipulated under Section 26 of DAO 97-04, they are as follows
1. FAILURE TO IMPLEMENT THE APPROVED COMPREHENSIVE DEVELOPMENT AND MANAGEMENT PLAN.
Under the approved comprehensive and development plan, 1,597.0 ha of plantation should have been established from the Approval of the CDMP. However, only 365.2 ha were reportedly planted from CY 1995 to 1997. This represents only 28% of the targeted goal on plantation establishment.
Field validation of the reported established plantation revealed otherwise. The findings of the team are:On Infrastructure, the holder constructed only one (1) lookout tower as against the goal of 4 towers; established one (1) nursery as against the goal of two (2); and constructed only 6km foot trail. These represent only 27% of the total infrastructure to be undertaken by the holder over the area.
- Portion of the area reported as established plantation by the IFMA holder is an ISF project with an area of 226.17 ha. These are covered with Certificate of Stewardship;
- Locations and boundaries of reported plantations established from 1995 to 1997 cannot be located on the ground by the team neither by the representative of the IFMA holder who accompanied the validating team; and
- No plantation was established during CY 1998.
2. FAILURE TO IMPLEMENT OR ADOPT AGREEMENT WITH COMMUNITIES AND OTHER RELEVANT SECTORS.
Attached herewith are copies of petitions, sworn statements, affidavit and resolutions from Subanen Communities (IP's) and other sectors in the area demanding the cancellation of IFMA R9-040.
The complaints and demand for cancellation by the people where the IFMA is located is a manifestation and proof of non-social acceptance of the project by the residents in the locality.
In view of the above findings, IFMA No. R9-040 is hereby recommended for cancellation.[13]
WHEREFORE, premises considered, IFMA No. R9-040 issued to Pagadian City Timber Co., Inc. is hereby ordered cancelled. The IFMA holder is hereby ordered to immediately vacate the area and to surrender/return copy of the Agreement to the Regional Executive Director, DENR Region 9, Zamboanga City.On July 2, 1999, respondent's President, Filomena S. San Juan, wrote DENR Secretary Cerilles that the company was surprised to receive the Order of the cancellation of IFMA No. R-9-040 on June 22, 1999. She claimed that -
The RED concerned or his duly authorized representative is hereby directed to serve this Order; determine best end use of the land; take appropriate measures to protect the same and inform this Office immediately of his compliance.
SO ORDERED.[15]
The DENR regional office is fully aware that the company is doing its best to manage and develop the area by continually planting trees and protecting the area from forest fires and illegalities. No company would ever set fire on its own plantation for obvious reasons. The company observed precautionary measures especially during the time of the El NiƱo phenomenon. If there have been mistakes and miscommunications in the reports of the DENR field officers, these could have been threshed out by a conference between DENR and the Pagadian Timber Company Inc.She appealed for the reconsideration of the Order asking that a re-investigation be conducted to comply with due process.
The company was not accorded due process before the order of cancellation was issued. The company was not furnished copy of the evaluation and recommendation of the DENR Regional Executive Director of Region IX. Had the company been given the opportunity to contest the findings, evaluation and recommendation of the said office, the result would be otherwise.[16]
In essence, petitioner argues that an IFMA is not an ordinary contract which is protected by the Constitution against impairment[24] but a mere privilege granted by the State to qualified persons by means of a permit, license, franchise, agreement, or other similar concessions, which in this case is the exploration, development and utilization of the forest lands belonging to the State under its full control and supervision. Thus, the cancellation of the IFMA does not amount to a rescission of a contract but a mere withdrawal of this privilege. As such, the due process clause under the Constitution[25] does not likewise apply since the IFMA area cannot be considered as property of respondent. According to petitioner, IFMA No. R-9-040, with the forest lands covered by it, is imbued with paramount considerations of public interest and public welfare such that whatever rights respondent may have under it must yield to the police power of the State. In this sense, respondent cannot take refuge in Sections 35 and 36 of IFMA No. R-9-040 to prevent the IFMA's cancellation.
- The Court of Appeals gravely erred in ruling that IFMA No. R9-040 is a contract and not a mere privilege granted by the State to respondent.
- The Court of Appeals seriously erred in ordaining that respondent can rightfully invoke prior resort to arbitration or the option to mend its violations under IFMA No. R9-040.[23]
An IFMA has for its precursor the Timber License Agreement (TLA), one of the tenurial instruments issued by the State to its grantees for the efficient management of the country's dwindling forest resources. Jurisprudence has been consistent in holding that license agreements are not contracts within the purview of the due process and the non-impairment of contracts clauses enshrined in the Constitution. Our pronouncement in Alvarez v. PICOP Resources, Inc.[28] is enlightening -
- The State agreed to devolve to the holder of IFMA No. R-9-040 the responsibility to manage the specified IFMA area for a period of 25 years, specifically until October 14, 2019, which period is automatically renewable for another 25 years thereafter;
- The State imposed upon respondent, as holder of IFMA No. R-9-040, the conditions, the means, and the manner by which the IFMA area shall be managed, developed, and protected;
- The State, through the DENR Secretary, shall not collect any rental within the first five (5) years of the IFMA, after which it shall be entitled to annual rental of fifty centavos (P0.50) per hectare from the sixth to the tenth year thereof, and one peso (P1.00) per hectare thereafter;
- The IFMA area, except only the trees and other crops planted and the permanent improvements constructed by the IFMA holder, remains the property of the State; and
- Upon cancellation of the IFMA through the fault of the holder, all improvements including forest plantations existing within the IFMA area shall revert to and become the property of the State.
In unequivocal terms, we have consistently held that such licenses concerning the harvesting of timber in the country's forests cannot be considered contracts that would bind the Government regardless of changes in policy and the demands of public interest and welfare. (citing Oposa v. Factoran, Jr., G.R. No. 101083, July 30, 1993, 224 SCRA 792, 811) Such unswerving verdict is synthesized in Oposa v. Factoran, Jr., (id., at pp. 811, 812) where we held:Even assuming arguendo that an IFMA can be considered a contract or an agreement, we agree with the Office of the Solicitor General that the alleged property rights that may have arisen from it are not absolute.In the first place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber license holders because he would have forever bound the Government to strictly respect the said licenses according to their terms and conditions regardless of changes in policy and the demands of public interest and welfare. He was aware that as correctly pointed out by petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides:"x x x Provided, that when the national interest so requires, the President may amend, modify, replace or rescind any contract, concession, permit, licenses or any other form of privilege granted herein x x x."Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the constitution. In Tan vs. Director of Forestry, [125 SCRA 302, 325 (1983)] this Court held:"x x x A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case.We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary [190 SCRA 673, 684 (1990):
"A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights. (People vs. Ong Tin, 54 O.G. 7576). x x x""x x x Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause. [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302]."Since timber licenses are not contracts, the non-impairment clause, which reads:"SEC. 10. No law impairing, the obligation of contracts shall be passed."cannot be invoked.
The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling complained of. What the law prohibits is the absolute absence of the opportunity to be heard; hence, a party cannot feign denial of due process where he had been afforded the opportunity to present his side.[36]WHEREFORE, the Decision dated October 18, 2001 and the Resolution dated July 24, 2003 of the Court of Appeals in CA-G.R. SP No. 59194 are REVERSED and SET ASIDE, and the Order dated June 7, 1999 of then DENR Secretary Antonio Cerilles, and the Resolutions of the Office of the President dated January 12, 2000 and May 8, 2000 affirming the said Order, are REINSTATED and AFFIRMED. No pronouncement as to costs.