PTK2 H2O Corporation vs. Hon. Court of Appeals

The reliefs under the writ of kalikasan are broad, comprehensive, and non-exclusive; they are not limited to those enumerated in Section 15, Rule 7 of the Rules of Procedure for Environmental Cases, and may include the revocation of an ECC and water permits. Where uncertainty, the possibility of irreversible harm, and the possibility of serious harm coincide, the precautionary principle applies, and doubts must be resolved in favor of the constitutional right to a balanced and healthful ecology.

PTK2 H2O Corporation (PTK2) is a water supplier that contracted with Tagaytay City Water District (TCWD) to supply bulk water sourced from the Lambak, Indang, Saluysoy, and Ikloy Rivers in Indang, Cavite. Private respondents are Save Waters of Indang, Cavite Movement Inc. (SWIM) and its officers. The dispute concerns the constitutional right to a balanced and healthful ecology, the writ of kalikasan under the Rules of Procedure for Environmental Cases, and the Environmental Impact Statement requirements under Presidential Decree No. 1151 and Presidential Decree No. 1586, together with the precautionary principle in environmental litigation.

On 23 April 2012, Tagaytay City Water District (TCWD) entered into a water supply contract with PTK2 H2O Corporation (PTK2) for the supply of 3,600,000 cubic meters (cu.m.) of water annually, or 10,000 cu.m. per day, for twenty (20) years for consumption in Tagaytay City. TCWD generally sourced its water requirements from several deep wells but contracted with PTK2 because it foresaw a gigantic increase in consumption due to the influx of hotels and other industrial and commercial establishments in Tagaytay City. Prior thereto, PTK2 was already a grantee of conditional water permits from the National Water Resources Board (NWRB) for four major rivers—Lambak, Indang, Saluysoy, and Ikloy—all located in Indang, Cavite, from where it planned to source the water for TCWD. These conditional permits, all dated 24 November 2010, allowed PTK2 to extract water at the following rates: Lambak River, 126 liters per second (lps.); Indang River, 110 lps.; Saluysoy River, 45 lps.; and Ikloy River, 50.56 lps. The conditional permits ripened into permanent water permits on 28 May 2012, despite the admitted fact that no extraction of water had then actually been made by PTK2.

On 4 July 2012, PTK2 and TCWD entered into a Memorandum of Understanding (for Supply of Bulk Water) to increase the volume of their water supply agreement. Accordingly, on 15 December 2012, a Memorandum of Agreement (for Increased Supply of Bulk Water) was entered into between PTK2 and TCWD, increasing the supply volume from 10,000 cu.m. to 50,000 cu.m. per day, albeit for a shorter period of ten (10) years. PTK2 then applied with the NWRB for an increase in the volume of water it could extract from the Ikloy and Lambak Rivers. This was later granted by the NWRB in a Resolution dated 14 March 2012, after noting that PTK2 was allowed only 331.5 lps. or 28,646.78 cu.m./day when it needed to supply at least 50,000 cu.m. daily. The NWRB increased the allowable extraction from Ikloy River to 107.26 lps. or 9,267.26 cu.m./day, and from Lambak River to 270 lps. or 23,328 cu.m./day, allowing PTK2 a total volume of 532.26 lps. or 45,987.26 cu.m./day from the four rivers.

On 12 April 2013, PTK2 applied for and was granted Environmental Compliance Certificate (ECC) ECC-R4A-1304-0201 by the Department of Environment and Natural Resources (DENR). The ECC covered the Ikloy River only and was limited to a maximum capacity of 20,000 cu.m. per day. The components noted and approved by DENR were the intake structure (intake water and wet well), three units of submersible pumps, a unit of flocculation and sedimentation basin, pressure filter tanks and effluent channel, four units of booster pumping stations, an administration and laboratory building, and installation of an 11.80-kilometer water pipe. On 4 July 2014, Regional Director Engr. Carlos J. Magno of the DENR-EMB CALABARZON issued a Memorandum recommending that PTK2 temporarily cease construction of the project and pay a penalty for alleged violations of the conditions and restrictions of its ECC.

