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CONGRESSMAN ENRIQUE T. GARCIA v. BOARD OF INVESTMENTS

FACTS:

Gutierrez, Jr. J. filed a petition to annul the decision of the Board of Investments (BOI) regarding the transfer of the petrochemical plant from Bataan to Batangas and the change in feedstock. This petition is related to a previous case where the Court ordered the BOI to publish the amended application of Bataan Petrochemical Corporation (BPC), grant petitioner access to records, and hold a hearing for opposition to the amended application. However, the Court did not rule on the issue of the investor's right to choose the plant site. The petitioner filed a motion for reconsideration to address this issue, but it was denied. The Court emphasized that the investor does not have the final say, and the BOI has the authority to decide. While the petitioner's motion for reconsideration was denied, a minority of justices voted to grant it. BPC is a joint venture between Taiwanese investors and the Philippine National Oil Company (PNOC). Initially, BPC applied for registration as a petrochemical manufacturer in Bataan, receiving pioneer status and incentives from the BOI. However, BPC later requested to change the plant's location to Batangas due to insurgency and labor issues. Despite opposition, BPC filed for approval of the amendments.

ISSUES:

  1. Whether or not the transfer of the petrochemical plant from Bataan to Batangas constitutes a grave abuse of discretion by the Board of Investments (BOI).

  2. Whether or not it is the investor who has the final choice of the site and the decision on the feedstock.

  3. Whether the Board of Investments (BOI) committed grave abuse of discretion in approving the transfer of the petrochemical plant from Bataan to Batangas and authorizing the change of feedstock from naphtha only to naphtha and/or LPG.

  4. Whether the transfer of the petrochemical plant and change of feedstock is in violation of the constitutional mandate to promote industrialization and protect Filipino enterprises against unfair foreign competition and trade practices.

  5. Whether or not Atty. Sycip is authorized to represent Pilipinas Shell Corp. (Cebu Office).

  6. Whether or not the transfer of shares by Pilipinas Shell Corp. to other shareholders is valid.

RULING:

  1. The Court ruled in favor of the petitioner and held that the transfer of the petrochemical plant to Batangas constitutes a grave abuse of discretion by the BOI. The Court concluded that Bataan was the original choice for the plant site and that there is no need to transfer it to Batangas. The Court also emphasized that the feedstock originally consisted of naphtha only, and changing it to include liquefied petroleum gas (LPG) contravenes the policy expressed in the law. The Court also recognized that it is the investor who has the final choice of the site and decision on the feedstock. However, in this case, the BOI had disregarded the expressed policy by allowing the transfer and change in feedstock.

  2. The Supreme Court ruled in favor of the petitioner. The Court held that the BOI committed a grave abuse of discretion in approving the transfer of the petrochemical plant from Bataan to Batangas and authorizing the change of feedstock from naphtha only to naphtha and/or LPG. The Court found that no cogent advantage to the government has been shown by this transfer and that it is a repudiation of the independent policy of the government to run its own affairs in the best interests of the national interest. The original certificate of registration of the petrochemical plant in Bataan with naphtha as the feedstock is ordered to be maintained.

  3. No, Atty. Sycip is not authorized to represent Pilipinas Shell Corp. (Cebu Office).

  4. The transfer of shares by Pilipinas Shell Corp. to other shareholders is valid.

PRINCIPLES:

  • The Court has the constitutional duty to settle actual controversies involving rights and determine if there was a grave abuse of discretion on the part of any branch or instrumentality of the government.

  • The BOI's choice of site for a project is only a recommendation, and it is the investor who has the final choice.

  • The State has the duty to regulate and exercise authority over foreign investments in accordance with its national goals and priorities.

  • The development of a self-reliant and independent national economy controlled by Filipinos is mandated by the Constitution.

  • The non-alienation of natural resources and the state's full control over the development and utilization of scarce resources.

  • Foreign investments should be regulated in accordance with national goals and priorities.

  • The state's duty to promote industrialization and protect Filipino enterprises against unfair foreign competition and trade practices.

  • The petrochemical industry is essential to the national interest and should not be treated like ordinary investments.

  • The government has the authority to run its own affairs in the best interests of the national interest.

  • The authority of a lawyer to represent a corporation must be clearly established, usually by a board resolution or corporate secretary’s certificate.

  • Just because a corporation operates several branches does not automatically grant authority to one branch to act for the others. Each branch operates as a separate entity unless there is a clear showing of authority to represent the other branches.