G.R. No. 205835, June 23, 2020
NATIONAL FEDERATION OF HOG FARMERS, INC., REPRESENTED BY MR. DANIEL P. JAVELLANA, ABONO PARTY-LIST INC., REPRESENTED BY ROSENDO SO, ALYANSA NG MGA GRUPONG HALIGI NG AGHAM AT TEKNOLOHIYA PARA SA MAMAMAYAN, INC., REPRESENTED BY CONG. ANGELO B. PALMONES, JR., AGRICULTURAL SECTOR ALLIANCE OF THE PHIL., INC., REPRESENTED BY CONG. NICANOR BRIONES, PORK PRODUCERS FEDERATION OF THE PHILIPPINES, INC., REPRESENTED BY MR. RICO GERON, SOROSORO IBABA DEVELOPMENT COOPERATIVE, REPRESENTED BY DR. ANGELITO D. BAGUI, ASSOCIATION OF PHIL. AQUA FEEDS MILLERS, INC., REPRESENTED BY MR. NAPOLEON G. CO, PETITIONERS, VS. BOARD OF INVESTMENTS, LUCITA P. REYES, FELICITAS AGONCILLO-REYES, EFREN V. LEAÑO, AND RAUL V. ANGELES, PHILIPPINES CORPORATION, IN THEIR CAPACITY AS EXECUTIVE DIRECTORS OF THE BOARD OF INVESTMENTS, THE BOARD OF TRUSTEES OF BOI, AND CHAROEN POKPHAND FOODS PHILIPPINES CORPORATION, RESPONDENTS.

FACTS

Charoen Pokphand Foods Philippines Corporation (Charoen), a 100% foreign-owned Thai company, filed three separate applications for registration with the Board of Investments (BOI) as a new producer under the Omnibus Investments Code (Executive Order No. 226). The applications were for: (1) aqua feeds (filed October 6, 2011, approved February 28, 2012); (2) hog parent stocks and slaughter hogs (filed October 14, 2011, approved April 24, 2012); and (3) an integrated broiler project (filed October 11, 2012, approved November 6, 2012). Each application underwent a process of check-listing, assessment by the BOI’s Resource-Based Industries Department, publication of notice in the Philippine Star, and payment of fees before official filing and BOI Board of Governors’ approval. The published notices invited objections under oath within three days. Petitioners, various agribusiness industry groups, requested copies of Charoen’s supporting documents from the BOI on November 20, 2012, which was denied on December 17, 2012, on grounds of confidentiality. Petitioners filed a Petition for Certiorari directly with the Supreme Court on March 7, 2013, assailing the three BOI Resolutions. They alleged grave abuse of discretion, claiming the resolutions violated their constitutional right against unfair foreign competition, were issued without prior consultation with the Department of Agriculture, wrongly classified Charoen as a new producer despite prior operations, and would cause them injury by giving Charoen undue competitive advantage through incentives. The BOI, in its Comment, argued the petition should be dismissed for failure to exhaust administrative remedies (appeal to the Office of the President), improper venue (should have been filed with the Court of Appeals), lack of proper authorization for petitioners, and because the Executive Directors named were not proper parties. The BOI defended its resolutions as within its powers under E.O. No. 226 and the applicable Investment Priorities Plans, issued after consultations to bridge local production-demand gaps, and noted that agribusiness was not on the Foreign Investment Negative List restricting foreign equity.

ISSUE

Whether the Supreme Court should dismiss the Petition for Certiorari assailing the BOI Resolutions that granted Charoen’s applications for registration.

RULING

Yes, the Petition is dismissed. The Supreme Court held it lacked original jurisdiction over the petition, which should have been filed with the Court of Appeals under Rule 65 of the Rules of Civil Procedure. Furthermore, petitioners failed to exhaust available administrative remedies, as an appeal to the Office of the President was provided under Article 36 of E.O. No. 226 from decisions of the BOI on registration applications. The Court found the invocation of grave abuse of discretion was a “subterfuge” to challenge an allegedly irregular grant of registration. On the substantive allegations, the Court ruled that the constitutional provisions on economic nationalism (Sections 10 and 12, Article XII) are not self-executing and require implementing legislation, such as the Foreign Investments Act (Republic Act No. 7042), which allows 100% foreign equity in areas not included in the Negative List. Agribusiness was not on the Negative List at the time. The BOI acted within its delegated authority under E.O. No. 226 and the Investment Priorities Plans in approving the applications. The Court also noted that the policy of the State, as per R.A. No. 7042, is to welcome foreign investments that contribute to socioeconomic development, and protection against competition is not an absolute constitutional right. The petition was not justiciable as presented.