The Supreme Court ruled that the Philippine Economic Zone Authority (PEZA) has the authority to require demolition of structures built within its economic zones without proper permits, even if the builders hold ancestral land claims. This decision clarifies that while ancestral land claims are recognized, they do not override national building codes and PEZA’s regulatory powers within economic zones. The ruling emphasizes the importance of obtaining proper permits for any construction activity within these zones, regardless of land ownership claims.

Building on Claims: When Economic Zones Meet Ancestral Lands

This case revolves around a dispute between the Philippine Economic Zone Authority (PEZA) and the heirs of Maximino Carantes, who claimed ownership of a parcel of land in Baguio City based on a Certificate of Ancestral Land Claim (CALC). The Carantes heirs constructed a residential building on the land, but PEZA, asserting its authority over the Baguio City Economic Zone (BCEZ), demanded its demolition because they did not secure the necessary building permits from PEZA. The central legal question is whether a CALC holder can disregard national building codes and PEZA’s regulatory authority when constructing within an economic zone.

The Regional Trial Court (RTC) initially ruled in favor of the Carantes heirs, granting an injunction against PEZA, arguing that the CALC gave them the right to possess and occupy the land. The Court of Appeals (CA) affirmed this decision. However, the Supreme Court reversed the CA’s ruling, emphasizing that holding a CALC does not exempt individuals from complying with the National Building Code of the Philippines and PEZA’s regulations. This decision highlights the balance between protecting indigenous rights and enforcing national laws within special economic zones.

The Supreme Court addressed the procedural issue of the delayed filing of the petition. While acknowledging the Office of the Solicitor General’s (OSG) lapse in filing the appeal on time, the Court opted to overlook the procedural error in the interest of substantial justice. The Court noted that strict adherence to procedural rules should not prevail over the need to correct a clear violation of substantive law, especially when the lower courts’ decisions could set a harmful precedent. The Supreme Court emphasized that procedural rules are meant to facilitate justice, not to obstruct it.

Building on this principle, the Court then analyzed the substantive issue of whether the injunction against PEZA was properly issued. The Court reiterated the requirements for the issuance of an injunction, which include the existence of a right to be protected and a violation of that right. The Court found that the Carantes heirs failed to establish a clear right to construct buildings without complying with building permit requirements. While they held a CALC, this document did not exempt them from the National Building Code or PEZA’s regulatory authority within the economic zone.

The Court highlighted the parallel case of Philippine Economic Zone Authority (PEZA) v. Borreta, where the same CALC (CAR-CALC-022) was invoked. In that case, the Court ruled that a CALC holder is merely an applicant for a certificate of ownership and does not possess a vested right of ownership that would exclude the land from PEZA’s jurisdiction. The Supreme Court reiterated the limited rights conferred by a CALC, as outlined in DENR Department Administrative Order (DAO) No. 02, Series of 1993:

SECTION 2. Rights and Responsibilities of Ancestral Land Claimants –

1. Rights

1. The right to peacefully occupy and cultivate the land, and utilize the natural resources therein, subject to existing laws, rules and regulations applicable thereto;

The Court clarified that the right to possess ancestral land under a CALC is limited to occupation in relation to cultivation and does not extend to constructing permanent structures without proper permits. This distinction is crucial because it prevents ancestral land claims from being used to circumvent national building regulations and zoning laws.

The Supreme Court emphasized that even if the Carantes heirs had established ownership of the land, they were still obligated to comply with applicable laws, rules, and regulations before constructing any structures. Section 301 of the National Building Code of the Philippines clearly mandates that no person, firm, or corporation can erect, construct, alter, repair, move, convert, or demolish any building or structure without first obtaining a building permit from the Building Official.

SECTION 301. Building Permits

No person, firm or corporation, including any agency or instrumentality of the government shall erect, construct, alter, repair, move, convert or demolish any building or structure or cause the same to be done without first obtaining a building permit therefor from the Building Official assigned in the place where the subject building is located or the building work is to be done.

The Court then addressed the issue of who has the authority to issue building permits within PEZA zones. Section 6 of P.D. No. 1716, amending P.D. No. 66, explicitly vests the administration and enforcement of the National Building Code in all zones and areas owned or administered by PEZA in the PEZA Administrator or their duly authorized representative. This provision empowers PEZA to appoint qualified personnel to act as Building Officials responsible for issuing building permits within these zones.

SEC. 6. The administration and enforcement of the provisions of Presidential Decree No. 1096, otherwise known as the National Building Code of the Philippines in all zones and areas owned or administered by the Authority shall be vested in the Administrator or his duly authorized representative. He shall appoint such EPZA qualified personnel as may be necessary to act as Building Officials who shall be charged with the duty of issuing Building Permits in the different zones. All fees and dues collected by the Building Officials under the National Building Code shall accrue to the Authority.

Furthermore, Section 14(i) of R.A. No. 7916 grants the PEZA Director General the power to require owners of structures built without the necessary permits to remove or demolish them. This authority extends to structures built on both public and private lands within PEZA zones. Consequently, the Court concluded that PEZA acted within its legal mandate when it demanded the demolition of the structures built by the Carantes heirs without the necessary permits from PEZA.

FAQs

What was the central issue in this case?	The central issue was whether the Carantes heirs, holding a Certificate of Ancestral Land Claim (CALC), could construct a building within the Baguio City Economic Zone without securing building permits from PEZA.
What is a Certificate of Ancestral Land Claim (CALC)?	A CALC is a document issued by the DENR that recognizes a claim to ancestral land. However, it does not automatically grant full ownership or exempt the holder from complying with national laws and regulations.
Does a CALC exempt holders from building permit requirements?	No, a CALC does not exempt holders from complying with the National Building Code and securing the necessary building permits before constructing structures on the land.
Who has the authority to issue building permits within PEZA zones?	PEZA, through its designated Building Officials, has the authority to issue building permits within areas owned or administered by it, as mandated by P.D. No. 1716 and R.A. No. 7916.
What powers does the PEZA Director General have regarding illegal structures?	The PEZA Director General has the power to require owners of structures built without necessary permits to remove or demolish them within 60 days, as per Section 14(i) of R.A. No. 7916.
What was the Supreme Court’s ruling?	The Supreme Court ruled in favor of PEZA, directing the Carantes heirs to demolish the residential building they constructed without the required permits.
Why did the Supreme Court overlook the OSG’s delayed filing?	The Court overlooked the delay in the interest of substantial justice, recognizing that strict adherence to procedural rules should not result in a violation of substantive law.
What is the significance of the PEZA v. Borreta case?	The PEZA v. Borreta case established that a CALC holder is merely an applicant for ownership and does not have a vested right that excludes the land from PEZA’s jurisdiction.

In conclusion, this case reinforces the principle that while ancestral land claims are important and recognized under Philippine law, they do not override the need to comply with national building codes and the regulatory authority of agencies like PEZA within their designated zones. This ruling ensures that development within economic zones is orderly and complies with safety standards, while also acknowledging the rights of indigenous communities.

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: Philippine Economic Zone Authority vs. Joseph Jude Carantes, G.R. No. 181274, June 23, 2010