14 - Roque vs. COMELEC digest .docx

Roque, Jr. vs. Commission on Elections G.R. No. 188456. September 10, 2009 FACTS: (1) Petitioners filed a petitioner for certiorari, prohibition and mandamus with prayer for a restraining order and/or preliminary injunction and are suing as taxpayers and concerned citizens. They seek to nullify respondent COMELEC’s award of the 2010 Elections Automation Project to the joint venture of Total Information Management Corporation (TIM) and Smartmatic International Corporation (Smartmatic)1 and to permanently prohibit the Comelec, TIM and Smartmatic from signing and/or implementing the corresponding contract-award. (2) On Dec 22, 1997 Congress enacted RA 8346 authorizing the adoption of an automated election system (AES) in the May 11, 1998 national and local elections and onwards. However during 1998, 2001 and 2004, purely manual elections were done. (3) On Jan 23, 2007, the amendatory of RA 9369 was passed authorizing again the COMELEC to use the AES. Sec 5 of that law authorised the COMELEC to: “Use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording automated election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local election, which shall be held immediately after effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission x x x x In succeeding regular national or local elections, the AES shall be implemented nationwide.”

(4) However, the COMELEC did not use any AES in the May 14 2007 elections. (5) On July 19, 2009, the COMELEC and the TIM and Smartmatic (provider) signed the contract for the automated tallying and recording of votes cast nation-wide in the May 2010 elections. (6) For around P7 billion, the COMELEC leased 82,200 optical scanners, related equipment and hired ancillary services provider to be used in the May 2010 elections. (7) Hence this petition was filed to enjoin the signing of the Contract or its implementation and to compel disclosure of the terms of the contract and other agreements between the provider and its subcontractors. (8) Petitioners sought the Contract's invalidation for non-compliance with the requirement in Section 5 of RA 8436, as amended, mandating the partial use of an automated election system before deploying it nationwide. To further support their claim on the Contract's invalidity, petitioners alleged that:

(1) the optical scanners leased by the COMELEC do not satisfy the minimum systems capabilities" under RA 8436, as amended (he was claiming that the COMELEC must pilot test in 12 areas in the country in the national elections of 2010, before doing fully computerized elections in the national elections after 2010) (2) the Provider not only failed to submit relevant documents during the bidding but also failed to show "community of interest" among its constituent corporations as required in Information Technology Foundation of the Philippines v. COMELEC (Infotech). ISSUE:  

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Is there a need for pilot testing of the PCOS machines offered by Smartmatic and TIM? NO. Was there an invalid joint venture agreement between COMELEC and the provider during the bidding that would be in violation of the SC’s holding in the Information Technology Foundation of the Philippines v. COMELEC (Infotech) which requires a joint venture to include a copy of its JVA DURING the bidding? NONE Was there an infringement of the constitutional right of the people to secrecy of the ballot? NONE

HELD: Pilot testing 

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The plain wordings of Republic Act No. 9369 (that amended RA 8436) commands that the 2010 elections shall be fully automated, and such full automation is not conditioned on “pilot testing” in the May 2007 elections. Congress merely gave COMELEC the flexibility to partially use the AES in some parts of the country for the May 2007 elections. Any lingering doubt on the issue of whether or not full automation of the 2010 regular elections can validly proceed without a pilot run of the Automated Election System (AES) should be put to rest with the enactment in March 2009 of Republic Act No. 9525, in which Congress appropriated PhP 11.301 billion to automate the 2010 elections—the Republic Act No. 9525 is a compelling indication that it was never Congress’ intent to make the pilot testing of a particular automated election system in the 2007 elections a condition precedent to its use or award of the 2010 Automation Project.

