SM Answer

REPUBLIC OF THE PHILIPPINESREGIONAL TRIAL COURT

FIRST JUDICIAL REGIONBAGUIO CITY, BRANCH V

GLOBAL NETWORKits President Gloria

CORDILLERArepresented byAbaeo, ET AL.,

Plaintffi,

versus -

SEC. RAMON I.P. PAIE, in his capacityas Secretary of the Department ofEnvironment and Natural Resources, ETAL,,

CORDILLERA GLOBAL NETWORKrepresented by its President GloriaAbaeo,

Petitioner,

VETSUS -

SM INVESTMENT CORPORATION, itS

officers, directors, agents, representativesand all persons acting under its directcontrol and supervision operating thetree-cutting and/or earth-ballingoperations at Luneta Hill, Baguio City,

x____________ I::,Y:':;IUDY LYI{ C. ADAIAR, ET AL.,

Plaintffi,

Civil Case No.7595-RFor: Injunction with Prayer forthe Issuance of a TemporaryEnvironmental ProtectionOrder

Civil Case No. 7526-RFor: Contempt of Court

Civil Case No.7629'RFor: Declaration of NullitY andInjunction with Prayer for theIssuance of TemPorarYEnrrironmental ProtectionOrder

- versus -

SEC. RAMON I.P. PAIE, in his capacityas Secretary of the DePartment ofEnvironment and Natural Resources, ETAL,,

x--..-----.-- ?-:!:!::':"

ANSWER

Defendants SM PRIME HOLDINGS, INC. ("SMPH") AND SHOPPING

CENTER MANAGEMENT CORPORATION ("SM SUPERMALLS'), bY

counsel, respectfully submit its Answer to the Complaint dated 13 April 2012

("Comp1aint") in Civil Case No. 7629-R and, in support thereof, state:

ADMISSIONS

Subject to its Denials, Affirmative Allegations, and Affirmative and

Special Defenses hereinafter set forttu SMPH and SM SUPERMALLS admit the

following allegations in the Complaint dated 13 April 2012 (the "Complaint")

contained in:

1,.1,. Paragraphs 4,5, 6,57 and 58.

1,.2. Paragraph 7, b:ut only insofar as it states that defendant SM Prime

Holdings ("SMPH") is a stock profit corporation doing business in the

Philippines.

1.3. Paragraph 9, but only insofar as it states andf or it is made to

appear therein that SM SUPERMALLS operates SM City Baguio shopping mall

("SM City Baguio").

1.4. Paragraph 10, but only insofar as it states andf or it is made to

appear therein that SMPH and SM SUPERMALLS, acting through one Engineer

Bien C. Mateo ("E.gr.Mateo"), wrote a letter to the City Government expressing

the company's desire to expand SM City Baguio.

1.5. Paragraph 11, but only insofar as it states that, in a letter dated 11

JuLy 2011, the City Government of Baguio, through the Hon. Mayor Mauricio G'

Domogan ("Mayor Domogan") favorably indorsed the desire of SMPH and SM

SUPERMALLS to expand SM City Baguio to the Department of Environment

and Natural Resources ("DENR").

1.6. Paragraph 1,4, but only insofar as it states andf or it is made to

appear therein that: (a) Secretary Ramon ].P. Paje ("Sec. Paje") of the DENR

issued a Memorandum dated L7 October 201'1, directing the issuance of a Tree

Cutting and Earth-balling Permit for the Mall Expansion; (b) In a letter dated 27

October 2011,, the Regional Executive Director of the DENR-Cordillera

Administrative Region ("DENR-CAR"), Clarence L. Baguilat, informed Engr.

Mateo of the grant of the Tree Cutting and Earth-balling Permit for the Mall

Expansion; and (c) The Tree Cutting and Earth-balling Permit allows the cutting

of forty (43) alnus trees, and the earth-balling of ninety seven (97) Benguet pine

trees and forty two $2) sapling of Benguet pine and alnus trees.

1,.7. Paragraphs L5 and 56, but only insofar as it is stated that a Building

Permit for a mall and parking building was issued by Engineer Oscar V. Flores of

the Office of the City Building Official of Baguio City.

1.8. Paragraph L8, but only insofar as it states or made to appear therein

that the Tree Cutting and Earth-balling Permit was issued on the condition that

the permittee shall, among others, "conduct meetings or public consultations

with LGUs, NGOs, and other stakeholders in the area" and "obtain the necessary

environmental compliance certificate".

1,.9. Paragraph 22,but only insofar as it states that (a) the SM expansion

is a major deveiopment project to be implemented at the central business district

of Baguio City; and (b) the issuance of an ECC was an express condition in the

grant of the Tree Cutting and Earth-balling Permit by Sec. Paje.

1.10. Paragraph 38, but only insofar as it states that the area is erosion-

Prone.

IL DENIALS

A. SPECIFIC DENIALS

For the facts and reasons stated in its Affirmative Allegations and

A{firmative and Special Defenses hereinafter set forth, SMPH and SM

SUPERMALLS specifically

particularly those contained

2.1,. Paragraph 7, insof.ar

profit corporation doing business

Sy.,

following allegations in the Complaint,

as it states that SM SUPERMALLS is a stock

in the Philippines, and is controlled by Henry

deny the

in:

2.2. Paragraph 9, insofar as it states andf or it is made to appear therein

that (a) SMPH is the operator of SM City Baguio;2 (b) SMPH's and SM

SUPERMALLS' principal address is at Luneta Hill, Upper Session Road corner

Governor Pack Road, Baguio City.

2.3. Paragraph L0, insofar as it states andf or is made to appear therein

that what is being expanded is SM Supermall, when in fact it is SM City Baguio

which is sought to be expanded.

2.4. Paragraph 11, insofar as it states that the indorsement required SM

to conduct consultations and to secure an environmental compliance certificate.3

2.5. Paragraph \2, insofar as it states andf or is made to appear therein

that (a) in issuing the indorsement, the City Mayor was required to consult with,

or to obtain the approval. of., the Baguio City Council; (b) the City Mayor's

indorsement is an improper arrogation of the powers of the Baguio City Council;

and (c) that the City Mayor could not make a decision alone for the people of the

City of Baguio without the participation of the City Council.

2.6. Paragraph 13, insofar as it states andf or is made to appear therein

that (a) the indorsement of the Cify Mayor is illegal; (b) the indorsement of the

City Mayor is a requirement for the issuance of the Tree Cutting and Earth-

In truth, Shopping Center Management Corporation does business under the name and

style of, among others, "SM Supermalls", which is a trademark registered with the

Intellectual Property Office in the name of SMPH. "SM Supermalls" is neither a "stock

profit corporatio[n] doing business in the Philippines", nor is it "controlled by Henry Sy

along with SM Investment[s] Corporation, [its] parent holding company".In truth, SM SUPERMALIS is the operator of SM City Baguio.In truth, the Office of the City Government of Baguio City expressed its confidence in the

DENR's capability to ensure compliance with environmental requirements with respect

balling Permit; (c) SMPH and SM SUPERMALLS applied for a permit to cut and

earth-ball Benguet pine and alnus trees subsequent to the 11 July 2011 letter of

indorsement by the City Government of Baguio to the DENR;a and (c) the Subject

Property is still part of the public domain.

2.7. Paragraph 13, insofar as it is alleged andf or made to appear that

SMIC has a false claim over the properfy.

2.8. Paragraph 14, insofar as it states aid/ or is made to appear therein

that there was an application for earth-balling's

2.9. Paragraph L5, insofar as it is alleged andf or made to appear that

Engr. Oscar Flores relied on the representations of SMIC.

2.1.0. Paragraph 15, insofar as it states andf or is made to appear therein

that (a) SMIC is the applicant for, and was issued, a building permi! and (b)

SMPH was not able to comply with the requirements under the 1aw.0

2.11,. Paragraph L6, insofar as it states andf ot it is made to appear

therein that (a) under the Local Government Code, the DENR and the DPWH

are required to consult with the Baguio City Council prior to making a decision

on proiects involving private entities; and (b) the decisions of the DENR and the

DPWH with respect to the expansion project are invalid.

2.12. Paragraph 17, tnsof.ar as it states andf ot it is made to appear

therein that: (u) that the DENR and the DPWH committed violations in

approving the permits in connection with the expansion project; (b) consultations

in connection with the expansion are required under the Local Government

Code; and (c) SMPH and SM SUPERMALLS have considered the indorsement of

the City Mayor as a substantial compliance to any alleged requirement for

consultation.

In truth, it was SM SUPERMALLS, through Engr. Mateo, that applied for a "Tree Cufting

Permi(' from the DENR-CAR as early as 30 May 2011'

In truth, SM SUPERMALLS sought for a permit to cut the trees in the Subject Property

and that the directive to earth-ball came directly from the DENR.

The Building Permit for the construction of the mall and parking building was issued inC^-,^- ^C C.l\f l)rima L{nlr{inoc Tnr

2.13. Paragraph 18, insofar as it states andf or it is made to appear that

consultations are required prior to the issuance of a Tree Cutting andf or Earth-

balling Permit.

2.14. Paragraph 19, insofar as it states andf or it is made to appear

therein that: (a) consultations are required bylaw; (b) no public announcement of

any consultation was ever made to invite the public and concerned civil society

organizations to participate in the Environmental Impact Statement process; (c)

no public consultation on the Malt Expansion was conducted among the

residents of Baguio City; and (d) consultations with groups or individuals were

done clandestinely.

2.1,5. Paragraphs 20 and 22, insof.ar as it is alleged andf or it is made to

appear therein that (a) the Mall Expansion is classified under the provisions of

the PEIAS as a Category A project or an Environmental Critical Projec! and (b)

that a public consultation is required. for the issuance of the ECC.

2.16. Paragraph 23, insof.ar as it states andf or it is made to appear

therein that (a) the acts done by certain individuals were one of the biggest mass

actions to take place in Baguio; and (b) acts done by certain individuals establish

the sentiment of the entire populace of Baguio City.

2.17. Paragraph 24, insofar as it states andf ot it is made to appear

therein that (a) there was public dissent; (b) the public was "fenced out" from

participating in the Environmental Impact Assessment process; (.) the

transactions were conducted under clandestine conditions; and (d) the

transactions were in circumvention of the law.

2.18. Paragraph 25, insofar as it alleges andf or it is made to appear

therein that (u) SMIC did not obtain an ECC; and (b) SMPH and SM

SUPERMALLS violated PD 1121- and PD 1586'

2.19. Paragraph 26, insolar as it alleges andf ot it is made to appear

therein that (a) the project covered by the ECC in 2001 is not the same as the

proposed. expansion; (b) that a new ECC is required; (c) that an amendment to

the ECC issued in 2001 may not be validty made for the Mall Expansion; (d) the

amended ECC was issued in favor of a different entity,T and (e) that the issuance

of the ECC reeks of anomaly.

2.20. Paragraph 28, insofar as 'it alleges andf or it is made to appear

therein that (a) the land where the expansion is proposed to be located is public;

and (b) SMPH and SM SUPERMALLS should not have been granted any permit

to develop the Subject ProPertY.

2.21,. Paragraphs 28,29 and 30, insofar as it is alleged andf ot it is made

to appear that (a) the area and the trees therein are covered by the provisions of

RA No. 1.0066, and (b) the evaluation or scrutiny of the National Commission for

Culture and Arts is required for the approval of the expansion project.

2.22. Paragraph 31, insofar as it alleges andf or it is made to appear that

the removal of the L82 trees will result in the disappearance of all trees in the

Central Business District.

2.22. paragraphs 32 to 33, insofar as it is alleged and'f ot it is made to

appear therein that (a) the cutting of trees for the Mall Expansion is in violation

of Executive order No. 23;8 (b) the remaining trees located in the open area

currently considered as the back of the existing sM City Baguio building (the

"subject Property") qualifies as a forest, and (c) the 182 trees constifute a "thick

tree cover".

2.24. paragraphs 34 to 36, insofar as it is alleged andf ot it is made to

appear therein that (a) SMIC does not have the legal title to the Subject Property;

(b) proponents of the Mall Expansion are overriding a social responsibility and

(c) the implementation of the MalI Expansion will destroy general welfare

considerations.

In kuth, SMIC obtained the ECC through its Attorney-in Fact, SMPH.

DECLARING A MORATORIUM ON TTTS CLNTII\TG AND HERVTSTTNC OF TIMBER IN T}.IE

NATToNAL AND REsTDUAL FoRESTS aNo CnrertNc THE ANrr-Inrcal- LOGGING TASK FORCE

2.25. Paragraphs 37 and 38, insofar as it is alleged andf or is made to

appear therein (a) SM City Baguio is situated within an area which has three (3)

minor fault iines, and (b) that any development on the Subject Property may

stress its carrying capacity and may result in an environmental disaster.

2.26. Paragraph 41-, insofar as it alleges andf or it is made to appear

therein that: (a) the Mall Expansion involves the development of a "parking lot";

(b) the development of a parking lot will lead people to purchase more motor

vehicles, when in truth, parking lots are constructed to address the existing

number of vehicles; and (c) the parking lot, by itself, will negatively alter the

ambient air monitoring result from average to unhealthy.

2.27. Paragraph 42, insolar as it alleges andf or it is made to appear

therein that 182 trees supply the oxygen needs of 364 people.

2.28. Paragraph 43, insofar as it alleges and/ or it is made to appear

therein that the cutting of trees for the Mall Expansion will exacerbate the aerial

situation in Session Road and will entail deleterious effects on public health and

the general welfare of the PeoPle.

2.2g. Paragraph 44, insofar as it alleges andf or it is made to appear

therein that: (a) the implementation of the Mall Expansion will violate DENR

Memorandum Order No. 2005-19 ('DMO 2005-19"),e and (b) the earth-balling of

trees contravenes DMO 2005-19.

2.20. Paragraph 48, insofar as it alleges and/or is made to appear therein

that there was an act of misdeed in endorsing the expansion project.

2.31". Paragraph 49, insofar as it alleges that the decisions of the DENR

and the DPWH concerning the expansion project are illegal.

2.32. Paragraph 5L, insofar as it alleges and/or is made to appear therein

that (a) SMPH and SM SUPERMALLS started cutting trees on 9 April 2012, when

in truttu SM SUPERMALLS merely earth-balled the same; (b) the filing and

AUTHORIZING THE REGIONAL EXECUTI\E

ADMINISTRATTW RSCION TO ISSUE CUTTING

DIRECIOR OF THE DENR - COROTNTNA

pERMrrs INVoLVING THIRTY (30) rnrrs oR I-ESS

pendency of Civil Case No. 7595-R obliged SMPH and SM SUPERMALLS to stop

cutting and earth-balting; and (c) SMPH and SM SUPERMALLS engaged in graft

and corruption.


that (a) Dir. Baguilat did not send a representative from DENR during the time

the kees were being earth-balled; (b) that trees were cut on 9 April 2012, when in

truth SM SUPERMALLS merely earth-balled the same.


that (a) SMPH and SM SUPERMALLS blatantly,4"liud the issuance of the 72-

hour Temporary Environmental Protection Order ("TEPO"); (b) fences were

erected to obstruct human view, when in truth, it was erected for s#ety

purposes; (c) there were iltegal activities, and (d) that SMPH's and SM

SUPERMALLS' security guards assaulted the witnesses.


that (a) SMPH and SM SUPERMALLS cut the pine trees, and (b) the earth-balling

of the 182 pine trees will result in suffering to the people of Baguio City.


that there was a failure to comply with legal requirements.


that SMPH and SM SUPERMALLS made any misleading claims or statements.

2.38. Paragraphs 60 and 61, insofar as it is alleged andf or is made to

appear therein that (a) SMPH and SM SUPERMALLS made untrue statements;

and (b) the damage to be suffered with the cuttingandf or earth-balling of the

182 trees will be grave and irreparable.

2$9. Paragraph 61, insofar as it alleges and/or is made to appear therein

that there is an imperative need for the Honorable Court to immediately issue a

TEPO.

2.40. In addition to the foregoing, SMPH and SM SUPERMALIS

specifically deny all the conclusions of fact and law, as well as all the

speculations, presumptions, conjectures, legal interpretations and conclusions,

and the sham, false, redundant, immaterial, unfounded and self-serving

allegations in the Complaint.

B. NO KNOWLEDGE

SMPH and SM SUPERMALLS have no knowledge or information

sufficient to form a belief as to the truth or falsiiy of, and therefore specifically

de4y, the following allegations in the Complaint, particularly in:

2.41". Paragraphs 5 and 54, insofar as it is alleged andf or made to appear

that the individuals identified therein are all of legal age and are residents of

Baguio City.

2.42. Paragraph 19, insofar as it alleges andf ot made to appear that (a)

the Plaintiffs frequent the Central Business District; (b) the Plaintiffs have not

heard or read of a notice of consultation in which they could have participated,

and (c) the Plaintiffs would have participated had they heard or read the notice

of consultation.

2.43. Paragraph 27, insolar as it alleges andf or made to appear therein

that (a) Sec. Paje publicly admitted that he did not study the proposed expansion

plan; and (b) even if he publicly admitted, whether the statements of Sec. Paje are

true.

2.44. Paragraph 28, insofar as it alleges andf or made to appear therein

that the existence of Baguio's pine trees was a consideration for Baguio's

designation as the Summer Capital of the Philippines by the Philippine

Commission on 1 June 1903.

2.45. Paragraphs 39 to 44,insofar as it is alleged andf ot it is made to

appear therein that (a) the "ambient air quality specially in the country's major

cities - including Baguio - is piteous and contributes to rising incidence of lung

diseases", and that the quality of the air that hovers above Session Road has been

established to be "toxic" by a World Bank Study in 2003; (b) this finding by the

World Bank forced the City Government of Baguio to re-route utility jeepneys

that used to pass through Session Road; (c) the findings in a news article

purportediy written by Dexter See and published in the Manila Bulletin; and (d)

the findings of the DENR-EMB on the "poor" quality of ambient air in the

Central Business District until the jeepneys became "off-limits" to use Session

Road.

2.46. Paragraph 42, insof.ar as it alleges and.f or it is made to appear

therein that (a) each of the 182 trees produces 6,000 pounds of oxygen; (b) one

tree can absorb 40 to 45 pounds of carbon dioxide every year; (c) all 182 trees

absorb some 8,1g0lbs of carbon annually; and (d) the absorption of carbon makes

the air cooler and rids the atmosphere of harmful COz.

2.47. Paragraph 48, insofar as it alleges andf or it is made to appear

therein that (a) the Plaintiffs appealed to Mayor Domogan; and (b) the response

of Mayor Domogan.


that a public announcement was made by SM's lawyer on local television that no

11ee cutting or earth-balling activity would take place while Civil Case No. 7595-

R entitled " Cordillera Global Network, et al. u. Sec. Paje" is pending'

III. AFFIRMATIVE ALLEGATIONS

In support of its Specific Denials, Special and Affirmative Defenses, SMPH

and SM SUPERMALLS respectfully state:

g.1.. SM Prime Holdings, Inc. ("SMPH") is a corporation duly orgaruzed

and existing under the laws of the Philippines with office address at Mall of Asia

Arena Annex Building, Coral Way corner J.W. Diokno Blvd', Mall of Asia

Complex, Brgy.76,Zone 10, CBP-1A,1300 Pasay City.

3.2. SMPH',s primary purpose is to develop, conduct, operate and

maintain the business of modernized commercial shopping centers and all

business appurtenant thereto such as the conduct, operation and maintenance of

shopping center spaces for rent, amusement centers, or cinema theaters within

the compound of the shopping centers. SMPH currently has forty two $2) malls

in the counfry and four (4) malls in China. SM City Baguio is one of the malls in

operation developed by SMPH.

