West Tower Condominium Corporation v. First Philippine Industrial Corporation
West Tower Condominium Corporation v. First Philippine Industrial Corporation, G.R. No. 194239, June 16, 2015
- Procedural (Remedial Law)
- writ of kalikasan
- environmental law
- oil pipeline leak
- WOPL
- legal standing
- precautionary principle
- permanent environmental protection order
- special trust fund
- corporate officers liability
- DOE certification
- Rules of Procedure for Environmental Cases
- right to a balanced and healthful ecology
I. Facts of the Case
West Tower Condominium Corporation, for its residents and the residents of Barangay Bangkal, Makati, petitioned for a writ of kalikasan against First Philippine Industrial Corporation (FPIC), First Gen Corporation (FGC) and their directors and officers. The petition arose from a fuel leak from FPIC's White Oil Pipeline (WOPL) that contaminated the condominium. The Court resolved the standing of the petitioners, the continued closure of the pipeline, the requested trust fund, and the liability of FGC and the officers.
1969
FPIC began operating two pipelines: the 117-km White Oil Pipeline (WOPL) from Batangas to Pandacan, Manila, carrying diesel, gasoline, jet fuel and kerosene, and the 105-km Black Oil Pipeline (BOPL) from Batangas to Sucat, Parañaque, carrying bunker fuel.
May 2010
Residents of West Tower Condominium in Makati began to smell gas, and a leak from one of the pipelines was suspected.
July 10, 2010
A search of the condominium led to discovery of a fuel leak from the wall of Basement 2. West Tower management reported to the Makati Police, who called the Bureau of Fire Protection. The leak grew from two drums to 15-20 drums a day, and the City of Makati ordered the sump pit shut to prevent contaminated water from flowing into Barangay Bangkal's drainage.
July 23, 2010
Fumes forced residents to abandon their units and the condominium's power was shut down. FPIC initially disowned any leak, so the residents paid for hauling waste water and setting up a treatment plant to separate fuel from waste water.
October 28, 2010
UP-NIGS, invited by the City of Makati, found a leak in FPIC's WOPL about 86 meters from West Tower.
October 29, 2010
FPIC admitted that the WOPL, closed since October 24, 2010, was the source of the leak, but denied liability and blamed construction activities on the surrounding roads.
November 15, 2010
West Tower Corp. filed a Petition for the Issuance of a Writ of Kalikasan on behalf of West Tower and Barangay Bangkal residents, saying civil society groups, NGOs and people's organizations intended to join. It prayed that respondents cease negligent acts, check and replace the 117-km pipeline, make periodic reports, rehabilitate the environment and open a special trust fund, and that the pipeline be restrained from operating until checked and replaced.
November 19, 2010
The Court issued the writ of kalikasan with a TEPO requiring verified returns and enjoining FPIC and FGC to cease operating the WOPL, check its structural integrity and report within 60 days.
January 18, 2011
FPIC directors Chua, Javier, Gamab and Sarmiento filed a Joint Return, and other FPIC directors and officers a Verified Return, contesting petitioners' capacity, the absence of damage in two or more cities or provinces, and any basis for piercing the corporate veil. FGC and its directors and officers filed a Joint Compliance saying they neither own nor operate nor control the pipelines.
January 21, 2011
FPIC submitted its Report on Pipeline Integrity Check and Preventive Maintenance Program, citing borehole tests, pressure tests, in-line inspection and preventive measures.
April 15, 2011
The Court conducted an ocular inspection of the WOPL near West Tower, which belied the claim of two additional leaks. Petitioners also filed civil and criminal complaints from the same incident.
May 31, 2011
The Court clarified that only the WOPL was covered by the TEPO, so FPIC could resume BOPL operation. Petitioners assailed this in a July 7, 2011 Omnibus Motion and, on September 9, 2011, filed a Manifestation with Omnibus Motion invoking the precautionary principle and alleging illegal waste water discharge by FPIC's remediation contractors.
September 28, 2011
FPIC filed an Urgent Motion for Leave to undertake the 'Bangkal Realignment' project.
November 22, 2011
The Court remanded the case to the Court of Appeals for hearings and a report and recommendation. The CA held a preliminary conference on March 21, 2012, where facts were stipulated and issues defined, and appointed amici curiae.
December 26, 2012
The CA submitted its 156-page Report and Recommendation. It recommended that the intervening organizations be impleaded; that FPIC submit a DOE Secretary certification that the WOPL is safe for commercial operation within 60 days or the TEPO be made permanent; that the special trust fund be denied as in effect a prohibited claim for damages; that FGC not be held solidarily liable; and that directors and officers not be held liable in their individual capacities, without prejudice to the pending civil case (Civil Case No. 11-256, RTC Branch 58, Makati) and criminal complaint. It denied the Bangkal Realignment motion, found no additional leak established, and directed DENR monitoring of FPIC's remediation, with the Inter-Agency Committee on Environmental Health evaluating the CH2M remediation plan.
January 2013
Petitioners filed a Motion for Partial Reconsideration of the CA Report. On January 25, 2013, FPIC submitted a DOE Certification dated January 22, 2013 on the BOPL, which petitioners contested on March 14, 2013.
July 30, 2013
The Court adopted the CA recommendation and ordered FPIC to submit a DOE Secretary certification that the WOPL is safe for commercial operation, with the DOE Secretary to consult the DOST.
October 2, 2013
Petitioners filed a Motion for Reconsideration with Motion for Clarification, arguing that FPIC's tests were insufficient and the DOE was biased.
October 25, 2013
The DOE Secretary certified that the WOPL is safe to resume commercial operations, subject to monitoring conditions by the OIMB and to DOE/DOST tests.
April 29-30, 2014
The DOE organized a dialogue with FPIC on its pipeline integrity management measures.
August 5, 2014
DOE Secretary Petilla submitted a letter recommending activities and a timetable for resumption of WOPL operations.
February 3, 2015
The Court required the parties to comment on Sec. Petilla's letter. Respondents and West Tower filed comments, while the intervenors failed to comply and were deemed to have waived their right to comment.
June 16, 2015
The Court En Banc, through Justice Velasco, adopted the CA recommendations with modifications, denied the Motion for Partial Reconsideration and partly granted the Motion for Reconsideration with Motion for Clarification. Justice Leonen dissented, arguing mootness.
II. Issues
Whether West Tower Corp. has the legal capacity to represent the other petitioners and whether the other petitioners are real parties-in-interest.
Whether the DOE certification renders the issue of the WOPL's structural integrity moot and the writ of kalikasan functus officio, such that a permanent environmental protection order is no longer needed.
Whether the precautionary principle applies in determining the WOPL's structural integrity.
Whether a special trust fund may be opened by respondents to answer for future similar contingencies.
Whether FGC and the directors and officers of FPIC and FGC may be held liable under the environmental protection order in the writ of kalikasan proceedings.
III. Ruling
Whether West Tower Corp. has the legal capacity to represent the other petitioners and whether the other petitioners are real parties-in-interest.
West Tower Corp. has legal standing to represent its unit owners and residents, and the residents of West Tower and Barangay Bangkal are real parties-in-interest. The intervening organizations were also allowed as petitioners.
How the Court reasoned
- The Constitution recognizes the right to a balanced and healthful ecology, and the Rules of Procedure for Environmental Cases let a writ of kalikasan petition be filed on behalf of persons whose right is violated or threatened.
- The residents of West Tower were directly affected by the fuel leak, so they are real parties-in-interest.
- West Tower Corp., as the condominium corporation, represents the common interest of its unit owners and residents and so has standing.
- The lack of a board resolution is irrelevant because a notarized Secretary's Certificate showed authority from the full membership of the condominium corporation.
- Rule 7 clearly allows juridical persons to file the petition for persons whose right to a healthful ecology is violated or threatened, so the intervening organizations may be petitioners.
“There can also be no denying that West Tower Corp. represents the common interest of its unit owners and residents, and has the legal standing to file and pursue the instant petition.”
Rule applied
Section 16, Article II of the 1987 Constitution; Rule 7, Sec. 1 of the Rules of Procedure for Environmental Cases (A.M. No. 09-6-8-SC); Republic Act No. 4726 (Condominium Act)
Whether the DOE certification renders the issue of the WOPL's structural integrity moot and the writ of kalikasan functus officio, such that a permanent environmental protection order is no longer needed.
The DOE certification does not make the issue moot, because it is not an absolute attestation of structural integrity and is subject to conditions. The writ is not functus officio, and the Court adopted the DOE's August 5, 2014 activities as conditions for resuming WOPL operations, with the DOE to test and decide on reopening or closure.
How the Court reasoned
- The CA recommended requiring a DOE certification of safety for commercial operation, given the DOE's specialized expertise. Without it, use of the WOPL remained abated.
- The Court found this recommendation proper and required the DOE certification in its July 30, 2013 Resolution.
- The DOE's October 25, 2013 certification is not an absolute attestation of structural integrity. It imposes monitoring conditions and further DOE/DOST tests.
- Because the conditions remain unfulfilled, the question of the pipeline's structural integrity is still unresolved and the case is not moot, contrary to Justice Leonen's dissent.
- The Court adopted the activities and timetable in the DOE's August 5, 2014 letter as conditions for resuming WOPL operations, and the DOE implements the tests and decides whether to allow reopening or order closure.
