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SC upholds oil deregulation law anew

Posted in Oil Deregulation Law, Social Issues/Concerns, Supreme Court Decisions by Erineus on April 22, 2009

Philippine Daily Inquirer
First Posted 07:31:00 04/22/2009

BAGUIO CITY—The Supreme Court has shot down for the second time a constitutional challenge against the law that deregulated the oil industry in 1997.

In an April 2 en banc decision that was released to reporters during the court’s summer sessions here this week, the high court dismissed a second petition from Bataan Gov. Enrique Garcia Jr. challenging the constitutionality of Republic Act 8479, or the Oil Deregulation Act of 1998.

As it did a previous petition that Garcia submitted in 1999, the high court said that the issue of whether or not there should be deregulation of the oil industry was political and outside its jurisdiction.

It said that the issue that Garcia raised a second time—the propriety of immediately and fully deregulating the oil industry—was not something for the court to resolve as it revolved around the “soundness or wisdom of the timing and manner of deregulation” that Congress wanted to implement through RA 8479.

Not a job for SC

“Quite clearly, the issue is not for us to resolve. We cannot rule on when and to what extent deregulation should take place without passing [judgment] upon the wisdom of the policy of deregulation that Congress has decided upon,” the high court said.

It also noted that Garcia’s including a proposal to shift to “a system of partial deregulation,” revealed the “political, hence non-justiciable nature of his petition.”

“That the law failed in its objectives because its adoption spawned the evils petitioner Garcia alludes to does not warrant its nullification,” said the decision penned by Associate Justice Arturo Brion.

Garcia, a former congressman for Bataan, first asked the high court to nullify the Oil Deregulation Law in 1999.

At the time the court ruled: “We are not concerned with whether or not there should be deregulation. This is outside our jurisdiction. The judgment on the issue is a settled matter and only Congress can reverse it.”

Infirmities corrected

In the latest ruling, the high court reminded Garcia that it was a 1997 Supreme Court decision which convinced Congress to correct the infirmities of the Downstream Oil Deregulation Act of 1996, or RA 8180, through RA 8479.

“We struck down [the Downstream Oil Deregulation Act of 1996] as invalid because… contrary to its intent, RA 8180’s provisions on tariff differential, inventory requirements and predatory pricing inhibited fair competition, encouraged monopolistic power, and interfered with the free interaction of market forces,” the high court said.

“Congress responded to our decision… by enacting on Feb. 10, 1998 a new oil deregulation law,” which Garcia has questioned twice before the high court.

Garcia’s second petition focuses on the impact of Section 19 of RA 8479, which prescribed the duration for lifting the price restrictions that protect the local downstream oil industry. Elmer Kristian Dauigoy and Vincent Cabreza, Inquirer Northern Luzon