Maynilad Water Services, Inc. Vs. The Secretary of the Department of Environment and Natural Resources (DENR), et al. G.R. No. 202897/G.R. No. 206823/G.R. No. 207969. August 6, 2019

Maynilad Water Services, Inc. Vs. The Secretary of the Department of Environment and Natural Resources (DENR), et al. G.R. No. 202897/G.R. No. 206823/G.R. No. 207969. August 6, 2019

En Banc

## Issues

* I. Procedural Issues The SENR's Orders are appealable to the Office of the President

Thus, we affirm the appellate court's holding in CA-G.R. SP No. 112041 that the appropriate remedy from the Orders of the SENR is an appeal to the Office of the President.

* No Denial of Procedural Due Process
* Notice of Violation
* Act Constituting Violation

1. You have not provided, installed or maintained sufficient wastewater treatment facilities satisfactory enough in quantity to meet the standards and objectives of the law. Neither have you carried out the connection of the sewage line being mandated by law, notwithstanding the Order of the Court and the lapse of the five-year period provided by RA 9275.
2. Sec. 8 of RA 9275 states that "[w]ithin five (5) years following the effectivity of this Act, the agency vested to provide water supply and sewerage facilities and/or concessionaires in Metro Manila and other highly urbanized cities (HUCs) as defined in Republic Act No. 7160, in coordination with LGUs, shall be required to connect the existing sewage line found in all subdivisions, condominiums, commercial centers, hotels, sports and recreational facilities, hospitals, market places, public buildings, industrial complex and other similar establishments including households to available sewerage system."
Please be informed that pursuant to Section 28 of the Clean Water Act, a fine of not less than Ten Thousand Pesos (PhP 10,000.00) but not more than Two Hundred Thousand Pesos (PhP 200,000.00) per day of violation may be imposed to the offender who violates the provision of the Act and its IRR.
Hence, petitioners were notified of the charges against them, were given an opportunity to be heard during a technical conference, and were informed of the penalty for possible violations of the Clean Water Act.

* II. Substantive issues Violation of the Clean Water Act by petitioners
* Water Management as a Public Trust
* All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State.
* The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State.
* [P]olice power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property.
* We have held that the power to "regulate" means the power to protect, foster, promote, preserve, and control, with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons.
* The public is regarded as the beneficial owner of trust resources, and courts can enforce the public trust doctrine even against the government itself.
* The Clean Water Act
* Based on the aforecited legal baselines, the Clean Water Act requires water utility companies to provide for sewerage and septage management services within five years of the law's passage.

Section 8 of the Clean Water Act

* Section 8 thus imposes the following obligations, dissected as follows:

1. The setting of the obligation is prefaced by stating a day certain for its complete performance-period of within five years from effectivity of the Clean Water Act.

2. The actors here are "the agenc[ies] vested to provide water supply and sewerage facilities and/or concessionaires in Metro Manila and other highly urbanized cities (HUCs)."
3. The prestation set by law is the "[connection of] the existing sewage line found in all subdivisions, condominiums, commercial centers, hotels, sports and recreational facilities, hospitals, market places, public buildings, industrial complex and other similar establishments including households to available sewerage system."

* Section 7 is not a condition precedent to compliance with Section 8
* Maynilad and Manila Water did not comply with Section 8
* MMDA v. Concerned Residents of Manila Bay did not repeal Section 8 of the Clean Water Act

The meat of this case is the fact of delay by petitioners in complying with the mandate under Section 8, whereas the matter involved in MMDA v. Concerned Residents of Manila Bay is the urgency of rehabilitation of Manila Bay. Moreover, We find that citing this case militates against petitioners. This piece of jurisprudence only scoffs and highlights at the fact of petitioners' abject negligence in their role in local sanitation and exposes its nefarious consequences - adequate wastewater treatment facilities in Metro Manila, Rizal, and Cavite was found to be practically nonexistent which ended in the decrepit conditions of Manila Bay, meriting the command to construct the same "at the earliest possible time."

* The Liability of Petitioners
* [T]he EMB Regional Directors for NCR, CALABARZON and Region III took exception to the claim of compliance by MWSS and cited the following findings in support of their conclusion: (1) the lack of storage treatment facilities in San Juan and Valenzuela and the unacceptable results of the laboratory analysis of river systems; (2) the fact that there are no wastewater treatment facilities and appropriate sewage system in the Cavite area, particularly in Imus, Bacoor, Noveleta and Kawit; and (3) the absence of wastewater/sewerage program in the Meycauayan Service Area of MWSS. MWSS failed to introduce evidence to refute these findings.
* It should further be noted that the five (5)-year period was made to provide sufficient time to comply with the interconnection of all water supply and sewerage facilities. The continued failure of providing a centralized sewerage system in compliance with the said law means that several sewage [lines continue] to dump and release untreated sewerage within their vicinities resulting in unmitigated environmental pollution

## Decisions

**WHEREFORE**, the petitions are **DENIED**. The Decisions of the
Court of Appeals in CA-G.R. SP Nos. 113374, 112023, and 112041
respectively dated October 26, 2011, August 14, 2012, and September 25,
2012, are **AFFIRMED** with the following **MODIFICATIONS** -
    Petitioners are liable for fines for violation of Section 8, in relation to Section 28, of the Philippine Clean Water Act in the following manner:

    1. Maynilad Water Services, Inc. shall be jointly and severally liable with Metropolitan Waterworks and Sewerage System for the total amount of PhP 921,464,184.00 covering the period starting from May 7, 2009 to the date of promulgation of this Decision;

    2. Manila Water Company, Inc. shall be jointly and severally liable with Metropolitan Waterworks and Sewerage System for the total amount of PhP 921,464,184.00 covering the period starting from May 7, 2009 to the date of promulgation of this Decision;

    3. Petitioners shall pay the fines within fifteen (15) days from finality of this Decision;

    4. Thereafter, from finality of this Decision until petitioners shall have fully paid the amounts stated in paragraphs 1 and 2, petitioners shall be fined in the initial amount of PhP 322,102.00 a day, subject to a further 10% increase every two years as provided under Section 28 of the Philippine Clean Water Act, until full compliance with Section 8 of the same law; and

    5. The total amount of the fines imposed herein shall likewise earn legal interest of six percent (6%) per annum from finality and until full satisfaction thereof.

This instruction further enjoins not only petitioners herein, but all water supply and sewerage facilities and/or concessionaires in Metro Manila and other highly urbanized cities as defined in Republic Act No. 7160 or the Local Government Code, in the strict compliance with Section 8 of Republic Act No. 9275 or the Philippine Clean Water Act.