Oposa v Factoran

GR No. 101083
July 30, 1993

FACTS:

Petitioners herein are all minors duly represented and joined by their respective parents contesting the
granting of the Timber License Agreement (TLAs), which they claim was done with grave abuse of discretion,
violated their right to a balanced and healthful ecology.

ISSUES:

(1) WON the right to a balanced and healthful ecology is a substantive right
(2) WON timber licenses are contracts;
WON the cancellation of which would constitute non- impairment clause which is prohibited under the Constitution

APPLICABLE LAWS:

Art 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.

Art. II, Sec. 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.

E.O. No. 192, Section 4. of which expressly mandates that the Department of Environment and Natural
Resources "shall be the primary government agency responsible for the conservation, management,
development and proper use of the country' s environment and natural resources, specifically forest and
grazing lands, mineral, resources, including those in reservation and watershed areas, and lands of the
public domain, as w ell as the licensing and regulation of all natural resources as may be provided for by law
in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future
generations of Filipinos.

Art. III, Sec. 10. No law impairing the obligation of contracts shall be passed

RULING:

(1) Yes, it is a substantive right. Right of Filipinos to a balanced and healthful ecology which the petitioners
dramatically associate with the twin concepts of "inter-generational responsibility" and "intergenerational
justice."

Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony
for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of
their right to a sound environment constitutes, at the same time, the performance of their obligation to
ensure the protection of that right for the generations to come. (2) Since timber licenses are not contracts, the
non-impairment clause, cannot be invoked.

Oposa vs Factoran
Natural and Environmental Laws; Constitutional Law: Intergenerational Responsibility
GR No. 101083; July 30 1993

FACTS:
A taxpayers class suit was filed by minors Juan Antonio Oposa, et al., representing their generation and
generations yet unborn, and represented by their parents against Fulgencio Factoran Jr., Secretary of DENR. They
prayed that judgment be rendered ordering the defendant, his agents, representatives and other persons acting in
his behalf to:

1. Cancel all existing Timber Licensing Agreements (TLA) in the country;

2. Cease and desist from receiving, accepting, processing, renewing, or appraising new TLAs;

and granting the plaintiffs such other reliefs just and equitable under the premises. They alleged that they have
a clear and constitutional right to a balanced and healthful ecology and are entitled to protection by the State in its
capacity as parens patriae. Furthermore, they claim that the act of the defendant in allowing TLA holders to cut
and deforest the remaining forests constitutes a misappropriation and/or impairment of the natural resources
property he holds in trust for the benefit of the plaintiff minors and succeeding generations.
The defendant filed a motion to dismiss the complaint on the following grounds:

1. Plaintiffs have no cause of action against him;

2. The issues raised by the plaintiffs is a political question which properly pertains to the legislative or
executive branches of the government.

ISSUE:
Do the petitioner-minors have a cause of action in filing a class suit to prevent the misappropriation or impairment
of Philippine rainforests?

HELD:
Yes. Petitioner-minors assert that they represent their generation as well as generations to come. The Supreme
Court ruled that they can, for themselves, for others of their generation, and for the succeeding generation, file a
class suit. Their personality to sue in behalf of succeeding generations is based on the concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right considers the
rhythm and harmony of nature which indispensably include, inter alia, the judicious disposition, utilization,
management, renewal and conservation of the countrys forest, mineral, land, waters, fisheries, wildlife, offshore
areas and other natural resources to the end that their exploration, development, and utilization be equitably
accessible to the present as well as the future generations.
Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a little differently, the minors assertion of their right to a sound
environment constitutes at the same time, the performance of their obligation to ensure the protection of that right
for the generations to come.

Case Title: Oposa vs. Factoran (G.R. No. 101083 | 1993-07-30)

Topic: Proper Party (locus standi) [under Topic C: The Constitution and the Courts; subtopic 2: requisites of judicial
review]

Ponente: Justice Hilario G. Davide

Facts of the Case:

Petitioners: minors and their respective parents and the Philippine Ecological Network, Inc.
Respondents: Hon. Fulgencio S. Factoran, Jr., in his capacity as the Sec. of the Department of Environment and
Natural Resources (substituted by Hon. Angel C. Alcala)

The petition stems from a civil case instituted by minors duly represented and joined by their respective
parents against Fulgencio S. Factoran, the then Secretary of the Department of Environment and Natural Resources
(DENR). The complaint was instituted as a taxpayers' class suit and alleges that the plaintiffs "are all citizens of
the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural
resource treasure that is the country's virgin tropical rainforests."
The same was filed for themselves and others who are equally concerned about the preservation of said
resource. The petitioners also aver that they represent their generation and generations yet born (by virtue of
inter-generational responsibility and inter-generational justice.)
In the said civil case, the petitioners prayed to have all existing timber license agreements (TLAs) cancelled
and for the DENR Secretary to cease and desist from approving new TLAs. They sought to prevent the
misappropriation or impairment of Philippine rainforests and arrest the unabated hemorrhage of the countrys
vital life-support systems and continue rape of Mother Earth.