3.3. Shopping Center Management Corporation ("SM SUPERMALLS")

is a corporation organized and existing under Philippine laws with office address

at SM Corporate Offices, Bldg. B, J.W. Diokno Blvd., Mall of Asia Complex, CBP-

1"A, Pasay City.

3.4. Shopping Center Management Corporation does business under

the name and style of "SM City"ro and "SM Supermalls".11

3.5. SM SUPERMALLS' primary PurPose is to provide general and

special management and advisory services to corporations engaged in

commercial center operations. It presently manages and operates all SM City

malls nationwide and in China.

3.6. SM SUPERMALLS has been managing the chain of SM City malls

or SM Supermalls in Meko Manila, provincial areas and in China in the last five

(5) decades. This chain of SM City malls evolved from a shoe store known as

"shoemart" in Manila in 1958. Among the malls currently managed and

operated by SM SUPERMALLS is SM City Baguio.

A.

SMIC'S PROPERTY AND SM PINES RESORT PROIECT

3.7. As part of SM Investments Corporation's ("SMIC") expansion

program in the Northern Philippines and in the pursuit of an objective to make

world-class cofiunercial establishments accessible to residents outside of Metro

Manila, SMIC sought to establish the SM Pines Resort Project. To fulfill this

10 The trademark "SM City" is registered in the name of SM Prime Holdings, Inc.11 The trademark "SM Supermalls" is also registered in the name of SM Prime Holdings,

objective, SMIC acquired several parcels of land with a total area of 8.5 hectares

in Luneta Hill, Baguio City, Benguet Province. These parcels of land included

land covered by Transfer Certificate Title No. 4563012; Transfer Certificate Title

No. 4563113' and DENR Order: Award dated 5 May 1992 issued to SMIC

("Subject Property")14.

3.8. With respect the subject Property, on 3L August 1988, SMIC

applied for its acquisitiorr"for commercial and tourism purposes" and submitted

the highest bid for the same during the public auction conducted by the DENR

held on 22 April1992.t5

3.g. on 5 May lggz,the DENR issued to sMIC an Order: Award.16

3.10. SMIC subsequently paid in full the purchase price for the parcel of

landslz which make up the Subject Property in the amount of Php 69,999,995.52.

3.11.. On

Subject Property

SMIC.18

L6 Septemb er 2071, the Deed of Absolute Sale covering the

was executed between the Republic of the Philippines and

g.12. Even prior to SMIC's acquisition of the Subject Property it was

already located within the Commercial Zone 1., wherein construction of

commercial buildings with provision of adequate parking spaces are allowed.1e

significantly, the Pines Hotei, which "was Baguio's conference center" and was

"one of the best hotels in the city"2o where "[m]any official visits from national

goverrunent officials were conducted", was built in the area until it was gutted

12

13

14

15

1"6

17

18

79

SeeTCT No. 45630 attached hereto as ANNEX "1" andmade an integral part hereof'

see TCT No. 45631 attached hereto as ANNEX "2" and.made an integral part hereof'

See DENR Order of Award dated 5 May 1992 attached hereto as ANNEX "3" and made

an integral part hereof.tbid.see DENR Certification dated 25 March 2011 attached hereto as ANNEX "4" arld made an

integral part hereof.lbid.See Deed of Absolute Sale dated 16 September 2011- attached hereto as ANNEX "5" attd

made an integral Part hereof.

See Environriental Performance Report and Management Plan ("EPRMP") attached

hereto as ANNEX "39" anrd made an integral part hereof, p' 16'

down by a fire in1984.21

3.13. Moreover, the City Planning and Development Coordinator in

Baguio City has certified that the Subject Property is also located within the

Commercial Zone1,.22

3;1.4. At the same time, the Subject Property does not lie on any fault line,

and is well within the buffer zone of "at least 5 meters on both sides of

mapped fault trace or from the edge of the deformation zone", and

"approximately nine (9) kilometers east of the Philippine Fault Zorte."%

3.15. Further, the Subject Property has a slope of 0 to 8 percent2a and has

a sandy and silty top soil.zs

g.1,6. The SM Pines Resort Project is a mixed eco-tourism project and was

designed to consist of a shopping mall, hotel, service apartments, multi-purpose

entertainment center and other appurtenant strucfures.26 Its construction in

SMIC's property sought "to tealize the property's potential"2T and "its profitable

use"28 given its strategic location. The development was envisioned to enable

Baguio City to regain its popularity and dominance as a tourist destination' 2e

Accordingly, it was designed to accommodate thousands of local and foreign

tourists that flock to Baguio City. ao

3.12. The introduction of SM Pines Resort and its comPonents in the City

of Baguio was weicomed by the Baguio City Local Government and the residents

zo

27

28

29

<http:/ /www.baguiomidlandcourier.com.ph/centennial-article.asp?mode=centennial/supplements / bennett-hamada. txt> last visited on 23 May 2012'

See.Certification dated 7 February 2011 issued by the Office of the City Planning and

Development Coordinator attached hereto as ANNEX "6" an'td made an integral part

hereof.See pHILVOLCS Certificate dated 17 December 20L0 attached hereto as ANNEX "7" arrd

made an integral part hereof, p' L6.

See Engineer;Lg Ceological and Geo-Hazard Assessment and Seismic Risk Evaluation of

the prJposed Shoemari Pines Resort Project dated April200L, ("EGGA") attached hereto

as ANNEX "40" and made an integral part hereof, Sec' 3-1-2'

See Environmental Impact Statement ('EIS") attached hereto as ANNEX "41" and made

an integral part hereof, Baseline Environmental Condition,2-13'EPRMP, p.8.EIS.

tbid.,td.,

the

is:

of Baguio City because it was expected to "enhance the business activity in the

City"tr, "boost the City's economy"s2, "provide solutions for the unemployment

problem of the City"st and boost tourism in Baguio City.s+ The social

acceptability o{ the project was formalized in the following resolutions:

a. On 12 April 1993, the Sangguniang Panglungsod of Baguio

City issued Resolution No. 215 inviting business and industrial

establishments to make the City of Baguio the site of their trades and

businesses and to welcome SM Supermalls as among the first to ProPose

the establishment of its business in the city. as

b. Likewise, on 8 July 1997, the Office of the Barangay Council

of Salud Mitra, issued a resolution indorsing and supporting the

construction and development of the SM Pines Resort Project' 36

B.

ORIGINAL ECC

3.18. In order to commence the construction and implementation of the

SM Pines Resort Project, its project proponent SMIC applied for an

Environmental Compliance Certificate ("ECC") and prepared the Environment

Impact Statement ("EIS").

g.19. As reported in the EIS, among the benefits of SM Pines Resort

Project are:

a. Creation of new business activities for Baguio City and the

surrounding areas as a result of increased economic activity effected by

the projec!37

b. Availability of employment opportunities for residents of

Baguio City and surrounding areas;38

33

34

35

36

37

See Unnumbered Resolution dated 8 Jttly 1997 attached hereto as ANNEX "8" and made

an integral part hereof.See Restlution No. 215 dated 12 April 1993 of the Sanguniang Panglungsod, Baguio City

attached hereto as ANNEX "9" and made an integral part hereof.

tbid.Annex 8.

rbid.

td.EIS.

c. Increase in revenue of the city through taxes and license fees

and expenditures from improved tourism; se

d. Provision of wholesome shopping facilities to the public;4o

and

e. Amelioration of the tourism industry. a1

3.20. On 13 September 200'1, the DENR, after finding that SMIC's

application is complete and in compliance with the law and its implementing

rules, issued an ECC (CAR-0106-047-120) to the SM Pines Resort Project of SMIC,

subject to the conditions stated therein.a2

3.2L. Among the conditions set forth in the ECC are:

This Certificate is valid only for the development andoperation of the above mix-use eco-tourism project coveringan area of about 8.5 ha., which shall consist of: a shoppingmall, a hotel with function rooms, banquet hall, multi-purpose hall, restaurant, and physical fitness facility, service

apartments, multi-purpose entertainment center and itsappurtenant structures, andf or as described in the

submitted documents.

xxx

9. Local residents, where applicable shall be given priority tothe labor requirement of the projecf

xxx

A11 trees to be affected by the project shall be disposed off inaccordance with existing Forestry Laws, Rules and

Regulations. A replacement of at least 25 saplings for every

tree cut shall be undertaken by the proponent. Tree plantingshould be done within the project site to maintain the

ecological balance of the area. Planting site(s) outside the

SM Property, in coordination with the concerned

government agencies/units, shall be covered by a

Memorandum of Agreement (MOA) to be submitted to

EMB/DENR-CAR by the proponent within sixty (60) days

upon receipt of this certificate and, prior to start ofdevelopment;

Executive Summary.

ECC CAR-01,06-047-120 attached hereto as ANNEX "10" antd made an integral part

,r1.

12.

3e Id.40 ld.,41 ld.42 See

xxx

SMIC shall provide adequate water supply for theimplementation/operation of the projec!

xxx

The proponent, in coordination with the concerned agencies

and taking into consideration the Tr#fic Impact Studyundertaken for the project, shall adopt and implement a

traffic management plan to minimize traffic problems withinthe immediate vicinity of the projec!

xxx

SMIC shall form, prior to project implementatiory a Multi-partite Monitoring Team (MMT) through a Memorandum ofAgreement with the DENR thru EMB, the LGU's concerned,a local environmental NGO and the affected communities.The MMT shall primarily oversee the compliance of the

proponent with the conditions of the ECC, the EMP, and

other applicable laws, rules and regulations;

The proponent shall set aside an Environmental MonitoringFund (EMF) to cover all costs attendant to the operation ofthe MMT.

The proponent shall submit an EMF proposal (withsupporting computations) based on existing/relevantguidelines within thirty (30) days from the receipt of this

iertificate. The said amount shall be incorporated in the

EMF-MMT-MOA to be discussed among the signatories and

the final draft should be submitted within sixty (60) days

from receipt of this ECC;

Ary expansion andf or modification/deviation in the

submitted documents shall be subject to the EnvironmentalImpact Assessment requirement prior to its

implementationi'

3.22. Thereafter, implementation of the SM Pines Resort Project took

place. SM City Baguio was constructed as well as SM Cyberzone, a Banco de Oro

branch, and residential cottages.

3.2g. In 2003, SMIC and SMPH entered into a contract of lease. The

contract of lease further provided that SMPH shall act as Attorney-in-Fact of

SMIC with respect the application of the relevant goverrunental permits and

licenses for the SM Pines Resort Proiect.

15.

18.

24.

25.

28.

C.

SM SUPERMALLS AND SM CITY BAGUIO

3.24. SM City Baguio is one of the components of SM Pines Resort

Project. It was completed in November 2003 and thereafter was opened to the

public.

3.25. In 2009, SMPH, as developer of SM City Baguio, and SM

SUpERMALLS agreed that SM SUPERMALLS will assume resPonsibility for the

general management of all the operations and personnel of SM City Baguio'

Since then SM City Baguio has been managed and continues to be managed by

SM SUPERMALLS.

3.26. As the manager of SM City Baguio, it is SM SUPERMALLS'

responsibility to ensure that the mall's operations and any improvement ot

expansion made therein is in compliance with the conditions set forth in the

ECC. Throughout the construction of SM City Baguio and during actual

operation, the conditions of the ECC were strictly complied with.

g.27. With respect to the condition of the ECC that a Multi-partite

Monitoring Team ('MMT-) be created. to oversee the compliance with the

conditions of the ECC and other applicable laws, rules and regulations, SM

SUpERMALLS created the MMT composed of representatives from the

Environmental Management Bureau ("EMB"), DENR-CA& Provincial

Environment and Natural Resources Office/Community Environment and

Natural Resources Office ('PENRO/CENRO-), Local Government Unit of

Baguio City, SMIC, barangay directly affected by the projec! Environmental

Impact Assessment Review Committee ("EIARC") for the SM Pines Resort

Project and Baguio Regreening Movement ("BRM") and a Memorandum of

Agreement dated 26March2})2wasentered into. The MMT submitted quarterly

reports to the DENR. Thus, at all times, SM SUPERMALLS, through the MMT,

coordinated with the 'DENR thru EMB, the LGU's concerned, a local

environmental NGO and the affected communities".43

See Multi-partite Monitoring Team, Memorandum of Agreement attached hereto as

3.28. In the course of the initial construction of the SM Pines Resort

Project, three hundred (300) trees were lawfully cut. As replacement, SM

SUPERMALLS donated to the City Government of Baguio fifteen thousand

(15,000) seedlings, twice the required number of replenishment under the ECC.4

3.2g. The construction of SM Pines Resort, especially SM City Baguio,

had far reaching benefits to Baguio City and its residents. Aside from boosting

tourism and increasing employment opportunities, as of 2011,, SM City Baguio

has paid business taxes amounting to millions of pesos. In 2011 alone, SM City

Baguio paid Php25,130,364.30 as business tax. This is aside from the

Php1.49,643,167.19 business taxes paid by SM City Baguio's tenants.

3.30. Aside from business taxes paid to the City Government of Baguio

City, SM City Baguio has contributed Php376,689,987.78 to the National

Government as income taxes payment.

D.

MALL EXPANSION

3.1". To better serve its clientele and the City of Baguio, sM

SUPERMALLS ensures that quality service is provided and that the growing

needs of its patrons, through improvements and expansiory are met and

addressed.

3.2. Pursuant to its duties, in 2010, sM SUPERMALLS decided to

expand SM City Baguio in order to provide more parking and commercial spaces

in the mallas and at the same time address the top soil erosion and water supply

shortage the mall was experiencing ("Ma11Expansion").

3.3. Significantly, SM SUPERMALLS' desire to construct a parking

building is in accordance with the original plan as stated in the EIA. As the SM

Pines Resort Project was designed precisely to accommodate thousands of local

and foreign tourists that flock to Baguio City,46 availability of ample parking

See Letter dated.24October 2003 attached hereto as ANNEX "12" antd made anintegral

part hereof.EPRMP, p.8.

spaces is an essential feature for all of its components. a7

g.4. The Mall Expansion, in addressing the limited parking spaces

available for customers, was also expected to contribute to lessening the traffic

congestion experienced by the Central Business District, where SM City Baguio is

located. Uncontrolled parking in the narrow roads of the district has been

identified as one of the contributors to fraffic congestion.as

3.5. To further serve the public interest, SM SUPERMALLS also

endeavored to include in the design of the Mall Expansion, a public bay terminal

area for the convenience of its patrons and also for the use of public utility

vehicles.

2.6. With respect to top soil erosion, SM SUPERMALLS noticed in

several instances that portions of the Subject Property experienced the problem.

Rip rapping measures were employed in 2005, 2008 and 2010. This is not

surprising, considering that the top soil profile in Baguio City is silty and

sandy.ae Further, with a slope of 0 to 8 percentso the Luneta Hill area, where SM

City Baguio is located, is prone to gully erosion and potential flow slides if the

underlying soil is loose and saturated with water.sl The Engineering Geological

and Geo-Hazard. Assessment and Seismic Risk Evaluation ("EGGA") prepared

for the EIS also identified erosion as one of the potential problems to be faced by

the project and recornmended that the drainage system be designed and

maintained to prevent potential erosion.s2 SM SUPERMALLS was advised that

the Mall Expansion will also address the top soil erosion problem.

3.7. In relation to insufficiency of water supply, in further compliance

with Condition 15 of the ECC, SM SUPERMALLS integrated in the design of SM

City Baguio water efficiency through recycling of treated effluent from the

sewerage keatment plant ("STP';.sl Through the Mall Expansion a new STP will

be constructed at the Government Pack Road level. The STP shall have a capacity

47

48

49

50

51

52

tbid.Irl,, at Baseline Environmentai Condi t:ron, 2-69 .

Id., at2-13.EGGAR, Sec.3-1-2.EGGAR, Sec. 10.2.

lbid., atSec.12.2.

of 1,,200 cubic meters per day to accommodate the'future wastewater discharge

of the existing mall and the proposed expansion project.s4 Recycling of treated

wastewater will allow SM City Baguio to reduce water consumption by as much

as 65%.55

3.8. Also, in order to ensure that the effects of the removal and kansfer

of the trees from the Subject Property will be lessened, the MalI Expansion was

designed to include a Sky Park which will feature a landscaped area, park and

view deck, with green space. This elevated garden will be designed with lush

land and waterscape that will complement the wavy cladding of the mall. Aside

from that, canopied walkways with ponds and trees will be feature to

complement the natural beauty of Baguio City' s0

g.g. Based on the foregoing reasons, SM SUPERMALLS resolved to

undertake the Mall Expansion including in its design the following:

a. Additionat 1.,120 parking sPaces located underground, to

reduce impact on wooden surroundings, as well as the undesirable 'heat

island effects' often encountered in other large shopping center, and

incorporated with LED park finders for customers to easily locate parking

and lessen fuel consumption among vehicle owners;s7

b. Eleven (11) public bay terminals or lay-bys;s8

c. Opening of gates in Governor Pack Road for convenience of

the public;se

d. Increase in security in the Governor Pack Road area for the

protection o{ the public and of customers;60

e. A retaining wall to prevent top soil erosion;61

f. An improved sewerage treatrnent plant with increased

capacity and improved odor eliminating features.62

54

55

56

57

58

59

60

67

Ihid., at30.ld., at30,EPRMP, p.29.EPRMP, Annex O.

tbid.EPRMP, p.26.EPRMP, Annex O,2.3EPRMP, p.29.

g. An expansive Sky-Park which will feature a landscaped area

with native and non-invasive trees and other plant materials, intermingledwith numerous water features, which roof garden will create an

environment for vegetation growth that is as close to the plant's naturalenvironment as possible. 63

3.10. In addition, the Mall Expansion was designed to include a rain

water collection system and underground reservoir with a capacity of 6.9 million

liters of water to help control water run-off in and around the property, to

alleviate problem caused by heavy rains in the drainage system while providing

a secondary water resource for the facility.6+ Moreover this feature is intended to

make SM City Baguio adaptable to climate change considering that current high

amount of rain-fall received by Baguio City is expected to increase through the

years.

3.1L. Ffowever, as it will alter the first ECC, by relocating the skuctures

designed therein, SM SUPERMALLS informed DENR and sought their advice on

the requirements before such change could be implemented.

E.

AMENDMENT TO THE ECC

3.12. In July 20L0, SM SUPERMALLS conferred with Director Paquito

Moreno of DENR-EMB-CAR to inquire about the scope and requirements of

securing an amendment to the ECC.65

3.13. SM SUPERMALLS was required to submit an Environmental

Performance Report and Management Plan ("EPRMP") as part of the

requirements to secure an amendment to the ECC for the proposed Mall

Expansion. The proposed Mall Expansion falls under Group II Non

Environmental Critical Project located in Environmentally Critical Area as a

"Comrnercial, Business Centers with residential units (mix use), malls,

63 lbid.64 SM SUPERMALLS' Earthballing and Transplanting Operations PLan, p.7

i!:{

supermarkets, public markets".66

g.1-4, The required EPRMP includes information and data prescribed by

DENR Memorandum Circular 2010-14, such as environmental baseline data,

project description, an environmental impact and environmental management

plan.

