The Supreme Court has upheld Section 14(e) of Republic Act No. (RA) 8479 or the Downstream Oil Industry Deregulation Act, giving the Department of Energy (DOE), on behalf of the President, the power to take over oil firms in case of national emergency.
This was the ruling of the Supreme Court En Banc, in a Decision penned by Acting Chief Justice Marvic M.V.F. Leonen, as it granted the petition for review on certiorari filed by former Executive Secretary Leandro Mendoza, the DOE-Department of Justice Joint Task Force, and DOE Secretary Angelo T. Reyes. The petition challenged the rulings of the Court of Appeals (CA) which affirmed the Regional Trial Court’s (RTC) Decision declaring Section 14(e) of RA 8479 unconstitutional.
The case originated from the petition for prohibition, mandamus, and injunction filed before the RTC by Pilipinas Shell Petroleum Corporation (Pilipinas Shell) assailing Executive Order No. (EO) 839 which directed oil industry players to maintain oil prices of their petroleum products during the state of calamity brought about by Typhoons Ondoy and Pepeng. Pilipinas Shell also prayed, in an amended petition for declaratory relief, that Section 14(e) of RA 8479 be declared null and void for being an invalid delegation of emergency powers to the Executive.
Following the lifting of EO 839 during the pendency of the case, the RTC initially issued an Order dismissing Pilipinas Shell’s petition. However, the RTC subsequently reversed its dismissal and ultimately ruled in Pilipinas Shell’s favor, declaring Section 14(e) of RA 8479 unconstitutional. The RTC was affirmed by the CA, prompting the present petition.
In resolving the petition, the Court discussed whether Section 14(e) of RA 8479 is a proper delegation of the emergency takeover power to the DOE.
Under Article XII, Section 17 of the Constitution, the State has the power to temporarily take over the operations of privately-owned public utilities or businesses affected with public interest in times of national emergency public, when the public interest requires.
Article VI, Section 23 further provides that in times of national emergency, Congress may grant the President temporary emergency powers. To be a valid delegation, the legislative enactment must authorize the President for a limited period and subject to prescribed restrictions, held the Court.
While Section 14(e) of RA 8479 authorizes, not the President, but the DOE to temporarily take over oil firms in times of emergency, the Court ruled that such is a proper delegation consistent with the doctrine of qualified political agency.
This doctrine recognizes “the multifarious responsibilities a president faces, which calls for the delegation of certain responsibilities to the cabinet members. It posits that the heads of the various executive departments stand as the president’s alter egos permitted to act on behalf of the president,” said the Court.
The President may hence carry out their functions through the heads of the executive departments, who function as the President’s alter egos.
The Court clarified, however, that the department secretaries are not given complete discretion over how to exercise the delegated authority. The doctrine dictates that the President retains control, having the authority to confirm, modify, or reverse the action taken by his department secretaries.
Thus, while the language of Section 14(e) appears to allow an interpretation that permits the DOE secretary to act independently or without instructions from the President, the doctrine of qualified political agency entails that a cabinet secretary may only exercise the authority acting as the president’s alter ego.
“[I]f, in the exercise of its delegated authority, the energy secretary acts in contrast with the president’s intent or instructions, the act will be deemed ultra vires and an unconstitutional usurpation of executive power,” stressed the Court.
Thus, Section 14(e) of RA 8479, as it currently stands, is constitutional, the Court concluded. (Courtesy of the Supreme Court Public Information Office)
FULL TEXT of G.R. No. 209216, Executive Secretary Mendoza v. Pilipinas Shell (February 21, 2023) at: https://sc.judiciary.gov.ph/209216-executive-secretary-leandro-mendoza-department-of-energy-department-of-justice-joint-task-force-and-department-of-energy-secretry-angelo-t-reyes-vs-pilipinas-shell-petroleum-corporation/
Full text of the Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa at: https://sc.judiciary.gov.ph/209216-separate-concurring-opinion-justice-alfredo-benjamin-s-caguioa/