Whether DOH or Philippine Competition Commission Has Jurisdiction over Monopoly or Decking Practice of Clinics

DOJ OPINION NO. 009, s. 2018 May 7, 2018 Hon. Francisco T. Duque III Secretary of Health Department of Health Building I, San Lazaro Compound Rizal Avenue, Sta. Cruz 1003 Manila Dear Secretary Duque : This refers to the request of your predecessor for legal opinion regarding the issue of jurisdiction between the Department of Health (DOH) and the Philippine Competition Commission (PCC). You stated that a complaint was filed before the Health Facilities and Services Regulatory Bureau (HFSRB) of the DOH, entitled "In the Matter of Complaint of Mr. Roderick Atienza against member-clinics of GCC Approved Medical Centers Association, Inc. (GAMCA)" for alleged violation of Section 16 (Pars. C.3 and C.4) of Republic Act (RA) No. 10022, otherwise known as the Migrant Workers Act; and that the complaint stemmed from alleged monopoly and decking practice committed by several GAMCA accredited clinics. You also mentioned that respondent clinics have filed their respective motions to dismiss assailing the jurisdiction of the DOH in taking cognizance of the complaint on the basis that any inquiry, investigation and hearing on the issue of monopoly is within the jurisdiction of the PCC. It is your position that RA No. 10022 takes precedence over RA No. 10667, or the Philippine Competition Act, considering that RA No. 10022 and its Implementing Rules and Regulations (IRR) grant specific jurisdiction to the DOH on matters pertaining to the regulation of medical clinics for overseas Filipino workers (OFWs). By way of background, RA No. 10022, which lapsed into law on 08 March 2010, amended RA No. 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, as amended, with a view to further improving the standard of protection and promotion of the welfare of migrant workers, their families and overseas Filipinos in distress. Accordingly, the Omnibus Rules and Regulations Implementing RA No. 8042, as amended by RA No. 10022, was signed on 08 July 2010 and took effect on 13 August 2010. RA No. 10667, on the other hand, was signed into law on 27 July 2015, and took effect on 08 August 2015. The law aims to enhance economic efficiency and promote free and fair competition, prevent economic concentration, and penalize all forms of anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions. 1 It applies to any person or entity engaged in any trade, industry and commerce in the country, as well as international trade having direct, substantial, and reasonably foreseeable effects therein. 2 We now examine pertinent provisions of RA No. 10022. Section 16 of RA No. 10022 expanded Section 23 of RA No. 8042, as amended, to include the DOH as an additional implementing agency, viz. : Sec. 16. Under Section 23 of Republic Act No. 8042, as amended, add new paragraphs (c) and (d) with their corresponding subparagraphs to read as follows: (c) Department of Health. The Department of Health (DOH) shall regulate the activities and operations of all clinics which conduct medical, physical, optical, dental, psychological and other similar examinations , hereinafter referred to as health examinations, on Filipino migrant workers as requirement for their overseas employment Pursuant to this, the DOH shall ensure that: (c.1) The fees for the health examinations are regulated, regularly monitored and duly published to ensure that the said fees are reasonable and not exorbitant; (c.2) The Filipino migrant worker shall only be required to undergo health examinations when there is reasonable certainty that he or she will be hired and deployed to the jobsite and only those health examinations which are absolutely necessary for the type of job applied for or those specifically required by the foreign employer shall be conducted; (c.3) No group or groups of medical clinics shall have a monopoly of exclusively conducting health examinations on migrant workers for certain receiving countries; (c.4) Every Filipino migrant worker shall have the freedom to choose any of the DOH-accredited or DOH-operated clinics that will conduct his/her health examinations and that his or her rights as a patient are respected. The decking practice, which requires an overseas Filipino worker to go first to an office for registration and then farmed out to a medical clinic located elsewhere, shall not be allowed ; (c.5) Within a period of three (3) years from the effectivity of this Act, all DOH regional and/or provincial hospitals shall establish and operate clinics that can serve the health examination requirements of Filipino migrant workers to provide them easy access to such clinics all over the country and lessen their transportation and lodging expenses; and (c.6) All DOH-accredited medical clinics, including the DOH-operated clinics, conducting health examinations for Filipino migrant workers shall observe the same standard operating procedures and shall comply with internationally-accepted standards in their operations to conform with the requirements of receiving countries or of foreign employers/principals. xxx xxx xxx [Emphasis supplied.] RA No. 10022 has included the DOH as one of the implementing agencies. Under the law, its regulatory power applies to activities and operations of all clinics which conduct medical, physical, optical, dental, psychological and other similar examinations, on Filipino migrant workers as requirement for their overseas employment. In fulfilling this mandate, the DOH shall ensure that no group or groups of medical clinics shall have monopoly of exclusively conducting health examinations on migrant workers. Additionally, consistent with the right of every Filipino migrant worker to exercise the freedom to choose any of the DOH-accredited or DOH-operated clinics that will conduct his/her health examinations, the decking practice as defined under RA No. 10022 shall not be allowed. The main issue at hand is whether RA No. 10667 repealed by implication portions of Section 16 of RA No. 10022. Section 55 of RA No. 10667 reads: Section 55. Repealing Clause. The following laws, and all other laws, decrees, executive orders and regulations, or part or parts thereof inconsistent with any provision of this Act, are hereby repealed, amended or otherwise modified accordingly . xxx xxx xxx [Emphasis supplied.] The above provision is a general repealing clause. It is a clause which predicates the intended repeal under the condition that a substantial conflict must be found in existing and prior acts. The failure to add a specific repealing clause indicates that the intent was not to repeal any existing law, unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and old laws. This latter situation falls under the category of an implied repeal. 