The case was dismissed by the lower court on the ground inter alia that the plaintiffs were not
proper parties, hence the filing of a special civil action for certiorari under Rule 65 asking the Court to set aside
the judgment.

Petitioner's Contention:

1. The complaint clearly and unmistakably states a cause of action as it contains sufficient allegations
concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human
Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree
(P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing
the right of the people to a balanced and healthful ecology, the concept of generational genocide in
Criminal Law and the concept of man's inalienable right to self-preservation and self-perpetuation
embodied in natural law.
2. The respondent has a correlative obligation, per Section 4 of E.O. No. 192, to safeguard the people's right
to a healthful environment.
3. Petitioners minors assert that they represent their generation as well as generations yet
unborn, hence they are proper parties.

Defendants Contention:
 On the matter of proper party, the challenged RTC order stated that the complaint fell short in alleging
with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the Complaint is
replete with vague assumptions and vague conclusions based on unverified data. In fine, plaintiffs fail to state a
cause of action in its Complaint against the herein defendant.
D. Issue: Whether or not the petitioners have legal standing.

E. Supreme Court Decision

The Supreme Court reversed the lower courts decision to dismiss the case on the ground that the plaintiffs
were not proper parties. Petitioners have the legal standing. In fact, they can, for themselves, for others of their
generation, and for succeeding generations, file a class suit. Their personality to sue on behalf of
succeeding generation can only be based on the personality concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology is concerned.

The complaint focuses on a fundamental natural and legal right enshrined in the Constitution. The same
right and source of obligation can justify the claimed inter-generational responsibility. Hence, they may bring the
matter at hand to court and be granted the proper recognition.

Section 16, Article II which recognizes above all: THE STATE SHALL PROTECT AND ADVANCE THE RIGHT TO
A BALANCED AND HEALTHFUL ECOLOGY IN ACCORD WITH THE RHYTHM AND HARMONY OF NATURE. Said provision
is recognized as self executory and hence may be a source of obligation upon the state without need of further
positive act from Congress.

Policy Approaches:

1. Polluter Pays Principles - The 'polluters pays' principle is the commonly accepted practice that those who
produce pollution should bear the costs of managing it to prevent damage to human health or the environment.
For instance, a factory that produces a potentially poisonous substance as a byproduct of its activities is usually
held responsible for its safe disposal.
This principle underpins most of the regulation of pollution affecting land, water and air. Pollution is defined in UK
law as contamination of the land, water or air by harmful or potentially harmful substances.

2. Beneficiary Pays Principles - This principle claims that being an innocent beneficiary of significant harms
inflicted by others may be sufficient to ground special duties to address these harms, at least when it is
impossible to extract compensation from those who perpetrated the harm. My main aim in this thesis is to
give a novel theoretical defence of the beneficiary pays principle, and justify its application to climate
change.

