Philstar.com reported the following news item:

OSG asks court to stop audit of ‘Big 3’ oil firms

By Sandy Araneta Updated May 23, 2009 12:00 AM

MANILA, Philippines – The Office of the Solicitor General (OSG) urged a Manila regional trial court (RTC) yesterday to reconsider its decision ordering an audit of the “books of account” of Pilipinas Shell Petroleum Corp., Chevron Corp. and Petron Corp., the country’s three largest oil firms.

In two orders dated April 27 and May 5, Manila Judge Silvino Pampilo Jr. directed the Commission on Audit (COA), Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to form a panel of examiners to conduct the audit and find out whether the firms committed cartelization and predatory pricing under the Oil Deregulation Act (Republic Act 8479) and monopoly and combination in restraint of trade prohibited under the Revised Penal Code.

Solicitor General Agnes Devanadera, in a motion for reconsideration, said the government agencies would be exceeding their own mandate if they are compelled to conduct the audit.

The OSG branded the court’s order as “unwarranted,” saying “it would be improper and unjust to demand compliance with what is not sanctioned by law.”

“Consequently, since the examination of the books of accounts of the respondents are beyond the mandate and jurisdictions of the COA, BIR and BOC, it would be legally impossible for said government agencies to comply with the order,” the OSG said.

The OSG cited the case of “Cui v. Cui,” which provides that “one can do lawfully only those things and can do them only in the manner prescribed by the law of its charter and of the state, and whatever may be the purpose of its creation.”

The order stemmed from a petition for declaratory relief filed by civil society group Social Justice Society (SJS), requesting the opening and examination of the three oil firms’ books of account. The group contended that their request is necessitated by a strong public interest and the need to uncover the mystery surrounding the frequent increases in the prices of petroleum products.

The three oil firms have filed separate motions to dismiss the petition.

Devanadera said the COA, BIR, and BOC can only examine the oil firms’ books if it is for the purpose of determining tax liabilities, franchise taxes, customs and tariff duties as well as for the fixing of rates of public utilities.

The OSG argued the ordered examination is not sanctioned by the Rules of Court or by RA 8479. The OSG lawyers said the rules cover only the production and inspection of the books or documents being requested by the other party.

The OSG cited Black’s Law Dictionary in contending that inspection and audit “are two different matters.”

The OSG said inspection involves an examination by a private person of public records and documents, or the books and papers of his opponent in an action, for the purpose of better preparing his own case for trial.

An audit is defined as an official investigation and examination of accounts and vouchers.

The OSG also said RA 8479 grants jurisdiction to the court in cases involving cartelization and predatory pricing, but only after the Department of Justice-Department of Energy Task Force deems there has been such a violation and directed the prosecutor to file the appropriate complaint.

The OSG also said “the audit of the respondents, which are private corporations, is not within the jurisdiction and mandate of the COA, BIR and BOC.”

The COA is limited to auditing the government or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled bodies with original charters.

“Not being public utilities, the COA does not have the power and authority to examined respondents’ books of account in connection with the fixing of rates of regulatory bodies and prices of petroleum products and for the purpose of fixing the franchise taxes,” the OSG said.

The OSG said the BOC can only examine the oil companies’ books of account only for the purpose of determining proper payment of duties and taxes by an importer.

Solicitor Agnes Devanadera showed her legal ineptitude by filing what looks like a pleading urging Manila Judge Silvino Pampilo Jr. to reconsider his earlier ruling directing concerned government agencies to conduct meticulous audit to determine whether the giant oil firms “committed cartelization and predatory pricing under the Oil Deregulation Act (Republic Act 8479) and monopoly and combination in restraint of trade prohibited under the Revised Penal Code.”

The OSG, as the government’s or for that matter, the people’s counsel, failed to champion the latter’s interest. Devanadera exhibited myopia in her unthinking defense of Pilipinas Shell Petroleum Corp., Chevron Corp. and Petron Corp., the country’s three largest oil firms.

By submitting an MR short of foresight and intensity, it reveals a questionable competence of the Solicitor General who happens to be applying as Justice of the Supreme Court in the forthcoming avalanche of vacancies. While the venerable Jovito Salonga and his Kilosbayan are busied up in the impeachment of another Palace protégé who played her role like no other, Devanadera’s patron is ready to bushwhack us again by the latter’s sly High Court designation.

Devanadera fails to grasp her role as defender of the people’s interest. The OSG was helmed in the past by men (Devanadera is the first woman SolGen) with unquestionable patriotism. To name a few: Ramon Avanceña, Quintin Paredes, Lorenzo Tanada, Ambrosio Padilla, and Sedfrey A. Ordoñez.  The presidents who appointed these giants knew that the OSG is the first rampart in the defense of the people’s interest. Appointment to this office is usually attended with bipartisanship or multi- partisanship, if you will, and not a spoil to be parlayed to a loyal gofer.

Devanadera, with her credentials, and now her pending MR, betrays her diminished stature against the firmament that adorns her predecessors.

By banking on Cui v. Cui, the OSG glosses over the greater significance of the public interest case filed by the civil society group Social Justice Society (SJS). It should have joined the petitioners in cajoling the Big 3 into exposing their books.

We don’t have oil like Venezuela. But Hugo Chavez is wise enough to channel his profit from the nationalized oil companies to addressing poverty in his country. As a third world country gas guzzler, the OSG instead should have initiated the inquiry.

