Bohol court scraps proposed Panglao reclamation project

BOHOL, Philippines – A regional trial court here has shelved a plan to reclaim 450 hectares of seashores off Panglao Island after it junked a case earlier filed against Bohol officials that would have compelled them to enforce a joint-venture agreement forged by the previous local administration and a private entity.

In a 17-page decision penned by Regional Trial Court Branch 4 Judge Sisinio Virtudazo, the court dismissed Civil Case No. 8083 lodged in 2010 by Oasis Leisure Islands Development Corporation (Oasis) against Bohol Governor Edgar Chatto and members of the Sangguniang Panlalawigan (SP). 

The civil suit had sought for a "specific performance" to honor the contract entered by the late former Bohol governor Erico Aumentado and Oasis president Norris Oculam 11 days before Aumentado's term expired on June 30, 2010.

“In this case, the defendants are not guilty of breach of contract because, in the first place, there was no binding contract at all,” the judge said in the decision dated July 3, 2017, but was received by the Office of the SP Secretary only on September 15, 2017. Rappler obtained a copy of the document Saturday, September 23.

Citing the Supreme Court’s ruling on Ayala Life Assurance Inc. vs Ray Burton Development Corporation (G.R. No. 163075), the court said that “before the remedy of specific performance is availed of, there must first be a breach of the contract.”

The case stemmed from a plan initiated by Aumentado and Oculam in 2009 which would involve a massive reclamation of seashores off Panglao Bay for a supposed leisure and resort park.

Court documents show that on October 2, 2009, Oasis made an unsolicited proposal to the provincial government of Bohol to undertake the said reclamation project.

In 2009 the SP passed Resolution No. 2009-633 authorizing Aumentado to represent the province and enter into a negotiation for a Joint Venture and Development Agreement (JVDA) with Oasis corporation for the proposed reclamation project.

It was stipulated in the agreement that before the start of the proposed reclamation, an environmental impact study should be undertaken “to ensure that the project will not cause irreversible damage to the local government of the project site.”

In the JVDA, it was indicated that the province and Oasis had agreed that they would honor the results of an environmental impact study, which would serve as the basis for the implementation of the project.

As provided in the JVDA, the provincial government then filed on June 21, 2010 an application with the Philippine Reclamation Authority (PRA) for the reclamation of approximately 450 hectares of land offshore of Panglao Bay in the municipality of Panglao.

When Chatto and new SP members assumed office in 2010, they learned that the joint-venture agreement forged by Aumentado and Oculam had legal issues.

But Oasis asserted that it had entered into a lawful agreement with the Province of Bohol.

The corporation said the province had an obligation to comply with the Agreement, more so that the latter had filed an application with the PRA by way of “Letter of Intent.”

“The unwillingness, failure, and refusal of the defendants to further implement the JVDA is a manifestation of contumacy to honor a valid, binding, and enforceable agreement, which failure and refusal jeopardize (Oasis’) interests under the agreement,” the plaintiff corporation argued in its court pleadings.

The corporation said that the defendant provincial officials “cannot simply renege on their obligations and refuse to honor the JVDA made pursuant to a validly enacted SP Resolution, which has not been modified, recalled, or set aside.”

Reply from defendants

In their reply, Chatto and the SP officials admitted that Resolution No. 2009-633 was indeed passed, clarifying that the said resolution only authorized Aumentado to enter into a “negotiation only” proceeding.

Aumentado was only authorized to enter into a negotiation, but he was not authorized to enter into an agreement, the defendants had claimed.

They further argued that the application with the Philippine Reclamation Authority (PRA) was not duly authorized by the provincial board as provided in the Implementing Rules and Regulation of the PRA law.

“From the minutes of the sessions of the Sanggunian, no Resolution was passed and adopted authorizing the Province through the Governor to file an application for Reclamation at the PRA as per certification from the SP Secretary,” the defendants had told the court.

In denying all the other allegations of Oasis “for lack of sufficient knowledge as to their truth,” Chatto and the SP members argued that since the JVDA is unenforceable, the same is “not binding nor are the defendants duty-bound to abide by its provisions.”

In asking the court to dismiss the case for lack of cause of action, defendants cited Article 1403 of the New Civil Code which provides that "contracts entered into in the name of another person by one, who has been given no authority or legal representation or who has acted beyond his powers are unenforceable, unless they are ratified.”

“The plaintiff has no original authority to undertake reclamation projects and cannot claim the exclusive right to develop the project considering that it will still have to secure a contract from the PRA after public bidding conducted for the purpose,” said Chatto and the SP members in their court pleadings.

Finding the JVDA legally defective, the SP on December 2, 2011 passed and approved Resolution No. 2011-673 authorizing Chatto "to cause the cancellation and rescission of the Joint Venture and Development Agreement (JVDA)."

The cancellation came after the province had consulted with some University of the Philippines (SP) scientists and marine experts, who had said the proposed reclamation project would be damaging to the environment and ecosystem.

The cancellation prompted Oasis corporation to sue Chatto and the SP officials in the court.

Environment first

The court, in dismissing the case, noted Section 16, Article 2 of the Constitution, which mandates the state to "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature."

“And the defendants, representing the people, have rightly performed their task of safeguarding the rights of the people they represent,” the court decision said.

“Unfortunately, we have been less mindful in the observance of this basic principle of justice not only in the way we relate to each other but also in the way we treat our natural environment. We have, it seems, forgotten the prophet’s admonition that ‘he who sows the wind shall reap the whirlwind,’” the court said, quoting a lecture delivered by the late Supreme Court Chief Justice Renato Corona in 2010 at the University of Santo Tomas. –