MANILA, Philippines - Malacañang has floated the idea that it might take over Sulpicio Lines. Will the idea, even if unwise, float, or will it sink even before it can be torpedoed?
From where I sit, I can see that one must first determine what kind of takeover is being contemplated. There are in fact two possible ways. The first would be through the exercise of the power of eminent domain.
The Constitution has a specific provision about vital industries which says: ?The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government.?
Certainly maritime transportation is a vital industry whose successful operation is needed in the interest of national welfare. But whether the Philippine state in its present condition can operate a shipping line in a manner that will serve the national welfare is something else.
Operating a mammoth business enterprise is not something the government is set up for. Moreover, since a takeover under the above provision will mean that government must pay just compensation, Congress will have to be convinced to make a special appropriation for the purpose. I do not think that the Palace has enough money in its contingency kitty to be able to buy out the Gos. Nor will Congress be in the mood to throw away money foolishly, money that can be better spent for more productive purposes like improving the state of public education or upgrading the technical capabilities of Pagasa or modernizing the Air Force.
Government might also be contemplating the kind of takeover that is mentioned in Article XII, Section 17, which says: ?In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily
take over or direct the operation of any privately-owned public utility or business affected with public interest.? We might recall that two years ago the President, through Presidential Proclamation 1017, hinted that she might make use of this presidential takeover power.
This takeover power came as a product of the ?martial law? thinking of the 1971 Constitutional Convention. In effect at the time of the approval of this provision was Letter of Instruction No. 2 of President Marcos dated 22 September 1972, instructing the secretary of national defense to take over ?the management, control and operation of the Manila Electric Company, the Philippine Long Distance Telephone Company, the National Waterworks and Sewerage Authority, the Philippine National Railways, the Philippine Air Lines, Air Manila (and) Filipinas Orient Airways ... for the successful prosecution by the Government of its effort to contain, solve and end the present national emergency.?
This letter of instruction was among the executive acts which the Convention wanted ratified by Section 3(2), Article XVII of the 1973 Constitution. It was thus clear that in the mind of the Convention the power, as granted under the 1973 Constitution, could be exercised by the executive arm of the government. And it was for the executive arm to decide whether ?national emergency? and ?public interest? demanded the temporary takeover.
Understood in this broadly permissive way, Section 17 can be seen as embodying a very dangerous power. But when the Supreme Court finally took up cases involving Presidential Proclamation 1017 in 2006, the Court said that the takeover power mentioned in Section 17 can be exercised by
the President only if Congress, through Article VI, Section 23, has given her emergency powers. President Arroyo may have been forewarned against this possibility of a Supreme Court rebuke, for which reason she did not attempt to take over any public utility. I am therefore surprised why the Palace has floated the idea of taking over the operation of Sulpicio Lines.
Mischievous minds, however, might have more suspicious readings of why the takeover of Sulpicio Lines has been broached at all. Although the Court has said that Section 17 of Article XII can be used only in conjunction with Article VI, Section 23, the Court did not say that the President does not have that power in a situation of martial rule. It should be recalled that President Marcos exercised that power almost immediately after he declared martial law and it was what Marcos had done which inspired the 1971 Constitutional Convention to include this takeover power in the Constitution. I am of the view that the President can exercise that power when martial rule is in effect.
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