Transpo Public Law Aspect Uranza Reviewer

TRANSPO LAW / URANZA / PUBLIC LAW ASPECT

SEC. 11, ART. XII CONSTI
Limitations to grant of franchise, certificate or any other form of authorization for the operation of a public utility 1. it shall be granted only to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least 60% of whose capital is owned by Philippine citizens 2. it shall not be exclusive in character nor for a period longer than 50 years 3. it shall be under the condition that it shall be subject to amendment, alteration or repeal by Congress when the common good so requires.
Rule re: participation 1. The state shall encourage equity participation in public utilities by the general public 2. The participation of foreign investors in the governing body of an public utility shall be limited to their proportionate share in its capital 3. All the executive and managing officers of such corporation or association must be citizens of the Philippines.







4. any common carrier or public service entity 5. for hire or for compensation 6. with general or limited clientele 7. whether permanent, occasional or accidental 8. and done for general business purposes It is not necessary under this definition that one holds himself out as serving or willing to serve the public in order to be considered a public service. [Luzon Stevedoring Corp v PSC] The idea of public use is implicit in the term “public service.” A public service is a service for public use. Hence, the mere omission from Sec.13 of the phrase “public use” in the definition of public service does not warrant the inference that the legislature meant to extend the jurisdiction of the PSC to private enterprises not devoted to use. [Luzon Brokerage v PSC]

REGULATORY AGENCIES
Land transportation—DOTC & LTFRB
Water transportation—Maritime Industry Authority (MARINA)
Air Transportation—ATO & and the Civil Aeronautics Board (CAB), which has been placed under the DOTC as an attached agency
Telecommunications—National Telecommunications Commission (NTC), which has been placed under the DOTC as an attached agency
Energy—Board of Energy
Waterworks—National Water Resources Council

HISTORY OF SEC. 11, ART. XII CONSTI
1935 Constitution
1973 Constitution—added “equity participation” and “rule on participation of foreign investors.”
1983 Constitution—added “rule on executive and managing officers.”

CPC/CPCN
A certificate of public convenience is an authorization by the Commission (public service regulatory body) for the operation of public services for which no franchise, either municipal or legislative, is required by law.
A certificate of public convenience and necessity is an authorization issued by the Commission (public services regulatory body) for the operation of public services for which a franchise is required by law.

PUBLIC UTILITY [North Negros Sugar v Hidalgo]
Property becomes clothed with public interest when used in a manner to make it of public consequence, and affect the community at large.
The public or private character of the enterprise does not depend upon the number of persons by whom it is used, but upon whether or not it is open to the use and service of all members of the public who may require it, to the extent of its capacity; and the fact that only a limited number of persons may have occasion to use it does not make it a private undertaking if the public generally has a right to such use.
Whether or not a given business, industry or service is a public utility does not depend upon legislative definition but upon the nature of the business or service.

NATURE OF CPC
Insofar as the State is concerned [Pangasinan Trans v PSC] 1. it is a mere privilege that is always subject to regulation 2. it constitutes neither a franchise nor a contract, confers no property right, and is a mere license or privilege.
It is included in the broad sense of the term property in the broad sense of the term. Under the Public Service Law, it can be sold by the holder thereof because it has considerable material value and is considered a valuable asset.

DEFINITION OF PUBLIC SERVICE
Sec. 13(b), Public Service Act: The term public service shall include 1. every person, whether natural or juridical 2. that now or hereafter 3. may own, operate, manage or control in the Philippines page. 1

TRANSPO LAW / URANZA / PUBLIC LAW ASPECT

WHEN CPC NOT REQUIRED Sec. 14 Public Service Act [AB-WARP] 1. Vehicles drawn by Animals and Bancas moved by oar or sail, and tugboats and lighters 2. Warehouses 3. Airships within the Philippines [except as regards the fixing of their maximum rates on freight and passengers] 4. Radio companies [except with respect to the fixing of rates] 5. Public services owned or operated by any instrumentality of the National Government or by any government-owned or controlled corporation [except with respect to the fixing of rates]




