DOJ Opinion No. 064, s. 2001

DOJ OPINION NO. 064 , s. 2001 November 9, 2001 Secretary Heherson T. Alvarez Department of Environment and Natural Resources (DENR) Visayas Avenue, Diliman Quezon City Sir : This refers to your request for opinion on the following Issues concerning the grant of Integrated Forest Management Agreements (IFMA) pursuant to DENR Administrative Order (DAO) No. 99-53; "1. May a person or entity be granted more than one IFMA covering a total land area of more ( sic ) 40,000 hectares provided that the land area of each IFMA does not exceed 40,000 hectares? 2. Should shares that have not been fully paid be considered in determining whether at least Filipino citizens hold 60% of the capital stock of a corporation? 3. May the DENR enter into IFMAs with the applicant-corporations in the light of the two preceding issues?" You inform us that an IFMA is a production-sharing contract between the DENR and a qualified applicant wherein the latter is granted the exclusive right to develop, manage, protect and utilize a specified area of forestland and the forest resources therein for twenty-five (25) years; that said production-sharing agreements must be made pursuant to Section 2, Article XII of the 1987 Constitution which requires that at least sixty percent (60%) of the capital stock of the applicant-corporations involved must be owned by Filipino citizens; that Section 6 of DAO No. 99-53, however, provides that the maximum size of an IFMA may depend upon the capability of the applicant provided that it shall not exceed 40,000 hectares; that the applicant-corporations are of the view that there would be no violation of Section 6 of said Administrative Order even if they were considered one entity having substantially common incorporators because said issuance merely establishes a maximum land area that may be covered by an IFMA, without express prohibition on a person or entity being granted more than one IFMA; that it is also argued that each of the corporations complied with the Filipino nationality requirement even if the Filipino shareholders have not fully paid for their subscribed shares since Section 2 of the Corporation Code provides that "holders of subscribed share not fully paid which are not delinquent shall have all the rights of a stockholder." With much regret, this Department is constrained to decline rendition of the opinion requested. The issues raised in the instant request necessarily affect the substantive rights of private parties, namely, the applicant-corporations, upon whom the opinion of the Secretary of Justice has no binding effect and would, in all probability, contest the same in court if the opinion turns out to be adverse to their interests. As a matter of policy, therefore, this Office does not render opinion or give legal advice on matters which are justiciable in nature or those which may be the subject of a judicial controversy (Secretary of Justice Opinion No. 37, current series; No. 2, s. 1997; and No. 46, s. 1981). Furthermore, the issue regarding the qualification of an applicant-corporation with unpaid subscription by Filipino shareholders pertains to the official competence of the Securities and Exchange Commission (SEC) to resolve. Pursuant to settled policy and practice, this Department has consistently refrained from expressing its views on matters that fall within the primary jurisdiction of another office or agency over whose rulings or actuations this Department exercises no revisory authority ( Ibid. No. 5, s. 1999; Nos. 16, 44 and 45, s. 1998; Nos. 47 and 159, s. 1993). Finally, any opinion that may be rendered by this Department on the subject matter would necessarily involve the interpretation of the contracts, namely, the IFMAs between the DENR and the applicant-corporations. The Secretary of Justice does not render opinion or give legal advice on issues involving interpretation of contracts ( Ibid. No. 10, s. 1979 and No. 64, s. 1999). EHTISC Very truly yours, (SGD.) HERNANDO B. PEREZ Secretary