When private respondents discovered the project, construction of the intake structure had already started in Ikloy River. Indang residents and other environment conservation groups vehemently protested the project. A study was prepared by Prof. Noel Sedigo under commission from Cavite State University (Sedigo Study), concluding that the project was not environmentally sound. The study noted that SUWECO and the Indang Water District measured the actual flow of the rivers in May 2012, yielding: Ikloy River, 369.50 lps. or 31,924.80 cu.m.; Lambak River, 312 lps. or 26,956.80 cu.m.; Saluysoy River, 59.50 lps. or 5,140.80 cu.m.; and Indang River, 8.4 lps. or 725.76 cu.m. Private respondents cited the writings of Wright and Nebel on environment and sustainability, which advocate a maximum threshold of thirty percent (30%) of surface water flow for appropriation; the water permits granted to PTK2 allowed extraction of more than that threshold.

Premised on these factors, private respondents filed a Petition for Writ of Kalikasan (With Prayer for TEPO) against PTK2, NWRB, TCWD, and DENR, praying that the CA order PTK2 and TCWD to permanently cease and desist from extracting water from the Ikloy, Indang, Lambak, and Saluysoy Rivers, from undertaking construction works within the vicinity, and to protect, preserve, rehabilitate, or restore Ikloy River and the affected areas in Brgy. Kayquit II, Indang, Cavite. Private respondents alleged that PTK2 fast-tracked the process and bypassed several important environmental regulations and concerns, as shown by its permit to extract 10,000 cu.m. of water every day from the headwater of Ikloy River—the main source of other neighboring river systems—without a public hearing.

The CA found that PTK2's applications for water permits and ECC were only perfunctorily assessed and processed by NWRB and DENR, which granted the applications only because there was lack of objection or comment from those given notices. Ms. Noemi Paranada, Chief-Environmental Management Division of DENR Region IV-A, testified that the ECC was issued without requiring an Environmental Impact Statement (EIS) because the bulk water project was considered a “distribution-only system,” contrary to PTK2's own Initial Environmental Examination (IEE) Checklist Report designation of a “complete system.” The CA also found that DENR, NWRB, and TCWD were remiss under Sections 26 and 27 of the Local Government Code, as only Mayor Bienvenido Dimero of Indang, by mere letter, signified non-objection to the project, not the Sangguniang Bayan. The Sedigo Study suggested that the total discharge of the springs flowing to Ikloy River—the headwater—was measured at a minimum of 16,666.56 cu.m. to a maximum of 19,517.76 cu.m. per day, so the approved extraction rate of 107.26 lps. or 9,267.26 cu.m./day for Ikloy River far exceeded the recommended maximum sustainable limit of 30% surface water flow. The CA further noted that the PTK2-TCWD agreement for 50,000 cu.m./day was significantly higher than the maximum allowed under the NWRB permit of 45,987.26 cu.m./day, and that the contract for increased supply preceded PTK2's permit application for the increase. Even the independent CEST Inc. study submitted by PTK2 concluded that the three ungaged rivers—Ikloy, Lambak, and Indang—were insufficient to individually supply the target contract volume; the rivers depended on the flow of the springs, such that any diversion would affect the total yield, particularly Ikloy River. The CA found that allowing the water supply contract to proceed according to its terms would lead to irreversible environmental damage, with grave and imminent danger to river systems and watersheds, possible seawater seepage into lowland Cavite, destruction of vegetation and the seafood industry, and extinction of the giant cloud rat.

• ECC Cannot Be Challenged via Writ of Kalikasan: PTK2 mainly insisted that the ECC may not be questioned through a writ of kalikasan.
• Insufficient Showing of Magnitude: Even assuming the ECC may be challenged, PTK2 maintained that the CA failed to name any city except Tagaytay in its Decision, so the magnitude of the environmental damage was not established.
• Reliance on Sedigo Study: PTK2 claimed that the CA based its Decision only on the figures presented in the Sedigo Study.
• No EIS Required: PTK2 maintained that an EIS is not required because the project site—despite involving watersheds—is neither an Environmentally Critical Project nor an Environmentally Critical Area.
• Reliefs Not Included under Rule 7: PTK2 argued that the revocation of the water permits and ECC is not included among the reliefs granted under Sections 1 and 15, Rule 7 of the Rules of Procedure for Environmental Cases.

