The Supreme Court ruled that a local government’s permit is a prerequisite for quarrying operations, even if a national agency has already granted a permit. This means businesses must comply with both national and local regulations before starting operations. The decision underscores the importance of securing all necessary permits from the appropriate local government units, affirming their authority over natural resource extraction within their jurisdiction, ensuring adherence to local ordinances and regulations.

Excavating Rights: When a National Permit Isn’t Enough

This case revolves around Joseph Lasam Lara, who obtained an Industrial Sand and Gravel Permit (ISAG Permit) from the Mines and Geosciences Bureau (MGB) and an Environmental Compliance Certificate (ECC) from the DENR Environmental Management Bureau (EMB). With these national permits in hand, Lara commenced quarrying operations in Peñablanca, Cagayan. However, the local government, through Governor Alvaro T. Antonio, issued a Stoppage Order, arguing that Lara also needed a local permit. The central legal question is whether a national permit is sufficient to authorize quarrying operations, or if a local permit is also required.

The Province of Cagayan argued that Lara’s ISAG Permit did not automatically entitle him to begin quarrying, as he still needed to comply with local requirements. They cited his failure to pay sand and gravel fees under Provincial Ordinance No. 2005-07 and to secure necessary permits and clearances from the local government unit. Governor Antonio asserted his duty to enforce laws and ordinances under the “Local Government Code of 1991.” Lara, on the other hand, contended that the national permits from MGB and DENR-EMB should suffice, arguing that local officials were deliberately obstructing his operations without legitimate cause. He argued that the national permits should supersede any need for local approvals.

The Supreme Court sided with the Province of Cagayan, emphasizing the necessity of securing a governor’s permit before engaging in quarrying activities. The Court anchored its decision on Section 138(2) of the “Local Government Code of 1991” (RA 7160), which explicitly states:

SECTION 138. Tax on Sand, Gravel and Other Quarry Resources. – x x x.

The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan.

Building on this statutory foundation, the Sangguniang Panlalawigan of Cagayan had also enacted Provincial Ordinance No. 2005-07, reinforcing the requirement for a local permit. Section 2H.04 of this ordinance stipulates:

SECTION 2H.04. Permit for Gravel and Sand Extraction and Quarrying. – No person shall extract ordinary stones, gravel, earth, boulders and quarry resources from public lands or from the beds of seas, rivers, streams, creeks or other public waters unless a permit has been issued by the Governor (or his deputy as provided herein) x x x.

The Court interpreted these provisions as unambiguously mandating a governor’s permit as a prerequisite for quarrying in Cagayan. Because Lara failed to obtain this permit, the Court concluded that he had no legal right to conduct quarrying operations and was therefore not entitled to an injunction preventing the local government from stopping him. The Court emphasized that securing the necessary local permits is essential for legitimate quarrying operations.

This decision highlights the principle that compliance with national regulations does not automatically exempt businesses from adhering to local laws and ordinances. The “Local Government Code of 1991” grants local government units significant autonomy in regulating activities within their jurisdiction, especially concerning natural resources. The Supreme Court recognized and upheld this local autonomy, underscoring the importance of securing all required permits at both the national and local levels.

The ruling clarifies that businesses must navigate a dual regulatory landscape. Obtaining a national permit, such as an ISAG Permit from the MGB, is only the first step. Businesses must also proactively engage with local government units to understand and comply with local ordinances and permitting requirements. This dual compliance ensures that local interests and environmental concerns are adequately addressed, alongside national economic development goals.

The case underscores the importance of due diligence for businesses involved in natural resource extraction. Before commencing operations, businesses must thoroughly investigate all applicable national and local regulations. This includes consulting with local government officials, reviewing relevant ordinances, and securing all necessary permits and clearances. Failure to do so can result in costly disruptions, legal challenges, and potential cessation of operations.

The Supreme Court’s decision serves as a reminder of the balance between national and local authority in regulating natural resource extraction. While national agencies like the MGB play a crucial role in granting permits and overseeing mining activities, local government units have the power to enforce their own ordinances and protect local interests. This balance ensures that natural resource extraction is conducted in a sustainable and responsible manner, considering both economic development and local environmental concerns.

FAQs

What was the key issue in this case?	The key issue was whether a national permit for quarrying operations (ISAG Permit) is sufficient, or if a local permit from the provincial governor is also required. The Supreme Court ruled that a local permit is indeed a prerequisite.
What is an ISAG Permit?	An ISAG Permit is an Industrial Sand and Gravel Permit, issued by the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR). It authorizes a person or entity to conduct quarrying operations.
What is the role of the Local Government Code in this case?	The Local Government Code (RA 7160) grants local government units the power to regulate activities within their jurisdiction, including quarrying. Section 138(2) of the Code specifically gives the provincial governor the exclusive authority to issue permits for extracting sand, gravel, and other quarry resources.
What was the basis for the Stoppage Order issued by the Governor?	The Stoppage Order was based on the grounds that Lara’s ISAG Permit was not in accordance with RA 7942, his failure to pay sand and gravel fees under Provincial Ordinance No. 2005-07, and his failure to secure all necessary permits or clearances from the local government unit.
Did Lara have any permits at all?	Yes, Lara had an ISAG Permit from the MGB and an Environmental Compliance Certificate (ECC) from the DENR-EMB. However, he lacked the necessary permit from the provincial governor of Cagayan.
What does this case mean for businesses involved in quarrying?	This case means that businesses must comply with both national and local regulations before starting quarrying operations. Securing a national permit is not enough; they must also obtain all necessary permits from the relevant local government units.
What should a business do to ensure compliance with local regulations?	A business should consult with local government officials, review relevant ordinances, and secure all necessary permits and clearances before commencing operations. Due diligence in understanding both national and local requirements is crucial.
What was the court’s final ruling?	The Supreme Court granted the petition of the Province of Cagayan and reversed the decision of the Regional Trial Court. The injunction preventing the local government from stopping Lara’s quarrying operations was lifted.

In conclusion, this case serves as a critical reminder of the importance of navigating both national and local regulatory landscapes for businesses involved in natural resource extraction. The need to secure local permits in addition to national authorizations ensures compliance with local ordinances and fosters sustainable and responsible resource management.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Province of Cagayan v. Lara, G.R. No. 188500, July 24, 2013