3.15. Subsequently, environmental baseline data gathering was

undertaken and the requirements of the DENR for the amendment of the existing

ECC were prepared.67

3.1,6. The environmental baseline data gathering included the social

::perception survey, key inlormant interviews, transect walk and inspection of the

'pioposed Mall Expansion site and vicinity.-.+

d

3.17. Also, the services of an Environmental Impact Assessment Team

('EIA Team") wele engaged. The EIA Team is composed of Engineers. Mateo

and Marc ]anssen T. Pe (of SM City Baguio), Architect Debbie Guerrero

(designer), and Engrs. Virgilio Miguel and Ryan Lintag of D.A' Abcede &

Associates (project managers). The following served as the EIA Team's

Consultants: Engineer Cherry Rivera (environmental engineer), Reinerio

Fedrizon (geologist), Engineer Brian Tan (geotechnical engineer) and Delio

Florentio Cimatu (community development specialist). 68

3.18. Primary and secondary data were gathered during surveys from

August to December 2010. The EIA Team used a participatory and community-

based approach in conducting the EIA. The following are the reports prepared

for the EPRMP:

Social Perception Survey and Key Informant Interviews;' .

Geotechnical Assessment;

Engineering Geological and Geohazard Assessment Reporf

66

67

lbid., at1-1.ld., at10.

a.

b.

c.

and

d. Traffic Impact Assessment Study.

3.1,9. The social perception survey and key informant interviews were

conducted from 6-8 December 2010. The following were interviewed:

a. Isabelita Ida - Dean of Student Affairs and Popo Gallardo -PCO/Health and Occupational Preparedness Officer of theUniversity of the Cordilleras;

b. Engelbert Z. Soriano - Police Superintendent of the TrafficManagement Branch;

c. SPO2 Lagleva - COMPAC Office;

d. Might S. Gupit - Manager of Baden Poweil Inn;

e. Marilyn Ngan-ngaya - President, Center for Women andChildren of the Office of the CWC;

f . Trinidad Cayadin - Executive Director of PCCI;

g. Rita Magpatoc - Manager of.Zizzline Restaurant;

h. Domingo V. Urbanozo - Officer III of the Office of the

SWMO-CEIIIPO;

i. Tom Velasco - CENRO;

j. Hon. Onofre D. Ibanez - Office of the Barangay of Barangay

Governor Pack Road; and

k. Melanie Daza - Office of the Director, COMELEC.

3.20. Based on the survey and interviews, acceptance of the project is

65.71% lnigL:. despite the negative views and comments of the key in-formants.6e

The acceptance of the proposed Mall Expansion is anchored on employment and

tourism, which, positiveiy, they experienced and proved since the operation of

the mall in the city.zo

3.21. The Geotechnical Assessment found that the Mall Expansion will

be located in a slopin g area and will require a 12.5 meter excavation to be made

in the rear portion of the existing malI. The ground in the area was found to

consist of loose to medium dense, reddish brown silty sand overlying very dense

brown silty sand and sandy silt. The assessment found that the absence of soft,

compressible soils in the area permit the use of a shallow foundation system to

support the proposed Mal1 Expansion.Tl However, it was recoilrmended that the

area of the existing mall adjacent to the excavation be monitored for movements

on a weekly basis.72 i

3.22. Meanwhile, the Engineering Geological and Geohazard

Assessment Report found that the Mall Expansion site is suitable for land

development provided that the recommendations stated therein are complied

with.Te Among the recommendations is the protection of excavation walls to

prevent landslides and installation of silt traps during construction to prevent

sedimentation and siltation around the project site during construction.Ta

3.23. Lastly, the Traffic Impact Assessment Study found that the

construction of the Mall Expansion is expected to have an impact on the over-all

traffic condition in the area.7s The study pointed to (a) on road loading and

unloading by public transport vehicles; (b) heavy pedestrian traffic flow

compounded by ingress and egress of private vehicles; and (c) standing

passengers on the road waiting for PUJs and FX as main causes of traffic

congestion.76 Intense parking activities were also observed as a regular feature of

the traffic condition in the area.77 With respect to parking, the study found that

the currently proposed1,,120 parking slots are more than sufficient (with spare

slots of 243) to cater the estimated parking demand. 78 For the Lay-Bays, the

proposed facility with an estimated capacity of eleven (11) bays is expected to be

sufficient to meet the demands.Te

71

72

73

74

75

76

n78

Id., Annex K, p. 1.

Ibid., p.4.EPRMP, Annex N, p. 8.

Ibid., at9EPRMP, Annex O,p.7.lbid., AnnexO,p.7.td.,ld., Annex O, p. 15.

9,24. For purposes of the EPRMP, SM SUPERMALLS also obtained the

following certifications:

a. Certification from PHILVOLCS that the Mall Expansion

does not lie on any fault line and is well within the buffer zone of "at least

5 meters on both sides of the mapped fault trace or from the edge of the

deformation zone".80 In addition, the PHILVOLCS Certificationestablished that the Mall Expansion is "approximately nine (9) kilometers

east of the Philippine Fault Zone" .81

b. Certification from the City Planning and Development

Coordinator in Baguio City that the Subject Property is also located withinthe Commercial iorr" 1, which allows the construction of commercial

building with the provision of adequate parking spaces fot is

clients/customers. 82

3.25. As reported in the EPRMP, among the benefits of the Mall

Expansion are:

Significantly enhance the tourism potential of Baguio City;

Promote more investments and commercial activities in the

city;

Improve the parking availabitity of the ma1l;

Improve and beautify Governor Pack Road'; and

Help avert criminalities in the area through improved

security from the security guards. a3

2.26. On 29 December 2010, the EPRMP was submitted to the DENR-

EMB-CAR for procedural review.sa The EPRMP indicated the project proponent

as SMIC and contact persons as Mr. Hans Sy, President of SMPH, Engr' Mateo,

vice President of operations of sM SUPERMALLS, and E.g.. Pe, Mall Manager

of SM City Baguio.

3.27. In a letter dated 26 January 201L, DENR-EMB-CAR, after it

conducted a procedural review on the EPRMP, required the submission of the

a.

b.

c.

d.

e.

80

81

82

83

Annex 8.

rbid.

Annex 7.

EGGAR, p.18.

following documents:

A Certification from the City Government of Baguio(Office of Planning and Development Coordinator)certifying that the proposed expansion project suitsthe comprehensive land use plan of the city;

Identified off-set disposal area for the excavated earthmaterials including retention measures to stabilize thesame;

Inventory of trees to be #fected (coordinated with theconcerned agency); and

Project social acceptability indicators, such as, but notnecessarily limited to barangay /LGU endorsements."85

3.28. The foregoing requirements were completed and submitted to the

DENR-EMB-CAR on 16 February 2011,.

3.29. In another lener dated 5 April 2011., the DENR-EMB-CAR

requested for the following additional information:

Inventory report on affected trees.

Identification and stability measures (earth retaining

measures) of the dumping sites for excavated materials-

]ustification on the building expansion footprint'

Relocation and engineering plants for the proposed sewage

treatments plant (STP1."so

3.30. In a letter dated 7 April 201L, SM SUPERMALLS reported to the

DENR-EMB-CAR that it was in the process of consolidating the additional

information request in the 5 April 2011 letter. With respect to the query on the

justification of the building expansion footprint encroaching upon non-build

areas, SM SUPERMALLS reasoned that it has incorporated in the design of the

See Letter sent by Paquito T. Moreno, ]r., Regional Director of the DENR-EMB to Hans T.

sy, President, sM Prime Holdings, Inc. attached hereto as ANNEX "73" and made an

integral part hereof; EPRMP, P. 10.

See "Lettir

dated 5 April 201L sent by Paquito T. Moreno, ]r., Regional Director of the

DENR-EMB to Engr. Marc |anssen T. Pe, Manager, SM City Baguio attached hereto as

,r1.

2.

aJ.

4.

,rl,

2.

J.

4.

Mall Expansion the Sky Park.87

3.31. On 23 August 2011, the revised EPRMP, which incorporated the

comments from the DENR and responded to the requests for additional

documents contained in the DENR's letters dated 26 January 2011, and 5 April

2011, was submitted.ss

g.32. Upon submission of all the requirements, the ECC was amended

with the following conditions in addition to the previously issued ECC:

"Condition B.1

Condition 8.2

The proponent shall effect solid waste management at

source which includes the segregatioru recycling and

compositing of compostable materials; and

This Certificate shall automatically expire if the

proposed expansion not implemented within five (5)

years from the date of issuance."

3.33. The amended ECC was issued on22 September 2011' by the DENR-

EMB-CAR.89

E.

APPLICATION FOR OTHER PERMITS

g.24. In addition to obtaining the amended ECC, in order to clear the site

for the Mall Expansion, SM SUPERMALLS then sought the DENR's permission

to cut the trees.

3.35. In a letter dated 30 May 2011., SM SUPERMALLS' E.gt. Mateo

wrote to DENR-CAR Regional Executive Director Baguilat requesting the DENR

to issue a Tree Cutting Permit in line with the Mall Expansion'eo SM

SUpERMALLS undertook to plant seven thousand (2000) forest tree seedlings in

88

89

See Letter dated 7 April 2011 sent by Engr. Bien Mateo, VP North RegioO SM

SUPERMALLS, to naquito T. Moreno, |r., Regional Director of the DENR-EMB attached

hereto as ANNEX "15" and made an integral part hereof.

EPRMP, Cover Letter stamped received on 23 August 2011'

See Letter to Hans Sy, President, SMPH from Atty. |uan Miguel Cuna, OlC-Director

DENR-EMB d.ated. 2i September 201L attached hereto as ANNEX "76" and made an

integral part hereofSee Letter dated 30 May 2011 of Bien Mateo to Clarence Baguilat, Regional Executive

, ^- i-+^cral narl horpnf

replacement of the trees sought for cutting. el

3.36. Thereafter, in a ietter dated 6 June 201L, SM SUPERMALLS E.gt.

Mateo requested DENR-CENRO Mr. Edgardo S. Flor to conduct an inventory

and tagging of the trees to be affected in SM SUPERMALLS' application for tree

cutting permit. e2 An Ocular Inspection/Inventory of Trees was conducted by the

DENR on even date.

9.97. On 11 July 2011., the findings of the Inventory was issued, wherein

it was stated that the application will affect forty three (43) Alnus trees, ninety

seven (97) Benguet pine trees, forty two (a2) Benguet pine saplings and two (2)

Alnus saplings. e3

3.38. On 27 October 2011., DENR-CAR-RED, in pursuance of the

Memorandum issued by the DENR Secretary, issued the Tree-Cutting and Earth-

balling Permit applied for and allowed SM SUPERMALLS to cut the forty tree

(43) planted Alnus trees and earth-ball the ninety seven (97) Benguet pine trees

and forty four (44) Benguet pine and Alnus saplings on the condition that there

will be a replacement of thirty (30) saplings for each tree cut or tree damaged

during earth-ball ing. s+

g.Zg. While there is an impact on the kees located at the Mall Expansion

site, such impact is short-term and reversible.es Also, the environmental impact

of clearing the site has been mitigated by SM SUPERMALLS' earlier planting of

trees and will further be mitigated by the planting of 50,000 trees by end of

201.4.e6

93

94

See Memorandum dated lL J:u/ry 2011. from The joint Inspection Team of DENR-CAR,

Special Order No. 219 sent to the CENR Officer-in-Charge attached hereto as ANNEX

"18" and made an integral part hereof.See DENR Inventory o-f tru"r dated 11 ]uly 2011 attached hereto as ANNEX "18-A" and

made an integral part hereof.Annex 18.

See Memorandum of the DENR Secretary to the RED, DENR-CAR datedlT October 2011;

ANNEX "19"; Letter dated. 27 October 201L sent by Clarence L. BagUilat, Regional

Executive Director of DENR to Engr. Bien C. Mateo, Vice-President of Operations, SM

Supermalls, Baguio City attached hereto as ANNEX u7g-A" and made an integral part

hereof.EPRMP, p,66.

<http: / / www.philstar.c omf nattonfarticle.aspx?publicationsubcategoryid=67&articleid

95

96

3.40. Incidentally, SM SUPERMALLS did not find it irregular or

misplaced to apply for a tree cutting permit. As far as it is aware/ the DENR-

CAR-RED in the past similarly issued tree cutting permits to other similarly

situated entities on the ground that the trees "affected by development project".

3.41,. There#ter, SM SUPERMALLS requested for clearance from the

Department of Public Works and Highways ("DPWH") District Engineering

Office of Baguio City in relation to the improvements which may encroach upon

Governor Pack Road, which is classified as a national roadeT and for assistance on

the processing of excavation and sidewalk permit including riprap costing on the

proposed Mall Expansion fronting Governor Pack Road.es

3.42. After a study of the site development plan, inspection of the actual

site by the Road Right-of-Way (RROW) Task Force, and. submission of additional

documents and conduct of a relocation survey,ee the clearance10o and excavation

permit1o1 were issued by the DPWH-CAR District Engineering Office.

g.43. In order to cofiunence construction activities for the Mall

Expansiory SMPH (as the developer of the Mall Expansion and Attorney-in-Fact

of SMIC) commissioned various professionals and entities to conduct inspections

that were required under the provisions of PD 1096 (the "National Building

Code")roz and its implementing rules and regulations for the issuance of a

building permit. Specifically, the following plans and specifications (the

"Building Documents") were prepared:

See Letter dated 6 December 2011 from Engr. Mark M. Abad, Building Administration

Officer, SM City Baguio to Engr. Ireneo Gallato, District Engineer, DPWH District

Engineering Offiie attiched hereto as ANNEX "20" and made an integral part hereof'

SeiLetter dated 9 January 2012 from Engr. Mark M. Abad, Building Administration

Officer, SM City Baguio to Engr. Ireneo Gallato, District Engineer, DPWH District

Engineering Office attiched hereto as ANNEX "21-" atrd made an integral part hereof'

Sre-M"morundum dated 26 December 2011 from RROW Task Force Committee to Engr.

Ireneo Gallato, District Engineer, DPWH District Engineering Office attached hereto as

ANNEX "22" antd made an integral part hereof.

See Lefter dated.27 December 2011 from Engr. Ireneo Gallato, District Engineer, DPWH

District Engineering Office to Engr. Mark M. Abad, Building Administration Officer, SM

city Baguio attached hereto as ANNEX "23" an:rd made an integral part hereof.

See ExiavaLion and Ground Preparation Permit No. 858-02-23-L2 issued on 23 February

2012 attached hereto as ANNEX "24" antd made an integral part hereof.

Architectural Plans and Specifications, prepared by

Architect Jose Siao Ling;

Design Plans and Specifications (Excavation and

Ground Preparation), prepared by Architect Jose Siao

Ling;

Electrical Plans and Specifications, prepared by

Engineer Peter T. Legaspi;

Sanitary Plumbing Plans and Specifications, prepared

by Engineer Anthony Jerome M. Lara;

Mechanical Plans and Specifications (for the Sprinkler

System), prepared by Engineer Ferdinand L.

Figueroa;

Mechanical Plans and Specifications, prepared by

Engineer Francisco N. Manlises; and

Design Plans and Specifications (for the construction

of a temporary sidewalk and enclosure), prepared by

Engineer Joe Johanne C. Buado.

2.44. The Building Documents were submitted to the Office of the City

Building Official of Baguio City ("OBO"), together with SMIC'S proof of

ownership over the subject Property,103 as part of sMPH's Application No. 2012-

0005 for the issuance of a building permit.

2.45. After an evaluation of the Building Documents by the different

divisions of the OBO and payment by SMPH of the assessed fees, the following

permits were issued on 12 January 2012 (the "Ancillary Permits")

Electrical Permit;roa

Sanitary-Plumbing Permiqlos

Mechanical Permit (for Fire Protection);106

Mechanical Permit;ro7

Annex 4; see also Letter dated 15 October 2011, of Engineer |anssen Pe, Mall Manager to

Engr. Oscar Flores attached hereto as ANNEX '25-F" and made an integral part hereof.

A ipy of which is attached hereto as ANNEX ttz5-Ail and made an integral parthereof.

a .opy of which is attached hereto as ANNEX '25-8" and made an integral part hereof.

a.

b.

c.

d.

e.

I'

a.

b.

C.

d.

104

105

Temporary Sidewalk Enclosure and Occupancy Permi!108

and

Excavation and Ground Preparation Permit.loe

3.46. On 12 January 2012, after an evaluation of the supporting

documents, the OBO, through Building Official Oscar V. Flores, issued Building

Permit No. 201200009 (the "Building Permit")rro in favor of SMPH'

g.42. During the entire process of obtaining the necessary government

permits, SM City Baguio continued to correspond and liaise with the Baguio City

Government in order to make the Mall Expansion more responsive to the needs

of the stakeholders.

3.4g. In particular, SM SUPERMALLS continued to liaise with the

residents who will be directly affected by the MaIl Expansion. To show their

support, on 20 January 2011., Barangay Session Road-Governor Pack Road issued

Resolution No. 007 which stated that the Barangay is allowing SM City Baguio to

undergo expansion. The Resolution further provides that the Barangay Council

has no objection to the cutting 6f ftsg5.111

2.4g. SM SUpERMALLS also presented the Mall Expansion project to the

of{ice of the Mayor and the Vice-Mayor, even prior to the application for a Tree-

Cutting Permit. The desire of SM SUPERMALLS to expand was endorsed by

Mayor Mauricio Domogan to the DENR Secretary through a letter dated 11 July

2011.112 This indorsement was for the purpose of ensuring that the necessary

environmental requirements with respect to the cutting of the a-ffected trees will

be implemented.

3.80. Further, public consultations at the Governor Pack Barangay Hall

were conducted on 17 January 2012 and, were attended by residents of the

barangay and barangay officials. Also, a presentation of the MaIl Expansion was

A copy of which is attached hereto as ANNEX "25-D" and made an integral parthereof'

a "opy

of which is attached hereto as ANNEX '25-E" and made an integral part hereof'

a copy of which is attached hereto as ANNEX "25-G" and made an integral part hereof'

A copy of which is attached hereto as ANNEX "25" and made an integral part hereof'

EPRMP, p.116.SeeLettei dated 11july 2011 from Mayor Mauricio Domogan to DENR Secretary Ramon

e.

t.

107

108

109

110

111

"i2

made to the Baguio Regreening Movement by Engr. Mateo on 20 ]anuary 2012.113

3.51. On23 February 2012, a public hearing was conducted by the Office

of the Sangguniang Lungsod August Body which was attended by the various

oppositors to the Mall Expansion, the concerned government agencies and Engr'

Mateo.1i4

F.

PREPARATION FOR EARTHBALLING OF TREES AND EARTHBALLINGUNTIL RECEIPT OF TEPO

g.52. After the issuance of the required goverrunental permits and

further public consultations, preparation for the earth-balling was made by SM

SUpERMALLS. On 19 March 2012, the Earth-balling and Transplanting

Operations Plan was sent to DENR-CAR and presented to DENR-CAR on 29

March 2012 and,2 April2012. On 3 April2012, the revised Earth-balling Plan was

re-submitted to DENR-CAR.

3.53. On 4 April 2012, aftet

order, the DENR-CAR allowed SM

balling and transplanting operations

designated DENR personnel.11s

finding that the Earth-balling Plan was in

City Baguio to commence with the earth-

but only and always in the Presence of duly

from DENR-CAR-RED7 ,- - --L 1^ ^-^ ^C

2.54. On 9 April 2012, a ceremonial start-up on earth-balling was

conducted on one (1) Benguet pine and sixteen (16) Alnus trees. The trees were

simultaneously transplanted within the sM City Baguio compound except the

Benguet pine.116

3.55. On 10 April 2012, the Benguet pine subject of the ceremonial set-up

and forty (42) Alnus trees and saplings were earth-balled and transplanted

See Letter dated 23 January 2012 from Engr. Marc Janssen T. Pe, Mall Manager, SM City

Baguio to Edgardo Flor, CENR Officer-in-Charge, Baguio City attached hereto as

ANNEX "27" anrd made an integral part hereof.

