Danilo P.

Villarey III LAW 175-A: Law and Environment (Gasgonia)

2019-21368

Public Hearing Committee of the Laguna Lake Development Authority (LLDA) v. SM Prime Holdings
G.R. No. 170599, September 22, 2010

[ Lesson 8: Pollution when environmental standards are breached  Water Pollution ]

[ Area involved: Pasig River near SM City Manila ]

ISSUE

 Main Issue: Whether LLDA has the power to impose fines as penalties over pollution cases?
 Guide Question: Whether LLDA has jurisdiction over water pollution in the Pasig River?

RULES & DEFINITIONS

Relevant Laws and Rules Description or Relevant Provisions

RA 4850
EO 927
Pacific Steam Laundry v. LLDA
Alexandra Condominium v. LLDA
LLDA v. CA
Doctrine of Exhaustion of
Administrative Remedies
LLDA Charter enacted in 1966.
Amendatory law of RA 4850.
2009 case which categorically ruled that LLDA has the power to
impose fines as a regulatory and quasi-judicial body.
2009 case which acknowledged LLDA’s authority to impose fines.
1994 case discussing LLDA’s authority over Laguna Lake area and its
surrounding areas such as the City of Manila.

ANALYSIS OF FACTS

 February 4, 2002: The Pollution Control Division of the LLDA conducted an inspection of the
wastewater collected from SM City Manila branch. Results showed that the sample collected failed to
conform with the effluent standards for inland water imposed by law.
 March 12, 2002: LLDA informed SM City Manila of the violation, ordered to perform corrective
measures and imposed a fine of PhP 1,000 per day from February 4 until full cessation of the
discharging of pollutive wastewater.
 March 23, 2002: SM requested LLDA to conduct a re-sampling of their effluent claiming they already
took measures to meet the standards set by DENR.
 July 2, 2002: SM requested for a waiver since they immediately undertook corrective measures and
that the pH levels of its effluent were already controlled even prior to their request of re-sampling, and
since it was the first time that SM City Manila failed to meet the standards.
 October 2, 2002: LLDA required SM to pay a total of PhP 50,000 for the accumulated daily penalty from
February 4 to March 25.
 November 29, 2002: SM filed a motion for reconsideration. But was still denied by LLDA.
 April 21, 2003: SM filed another motion for reconsideration but was still denied.
 Hence, SM City Manila filed a petition for certiorari with the CA. CA granted the petition of SM ruling that
an administrative agency’s power to impose fines should be expressly granted and may not be implied.
Therefore, the Orders of LLDA are issued without jurisdiction and with grave abuse of discretion.

ARGUMENTS PRESENTED

Petitioner’s Arguments Respondent’s Arguments

(LLDA) (SM Prime Holdings)
 LLDA has the power to impose fines and penalties based on RA  none
4850 and EO 927.
 SM is already barred by estoppel from questioning LLDA’s power to
impose fines because it actively participated in the proceedings.

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  Procedural: SM did not raise purely legal but also brought factual
issues. Therefore, it must be raised with the DENR first, having
administrative supervision over LLDA.
 Procedural: CA has no jurisdiction over the petition. Rule 43
enumerates the quasi-judicial agencies whose decisions or orders
are directly appealable to CA. LLDA is not one of them.

CONCLUSION

 SM is barred by estoppel from questioning LLDA’s power to impose fines as penalty.

o SM actively participated during the hearing before LLDA without impugning such power.
o SM even asked for reconsiderations and even waiver of fines.
o SM impliedly admitted the authority of LLDA to impose penalty.
 Even if there was no active participation from SM, LLDA indeed has the power to impose fine. (Pacific
Steam, Alexandra Condominium and LLDA v. CA cases)
o It has the power in the exercise of its function as a regulatory and quasi-judicial body with
respect to pollution cases in the Laguna Lake region. Adjudication of pollution cases pertains to
the Pollution Adjudication Board, except where a special law (LLDA Charter) provides for
another forum. This does not preclude LLDA from assuming jurisdiction of pollution cases
within its area of responsibility and to impose fines as penalty.
o RA 4850, Sec. 4-A: LLDA is entitled to compensation for damages resulting from failure to
meet established water and effluent standards.
o EO 927 also provides certain powers:
 Sec. 4(d): the power to make, alter or modify orders requiring the discontinuance of
pollution specifying the conditions and the time within which such discontinuance
must be accomplished.
 Sec. 4(i): the authority to exercise powers and perform other functions necessary to
carry out its duties and responsibilities.
 Sec. 4(c): to issue orders or decisions to compel compliance under the EO.
o LLDA also has the responsibility to protect the inhabitants of the Laguna Lake Region.
 Therefore, based on the citations above, LLDA cannot effectively perform its functions if for every
violation of the law it is supposed to enforce, it is required to resort to some other authority for proper
remedy or penalty.
 LLDA is clothed not only with the express powers granted to it, but also those which are implied or
incidental that are necessary for the proper implementation of its functions.

Other Issues
 Procedural Issue: SM Prime did not exhaust administrative remedies before filing a petition with CA.
Although there are exceptions to the doctrine of exhaustion of administrative remedies (such as when
the issues raised are purely legal), the questions raised by SM did not fall under such exception. The
determination whether LLDA committed grave abuse of discretion in imposing fine would necessarily
and inevitably touch on the factual issues. The questions should have been brought first to DENR.
 Procedural Issue: Rule 65, Sec. 4 provides that if a petition involves acts or omissions of a quasi-
judicial agency, the petition shall be filed in and cognizable only by the CA. It is clear that jurisdiction
over acts or omissions of the LLDA belong to the CA.