In June 2011, pending the enactment of a law that will address the issue of monopolies and combinations in restraint of trade, President Aquino issued Executive Order No. 45 designating the Department of Justice as the Competition Authority to, among others, “investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade.”
The order also created an Office for Competition (OFC) under the Secretary of Justice to be manned by such staff that may be needed to meet that mandate.
Early this week, the DOJ issued Department Circular No. 011 which spells out the guidelines on the implementation of EO 45.
The circular covers all investigations that OFC shall conduct on cartelization, monopolies and combinations in restraint of trade as defined in various civil, criminal and special laws that date back to 1925.
That’s right, our existing laws on fair trade were enacted during the American colonial period and, except for some minor amendments, have remained untouched. Big businesses controlled by politically influential families have, for decades, been able to restrain our legislators from enacting laws that will loosen their grip on the country’s vital industries.
Investigation
Although, as a rule, complaints and reports involving violations of business regulations should be handled by their respective sector regulators, OFC may, at its initiative, conduct the investigation if the facts brought to its attention justify that action.
It may also act based on “information gathered in the context of sector inquiries, informal meetings with industry or the monitoring of markets, or on the basis of information exchanged with sector regulators.”
Unlike the preliminary investigation of criminal cases where affidavits can be required of the parties and a determination of probable criminal liability is made, the OFC investigation is primarily fact-finding in nature.
It is limited to determining whether the allegations in a complaint or the findings in a report can properly be the subject of administrative, civil or criminal action, or both.
Thus, OFC has to request (not order) information in writing “to the respondent or any person or entity which may have information relevant to the case, indicating the legal basis and the purpose of the request as well as the sanctions for supplying incorrect information as provided by law.”
As part of the process, OFC can, after securing the proper search warrant from a court, enter premises, inspect pertinent records and secure certified copies of any document that may be needed to complete its investigation.
Information
Since issues involving monopolies, cartels and combinations in restraint of trade may intrude into the turf of some government regulators, e.g., Department of Trade and Industry, National Telecommunications Commission and Securities and Exchange Commission, or be the subject of judicial action, the circular provides some caveats in the exercise of OFC’s authority.
If a complaint raises issues pending before a court or another government agency, OFC has to get more information about the matter with the court or agency concerned. After obtaining that information, OFC “may proceed with the investigation consistent with existing laws.”
The underlying message of that instruction is, OFC should not interfere in ongoing administrative or legal proceedings over the same subject matter, or do anything that may compromise the authority of the office that has taken first crack on the complaint.
A similar hands-off policy has to be adopted by OFC if the complaint involves purely technical regulations. This time, OFC has to endorse the complaint to the government regulator that has jurisdiction over the business activity or company involved. This directive makes sense because, after all, there are limits to the ability of OFC’s staff to analyze technical facts and figures. These things are better left to the highly skilled personnel of the proper regulatory agency to handle.
Administrative
Upon completion of the investigation, OFC shall submit its recommended course of action to the Secretary of Justice for final action.
Depending on his appreciation of the report, the justice secretary may approve or disapprove the recommendations, or order the conduct of further investigation.
If the filing of administrative charges against certain government officials is recommended, the case shall be referred to the government office concerned. In case civil or criminal charges, or both, are recommended, the proper complaints shall be filed in court or the National Prosecution Service for preliminary investigation, as the case may be.
On its face, the DOJ circular appears to address the concerns raised by the public about the predatory practices of companies that, through sheer size and political influence, have monopolized or dominated certain businesses or industries in the country.
But does DOJ have the manpower, time and expertise to handle the additional load to its already heavy responsibility on law enforcement and prosecution?
To illustrate, the Bureau of Internal Revenue has, since the start of the Aquino administration, filed more than 100 complaints for tax evasion in the DOJ. Three years after, we can count in our fingers the number of cases that the DOJ has reviewed, investigated and filed in court.
Neither is the DOJ’s record any better for complaints filed by the Bureau of Customs and other government agencies that, by provision of law, needed the DOJ’s imprimatur before they could prosecute their cases in court.
Only time will tell if this latest DOJ circular will join the ranks of countless government issuances that are long on form but short on substance.
(For comments, please send your e-mail to rpalabrica@inquirer.com.ph)