DOE backs emergency takeover of oil industry

MANILA, Philippines — The Department of Energy is ready to take over oil firms in case of a national emergency after the Supreme Court (SC) upheld its emergency takeover power.

In a statement, the DOE said it “respects and supports” the ruling of the high tribunal upholding Section 14(e) of Republic Act 8479 or the Downstream Oil Industry Deregulation Act.

“The DOE is committed to implementing Section 14(e) of the said law as the public interest may require in times of national emergency, in accordance with the Constitution and the applicable laws and consistent with the President’s intent or instructions,” the agency said.

The ruling of the SC en banc penned by acting Chief Justice Marvic Leonen granted the petition for review on certiorari filed by former executive secretary Leandro Mendoza, the DOE-Department of Justice Joint Task Force and the late energy secretary Angelo 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 Corp. assailing Executive Order 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 appellate court affirmed the decision of the RTC, prompting the government to elevate the case to the SC.

In resolving the petition, the SC 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 High Tribunal 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,” the decision read.

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.