Supreme Court told: Nothing wrong with auditing 'Big 3' oil firms

MANILA, Philippines - The group Social Justice System (SJS) yesterday opposed the Office of the Solicitor General’s petition at the Supreme Court (SC) seeking to stop a Manila regional trial court’s order for the Commission on Audit (COA), Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) to audit the books of the country’s three biggest oil firms as part of an investigation into allegations of cartelization by these firms.

In a 13-page comment, the group led by lawyer Vladimir Cabigao argued there was nothing wrong with the order issued by Manila RTC Branch 26 Judge Silvino Pampilo Jr. for the examination of financial documents on purchases of petroleum products of the Petron Corp., Pilipinas Shell and Chevron Philippines from January to December 2003.

Cabigao rebutted the claim in the petition filed by the Office of the Solicitor General that there was no law to justify having the BOC, COA, and BIR open the oil firms’ books.

“There is basis for the court a quo to order the opening and examining of the books of account of the necessary parties and that may basis may be found on Article 24, of the New Civil Code.

In this case, state intervention is urgently demanded by the promotion of social interest,” the SJS said.

Cabigao explained that Article 24 of the New Civil Code provides that “in all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.”

He stressed that this provision may be invoked to “promote the public welfare by restraining and regulating the use of liberty and property.”

The SJS also said Pampilo was right in ordering the arrest of the heads of three government agencies for refusing to obey his order.

The group also asked the SC to lift a temporary restraining order it issued last Aug. 4 enjoining the three agencies from obeying Pampilo’s order.

Solicitor General and concurrent Justice Secretary Agnes Devanadera said the government was not opposing the audit, but was only against assigning the COA, BIR and BOC to do the job.

She said the three agencies cannot be compelled to conduct an audit because it would be beyond their mandate under the Constitution, but noted that a private party may conduct the audit.