See August Body Committee Report attached hereto as ANNEX "28" antd made an

integral part hereof.See Letter dated 4 Aprll 2012 from DENR-CAR-RED Clarence Baguilat to Engt. Bien

Mateo, VP for Operations, SM Supermalls, Baguio City attached hereto as ANNEX "29"

and made an integral Part hereof.Memorandum dated 10 April 2012 for DENR Secretary Paje

Lt4

115

within the SM City Baguio compound. Likewise, thirteen (13) Benguet pine and

fifteen (15) Alnus trees were partially dug.llz The earth-balling and transplanting

were done under the supervision of the DENR.

G.

FIRST ENVIRONMENTAL CASE, THE TEPO AND COMPLIANCE WITHTEPO

3.56. Cordillera Global Netruork, et al. a. Hon. Sec. Ramon J.P. Paje, et al.

docketed as Civil Case No. 7595-R ("the First Environmental Case") was filed by

Plaintiffs therein before this Honorable Court against SMIC, DENR Secretary

Ramon J.P. Paje, DENR-EMB Director Atty. Juan Miguel T. Cuna and DPWH

Secretary Rogetio Singson. SMPH and SUPERMALLS were not impleaded as

defendants and were not served with summons.

3.57. Plaintiffs in the First Environmental Case sought to permanently

enjoin the Mall Expansion.118 They prayed that judgment be issued declaring the

tree-cutting and earth-balling permit void; declaring the building permit void;

and permanently enjoining SMIC from cutting andf or earth-balling the trees

covered by the tree-cutting and earth-balling permit.

3.58. On 10 April 2012, a 72-hour Temporary Environmental Protection

Order ('TEPO") was issued enjoining SMIC or any person acting on its behalf

from cutting, earth-balling as well as uprooting trees from the ground.lle The

TEPO was effective for only seventy two (72) hours from the date of receipt. On

13 April 2012, the effectivity of the TEPO was extended until after the

termination of the proceedings in the case.

3.59. Upon SMIC's receipt of the TEPO on 11 April 2012, SM

SUPERMALLS, even if it was not impleaded as a Defendant in the First

Environmental Case, voluntarily and immediately ceased and desisted from its

earth-balling and transplanting operations.

717

118

Memorandum dated 20 April 2012 for DENR Secretary Paje from DENR-CAR-RED

Clarence Baguilat attached hereto as ANNEX "31" arid made an integral part hereof.

Civil Case No. 7595-R, p.6,par.2,EF T D

3.60. However, before the TEPO was received by SMIC, SM

SUPERMALLS, under the supervision of DENR, had already conducted pre-

earthballing measures on thirteen (13) Benguet pine trees and fifteen (15) Alnus

trees. In a letter dated 15 April 2012, the DENR Forest Management Service

("DENR-FMS") advised SM SUPERMALLS to manifest in court that the

conditions of the partially drg trees require that remedial measures be

undertaken.

3.61.. On 16 April 2012, pursuant to the advice of the DENR-FMS, SMIC

(since SM SUPERMALLS was not impleaded as a Defendant in the First

Environmental Case) filed an Urgent Motion of even date for this Honorable

Court to issue an order directing the DENR to send its monitoring team to

supervise and oversee the conduct of remedial measures on the partially dug

thirteen (13) Benguet pine and fifteen (15) Alnus trees and to authorize

replanting of the said trees to avert their deterioration and health, which Urgent

Motion was granted by this Honorable Court ("L6 April2012Order").

3.62. Accordingly, on 1.6 April 2012, the DENR Supervision and

Monitoring Team coordinated with SM SUPERMALLS for the preparation of the

necessary materials, chemicals, manpower for the implementation of the

remedial measures. On 17 April 2012, a technical meeting was held between

members o-f DENR Supervision and Monitoring Team.

3.63. Thereafter, SM SUPERMALLS, with the technical assistance from

the DENR, conducted and completed the necessary remedial measures and

treatments on the exposed/affected roots of the partially dug thirteen (13)

Benguet pine trees and fifteen (15) Alnus trees, as follows:

"Root pruning and application of treatments on the 28 (13

Benguet Pine and 15 Alnus) trees using fungicides (dithane)to protect the entry of pests and diseases and rootinghormone (IBA) to enhance recovery, glowth, and survival'This activity was commenced on April 17 and completed onAprii 19,2012;

Burlapping of said trees and covering the same with soil upto its original level which was simultaneously done after theroot treatments and completed on April 20,2012;

b.

Removal from the project site of the equipment (1 crane and3 backhoe) which were used in the operations were moved-out from the project site;

Landscaping works by introducing potted ornamental plantsto improve the scenery of the project site is progressivelybeing undertaken by SM. Meanwhile, the installation ofsupports/anchors (bamboo poles) and ropes (guying) forprotection from strong winds was also prepared. "1.20

3.64. On 26 April 2012, the report of the Supervision and Monitoring

Team in compliance with the L6 April 2012 Order was filed with this Honorable

Court.

H.

SECOND ENVIRONMENTAL CASE

3.65. Instead of amending the Complaint filed in the First Environmental

Case, on L6 April 2012,ludy Lyn C. Adaiar, et al. a, Hon. Sec. Ramon l.P. Paje, et al.

docketed as Civil Case No. 7629-F. ("the Second Environmental Case") was filed

against the same goverrunent agencies/officials. The Second Environmental Case

onty differed from the First Environmental Case in that (a) a different set of

Plaintiffs purporting to represent the same cause as the Plaintiffs in the First

Environmental Case; (b) SMPH, SM SUPERMALLS, City Mayor Mauricio

Domogan, and DENR-CAR-RED Clarence Baguilat. SignificantlY, the Complaint

in this Second Environmental Case contained similar allegations (some

paragraphs even copied in toto) and sought almost the same relief sought in the

First Environmental Case. The Second Environmental Case also contained an

application for a TEPO.

I.

IPS INFESTATION

g.66. In the meantime or on 3 April 2012,a site inspection was conducted

by the DENR Central Office, DENR-FMS, CENRO and DENR Ecosystem

Letter dated 20 April 2012 from Augusto Lagon, Team Leader, Supervision and

Monitoring Team for DENR-CAR-RED Clarence Baguilat attached hereto as ANNEX

c.

d.

Research and Development Service ("DENR-ERDS) pursuant to the report of SM

SUPERMALLS that some of the requested trees to be earth-balled are infested

with the Ips infection.

3.67. The inspection report disclosed that four (4) Benguet pine trees are

affected with Ips infection and three (3) Benguet pine trees were noted to have

been inlested previously by Ips beetle and are already dsad.12r

3.68. In a Memorandum dated 19 April 2A12, the DENR issued clearance

to conduct sanitation cutting in relation to the trees infected by Ips as found in

the report.122 The infected trees have not been cut and remain within the

premises of SM City Baguio and threaten the health of the remaining trees

therein.

t.

SMPH AND SM SUPERMALLS ADVOCATE ENVIRONMENTALPROTECTION AND SUSTAINABLE DEVELOPMENT

3.69. SMPH and SM SUPERMALLS take strong exception to the

accusations made against them as being a "murdete{'7%, and "SM Baguio being

a graveyard of dead and dying trees" 124 and that the trees in SM City Baguio

"mass murdered"l2' allf, as being engaged in the practice of pursuing its

business expansions at the expense, and with utmost disregard, of the

environment. Contrary to what has been made to appear, SMPH and SM

SUPERMALLS have consistently pursued efforts of environmental preservation

and conservation.

See Memorandum dated 4 April 2012 of DENR-CAR-RED attached hereto as ANNEX

"33" and made an integral part hereof.

Memorandum dated 19 April20L2 issued by Marcial C. Amero for the DENR Secretary

attached hereto as ANNEX "34" andmade an integral part hereof.

<:11ftp:/ / www.cordilleravoice.com/index.php?option:com-content&view=article&id=2044:protesters-shocked-over-faulty-tree-balling& cattd=79:latest-news&Itemid:L>last visited on 23 May 2012

tbid.

121

122

3.70. Over and above its responsibility under the ECC, as part of its

corporate social responsibility ("CSR") projects and as part of the SM

SUPERMALLS' commitment to sustainable development and environmental

stewardship, SM City Baguio consistently displayed its concern for the

environment through its reforestation and tree planting activities. Some of the

notable reforestation and tree planting activities that SM Baguio undertook are:

Tree planting of twenty-five (25) Benguet pine seedlings on 8

March 2007 to replace the two (2) dead Benguet pine trees

cut;126

Tree planting activity in the SM perimeter in 2008;

Tree planting activity in Mt. Sto. Tomas in 2008;

Tree planting activity in Buyog Watershed dated 25 ]une2009;

Tree planting of two hundred twenty (220) tree seedlings on

20-23 ]uly 2009 as replacement for ten (10) dead trees cuq 127

Tree planting activity in Busol Watershed dated 25 June2010;

Tree planting activity in the SM Baguio Compound on 1"4

June2011,;

SM and UC Making Baguio Green (Tree Planting Activity)on 2 ]uly 2011;

Tree planting of twenty (20) seedlings as replacement for the

two (2) dead Benguet pine trees cut;128

Intention to donate 900 Saplings to the BRM; rze

Tree Planting Activity in Busol Watershed dated 3 February

2012;

See Certification dated 9 April2008 issued by Pascual D. Abaclod, Chief of FPWMD and

Cordelia C. Lacsamana, Officer-In-Charge, City Environment and Parks Management

office attached hereto as ANNEX "35" and made an integral part hereof.

See Ceftrticate of Appreciation dated 19 October 2009 awarded by the City G,overnment

Parks and Managemlnt Office to SM Baguio attached hereto as ANNEX "35" and made

an integral part hereof.See Ceitrlication dated 18 June 2008 issued by Pascual D. Abaclod, Chief of FPWMD

attached hereto as ANNEX "37" and made an integtal part hereof'

See Letter dated. 22 June 2007 sent by Samuel R. Penafiel, III to Amy L. Gonzales and

Engr. Marc fanssen T. Pe, Assistant Mall Managers of SM Supermalls, Baguio City

b.

c.

d.

f.

ob'

h.

j.

k.

t29

3.71,. SM SUPERMALLS' efforts in promoting environmentally

sustainable development are not diminished by its lawful cutting of trees. Each

time SM City Baguio had to resort to tree cutting, the necessary DENR permit

was securedl3o and the required replacement of the sufficient number of trees of

the same species was fulfilled.

3.72. Since the implementation of the SM Pines Resort Project, SM City

Baguio has planted EIGHT HUNDRED THIRTY (830) Benguet Pine seedlings,

FIFTY (50) Alnus seedlings and FIFTY (50) Agoho seedlings within the SM City

Baguio premises from 2007 to 201L. Aside from that, SM SUPERMALLS have

planted SEVEN THOUSAND NINE HUNDRED (7,900) Benguet Pine seedlings

within Benguet from 2005 to 2012. This is more than what SM SUPERMALLS is

required to plant as prescribed in the ECC condition and the tree cutting permits.

Aside {rom that, SM SUPERMALLS have planted more than TWENTY THREE

THOUSAND NINE HUNDRED THIRTY SEVEN (23,937) seedlings in different

provinces in the Philippines from 2005 to 2012.

313. Moreover, the numerous tree-planting activities of SM

SUPERMALLS are not limited within Baguio City alone but are spread

throughout the Philippines.

a. With Green Philippine Highway,last 25 August 2006;

b. With Buhayin ang Isla ng Bulkang Taal, Buhayin ang

Kalikasan at Ekotorismo ng Batangas, last 16 November2007;

In relation to the Adopt a Hi-way project in cooperation withDENR & University of St. La Salle Bacolod, last December2008;

Tree Planting Activity along C-5 in cooperation with MayorBobby Eusebio,Iast23 April 2009;

In relation to the Tagaytay Highlands-ACB tie up for tree

planting, last 22 May 2010;

f. With the Green Philippine Highway Project, last 1,6

November 2007;

d.

e.

g. With Sagip Sierra Madre, San Isidro, San ]ose Del Monte,last 1 April 201,0;

h. Tree planting in Poblacion, Dona Remedios Trinidad,Bulacan, last 23 July 2010;

i. In relation to the SAVE BIAK NA BATO Bulacan State

University, last l January 2011,;

j. With the Et Verde Movement,last 23 February 2011,;

k. With the Paradise Ranch,last 18 April 2017;

t. Tree planting in SMRS Vacant lot,last 19 April 2011';

m. Roadside Tree-Planting Activity with the CommunityEnvironment and Natural Resources Office in DRT

Highway,last 1 ili4.ay 2011.;

n. Tree planting in partnership with DENR Poblacion Dona,

last 16 june 2011;

o. With the Baguio Athletic Bowl, last2July 2011';

p. Biak na Bato, San Miguel Bulacan,last26 August 2011''

q. Tree Planting with Bulacan State University in Biak na Bato,

San Miguel, Bulacan,last L October 2011,;

r. Tree Planting Activity with Cerebral Palsy Association of the

Philippines,last 1 October 201'J.; and

s. Tree Planting at Tayak Hills, Rizal Laguna with Hon. Mayor

Antonino Aurelio-DENR-ECC.

2.74. In fact, in recognition of SM SUPERMALLS' efforts in caring and

preserving the environment, various environmental awards were given to its

parent and affiliate. Some of these awards given to the SM Group of Companies

are:

a. The Asset Corporate Awards (Platinum Awardee 2010 and

2011) given to SM Prime Holdings, Inc. for all around

excellence, among many others, for social responsibility and

environmental responsibility; tst

b. Corporate Governance's Asia's 1't Asian Excellence Awards

2011. lor Best Environmental Responsibility;

CG Asia and Alpha Southeast Asia IR and CG Award givento the SM Group of Companies on March 201'1, for being theBest in Environmental Responsibility;

The Asset: 2010 Platinum Corporate Award given to SMIC,SM Prime and BDO for their excellent performance inenvironmental responsibility; and

PCCI's E3 Award for Excellence in Ecology and Economy tothe SM Supermalls by President Gloria Macapagal Arroyoand the Philippine Chambers of Commerce and Industry.

IV. SPECIAL AND AFFIRMATIVE DEFENSES

SMPH and SM SUPERMALIS respectfully replead the allegations

contained in the foregoing paragraphs and respectfully pray that the Complaint

be dismissed, or judgment be rendered in SMPH's and SM SUPERMALLS' favor,

on any or all of the following grounds:

A.

THE COMPLAINT SHOULD BE DISMISSED FORLACK OF CAUSE OF ACTION BECAUSEPLAINTIFFS' RIGHT TO A BALANCED ANDHEALTHFUL ECOLOGY, AND THE PUBLICINTEREST IN ENVIRONMENTAL PROTECTION,ARE SUFFICIENTLY MET BY THE REGULATORYMECHANISM PRESENTLY ENFORCED BY THEDENR. IN LINE WITH THIS REGULATORYMECHANISM, ANY ENVIRONMENTAL IMPACTCAUSED BY THE REMOVAL OF THE TREES ONTHE SUBIECT PROPERTY HAS NOT ONLY BEENMITIGATED, BUT HAS, IN FACT, BEENSUFFICIENTLY COMPENSATED BY THEPREVIOUS PLANTING EFFORTS OF SMSUPERMALLS IN BAGUIO CITY AND BENGUETPROVINCE.

4.1,. It is basic procedural law that every civil action must be based on a

cause of action.le2 The elements of a "cause of action" arei

c.

d.

the existence of a legal right in favor of the plaintiff;

b. a correlative obligation of the defendant to respect such

right; andan act or omission of the defendant in violation of said legalright.rsa

4.2. The third element, in particular, requires that the act or omission by

the defendant in violation of the right of the plaintiff results in an injury or

damage for which the plaintiff may maintain an action for recovery of. re1ief.134

Although the first two elements may exist, a cause of action arises only upon the

occurrence of the last element, which would effectively give the plaintiff the right

to maintain an action in court for recovery of damages or other appropriate

relief .135

4.g. The Supreme Court has had occasion to declare that "[i]t is a rule of

law to which there is, perhaps no exception, either in law or in equity, that to

recover at all there must be some cause of action at the corilnencement of the

suitr"r:o 11,rr'

"There are reasons of public policy why there should be no

needless haste in bringing up litigation, and why people who are inno default and against whom there is as yet no cause of action

should not be summoned before the public tribunals to answer

complaints which are groundless. An action prematurely brought is

a grtundless suit. Unless the plaintiff has a valid and subsisting

"urr" of action at the time his action is commenced, the defect

cannot be cured or remedied by the acquisition or accrual of one

while the action is pendin1, and a supplemental complaint or an

amendment setting up such after-accrued cause of action is not

permissible."L3T

4.4. F{ence, in order for the Complaint to prosper, Plaintiffs must

establish that they have a legal right which was, andfor is threatened to be,

violated by the continued implementation of the Mall Expansion. In the absence

of any correlation between Plaintiffs' alleged right and an act or omission by

Bank of America NT & SA v. Court of Appeals , et al., G.R. No. 120135,31 March 2003,

400 SCRA 156,167;emphasis and underscoring supplied'

Turner, et al. v. Lorenzo Shipping Corp., G.R. No. 157479,24 November 2010, 636 SCRA

13,30.

Ibid at p.30.Surigao Mine Exploration Co, Inc. v Harris, G.R. No. 45543,17 May 1939,68Ph17113,121"

133

734

135

136

SMPH andf or SM SUPERMALLS that is violative of the same, Plaintiffs would

necessarily lack a cause of action for the filing of an injunction suit.

4.5. Based on the records and available documents, it is clear that there

is an insufficiency of any factual basis for Plaintiffs' claim of irreparable injury to

the environment, thus necessitating the outright dismissal of the Complaint.

4.6. It should be noted at the onset that cutting/earth-balling of trees

per se is not absolutely prohibited. It is in fact allowed subject to state regulation.

4.7. The right to a balanced and healthful ecology, which is a d6clared

state policy enshrined in the Constituti61138 ffi6f is implemented through various

statutes enacted by the legislature, was characterized in Oposa u. Factoran

(" Oposa")r3e as a right that "concerns nothing less than self-preservation and self-

perpetuation...the advancement of which may even be said to predate all

goverrunents and constitutions./l40 Further, the Supreme Court Pronounced in

Oposa that this "specific fundamental legal right"t+t to a balanced and healthlul

ecology carries with it the correlative duty to refrain from impairing the

environmg11l."L42

4.8. It must be noted, however, that this "correlative duty" as found in

Oposa is specifically addressed to the responsible government agencies, and not

to private persons.143 This is clear from the wording of Section 16, Article II:

"Sec. 16. The State shall protect and advance the right of the

people to a balanced and healthful ecology in accord with the

rhythm and harmony of nature."

4.9. It is indeed settled that rights embodied in the Constitution are not

meant to be invoked against the acts of private individuals.le Nevertheless,

138

139

140

t4'1,

142

143

See CoNSr,, Art. II, Sec. 16, which states thal "The State shall protect and advance the

right of the people to a balanced and healthful ecology in accord with the rhythm and

harmony of nafure,"G.R. No. 1011083,30 July 1993,224 SCRA 796'

Oposa, et. al.v. Factoran, et al.,G.R. No. 101"083,30 July 1993,224 SCRA 796,805.

