CA: DOE can't take over oil industry in nat'l emergencies

Posted at 07/08/2013 1:43 PM | Updated as of 07/09/2013 12:00 AM

MANILA, Philippines - The Department of Energy cannot take over control of the oil industry in times of national emergencies, according to a ruling by the Court of Appeals (CA).

In an 11-page decision by its 9th Division, penned by Associate Justice Socorro Inting, the appellate court ruled that Sec 14 (e) of Republic Act (RA) No 8479, also known as the Downstream Oil Industry Deregulation Act of 1998, is unconstitutional.

The said provision states that "in times of national emergency, when the public interest so requires, the DOE may, during the emergency and under reasonable terms prescribed by it, temporary take over or direct the operation of any person or entity engaged in the industry."

The case stemmed from a case filed by oil giant Pilipinas Shell and Petroleum Corp. before a Makati City Regional Trial Court (RTC) that questioned Executive Order 839 handed down by former Pres. Gloria Macapagal Arroyo in 2009 that sought to freeze oil pump prices in Luzon following the onslaught of typhoons Ondoy and Pepeng.

The EO ordered that pump prices be kept at October 15, 2009 levels.

Shell argued that the move had disastrous short-term and long-term effects on the country and posed an "imminent danger to the economy, business and employment."

The RTC ruled in favor of Shell and declared the assailed provision as unconstitutional, which led government to elevate the case before the appellate court.

In affirming the lower court, the appellate court ruled that the subject provision gave the DOE "unbridled power." The appellate court pointed out that only Congress may perform such acts prescribed in Arroyo's order.

The appellate court stressed that in the case of David, et al. vs Arroyo, no less than the Supreme Court (SC) ruled that emergency powers requires Congress' nod, including those involving public utilities and businesses that affect public interest.

The appellate court also said the government lawyers should have went straight to the high court to question the RTC's ruling since it involves a "pure question of law."