DENR Decision on Richli Water vs LGU Balilihan, Bohol

Republic of the Philippines
Department of Environment and Natural Resources
NATIONAL WATER RESOURCES BOARD
8 Floor NIA Bldg. EDSA Diliman Quezon City, Philippines 1100

RICHLI CORPORATION, WATER USE CONFLICT
Petitioner/Protestant, CASE NO. 2021-011

- versus -

LOCAL GOVERNMENT UNIT OF IN RE: CWP NO. 01-22-20-008
BALILIHAN, BOHOL,
Respondent/Protestee.
x—-------------------------------------------x

RESOLUTION

For resolution is the Motion for Reconsideration (MR), dated 18 July 2022, and Supplemental MR, dated 19 September 2022, filed by the Local Government Unit of Balilihan (Respondent or LGU-Balilihan) on the Resolution dated 2 June 2022 rendered by the National Water Resources Board thru the Executive Director, the dispositive portion of which reads:

"WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. For failure to comply with the requirement set forth under Section 9 of the Amended Implementing Rules and Regulations of P.D. 1067 or the Water Code of the Philippines, the Decision dated 14 September 2021 is hereby SET ASIDE.
2. Conditional Water Permit No. 01-22-20-008 issued to the Municipality of Balilihan is hereby CANCELLED/REVOKED without prejudice to the filing of application for water permit showing compliance with the cited provision.

SO ORDERED."

In its MR dated 18 July 2022, Movant-Respondent Local Government Unit Balilihan, Bohol (LGU Balilihan) alleged the following:

1. It provided accurate data and information and did not indicate that Bugwak Spring is located in Sto Niño, Balilihan;

2. The CWP enjoys the presumption of regularity as it passed through the application process and posting of notice takes the place of publication which is deemed as constructive notice of the application to the whole world, including petitioner Richli and LGU Sevilla;

3. There is substantial compliance with Section 9 of the Amended Implementing Rules and Regulation of the P.D. 1067 as it relied in good faith on the coordinates provided by the National Irrigation Administration (NIA), an agent of NWRB, in determining the extraction of its water source, and official notice was sent to Sevilla thru Mayor Dano on 17 May 2021 about the project of LGU Balilihan;

4. The defect was not mentioned in the ruling of NWRB dismissing the petition to cancel of Richli. Site validation is a function of NWRB to be conducted before CWP is approved with or without protest. There is lack of due diligence in verifying applications; and

5. It was not afforded due process because Richli committed the same mistake yet was only issued a Show Cause Order instead of cancellation.

On 03 August 2022, NWRB received an Opposition to the Motion for Reconsideration, dated 29 July 2022, filed by petitioner Richli Corporation (Richli), submitting as follows:

1. Good faith and negligence are not substitutes for compliance;

2. The Respondent was afforded due process in the revocation of its water permit, the fact that it was given a copy of the Petition, given a chance to answer and present its evidence, and file the motion for reconsideration is already due process;

3. Respondent has no access to the water source as it does not have lot beside the source of the water. The alleged barangay road is a private road owned by the petitioner-protestant Richli Corporation and the alleged permission given by BOHECO has not been presented in evidence; and

4. The Respondent has to show that it has ECC for the project in Sevilla, Bohol.

On 20 September 2022, LGU Balilihan filed a Supplemental MR dated 19 September 2022 alleging the following:

1. What cannot be legally done directly cannot be done indirectly - The petition to cancel the water permit is in effect a protest which was filed out of time. It enjoys the presumption of regularity and cannot be attacked unless by grounds that would warrant its suspension, cancellation or revocation under the Water Code;

2. LGU Balilihan had nothing to do with the determination of the coordinates - It was NIA, as agent of NWRB, which designated and assigned the coordinates of the diversion point of the water source. The same can be plainly seen in the application as "TO BE FILLED BY NWRB";

3. Posting of the notices is the obligation of the NWRB and not of the applicant Section 9 of the Amended IRR of the Water Code provides that the Board shall send notices to offices for posting in conspicuous places. LGU Balilihan also sent a letter to LGU Sevilla
regarding its water supply project which constitutes substantial compliance;

4. LGU Balilihan applied for the water source at Bugwak Spring and no other - Even if there is a seeming mistake on the technical coordinates, both LGU Balilihan and NWRB are in perfect understanding that the water source over which the water permit is being applied for is the same;

5. The penalty of cancellation of the CWP of LGU Balilihan is harsh under the prevailing facts - There is double standard when Richli was merely issued with a Show Cause Order when their CWP was found with inaccurate coordinates which is worse as it pertains to a different spring.