Ibid at p. 804.

Id at p. 805

Hilarion Henares, lr., et.al v. LlO, et.al,

104,11,6.

G.R. No. 158290,23 October 2006, 505 SCRA

considering that the correlative obligation under the law from which Plaintiffs

claim their right does not devolve directly on SM SUPERMALLS but on the State,

such right cannot be deemed absolute. As shown in the foregoing, any damage to

the environment arising from the implementation of Mall Expansion

(specifically, the earth-balling of the remaining trees) is not irreparable. On the

other hand, SM SUPERMALLS stands to suffer even greater injury should it be

permanently enjoined from implementing the Mall Expansion. It may thus be

argued that, unlike in Oposa, the attendant circumstances in the present case will

require a judicious balancing of interests that are resPectively claimed by the

parties.

4.1.0. Plaintiffs, on the one hand, allege that private rights "cannot

destroy the public interest" in maintaining the remaining trees within the Subject

Property.l4s Hence, Plaintiffs posit that, even assuming the private character of

the Subject Property, arry private right as an owner or developer to use the

Subject Property is absolutely inferior to general welfare considerations.

Plaintiffs' conclusions are inaccurate and misleading.

4.L1,. A careful consideration of Philippine law and relevant regulatory

rules reveals that the underlying policy of environmental justice is still

sustainable development. This policy of balancing environmental conservation

with economic development considerations is also espoused by international

environmental law.

4.12. The three (3) main milestones in international environmental law,

namely: the Stockholm Declaration,L46 the World Commission on Environmental

and Development Brundtland Report,l47 arrd Rio Declaration la8 a[ refer to

sustainabie development and its componenb.lae Jftsse international inskuments

recognize that, in a sustainable development policy, economic development and

environmental protection do not exclude each other and are not in conflict with

145

146

-t47

148

149

See Complaint, P. 9, Par. 36.

1.6June1972.4 August 1,987.

1.4Jrne1992.

<http:/ /www.envirosecurity.org/espa/PDF /IEs-EsA-Cs-Kalimantan-Legal-Analysis'

one another.lso Instead, it is suggested that economic development and

environmental protection are mutually reinforcing, and that sustainable

development is a workable solution between the two.1s1 In a report by the World

Commission on Environmental and Development, sustainable development was

referred to as "development that meets the needs of the present without

compromising the ability of future generations to meet their needst'.152

4.13. The Constitutional right to a balanced and healthful ecology must

be read in light of the policy in the foregoing international agreements to which

the Philippine Government subscribes and adheres to.153

4.1,4. In the same vein, Philippine environmental laws seek to find a

balance between environmental protection and development, instead of

favoring one over the other.154 The Supreme Cour! in fact, stated that domestic

laws are geared towards "maintaining and ensuring an environment under

which man and nature can thrive in productive and enjoyable harmony with

each othet".lss

4.15. Evidently from the foregoing, it is not sufficient for the Plaintiffs to

aver that proceeding with the Mall Expansion will result in a negative impact to

the environment. Instead, Plaintiffs must allege and prove that the negative

environmental impact significantly outweighs the benefit of the development

introduced by SMPH and SM SUPERMALLS and that such negative impact

cannot be reversed nor mitigated. It is upon Plaintiffs to show that there is no

middle ground. and a balance between the opposing interests cannot be found.

4.1,6. Contrary to Plaintiffs' belief, the public interest against any

negative impact that may accompany the developments introduced by private

individuals and entities in their privately owned property is sufficiently

protected by the regulatory mechanisms already in place in the legal system. The

middle ground wherein environmental preservation and economic development

rbid.

td.td.

CoNST., Art, II, Sec. 2.

See Province of Rizal, et.al. v. Executive Secretary, et.al., G.R.

2005,477 SCRA 436,469.

150

151

t52

153

154 No. 129546, 13 December

meets is found through the application of the rules and regulations crafted with

the technical expertise of the DENR and the implementation of said rules and

regulations in due course.

4.17. Parenthetically, the policy of sustainable development is also the

objective of the DENR in managing and regulating the use of the environment.

The DENR, being the primary government agency responsible for the

conservation, management, development and ProPer use of the country's

environment and. natural resources/ as well as the licensing and regulation of all

natural resources,156 must ensure "the sustainable usg development'

management, renewal, and conservation" of the country's natural resources'1s7

Further, the DENR has to "esurg the availability and sustainabilig of the

country's natural resources through iudicious use and systematic restoration or

replacement. whenever l2gggihlg'"1s8

4.18. The DENR ensures that the public interest of sustainable

development is protected by promulgating rules and regulations governing the

exploration, developmen! extraction, and disposition, use and such other

commercial activities tending to cause the depletion and degradation of our

natural resources.159

4.1g. Clearly, the DENR also pulsues a policy of sustainable

development. The presence and establishment of these regulatory mechanisms

allows for the conclusion that, in the absence of any proof showing deviation

from these mechanisms, public interest should be deemed sufficiently protected"

Conversely, as long as owners of private land comply with these rules and there

is no proof showing the contrary, it cannot be said that public interest is being

prejudiced.

4.20. plaintiffs generally and baselessly insist that their environmental

rights have been violated simply because the implementation of the Mall

Expansion entails the earth-balling of trees. Plaintiffs, however, fail to even allege

8.O.192, Sec.4.Ibid,, Sec. 3; emphasis and underscoring supplied'

ADMTN. CSDE, iitl" XfV, Book IV, Sec. 3; emphasis and underscoring supplied.

156

157

158

any violation of DENR Department order No. 1989-12't ("DO 89-121"|00 and

Administrative Order No. 1990-79 ("A.O. 90-79"1,t0t which issuances are

precisely designed to regulate cutting of trees found and planted on privately

owned land.

4.21,. In recognition of the rights of land owners, DO 8g-12L was issued

to allow land owners to cut the trees found within their private lands on the

condition that a Private Land Timber Permit ("PLTP") shall be applied for and

obtained prior to the cutting. The right of the landowner to cut trees found

within privately owned land was further liberalized by the DENR in AO 90-79,

which provides that no permit shall be required in the cutting of planted trees

within privately owned land.s, except for Benguet pine and premium hardwood

species,162 in which case the coffesponding PLTP would still be required.

4.22. It was in contemplation of the mechanism under AO 90'79 that SM

SUpERMALLS sought regulatory approval for the cutting of the trees on the

Subject Property. Further, and contrary to what Plaintiffs aver, the Tree Cutting

and Earth-batling Permit in this instance was not approved on the sole authority

of DENR-CAR Regional Executive Director Baguilat. As admitted by Plaintiff

themselves,l63 on 17 October 2011., and upon submission of all necessary

requirements, the Tree Cutting and Earth-balling Permit was ordered to be

issued by sec. Paje, who remains to be the proper approving authority in

accordance with the DENR Manuai of Approvals.l'64

4.23. A11 told, without any showing of the commission of specific acts

violating DENR regulations that were precisely established in protection of these

rights, it cannot be said that the public interest sought to be protected by such

has been injured.

4.24. On the contrary, extant from public records is the fact that, in its

efforts to comply with relevant regulation and pursuant to its mandate of

corporate social responsibility, SM City Baguio's planting efforts in Benguet

160

161

L62

163

21 November 1989.

19 September 1990.

A.O. 87 -78, 28 December 1987.

See Complant, p. 4, Par.1,4.

Province have not only mitigated any environmental impact that may be caused

by the removal of one hundred eighty two (182) trees, but have also fully

compensated for such removal by going above and beyond the conditions

imposed by DENR.

4.25. The impact of the removal of 182 trees has been in fact addressed

by the previous planting activities of SM SUPERMALLS, even before the

removal can take place. Since the implementation of the SM Pines Resort Project

and in compliance with the DENR rules, SM SUPERMALLS has planted trees in

replacement of each and every tree cut. In one instance, SM SUPERMALLS even

planted double the number required by DENR as replacement. From this alone,

SM SUpERMALLS exceeded the DENR required replacement by 7,500 seedlings.

4.26. To date EIGHT HUNDRED (800) Benguet Pine and other seedlings

have been planted by SM SUPERMALLS within the SM City Baguio premises.

Aside from that, sM SUPERMALLS have planted more than EIGHT

THOUSAND (8,000) Benguet Pine and other seedlings within the Benguet

Province from 2003 to 2012. Aside from that, SM SUPERMALLS have planted

moTe than TWENTY THREE THOUSAND NINE HUNDRED THIRTY SEVEN

(23,937) seedlings in different provinces in the Philippines.

4.27. Also, SM SUPERMALLS' tree planting activities are not exclusive

to those made in pursuance of a condition to replace cut trees. SM

SUPERMALLS, as part of its CSR projects, has voluntarily participated in

numerous tree-planting activities in Baguio City and nationwide.

4.28. Considering the number of trees already planted by SM

supERMALLS not only within sM City Baguio's premises but within Benguet

province and even nationwide, the impact of the removal of the L82 trees covered

by tree cutting and earth-balling permit has been already mitigated or

compensated as a result of the previous tree planting efforts of SM

SUPERMALLS. By the sheer number of trees sM SUPERMALLS has already

planted, it is evident that it has, in advance, mitigated or comPensated any

adverse effect of the removal of the 182 trees affected by the Mall Expansion.165

4.29. Also, SM SUPERMALLS undertook to plant 50,000 trees by end of

2014.166

4.30. Further, the benefits of carbon sequestration to the Luneta Hill area

produced by l8|trees which are affected by the Mall Expansion have been more

than sufficiently compensated by the previous planting efforts of. SM

SUPERMALLS taking into account the numerous seedlings planted on site. This

is aside from the trees and plants which are designed to be included in the Sky

park and those which will be planted in replacement of the same L82 trees'

Significantly, replacing the removed trees with more aggressive young saplings

will more than compensate the carbon dioxide sequestration ability of the old,

mature trees for the reason that compared to old trees, young saplings can

sequester more carbon dioxide.167

4.21,. It should be noted that Plaintiffs here are suing in their own

capacities and as citizens of the Philippines to prevent "untold and irreparable

damage to the environms11."168 Put simply, the supposed damage and

irreparable injury sought to be prevented is not personal to the Plaintiffs, but the

suit is merely brought for and in behalf of the environment. There is, however,

the First Environmental Case,16e which is also pending before the Honorable

Court. Like the instant case, the First Environmental Case, also prays for the

Honorable Court to set aside the permit granted by Sec. Paie,L7} to set aside the

building permit issued by the City Building and Architecture Office,171 and to

Annex 19; under the tree-cutting permit, SM SUPERMALIS was required to plant thirty

(30) trees per tree cut. For the 182 trees, SM SUPERMALLS is supposed to plant 5,450'

dir"r., theloregoing, SM SUPERMALLS have clearly planted more than required, even

takir-rg into account those seedlings which will not survive.

<http:/ /www.philstar.c omf natronf article.aspx?publicationsubcategoryid=67&articleid

=798021> last visited 23 May 2012.

see Affid,avit of Dr. Armando Palijon attached hereto as ANNEX "42" and made an

integral part hereof; see also Article by Nowak, D.J. entitled oxygen Production by

Urban Trees in the United States attached hereto as ANNEX "43" and made and integral

part hereof.See Complaint, p.1.4, Par. 61,,

Civil Case No. 7595-R.

See Complaint in Civil Case No. 7595-R, p. 18, par. 2a.; Complaint, p'L4, par'2b'i o ,- --- ^t^

- -^*-.t^:-L ^ 1 A ^-- n^

168

r69

170

permanently enjoin the cutting andf or earth-balling of the L82 Pine and Alnus

treeS.172

4.32. Aside from similar relief sought, it is apparent that the instant

complaint merely replicates the Complaint in the First Environmental Case, as it

lifted verbatim twenty eight (28) paragraphs from said Complaint. This

Complaint even referred to an Exordium which does not even exist.173 In

drafting Complaint for the Second Environmental Case then, the lawyers of the

Piaintiffs -- who also represent plaintiffs in the First Environmental Case - might

be referring to the Exordium in that case.

4.33. Considering that a TEPO had already been issued in the First

Environmental Case enjoining the cutting and/ or earth-balling of the pine and

alnus trees, and which TEPO continuous to be effective to date, Plaintiffs do not

have in fact any damage to speak of. Notably, Plaintiffs herein filed their

Complaint six (6) days, or on 16 Aprit 2012, after the 72-hour TEPO was issued

and three days after said TEPO was extended. To be sure, there no longer exists

any extreme urgency and any threat of irreparable injury to merit the issuance of

another TEPO for this case as a TEPO was already issued for the First

Environmental Case.

4.34. As the cause of action, the damage sought to be prevented, and the

relief sought are practically at all fours with the Complaint in the First

Environmental Case, the filing of this almost identical Complaint is manifestly

vexatious. While Plaintiffs have the right to resort to legal remedies available to

them, such remedies should not be duplicitous and abusive of this Honorable

Court's processes. If at all, Plaintiffs herein could have indeed just joined the

Plaintiffs in the First Environmental Case and had the Complaint in that case

amended.. In fact, this Honorable Court motu proprlo ordered the consolidation of

this case to the First Environmental Case because "of identica| i5sus5.'/174

172 See Complaint in Civit Case No, 7595-R, p. 18, par. 2c.; Complaint, p. 15, pat.2d.173 See Complaint, p. 2, Pat. L.

B.

THE COMPLAINT SHOULD BE DISMISSED FORLACK OF CAUSE OF ACTION BECAUSE SMPHAND SM SUPERMALLS ARE NOT INVIOLATION OF ANY ENVIRONMENTAL LAWOR REGULATION THAT WOULD WARRANTTHE PERMANENT ENIOINMENT OF THE MALLEXPANSION.

4.95. Plaintiffs allege that the issuance of the Tree Cutting and Earth-

balling Permit and, ultimately, the implementation of the Mall Expansion,

violates their environmental rights without, however, specifying any overt act of

Defendants that suggests even a prima facie violation of any environmental

statute.

4.36. An examination of the laws and regulations cited in the Complaint

reveals that Plaintiffs' all-too general averments that the grant of governmental

permits "reeks anonrtaly"l7s as it was done in alleged non-comPliance of

mandatory requirements, and their fear that the Mall Expansion will irreparably

damage the environmsnllT6 are without basis.

4.g7. At the outset, it must be noted that Plaintiffs admit the issuance of

the necessary governmental licenses and permits endorsing and/ or approving

the implementation of the Mall Expansion, particularly the earth-balling of the

remaining Yvsss.177

4.g8. Under Section 3(*), Rute 131 of the Rules of Court, there exists a

disputable presumption that official duty has been regularly performed' Thus, in

the absence of evidence to the contrary, there is a presumption that public

officers performed their official duties regularly and legallY, and in compliance

with applicable laws, in good faith, and in the exercise of sound judgment.tzs

4.39. Plaintiffs fail to rebut the presumption of regularity by any

affirmative evidence of irregularity or failure to perform a duty' The

17s-t76

7n174

See Complaint, p. 7, Par. 26.

See Complaint p. 18, Pat.6L.See Complatnt, p. 4-6, par.L4--15.

United B.F. Homeowners' Assn. Inc., et al. v. (Municipal) City Mayor, et al., G.R. No'

presumption of regularity relative to the allowance of the amendment of the

original ECC by the DENR; the issuance of the Tree Cutting and Earth-balling

Permit by DENR; and Building Permit issued by the OBO thus continues to

prevail until it is overcome by no less than clear and convincing evidence to the

contrary. If the presumption is not rebutted in this manner, as in this case, the

presumption should be deemed conclusive.lTe

4.40. It bears emphasis that, with respect to the lawfulness and validity

of the earth-balling of the remaining trees, every reasonable intendment should

be made in support of the presumption that SMPH and SM SUPERMALLS have

sufficiently complied with all statutory and regulatory requirements, thus

warranting the eventual issuance of the Tree Cutting and Earth-balling Permit.

Moreover, in case of doubt as to the issuance of the permit being lawful or

unlawful, any construction should be in favor of its lawfulness and regularity.lso

4.4'J.. There is nothing on record to suggest that the officials of DENR-

CAR, whether in monitoring SM SUPERMALLS' compliance with regulatory

requirements or in ultimately allowing the earth-balling of the trees, deviated

from the standard conduct of official duty required by law; nor are there

allegations of any prima facie irregtlarities in the official documents arising from

the performance of their duties.181

4.42. On the contrary, an examination of the reqords and available

documents readily shows the absence of any act or omission that can even be

remotely deemed as violative of any of the laws or regulations cited by Plaintiffs.

1. SMPH AND SM SUPERMALLSHAVE SHOWN SUFFICIENT PROOF

THAT SM CITY BAGUIO,S MALL

EXPANSION WAS FOUND SOCIALLY

ACCEPTABLE BY THE

STAKEHOLDERS AF"TER BEING

ADEQUATELY AND FULLY APPRISED

OF THE PROIECT THROUGH THE

NUMEROUS

CONDUCTED.

CONSULTATTON

Bustillo, et al.v. People, G.R. No. 160718,12May 2010,620 SCRA 483.

rbid.

t79

180

4,43. Plaintiffs recklessly and baselessly allege, despite readily accessible

public records, that "no public announcement of any consultation was ever made

to invite the public and concerned civil society organizations"ls2 relative to the

Mall Expansion.

4.44. In a strained attempt to impute violations under Rep. Act No.

71"60,ta2 the Constitution and even international 1aw,18e Phintiffs conclude that

the "Baguio City Local Government was not consulted about the expansion/l8s

and that no public consultation was conducted wherein "the stakeholders in the

area" could have participatedl86 - a statement designed to mislead this

Honorable Court through a withholding of relevant facts and a misapplication of

pertinent laws and regulations.

4.45. Plaintiffs must be reminded that it does not fall upon them to

baselessly classify the Mall Expansion as an Environmental Critical Project under

DAO 2003-30, and determine for themselves the nature of the public consultation

required thereunder;182 ,lor is SM SUPERMALLS entitled to unilaterally make

such classification. Such mandate is precisely granted to, and the required

technical competence presumed to be vested iru the Secretary of the DENR and

the Director and Regional Directors of the EMB.188 Pursuant to such mandate, the

DENR found that the Mall Expansion is under Group II-Non Environmentally

Critical Project located in an Environmentally Critical Area.

4.46. In any event, even a cursory consideration of the specific areas and

types of projects proclaimedlse as "environmentally critical" reveals that the Mall

Expansion cannot be classified as such, but instead falls under Group II - Non

Environmental Critical Projects, which are projects located in Environmentally

See Complatnt, p. 6, par.19.Rep. Act. No.7160, Srcc.26;see also Complaint, p.6,pat.19.UNrrpo NATIONS FRarraEwOnx COmVTNuON oN CLIMATE CHANGT, Art' 6; see also

Complainf p.6,par.19.See Complaint, p.5, par.17.See Complaint, p.6, par. 19.

See Complaint par. 19,p.10.See DENR Administrative Order No. 42, which streamlined the EIS processing system

and delegated the ECC approving authority to the Secretary of the Department of

Environment and Natural Resources (DENR) and the Director and Regional Directors of

the Environmental Management Bureau (EMB) of the DENR.

t82

183

184

185

186

t87

188

Critical Areas. Thus, the mandatory requirement of public consultation required

by DAO 2003-30 does not apply to the Mall Expansion.leo

4.47. In recognition of an "urgent need to formulate an intensive,

integrated program of environmental protection", Presidential Decree No.

