Supreme Court stops audit of 'Big 3' oil firms

MANILA, Philippines - The Supreme Court (SC) stopped yesterday a Manila court from implementing an order to audit the books of the country’s three biggest oil firms.

In a resolution issued by all 15 justices, the SC issued a temporary restraining order enjoining the Commission on Audit (COA), Bureau of Internal Revenue (BIR), and the Bureau of Customs (BOC) from complying with an order by Manila Regional Trial Court Judge Silvino Pampilo Jr. to examine financial documents on the purchase of petroleum products by Petron Corp., Pilipinas Shell and Chevron Philippines from January to December 2003.

The SC also ordered the Social Justice System and transport group Pasang Masda, which sought the audit, to comment on the petition filed by the Office of the Solicitor General (OSG) questioning the order of the lower court.

Justice Secretary Agenes Devanadera, who is also solicitor general, said it would be beyond the mandate of the Commission on Audit, Bureau of Internal Revenue and Bureau of Customs to examine the financial records of the oil firms.

“Such action would be considered ultra vires or improper, making the results of the audit legal non-binding,” she said.

“The motion does not preclude an audit to be conducted by a panel appointed by the court other than those coming from COA, BIR and BOC.”

Devanadera said the government was not opposing the audit of the oil firms’ books, but was against the assignment of COA, BIR and BOC to do the audit.

The three agencies cannot be compelled to conduct an audit because it would be beyond their mandate under the Constitution, she added.

In a motion filed Monday, Assistant Solicitor General Karl Miranda said the SC must stop Pampilo from citing the three government agencies in contempt for failing to comply with his order.

The COA, BIR and BOC have until Oct. 3 to comply with Pampilo’s order, he added.

Denavadera said the court’s the order was legally impossible since demanding that the COA, BIR and BOC comply with the order would violate the law and exceed their jurisdiction and mandate.

“If the purpose of the ordered examination is merely to determine the reasons for the frequent increase in the petroleum products and subsequently to determine any violation of the Revised Penal Code or Republic Act 8479 (oil price deregulation law), it can be done even without the ordered examination,” she said.

Last July 31, the court ordered the heads of the three agencies to explain within five days why they should not be arrested.

Last month, the court ordered the three government agencies to check the books of the “Big 3” and investigate allegations of “cartelization.”

The court has denied the government’s motion to reconsider its decision ordering the three government agencies to audit the books of the three oil firms.