“The issue, therefore, on the pipeline's structural integrity has not yet been rendered moot and remains to be subject to this Court's resolution.”
Rule applied
Rule 5, Sec. 3 and Rule 7, Sec. 15(e) of the Rules of Procedure for Environmental Cases; Sec. 12(b)(1), RA 7638; Section 13, Article VIII of the Constitution
Whether the precautionary principle applies in determining the WOPL's structural integrity.
The precautionary principle was not applied in deciding the WOPL's structural integrity. The issue is the pipeline's compliance with structural standards, which is a question of fact.
How the Court reasoned
- The precautionary principle applies where scientific evidence of environmental threat is uncertain.
- Petitioners invoked it in asking that the pipeline remain closed.
- The Court did not rely on the principle in resolving structural integrity.
- The question is whether the WOPL meets pipeline structure standards, which is a factual matter to be settled by expert testing through the DOE.
“Nowhere did We apply the precautionary principle in deciding the issue on the WOPL's structural integrity.”
Rule applied
Section 1, Rule 20, A.M. No. 09-6-8-SC (Precautionary Principle)
Whether a special trust fund may be opened by respondents to answer for future similar contingencies.
A special trust fund for future contingencies cannot be created. Under the environmental rules such a fund is limited to rehabilitating or restoring the environment, and the prayer is effectively a prohibited claim for damages.
How the Court reasoned
- The Rules of Procedure for Environmental Cases limit a special trust fund to rehabilitating or restoring the environment.
- Petitioners asked for a fund to answer for similar future contingencies, not for rehabilitating the actual damage.
- The CA observed this was in effect a claim for damages.
- Damages are prohibited in a writ of kalikasan petition, and the Court concurred with the CA.
“Hence, the Court affirms with concurrence the observation of the appellate court that the prayer is but a claim for damages, which is prohibited by the Rules of Procedure for Environmental Cases.”
Rule applied
Sec. 1, Rule 5 and Rule 7 of the Rules of Procedure for Environmental Cases (damages not allowed in a writ of kalikasan petition; trust fund limited to rehabilitation)
Whether FGC and the directors and officers of FPIC and FGC may be held liable under the environmental protection order in the writ of kalikasan proceedings.
FGC was not held liable under the TEPO, and the Court declined to rule on the liability of the directors and officers of FPIC and FGC. Their liability is to be resolved in the pending civil and criminal cases.
How the Court reasoned
- FGC stated it neither owns nor operates nor controls the pipelines, and the CA found it not liable under the TEPO.
- The CA found the individual directors and officers not liable in their individual capacities, without prejudice to the other cases.
- Civil Case No. 11-256 (RTC Branch 58, Makati) and a criminal complaint for reckless imprudence are pending against them.
- Individual liability is properly resolved in those cases, so the Court refrained from ruling here.
- The DENR has jurisdiction to oversee the remediation of Barangay Bangkal.
“Hence, the Court will not rule on the alleged liability on the part of the FPIC and FGC officials which can, however, be properly resolved in the civil and criminal cases now pending against them.”
Rule applied
Rules of Procedure for Environmental Cases (writ of kalikasan limited to environmental remedies, damages excluded); separate civil and criminal proceedings
Doctrines
Under Rule 7 of the Rules of Procedure for Environmental Cases, juridical persons such as condominium corporations and organizations may file a writ of kalikasan petition on behalf of persons whose constitutional right to a balanced and healthful ecology is violated or threatened.
A writ of kalikasan case is not rendered moot by a conditional government safety certification when the structural integrity of the facility remains subject to further tests.
The precautionary principle applies where there is scientific uncertainty, not to factual questions of compliance with structural standards.
A special trust fund in environmental cases is limited to rehabilitating or restoring the environment. A fund for future contingencies is an impermissible claim for damages, which is prohibited in writ of kalikasan proceedings.
The liability of corporate directors and officers for environmental harm is properly resolved in separate civil and criminal proceedings, not in a writ of kalikasan petition.
Final Disposition
WHEREFORE/IN VIEW OF THE FOREGOING, the Motion for Partial Reconsideration is DENIED. The Motion for Reconsideration with Motion for Clarification is PARTLY GRANTED. The recommendations of the Court of Appeals are ADOPTED with modifications: the activities and measures in the DOE's August 5, 2014 letter are adopted as conditions for resumption of WOPL commercial operations, the DOE to implement the tests and decide whether to allow reopening or order closure; the special trust fund is denied; FGC is not held liable and the liability of the directors and officers is left to the pending civil and criminal cases; and the DENR is to oversee the remediation of Barangay Bangkal.
Notes
Justice Leonen dissented, arguing the petition was moot due to the DOE certification and the writ was functus officio. The majority rejected this view. Issues were synthesized from the chunk extractions.