G.R. No. 92024. November 09, 1990 (Case Brief / Digest)

### Title:
**Congressman Enrique T. Garcia vs. The Board of Investments et al.**

### Facts:
This case revolves around the petition filed by Congressman Enrique T. Garcia of Bataan, aiming to annul and set aside the decision of the Board of Investments (BOI)/Department of Trade and Industry (DTI) which approved the transfer of the proposed petrochemical plant site from Bataan to Batangas and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas (LPG). The case followed a prior petition (G.R. No. 88637), where the Supreme Court ordered the BOI to publish the amended application for registration of Bataan Petrochemical Corporation (BPC), allow Garcia access to relevant records, and set a hearing for Garcia’s opposition to the amendments. However, Garcia petitioned for a reconsideration on aspects untouched by the court’s resolution, particularly the investor’s right to the final selection of the plant site. The Supreme Court reiterated that there is no inherent “right of final choice” for the investor under the Constitution or the Omnibus Investments Code and declined the motion for reconsideration, leading to this subsequent petition.

Garcia’s primary contention rested on the argument that the BOI committed a grave abuse of discretion by allowing the foreign investor (now referred to as Luzon Petrochemical Corporation or LPC) to dictate the project’s site and feedstock choice against national interest. The Taiwanese investors initially targeted Bataan due to strategic considerations, including the presence of major naphtha production facilities, proximity to Bataan Refining Corporation, and incentives like tax exemptions. Despite opposition and expressed preferences for Bataan from various sectors, including then-president Aquino, the BOI approved LPC’s amended application to shift the site to Batangas and change the feedstock to naphtha and/or LPG, citing insurgency, labor instability in Bataan, and logistical advantages in Batangas.

### Issues:
1. Whether the foreign investor has a “right of final choice” for the petrochemical plant site under the 1987 Constitution and Omnibus Investments Code.
2. Whether the BOI committed a grave abuse of discretion in approving the transfer of the plant site and change in feedstock despite stating that government or the BOI ultimately has final say in such decisions.
3. Whether the transfer and feedstock change contravenes national policies and interests, notably the principle of economic nationalism and the strategic importance of the petrochemical industry.

### Court’s Decision:
The Supreme Court granted Congressman Garcia’s petition, declaring the BOI’s decision to approve the change of site and feedstock as null and void for constituting a grave abuse of discretion. The Court reasoned that:
– The choice and subsequent amendment went against the national interest and violated principles of economic nationalism, overly favoring the investor’s preferences over strategic considerations for the country.
– The original incentives, strategic alignment with national production capabilities (naphtha production), and regulatory approvals were predicated on the plant being situated in Bataan, using naphtha as feedstock.
– Substantial benefits to the government and the Filipino people from the project as initially approved (including tax incentives specifically geared towards the use of naphtha and the strategic location within Bataan) were undermined by the amendments.

### Doctrine:
The decision established or reiterated the doctrine that the final decision regarding significant foreign investments, particularly those involving strategic industries like petrochemicals, rests with the national government and its agencies, rather than the foreign investors. The government, through its agencies like the BOI, has a duty to uphold national interest and economic policies over individual investor preferences, especially when strategic national resources and economic policies are at play.

### Class Notes:
– **Judicial Review and National Interest:** The Supreme Court has the duty and authority to nullify decisions of government bodies that contravene constitutional mandates and national policies, especially when such decisions are perceived as yielding national interest to foreign investor preferences.
– **Investment Regulation Consistent with National Goals:** Foreign investment decisions, particularly those concerning strategic industries, must align with national goals, economic nationalism, and the efficient use of natural resources as prescribed by the Constitution and relevant laws.
– **Economic Nationalism:** The strategic control and regulation of industries essential to national interest form a core principle in investment decisions, implications of which extend to preferences for site, partnerships, and resources (e.g., feedstock for petrochemical plants).

### Historical Background:
The case highlights the tensions between encouraging foreign investment and maintaining economic sovereignty in the Philippines. It underscores the intricate balance required in navigating foreign investor interests, national economic policies, and the strategic importance of certain industries to national development and security.


Leave a Reply

Your email address will not be published. Required fields are marked *

Apply Filters