DOJ Opinion No. 119, s. 1989

DOJ OPINION NO. 119 , s. 1989 June 20, 1989 Secretary Peter D. Garrucho, Jr. Department of Tourism T.M. Kalaw St., Rizal Park Manila Sir : This refers to the letter of then Secretary of Tourism Jose Antonio U. Gonzales, copy attached, requesting opinion on his queries concerning the draft "Memorandum of Understanding (MOU) between the United States of America and the Republic of the Philippines concerning the Pacific War Memorial and Other Historical Landmarks on Corregidor Island." cdll Hereunder are our comments, observations and recommendation on the aforesaid draft MOU which we have thoroughly studied and considered in the light of the pertinent provisions of the Constitution, existing statutes and executive issuances. I. Background The U.S. Mission, through the American Battle Monuments Commission, has proposed to the Department of Tourism the aforementioned Memorandum of Understanding (MOU) by which the U.S. Government shall be given full and free use of all the land in Corregidor Island at least 350 feet above sea level and full access with permission to restore and maintain the adjoining areas described in the Annex to the said MOU, consisting of roads, wells, pumping stations, pipelines and reservoir. Within the memorial site, the Philippine Government is allotted only the use of the light-house for military or navigational purposes. The matter reached the Department of Justice on February 6, 1989 through a query raised by Tourism Secretary Jose Antonio U. Gonzales on whether our Constitution gives the Department of Tourism flexibility regarding the period of what he calls "lease" of a portion of Corregidor Island under the same draft MOU. The Department of Tourism has proposed a lease for 25 years renewable for another 25 years since it is the opinion of the said department that the constitution imposes such time constraints. The US counter-proposed a 50-year lease without interruption. Particularly, the queries of the then Tourism Secretary are: "Is it possible for us to do this [agree to continuous 50-year lease] since Article 14, Section 16 appears to give us some flexibility? Furthermore, Article 12, Section 3, in respect to property within the public domain seems to limit the lease of the same to private corporations. Since the American Battle Monument Commission is neither, does this give us flexibility as well?" The constitutional and legal implications of the proposed MOU go beyond the issues raised regarding the duration of the agreement. Hence, we felt the need to look over the entire text of the draft MOU before answering the former Tourism Secretary's queries. prcd Upon our request, the Department of Tourism and Major David P. Stephenson of the USAF furnished us a copy of the text of the draft MOU. The latter informed us that the "main body of the text is agreed [probably between the negotiating U.S. officials and the former Tourism Secretary] except Article VII, Section 2 concerning the duration of the agreement." II. The draft MOU and relevant existing agreements between RP and US a. The Military Bases Agreement (MBA) At the outset, we observe that the draft MOU is the same Corregidor MOU placed in the agenda of the 1988 MBA Review but later withdrawn therefrom by the US Panel, and that the same draft prepared by the US has not undergone any change despite negotiations between US authorities and the Department of Tourism. The matter was initially suggested for consideration during the recent MBA review due to the desire of the US that the Corregidor Memorial be accorded the same treatment as a US facility falling within the MBA. However, the said matter was dropped by the U.S. Panel from the agenda during the April 4, 1988 negotiations after the members of the RP Panel vehemently objected to the extremely one-sided and onerous provisions of the MOU, which raised sovereignty and constitutional issues. Moreover, the US Panel realized that the duration of the MBA which is due to expire on September 16, 1991 will apply to the MOU if it is made an integral part of the MBA. b. 1965 RP-US Exchange of Notes As early as December 22, 1965, the American Ambassador and the Philippine Secretary of Foreign Affairs, exchange notes which constituted an agreement between RP and the US concerning the construction and maintenance of the Corregidor-Bataan Memorial. prcd Pursuant to the said agreement, the US agreed to construct, in cooperation with the Philippine Government, a suitable memorial to honor the thousands of American and Philippine soldiers, sailors and marines who died in the Pacific area during World War II. The memorial shall include: (1) twin flagpoles at a high point flying the flags of RP and US (2) building/s for use as an auditorium and tourist center; and (3) a contiguous battlefield park. The goods used and the activities undertaken exclusively for the construction of the memorial were tax-exempt. The Philippine government was vested with the responsibility of the administering and maintaining the memorial proper, the contiguous battlefield and the Corregidor Island as a whole. The implementation of the agreement was a cooperative undertaking on the part of the US by the Corregidor-Bataan Memorial Commission, and on the part of RP by the Philippine National Shrines Commission. The proposed MOU shall supersede this 1965 Exchange of Notes. (Par. 3, Art. VII, draft MOU) We assume that the administration of the memorial shall be transferred from the Philippine government to the US government by virtue of the full use to be granted to latter by the proposed MOU. III. Relevant Philippine laws and executive issuances concerning Corregidor 1. Proclamation No. 69 Proclamation No. 69, issued on May 31, 1948, reserved for military purposes Corregidor and the adjacent islands, such as Caballo (For Hughes), La Monja, El Fraile (Fort Drum), Santa Amalia, Carabao (Fort Frank) and Lembones as well as all water and surrounding detached rocks, taking into account their strategic location for defense purposes, and declared the same as a national defense zone, and therefore a restricted area under the direct supervision and control of the Armed Forces of the Philippines. 