Mr. Manuel G. Imson

June 26, 1992 Mr. Manuel G. Imson Deputy Administrator and Officer-In-Charge Philippine Overseas Employment Administration POEA Bldg.,Ortigas Ave. corner EDSA, Mandaluyong, Metro Manila S i r : This refers to your letter of May 25, 1992 informing this Commission of the decision of your Office to defer for a period of ninety (90) days the implementation of the SEC Ruling prohibiting foreigners from occupying administrative and managerial positions in partly nationalized industries which allegedly cause adverse effect on the operations of overseas employment industry. We would like to inform you that the opinion of the SEC stating that in firms engaged in wholly or partially nationalized activities, aliens are banned from being appointed to management positions as president, vice-president, treasurer, auditor, etc., of said companies, although they can be elected directors in proportion to their allowable participation or share in the capital, was rendered pursuant to the ruling of the Department of Justice Re: Opinion No. 37, Series of 1976, and provisions of Commonwealth Act No. 108, as amended by P.D. 715, otherwise known as the Anti-Dummy Law, quoted hereunder: "SECTION 2-A. Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any other way, transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association not otherwise qualified under the Constitution, or the provisions of the existing laws; or in any manner permits or allows any person, not possessing the qualifications required by the Constitution, or existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of any other specific country, to intervene in the management, operation, administration or control thereof, whether as an officer ,employee or laborer therein with or without remuneration except technical personnel whose employment may be specifically authorized by the Secretary of Justice ,and any person who knowingly aids, assists or abets in the planning, consummation or perpetration of any of the acts herein above enumerated shall be punished by imprisonment for not less than five nor more than fifteen years and by a fine of not less than the value of the right, franchise or privilege enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand pesos: Provided, however, That the president, managers, or persons in charge of corporations, associations or partnerships violating the provisions of this section shall be criminally liable in lieu thereof: Provided, further, That any person, corporation or association shall, in addition to the penalty imposed herein, forfeit such right, franchise, privilege, and the property or business enjoyed or acquired in violation or the provisions of this Act: And provided, finally, that the election of aliens as members of the board of directors or governing body of corporations or associations engaging in partially nationalized activities shall be allowed in proportion to their allowable participation or shares in the capital of such entities ." (Emphasis supplied) We believe that without legislative authority, the Commission has no power to suspend the implementation of the aforecited statutory provision. In this connection, it is worthy to mention the following authorities on the application and enforcement of laws: LibLex Where the requirement is made in explicit and ambiguous terms, no discretion is left to the judiciary. It must see to it that its mandate be obeyed ." (Alcantara, Statutes, citing Luzon Surety Co.,Inc. vs. De Garcia et al.,GR. No. L-25659, Oct. 31, 1969) "Acts executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity" (Art. 5, Civil Code of the Philippines.) " Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution ." (Article 7, Civil Code of the Philippines) "Administrative rules and regulations must be germane to the object and purpose of the law and conform to the standards that the law prescribes. They cannot supplant the plain and explicit command of the statute .An administrative agency cannot amend an act of Congress ." (Gonzales, Administrative Law, citing Teoxon vs. Board of Administrators, G.R. No. L-25619, June 30, 1970 ;Director of Forestry vs. Muoz, G.R. Nos. L-24796 & L-25459, June 28, 1968; Del Mar vs. Philippine Veterans Administration, G.R. No. 27299, June 27, 1973; Manuel vs. General Auditing Office, G.R. No. 28952, December 29, 1971; Santos vs. Estenzo, G.R. No. L-14740, September 26, 1960, 109 Phil. 419 (1960). However, since the law allows exception in cases of "technical personnel whose employment may be specifically authorized by the Secretary of Justice",your Office, as the government regulatory body of overseas employment industry, may favorably recommend to the Department of Justice the employment or appointment of foreign nationals to management positions in said industry. Thus, unless there is an exemption granted by the Department of Justice, the Commission is duty bound to implement the above-mentioned statutory provision. While the SEC has no jurisdiction over matters relating to the implementation of the provisions of the Labor Code, it has jurisdiction over intra-corporate affairs of corporations which include those involving management by the board of directors and/or officers. Please be advised accordingly. cdlex Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman