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BAR REVIEWER ON LABOR LAW 2014 (2nd) Edition - By Prof. Joselito Guianan Chan

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[G.R. No. 122898.October 17, 2001]




Quoted hereunder, for your information, is a resolution of this Court dated OCT 17 2001.

G.R. No. 122898 (Pilipinas Shell Petroleum Corporation and Adolfo Gonzales, petitioners, vs. Laura G. de Ocampo, respondent.)

Petition for certiorari assailing the Decision of the Court of Appeals dated June 26, 1995 annulling the order of the Energy Regulatory Board dated December 23, 1992; and its Resolution dated November 29, 1995 denying respondent's motion for reconsideration.

On April 23, 1991, petitioner Pilipinas Shell Petroleum Corporation (Shell) filed with the Energy Regulatory Board (ERB) an application for authority to construct a dealer-owned marine filling station at Bo. Paliwas, Obando, Bulacan, with Adolfo Gonzales as the proposed dealer.

Forthwith, Caltex (Philippines), Inc. and Petron Corporation filed their respective oppositions. Respondent Laura De Ocampo also filed her opposition, contending that Shell's proposed outlet is just 50 meters away from her own marine outlet.

On May 13, 1992, the ERB issued an order approving Shell's application, thus:

"WHEREFORE, the foregoing considered, the Board hereby approves the application filed by Filipinas Shell Petroleum Corporation to construct a dealer-owned marine filling station at Bo. Paliwas, Obando, Bulacan with Adolfo Gonzales as the proposed dealer.

In view thereof, Shell is hereby directed to comply with the following:

1. Start the construction and operation of the retail outlet at the actual approved site appearing in the vicinity map previously submitted to the Board within one (1) year from the finality of this decision and thereafter a responsible official/ employee of the applicant should submit a sworn document of compliance herewith;

2. Submit a layout plan of the completed outlet showing the installed pumps and underground tanks, photographs showing the left side, right side and front views of the retail outlet, within fifteen (15) days from completion of the construction work;

3. Submit to the Board a report on the total volume of petroleum products sold each month during the first six (6) months of the operation of the station. The report shall be submitted in the form of an affidavit within ten (10) days after the end of the six-month period; and

4. Inform the Board in writing, and the general public through a notice posted conspicuously within the premises of the station of the (a) intention of the applicant or its dealers to stop operation of the retail outlet for a period not longer than ninety (90) days; or (b) of any shutdown of operation of the retail outlet that will likely extend beyond thirty (30) days. Such notice must be given fifteen (15) days before the actual cessation of operation in the case of (a), and in the case of (b) within the first five (5) days of an unplanned stoppage of operations.


On December 18, 1992, Shell filed with the ERB a "Motion for Ministerial Approval of Transfer of Outlet Site" to a parcel of land just six (6) meters away from the approved area.

On December 23, 1992, the ERB issued an order granting Shell's motion.

Respondent De Ocampo filed a motion for reconsideration but was denied by the ERB, in its order of February 10, 1993.

Aggrieved, respondent De Ocampo filed with this Court a petition for certiorari and prohibition with prayer for the issuance of a restraining order, and/or writ of preliminary injunction assailing the ERB's orders of December 23, 1992 and February 10, 1993. In a Resolution dated September 28, 1994, this Court referred the petition to the Court of Appeals.

On June 26, 1995, the Court of Appeals rendered its Decision granting respondent De Ocampo's petition.

On July 18, 1995, petitioner Shell filed a motion for reconsideration but was denied by the Appellate Court for lack of merit on November 29, 1995.

Hence, this petition.

The ERB was created by Executive Order No. 172 dated May 8, 1987 abolishing the Oil Industry Commission. One of the powers and functions of the ERB is quoted as follows:

"(d) Regulate the capacities of new refineries or additional capacities of existing refineries and license refineries that may be organized after the issuance of this Executive Order, under such terms and conditions as are consistent with the national interest;"

On December 9, 1992, Congress enacted Republic Act No. 7638, otherwise known as the Department Energy Act of 1992, creating the Department of Energy.

Among the powers and functions of the newly created Department of Energy, pertinent to this case, are:

"(b) Develop and update the existing Philippine energy program which shall provide for an integrated and comprehensive exploration, development, utilization, distribution, and conservation of energy resources, with preferential bias for environment-friendly indigenous, and low-cost sources of energy. The program shall include a policy direction towards the privatization of government agencies related to energy, deregulation of the power and energy industry, and reduction of dependency on oil-fired plants. Said program shall be updated within nine (9) months from the effectivity of this Act and submitted to Congress within ten (10) days from its completion and not later than the fifteenth day of September every year thereafter.

x x x

(e) Regulate private sector activities relative to energy projects as provided for under existing laws: Provided, That the Department shall endeavor to provide for an environment conducive to free and active private sector participation and investment in all energy activities.

At the end of four (4) years from the effectivity of this Act, the Department shall, upon approval of the President, institute the programs and timetable of deregulation of appropriate energy projects and activities of the energy industry;"

In 1996, Republic Act No. 8180, otherwise known as the Downstream Oil industry Deregulation Act of 1996, was passed into law but was declared unconstitutional by this Court on November 5, 1997.1 Tatad vs. Secretary of the Department of Energy. G.R. No. 124360 and Lagman vs. Torres. G.R. No. 127867, November 5, 1997, 281 SCRA 330, 370 (1997).

On February 10, 1998, Republic Act No. 8479 (Downstream Oil Industry Deregulation Act of 1998) was enacted, amending the unconstitutional provisions of Republic Act No. 8180. The new law provides for the liberalization of the oil industry. Section 5 provides:

SEC. 5. Liberalization of the Industry. - Any law to the contrary notwithstanding, any person or entity may import or purchase any quantity of crude oil and petroleum products from a foreign or domestic source, lease or own and operate refineries and other downstream oil facilities and market such crude oil and petroleum products either in a generic name or his or its own trade name , or use the same for his or its own requirement: Provided, That any person or entity who shall engage in any such activity shall give prior notice thereof to the DOE for monitoring purposes: Provided, further, That such notice shall not exempt such person or entity from securing certificates of quality, health and safety and environmental clearance from the proper governmental agencies: Provided, furthermore, That such person or entity shall, for monitoring purposes, report to the DOE his or its every importation/exportation: Provided, finally, That all oil importations shall be in accordance with the Basel Convention.

Under the above provision, it is no longer necessary for any person or entity to apply for authority to construct a dealer-owned filling station. Such person or entity, such as petitioner Shell, is only required to give prior notice to the Department of Energy for monitoring purposes.

It is thus clear that with the enactment of Republic Act No. 8479, the instant petition has become moot and academic.

WHEREFORE, the petition is hereby dismissed.


Very truly yours,


Clerk of Court

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