6. It was deprived of due process for lack of due notice and hearing under Article 29 of the Water Code when NWRB- The CWP of LGU Balilihan was cancelled not based on grounds raised in Richli's MR but only after the ocular inspection which doubles as a fishing expedition. No due regard was given towards notice and hearing;

7. There is no cause of action against LGU Balilihan - Articles 28, 29, and 90 of the Water Code and Articles 15 (g) (h) 👎, 20 and 89 or its IRR provides the specific grounds for the suspension, cancellation and revocation of water permits. Clearly, it was not among the grounds for cancellation;

8. Richli has no locus standi - Richli was not able to show any direct and material injury that it would suffer by virtue of the CWP issued in favor of LGU Balilihan. All structures were placed on public properties carefully and completely plotted by DENR and DPWH to ensure that private rights will be respected; and

9. Monopoly is unlawful and is frowned upon by the State - LGU Balilihan, Richli and even LGU Sevilla can mutually and beneficially co-exist. LGU Balilihan is pushing for competition in order to improve the delivery of water supply in the municipality;

10. Cancelling the CWP would set a bad precedent to LGUs and would put to waste public funds - LGUS' water development plans are not respected. LGUs deserve support and technical assistance from the national government. The public funds allocated for the project which has started construction since 2020 is nearing completion to date.

In response, Richli filed its Comment on the Supplemental MR on 7 October 2022, submitting the following:

1. Estoppel cannot lie against the government;

2. The grounds for suspension and revocation of a water permit under Article 28 and 29 of Presidential Decree No. 1067 or the Water Code are not exclusive; and

3. Richli has locus standi in the case as the owner of several lots traversed by the pipelines of the water project construction of LGU Balilihan.

With the filing of Richli's Comment on the Supplemental MR, the case is deemed submitted for resolution by the Board.

Pursuant to the Board Resolution No. 005-1000, delineating the authority of the Board, the Executive Director and the Division Chiefs, motions for reconsideration from resolutions/decisions of the Executive Director, shall be acted upon by the members of the Board.

This case stemmed from the Petition to Cancel the Conditional Water Permit No. 01-22-20-008 of LGU Balilihan filed by Richli on 5 October 2020.

On procedural grounds, the timeliness of the petition to cancel the subject CWP was already passed upon in both the Decision dated 14 September 2021 and Resolution dated 2 June 2022 issued by the Board.

Article 16 of P.D. 1067 or the Water Code of the Philippines (Water Code) provides that:

"ARTICLE 16. Any person who desires to obtain a water permit shall file an application with the Council who shall make known said application to the public for any protests.

In determining whether to grant or deny an application, the Council shall consider the following: protests filed, if any; prior permits granted; the availability of water; the water supply needed for beneficial use; possible adverse effects; land-use economics; and other relevant factors.

Upon approval of an application, a water permit shall be issued and recorded." (Emphasis supplied)

ARTICLE 17. The right to the use of water is deemed acquired as of the date of filing of the application for a water permit in case of approved permits, or as of the date of actual use in a case where no permit is required.