• Environmental Unsustainability: Private respondents asserted that the project was not environmentally sound, citing the Sedigo Study and actual flow measurements showing that the water permits allowed extraction exceeding the recommended 30% maximum sustainable threshold of surface water flow.
• Irregular Approval Process: Private respondents claimed that PTK2 fast-tracked the process and bypassed important environmental regulations, including by obtaining a permit to extract 10,000 cu.m. of water daily from the headwater of Ikloy River without a public hearing.
• Threat to Downstream Areas: Private respondents contended that the project threatened the river systems and watersheds, with possible massive flooding, soil erosion, denudation of vegetation, water shortage, destruction of flora and fauna, depletion of groundwater, and extinction of cloud rats.
• Relief Sought: Private respondents prayed for a permanent cease-and-desist order against water extraction and construction, and for the protection, preservation, rehabilitation, or restoration of Ikloy River and affected areas in Brgy. Kayquit II, Indang, Cavite.

• Writ of Kalikasan: Whether the CA erred in granting the writ of kalikasan.
• Reliefs under Rule 7: Whether the CA erred in revoking the water permits and the ECC when such reliefs are not included under Sections 1 and 15, Rule 7 of the Rules of Procedure for Environmental Cases.
• EIS Requirement: Whether an EIS is required before an ECC may be issued.

• Writ of Kalikasan: No. The CA correctly granted the writ because the requisites under Section 1, Rule 7 of the RPEC were sufficiently established: an actual or threatened violation of the constitutional right to a balanced and healthful ecology, arising from unlawful acts or omissions, and involving environmental damage of such magnitude as to prejudice inhabitants in two or more cities or provinces.
• Reliefs under Rule 7: No. The reliefs under the writ of kalikasan are broad, comprehensive, and non-exclusive; the revocation of the ECC and water permits may be granted to ensure the permanent discontinuation of environmentally harmful acts.
• EIS Requirement: Yes. The project site is an Environmentally Critical Area and a resource extractive industry, and PD 1151 and PD 1586 require an EIS for projects significantly affecting environmental quality; the ECC was invalid for lack of the required EIS.