Aren’t we conditioned to the idea that the president is a top-notch economist and has gained accolade for allegedly managing well our moribund economy? The price of oil if interpolated in every aspect of production spells the destiny of our economy. Hence, the OSG has the bounden duty to compel the Big 3 to open up their journals.

But Devanadera misses the point. Over and above what Devanadera says “one can do lawfully only those things and can do them only in the manner prescribed by the law of its charter and of the state, and whatever may be the purpose of its creation,” she hasn’t heard of the principle of parens patriae.

PARENS PATRIAE – Lat. “parent of his country.” Used when the government acts on behalf of a child or mentally ill person. Refers to the “state” as the guardian of minors and incompetent people.

[Latin, Parent of the country.] A doctrine that grants the inherent power and authority of the state to protect persons who are legally unable to act on their own behalf.

The parens patriae doctrine has its roots in English Common Law. In feudal times various obligations and powers, collectively referred to as the “royal prerogative,” were reserved to the king. The king exercised these functions in his role of father of the country.

In the United States, the parens patriae doctrine has had its greatest application in the treatment of children, mentally ill persons, and other individuals who are legally incompetent to manage their affairs. The state is the supreme guardian of all children within its jurisdiction, and state courts have the inherent power to intervene to protect the best interests of children whose welfare is jeopardized by controversies between parents. This inherent power is generally supplemented by legislative acts that define the scope of child protection in a state.

The state, acting as parens patriae, can make decisions regarding mental health treatment on behalf of one who is mentally incompetent to make the decision on his or her own behalf, but the extent of the state’s intrusion is limited to reasonable and necessary treatment.

The doctrine of parens patriae has been expanded in the United States to permit the attorney general of a state to commence litigation for the benefit of state residents for federal antitrust violations (15 U.S.C.A. § 15c). This authority is intended to further the public trust, safeguard the general and economic welfare of a state’s residents, protect residents from illegal practices, and assure that the benefits of federal law are not denied to the general population.

States may also invoke parens patriae to protect interests such as the health, comfort, and welfare of the people, interstate Water Rights, and the general economy of the state. For a state to have standing to sue under the doctrine, it must be more than a nominal party without a real interest of its own and must articulate an interest apart from the interests of particular private parties.

[Latin, Parent of the country.] A doctrine that grants the inherent power and authority of the state to protect persons who are legally unable to act on their own behalf.

The parens patriae doctrine has its roots in English COMMON LAW. In feudal times various obligations and powers, collectively referred to as the “royal prerogative,” were reserved to the king. The king exercised these functions in his role of father of the country.

In the United States, the parens patriae doctrine has had its greatest application in the treatment of children, mentally ill persons, and other individuals who are legally incompetent to manage their affairs. The state is the supreme guardian of all children within its jurisdiction, and state courts have the inherent power to intervene to protect the best interests of children whose welfare is jeopardized by controversies between parents. This inherent power is generally supplemented by legislative acts that define the scope of child protection in a state.

The state, acting as parens patriae, can make decisions regarding mental health treatment on behalf of one who is mentally incompetent to make the decision on his or her own behalf, but the extent of the state’s intrusion is limited to reasonable and necessary treatment.

The doctrine of parens patriae has been expanded in the United States to permit the attorney general of a state to commence litigation for the benefit of state residents for federal antitrust violations (15 U.S.C.A. § 15c). This authority is intended to further the public trust, safeguard the general and economic welfare of a state’s residents, protect residents from illegal practices, and assure that the benefits of federal law are not denied to the general population.

States may also invoke parens patriae to protect interests such as the health, comfort, and welfare of the people, interstate WATER RIGHTS, and the general economy of the state. For a state to have standing to sue under the doctrine, it must be more than a nominal party without a real interest of its own and must articulate an interest apart from the interests of particular private parties (courtesy of Atty. Arturo Achacoso).

In U.S. litigation, parens patriae can be invoked by the state to create its standing to sue; the state declares itself to be suing on behalf of its people. For example, the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (15 USC 15(c)), through Section 4C of the Clayton Act, permits state attorneys general to bring parens patriae suits on behalf of those injured by violations of the Sherman Antitrust Act.

The OSG has a slew of legal armaments in bulldozing what appears to be stonewalling by the Big 3 oil dealers. Among them are police power, taxing power, eminent domain, the general welfare clause, and in this case, we need the tender loving care of the government by its exercise of parens patriae which regrettably Devanadera sloppily missed.

While she’s at it, this SC justice wannabe went along with the recommendation of a former SolGen, Estelito Mendoza, in firing a fine and competent litigator from the PCGG in charge of running after the questionable wealth of El Kapitan, Lucio Tan. This takes the cake because Titong Medoza, a vaunted trial lawyer hereabouts represents the owner of Fortune Tobacco. Atty. Catalino Generillo was doing an absolutely novel, yet effective, legal strategy in ferreting out the truth from the more than of a quarter of a century old sequestration cases against Tan. From all indications, the falling out of the brothers Tan and Mariano Tanenglian is divine intervention, not to mention the determination of Imelda Marcos to spill what she heard between her husband and Tan while the duo was talking shop. Perhaps this is the closure that we as a people have been waiting for, courtesy of Atty. Generillo. The Sandiganbayan is a trial court. The business of a trial court is to find out what happened by laying out the facts straight from the witnesses’ mouths. It has no business yet to rule on the finer points of the law. Substantial justice permeates the Rules of Court.

Still and all, regrettably, Devanadera approved the sacking of Generillo, assisting in the process her adversary. And we praise to high heavens the trial skills of Titong Mendoza.