("PD") 1151 required " all agencies and instrumentalities of the national

government, including government-owned or controlled corporations, as well as

private corporations, firms and entities" to "ptepare, file and include in every

action, project or undertaking which significantly affects the quality of the

environment a detailed statement" on, among others, "the environmental impact

of the proposed actiory project or undertaking".

4.48. The requirement of an EIS under PD 1151 was later made basis for

the establishment of the PEIAS under PD 15861e1 in order "to ensure that no

person, partnership or corporation shall undertake or operate any project

declared as environmentally critical or is located within an environmentally

critical area without first securing an [ECC] issued by the President or his duly

authorized representaliys."l'e2 Under Article II, Section 1', of. the Rules and

Regulations Implementing PD L586, the declaration of certain projects or areas as

environmentally critical, and which shall falt within the scoPe of the

Environmental Impact Statement System, shall be by Presidential

Proclamation.le3

4.4g. Proclamation No. 21,46 thereafter proclaimed specific areas and

types of projects as environmentally critical and within the scope of the EIS

System established under PD L586.1ea Presently, the implementation of the EIA

System as a project pianning and management tool is governed by DENR

Administrative Order 2003-30 ("DAO 03-30").

4.50. As early as 200L, Environmental Compliance Certificate No.

CAR106-0 47-120 had already been issued for the SM Pines Resort Project, which

project was "originally designed as a mixed-use development" of the 8.5 hectares

DAO 2003-30, Sec.5.3.

Pres. Dec. 1586 (1978).

rbid.

IRR of Pres. Dec. 1586 (1978), Art. II, Sec. 1.

1,90

t9lt92

193

property owned by SMIC. To reiterate, the issuance of the original ECC

made subject of several conditions including, among others:

The strict implementation of the EnvironmentalManagement Plan ("EMP") originally submitted by SMIC;

The proper disposal of all trees to be affected by the SMPines Resort Project in accordance with exiting ForestryLaws, Rules and Regulations. In this regard, SMIC was

obligated to replace every tree cut with at least twenty five(25) saplings. Tree planting ryas also required to be

conducted within the SM Pines Property to maintain the

ecological balance of the area.

The conduct of a separate EIA procedure prior to the

implementation of any expansion andf otmodification/ deviation in the submitted documents.

4.51,. From the original components of the SM Pines Resort Project,

which included a hotel, service apartments and multi-purpose entertainment

center, only the SM Baguio City commercial mall with car park and several other

facilities had been completed.i

4.52. Considering the remaining availability of suitable land, the Mall

Expansion was envisioned to address various issues from environmental issues

(such as top soil erosion and water scarcity) to matters to address the need of its

immediate vicinity and mall patrons (such as parkin g, traffic and security

concerns) arising from the operation of SM City Baguio. As early as july 2010,

SM SUPERMALLS undertook to comply with the requirements for securing the

amendment of the original ECC for the planned Mall Expansion. Such

amendment required submission of an EPRMP, which requires proof of project

social acceptability. The final and revised EPRMP was submitted on 23 August

2011,.

4.53. It bears stressing that, the EIA Team formed for the preparation of

the EPRMP conducted the studies for the Mall Expansion from ]uly 2010 to April

2011., one of which was the social perception survey. Evident from the manner by

which the EIA was conducted is the utilization o{ a participatory and community

based approach. The study produced results showing that the project received

hieh social acceptability.

11.

111.

4.54. Hence, it is patently misleading for Plaintiffs to claim that there is

the grant of the permits "reeks anomaly"tes or that the public was

"clandestinely" "fenced out" from the EIA process.le6 Conveniently, Plaintiffs

also allege the existence of "public opposition to the proiect"lez "plainly

indicat[ing] that [the MaIl Expansion] is not acceptable to the people of

Baguio".les

4.55. Contrary to such claim, and as substantiated by public records, the

planned development of the entire SM Pines Resort Project was made public

as early as 2001. Other than Plaintiffs' say-so, there is no evidence to show that

the conduct of the two (2) EIA processes commissioned by SMIC and SM

SUPERMALLS were purposefully concealed from the public. The methodology

utilized to ensure public participation in the EIA process for the expansion

project is extensively set out in the revised EPRMP which, as found by the ProPer

regulatory authorities, suf{iciently complies with the requirements on project

social acceptability. This is evinced by no less than the issuance of the amended

ECC which, as discussed above, enjoys the presumption of regularity in the

absence of evidence to the contrary.

4.56. Over and above the requirement under the EPRMP, to ensure that

majority of the stakeholders are informed about the Mall Expansion, SM

SUPERMALLS conducted discussions with the public officials who represent the

people of Baguio City wherein the features of the Mall Expansion was explained

and presented. Discussions with the Office of the Mayor, Office of the Vice

Mayor and with the Barangay Session Road and Governor Pack were made. In

fact, as a result of such discussions, Barangay Session Road-Governor Pack Road

issued Resolution No. 007 allowing the SM City Baguio to undergo exPansion

and Mayor Mauricio Domogan indorsed to the DENR the desire of SM

SUPERMALLS to expand in order to ensure that the necessary environmental

requirements with respect to the cutting of the affected trees be implemented'

2. THT AUNNDED ECC IS REGULARLY

ISSUED CONSIDERING THAT IT WAS

See Complaint, p.7, par.26.See Complaint, p.7, par 24.See Complaint, p.7, par.23.

195

L96

197

ISSUED IN ACCORD WITH THE DENR

RULES AND IN FAVOR OF THE SAME

PROJECT AND PROJECT PROPONENT

4.57. That only an amendment to the ECC was issued to the Mall

Expansion Project is in itself a non-issue. To be sure, amendments to an ECC are

likewise recognized by Section 8.3 of DAO-2003-30 in laying down the

requirements for processing amendments to an ECC. With the grant of the

amended ECC, it is presumed that official functions have been performed and

grant was made after finding that all requirements have been complied with.

4.58. Verily, the issuance of an amendment to the ECC to the Mall

Expansion Project, instead of the issuance of a new ECC as asserted by Plaintiffs,

is presumed to be in compliance with statutory and procedural requirements.

Plaintiffs' bare and baseless claim that the grant "Ieeks anomaly" cannot be

sufficient to dispute this presumption of law.

4.59. Plaintiffs aver that the Mall Expansion "necessitates a new

environmental compliance certificals"lge and an "amendment may not be validly

made considering that the project covered in the ECC in 2001 is not the same as

the proposed expansion./2oo Again, Plaintiffs have to be reminded that it does

not rest upon them to baselessly determine what goverrunental permits have to

be obtained for the implementation of the Mall Expansion. The determination of

Plaintiffs cannot override the determination of Director Paquito Moreno of the

DENR-CAR when he advised SM SUPERMALLS that the Mall Expansion would

require only an amendment and not another ECC. It bears emphasis that the

Mall Expansion is only a component of the SM Pines Resort Project for which the

original ECC was issued. An amendment was only necessary because the Mall

Expansion will alter the original design by relocating the structures therein.

4.60. Subsequently, Plaintiffs conclude that the issuance of the amended

ECC in favor of SMPH is anomalous since it is a different entity from the original

grantee, SMIC. Plaintiffs fail to understand the legal import and significance of

an ECC and amendment thereof. The Procedural Manual implementing DAO 30-

See Complaint, p. 7 par. 26.

2003 stated that the ECC is a "project- and location-specific desqlngnl./'201

such, it will not specifically matter to whom the ECC was issued as long as

specific project is compliant with the terms and conditions stated in the ECC.

4.61. Moreover, to treat an ECC as a project specific document is clear

from the basic policy and operating principles of the EIS System. Section 1,

Article 1 of DAO 03-30 provides:

"SECTION 1. Basic Policy and Operating Principles. -

Consistent with the principles of sustainable development, it is the

policy of the DENR to implement a systems-oriented and

integrated approach to the EIS system to ensure a rational balance

between socio-economic development and environmental

protection for the benefit of present and future generations.

The following are the k"y operating principles in the

implementation of the Philippine EIS System:

a. The EIS System is concerned primarily with assessing the

direct and indirect impacts of a project on the biophysical and

human environment and ensuring that these impacts are addressed

by appropriate environmental protection and enhancement

measures.b. The EIS System aids proponents in incorporatingenvironmental considerations in planning their projects as well as

in determining the environment's impact on their project'

c. Project proponents are responsible for determining and

disclosing-all ielevant information necessaly for a methodical

uss"ss*errt of the environmental impacts of their projects."

4.62. In other words, in an application for an ECC, evaluation dwells

upon the details and design of the project and the impact of the same, both direct

and indirect, to the environment rather than on the quali{ications of the project

proponent. Notably, the project proponent's role is limited to disclosing

necessary information and ensuring that the project remains compliant with the

law and the rules throughout its implementation.

4.63. Further, in submitting its request and EPRMP, SMIC clearly

indicated therein that it remains, and was never substituted, as Project

proponent. To facilitate the application, SMIC identified three (3) contact

As

the

persons: Mr. Hans Sy, President of SMPH; Engr. Bien Mateo, Vice President for

Operations of SM SUPERMALLS and Engr. ]anssen Pe, Mall Manager of SM City

Baguio, also part of SM SUPERMALLS. As a matter of course, the amendment to

the ECC was addressed to Mr. Hans Sy, one of its contact persons stated in the

EPRMP. There is however, no inconsistency since the amendment and the

original ECC were issued to one and the same entity, SMIC, and to one and the

same project, SM Pines Resort Project.

4.64. At this point, it bears repeating that SMPH was constituted as

SMIC's Attorney-in-Fact in relation to any and all applications required for the

SM Pines Resort Project. Hence, assuming arguendo that the amended ECC was

issued in favor of SMPH, clearly, it was only in pursuance and in recognition of

the agency relationship between SMPH and SMIC. Certainly SMPH's acts,

including the acts of its sub-agent SM SUPERMALLS, with respect the

application for the amended ECC i,e. liaising with the DENR, completion of

required documentation, and submission of the EPRMP, should be correctly

acknowledged as done in representation of their principal, SMIC. Consequently,

the issuance of the amended ECC to SMPH should also be construed as issuance

to its principal, the project proponent, SMIC.

4.65. As an aside, the amended ECC refers to only to an expansion of an

existing project. Assuming ex gratia that the amended ECC was issued in favor

of SMPH, the foregoing amendment refers only to a prt and parcel of the

project. Flowever, the owner of the entire SM Pines Resort Project remains to be

SMIC.

3. Tsnnn Is No vIoLATIoN or DMO2005-19, wHICH wAS ISSUED ToSTREAMLINE THE OPERATIONS OF

THE DENR TO ALLOW THE DENR-CA& BY ITs owN AUTHoRITY, ToISSUE TNNT CUTTING PERMTTS.

4.66. Plaintiffs mislead this Honorable Court in making the assertion that

the Tree Cutting and Earth-balling Permit violates DMO 2005-19 which they

claim "prohibits the issuance of a permit for the cutting of more than 30 trees in

one area".2o2 Contrary to Plaintiffs' claim, DMO 2A05-19 provides no such

prohibition.

4.67. On the other hand, DMO 2OO5-1g was issued to grant the DENR-

CAR-RED authority "to issue cutting permits involving thirty (30) trees or less

located in private/titled property"2o3 in order to streamline DENR operations in

the Cordillera Administrative Region in view of the numerous requests for a

permit to cut trees in the Cordillera Administrative Region by granting the

DENR-CAR-RED. There is nothing in DMO 2005-19 that restricts the DENR itself

from allowing cutting of more than thirty (30) trees.

4.68. Clearly, DMO 2005-19 finds no application in this case since,

opposite to Plaintiffs' conclusion, it imposes no prohibition on cutting more than

30 trees in one area. Further, as admitted by Plaintiffs themselves,204 the

authorization to grant the Tree Cutting and Earth-balling Permit was issued on

27 October 2011. upon clearance issued directly by Sec. Paje of the DENR through

a Memorandum dated L7 October 2011.2os

4. PterNrrrns FAILED To ALLEGE,

MUCH LESS PROVE, AT\TY

TRREGULARITY IN THE ISSUANCE OF

THE BUTTOTUC PNNUM THAT

WOULD WARRANT ITS ANNULMENTBY THIS HONONASLE COURT.

4.69. Similar to their baseless position that the Mall Expansion is in

vioiation of environmental laws, Plaintiffs' prayer for this Honorable Court to set

aside the Building Permit is supported by nothing more than a bare and

generalized assertion, i.e. not all requirements under the law were complied with

prior to its issuance.206 Worse, the Complaint is bereft of any allegation, much

less proof, that would even cast aspersion on the regularity of the issuance of the

Building Permit.

202

203

204

205

See Complaint, p. 14, par. M.DMO 2005-19.

See Complantt, p. 4, par.43.Annov 1Q and'19-A

4.70. It bears stressing that, in the absence of direct evidence to the

contrary, the presumption of regularity of official functions must prevail in this

instance, in that the Building Permit was properly issued in accordance with law.

4.71,. The above notwithstanding, SMPH and SM SUPERMALLS clearly

complied with the rules in obtaining the building permit.

4.72, Plaintiffs do not, as they cannot, allege that there was a deficiency

in the documents submitted for the due issuance of the Building Permit by the

OBO. As discussed in the foregoing, SMPH, as developer of the building and

Attorney-in-Fact of SMIC, applied for, and was issued, the Building Permit only

a{ter the submission of all requisite documents in compliance with the National

Building Code and its IRR. Prior to its application for the issuance of Ancillary

Permits, SMPH andf or SM SUPERMALLS commissioned the services of

different professionals or firms to ensure that the necessary plans and

specifications were duly submitted to the various divisions of the OBO. Upon

payment of the assessed fees, these Ancillary Permits were issued by specially

mandated divisions of the OBO, which evaluated those plans and specifications

that corresponded to their own comPetence.

4.73. Hence, and contrary to Plaintiffs' averment, the OBO did not

merely rely " or7 the representations of SMIC that it complied with all

requirements under the iaw".207 Rather, City Building Official Oscar V. Flores

approved the issuance of the Building Permit after considering the assessment of

the officers of the various divisions of the OBO that SMPH is indeed fully

compliant with all relevant rules and regulations. To hold otherwise would be an

unfair and undue disservice to the OBO, which, in the issuance of a building

permit, is mandated to evaluate the accompanying principal plans, specifications

and other pertinent documents to ensure that these are satisfactory and

substantially conforming with the National Building Code.

5. TUE INDoRSEMENT oF THE

PROJECT BY THE CTTY MAYOR WAS

NOT A REQUISITE FOR THE PERMITS

OBTAINED BY SM SUPERMALLSFOR THE MALL EXPANSION AND IS

NOT AN IMPROPER ARROGATION

OF AN EXCLUSIVE POWER VESTED

UPON THE CITY COUNCIL.

4.74.

the gun on

Plaintiffs claim that the 'unilateral act of the Mayor which jumped

the other goverrunent agencies concerned'208 is an "improper

arrogation of the powers of the Baguio City Council.il2\e Plaintiffs conclude that

"[t]he City Mayor could not make a decision alone [in relation to the Mall

Expansionl for the people of the City of Baguio without the participation of the

City Council,"2ll These statements are both false and misleading.

4.75. Admittedly, "[t]he power to maintain and protect the ecology is

shared between the central government and the 1ocal government subject to the

provisions of the Local Government Code and national policies."2fl

Consequently, in any project or program that may cause pollution, climatic

change, other negative effect to the environment consultation with local

goverrunent unit concerned is required for the purpose of explaining "the goals

and objectives of the project or program, its impact upon the people and the

community in terms of environment or ecological balance, and the measures that

will be undertaken to prevent or minimize the adverse effects *1sve6f."212

4.76. However, the DENR remains as "the agency primarily responsible

for maintaining a sound ecological balance and protecting and enhancing the

quality of the environment or for promulgating rules and regulations for the

control of water, air and land po11u1isn."2L3 Deference is still given to the DENR

because "pollution control and environmental protection and enhancement are

national concerns.//214

4.77. To avoid any collision between the DENR and the local

government concerned, the Local Government Code requires consultation

208

209

2L0

2L1,

212

213

See Complaint, p. 6, par. 17.

See Complaint, p. 4, par.12.See Complaint, p. 4, par.12.PrurNrnl, AeUILINo Q., TFffi LOCAL GOVERNMENT CODE REVISITsD, a1, Q007 ed.).

lbid.,38'td 11)

between the former and the latter on matters that impact upon the

environment.2ls Clearly, the law does not provide that the local government can

refuse the implementation of a National Government program outright but

instead, subjects the same to a consultation wherein the local goverrunent unit's

comments, suggestions and opposition can be addressed.

4.78. Parenthetically, however, based on the wording of the Local

Governrnent Code, this provision applies only with respect programs and policy

implemented by the National Government. This does not apply to developments

introduced by a private individual or entity on a property it owns on its private

capacity. Based on the foregoing reasons, Plaintiffs' claim that the alleged failure

on the part of DENR and the DPWH to consult the Baguio City Local

Government about the Mall Expansion violated the Local Government Code416

does not find basis in the law.

4.79. Admittedly, use of private property is regulated by both the local

government and the State in pursuance of their police powers i.e. through the

enactment of the relevant laws and ordinances. Plaintiffs, however, have

completely failed to indicate, as they could not indicate, the relevant laws which

SM SUPERMALLS has violated through the Mall Expansion. On the contrary,

SMPH and SM SUPERMALLS complied with the law and obtained all necessary

permits for the Mall Expansion, namely: (1) an amendment to the ECC from the

DENR; (2) a tree-cutting permit from the DENR; and (3) a building permit from

the City Building Official. AII these permits have been obtained by SMPH and

SM SUPERMALLS from the concerned agencies after complete submission the

requirements. Clearly, from the foregoing, the Local Government's role in the

grant of the permit to SMPH is only in relation to the Building Permit. With

respect the ECC and tree-cutting, application were filed with the appropriate

DENR agency, for its consideration.

4.80. Flowever, in this case, it is not as if the DENR completely isolated

itself from the Baguio City Local Government in determining that the Mall

Expansion should be allowed to proceed. In fact, on 26lanuary 2011., the DENR-

ld.,112

EMB required SM SUPERMALLS to submit as part of the EPRMP "a project

social acceptability indicators, such ds, but not necessarily limited to,

baranggay/LGU endorsements." This was complied with by attachment of the

Social Perception Study and Key Interviews together and Resolution 007 of the

Barangay Session Road-Governor Pack Road to the EPRMP initially submitted

on 16 February 2011,.

4.81. Notably, from the foregoing, it is clear that even prior to the

indorsement from the City Mayor on lL July 2011, and even prior to the request

for such indorsement on 14 June 2011., the requisite project social acceptability

indicator has already been sufficiently complied with and the revised EPRMP,

the only requirement for the amended ECC, has already been submitted. This

clearly bellies what Plaintiffs seem to insinuate that the City Mayor's

indorsement influenced the goverrunent agencies and was the only basis for the

latter to grant the necessary governmental permits requested by SMPH and SM

SUPERMALLS for the Mall Expansion.

4.82. Moreover, Plaintiffs claim that SM SUPERMALIS used the

indorsement of the City Mayor in applying for a permit to cut and earth-ball

Benguet pine is strongly negated by the fact that as early as 28 ]anuary 2011',

almost six (6) months before the request for indorsement was made, SM

SUPERMALLS already made a request for an inventory of the trees affected by

the Mall Expansion for the purposes of the amended ECC and consequently the

application for tree cutting permit. In addition, the grant of the tree cutting

permit is but a necessary consequence of the prior issuance by the DENR of the

amended ECC, which contemplates relocation of structures resulting to the

removal of the trees in the area wherein the Mall Expansion is expected to be

constructed.

