San Jose, Clarice Joy D.J.

2013-0051

Atty. Mary Jude Cantorias Legal Writing (SUN Set A) 23 June 2013

GARCIA v THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND INDUSTRY, LUZON PETROCHEMICAL CORPORATION and PILIPINAS SHELL CORPORATION 177 SCRA 374, September 7, 1989 Ponente: J. Grino-Aquino FACTS: A group of Taiwanese investors doing business under the name Bataan Petrochemical Corporation (BPC) filed with the Board of Investments (BOI) an application for registration as a domestic producer of petrochemicals. BPC specified Bataan as the plant site. One of the terms and conditions of the registration was the use of naphtha cracker and naphtha as feedstock for its petrochemical plant. The petrochemical project was to be a joint venture with the Philippine National Oil Company (PNOC). BPC was issued a Certificate of Registration on February 24, 1988; was granted pioneer status, and was given fiscal and other incentives by the BOI. On January 25, 1989, BPC sent a letter to the BOI advising the latter of the formers desire to amend the original registration of its project by (1) changing the job site from Bataan to Batangas; (2) increasing the investment amount from US$220 million to US$320 million; (3) increasing the production capacity of its naphtha craker, polyethylene plant and polypropylene plant, and; (4) changing the feedstock from naphtha only to naphtha and/or liquefied petroleum gas. The petitioner, the congressman for the second district of Bataan, opposed the transfer of the proposed petrochemical plant to Batangas. The petitioner requested the Department of Trade and Industry (DTI) for a copy of the amendment reportedly submitted by the Taiwanese investors, as well as the original application for registration together with any and all attachments to the said original application and the amendment as well. The Taiwanese investors declined to give their consent to the release of the petitioners requested documents. On May 25, 1989, the BOI approved the revision of the registration of BPCs petrochemical project. On June 26, 1989, the petitioner filed for certiorari and prohibition with a prayer for preliminary injunction, alleging that the BOI and DTI gravely abused their discretion by not observing due process in approving the amendment without hearing, in refusing to

furnish the petitioner copies of pertinent documents in violation of the Governments policy of transparency, in approving the transfer of the petrochemical plant from Bataan to Batangas, in approving the change in feedstock from naphtha only to naphtha and/or LPG, and in showing gross partiality for BPC. ISSUE: 1.) Whether or not the BOI committed grave abuse of discretion when it approved the amendments of the registration of the BPC 2.) Whether or not the BOI denied the petitioner of due process when it denied petitioners request for a copy of the amendments and when it approved, without hearing, the amendments of the registration of the BPC RULING: 1.) Yes. The BOI failed to publish the amended application for registration of the Bataan Petrochemical Corporation (BPC) as it was in effect a new application. The notice invites any person with valid objections to or pertinent comments to file them in writing to BOI within one week from the date of the notices publication. The publication recognizes that the proposed investment is a matter of public concern on which the public has a right to be heard. When the BOI approved BPCs application to establish its petrochemical plant in Limay, Bataan, the inhabitants of that province, particularly the affected community acquired an interest in the project which they have the right to protect. Therefore, they, affected communities, have the right to be consulted; as was also the requirement of the Investments Code. 2.) Yes. The BOI was ordered to allow the petitioner access to its records on the original and amended applications for registration of the BPC, excluding, however, privileged papers containing trade secrets and other business and financial information. The BOI was also ordered to set for hearing the petitioners opposition to the amended application for the petitioner to present all evidence in his possession to support his opposition to BPCs amendments. The petition for certiorari was granted and the petition for a writ of prohibition of preliminary injunction is denied. DISSENTING OPINION: No. The BOI did not commit grave abuse of discretion in approving the amendments to BPCs registration nor has it failed to observe due process in approving the same without a formal hearing. The BOI is the administrative body specifically tasked to handle specific matters such as the case at hand. Furthermore, due hearing is required only in connection with controversies between registered enterprises or investors, pursuant to the Omnibus Investments Code and the law does not speak at all of a hearing on applications for registrations.