3 Well-settled is the rule in statutory construction that implied repeals are disfavored. In order to effect a repeal by implication, the later statute must be so irreconcilably inconsistent and repugnant with the existing law that they cannot be made to reconcile and stand together. The clearest case possible must be made before the inference of implied repeal may be drawn, for inconsistency is never presumed. There must be a showing of repugnance clear and convincing in character. The language used in the later statute must be such as to render it irreconcilable with that had been formerly enacted. An inconsistency that falls short of that standard does not suffice. 4 It would seem that this irreconcilable inconsistency is manifest in several provisions of RA No. 10667. Monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right or power to carry on a particular business or trade, manufacture a particular article, or control the sale or the whole supply of a particular commodity. It is a form of market structure in which one or only a few firms dominate the total sales of a product or service. 5 Under RA No. 10667, monopoly per se is not prohibited . Rather, it is the abuse of monopoly that is forbidden. This means Section 16 of RA No. 10022 prohibits a conduct which would otherwise be considered legitimate under RA No. 10667. A term that is closely related to and is, in fact, used interchangeably with monopoly in other jurisdictions is dominant position. RA No. 10667 pertinently provides: Section 15. Abuse of Dominant Position. It shall be prohibited for one or more entities to abuse their dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition : xxx xxx xxx Provided, That nothing in this Act shall be construed or interpreted as a prohibition on having a dominant position in a relevant market, or on acquiring, maintaining and increasing market share through legitimate means that do not substantially prevent, restrict or lessen competition . xxx xxx xxx [Emphasis supplied.] Such conduct is defined by law as any type or form of undertaking, collective recommendation, independent or concerted action or practice, whether formal or informal. 6 To attain the objectives and purposes of RA No. 10667, the PCC, an independent quasi-judicial body attached to the Office of the President, was created. It is vested with original and primary jurisdiction over the enforcement and implementation of the law and its IRR. Section 12. Powers and Functions. The Commission shall have original and primary jurisdiction over the enforcement and implementation of the provisions of this Act, and its implementing rules and regulations. The Commission shall exercise the following powers and functions: (a) Conduct inquiry, investigate, and hear and decide on cases involving any violation of this Act and other existing competition laws motu proprio or upon receipt of a verified complaint from an interested party or upon referral by the concerned regulatory agency, and institute the appropriate civil or criminal proceedings; xxx xxx xxx [Emphasis supplied.] In the exercise of its enforcement mandate, Section 31 states: Section 31. Fact Finding; Preliminary Inquiry. The Commission, motu propio, or upon filing of a verified complaint by an interested party or upon referral by a regulatory agency, shall have the sole and exclusive authority to initiate and conduct a fact-finding or preliminary inquiry for the enforcement of this Act based on reasonable grounds . xxx xxx xxx Except as otherwise provided in Section 12(i) of Chapter II of this Act, no law enforcement agency shall conduct any kind of fact-finding, inquiry or investigation into any competition-related matters . [Emphasis supplied.] Further, during the legislative deliberations, lawmakers recognized the need to address possible overlap or conflict in the implementation of RA No. 10667 and other competition-related laws, including industry-specific statutes with competition provisions which are being enforced by regulatory agencies or sector regulators. To this end, Section 32 was inserted to govern the interface between the PCC and sector regulators, viz. : Section 32. Relationship with Sector Regulators. The Commission shall have original and primary jurisdiction in the enforcement of all competition-related issues . The Commission shall still have jurisdiction if the issue involves both competition and noncompetition issues , but the concerned sector regulator shall be consulted and afforded reasonable opportunity to submit its own opinion and recommendation on the matter before the Commission makes a decision on any case. Where appropriate, the Commission and the sector regulators shall work together to issue rules and regulations to promote competition, protect consumers, and prevent abuse of market power by dominant players within their respective sectors. [Emphasis supplied.] As a sector regulator, it is our view that the DOH may only take cognizance of complaints for alleged violation of Section 16 of RA No. 10022, as amended, if such complaints involve noncompetition or regulatory issues. In light of RA No. 10667, a complaint for monopoly, committed by exclusively conducting health examinations on migrant workers is, in fact, a competition issue. On the other hand, the decking practice may be considered a technical or regulatory issue which falls within the jurisdiction of the DOH to resolve. Foregoing considered, we are of the position that RA No. 10667 repealed by implication RA No. 10022 insofar as it is inconsistent therewith. Please be guided accordingly. Very truly yours, (SGD.) MENARDO I. GUEVARRA Secretary of Justice Footnotes 1. Section 2 (a), 2 (b) and 2 (c). 2. Section 3, 1st paragraph. 3. Intia, Jr. v. Commission on Audit , 366 Phil. 273, 290 (1999), citing Mecano v. Commission on Audit , G.R. No. 103982, 11 December 1992, 216 SCRA 500, 504. 4. Agujetas v. Court of Appeals , G.R. No. 106560, 23 August 1996, 261 SCRA 17, 34-35. 5. Tatad v. The Secretary of the Department of Energy, et al. , G.R. No. 124360, 05 November 1997. 6. Section 4 (c) of RA No. 10667.