Joint venture 

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As petitioners observed, that the TIM- Smartmatic joint venture remained an unincorporated aggroupment during the bid- opening and evaluation stages. It ought to be stressed, however, that the fact of non-incorporation was without a vitiating effect on the validity of the tender offers. For the bidding ground rules, as spelled out primarily in the RFP and the clarificatory bid bulletins, does not require, for bidding purposes, that there be an incorporation of the bidding joint ventures or consortiums In fact, Bid Bulletin Nos. 19 and 20 recognize the existence and the acceptability of proposals of unincorporated joint ventures. In response to a poser, for example, regarding the 60% Filipino ownership requirement in a joint venture arrangement, the SBAC, in its Bid Bulletin No. 22, stated:

As to petitioner’s contention that the PCOS would infringe on the secrecy and sanctity of the ballot because the voter would be confronted with a “three feet” long ballot: 

As to the issue of the possible violation of the Anti Dummy Law given that the RFP requirement of a joint venture bidder to be at least be 60% Filipino:

“In an unincorporated joint venture, determination of the required Filipino participation may be made by examining the terms and conditions of the [JVA] and other supporting financial documents submitted by the joint venture.”

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And the Court held that petitioners have not shown that incorporation is part of the pass/fail criteria used in determining eligibility

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Infringement on secrecy and sanctity of the ballot and the possible violation of the Anti-Dummy Law 

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Petitioners were contending that the COMELEC relinquished its supervision and control of the system to be used for the automated elections since the COMELEC would not be the one holding possession of the public and private keys pair of the machines. But Court held that the role of Smartmatic TIM Corporation is basically to supply the goods necessary for the automation project, such as but not limited to the PCOS machines, PCs, electronic transmission devices and related equipment, both hardware and software, and the technical services pertaining to their operation. As lessees of the goods and the back-up equipment, the corporation and its operators would provide assistance with respect to the machines to be used by the Comelec which, at the end of the day, will be conducting the election thru its personnel and whoever it deputizes. And if only to emphasize a point, Comelec’s contract is with Smartmatic TIM Corporation of which Smartmatic is a 40% minority owner, per the JVA of TIM and Smartmatic and the Articles of Incorporation of Smartmatic TIM Corporation. Accordingly, any decision on the part or on behalf of Smartmatic will not be binding on Comelec. As a necessary corollary, the board room voting arrangement that Smartmatic and TIM may have agreed upon as joint venture partners, inclusive of the veto vote that one may have power over the other, should really be the least concern of the Comelec.

The Court held that, surely, the Comelec could put up such infrastructure as to insure that the voter can write his preference in relative privacy. And as demonstrated during the oral arguments, the voter himself will personally feed the ballot into the machine. A voter, if so minded to preserve the secrecy of his ballot, will always devise a way to do so. By the same token, one with least regard for secrecy will likewise have a way to make his vote known.

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The winning bidder, TIM-Smartmatic joint venture, has Smartmatic, a foreign corporation, owning 40% of the equity in, first, the joint venture partnership, and then in Smartmatic TIM Corporation. The Anti-Dummy Law has been enacted to limit the enjoyment of certain economic activities to Filipino citizens or corporations. For liability for violation of the law to attach, it must be established that there is a law limiting or reserving the enjoyment or exercise of a right, franchise, privilege, or business to citizens of the Philippines or to corporations or associations at least 60 per centum of the capital of which is owned by such citizens. In the case at bench, the Court is not aware of any constitutional or statutory provision classifying as a nationalized activity the lease or provision of goods and technical services for the automation of an election. In fact, Sec. 8 of RA 8436, as amended, vests the Comelec with specific authority to acquire AES from foreign sources, thus: 

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SEC 12. Procurement of Equipment and Materials.—To achieve the purpose of this Act, the Commission is authorized to procure, xxx, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other services, from local or foreign sources xxx.”

Petitioners cite Executive Order No. (EO) 584,98 Series of 2006, purportedly limiting “contracts for the supply of materials, goods and commodities to government- owned or controlled corporation, company, agency or municipal corporation” to corporations that are 60% Filipino.

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But the Court did not see the governing relevance of EO 584. For let alone the fact that RA 9369 is, in relation to EO 584, a subsequent enactment and, therefore, enjoys primacy over the executive issuance, the Comelec does fall under the category of a government-owned and controlled corporation, an agency or a municipal corporation contemplated in the executive order.