DOJ Opinion No. 142, s. 1990

DOJ OPINION NO. 142 , s. 1990 August 9, 1990 Comm. Adelita A. Vergel De Dios Insurance Commission Manila Madam : This has reference to your request for opinion on (1) whether or not International Rice Research Institute ("IRRI") may be deemed a "trustee" within the meaning and purview of Section 411 of P.D. No. 1460, otherwise known as the Insurance Code and (2) whether or not the assets and properties the IRRI holds as trust properties are within the definition of "trust for charitable uses" in Section 410 of the same Code. prcd You are raising the foregoing queries to guide you in determining whether the IRRI should be required to obtain a certificate of registration from your Commission pursuant to Section 413 of the Insurance Code. The abovecited provisions of the Insurance Code in so far as pertinent read thus: "SEC. 410. The term 'trust for charitable uses' within the intent of this Code, shall include, all real of personal properties or funds, as well as those acquired with the fruits or income therefrom or in exchange or substitution thereof, given to or received by any person, corporation, association, foundation or entity, except the National Government, its instrumentalities, or political subdivisions, for charitable, benevolent, educational, pious, religious, or other uses for the benefit of the public at large or a particular portion thereof or for the benefit of an indefinite number of persons." "SEC. 411. The term "trustee" shall include any individual, corporation, association, foundation, or entity, except the National Government, its instrumentalities, or political subdivision, in charge of, or acting for, or concerned with the administration of, the trust referred to in the section immediately preceding and with the proper application of trust property. xxx xxx xxx "SEC. 413. All trustees shall, before entering in the performance of the duties of their trust, obtain a certificate of registration from the [Insurance] Commissioner. xxx xxx xxx You state that the IRRI came into being in 1959 by virtue of a Memorandum of Understanding between the Ford and Rockefeller Foundations, on the one hand, and the Philippine Government, on the other; that in 1960, it was incorporated under Philippine law as a non-stock, philanthropic, and non-profit corporation, organized as an autonomous entity "to establish, maintain and operate an international rice research institute" designed to pursue specific objectives; and that it is primarily supported by bilateral and multilateral donors, enjoying tax exemptions and benefits, with the status, privileges and immunities of an international organization. prcd Pursuant to Presidential Decree No. 1620, the Philippine Government has recognized the IRRI "as an international organization, and has accorded thereto such status in the Philippines (Art. 1). It further provides that the IRRI "shall enjoy in the Philippines all the immunities normally accorded to international organizations of a universal character" (Art. 2), particularly, immunity from legal process (Art. 3), exemption from taxation and customs duties (Art. 5) and free disposition of its gold and foreign exchange (Art. 6), among others. The rationale behind the aforesaid decree is that the ability of IRRI "to operate as such in the Philippines is greatly hampered by the fact that it was organized and registered with the Securities and Exchange Commission as a private corporation and therefore is subject to all laws and regulations covering private corporations, which is in conflict with its international status, and which is not conductive to the free operation of the [IRRI's] routine activities and its efforts towards the attainment of its objectives" (2nd "whereas" clause). It is a well recognized rule in international law that international administrative bodies are vested with international personality insofar as they are beyond the control and authority of any particular state, including the region in which the seat of the organization is found (Paras, International Law, 1980 Ed., p. 60 citing Oppenheim). The concern behind this rule is with the elements of functional independence necessary to free international institutions from national control and to enable them to discharge their responsibilities efficiently, economically and impartially on behalf of all their members (International Immunities, by C. Wilfred Jenks, p. 17). P.D. No. 1620 acknowledges this international law principle when it provides that the privileges and immunities of IRRI are accorded "to ensure in all circumstances [its] free operation . . . and the complete freedom of its officials" (Art. 10[2]). Premises considered, it is believed that although by nature the IRRI may be deemed a trustee of assets and properties, including funds and valuable effects, it does not fall within the contemplation of Sections 410, 411 and 413 of the Insurance Code. prcd Please be advised accordingly. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary