EN BANC
G.R. No. 110526 February 10, 1998
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,
vs.
PHILIPPINE COCONUT AUTHORITY, respondent.
Separate Opinions
ROMERO, J., dissenting;
The past decade, a distinct worldwide trend towards economic deregulation has been evident. Both developed and developing countries have seriously considered, and extensively adopted, various measures for this purpose. The Philippines has been no exception.
To this end, the Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93 (PCA-BR No 018-93) dated March 24, 1993, deregulating the coconut processing plant industry.1 The Association of Philippine Desiccators (APCD) has filed this instant petition for prohibition and mandamus under Rule 65 of the Rules of Court seeking the annulment of said resolution.
APCD questions the validity of PCA-BR No. 018-93 for being violative of the principle of non-delegability of legislative power. It contends that in issuing the resolution deregulating the coconut industry, the PCA exercised legislative discretion, which has not been delegated to it by Congress. It adds that when PCA deregulated the coconut industry, it ran counter to the very laws2 which mandated it to regulate and rationalize the industry.
We see no merit in this contention. PCA's authority to issue PCA-BR No. 018-93 is clearly provided in Section 3(a) of P.D. No. 232, reading as follows:
. . . To formulate and adopt a general program of development for the coconut and other palm oil industry.
Similar grants of authority were made in subsequent amendatory laws.3
In this regard, we have ruled that legislative discretion, as to the substantive contents of a law, cannot be delegated. What may be delegated is the discretion to determine how the law is to be enforced, not what the law should be, a prerogative of the legislature which it can neither abdicate nor surrender to the delegate.4 The principle is based on the separation and allocation of powers among the three departments of government.5
Thus, there are two accepted tests to determine whether or not there is a valid delegation of legislative power, namely, 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 legislature such that when it reaches the delegate, the only thing he will have to do is 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 amiss.6
We have accepted as sufficient standards "interest of law and order,"7 "adequate and efficient instruction," 8 "public interest,"9 "justice and equity,"10 "public convenience and welfare,"11 "simplicity, economy and efficiency,"12 "standardization and regulation of medical education,"13 and "fair and equitable employment practices."14 Consequently, the standard may be expressed or implied. In the former, the non delegation objection is easily met. The standard though does not have to be spelled out but need only be implied from the policy and purpose of the act considered as a whole.15 It may also be found in other statutes on the same subject as that of the challenged legislation.16
In no uncertain terms must it be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying out the provisions of a law. The power of administrative agencies is confined to implementing the law or putting it into effect. Corollary to this guideline is that administrative regulation cannot extend the law and amend a legislative enactment.17
In the instant case, we believe that the PCA did not overstep the limits of its power in issuing the assailed resolution. We need not belabor the point that one of the economic goals of our country is the increased productivity of goods and services provided by the nation for the benefit of the people,18 since from a purely economic standpoint, the increase in agricultural productivity is of fundamental importance.19
Considering the responsibilities and powers assigned to the PCA, as well as its underlying policy, namely, that "the economic well-being of a major part of the population depends to a large extent on the viability of the industry and its improvement in the areas of production, processing and marketing," the irresistible conclusion is that PCA-BR No. 018-93 is a valid exercise of delegated legislation by the PCA. Such resolution is in harmony with the objectives sought to be achieved by the laws regarding the coconut industry, particularly "to promote accelerated growth and development of the coconut and other palm oil industry,"20 and "rapid integrated development and growth of the coconut and other palm oil industry."21 These are sufficient standards to guide the PCA. Thus, measures to achieve these policies are better left to the administrative agencies tasked with implementing them.
It must be stressed that with increasing global trade and business and major upheavals in technology and communications, the time has come for administrative policies and regulations to adapt to ever-changing business needs rather than to accommodate traditional acts of the legislature.22 Even the 1987 Constitution was designed to meet, not only contemporary events, but also future and unknown circumstances.23
It is worth mentioning that the PCA, after conducting its studies, adopted the policy of deregulation to further enhance the coconut industry competition, since any continuation of the restrictive regulation in the industry would have detrimental effects.24 This is in consonance with the constitutional mandate that the State must "adopt measures that help make them (locally produced goods) competitive."25 Undoubtedly, an "agency, in light of changing circumstances, is free to alter interpretative and policy views reflected in regulations construing an underlying statute, so long as any changed construction of the statute is consistent with express congressional intent or embodies a permissible reading of the statute."26
Furthermore, the Constitution is cognizant of the realities of global interdependency, as it requires the pursuit of "a trade policy that serves the general welfare and utilizes all forms and arrangements of exchanges on the basis of equality and reciprocity."27
In sum, the policy of deregulation must be determined by the circumstances prevailing in a certain situation.28 As we have stressed in the past, this Court is only concerned with the question of authority, not the wisdom of the measure involved which falls within the province of the Legislature.ℒαwρhi৷
The ponencia presents the issue: whether it is within the power of the PCA to renounce the power to regulate implicit in the law creating it (P.D. No. 232). (It is to be pointed out that this issue was not included in the Assignment of Errors of Petitioner).
Underlying this formulation is the assumption/admission that PCA has the power to regulate the coconut industry, as in fact the power is bestowed upon it by its organic act, P.D. No. 232, viz. "to promote the rapid integrated development and growth of the coconut and other palm oils in industry in all its aspects and to ensure that the coconut farmers become direct participants in, and beneficiaries of, such development and growth." Its broad mandate is "to formulate and adopt a general program of development for the coconut and other palm oils industry."
It avers that this "legislative scheme" was disregarded when the PCA adopted on March 24, 1993 the assailed Resolution which is effect liberalized the registration and licensing requirements for the granting of permits to operate new coconut plants. But this was effected pursuant to the October 23, 1987 PCA Board Resolution laying down the policy of deregulating the industry and authorizing the creation of additional desiccated coconut plants.
As with any administrative agency established to promote the growth and development of any industry, the PCA has considerable latitude to adopt policies designed to accelerate the attainment of this objective and corollarily, to lay down rules and regulations to implement the same. We can take judicial notice of the fact that during its 25 years of existence, the PCA has achieved enough experience and expertise to introduce measures which shall ensure the dominant role of the crop as a major dollar-producing industry, including the manipulation of market forces to our comparative advantage, certainly an area beyond the Court's ken.
Hence, guided by guidelines already laid down, it responded to regional developments by:
(1) taking cognizance of the overproduction in the industry and curtailing the expansion of coconut processing plants in 1982, within reasonable limits and with safeguards (hence the issuance of Executive Order Nos. 826 on August 28, 1982 and No. 854 on December 6, 1982);
(2) five years later, responding to the demand for desiccated coconut products in the world market, liberalized its former policy by deregulating the industry and authorizing the creation of additional desiccated coconut plants in 1987;
(3) complementing and supplementing (2), by easing registration and licensing requirements in 1993.
It bears repeating that the above measures were not taken arbitrarily but in careful compliance with guidelines incorporated in the Executive Orders and subject to the favorable recommendation of the Secretary of Agriculture and the approval of the President.
The crux of the ponencia is that, in the process of opening doors to foreign markets, the PCA "limited itself to merely monitoring their volumes of production and administration of quality standards, in effect abdicating its role and leaving it almost totally to market forces to define how the industry will develop."
Actually, the relevant provisions in the disputed resolution reads:
Resolved further, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges.
For the sake of clarity and accuracy, it is to be stressed that the PCA did not limit itself "merely to monitoring . . ." as the ponencia states, but to "registering the . . . processors for the purpose of monitoring their volumes of production and administration of quality standards. . . ."
In the actual words of the Resolution, the PCA recognizes its principal function of registration so as to be able to monitor the production and administer quality standards, both objectives of which are not merely nominal or minimal, but substantial, even vital, aspects of the power to regulate. Put differently, there is no renunciation of the power to regulate, for the regulation is essentially recognized and accomplished through the registration function which enables the PCA to keep track of the volume of production and the observance of quality standards by new entrants into the industry. In sum, trimming down its functions to registration is not an abdication of the power to regulate but is regulation itself.
If the PCA, in light of the crucial developments in the regional and domestic coconut industry decides to open wide its doors, allow the free entry of other players and the interplay of competitive forces to shape the configuration of the industry, who are we to declare such policy as one characterized by "wastefulness and inefficiency . . . based on its naive faith in survival of the fittest." Is not this a blatant incursion by the Court into the economic arena which is better left to the administrative agency precisely tasked to promote the growth of the industry, through the exercise of its studied discretion? To be sure, those operators already in the field, such as the petitioner members of the Association of Philippine Coconut Desiccators, are expected to vigorously protest and work for the nullity of what they perceive as an obnoxious, life threatening policy. But instead of opposing what the PCA views as a timely, well-considered move, the healthy competition should spur them to improving their product and elevating the standards they have imposed on themselves.