REQUISITES FOR GRANT OF CPC
Under the Constitution 1. it shall be granted only to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least 60% of whose capital is owned by Philippine citizens 2. it shall not be exclusive in character nor for a period longer than 50 years 3. it shall be under the condition that it shall be subject to amendment, alteration or repeal by Congress when the common good so requires.
Under the Public Service Act [Sec. 16(a)] 1. notice and hearing 2. subject to the limitations and exceptions mentioned and saving the provisions to the contrary 3. operation of the public service proposed and the authorization to do business will promote the public interests in a proper and suitable manner 4. grantee is a citizen of the Philippines or entity organized under the laws of the Philippines and sixty percent of its stock or paid-up capital is owned by Philippine citizens 5. it shall not be for a period of more than fifty years
Under RA 9295 (for vessels) 1. Sec. 5. Authority to Operate—No franchise, certificate or any other form authorization for the carriage of cargo or passenger, or both in the domestic trade, shall be granted except to domestic ship owners or operators. 2. Sec. 6. Foreign Vessels Engaged in Trade and Commerce in the Philippine Territorial Waters— No foreign vessel shall be allowed to transport passengers or cargo between ports or place within the Philippine territorial waters, except upon the grant Special Permit by the MARINA when no domestic vessels is available or suitable

to provide the needed shipping service and public interest warrants the same. Under RA 776 (for aircrafts) 1. Sec. 12. Citizenship requirement—Except as otherwise provided in the Constitution and existing treaty or treaties, permit authorizing a person to engage in domestic air commerce and/or transportation shall be used only to citizens of the Philippines. 2. Sec. 34—Except as otherwise provided in the Constitution and existing treaties, no aircraft shall be eligible for registration unless a. it is owned by a citizen or citizens [including corporations organized under laws of the Philippines, 60% of its capital is owned by citizens of the Philippines]; and b. it is not registered under the laws of a foreign country.

KMU v GARCIA
Court holding: 1. undue delegation 2. Government must not relinquish the important function of rate-fixing 3. Department Order conflicts with the law
Note: 1. power or LTFRB (to determine, prescribe and approve and periodically review and adjust reasonable fares, rates and other related charges relative to the operation of public land transportation services provided by motorized vehicles) [Sec. 5(c) EO 292] 2. Importance and complexity of rate-fixing (p. 409) 3. Requirement for grant of CPC (p. 411) 4. When public convenience and necessity exists (p. 411)—when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. JUST & REASONABLE RATE A rate is just and reasonable if it conforms to the following requirements: 1. one which yields to the carrier a fair return upon the value of the property employed in performing the service; and 2. one which is fair to the public for the services rendered RETURN ON RATE BASE

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TRANSPO LAW / URANZA / PUBLIC LAW ASPECT

DEREGULATION
Domestic Shipping 1. Sec. 8. Deregulation of the Domestic Shipping Industry— In order to encourage investments in the domestic shipping industry by existing domestic ship operators and attract new investment from new operators and investors, domestic ship operators are hereby authorized to establish their own domestic shipping rates: Provided, That effective competition is fostered and public interest is served. The MARINA shall operations and exercise where it is established public interest needs safeguarded.

PRIOR APPLICANT RULE [Paez Vda. de Cruz v Marcelo] Priority in the filing of the application for a CPC is, other conditions being equal, an important factor in determining the rights of the public service companies, and in the grant or refusal of a certificate PRIOR OPERATOR LAW [Batangas Trans v Orlanes]
It is not the policy of the law to issue a CPC to a second operator to cover the same field and in competition with a 1st operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the Commission
RATIONALE: experience has demonstrated that competition among natural monopolies is wasteful economically and results finally in inefficient and unsatisfactory service and extravagant fares.
Exceptions 1. Old operators were given a chance to improve or complete their service but failed to do so [Paez Vda. de Cruz v Marcelo] 2. Change in rule with respect to the domestic water transport [Par. 1, Executive Order 185]— The entry of new operators into the domestic water transport industry shall be liberalized to enhance the level of competition and bring about reasonable rates and improved quality of services

monitor all shipping regulatory intervention after due process that to be protected and

2.




