Case Summary (G.R. No. 202897)
Procedural Background and Claims
DENR-EMB regional offices charged MWSS, Maynilad, and Manila Water before the PAB for failure to install and maintain adequate wastewater treatment facilities (WWTFs) and to connect existing sewage lines, leading to pollution of waterways draining into Manila Bay. The DENR Secretary, acting on the PAB’s findings, imposed daily fines for Section 8 violations. Petitioners’ motions for reconsideration were denied. They then filed Rule 43 petitions in the Court of Appeals, raising due-process and jurisdictional objections, claiming Section 7 conditions and Concession Agreement milestones justified delay, and citing this Court’s MMDA Manila Bay decision.
Legislative Framework and Policy of the Clean Water Act
RA 9275 unifies water pollution control under a “holistic” national program.
- Section 7: DPWH, with DENR, LGUs, and other agencies, must prepare a National Sewerage and Septage Management Program within 12 months of effectivity.
- Section 8: Within five years of effectivity (by May 6, 2009), MWSS and its concessionaires in Metro Manila and other HUCs must connect all existing sewage lines (from apartments, hotels, hospitals, households, etc.) to available sewerage systems; rates may be charged unless a source has its own system.
- Section 28: Authorizes the DENR Secretary, upon PAB recommendation, to impose P10,000–P200,000 daily fines for violations, with a 10% biennial escalation, and to order closures or disconnect water supply.
Administrative Proceedings and Findings of DENR-PAB
After a Notice of Violation and technical conference, the PAB found petitioners in continuing violation of Section 8, noting incomplete centralized sewerage and evidence of untreated discharge. It recommended maximum fines. The DENR Secretary adopted those findings in Orders of October 7 and December 2, 2009, imposing P200,000 daily fines from May 7 to September 30, 2009, and P200,000 per day thereafter until compliance.
Court of Appeals Rulings
Each CA division dismissed the Rule 43 petitions:
- Maynilad (CA-G.R. SP 113374): Dismissed for procedural default—late reconsideration.
- Manila Water (CA-G.R. SP 112023): Held Section 8’s five-year deadline clear and separate from Section 7 and NSSMP formulation.
- MWSS (CA-G.R. SP 112041): Ruled the wrong remedy was sought and failure to exhaust administrative appeals; substantively confirmed its concessionaires’ duties under Section 8.
Issues before the Supreme Court
Procedural
- Validity and appealability of DENR Secretary’s Orders under RA 9275 and EO 192.
- Alleged denial of procedural due process.
Substantive
- Petitioners’ compliance with Section 8:
1.1. Is Section 7 a condition precedent?
1.2. Do Concession Agreements override Section 8?
1.3. Any exemption from the five-year deadline? - Effect of MMDA Manila Bay decision on Section 8’s deadline.
- Proper computation of fines under Section 28.
Procedural Determinations
- The daily-fine Orders were issued by the DENR Secretary, pursuant to Section 28, and are appealable to the Office of the President, not by Rule 43 to the CA.
- Petitioners failed to exhaust administrative remedies, warranting dismissal on technical grounds.
- Due process was afforded: Notice of Violation, PAB technical conference, written submissions, and motions for reconsideration.
Substantive Determinations: Scope of Section 8
- Section 8 imposes an unconditional duty, demandable by May 6, 2009, irrespective of Section 7 or NSSMP completion.
- Section 7’s 12-month IRR program is distinct, not a condition precedent.
- Concession Agreements expressly require compliance with Philippine laws and cannot modify statutory deadlines.
- MOAs extending concession terms to 2037 cannot override the five-year statutory mandate.
Public Trust Doctrine and State’s Regulatory Role
Under the 1987 Constitution, water is a natural resource held in public trust. MWSS and its concessionaires function as fiduciaries, tasked with protecting water quality and sanitation. RA 9275 is a valid exercise of the State’s police power in furtherance of public welfare, health, and environmental protection.
Violation of Section 8 by Petitioners
DENR-EMB laboratory analyses and monitoring confirmed widespread pollution from untreated sewage. By 2017, petitioners’ sewerage coverage ranged from 9–19%, far sh
Case Syllabus (G.R. No. 202897)
Procedural History
- April 2, 2009: EMB-Region III filed before the DENR’s Pollution Adjudication Board (PAB) a complaint charging MWSS, Maynilad, and Manila Water with failure to install and maintain adequate Wastewater Treatment Facilities (WWTFs) leading to pollution of Manila Bay tributaries.
- April 8 & 21, 2009: EMB-NCR and EMB-Region IV-A filed similar complaints before the PAB.
- SENR issued a Notice of Violation (NOV) citing petitioners’ non-compliance with Section 8 of the Clean Water Act and directed them to a technical conference.
- October 7, 2009: Secretary of DENR, upon PAB recommendation, found petitioners liable under Section 8 of R.A. 9275 and imposed joint fines amounting to ₱29.4 million covering May 7–September 30, 2009 and ₱200,000 per day thereafter until full compliance.
- December 2, 2009: Motions for reconsideration by MWSS and Manila Water denied; Maynilad’s failure to timely move deemed waiver.
- March 17, 2010: PAB denied Maynilad’s second motion for reconsideration.
- Late 2009–2010: Petitioners filed separate petitions for review under Rule 43 before the Court of Appeals.
- October 26, 2011; August 14, 2012; September 25, 2012: Court of Appeals dismissed petitions of Maynilad, Manila Water, and MWSS, respectively, and affirmed DENR-PAB orders.
- July 17, 2012; April 11, 2013; June 17, 2013: Court of Appeals denied motions for reconsideration of each petitioner.
Facts
- MWSS granted a 25-year concession (extendable by 15 years) to Maynilad (West Zone) and Manila Water (East Zone) to supply water and sewerage services in Metro Manila, Rizal, parts of Cavite and Bulacan.
- R.A. 9275 (Clean Water Act of 2004) Section 8 mandates that, within 5 years of effectivity (May 6, 2004), agencies and concessionaires must connect all existing sewage lines—from subdivisions, commercial centers, hospitals, households, etc.—to available sewerage systems.
- EMB sampling (Jan–Mar 2009) showed rising Biochemical Oxygen Demand (BOD) and failing Dissolved Oxygen (DO) levels in river tributaries, evidencing continuous discharge of untreated wastewater.
- Petitioners lacked WWTF capacity in Cavite (Imus, Bacoor, Noveleta, Kawit) and San Juan and failed to connect households and establishments to existing sewer lines.
- Petitioners invoked their Concession Agreements (CAs) with phased service targets and invoked Section 7 of the Clean Water Act—which required DPWH to devise a national sewerage and septage management program—as a condition precedent to their Section 8 compliance.
- Maynilad and Manila Water cited ongoing projects and claimed other pollution sources.
Issues
Procedural
- Did the SENR’s Orders of October 7 and December 2, 2009 comply with Section 28 of R.A. 9275 and Section 19 of EO 192?
- Were petitioners deprived of procedural due process when the DENR Secretary imposed fines without a PAB recommendation or valid complaint?
Substantive
- Did petitioners violate Section 8 of R.A. 9275 by failing to connect existing sewage lines within five years?
- Is compliance by DPWH, DENR, and LGUs under Section 7 a condition precedent to petitioners’ Section 8 obligations?
- Do CA targets supplant or prevail over the unconditional mandate of Section 8?
- Are petitioners exempt from the five-year deadline or extended by MMDA v. Concerned Residents of Manila Bay (2037)?
- Did MMDA v. Concerned Residents of Manila Bay implicitly repeal Section 8 or nullify the SENR’s Orders?
- Should petitioners be fined under Section 28