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Tatad v. DOE, G.R. No. 124360, 3 December 1997

 

Tatad v. DOE, G.R. No. 124360, 3 December 1997

 

Facts:

In December 9, 1992, the Department of Energy was created to control energy-related government activities. In March 1996, R.A. No. 8180 (Downstream Oil Industry Deregulation Act of 1996) was enacted in pursuance to the deregulation of the power and energy thrust under R.A. 7638. Under the R.A. No. 8180, any person or entity was allowed to import and market crude oil and petroleum products, and to lease or own and operate refineries and other downstream oil facilities.

Francisco Tatad, petitioner,  questions the constitutionality of Section 5 of R.A. No. 8180 since the imposition of tarrif violates the equal protection clause and bars the entry of others in the oil industry business. Also, the inclusion of tarrif violates Section 26 (1) of Article VI of the constitution requiring every law to have only one subject which shall be expressed in its title.

In a separate petition (G.R. 127867), petitioners Edcel Lagman, Joker Arroyo, Enrique Garcia, Wigberto Tanada, Flag Human Rights Foundation, Inc., Freedom from Debt Coalition and Sanlakas argued that R.A. No. 8180, specifically Section 15 is unconstitutional because it: (1) gives undue delegation of legislative power to the President and the Secretary of Energy by not providing a determinate or determinable standard to guide the Executive Branch in determining when to implement the full deregulation of the downstream oil industry; (2) Executive Order No. 392, an order declaring the implementation of the full deregulation of the downstream oil industry, is arbitrary and unreasonable because it was enacted due to the alleged depletion of the Oil Price Stabilization Plan- a condition not found in R.A. No. 8180; and (3) Section 15 of R.A. No. 8180 and E.O. No. 392 allow the formation of a de facto cartel among Petron, Caltex and Shell in violation of constitutional prohibition against monopolies, combinations in restraint of trade and unfair competition.

Respondents declare the petitions cannot be settled by the court and that the petitioners have no locus standi since they did not sustain direct injury as a result of the implementation of R.A. No. 8180.

Issues:

1. Whether or not R.A. no. 8180 is unconstitutional.

2. Whether or not E. O. no. 392 is arbitrary and unreasonable.

3. Whether or not Section 5 of R.A. no. 8180 violates Section 26(1), Article VI of the Constitution.

4. Whether or not Section 15 of R.A. no. 8180 constitutes undue delegation of legislative power.

 

Ruling:

1. No, R.A. No. 8180 is unconstitutional. It violated Section 19, Article XII of the Constitution prohibiting monopolies, combinations in restraint of trade and unfair competition. The deregulation act only benefits Petron, Shell and Caltex, the three major league players in the oil industry.

2. Yes, Executive Order No. 392 was arbitrary and unreasonable and therefore considered void. The depletion of OFSP is not one of the factors enumerated in R.A. No. 8180 to be considered in declaring full deregulation of the oil industry. Therefore, the executive department, in its declaration of E.O. No. 392, failed to follow faithfully the standards set in R.A. No. 8180, making it void.

3. No, section 5 of R.A. No. 8180 does not violate Section 26(1), Article VI of the Constitution. A law having a single general subject indicated in the title may contain any number of provisions as long as they are not inconsistent with the foreign subject. Section 5 providing for tariff differential is germane to the subject of the deregulation of the downstream industry which is R.A. No 8180, therefore it does not violate the one title-one subject rule.

4. No, Section 15 did not violate the constitutional prohibition on undue delegation of legislative power. The tests to determine the validity of delegation of legislative power are the completeness test and the sufficiency test.  The completeness test demands that the law must be complete in all its terms and conditions such that when it reaches the delegate, all it must do is enforce it. The sufficiency test demand an adequate guideline or limitation in the law to delineate the delegate’s authority. Section 15 provides for the time to start the full deregulation, which answers the completeness test. It also laid down standard guide for the judgement of the President- he is to time it as far as practicable when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of peso to dollar is stable- which answers the sufficiency test.

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