Sec. 11—Every domestic ship operator shall have the right to fix its own passenger or cargo rates. Air Transport 1. Par. 2.2 Executive Order No. 219—Tariffs and Fares. To the extent allowed by law passage freight and other charges shall be liberalized. However, passage rates shall likewise be deregulated for routes/links operated by more than one (1) common carrier. For routes serviced by a single operator, passage rates shall continue to be regulated. However, all freight rates, charges and passage rates shall be monitored by the CAB. 2. Sec. 10 RA 776—CAB a. power to regulate economic aspect b. general supervision and regulation of and jurisdiction and control Sec. 10 (c) (2) a. power to fix and determine the rates which an air carrier may demand, collect or receive for any service in connection with air commerce b. rate should not be unduly preferential or unduly discriminatory or unreasonable c. burden of proof on the carrier d. considerations in imposition of rate † movement of traffic † adequate and efficient transportation at the lowest cost † character and quality as prescribed by law † inherent advantages of air transportation † need for revenues of carrier

REGULATION OF AUTHORIZED ROUTES

REGULATION OF EQUIPMENT USED
Sec. 16(d) Public Service Act— The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exception mentioned and saving provisions to the contrary, To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed thereafter by any public service.
LTFRB has power to promulgate [Sec. 19, Chapter 5, Title XV, Executive Order 292] (11) rules requiring operators of public land transportation service to equip, install and provide in their utilities and in their stations such devices and operating procedures as may promote safety, protection and convenience to persons and property in their areas of operation. page. 3

TRANSPO LAW / URANZA / PUBLIC LAW ASPECT


MARINA 1. Sec. 9 RA 9295. Safety standards; domestic ships— shall at all times be in seaworthy condition, properly equipped with adequate life-saving, communication, safety and other equipment, operated and maintained in accordance with the standards set by MARINA 2. Sec. 10 RA 9295. Jurisdiction; Power; and Duties of MARINA—The MARINA shall have the power and authority to: ♦ Set safety standards for vessels in accordance with applicable conventions and regulations; ♦ Require all domestic ship operators to comply with operational and safety standards for vessels set by applicable conventions and regulations, maintain its vessels in safe and serviceable conditions, meet the standards of safety of life at sea and safe manning requirements, and furnish safe, adequate, efficient, reliable and proper service at all times; ♦ Inspect all vessels to ensure and enforce compliance with safety standards and other regulations; ♦ Ensure that all domestic ship operators shall have the financial capacity to provide and sustain safe, reliable, efficient and economic passenger or cargo service, or both; ♦ Adopt and enforce such rules and regulations which will ensure compliance by every domestic ship operator with required safety standards and other rules and regulations on vessel safety; ♦ Impose such fines and penalties on, including the revocations of licenses of any domestic ship operator who shall fail to maintain its vessels in safe and serviceable condition, or who shall violate or fail to comply with safety regulations;




over and direct the operation of any privately owned utility or business affected with public interest. Vessels 1. RA 7471 a. President may in times of war/other national emergencies requisition absolutely/temporarily vessels of Philippine registry for any naval or military purpose b. Pay owner † FMV if absolutely † Fair charter value if temporarily c. Rule in case of disagreement— Such fair value shall be determined by an arbitration committee [1 appointed by the MARINA, 1 appointed by the owner/operator, 1 appointed by the 2] 2. RA 9292 a. National emergency/public interest requires b. State may temporarily trade and commerce, or prescribe rates or routes of operation c. Upon cessation of national emergency, immediately reinstate the domestic ship operator the operation of its vessel under the same terms and conditions existing prior to the occurrence of the emergency

REVOCATION OF LICENSE
A CPC constitutes neither a franchise not a contract, confers no property right, and is a mere license or privilege; such privilege is forfeited when the grantee fails to comply with his commitments. [Pangasinan Trans v PSC]
Abandonment is sufficient cause for he cancellation of a certificate of public convenience for public necessity cannot be made to wait nor sacrifice for private convenience [Paez Vda. de Cruz v Marcelo] CABOTAGE
Nautical term denoting strictly navigation from cape to cape along the coast without going into open sea.
Only vessels carrying a certificate of Philippine registry have the right to engage in coastwise trade. [Tariff & Customs Code]
No foreign vessels shall be allowed to transport passengers or cargo between ports or places within the Philippine Territorial Waters, except upon the grant of special permit from by the MARINA when no domestic vessels is available or suitable to provide the needed shipping service and public interest warrants the same. QUASIJUDICIAL FUNCTIONS

REGULATION OF PERIOD
Constitution—shall not be more than 50 years
EO 292—none
Sec. 10 RA 9295—shall not be more than years
Sec. 11 RA 776—none REQUISITION
Sec. 7, Art. XIV CONSTITUTION In times of national emergency, when the public interest so requires, the State may temporarily take

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