June 6, 2003

DAR OPINION NO. 07-03

Mr. Danilo S. Sedilla
OIC Vice President
Technical and Maintenance Services
National Power Corporation
Cor. Quezon Avenue and Agham Road
Diliman, Quezon City

Dear Vice President Sedilla:

This refers to your letter dated 23 October 2002, requesting for reconsideration of DAR Opinion No. 22, series of 2002 dated 09 September 2002 denying the request of the National Power Corporation (NPC) for specific exemption of the San Roque Multi-Purpose Project located in the boundaries of Pangasinan and Benguet from the application of DAR Administrative Order No. 07, series of 1997 (Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses) and DAR Administrative Order No. 1, series of 1989 (Rules and Procedures, Governing Land Transactions) relative to lands acquired through expropriation by the NPC.

In your request for reconsideration you argued, among others, the following, quote:

"1.     Section 6.1.4 of AO No. 1, series of 2002 applies only to agricultural lands already owned by the government. In this case, the government does not yet own the agricultural lands involved and NPC is merely seeking DAR clearance to have the lands titled in its name. Without the clearance, the Register of Deeds would not register the lands thus defeating the purpose for which the lands were expropriated in the first place. NPC respectfully posits therefore that a DAR clearance be granted to it if only for the purpose of titling the lands. Once titled, then it has no objection of going through the problem of conversion as required under AO No. 1, series of 2002. (emphasis supplied)

xxx                      xxx                      xxx

3.      DAR Administrative Order No. 1, series of 1989 provides that transactions executed by beneficiaries covering lands acquired under agrarian reform laws in favor of the government are allowed. There is no doubt that the NPC is a government-owned and controlled corporation and therefore it could be deduced that it is actually not NPC itself but the government that is requesting for DAR clearance to have the lands titled in its name."   AHDTIE

Since the project site comprises vast tracts of agricultural lands of about 2,060 hectares, more or less, of private lands and around 2,800 hectares of public lands where some may even be lands awarded to agrarian reform beneficiaries and others may be tenanted and worked on by farmworkers who may be adversely affected or displaced by the expropriation and/or transfers/registrations, the provisions in Item II (b and d) of DAR Administrative Order 01, series of 1989 (Rules and Procedures Governing Land Transactions), which state:

"The following transactions are valid:

b)      Those in favor of the government, DAR or the Land Bank of Philippines;

xxx                      xxx                      xxx

d)      Those executed by beneficiaries covering lands acquired under any agrarian reform law in favor of the government, DAR, LBP or other qualified beneficiaries certified by DAR."

may not necessarily mean that DAR Clearance need no longer be issued.

A careful reading of the aforequoted provisions of DAR Administrative Order No. 1, series of 1989 and DAR Administrative Order No. 8, series of 1995 [Rules and Procedures Governing the Transferability of Lands Awarded to Agrarian Reform Beneficiaries (ARBs) Pursuant to Presidential Decree No. 27 as amended by Executive Order No. 228 and Republic Act No. 6657] would still call/require for a DAR Clearance.

Here, since the acquisition is by the government through expropriation for public use or national interest in the exercise of the power of eminent domain, your request for DAR clearance which is necessary for registration is hereby granted. However, it must be stressed that this clearance is solely for purposes of registration without prejudice to NPC still applying for conversion.

Please note that the issuance of a DAR clearance involving the disposition or transfer of agricultural lands coverable under the Comprehensive Agrarian Reform Program (CARP) merely signifies that the transaction is not in circumvention of the Comprehensive Agrarian Reform Law (CARL) and may therefore be registered. It is not synonymous with a DAR Conversion Order/Clearance which is issued only after determination on the merits of a duly filed application for conversion the effect of which is to change the current physical use of a piece of agricultural land into some other use.

Accordingly, our position in DAR Opinion No. 22, Series of 2002 that NPC should still apply for conversion pursuant to DAR Administrative Order 01, series of 2002 (2002 Comprehensive Rules on Land Use Conversion) stands.   TaHDAS

Finally, the rights and interests of CLOA or EP awardees and other farmworkers who may be displaced/affected, if any, should in all cases be protected/safeguarded pursuant to existing laws, rules and regulations. Moreover they should still be ordered as ARBs/awardees in other landholdings, if qualified.

This opinion is rendered on the basis of the facts presented. However, if upon investigation it will be disclosed that the facts are different, then this opinion shall be considered null and void.

Thank you for communicating with us and please be guided accordingly.

Very truly yours,

(SGD.) RICARDO S. ARLANZA
Undersecretary for Policy, Planning and Legal Affairs Office