Section 9 of the Amended Implementing Rules and Regulations (IRR) of the Water Code states that:

"Section 9. Processing, Posting and Sending of Notices of Applications/Petitions - Upon receipt of an application or a petition, the Board shall process the same to determine completeness of the requirements prescribed in Section 5 hereof. Once completed, and upon payment of the filing fee, notices of the application/petition shall be posted in a conspicuous place in the office of the Board for a period of thirty (30) days. The Board shall also send notices to the following offices for posting in conspicuous places for the same period:

a) Barangay Chairman of the place where the point of diversion is located;

b) City of Municipal Secretary of the city or town where the point of diversion is located;

c) The Secretary of the SangguniangPanlalawigan of the province where the point of diversion is located;

d) Department of Public Works and Highways (DPWH) District Engineer or National Irrigation Administration (NIA) Provincial Irrigation Officer as the case may be.

Copies of the notices of application shall, likewise, be furnished to concerned Regional Offices of the Department of Public Works and Highways, National Irrigation Administration, National Power Corporation, Department of tres Environment and Natural Resources, and Local Water District Office, if there is one and such other agencies as may be specified by the Board." (Emphasis supplied)

Section 10(B) of the Amended IRR further states that:

"B. Protest on Applications - Any person who may be adversely affected by the proposed appropriation may file a verified protest with the Board within thirty (30) days after the last day of posting of Notice.

Protests to an application for water permit shall be governed by the rules prescribed for resolving water use controversies." (Emphasis supplied)

From the above provisions, it is evident that after an application to obtain a water permit has been made known to the public, any interested party must file his protest thereto in order that the application may be properly evaluated. Otherwise, after the application for a water permit has been approved, the grantee of the permit now acquires an exclusive right to use the water source, reckoned from the date of the filing of the application. Thus, after the grantee's right to the water permit has been properly adjudicated, the same may no longer be questioned.

To reiterate, no opposition/protest was received by the Board within the reglementary period to file the same against LGU Balilihan's water permit application. The CWP No. 01-22-20-008 was already issued in favor of LGU Balilihan on 22 January 2020 when Richli filed its Water Permit Application (WPA) No. VII-BOH-2019-11-054 and the Petition to Cancel LGU Balilihan's CWP No. 01-22-20-008 on 5 October 2020. Hence, on the ground of timeliness alone, Richli's Petition to Cancel LGU Balilihan's CWP should not be given due course.

The fact that the petition was filed out of time was not affected by the findings in the ocular inspection conducted on 2-3 December 2021 based on a request made by Richli on 16 November 2021. While the Order dated 30 May 2022 indicated that Bugwak Spring is located in Brgy. Magsaysay, Sevilla, Bohol (LGU Sevilla) and not in Sto. Niño, Balilihan, Bohol, which was the location indicated in the WPAs of both LGU Balilihan and Richli, the same did not change the fact that the period to file a protest has already lapsed in favor of LGU Balilihan.

It is within logic and common sense that notices for posting will not be sent to LGU Sevilla when LGU Balilihan filed its water permit application because, at the time, there was an inadvertent mistake on the coordinates provided by NIA stating that Bugwak Spring's location is in Sto. Niño, Balilihan, Bohol. Therefore, to require compliance with the posting requirement in Brgy. Magsaysay, Sevilla, Bohol based on an ocular inspection conducted after the permit was already issued would be to impose an impossible condition. The same is true for Richli's CWP.

The presumption of regularity in the performance of official duties is an aid to the effective and unhampered administration of government functions. Without such benefit, every official action could be negated with minimal effort from litigants, irrespective of merit or sufficiency of evidence to support such challenge. To this end, our body of jurisprudence has been consistent in requiring nothing short of clear and convincing evidence to the contrary to overthrow such presumption.

The issuance of CWP in favor of LGU Balilihan is presumed valid and regular absent any clear and convincing evidence from Richli that the issuance of CWP is done with grave abuse of discretion, malice, or undue favor in spite of existing irregularities. No such proof was forwarded by Richli when it filed its petition or protest because the mistake or defect in the application was found after the conduct of the ocular inspection long after the issuance of CWP. Hence, the permits already issued by the Board after undergoing the procedures and requirements provided by the Water Code and the Amended IRR of the Water Code are presumed valid and regular. They cannot therefore be attacked indirectly if the period for filing protests have already lapsed.