2. Executive Order (E.O.) No. 58 [1954] E.O. No. 58 which issued on August 16, 1954 by then President Ramon Magsaysay, declared all battlefield areas in Corregidor and Bataan as national shrines, opened them to the public, made them accessible as tourist attractions and scenes of popular pilgrimages and created a Corregidor-Bataan National Shrines Commission. Excepted from the coverage of the national shrines were portions temporarily needed for the storage of ammunition and those deemed absolutely essential for safeguarding national security. 3. Executive Order No. 123 [1968] E.O. No. 123, issued on March 15, 1968, amended E.O. No. 58 [1954] cited above, by giving the National Shrine Commission the authority to enter into any contract for the purpose of converting areas into tourist spots and leasing them to private parties. Particularly, E.O. No. 123 provides as follows: "The Commission shall conduct studies and prepare a general program for the development of national parks embracing all the historic areas and recommend to the President a plan for appropriate memorials or monuments wherever they are deemed desirable, taking into account the topography, vegetation, and historical background of the places selected for the purpose. The Commission, is hereby authorized, with the prior approval of the President, to enter into any contract for the conversion of areas within national shrines into tourist spots and to lease such areas to any citizen or citizens of the Philippines, or any corporation 60% of the capital stock of which belongs to Filipino citizens ." (Emphasis supplied) 4. Integrated Reorganization Plan (P.D. No. 1 [1972]). The Integrated Reorganization Plan for the Executive Department adopted by P.D. No. 1 [1972], abolished the National Shrines Commission and transferred all its pertinent functions, appropriations, records, property and personnel to the National Historical Institute in the Department of Education and Culture. (Art XIX-8) prcd 5. P.D. No. 1076 [January 26, 1977] Pursuant to P.D. No. 1076, the administration, maintenance and development of national shrines consisting of military memorials or battle monument were transferred from the Department of Education and Culture to the Department of National Defense, particularly to the Military Shrines Service of the Philippine Veterans Affair Office. 6. 1986 Memorandum of Agreement (MOA) between the Ministry of Tourism (MOT) and the Philippine Tourism Authority (PTA) and the Ministry of National Defense (MND). Pursuant to the said 1986 MOA, the MND [the assignor] leased with the prior approval of the President to the MOT/PTA [the assignee], the entire area of Corregidor. The MOT/PTA is granted the following responsibility and prerogatives: 2. "The ASSIGNEE shall be responsible not only for the maintenance and preservation of war relics on the islands but also for the full development of its potentials as an international and local tourist destination, without, however, destroying its integrity as a war memorial and national shrine. For this purpose, it is authorized to: a. Package and source the necessary funds to develop and restore the Corregidor Island group: b. Negotiate with private interested parties, funding for the development and maintenance of the Corregidor Island group; c. Negotiate and oversee the development of the Island group, ensuring that private tour operators market and promote the Island group, subject to national security requirements and requirements of MOT/PTA and d. Enter into development and construction, operation or sub-lease of tourist facilities, i.e., hotels, inns, transport, and all other travel and tour amenities, subject to national security requirements and the provisions of amendatory Executive Order No. 123, s. 1968. It is understood that nothing in the foregoing authorization shall result in the destruction of the Island's integrity as a military memorial and national shrine." (Emphasis supplied.) IV. Relevant new constitutional provisions (1) Article XII, "National Economy and Patrimony" National parks are now specifically mentioned as one of the classifications of the lands of the public domain. Pertinently, Sec. 3 of Art. XII, 1987 Constitution provides: "Sec. 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks . Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands . Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant. Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions thereof ." (Emphasis supplied.) (2) Article XIV, "Education, Science and Technology, Arts Culture, and Sports." A new constitutional provision mandates protection by the State of our historic wealth. This is Section 16 of Article XIV which is quoted as follows: "All the country's artistic and historic wealth constitutes the cultural treasure of the nation and shall be under the protection of the State which may regulate its disposition." V. Comments on the Specific Provisions of the draft MOU 1. The U.S. is granted full and free use of the Memorial which comprises all the land in Corregidor at least 350 feet above sea level and full access to adjacent areas. Former Tourism Secretary Antonio Gonzales treated the draft MOU as a lease agreement. However, like the 1974 MBA, the provisions of the draft MOU does not clearly provide for a lessor-lessee relationship. We also note in particular the absence of any stipulation on the