If, in the course of its monitoring which is a piece of the regulatory function, the PCA should detect a violation of its guidelines that would result in a lowering of the quality of the product, or unfairness to other players, surely, it is not powerless to impose sanctions, as categorically provided in P.D. 1469, P.D. 1644, Adm. Order No. 003, Series of 1981 and Adm. Order No. 002, Series of 1991. Any administrative agency is empowered to establish its implementing rules, together with sanctions guaranteed to ensure the observance of such rules, else it would be a mere "toothless" entity.
The ponencia prognosticates, "The result can very well be a repeat of 1982 when free enterprise degenerated into a 'free-for-all,' resulting in cutthroat competition, underselling, the production of inferior products and the like, which badly affected the foreign trade performance of our coconut industry." Are we not encroaching on legislative domain in questioning the wisdom of the action taken by the PCA which was accorded a broad mandate by the Congress? Moreover, let us bear in mind that during those "abnormal times," forces other than merely economic, e.g. political, dominated the economy effectively supporting, even favoring, destructive capitalistic monopolies and, in the process suppressing healthy competition.
Not to forget, too, that we cannot close our eyes and ignore the world-wide trend towards globalization in the economy, as in other fields, as in fact the Court recognized this economic reality in its decision in the Oil Deregulation Case.
With the unrelenting march of globalization in our economy, the Philippines must find its market niches and be able to adapt to these inevitable changes, for the Asia-Pacific rim is bound to become a truly dynamic region in the economic, political and cultural arenas in the coming millennium.
ACCORDINGLY, the petition should be DISMISSED.
Bellosillo, Melo, Vitug, Quisumbing and Purisima, JJ., dissent.
Footnotes
1 Annex "A," Rollo, pp. 41-42.
2 P.D. No. 931 "Coconut Industry Code," P.D. No. 1468 "Revised Coconut Industry," P.D. No. 1644 "Granting Additional Powers to the Philippine Coconut Authority," E.O. 826 "Providing Measures for the Protection of the Dessicated Coconut Authority," E.O. 854 "Providing for the Rationalization of the Dessicated Coconut Industry."
3 Section 3(a), P.D. No. 961; Section 3(a), P.D. No. 962; Section (1) and (2), P.D. No. 1644.
4 Ynot v. Intermediate Appellate Court, 148 SCRA 659 (1987).
5 People v. Vera, 65 Phil. 56 (1937); Pelaez v. Auditor General, 15 SCRA 569 (1965).
6 Eastern Shipping Lines v. POEA, 166 SCRA 533 (1988).
7 Rubi v. Provincial Board of Mindoro, 39 Phil. 660 (1919).
8 Philippine Association of Colleges and University v. Secretary of Education, 97 Phil. 806 (1955).
9 People v. Rosenthal, 68 Phil. 328 (1939).
10 Amatok Gold Fields v. CIR, 70 Phil. 340 (1940).
11 Calalang v. Williams, 70 Phil. 726 (1940).
12 Cervantes v. Auditor General, 91 Phil 359 (1952).
13 Tablarin v. Gutierrez, 152 SCRA 731 (1987).
14 The Conference of Maritime Manning Agencies, Inc. v. Philippine Overseas Employment Administration, 243 SCRA 666 (1995).
15 Chiong Bian v. Orbos, 245 SCRA 253 (1995).
16 Rabor v. Civil Service Commission, 244 SCRA 614 (1995).
17 Land Bank of the Philippines v. Court of Appeals, 249 SCRA 149 (1995).
18 Article XII, Section 1, 1987 Constitution.
19 Crosson, P.R. CAPITAL-OUTPUT RATIOS AND DEVELOPMENT PLANNING, 1964.
20 P.D. No. 232, Section 1.
21 P.D. No. 931, Section 1; P.D. No. 1468, Section 2; P.D. No. 1644.
22 Philippine International Trading Corporation v. Judge Angeles, et al., G.R. No. 108461, October 21, 1996.
23 Tanada, et al. v. Angara, et al., G.R. No. 118295, May 2, 1997.
24 Board Resolution No. 058-87, October 23, 1987.
25 Article XII, Section 12, 1987 Constitution.
26 National Family Planning and Reproductive Health Association v. Sullivan, 298 US App DC 288.
27 Article XII, Section 13, 1987 Constitution.
28 Kilusang Mayo Uno Labor Center v. Garcia, Jr., 239 SCRA 386 (1994).
The Lawphil Project - Arellano Law Foundation