Anent the locus standi of Richli, Section 10(B) of the Amended IRR of the Water Code states that "any person who may be adversely affected by the proposed appropriation may file a verified protest with the Board within thirty (30) days after the last day of posting of Notice".

Richli submitted that it has locus standi as the owner of several lots traversed by the pipelines of the water project construction of LGU Balilihan. In proving the same, Richli merely submitted proof of purchase of lots in Sto. Niño, Balilihan, Bohol, acquired from one TomasaPajuta designated as Lot No. 8491 - PART covered by Tax Declaration No. 2016-06-0029-00233. Richli asserts that the barangay road within the said lot is a private road to which it will not allow LGU Balilihan to use.

On the other hand, LGU Balilihan stated that in order to verify the issue regarding the barangay road of Sto. Niño, Balilihan, an actual ground survey and verification/investigation on the site was conducted on 4-5 November 2021 attended by personnel from LGU Balilihan, DPWH and Brgy. Captain of Sto. Niño, Balilihan. It was confirmed that there is an existing barangay road which starts from the national road up to the BOHECO-1 JanopolHyrdo Electric Plant.

According to the PENR Officer For. Ariel Rica thru letter dated 8 November 2021, per ground verification, there is an existing concrete road in Sto. Niño, Balilihan which is a barangay road per approved cadastral map. Lots 23228 and 23225 both claimed by TomasaPajuta, the predecessor in interest of Richli. It is not titled/patented but the same are classified as alienable and disposable.

Based on the above submissions, TomasaPajuta, the predecessor-in-interest of Richli, could not be considered an owner of the barangay road which is neither titled nor patented. More importantly, besides the question of ownership over the barangay road, Richli failed to prove that it stands to be adversely affected by the CWP issued in favor of LGU Balilihan.

Article 18 of the Water Code provides that:

"ARTICLE 18. All water permits granted shall be subject to conditions of beneficial use, adequate standards of design and construction, and such other terms and conditions as may be imposed by the Council.

Such permits shall specify the maximum amount of water which may be diverted or withdrawn, the maximum rate of diversion or withdrawal, the time or times during the year when water may be diverted or withdrawn, the point or points of diversion or location of wells, the place of use, the purposes for which water may be used and such other requirements the Council deems desirable." (Emphasis supplied)

Article 20 of the Water Code further states that:

"ARTICLE 20. The measure and limit of appropriation of water shall be beneficial use.

Beneficial use of water is the utilization of water in the right amount during the period that the water is needed for producing the benefits for which the water is appropriated." (Emphasis supplied)

The Board notes that during the ocular inspection conducted, it was found that Bugwak Spring has a discharge capacity of 6542.50 lps.3 Even considering the CWP No. 01-22-20-008 granted to LGU Balilihan in an amount not exceeding 227.18 lps for municipal use as well as other permittees' CWPS, i.e. LGU Sevilla (33.45 Ips) and Richli (894.47 lps.), there is more than enough water to sustain the beneficial use of intended water users as aptly pointed out in the Decision dated 14 September 2021. Hence, Richli's Petition is without basis as it failed to establish any prejudice or adverse effect on the appropriation of LGU Balilihan on the same water source. Water is public good and should be shared.

On substantive grounds, the issue to be resolved is whether the mistake in the coordinates in the water permit application of LGU Balilihan found after the issuance of a CWP No. 01-22-20-008 may be a ground for summary cancellation of the permit.

We rule in the negative.