4.83. Further, based from a reading of the Cify Mayor's indorsement, its

apparent purpose is to advise the DENR of SM SUPERMALLS' desire to expand

and to ask the DENR to ensure that the affected trees will be removed in

accordance with the relevant environmental laws and was not for the purpose of

"mak[ing] a decision alone for the people the City of Baguio without the

participation of the City Council".2tz Clearly, if. any, the indorsement only

evinces that the Office of the City Mayor of Baguio City coordinated andf or

consulted the DENR Secretary on SM SUPERMALLS' proposed Mall Expansion.

This is well within the powers of a City Mayor to "call upon any national official

or employee stationed in or assigned to the city to advise him on matters

affecting the city and to make reconunendations thereon"218 and to "coordinate

with said official or employee in the formulation and implementation of plans,

programs, and projects."2le Clearly, City Mayor Domogan was acting within his

authority and power and did not in any way arrogate the power of City Council

as Plaintiffs claim, which power Plaintiffs did not even bother to identify.

6. Trrr TMPLEMENTATIoN oF THE

Men ExpeNsloN DoES NorREQUIRE THE APPROVAL OF THE

NCCA.

4.84. Plaintiffs posit that the MalI Expansion should be permanently

enjoined because the Subject Property, including the remaining trees to be earth-

balled, is "part of the heritage of the City of Baguio and its People"?2CI and is

protected under Rep. Act No. 10066. On the basis of this assumption, Plaintiffs

conclude that the expansion project requires the evaluation and approval of the

NCCA.221 Plaintiffs are mistaken.

4.85. Section 15 of Rep. Act No. 10066, which Plaintiffs cite as basis in

their Complaint, provides that:

"Sec. 15. Conseraation "f Cultural Property. Allintervention works and measures on conservation of nationalcultural treasures, important cultural property, as well as nationalhistorical landmarks, sites or monuments and structures previouslymarked by the National Museum andf or the National HistoricalInstitute before the implementation of this Act, shall be undertakenthrough the appropriate cultural agency which shall supervise the

same.

217

218

21,9

)ro

See Complaint, p. 4, par.12.Locel GovERNMENT CoDE, Sec. 455, par. xvi.Ibid., par. xvi.c-- /-^*-1^i^+ ^ 1C -or ??

The appropriate cultural agency shall approve only thosemethods and materials that strictly adhere to the acceptedinternational standards of conservation."

4.86. Section 3 of Rep. Act No. 10066 defines "cultural property" as those

that consist of "all products of human creativity by which a people and a nation

reveal their identity, including churches, mosques and other places of religious

worship, schools and natural history specimens and sites, whether public or

privately owned, movable or imrnovable, and tangible or intangible". Based on

these provisions, Rep. Act No. 10066 clearly finds no application in this instance.

4.87. At the onset, Plaintiffs do not, as they cannot, even allege that Rep.

Act No. 1,0066 involves the protection or enforcement of environmental rights.

More importantly, the expansion site and trees located thereat are not in the

nature of "national historical landmarks, sites or monuments and structures",

nor were these "previously marked by the National Museum and/or the

National Historical Institute" for intervention and conservation works. Thus,

Section 15 of Rep. Act No. 10066 clearly does not apply. In turn, Plaintiffs are not

entitled to any rights under the said provision that could possibly have been

violated by the implementation of the Mall Expansion.

7. THnnE IS No ALLEGATIoN oF ANY

OVERT ACT BY SMPH AND SMS{-IPERMALLS THAT IS INVIOLATION OF ANY OF THE

PROVTSIONS OF RNP. ACT NO.8749.

4.88. Rep. Act No. 8749 provides, among others, the power of the DENR

- the government agency tasked with implementing the provisions of tlrre law2z

to formulate a comprehensive air pollution management and controlprogratt@,

wherein ambient air quality standards are set. Such standards dictate the

corresponding allowable ambient guidelines values of air pollutants.2a

Emissions in excess of these standards are regulated by the DENR and other

government agencies such as the Department of Transportation and

Rep. Act No. 8749 (1999), Sec. 2.

lhid S'c,c 7

222

223

Communications and the Department of Trade and Industry issue rules and

regulations and permits as they may determine necessary.25

4.89. Without any allegation that rules and regulations issued by the

implementing government agencies have been transgressed, Plaintiffs conclude

that SM SUPERMALLS has violated Rep. Act No. 8749 with the implementation

of the MaIl Expansion which will lead to the removal of trees that "contribute

largely to the maintenance of the public's right to clean air" .26

4.90. Otherwise stated, Plaintiffs' right under the law is claimed to have

been violated by "the cutting of [these] trees will exacerbate the aerial situation in

Session [Road] and will entail deleterious effects on public health and the general

welfare of the peopls."zz7 Further, reasoning under the premise that emissions

from motor vehicles are the main source or contributor of pollutants in the

Central Business District of Baguio City, Plaintiffs posit that the construction of a

parking lot pursuant to the expansion project will result in a "more polluted"

atmosphere.22s

4.91,. In making the above allegations, Plaintiffs seem to suggest that the

cutting of trees and the construction of a parking building violate their right

under R"p. Act No. 8749. Stripped of Plaintiffs' strained reasoning, a

consideration of the provisions of Rep. Act No. 8749 clearly shows that SM

SUPERMALLS is not in violation thereof.

4.92. At the outset, it bears emphasis that the correlative duty oI

protecting and advancing the people's right to clean air rests upon the State.zs

To en{orce such standards, the DENR and other government agencies

promulgate the necessary rules and regulations, and issue the corresponding

permits as they may deem necessary.230 The duties of private entities such as SM

SUPERMALLS are usually established in such rules and regulations that are

enacted by the implementing agencies.

ld., Sec. -1.6,

21- and 26.See Complainf p. 10, par.42.See Complaint, p. 10, par.43.See Complaint, p. 10, par.40-4L.IJnp AnrNT.r R74q /1QQQ\ Qor ?

225

226

727

228

229

4.93. Plaintiffs, thus, mislead this Honorable Court in implying that the

cutting and earth-balling of trees are acts in violation of Rep. Act No. 8749.It is

only upon a showing that a private individual's act was committed in violation

of the standards, guidelines and permits issued by the DENR that any judicial or

administrative remedy against such private individual becomes available.

4.94. Worse, a close reading of the law will show that the very acts

complained of by Plaintiffs are not prohibited. The "cutting" or "earth-bal1ing" of

trees is not even contemplated thereunder. Neither does the law concern itself

with the construction of "parking lots".

4.95. Notably, R"p. Act No. 8749 seeks to achieve sustainable

development.23l In order to achieve this goal, the State endeavors to find a

balance between environmental protection and development.232 Based from a

reading of the law, it is evident that the legislature sought Rep. Act No. 8749 to

regulate and. mitigate acts that contribute pollutants to the air and not to

absolutely prohibit such acts. To illustrate, the law bans incinerationxs but only

regulates the use of any trade, industry, process and fuel-burning equipment or

industrial emitting air po11utan1s.234 The latter is performed by requiring the

industries that are proven to exceed the emission rates established by the DENR

to install appropriate air pollution control devices.23s Common experience

dictates that development has an adverse effect on our environment, specifically

by contributing pollutants to the air. Clearl/, the law does not ban all kinds of

development. To construe the law otherwise, as what Plaintiffs insits, will

hamper any legitimate industrial activity, unduly burden the exercise of private

rights, and ultimately prevent national progress.

8. Tunnn IS No BASIS FoR PLAINTIFFS

TO CLAIM THAT THE VEGETATION

rN THE sM PINIES Rnsonr Pno;ncrPRoreRtv, INCLUDING

VEGETATION FOUND IN THE LEASE

PROPERTY AND SUBJECT PROPERTY,

AMOUNTS TO A ,,NATURAL AND

231

232

233

234

ld.,Sec.3.td.ld., Sec.20.td..Sec.19.

RESTDUAL FOREST,, SO AS TO PLACE

IT WITHIN THE CONTEMPLATIONOF THE MORATORIUM ON CUTTING

AND HARVESTING OF TIMBER

UNDER EO 23.

4.96. Plaintiffs argue that the grant of the Tree Cutting and Earth-balling

Permit is in violation of EO 23 because the Subject Property whictu to reiterate, is

only a portion of the SM Pines Property, has a "thick tree cover" .%6Ir. relation to

this, Plaintiffs allege that EO 23 placed all "national and residual forests" under a

"total log ban". Plaintiffs further conclude that the Subject Property is a forest in

contemplation of international instruments and national laws of its "thick tree

cover".

4.97. Contrary to what Plaintiffs aver, EO 23 imposes a moratorium on

"natural and residual forests", which "are forests composed of indigenous trees,

not planted by r\ar('.%7 The Subject Property cannot be classified thereunder

because, and contrary to what Plaintiffs suggest there is no 'thick tree cover'. In

any event, the "thick tree cover" of the Subject Property, assuming that such is

indeed a "thick tree cover", is Largely due to the efforts of the SM Group of

Companies since the inception of the SM Pines Resort Project in 2001.

4.98. Notably, the forest lands contemplated by the law include "public

forest, permanent forest or forests reserves/ and forest reservations",2ss all of

which are lands of public domain. A public forest is a land of the public domain

which has not been the subject of the present system of classification for the

determination of which lands are needed for forest purposes, while a permanent

forest or forest reserves refer to those lands of the public domain which have

been the subject of the present system of classification and determined to be

need.ed for forest purposes.23e Clearly, the Subject Property, which is a privately

owned land, is not covered by the above definitions. It follows that the

moratorium cannot apply to the Subject Property.

See Complaint, p.9, par 33.

E.O.23, Section 1.2lhirl.. Sectton 1 .1

236

237

238

4.99. Significantly, Plaintiffs themselves admit that the SM Pines

Property is located in Baguio City's Commercial Business District,2ao whigh hag

been classified as a Commercial Zone 1 pursuant to the Comprehensive Land

Use and Zoning Regulations of Baguio City.z+t A certification to this effect has

also been issued by the City Planning and Development Coordinator's Office.

This certification by itself is enough to refute applicability of EO 23 to the earth-

balling of trees found within the SM Pines Property.

4.100. Moreover, the earth-balling of the remaining trees found within the

SM Pines Resort Property covered by a PLTP cannot be and is clearly not the

subject of the moratorium under EO 23 which pertains to logging contracts and

timber license agreements. From a reading of EO 23, it is apparent that the

moratorium is upon "cutting and harvesting of timber in the natural and residual

forests" which activity is properly covered by logging contracts and timber

license agreements. Based from the foregoing, it is obvious, that EO 23 finds no

application in this case.

9, A coRPoRATIoN HAS APERSONALITY SEPARATE AND

DISTINCT FROM THAT OF ITS

EMPLOYEES, OFFICERS AND

CORPORATE DIRECTORS. TUUS,

DEFENDANT OFFICERS ARE NOT

PROPER PARTIES TO THIS CASE.

4.101,. It is trite but still bears repeating, that a corporation is an entity

with a legal personality separate and distinct from its stockholders and from

other corporations to which it may be connected.%2 A consequence of their

separate legal personalities is that obligations incurred by the corporation, acting

through its officers, directors, and employees, are the corporation's own

tiabilities. Thus, property belonging to a corporation cannot be attached to satisfy

the debt of a stockhold.er. The reverse holds true: The general rule is that the

properties of a stockholder cannot be attached to answer for a corPoration's

debts. The stockholder has only an indirect interest in the assets and business of

240

241,

242

See Complaint, at p. 6, pat. 18, 22

Annex 7.

Thp Heirs of the Late Panfilo v. Paiarillo v. Court of Appeals, G.R. Nos. 155056-57, 19

the corpo.41l6n.2a3 The same rule, and more, applies to its officers, employees,

and agents. They do not even have an indirect or inchoate interest in the assets

of the corporation, unless at the same time they are stockholders.

4.102. The Supreme Court applied this rule fairly recently:

"Lastly, we come to the issue of whether Wiltschek,as the General Manager, should be personally liabletogether with M+W Zander. We agree with petitioners thathe should not be personally liable. The general manager ofa corporation should not be made personally answerablefor the payment of an illegally dismissed employee'smonetary claims arising from the dismissal unless he hadacted maliciously or in bad faith in terminating the servicesof the employee. The employer corporation has a separateand distinct personality from its officers who merely actas its agents.

xxx

The exception noted is where the official 'had acted

maliciously or in bad faith,' in which event he may be madepersonally liable for his own act. That exception is notapplicable in the case at bar, because it has not been Proventhat Wiltschek was impleaded in his capacity as GeneralManager of petition corporation and there aPPears to be noevidence on record that he acted maliciously or in bad faithin terminating the services of respondent' His act,

therefore, was within the scope of his authority and was a

corporate act for which he should not be held personallyliable."2M

4.1,03. Earlier, in CIR as. The Estate of Benigno P. Toda, lr,2as the Supreme

Court said that:

"A corporation has a juridical personality distinct and

separate from the persons owning or composing it. Thus, the

owners or stockholders of a corporation may not generally be

made to answer for the liabilities of a corporation and vice versa.

There are, however, certain instances in which personal liabilitymay arise. It has been held in a number of cases that personal

liability of a corporate director, trustee, or officer along, albeit notnecessarily, with the corporation may validly attach when: 1-' He

assents to the (a) patently unlawful act of the corporation, (b) bad faith or

gross negligence in directing its ffiirs, or (c) conflict of interest,

243 Delima v. Gois, G.R. 178352,17lune2008,554SCRA 731.,737.2M M+W Zander Phils. v. Enriquez, G.R. No. 169173,5 June 2009,588 SCRA 590,61L.

resulting in damages to the corporation, its stockholders, or other

persons;2. He consents to the issuance of usatered down stocks or, haaingknouledge thereof, does not forthwith file with the corporate secretary his

zoritten objection thereto; 3. He agrees to hold himself personally and

solidarily liable with the corporation; or 4. He is made, by specific

proaision of law, to personally answer for his corporate action.tt246

4.1.04. Bad faith or negligence is a question of fact that requires evidence,

not speculation. Indeed, bad faith per se is not enough for one to be held liable;

bad faith must be evident. There must be some dishonest purpose or some moral

obliquity and conscious doing of a wrong, a breach of a sworn duty through

some motive or intent or ill will for ulterior purposes.2aT

4.105. The Plaintiffs, by asserting the personal liability of unnamed

defendant officers, have to discharge the burden of proving that the conditions

for such personal liability are Present. Mere allegation is not enough.

4.1,06. Simply put, defendant officers are not one and the same as SMPH

and SM SUPERMALLS. Verily, the inclusion of unnamed defendant officers in

the Complaint is misplaced, if not, outright malicious.

PLAINTIFFS ARE NOT ENTITLED TO THEEQUITABLE REMEDY OF INIUNCTIONBECAUSE THEY ARE BARRED BYPRESCRIPTION AND/OR LACHES AND/OR AREOTHERWISE ESTOPPED FROM ASSAILING THEVALIDITY OF THE ORIGINAL ECC AND ITSSUBSEQUENT AMENDMENT.

4.107. Plaintiffs anchor their prayer for the permanent enjoinment of the

Mall Expansion on the claim that the issuance of the amended ECC was attended

by irregularities for failure to comply with the proper procedure laid down in

DAO 2003_30.248

246 lbi.d, at p. 304.247 Antonino v. Desierto et al., G.R.No. LM492,18 December 2008,574 SCRA 403,426.

C.

4.108. As discussed above, there was more than sufficient compliance

with the submission of an EPRMP containing environmental baseline data,

project descriptiory an environmental impact and environmental management

plan and proof that the Mall Expansion is socially acceptable.

4.1,09. In any even! Plaintiffs' remedy to assail the validity of the

amended ECC should properly be considered within the parameters of the

regulatory mechanism that they seek to invoke in their Complaint. DAO 2003-30

provides that the grant of an application for the issuance of an ECC may be

assailed by appeal within fifteen (15) days from the issuance of the decision

approving such application.24e Cleariy, Plaintiffs' right to appeal the issuance of

the amended ECC on 22 September 2011. had long prescribed following DAO

2003-30. Plaintiffs' right to appeal expired on 7 October 2011,. With more reason/

Plaintiffs should be precluded from assailing the original ECC for the SM Pines

Resort Projec! which was issued as early as September 2001. Without any appeal

having been filed by any interested parfy within the allowable period, the

decision allowing the issuance of the original ECC, as well as its subsequent

amendment, became final and executory. A decision which has attained finality

can no longer be assailed andf or modified.2s0

4.110. The right to appeal, being merely a statutory right, may be

exercised only in the manner and in accordance with the provisions of the law.

Failure to perfect an appeal in accordance with the rules and within the time

allowed has the effect of defeating the right to appeal of a party and precluding

the appellate court from acquiring jurisdiction over the case. xt This is for the

reason that "[j]ust as a losing party has the privilege to file an appeal within the

prescribed period, so does the winner also have the correlative right to enjoy the

finality of the decision." 252 In additiory "[p]ublic policy and sound practice

demand that judgments of courts should become final and irrevocable at some

definite date fixed by law. Such rules are a necessary incident to the Proper/

ef{icient and orderly discharge of judicial functions."53

249

250

251.

252

See DAO 2003-30, Sec. 6.

Pascual v. Robles., G.R. No. 182645,4 December 2009,602 SCRA 770,776.

Ibid. atp.777.td,

4.111,. In addition, "[i]t is well-established in our jurisprudence that the

decisions and orders of administrative agencies, rendered pursuant to their

quasi-judicial authority, have upon their finality, the force and binding effect of a

final judgment within the purview of the doctrine of. res judicata. ... The orderly

administration of justice requires that the judgments/resolutions of a court or

quasi-judicial body must reach a point of finality set by the law, rules and

regulation s."254

4.112. This principle was also enunciated by the Supreme Court inFortich,

et.al. a. Coronazss wherein it ruled that even if the grounds raised are

exceptionally meritorious, a decision of the Office of the President, which has

already become final and executory for failure to file a motion for

reconsideration/appeai within the reglementary period, can no longer be

modified, to wit:

"When the Office of the President issued the Order x x xdeclaring the Decision x x x final and executory, as no one has

."uronubly filed a motion for reconsideration thereto, the said

Office had lost its jurisdiction to re-oPen the case, more so modifyits Decision. Having lost its jurisdictiory the Office of the President

has no more authority to entertain the second motion for

reconsideration filed by respondent DAR Secretary, which second

motion became the basis of the assailed'Win-Win' Resolution. x x

x Thus, the act of the Office of the President in re-opening the case

and substantially modifying its March 29,1996 Decision which

had already become final and executory, was in gross disregard of

the rules and basic legal precept that accord finality to

administrative determinaliot t.//256

4.112. In addition to prescription, Plaintiffs are also barred by laches from

questioning the validity of the issuance of the original ECC.