rental price. Under the above-stated laws and issuances, Corregidor Island has been declared a national shrine wherein national parks embracing historic areas must be developed and preserved. By law, a government office, the Military Shrines Service is mandated to administer and maintain said national shrine. However, by virtue of a Memorandum of Agreement between the MOT (now Department of Tourism [DOT])/PTA and the DND, the latter assigned to the former, through a lease agreement, the functions of the Military Shrines Service, subject to national security requirements. The proposed MOU would transfer to the U.S. government the aforesaid responsibilities vested by law to our government offices, such as the Military Shrines Service, Philippine Veterans Affairs Office of the DND with respect to the administration of military shrines and the DOT, with respect to its authority to promote the protection, maintenance and preservation of historical, cultural and national assets with tourist attractions with appropriate government agencies and the private sector or private owners. (Sec. 3(p) and (g) E.O. 120 [1986]). Moreover, the term of the MOU, whether 50 years under the US proposal * or 25 years renewable for another 25 years under the DOT proposal, gives to the agreement permanency. In other words, the MOU is not of transitory effectivity. In view of the foregoing, the MOU may require Senate ratification. Moreover, another constitutional issue may have to be considered, that is whether the proposed MOU through which the Philippine government shall completely turn over to the US government the full use of a national shrine would amount to an abdication by the Philippine government of its responsibility, under Section 16, Article XIV of the 1987 Constitution, to protect the historic wealth of the nation. prcd The grant of "full use" of a national shrine to a foreign government under the proposed MOU needs to be restudied to evaluate constitutional implications and to identity policy concerns. 2. The draft MOU grants exemption to the US from all forms of taxation, which shall include among others, "all undertakings and services which it may order or contract for in carrying out the purposes of this Memorandum of Understanding". The tax exemption is couched in very broad language which may give rise to conflicts between the two governments regarding the scope of the tax exemption. Furthermore, the grant of tax exemption is a legislative prerogative. Deputy Commissioner Eufracio D. Santos of the Bureau of Internal Revenue who interposes no objection to the grant of tax exemption is also of the view that the matter should be referred to Congress pursuant to the 1987 Constitution (Letter dated April 17, 1989 addressed to the Secretary of Justice). Section 28(4) of Article VI of the Constitution reads: "No law granting any tax exemption shall be passed without the concurrence of a majority of all the Members of the Congress." 3. The US nationals present in the Philippines to implement the MOU shall be provided privileges and immunities equivalent to those of the administrative and technical staff of the US diplomatic mission accredited to the Philippine Government. This is an unusual grant of privileges and immunity. Moreover, the phrase "all US nationals present in the Philippines to implement the provision of the Memorandum of Understanding" is too broad and vague. It is suggested that the request of then Acting Deputy Executive Secretary Samilio N. Barlongay for the comment and recommendation of the Department of Foreign Affairs on this matter be followed-up (Attached is a copy of said official's 1st Indorsement dated January 20, 1988 to the Secretary of Foreign Affairs). 4. The US government commits to give preference to Philippine nationals in the employment of personnel to carry out the MOU, except for senior supervisory positions. The Department of Labor should be consulted on this matter. The scope of the exception to the preference granted to Philippine nationals and the laws to govern labor relations should be clarified. 5. Other matters There are some other important details on which the MOU is silent but which must be considered such as the access to and extent of the Philippines government's authority or participation in the administration of the memorial, the development plan and structural plan of the improvements to be constructed, and the ownership of the improvements during and after the term of the proposed MOU. The location plan of the memorial and the map showing the breadth and scope of the memorial area must also be obtained. Furthermore, the proposed MOU may have to be revised to express the cooperative nature of the undertaking of both governments with respect to the consecration of the corregidor memorial as a national shrine. (Please see Art. 1, draft MOU.) prcd V. Conclusion and Recommendations The proposed MOU raises grave constitutional, legal and sovereignty issues which should be addressed by the government offices concerned such as the Department of Justice, Department of Finance, Department of National Defense, particularly its Military Shrines Service, Department of Labor and Department of Foreign Affairs in coordination with the Department of Tourism. An ad hoc body composed of the representatives of the aforesaid offices may be convened for the aforestated purpose. LLpr Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice Footnotes * The U.S. remains steadfast in its proposal for a 50-year term. Its latest draft to a 25-year term "automatically" extendible for another 25 years, which is just a circuitous way of providing for a straight 50-year term. The duration of the agreement, probably can be limited to 25 years renewable by another 25 years by mutual agreement of the parties.