Alvarez v.

PICOP Resources, 508 SCRA 498

FACTS:
PICOP filed with the DENR an application to have its Timber License Agreement (TLA) No. 43
converted into an IFMA. PICOP filed before the (RTC) City a Petition for Mandamus against
then DENR Sec Alvarez for unlawfully refusing and/or neglecting to sign and execute the IFMA
contract of PICOP even as the latter has complied with all the legal requirements for the
automatic conversion of TLA No. 43, as amended, into an IFMA. The cause of action of PICOP
Resources, Inc. (PICOP) in its Petition for Mandamus with the trial court is clear: the
government is bound by contract, a 1969 Document signed by then President Ferdinand
Marcos, to enter into an Integrated Forest Management Agreement (IFMA) with PICOP.

ISSUE:
Whether the 1969 Document is a contract recognized under the non-impairment clause by
which the government may be bound (for the issuance of the IFMA)

RULING:
NO. Our definitive ruling in Oposa v. Factoran that a timber license is not a contract within the
purview of the non-impairment clause is edifying. We declared: Needless to say, all licenses
may thus be revoked or rescinded by executive action. It is not a contract, property or a property
right protected by the due process clause of the Constitution. Since timber licenses are not
contracts, the non-impairment clause, which reads: "SEC. 10. No law impairing the obligation of
contracts shall be passed." cannot be invoked. The Presidential Warranty cannot, in any
manner, be construed as a contractual undertaking assuring PICOP of exclusive possession
and enjoyment of its concession areas. Such an interpretation would result in the complete
abdication by the State in favor of PICOP of the sovereign power to control and supervise the
exploration, development and utilization of the natural resources in the area.
Alvarez v. PICOP Resources, 508 SCRA 498

FACTS:
PICOP filed with the DENR an application to have its Timber License Agreement (TLA) No. 43
converted into an IFMA. PICOP initially sought to comply with the requirement under Sections
26 and 27 of the Local Government Code to procure prior approval of the Sanggunians
concerned. However, only one of the many provinces affected approved the issuance of an
IFMA. PICOP nevertheless submitted to the DENR the purported resolution of the Province of
Surigao del Sur indorsing the approval of PICOPs application for IFMA conversion. PICOP filed
a petition for MANDAMUS against DENR Sec Alvarez for refusing to sign and execute the IFMA
contract.

ISSUE:
Whether PICOP complied with the LGC requirement of obtaining prior approval of the
Sanggunian concerned by submitting a purported resolution of the Province of Surigao del Sur
indorsing the approval of PICOPs application for IFMA conversion.

RULING:
NO. This cannot be deemed sufficient compliance with the foregoing provision. Surigao del Sur
is not the only province affected by the area covered by the proposed IFMA. The approval of the
Sanggunian concerned is required by law, not because the local government has control over
such project, but because the local government has the duty to protect its constituents and their
stake in the implementation of the project. Again, Section 26 states that it applies to projects that
"may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land,
rangeland, or forest cover, and extinction of animal or plant species." The local government
should thus represent the communities in such area, the very people who will be affected by
flooding, landslides or even climatic change if the project is not properly regulated, and who
likewise have a stake in the resources in the area, and deserve to be adequately compensated
when these resources are exploited. Indeed, it would be absurd to claim that the project must
first be devolved to the local government before the requirement of the national government
seeking approval from the local government can be applied.