SC: Smokey Mountain development project valid

The Supreme Court declared yesterday as valid the 1993 joint venture agreement between the National Housing Authority and the R-II Builders Inc. for the development of the former Smokey Mountain dumpsite in Manila into a low-cost housing project.

In an 82-page decision penned by Justice Presbitero Velasco, Jr., the SC denied for lack of merit the prayer for a writ of prohibition filed by Solicitor General Francisco Chavez asking the high court to stop the project.

But the SC also ordered the NHA to give Chavez access to records related to the Smokey Mountain Development and Reclamation Project (SMDRP).

Chavez argued in his petition that only the Public Estates Authority has a right over the old dumpsite and that NHA and R-II should not touch the property.

“We order the NHA to allow access to its official records, documents, and papers relating to official acts, transactions, and decision that are relevant to the said JVA and subsequent agreements relative to the SMDRP,” the SC said. “That would be adequate to satisfy petitioner’s right to the information gateway,” the SC added.

Reacting to the SC decision, Reghis Romero II, chairman and founder of R-II Builders, said he was “profoundly gratified” by the ruling and that the SMRDP can now “take its rightful post as a showcase for poverty alleviation and social transformation woven within a viable business proposition.”

“All through these years we have faithfully stood our ground and continued to operate business despite the grave setback and resultant financial difficulties posed by the filing of the legal question,” Romero said in a statement.

“But now in hindsight, we view this experience as a solid propeller to push ahead with our goals for social and economic development,” he said.

NHA and R-II signed the JVA on March 19, 1993. Records show that on Aug. 27, 2003, the NHA and RBI executed a memorandum of agreement to terminate the joint venture agreement.

In denying the prayer for a writ of prohibition, the Court said that “it has not been shown that the NHA exercised judicial or quasi-judicial functions in relation to the SMDRP and the agreements relative to it.”

“Likewise, it has not been shown what ministerial functions NHA has with regard to the SMDRP.” 

It stressed that Chavez was Solicitor General at the time the project was conceived and implemented and yet did not exert enough effort to stop it.

“[Chavez] had the opportunity to question the SMDRP and the agreements on it, but he did not. The moment to challenge the project had passed,” the Court pointed out.

In addition, the SC said NHA “had more than enough authority” to reclaim the lands under existing laws. The SC said that although PEA has the power to reclaim land, such authority may be delegated to other government agencies.

The SC said that the Department of Environment and Natural Resources “is deemed to have granted NHA the authority to reclaim in the Smokey Mountain Project.”

It added that the power to order the reclamation of lands rests on the president and not on the DENR secretary.

In 1988, then President Aquino ordered through memorandum order 415 that the Smokey Mountain dumpsite be made into a settlement area.

Her successor President Ramos issued several proclamations seeking the area’s development and allowing their expansion through reclamation.

“Having supervision and control over the DENR, both Presidents directly assumed and exercised the power granted by the Revised Administrative Code to the DENR Secretary to authorize the NHA to reclaim said lands,” the SC said.

The SC added that contrary to allegations, the NHA chose its joint venture partner through bidding.