DENR ends housing project contract with Masungi Georeserve founder, issues vacate order

MANILA, Philippines — The Department of Environment and Natural Resources (DENR) has terminated its joint venture with Blue Star Construction and Development Corporation following a decade-long investigation into its unfinished housing project in Rizal meant for government employees.

Despite its role in the project, Blue Star, as the founder of Masungi Georeserve, has been actively leading conservation and restoration efforts in the province.

At a press briefing on Friday, March 7, DENR Assistant Secretary for Legal Affairs Norlito Eneran announced the cancellation of the agency’s 2002 supplemental agreement with the contractor, citing violations and its “failure to undergo a proper bidding process” and implement the project. 

“Dito po sa napirmahang letter of cancellation ng atin department, sinasabi natin ang isa sa mga kontrata rito, which is the 2002 supplemental agreement, is cancelled,” he said.  

(In the signed letter of cancellation from our department, we state that one of the contracts, specifically the 2002 supplemental agreement, is canceled.)

The letter of cancellation comes with an order for Blue Star to vacate the land occupied by the Masungi Georeserve in Rizal within 15 days upon receipt. The DENR delivered the notice to the company’s office on Friday.

“We are demanding the Blue Star to vacate the area. Ito po ay may sukat na 300 hectares kung saan nandoon ang Masungi Geopark area,” Eneran added. 

(We are demanding the Blue Star to vacate the area. This covers 300 hectares, which includes the Masungi Geopark area.) 

However, the Masungi Georeserve Foundation said in a statement that it has yet to receive the 15-day notice to vacate. 

The conservation group added it had “anticipated this action” and plans to pursue legal remedies to continue its work in the area and protect the country’s forests from land grabbers and illegal quarries.

Investigation’s findings

According to the DENR, its investigation found that Blue Star committed multiple violations of the 1997 joint venture and supplemental agreements, such as:

• Charging fees to enter the Masungi park, which is not included in the Masungi Rock Eco-Tourism Plan.
• Constructing facilities without the necessary permits and clearances from local and national authorities.
• Fencing off a portion of Masungi Georeserve, specifically ‘Lot 10.’ 
• Restricting access to DENR personnel responsible for monitoring and inspecting the project.
• Failing to complete the housing project within the agreed five-year period, despite receiving extensions.

Eneran also explained the “legal defects” in the agreement, noting that no housing units were built as promised and the proposed construction bypassed the standard procurement and bidding process in relation to the 2002 agreement.

Some DENR officials are also under investigation by the Office of the Ombudsman over the stalled housing project, he added. 

For the agency, “no one is above the law,” and environmental protection should not be monopolized.

Meanwhile, Masungi Georeserve argued that the housing project was “competitively bidded out by the DENR and won by Blue Star.” 

It also previously explained that Masungi is a non-profit organization that uses the fees they charge for day treks, trails and rope bridges to fund their conservation efforts. 

Ann Dumaliang, one of the foundation’s trustees, also stressed that the committed demand for the housing project “never materialized” and that the agreement prioritizes conservation above all.

“The land in question and its surroundings had long been lost to other interests, yet our family, through Blue Star, chose to work with the government to close these gaps, investing in its restoration rather than taking the easier path of a low-risk, high-reward traditional housing development,” she said.  

Tracing the joint venture’s roots

The project began with a 1997 joint venture in which Blue Star committed to building 5,000 housing units or garden cottages on 130.74 hectares, with a five-year completion target. 

Masungi explained that the agreement sought to establish a “sustainable housing project,” allocating 70% for green spaces and 30% for development, which is cited in the terms of reference.

A 2002 supplemental agreement expanded the project’s coverage by 300 hectares, adding another 5,000 units within “Lot 10,” a 270-hectare property registered under the Bureau of Corrections (BOC).

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The housing project’s implementation was extended through a 2006 amendment. 

However, two years later, Blue Star and the DENR signed a memorandum of agreement to exchange the 5,000 planned units on the 130-hectare site for 145 completed units in a 1.5-hectare village in Dasmariñas, Cavite. 

Masungi’s conservation efforts

But what exactly is Lot 10, the site designated for the housing project?

According to the Masungi Georeserve Foundation, Lot 10 is part of the protected Upper Marikina River Basin Watershed, which shelters some of the country’s limestone rock formations and diverse flora and fauna.

It is also part of Masungi’s reforestation initiative under a 2017 memorandum of agreement with the DENR granting a “perpetual land trust,” signed during the tenure of the late Environment Secretary Gina Lopez, aiming to restore 2,700 hectares of forestland. 

The foundation said it has since restored 2,000 hectares.

RELATED: What is the Masungi Georeserve conservation project?

For years, Masungi has been recognized even internationally for its efforts to promote conservation and sustainable geotourism. It recently won the 2024 National Energy Globe Award.

However, the foundation has faced disinformation and legal challenges, especially after the DENR announced plans last year to cancel the 2017 agreement, arguing the land trust is unconstitutional.

“It should not be overlooked that the initial agreements under Blue Star played a crucial role in shielding the area from incompatible interferences, allowing reforestation efforts to take root and thrive — work that we will continue to defend against disinformation, omissions, and the lack of meaningful dialogue with the current DENR leadership,” Dumaliang said.