• Writ of Kalikasan: The requisites were drawn from Osmeña vs. Garganera: (1) an actual or threatened violation of the constitutional right to a balanced and healthful ecology; (2) the violation arises from an unlawful act or omission of a public official or employee, or private individual or entity; and (3) the violation involves or will lead to environmental damage of such magnitude as to prejudice life, health, or property of inhabitants in two or more cities or provinces. The first and second requisites were present. PTK2's commitment to supply TCWD 50,000 cu.m. of water per day exceeded the maximum volume allowed under the NWRB permits (45,987.26 cu.m./day) and violated the ECC, which covered only Ikloy River and allowed only 20,000 cu.m./day. The NWRB-approved extraction rates exceeded the 30% ceiling cited by private respondents and admitted by NWRB as a recognized limit; PTK2 itself admitted that NWRB policy allocates permits for only 20% of actual river flow. NWRB Engr. Charito Menguito admitted that water availability was based on a 1977 book, “Available Water in Philippine Rivers,” with data from 1945 to 1967. PTK2's facility was erected on the very spring and headwater of Ikloy River. Private respondents presented studies showing possible massive flooding, soil erosion, denudation of vegetation, water shortage, destruction of flora and fauna, depletion of groundwater, and extinction of cloud rats. Under Section 5, Rule 20, Part V of the RPEC, where there is a lack of full scientific certainty in establishing a causal link between human activity and environmental effect, the precautionary principle applies, shifting the burden of evidence of harm to the project proponent. The three conditions for its application were present: uncertainty as to the differing figures relating to the rivers, the possibility of irreversible harm, and the possibility of serious harm. PTK2 did not present measurements or numerical data to refute private respondents' findings; even its own CEST Inc. study supported the insufficiency of water supply vis-à-vis allowed extraction rates. Preponderance of evidence showed the project threatened damage to the environment and the life, health, or property of inhabitants in Alfonso, Amadeo, Dasmariñas City, Gen. E. Aguinaldo, Indang, Mendez, Naic, Rosario, Silang, Tagaytay City, Tanza, and Trece Martirez City, Cavite. The third requisite was also proven because the damage threatened at least three cities and nine municipalities. The CA clarified the affected cities and municipalities in its Decision and Resolution.
• Reliefs under Rule 7: The RPEC does not explicitly include revocation of permits and ECCs as possible reliefs, but the enumeration is not exhaustive. The reliefs under the writ of kalikasan are broad, comprehensive, and non-exclusive, and remedies to ensure the permanent discontinuation of environmentally harmful acts may be granted. Paje vs. Casiño ruled that the validity of an ECC may be challenged via a writ of kalikasan, provided the petitioner alleges and proves defects or irregularities and provides a causal link or reasonable connection between those defects and the actual or threatened violation of the constitutional right of the magnitude contemplated under the Rules. Here, the ECC was issued without the required EIS, so the possible adverse effects were not thoroughly assessed by DENR and NWRB. Without the safeguards of an Environmental Impact Assessment, the implementation of the project could violate or threaten the right to a healthful and balanced ecology of inhabitants near the rivers. The power of courts to nullify an ECC existed even before the writ of kalikasan, as judicial review of administrative acts has long been recognized subject to exhaustion of administrative remedies. Given the length of time since the case was first filed before the CA, ruling on the validity of the ECC and water permits would not violate exhaustion of administrative remedies and primary jurisdiction because judicial intervention was urgent and strong public interest was involved. The ECC was declared invalid for being issued without the required EIS. While generally no license may be withdrawn, suspended, revoked, or annulled without notice and hearing, this may be dispensed with in cases of willful violation of pertinent laws, rules, and regulations or when public security, health, or safety requires otherwise, as here. The permits issued to PTK2 exceeded established environmentally safe water extraction thresholds, posing a serious and exigent threat to public health and safety. Thus, the CA did not err in granting the writ and revoking PTK2's DENR-ECC ECC-R4A-1304-0210 and NWRB Water Permit Nos. 022584 to 022587.
• EIS Requirement: An EIS is a detailed statement containing (a) the environmental impact of the proposed action, project, or undertaking; (b) any adverse environmental effect that cannot be avoided should the proposal be implemented; (c) alternatives to the proposed action; (d) a determination that short-term uses of environmental resources are consistent with maintenance and enhancement of long-term productivity; and (e) whenever a proposal involves the use of depletable or non-renewable resources, a finding that such use and commitment are warranted. It is the product of a comprehensive assessment of possible environmental impacts and is required for every action, project, or undertaking that significantly affects the quality of the environment. Under EMB Memorandum Circular No. 2014-005, all ECC applications must be accompanied by an Environmental Impact Assessment Report in the form of an EIS. Proclamation No. 2146, series of 1981, classifies as Environmentally Critical Areas water bodies characterized by one or any combination of the following: tapped for domestic purposes; within controlled and/or protected areas declared by appropriate authorities; or supporting wildlife and fishery activities. The PTK2 project site on the headwater of Ikloy River is an aquifer, a source of water for domestic use, and a water source supporting wildlife, making it an Environmentally Critical Area. As a water supply project utilizing water source and water treatment facilities, it is also a resource extractive industry under EMB Memorandum Circular No. 2014-005. Braga vs. Abaya clarified that PD 1151 and PD 1586 require the submission of an EIS for every proposed project or undertaking, public or private, that significantly affects the quality of the environment. Given the scope and nature of PTK2's project, it should have submitted, and the concerned agencies should have required, an EIS. PTK2's non-submission of the EIS and its intended extraction volume rates violated the principle of sustainability and the right to a healthy environment embodied in PD 1151 and PD 1586, to the prejudice of the inhabitants of Cavite.

