Tatad Vs Secretary of Energy, 281 SCRA 330 Case Digest (Administrative Law)

Adminstrative Law Arellano Univeristy School of Law aiza ebina/2015

TATAD TATAD vs S!"TA"# $% &"'#  2(1 S!"A ))0 Sufciency o Standards %A!TS*  The petitions at bar challenge the constitutionality constitutionality of Republic Republic Act No. 8180 entitled "An Act Deregulating the Downstream il !ndustry and or ther #urposes". R.A. No. 8180 ends twenty si$ %&'( years of go)ernment go)ernment regulation of the downstream oil industry. *nder the deregulated deregulated en)ironment+ "any person or entity may import or purchase any ,uantity of crude oil and petroleum products from a foreign or domestic source+ lease or own and operate re-neries and other downstream oil facilities and maret such crude oil or use the same for his own re,uirement+" re,uirement+" sub/ect only to monitoring monitoring by the Department Department of  nergy.  The deregulation process has two phases the transition phase and the full deregulation deregulation phase. The -rst phase of deregulation commenced on August 1&+ 122'. n ebruary 8+ 1223+ the #resident implemented the full deregulation of the Downstream il !ndustry through .. No. 43&. The petitions at bar assail the constitutionality of )arious pro)isions of R.A No. 8180 and .. No. 43&. 5ection 16 pro)ides 5ec. 16. !mpleme !mplementat ntation ion of ull ull Deregul Deregulatio ation. n. 7 #ursuan #ursuantt to 5ection 5ection 6%e( of Republ Republic ic Act No. 3'48+ 3'48+ the D shall+ upon appro)al of the #resident+ implement implement the full deregulation deregulation of the downstream oil industry not later than arch 1223. As far as practicable+ the D shall time the full deregulation when the prices of crude oil and petroleum products products in the world maret are declining and when the e$change e$change rate of the peso in relation to the *5 dollar is stable. *pon the implementation of the full deregulation as pro)ided herein+ the transition phase is deemed terminated and the following laws are deemed repealed. !n assailing section 16 of R.A. No. 8180 and .. No. 42&+ petitioners o9er the following submissions irst+ section 16 of R.A. No. 8180 constitutes an undue delegation of legislati)e power to the #resident and the 5ecretary of nergy because it does not pro)ide a determinate determinate or determinable standard to guide the $ecuti)e :ranch in determining when to implement the full deregulation of the downstream oil industry. #etitioners contend that the law does not de-ne when it is practicable for the 5ecretary of nergy to recommend to the #resident the full deregulation of the downstream oil industry or when the #resident may consider consider it practica practicable ble to declare declare full deregul deregulatio ation. n. Also+ Also+ the law does not pro)ide pro)ide any speci-c speci-c standard to determine when the prices of crude oil in the world maret are considered considered to be declining nor when the e$change rate of the peso to the *5 dollar is considered stable. 5econd+ 5econd+ petition petitioners ers a)er that .. No. 42& implemen implementing ting the full deregulati deregulation on of the downstr downstream eam oil industry is arbitrary and unreasonable because it was enacted due to the alleged depletion of the #5 fund 7 a condition not found in R.A. No. 8180. #etitioners urge that the phrases "as far as practicable+" "decline of crude oil prices in the world maret" and "stability "stability of the peso e$chan e$change ge rate to the *5 dollar" dollar" are ambi)ale ambi)alent+ nt+ unclear unclear and inconcrete inconcrete in meaning. They submit that they do not pro)ide the "determinate or determinable standards" which can guide guide the #resid #resident ent in his decision decision to fully fully deregul deregulate ate the downstr downstream eam oil industry industry. !n addition addition++ they contend that .. No. 42& which ad)anced the date of full deregulation is )oid for it illegally considered the depletion of the #5 fund as a factor. +SSU* ;hether +SSU* ;hether or not 5ection 16 of R.A. No 8180 and .. No. 42& are unconstitutional on the ground that they constitute an undue delegation of legislati)e power to the #resident and the 5ecretary of nergy "UL+&'* No. The No. The power of of