G.R. No.
155001. May 5, 2003 En Banc [Non-legislative power of Congress; Police Power; Delegation of emergency powers]
FACTS:
On October 5, 1994, AEDC submitted an unsolicited proposal to the
Government through the DOTC/MIAA for the development of NAIA International
Passenger Terminal III (NAIA IPT III).
DOTC constituted the Prequalification Bids and Awards Committee
(PBAC) for the implementation of the project and submitted with its endorsement
proposal to the NEDA, which approved the project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in
two daily newspapers of an invitation for competitive or comparative proposals
on AEDC’s unsolicited proposal, in accordance with Sec. 4-A of RA 6957, as
amended.
On September 20, 1996, the consortium composed of People’s Air
Cargo and Warehousing Co., Inc. (Paircargo), Phil. Air and Grounds Services,
Inc. (PAGS) and Security Bank Corp. (Security Bank) (collectively, Paircargo
Consortium) submitted their competitive proposal to the PBAC. PBAC
awarded the project to Paircargo Consortium. Because of that, it was
incorporated into Philippine International Airport Terminals Co., Inc.
AEDC subsequently protested the alleged undue preference given to
PIATCO and reiterated its objections as regards the prequalification of PIATCO.
On
July 12, 1997, the Government and PIATCO signed the “Concession Agreement for
the Build-Operate-and-Transfer Arrangement of the NAIA Passenger Terminal III”
(1997 Concession Agreement). The
Government granted PIATCO the franchise to operate and maintain the said
terminal during the concession period and to collect the fees, rentals and
other charges in accordance with the rates or schedules stipulated in the 1997
Concession Agreement. The Agreement
provided that the concession period shall be for twenty-five (25) years
commencing from the in-service date, and may be renewed at the option of the Government
for a period not exceeding twenty-five (25) years. At the end of the concession period, PIATCO
shall transfer the development facility to MIAA.
Meanwhile,
the MIAA which is charged with the maintenance and operation of the NAIA
Terminals I and II, had existing concession contracts with various service
providers to offer international airline airport services, such as in-flight
catering, passenger handling, ramp and ground support, aircraft maintenance and
provisions, cargo handling and warehousing, and other services, to several
international airlines at the NAIA.
On September 17, 2002, the workers of the
international airline service providers, claiming that they would lose their
job upon the implementation of the questioned agreements, filed a petition for
prohibition. Several employees of MIAA likewise filed a petition assailing the
legality of the various agreements.
During
the pendency of the cases, PGMA, on her speech, stated that she will not “honor
(PIATCO) contracts which the Executive Branch’s legal offices have concluded
(as) null and void.”
ISSUE:
Whether or not the State can temporarily take over a business affected with public interest.
RULING:
Yes. PIATCO cannot, by mere contractual stipulation, contravene the Constitutional provision on temporary government takeover and obligate the government to pay “reasonable cost for the use of the Terminal and/or Terminal Complex.”
Article XII, Section 17 of the 1987 Constitution provides:
Section 17. 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.
Section 17. 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.
The above provision pertains to the right of the State in times of national emergency, and in the exercise of its police power, to temporarily take over the operation of any business affected with public interest. The duration of the emergency itself is the determining factor as to how long the temporary takeover by the government would last. The temporary takeover by the government extends only to the operation of the business and not to the ownership thereof. As such the government is not required to compensate the private entity-owner of the said business as there is no transfer of ownership, whether permanent or temporary. The private entity-owner affected by the temporary takeover cannot, likewise, claim just compensation for the use of the said business and its properties as the temporary takeover by the government is in exercise of its police power and not of its power of eminent domain.
Article XII, section 17 of the 1987 Constitution envisions a situation wherein the exigencies of the times necessitate the government to “temporarily take over or direct the operation of any privately owned public utility or business affected with public interest.” It is the welfare and interest of the public which is the paramount consideration in determining whether or not to temporarily take over a particular business. Clearly, the State in effecting the temporary takeover is exercising its police power. Police power is the “most essential, insistent, and illimitable of powers.” Its exercise therefore must not be unreasonably hampered nor its exercise be a source of obligation by the government in the absence of damage due to arbitrariness of its exercise. Thus, requiring the government to pay reasonable compensation for the reasonable use of the property pursuant to the operation of the business contravenes the Constitution.