• Requisites of the Writ of Kalikasan — Under Section 1, Rule 7 of the RPEC, the writ is available when: (1) there is an actual or threatened violation of the constitutional right to a balanced and healthful ecology; (2) the violation arises from an unlawful act or omission of a public official or employee, or private individual or entity; and (3) the violation involves or will lead to environmental damage of such magnitude as to prejudice the life, health, or property of inhabitants in two or more cities or provinces. The Court found all requisites sufficiently established.
• Non-Exclusivity of Reliefs under the Writ of Kalikasan — The reliefs enumerated in Section 15, Rule 7 of the RPEC are non-exhaustive and non-exclusive. Other remedies to ensure the permanent discontinuation of environmentally harmful acts may be granted, including the revocation of an ECC and water permits. The Court applied this to affirm the CA's revocation of PTK2's ECC and NWRB permits.
• Precautionary Principle — Under Section 5, Rule 20, Part V of the RPEC, when there is a lack of full scientific certainty in establishing a causal link between human activity and environmental effect, the court shall apply the precautionary principle. It shifts the burden of evidence of harm away from those likely to suffer harm and onto those desiring to change the status quo; the project proponent must provide evidence to dispel concerns regarding potential harmful impacts. When uncertainty, the possibility of irreversible harm, and the possibility of serious harm coincide, the case for the precautionary principle is strongest, and doubts must be resolved in favor of the constitutional right to a balanced and healthful ecology. The Court applied it because all three conditions were present.
• EIS Requirement and Environmentally Critical Areas — PD 1151 and PD 1586 require an EIS for every proposed project or undertaking, public or private, that significantly affects the quality of the environment. An EIS is a detailed statement containing the environmental impact, unavoidable adverse effects, alternatives, consistency with long-term productivity, and, for depletable or non-renewable resources, a finding that use is warranted. Under Proclamation No. 2146, water bodies tapped for domestic purposes, within protected areas, or supporting wildlife and fishery activities are Environmentally Critical Areas. The project site was an Environmentally Critical Area and a resource extractive industry, so an EIS was required; the ECC was invalid without it.
• Revocation of Licenses without Notice and Hearing — While generally no license may be withdrawn, suspended, revoked, or annulled without notice and hearing, the requirement may be dispensed with in cases of willful violation of pertinent laws, rules, and regulations or when public security, health, or safety requires otherwise. The Court applied this to the NWRB permits, which exceeded environmentally safe extraction thresholds and posed a serious and exigent threat to public health and safety.
• Exhaustion of Administrative Remedies and Primary Jurisdiction — Judicial review of administrative acts is subject to the doctrine of exhaustion of administrative remedies, but the Court may intervene where judicial intervention is urgent and strong public interest is involved. Given the length of time since the case was filed before the CA, the Court ruled on the validity of the ECC and water permits without violating these doctrines.

• "The enumerated reliefs in Section 15, Rule 7 of the Rules of Procedure for Environmental Cases being non-exhaustive and non-exclusive, other remedies to ensure the permanent discontinuation of environmentally harmful acts may be granted pursuant thereto." — This states the non-exclusivity of reliefs under the writ of kalikasan, the basis for allowing revocation of the ECC and water permits.
• "Under Section 1 of Rule 7 of the RPEC, the following requisites must be present to avail of this extraordinary remedy: (1) there is an actual or threatened violation of the constitutional right to a balanced and healthful ecology; (2) the actual or threatened violation arises from an unlawful act or omission of a public official or employee, or private individual or entity; and (3) the actual or threatened violation involves or will lead to an environmental damage of such magnitude as to prejudice the life, health, or property of inhabitants in two or more cities or provinces." — This sets the requisites for the writ of kalikasan, which the Court found sufficiently established.
• "When these features - uncertainty, the possibility of irreversible harm, and the possibility of serious harm - coincide, the case for the precautionary principle is strongest. When in doubt, cases must be resolved in favor of the constitutional right to a balanced and healthful ecology." — This states the canonical formulation of the precautionary principle as applied by the Court.
• "The writ of kalikasan is an extraordinary remedy issued for the purpose of stopping whatever act is being done that is harmful to the environment or to compel the commission of certain protective acts." — This defines the purpose of the writ, supporting the grant of broad and protective reliefs.

