A pattern of harassment | Inquirer Opinion

A pattern of harassment

/ 05:12 AM January 17, 2018

The decision of the Securities and Exchange Commission to revoke the incorporation of Rappler, the digital news organization, has been met with astonishment, angst, above all anger — lots of it.

The immediate response online, the outpouring of denunciatory statements, and the cascading calls for meet-ups and protest actions all recall the day Congress voted to reduce the 2018 budget of the Commission on Human Rights to P1,000, to manifest President Duterte’s expressed displeasure with the CHR.


The blowback (even from scandalized senators) caused Congress to restore most of the commission’s budget.

The SEC’s Jan. 11, 2018 ruling is an outrage because it invokes one constitutional provision and pays lip service to another, while completely ignoring a more fundamental provision in the Constitution: the freedom of the press.


And it ignores that constitutional guarantee by thrashing about in the thicket of technicalities.

A close look at the technicality the SEC relies on shows it cannot possibly bear the weight of a decision that will lead to the closing of a news organization.

But a wider look at the context proves that this decision is part of a pattern of harassment against the media in general and in this case against Rappler in particular; it was a preordained ruling in search of a rationalization.

The main argument of the decision is that the agreement with Omidyar Network (ON) for its investment in Rappler’s Philippine Depositary Receipts contains “a repugnant provision.”

Other PDRs do not, “so the issue is limited to the unique terms found only in the ON PDRs.”

That provision requires Rappler to consult PDR holders if the company’s Articles of Incorporation or By-Laws will be changed in a way that “will prejudice the rights in relation to the ON PDRs.”

This is only common sense, and an expression of a company’s readiness to comply with its fiduciary duties.


If the company were to change its business line, then naturally all investors must be consulted. But the SEC prefers to see this single provision, applicable to only one foreign investor, as the grant of control over Rappler’s operations to that investor.

The constitutional restriction on foreign ownership and management in certain industries (utilities, advertising, media, etc.) is both strict (the ratios are in the Constitution itself) and dependent on corporate definitions.

That flexibility is best illustrated by PLDT, one of the country’s largest enterprises, which for a long time followed a looser interpretation of the 40-percent cap on foreign ownership of telecommunications firms.

It believed that foreign investors can own more than 40 percent of the voting shares (the real source of control) if the total proportion of foreign-owned equity (voting and nonvoting shares combined) did not exceed the 40-percent limit.

The Supreme Court struck this down in the Gamboa ruling — but neither the SEC or the SC sought to revoke PLDT’s certificate of incorporation.

That the current SEC jumped to this conclusion is shocking. If the “repugnant provision” were truly unconstitutional, there are other remedies short of decertifying a news organization.

And why choose to run short?

Because as the Supreme Court has ruled again and again, freedom of the press is one of the fundamental basic rights necessary to a functioning democracy.

It is worth noting that the SEC decision itself says that the case was started by a letter from Solicitor General Jose Calida, requesting an investigation into Rappler’s PDRs. (It is also worth noting that on Tuesday, Presidential Spokesperson Harry Roque, who used to speak on behalf of human rights, lied flat out when he asserted that the SEC was already investigating the case before Calida’s intervention.)

But in fact the solicitor general was merely following orders.

In his second State of the Nation Address, the constitutionally mandated forum for discussing an administration legislative and policy agenda, President Duterte asked that Rappler’s corporate veil be pierced: “Rappler, try to pierce the identity and you will end up American ownership [sic].”

There was no need for any piercing of the veil, because the company had been forthright. But this was part of a history of harassment against Rappler (and the Inquirer and ABS-CBN).

Orchestrated online abuse, including repeated threats of gang rape and murder; targeting by “fake news” fabricators; retaliatory government conduct, including tax audits; demeaning speech from high public officials: The SEC decision joins a sorry list of horrors thrown at journalists doing their jobs.

Time for the blowback.

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TAGS: harassment of media, Inquirer editorial, press freedom, Rappler, SEC, Securities and Exchange Commission
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