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Tatad Vs Department of Energy G.R. No. 124360 and 127867. November 5, 1997 FRANCISCO S. TATAD, Petitioner

1. The petitioner questions the constitutionality of a law that deregulated the downstream oil industry in the Philippines. 2. The court ruled that the law did not violate the one title one subject rule or the prohibition on undue delegation of power. It provided adequate guidelines and standards. 3. The court also found that the law did not violate prohibitions against monopolies, combinations in restraint of trade, or unfair competition. It determined the law aims to increase competition in the oil industry.

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637 views3 pages

Tatad Vs Department of Energy G.R. No. 124360 and 127867. November 5, 1997 FRANCISCO S. TATAD, Petitioner

1. The petitioner questions the constitutionality of a law that deregulated the downstream oil industry in the Philippines. 2. The court ruled that the law did not violate the one title one subject rule or the prohibition on undue delegation of power. It provided adequate guidelines and standards. 3. The court also found that the law did not violate prohibitions against monopolies, combinations in restraint of trade, or unfair competition. It determined the law aims to increase competition in the oil industry.

Uploaded by

RayBradleyEduardo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TATAD VS DEPARTMENT OF ENERGY

G.R. No. 124360 and 127867. November 5, 1997


FRANCISCO S. TATAD, petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENERGY AND THE SECRETARY OF THE
DEPARTMENT OF FINANCE, respondents.

Facts:
The petitioner questions the constitutionality of RA No. 8180 “An Act Deregulating the
Downstream Oil Industry and For Other Purposes.” The deregulation (the reduction or
elimination of government power in a particular industry, usually enacted to create more
competition within the industry) process has two phases: (a) the transition phase and the (b)
full deregulation phase through EO No. 372.
The petitioner claims that Sec. 15 of RA No. 8180 constitutes an undue delegation of
legislative power to the President and the Sec. of Energy because it does not provide a
determinate or determinable standard to guide the Executive Branch in determining when to
implement the full deregulation of the downstream oil industry, and the law does not provide
any specific standard to determine when the prices of crude oil (the largest share
of crude is used for energy carriers that can be combined into gasoline, jet fuel, diesel, and
heating oils ) in the world market are considered to be declining nor when the exchange
rate of the peso to the US dollar is considered stable.
 
Issues:

1. Whether or not Sec 5(b) of R.A. 8180 violates the one title one subject requirement of
the Constitution.
2. Whether or not Sec 15 of R.A. 8180 violates the constitutional prohibition on
undue delegation of power.
3. Whether or not R.A. No. 8180 violates the constitutional prohibition against monopolies,
combinations in restraint of trade and unfair competition

 
 
 
Discussions:

1. The Court consistently ruled that the title need not mirror, fully index or catalogue all
contents and minute details of a law. A law having a single general subject indicated in the
title may contain any number of provisions, no matter how diverse they may be, so long as
they are not inconsistent with or foreign to the general subject and may be considered in
furtherance of such subject by providing for the method and means of carrying out the
general subject.

2. Adopting the ruling from Eastern Shipping Lines, Inc. vs. POEA, the Court states that:

“There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz: the completeness test and the sufficient standard test.
Under the first test, the law must be complete in all its terms and conditions when it
leaves the legislative such that when it reaches the delegate the only thing, he will have
to do is to enforce it.
Under the sufficient standard test, there must be adequate guidelines or limitations in the
law to map out the boundaries of the delegate’s authority and prevent the delegation
from running riot.
Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative.

3. A monopoly is a privilege or peculiar advantage vested in one or more persons or


companies, consisting in the exclusive right or power to carry on a particular business or
trade, manufacture a particular article, or control the sale or the whole supply of a particular
commodity. It is a form of market structure in which one or only a few firms dominate the
total sales of a product or service. On the other hand, a combination in restraint of trade is
an agreement or understanding between two or more persons, in the form of a contract,
trust, pool, holding company, or other form of association, for the purpose of unduly
restricting competition, monopolizing trade and commerce in a certain commodity,
controlling its production, distribution and price, or otherwise interfering with freedom of
trade without statutory authority. Combination in restraint of trade refers to the means while
monopoly refers to the end.

 
 
 
Rulings:

1. The Court does not concur with this contention. The Court has adopted a liberal
construction of the one title – one subject rule. The Court hold that section 5(b) providing for
tariff differential is germane to the subject of R.A. No. 8180 which is the deregulation of the
downstream oil industry. The section is supposed to sway prospective investors to put up
refineries in our country and make them rely less on imported petroleum.[i][20] We shall,
however, return to the validity of this provision when we examine its blocking effect on new
entrants to the oil market.
2. Sec 15 of R.A. 8180 can hurdle (take part in a race that involves jumping hurdles) both
the completeness test and the sufficient standard test. It will be noted that Congress
expressly provided in R.A. No. 8180 that full deregulation will start at the end of
March 1997, regardless of the occurrence of any event.

Full deregulation at the end of March 1997 is mandatory and the Executive has no
discretion to postpone it for any purported reason. Thus, the law is complete on the
question of the final date of full deregulation. The discretion given to the President is
to advance the date of full deregulation before the end of March 1997.

Section 15 lays down the standard to guide the judgment 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 the peso in relation to
the US dollar is stable.

Another example of deregulation is when government eliminates a statute that requires


banks to keep a certain percentage of deposits in liquid assets and allows the banking
industry to set their own liquidity ratio and types of financial products they offered.

3. Section 19 of Article XII of the Constitution allegedly violated by the aforestated


provisions of R.A. No. 8180 mandates: “The State shall regulate or prohibit monopolies
when the public interest so requires. No combinations in restraint of trade or unfair
competition shall be allowed.”

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