• Osmeña vs. Garganera, 828 Phil. 560 (2018), G.R. No. 231164, 20 March 2018 — Cited for the requisites of the writ of kalikasan under Section 1, Rule 7 of the RPEC; the Court applied these requisites and found them sufficiently established.
• Paje vs. Casiño, 752 Phil. 498 (2015), G.R. Nos. 207257, 207276, 207282 & 207366, 03 February 2015 — Cited for the rule that the validity of an ECC may be challenged via a writ of kalikasan if the petitioner alleges and proves defects or irregularities and a causal link or reasonable connection to the actual or threatened violation of the constitutional right. The Court also quoted Justice Leonen's Concurring and Dissenting Opinion on the purpose of the EIS.
• International Service for the Acquisition of Agri-Biotech Applications, Inc. vs. Greenpeace Southeast Asia (Phils.), 774 Phil. 508 (2015), G.R. Nos. 209271, 209276, 209301 & 209430, 08 December 2015 — Cited for the precautionary principle, including the shifting of the burden of evidence of harm to the project proponent.
• Villar vs. Alltech Contractors, Inc., G.R. No. 208702, 11 May 2021 — Cited in the discussion of the precautionary principle and its application in environmental cases.
• Braga vs. Abaya, 794 Phil. 662 (2016), G.R. No. 223076, 13 September 2016 — Cited for the rule that PD 1151 and PD 1586 require the submission of an EIS for every proposed project or undertaking, public or private, that significantly affects the quality of the environment.
• Samar II Electric Cooperative, Inc. vs. Seludo, 686 Phil. 786 (2012), G.R. No. 173840, 25 April 2012 — Cited in relation to the withdrawal, suspension, revocation, or annulment of licenses.

• Section 1, Rule 7, Rules of Procedure for Environmental Cases — Sets the requisites for the writ of kalikasan: actual or threatened violation of the constitutional right to a balanced and healthful ecology; unlawful act or omission of a public official or employee, or private individual or entity; and environmental damage of such magnitude as to prejudice inhabitants in two or more cities or provinces. The Court found these requisites met.
• Section 15, Rule 7, Rules of Procedure for Environmental Cases — Enumerates reliefs under the writ of kalikasan. The Court held the enumeration is non-exhaustive and non-exclusive, allowing revocation of the ECC and water permits.
• Section 5, Rule 20, Part V, Rules of Procedure for Environmental Cases — Requires application of the precautionary principle when there is a lack of full scientific certainty in establishing a causal link between human activity and environmental effect. The Court applied it in this case.
• Section 4, Presidential Decree No. 1151 — Defines an EIS as a detailed statement containing the environmental impact, unavoidable adverse effects, alternatives, consistency with long-term productivity, and warranted use of depletable or non-renewable resources. The Court used this definition to find the EIS requirement applicable.
• Presidential Decree No. 1586 — Cited with PD 1151 as requiring the submission of an EIS for every proposed project or undertaking that significantly affects the quality of the environment. The Court found PTK2's project covered.
• Proclamation No. 2146, series of 1981 — Classifies water bodies tapped for domestic purposes, within controlled or protected areas, or supporting wildlife and fishery activities as Environmentally Critical Areas. The Court found the PTK2 project site on the headwater of Ikloy River to be such an area.
• EMB Memorandum Circular No. 2014-005 — Requires all ECC applications to be accompanied by an Environmental Impact Assessment Report in the form of an EIS, and classifies water supply projects utilizing water source and water treatment facilities as resource extractive industries. The Court applied it to require an EIS.
• Sections 26 and 27, Local Government Code — Cited by the CA for the duty of national government agencies to consult with local government units, nongovernmental organizations, and concerned sectors, and for the requirement of prior approval of the sanggunian. The CA found only a letter from the Mayor of Indang, not sanggunian approval.
• Section 17, Chapter 3, Book VII, Administrative Code of 1987 — Allows revocation, suspension, or annulment of a license without notice and hearing in cases of willful violation of pertinent laws, rules, and regulations or when public security, health, or safety requires otherwise. The Court applied it to the NWRB permits.
• DENR Department Order 2003-30 — Cited by the CA as violated by DENR in granting the ECC to PTK2. The Court affirmed the CA's finding of less than conscientious observance of environmental requirements.

Gesmundo, C.J., Leonen, Caguioa, Hernando, Carandang, Lazaro-Javier, Inting, Gaerlan, Rosario, J. Lopez, and Dimaampao, JJ., concur. Perlas-Bernabe, J., was on official leave. M. Lopez, J., was on leave but voted.