3. The Coase Theorem -

The Coase-Theorem: The free-market version

This is the version I usually present to undergraduate classes when I am trying to convince them that there are
market based approaches to solving environmental problems. The focus here is on property rights. The firm
pollutes because it feels like it has the right to. The victim feels she has the right to clean air. Without a resolution
of the property rights dispute, there will always be a socially inefficient amount of pollution produced. So this
version of the Coase Theorem goes something like this:
As long as both parties are free to bargain, the final amount of pollution will be independent of the initial allocation
of property rights.
In other words, the problem is not that the polluter is polluting. The problem is that both the polluter and the
victim thinks their position is justified. The market fails to fix the problem because no one--or both parties--has the
property rights. In this version of the Coase Theorem, the role of the legal system is to simply decide who gets the
property rights. Because bargaining is assumed to be free, it doesn't matter who gets the property rights, just
assign them to either the polluter or the victim and let the market work. We will always get an efficient solution.
This version of the Coase Theorem fits nicely after a lecture on taxes and subsidies for solving pollution problems.
In this simple world, a properly set tax on emissions, or a properly set subsidy on pollution abatement will both
give the exact same final amount of pollution. The tax or the subsidy act as a price for pollution. The Coasian
bargaining solution does the same thing, only it allows the market to set the price for pollution. The market solves
the problem.
But, there are a lot of assumptions embedded in simple version of the Coase Theorem. So many that Coase
himself wrote a piece in 1988 to debunk the simple version. In effect he wrote 'That's not what I meant.'
The Coase Theorem: The fair market version
My reading on Coase's intent is that he was really trying to clarify the conditions under which bargaining might or
might not resolve a property rights dispute efficiently. This version of the Coase Theorem makes explicit one of the
conditions that might keep the market from efficiently solving the pollution problem: Transactions costs. Here's
my version:
In the presence of transactions costs, the final amount of pollution depends on the initial allocation of property
rights.
The focus here is on the transactions costs. That is any impediment to bargaining. Take the case where the victim
is assigned the property right. The free-market version of the Coase Theorem says that the victim will be willing to
sell that right up until the point where the monetary damage from one more unit of pollution exactly equals the
amount the polluter is willing to pay for it. With transactions costs, the victim must also recoup the bargaining
costs in addition tot he damages. The result is less pollution than we would get without the transaction cost. But,
if the polluter has the property right, the transaction costs cause more pollution relative to the free-market
version. We get a different amount of pollution depending on who gets the initial property rights.
The legal system now has a bigger impact. The outcome ends up tilted towards the side with the initial property
right. In this case, the free-market version of Coase is a corollary--created by assuming away transactions costs.
These are probably the two most popular versions of the Coase Theorem. They focus attention on property rights
and transactions costs, and the debate usually turns on whether we can assume away transactions costs. But the
debate shouldn't stop there. The Coase debate serves to focus attention on a number of assumptions that need to
be looked at before we declare a victory for the free market. Here's a brief discussion of two:
The Coase Theorem: The wealth effects version
The two versions of the Coase Theorem presented above ignore the possibility that the bargaining outcome creates
wealth for the owner of the property right. If I have the right to clean air, any income I receive from selling that
right might increase my demand for clean air. Just like getting a raise at work increases my demand for eating out,
getting more money from selling my right to clean air might increase my demand for clean air. Likewise, increased
profits to the polluter from selling pollution rights might increase the demand for emissions. Similar to the
transactions cost case, the final outcome depends on the initial allocation of property rights.
The Coase Theorem: The free entry version
Further, the increase in profits from selling the property right might lead others to want to take advantage. If firms
are free to enter the market, the assignment of property rights to the firms and the resulting profits from the sale
of those rights might cause other polluting firms to enter the market. Similarly, assigning property rights to the
victim, and creating wealth through bargaining might entice new victims to enter the market--for example, more
people might move into a polluted neighborhood as a result of the increased wealth from the sale of property
rights. The simple versions of the Coase theorem assumes away entry--by both new firms and new victims.
I'm sure I'm ignoring other issues, but this is a blog and not a textbook. The Coase Theorem is usually presented
separately from other market based solutions to environmental problems. However, the real beauty of the Coase
Theorem is that is focuses attention on the assumptions needed to make market based solution work--or fail.
Wealth effects are not unique to bargaining solutions: Taxes and subsidies have the same problem. Taxes on
pollution create potential wealth for the victim and abatement subsidies create wealth for the polluter. If victims
are compensated proportionately to their damages victims have the incentive to incur more damages. Similarly,
subsidies create a potential incentive for new firms to enter the polluting industry.
The conditions highlighted by Coase are not unique to bargaining solutions. And that is the real benefit of talking
about Coase. Instead of trying to figure out the right amount of pollution, we now focus our attention on the set of
conditions that help or hinder market based solution to environmental problems.

3. Economic Efficiency - Economic efficiency From an economic perspective, energy efficiency rebates
fundamentally involve financial incentives for energy efficiency investments. These programs are broadly
motivated by the concerns about the perceived underinvestment in energy efficiency. However, when analysing
the empirical evidence on whether consumers (and firms) leave profitable energy efficiency investments on the
table, the literature is far from conclusive. Allcott and Greenstone (2012) provide an extensive discussion on the
weaknesses of existing evidence on returns to energy efficiency investments to support the hypothesis of the
presence of an energy efficiency gap. Should this be true and, therefore, should not be a significant wedge
between the privately profitable level of investment in energy efficient capital stock and the level that would
actually 6 be chosen by private agents in a market without government intervention, then energy efficiency
rebates would lead to inefficiency losses (deadweight losses) that should be minimised.

4. The Tragedy of the Commons - The tragedy of the commons is an economic theory of a situation within a
shared-resource system where individual users acting independently according to their own self-interest behave
contrary to the common good of all users by depleting or spoiling that resource through their collective action. The
concept and name originate in an essay written in 1833 by the Victorian economist William Forster Lloyd, who used
a hypothetical example of the effects of unregulated grazing on common land (then colloquially called "the
commons") in the British Isles.[1] The concept became widely known over a century later due to an article written
by the ecologist Garrett Hardin in 1968.[2] In this context, commons is taken to mean any shared and unregulated
resource such as atmosphere, oceans, rivers, fish stocks, or even an office refrigerator.
It has been argued that the very term 'tragedy of the commons' is a misnomer per se, since 'the commons'
originally referred to a resource owned by a community, and no individual outside the community had any access
to the resource. However, the term is presently used when describing a problem where all individuals have equal
and open access to a resource. Hence, 'tragedy of open access regimes' or simply 'the open access problem' are
more apt terms.[3]:171
The tragedy of the commons is often cited in connection with sustainable development, meshing economic growth
and environmental protection, as well as in the debate over global warming. It has also been used in analyzing
behavior in the fields of economics, evolutionary psychology, anthropology, game
theory, politics, taxation and sociology.
Although commons have been known to collapse due to overuse (such as in over-fishing), abundant examples exist
where communities cooperate or regulate to exploit common resources prudently without collapse. According to
the political economist Elinor Ostrom, although it is often claimed that only private ownership or government
regulation can prevent the "tragedy of the commons", prudent users of a commons have a natural incentive to
voluntarily cooperate in self-regulation, and history exhibits many examples of complex social schemes to sustain
common resources efficiently.