4.11,4. Laches means the failure or neglect for an uffeasonable and

unexplained length of time, to do that whictu by exercising due diligence, could

or should have been done earlier; it is negligence or omission to assert a right

within a reasonable time, warranting the presumption that the party entitled to

Fortich, et al., v. corona, G.R. No. 13L457, 24 Aprtl \998 citing san Luis, et al. v. Court of

Appeals, et aL,289 SCRA 624,651..

lbid at650.

assert it either has abandoned or declined to assert it.%7 It is such neglect or

omission to assert a right, taken together with lapse of time and other

circumstances causing prejudice to an adverse party, as will operate as a bar in

equity.2ss

4.115. Evidently, Plaintiffs' negligence, without any justifiable excuse or

defense, in exercising their right to oppose validity of the original ECC is

tantamount to abandonment and consequently bars Plaintiffs from belatedly

asserting such right. This coupled with the lapse of more than a decade from the

issuance of the original ECC and the prejudice which will be caused to SM

SUPERMALLS operates to bar Plaintiffs claim for reasons of equity .25e To allow

the belated assertion of the right to oppose, attributed solely to Plaintiffs' neglect,

will work great disadvantage to SM SUPERMALLS. Under the authority granted

to it under the original ECC and in lawful exercise of its rights, SM

SUPERMALLS has incurred innumerable expenses for the clearing, constructiory

design, and security of the area with the reasonable expectation that these would

be returned upon completion of the entire project in the form of revenue. Clearly,

SM SUPERMALLS stands to be inequitably and gravely prejudiced should this

belated and baseless impugning of the validity of the original ECC be allowed to

Prosper.

4.116. Moreover, Plaintiffs are estopped from questioning the regularity

of the ECC. First, Plainti{fs' interests are represented in the participatory MMT,

which was created pursuant to the original ECC. Second, Plaintiffs themselves

argued that the Mall Expansion could proceed as long as an ECC is acquired for

such purpose and the conditions set forth therein are complied with.zeo Since it

has been clearly established that the Matl Expansion did not entail an entirely

new ECC but merely an amendment of the original ECC, using Plaintiffs' own

argument, then they should now be estopped from protesting the Mall

Expansion.

zsz Agueda de Vera Crtz, et al. a. SabinaMiguel, G.R. No. 1,M103,31 August 2005,468 SCRA

506,519.2s8 lbid., citing Catholic Bishop of Balanga v. Court of Appeals, G'R. No- 1125L9, L4

November 1996, 264SCRA iAL tgZ-tgg; Eduarte v. Court of Appeals, G'R' No' 121038' 22

lu.ly 1999,311 SCRA 18,26,519.25s lbid., citing Catholic Bishop of Balanga v. Court of Appeals, G'R. No. 112519, 14

November 1gg6,z64SCRA IALl-9Z-tgg; Eduarte v. Court of Appeals, G.R. No. 121038,22

Iulv 1999,311 SCRA 18,26,519.

4.117. It is a settled principle of civil law that "one may not change his

position and profit from his own wrongdoing when he has caused another to

rely on his former represenlalisvl.t'261' This principle of estoppel provides that

"[w]here a party, by his deed or conduct, has induced another to act in a

particular manner, estoppels effectively bars the former from adopting an

inconsistent position, attitude or course of conduct that causes loss or injury to

ths 1411s1./'262

4.118. Evidently, through the MMT, SM SUPERMALLS has been in

constant and continuous couununication with the EMB, DENR-CAR,

PENRO/CENRO, Local Government Units of Baguio, and the BRM. Obviously,

also, since the creation of the MMT, the members thereof, which include the

barangay directly affected by the project, as well as representatives of non-

governmental organizations with environmental thrusts, have been privy to the

plans of constructing the SM Pines Resort Project on the entire privately owned

8.5 ha. land. From the beginning, these parties have been apprised of the plan

which, although does not expressly include the Mall Expansiory is directed

towards developing the entire area, and as a consequence, necessarily entails

removal of some trees.

4.119. Significantly, the original ECC includes as a condition that "[a]ll

trees to be affected by the project shall be disposed of in accordance with existing

Forestry Laws, Rules and Regulations." Common Sense dictates that

in{rastructures such as a shopping mall, a hotel, service apartments, and a multi-

purpose entertainment center cannot be built on stilts. Hence, the parties that

claim that they would be 'adversely affected' by the Mall Expansiory who were

fairly represented in the MMT, cannot feign ignorance close to a decade after the

creation of the monitoring team and, on a whim, opPose the Mall Expansion.

Without showing that the Mall Expansion is in violation of the conditions set

forth in the original ECC, it cannot be prevented from proceeding to the

prejudice of SM SUPERMALLS.

267 Sy v. Central Bank, G.R. No. L-4'l'480,30 April1976,70 SCRA 570,584.262 Sps. William and Rebecca Genato v. Rita Viola, G.R. No. 1,69706,5 February 2010, 61-1,

E.

THE EARTH.BALLING OF THE REMAININGTREES, WHICH IS AN INTEGRAL COMPONENTOF THE LAWFUL IMPLEMENTATION OF THEMALL EXPANSION, IS A VALID EXERCISE OFSMPH'S AND SM SUPERMALLS' PROPERTYRIGHTS. HENCE, THE GRANT OF APERMANENT INIUNCTION AGAINST THEMALL EXPANSION IS TANTAMOUNT TO ANUNLAWFUL TAKING OF SM SUPERMALLS'PROPERTY WITHOUT DUE PROCESS OF LAW.

4.120. As discussed above, sufficient regulatory measures are in place to

address Plaintiffs' contention of irreversible damage to the environment. SMPH

and SM SUPERMALLS are in dutiful compliance with all the regulatory'

requirements and is justified in developing the property in accordance and in

reliance on the State's representation that the Subject Property is intended for

commercial development. SMPH and SM SUPERMALLS will be inequitably and

irreparably damaged should the planned Mall Expansion be permanently

enjoined through no fault of theirs. Moreover, to disallow the Mall Expansion is

tantamount to a deprivation of SMPH's and SM SUPERMALLS' right to develop

the property and is contemplated as unlawful taking without due process of law.

4.12L. The Mall Expansion which, to reiterate, is just part and parcel of the

SM Pines Resort Project, is located in Baguio City's Commercial Business District,

which has been classified as a Commercial Zone 1 pursuant to the

Comprehensive Land Use and Zoning Regulations of Baguio City. The plan to

develop the property into a business center which includes a shopping mall, a

hotel, service apartments and a multi purpose entertainment center is fit with the

usage to which the Subject Property is classified under.

4.122. Simply put, the Subject Property, by its very classification, is clearly

intended to be utilized for a commercial purPose.

4.123. Notably, the use of the Subject Property for the Mall Expansion is

in accordance with the zoning ordinance promulgated by the City Government

of Baguio. It should also be pointed out that the Subject Property was acquired

purposelv for commercial and tourism purposes. Throughout the years/

corunercial establishments have been constructed in the area, such as the SM

Baguio Mall and a Banco De Oro branch.

4.124. The Constitution expressly provides in Article III, Section 9 that

"private property shall not be taken for public use without just compensation."

In City of Manila a. Laguio,263 the Supreme Court identified the two different

kinds of taking by the goverrunen! namely: (1) possessory taking, which occurs

when the government confiscates or physically occupies property and (2) a

regulatory taking occurs when the government's regulation leaves no reasonable

economically viable use of the property.264

4.1,25. While property may be regulated to a certain extent, if regulation

goes too far it will be recognized as a taking.265 However, there is no formula in

answering the questions of what is.too far and when regulation becomes a

taking. As a rule, however, the courts ask whether justice and fairness require

that the economic loss caused by public action must be compensated by the

goverrunent and thus borne by the pubtic as a whole, or whether the loss should

remain concentrated on those few persons subject to the public action.266 What

is crucial in judicial consideration of regulatory takings is that government

regulation is a taking if it leaves no reasonable economically viable use of

property in a manner that interferes with reasonable expectations for use.267

When the owner of real property has been called uPon to sacrifice all

economically beneficial uses in the name of the cofiunon good, that is, to leave

his property economically idle, he has suffered a taking.268

4.126. In this case, Plaintiffs pray, among others, that this Honorable

Court: (a) nullify the Tree Cutting and Earth-balling Permit dated 27 Octobet

2011,; (b) nullify the Building Permit dated l2January 2012; and (c) permanently

enjoin the cutting and/or earth-balling of the remaining trees on the Subject

Property. Consequently, if Plaintiffs' Prayers would be granted, the judgment

would be tantamount to a taking of SMPH and SM SUPERMALLS' property as it

G.R. No. 118127,12 Aprrl'2005,455 SCRA 308.

lbid., at340.td.Id., at34].td.

263

264

265

266

267

goes beyond regulation and proceeds to deprive SMPH and SM SUPERMALLS

of the ordinary and beneficial use of the Subject Property.26e SMPH as developer

of the mall and SM SUPERMALLS as its manager and operator, would be

prevented from exercising their rights to develop and eventually, manage the

Subject Property as well as cater to the needs of its pafrons.

4.127. Also, to enjoin SMPH and SM SUPERMALLS to proceed with the

Mall Expansion will prevent them from adopting measures to make the

developrnent and the premises adaptable to climate change. Without the Mall

Expansion, SMPH and SM SUPERMALLS will be prevented from taking

affirmative and preventive steps to protect the development and the premises

from the adverse effects of climate change. Plaintiffs would argue that SM

SUPERMALLS could proceed with the construction of the retaining wall and

rain water reservoir without building a conunercial building. However, without

the proposed Mall Expansiory SMPH and SM SUPERMALLS would be unable to

recoup its expenses and as such, it would not be not cost-efficient for SMPH and

SM SUPERMALLS. Therefore, SMPH and SM SUPERMALLS will suffer damage

if the Mall Expansion is enjoined as it will be effectively prevented from adapting

its property to climate change.

4.128. In addition to that, to enjoin SM SUPERMALLS from cutting the

trees affected by the Mall Expansion, will prevent SM SUPERMALLS from

addressing the Ips infestation on the trees within its property. As disclosed by

the DENR inspection repor! four (4) Benguet pine trees are #fected with Ips

infection and three (3) Benguet pine trees were noted have been infested

prwiously by Ips beetle and are already dead.27o In fact, sanitation cutting has

already been cleared by DENR to prevent the inJestation from spreading and

from affecting the other trees in the area. Certainly, as long as SM SUPERMALLS

is prevented from removing from its property the unhealthy, sickly and dying

trees therein, such trees pose danger not only to the other trees, but to the

properties and lives found within the SM City Baguio premises.

Republic of the Philippines v. Sarabia, G.R. No. 157847,25 August 2005,468 SCRA 142,

151.

4.129. It bears reiterating that injunctive relief is an equitabie relief. By its

nature, it is imperative for this Honorable Court to examine the equities involved

and to baiance the hardships to be sustained by either parry. In Executiae

Secretary, et al. a. Court of Appeals, et al.,zzt the Supreme Court held that

"[c]onsidering that injunction is an exercise of equitable relief and authority, in

assessing whether to issue a preliminary injunctiory the courts must sensitively

assess all the equities of the situation, including the public inlsvssl."272

4.130. Therefore, in assessing the equities involved and balancing the

hardships to be suffered by the parties, SMPH and SM SUPERMALLS would

suffer more grievous and irreparable damage if the injunctive relief that Plaintiffs

seek is granted.

F.

THE ISSUANCE OF A PERMANENTINIUNCTION AGAINST THE MALL EXPANSIONIS VIOLATTVE OF THE EQUAL PROTECTIONCLAUSE.

4.131,. Although the issuance of a permanent injunction is within the

power of this Honorable Court, it is difficult to uphold the validity of such order

in view of its apparent transgression of the equal protection clause enshrined in

Section 1, Article III of the Constitution, thus:

'SEC. 1. No person shall be deprived of life, liberty, or

property without due process of 1aw, nor shall any person be

denied the equal protection of the laws."

4.132. "Equal protection requires that all persons or things similarly

situated should be treated alike, both as to rights conferred and responsibilities

tmposed."27z The rationale behind this principle is "to limit government

G.R. No. 131719,25May 2004,429 SCRA 81.

Ibid., at 102-103.

277

272

discriminationt'27( by treating similar subjects alike so as not to give undue favor

to some and unjustly discriminate against o1hs1s.275

4.133. "The equal protection clause is aimed at all official state actions, not

just those of the legislature." 276 ttlls inhibitions cover all the departments of the

goverrunent including the political and executive departments, and extend to all

actions of a state denying equal protection of the laws, through whatever agency

or whatever guise is taken."277

4.134. In the present case, any ruling by this Honorable Court in favor of

Plaintiffs and against the MalI Expansion will necessarily be violative of this

constitutional safeguard. Any enjoinment on the earth-balling of the remaining

trees on the Subject Property cannot be said to apply equally to all members of

the same class, such that the intent of singling out the Mall Expansion becomes

very apparent.

4.135. Based on available public record, a number of permits have been

grdnted to private entities for the purpose of developing their private property.

Between 2002 and2011., DENR issued five hundred sixty (560) cutting and earth-

balling permits for four thousand seven hundred twenty nine (4,729) trees to

developers such Camp John Hay Development Corporation; the Baguio City

Economic Zone; schools and universities such as the St. Louis University and the

University of the Philippines-Baguio; and residents who are expanding their

houses.278 Reports show that from these grants, a total of two thousand nine

hundred eighty (2,980) trees were cut to facilitate the implementation of private

development projects.2Te

274

275

276

2n

278

tbid.td.Louis "Barok" C. Biraogo v. The Phitippine Truth Commission of 2010, G.R. No' 192935,

7 December 201,0,637 SCRA 78; citation omitted.Ibid.

WidespreadTreeCuttingPromptsDENRReview,avai1ableat<http: / / newsin{o.inquir er.netf 186949/ widespread-tree-cutting-prompts-denr-baguio-review> last visited on23 May 2012.

4.136. There is no substantial distinction between the other tree cutting

permits issued by the DENR-CAR and Tree Cutting and Earth-balling Permit

subject of this case. It can be safely inferred that all tree cutting permits involving

commerciai development plans are within the same category. If a permanent

injunction is issued against the earth-balling of the remaining trees for the Mall

Expansion, which earth-balling is an express directive from no less than the

DENR, the Honorable Court will be creating an unnecessary classification

between and among the permits that were duly issued by the DENR-CAR.

Consequently, such delineation made by this Honorable Court will be

tantamount to unduly discriminating against SM SUPERMALLS vis-d-vis all

other entities that were allowed to remove trees on privately-owned property'

VI. RESERVATION

Defendants SMPH and SM SUPERMALLS respectfully reserve their right

to file and submit to this Honorable Court the affidavit of their witnesses and

other documentary evidence.

PRAYER

WHEREFORE, Defendants SMPH and SM SUPERMALLS respectfully

pray that judgment be rendered DISMISSING the Complaint dated 13 April'2012

for utter lack of merit.

SMpH and SM SUPERMALLS likewise pray for such further or other

relief as may be deemed just or equitable.

Taguig City for Baguio City,Z3May 20\2-

ANGARA ABELLO CONCEPCION REGALA & CRUZCounsel for SM Prime Holdings, Inc. and

Shopping Center Management Corporation22"d Floor ACCRALAW Tower2nd Avenue corner 30u. Street

Crescent Park West, Bonifacio Global City0399 Taguig, Metro Manila

Telephone No. (632) 830-8000Facsimile Nos. (632) 403-7007 / 403-7009

By,

PTR No. A-1,404735;1/ a/2012; Taguig CityIBP No. 87823L; 1. / 6 / 2012; Pampanga

RollNo. 23979MCLE Compliance No. III - 00164$; 0a/ 26 / 10

UrlCHRYSILLA CARISSA P. BAUTISTA

PTR No. A-1404769;1/a/2012; Taguig CityIBP No. 879059;L/6/2012; Quezon City

Roll No. 46309

MCLE Compliance No. II - 0017495; 06 / 21. / 10

4/h'/,tt/,,^^4h\VLADIMIR S. UY O

PTR No. A-1404785;1./ a/2012; Taguig CityIBP No. 879074;1./6/2012; RSM

Roll No. 48291MCLE Compliance No. III - 001561.4;05/0a/2010

/

*rruffiuMBALPTR No. 1024480;1./a/12; Davao City

IBP No. 871341.;1./3/12; Lanao del Norte

PTR No. A-1IBP No.

CTOR P. LAZATIN

RolINo. 57383

ICIAY. P2t;1./ a/2012;;1./ 6/2012; Qu

MCLE Compliance No. (N/A)

AW^,^,PTR No. A - 148d893; a/2/12; Taguig City

BERNAR

IBP No. 879081;1/6/2012; BulacanRollNo. 59752


IBP No. 893608;03/1.6/12; Makati CityRollNo. 60444


C"/-r/CARI,A6. PINGUL

PTR No. A-1.488896; a/2/12; Taguig CityIBP No. 893575;03/1,6/12; Makati City

Roll No. 60443MCLE Compliance No. (N/A)

Copy Furnished:

OFFICE OF THE SOLICITOR GENERAL1134 Amorsolo StreetLegaspi Village, Makati City

HON. MAURICIO G. DOMOGANOffice of the City MayorCity Government of BaguioBaguio City HallBaguio City, Benguet

HON. RAMON J.P. PAJEOffice of the SecretaryDepartment of Environment and Natural Resources

Visayas Avenue, Diliman1100 Quezon City

HON. ROGELIO SINGSONOffice of the SecretaryDepartment of Public Works and HighwaysBonifacio DrivePort Area, Manila

HON.IUAN MIGUEL CUNAOffice of theDirectorEnvironmental Management BureauDepartment of Environment and NaturalResourcesDENR CompoundVisayas Avenue, Diliman1100 Quezon City

HON. CLARENCE BAGUILATOffice of the Regional Executiae DirectorCordillera Administrative Re gionDepartment of Environment and NaturalResourcesNo. 80 Diego Silang StreetBaguio City, Benguet

THE NATIONAL UNION OF PEOPLESLAWYERS2Counsel for PlaintffiNo.57 Lower Rock QuarryBaguio CIq/ 2600

FORTUN NARVASA & SALAZAR3Counsel for SM lnaestments Corporation23,a Floor Multinational BancorporationCentre6805 Ayala Avenue, Makati City

REASON FOR SERVICE BY REGISTERED MAIL

In compliance with Section 11, Rule 13 of the Rules of Court, counselrespectfully manifests that the foregoing ANSIAIER will be served on the parties,the parties in Civil Case No. 7595-R and Civil Case No. 7626-R by registered mailbecause of time and distance constraints making personal service impracticable.

VERIFICATION

I, BIEN C. MATEO, Filipino, of legal age, with office address at SMCorporate O{fices, Building B, J.W. Diokno Boulevard, Mall of Asia Complex,CBP-1A, Pasay City, after having been duly sworn to in accordance with law, dohereby depose and state that:

1.. I am the Vice President for Operations of SHOPPING CENTERMANAGEMENT CORPORATION ("SCMC")/ one of thedefendants in the above-captioned case.

2. As evidenced by the Secretary's Certificate duly executed for thispurpose, a copy of which is attached hereto as ANNEX " A", I amauthorized by SCMC to cause the preparation of the foregoingANSWER and to verify the same.

3, I have read and understood the contents of the said ANSWER, andthe allegations therein are true and correct based on my personalknowledge andf or authentic records.

The National Union of Peoples Lawyers is also the counsel for the plaintiffs in Civil Case

No. 7595-R and the petitioner in Civil Case No. 7626-R.SM Tnvestmenfs Cornorafion is a defendant in Civil Case No. 7595-R and the resoondent

SuBSCRIBED AND swoRN to before ,,'," tniJ{OL 2 A#0# May 2012, att{- City, affiant who is personally known to me,

"*hibiti.,g tome the following:

I further certify that I have personally examined the affiant and that I amsatisfied that he understood and voluntarily executed this Affidavit.

Doc. No. WPaseNo. 4 ?:

solk No.V;Series of 2012.

Affiant

Community Tax Certificate Competent Evidence of IdentityNumber Date/Place

IssuedType Details

BIEN C.MATEO

05963310 MAKATIL/21/1.2

SM Answer

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Transcript of SM Answer