Article 30 of the Water Code provides that:

"ARTICLE 30. All water permits are subject to modification or cancellation by the Council, after due notice and hearing, in favor of a project of greater beneficial use or for multi-purpose development, and a water permittee who suffers thereby shall be duly compensated by the entity or person in whose favor the cancellation was made." (Emphasis supplied)

Section 89 of the Amended IRR of the Water Code further provides as follows:

"Section 89. Summary Revocation/Suspension - Water permits or other rights to use the water may be revoked or suspended summarily by the Board if any of the following facts and/or conditions exists:

a) That the suspension or revocation will redound to greater public interest, public health or safety;

b) That the acts complained of are grossly illegal per se;

c) That the violative act is the second offense on record involving the same infraction;

d) That the non-observance of or non-compliance with the rules, order or regulation is willful and deliberate;

e) When there is a prima facie showing that the non-observance of any standard for the beneficial use of water or non-compliance with any of the terms or conditions in a water permit or water rights granted is prejudicial to the life and property of third person;

f) When the suspension or revocation thereof is sought by an injured party, provided he files a bond to cover any damage which maybe sustained by the permittee or grantee arising from such summary revocation/suspension;

g) In times of emergency, where there is a prima facie showing that the use of water by the permittee/grantee is wasteful;

h) When health authorities so recommend to prevent or control the spread of disease due to inadequate facilities;

i) When in a decision of a competent court, the revocation or suspension of the water permit or grant is ordered or recommended; and

j) Such other serious offenses or gross violations and infractions as the Board stal may decide." (Emphases supplied)

While the Board agrees with Richli's submission that the grounds for suspension and revocation of water permits are not exclusive, the Board holds that the mistake in the coordinates provided by NIA is not the willful and deliberate non-observance of or non-compliance with the rules, order or regulations deserving of a summary revocation/cancellation contemplated above.

To summarily revoke or cancel LGU Balilihan's CWP based on a mistake it did not commit in the first place would result in grave injustice and inequity. The Board likewise notes that LGU Balilihan's Water Supply Project - which is a part of the 25-Year Bulk Water Masterplan of the Municipality of Balilihan - is infused with funds from the National Government worth Ninety-Five Million Pesos (PHP95,000,000.00) and is nearing completion.

Finally, on Richli's allegation that LGU Balilihan has no access to the water source because it does not own lots beside the water source, the Board considered Article 25 of the Water Code in relation to Section 5(A)(1) of the Amended IRR of the Water Code, viz:

"ARTICLE 25. A holder of a water permit may demand the establishment of easements necessary for the construction and maintenance of the works and facilities needed for the beneficial use of the waters to be appropriated subject to the requirements of just compensation and to the following conditions:

a. That he is the owner, lessee, mortgagee or one having real right over the land upon which he proposes to use water; and

b. That the proposed easement is the most convenient and the least onerous to the servient estate.

Easements relating to the appropriation and use of waters may be modified by agreement of the contracting parties provided the same is not contrary to law or prejudicial to third persons." (Emphases supplied)

"Section 5. Form and Requirements of Application - All applications shall be filed in the prescribed form, sworn to by the applicant and supported by the following:

A. Water Permit for Municipal Use

1. Proof of land ownership of, legal title to, or right to use, the property on which the water source is situated; xxx" (Emphasis supplied)

Based on the above provisions, ownership of lots beside the water source is not a requirement. It is sufficient that an applicant has a real right over the land upon which water is proposed to be used. The Board notes the submission of LGU Balilihan that it will utilize an unclassified dry land which forms part of public land, adjoining corner 10 of Lot 23225 and corner 7 of the Lot 23228 with an area of 2,861 sqm., to install the pipelines from the end of the barangay road down to the Bugwak Spring¹, and that LGU Balilihan's nationally funded infrastructure project for the rehabilitation of an existing water supply and construction of new water supply system will not pass through Richli's alleged properties.5 He who asserts - not he who denies-must prove. To date, no proof was submitted by Richli to establish that LGU Balilihan has no access to the water source.

IN VIEW OF THE FOREGOING, the Motion for Reconsideration filed by LGU Balilihan is hereby GRANTED. The Resolution dated 2 June 2022 is hereby SET ASIDE.
The Decision dated 14 September 2021 dismissing the Petition to Cancel Water Permit is REINSTATED.

SO ORDERED.

20 January 2023, Quezon City, Metro Manila.

MA. ANTONIA YULO-LOYZAGA
Chairman
Secretary, Department of Environment and Natural Resources

ATTY. ANALIZA REBUELTA-TEH
Representative
Undersecretary, DENR