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RIVERMAN’S VISTA: The Rappler Case: What is at stake? (1)

Part 1: Constitutional choices in the Rappler case
Antonio G.M. La Viña, with Christian Laluna

CAGAYAN DE ORO CITY (MindaNews / 01 February)  — At the outset, we disclose our bias: We consider the nationality requirement in the 1987 constitution as important but we are open to its revision in some sectors, such as telecommunications and mass media, because of their global context and other policy considerations. On the other hand, we strongly believe in freedom of the press, speech, and expression, that these great freedoms are non-derogable and can only be limited to prevent the occurrence of a clear, present, and physical danger to life and property. Nevertheless, we acknowledge that these two constitutional norms are applicable in the Rappler case and the Securities and Exchange Commission (SEC) is mainly and particularly tasked to implement the former. It is our contention though that the two constitutional norms could have been read harmoniously and that the SEC, in its decision, could have upheld freedom of the press while still applying the national requirement.

We also want to disclose immediately that we write this article with great admiration for the editors and reporters of Rappler. They are the best of Philippine media – their editors  are some of the most seasoned and principled in the field, their young and veteran reporters are courageous, idealistic, objective, unbiased, and excellent in their craft.

We also write this article giving the Chairpersons and the Commissioners of the SEC the benefit of the doubt. The reputation of the Chair and her colleagues, all of whom except one was appointed by President Aquino, are well known in the legal and corporate community. That reputation is one of integrity, probity, and independence. It is also well known among those of us who know that Finance Secretary Sonny Dominguez, as his predecessor Cesar Purisima did, consistently backs the SEC in difficult decisions, never second-guessing them for political reasons. For this reason, we believe the SEC decision, while wrong in the remedy it orders, was done in good faith. But it is wrong for being unbalanced and not considering properly the constitutional norms of freedom of the press. In doing so, unintentionally in our view, the SEC became a tool of the Duterte administration to suppress a fundamental constitutional right.

(Disclosure: One of us, Prof. La Viña, has worked closely with Commissioner Ephyro Amatong when the latter was an Assistant Secretary in the Department of Finance in the Aquino Administration. The Ateneo School of Government, when it was headed by Prof. La Viña, also collaborated with the DOF and SEC during the transition from the Aquino to Duterte administrations. That formal collaboration ended in March 2017.)

Dissecting the constitutional requirement for mass media

Other commentators, both in the legal and press fields, have weighed on the merits of the SEC decision finding that Rappler Inc. was deemed to be (partly) owned and operated/managed by its foreign investor, Omidyar Network, as a consequence of a conditionality in its debt instrument, Philippine Depositary Receipts (PDRs), requiring consultation prior to amending the Articles of Incorporation or by-laws, treated by the SEC as evidence of equity control. We will not retread the same ground here although we will go back to this issue at the last part of this article to be able to suggest the alternative approach the SEC should have taken and hopefully the Court of Appeals, and need be, the Supreme Court will consider.

Since Article XVI Sec. 11 (1) of the 1987 Constitution mandating 100% Filipino ownership and management of mass media outfits had been invoked, however, as well as the equally Constitutional guarantee of the freedom of the press, perhaps it profits more to look at the history behind the provision.

For if one were to look at the treatment of mass media entities ownership by this provision, it had been given short shrift, both in academic commentaries (at least, Fr. Bernas’ commentary on the subject constitute half a page of his book) and even during the Convention itself, when we read the official Records of the Constitutional Commission. For example, to quote Commissioner Blas Ople, he found “nothing wrong with that.” This would lead some legal analysts to conclude, citing principles of statutory construction, that the provision be taken in its plaintext meaning (the “plain language rule”), with no further reference to other authorities.

Especially in constitutional law, and especially when the matter had been given short shrift, we believe that would be unwise. This is not an ordinary provision of economic nationalism—it should be noted that the ownership ratio of telecommunications outfits (telcos) had originally been discussed alongside mass media and advertising, before it was decided that the matter of telco ownership be better treated in Article XII, National Economy. Althroughout the Commissioners had stressed the importance of a free press, only having emerged out of the Marcos regime’s muzzling or takeover of its entities, as well as that of telcos. Article XVI Sec. 11 (1) must be read in that light, informing its interpretations.

Part of that light can be also found, it may seem, in discussions surrounding the ownership of telcos and advertising firms. A more conservative construction may recoil at including the deliberations therein, given that these form provisions separate from mass media. And yet in the deliberations we see the Commissioners flow from debating mass media, to advertising, to telcos, as these three were originally discussed together, as will be revealed later. If invoking statutory construction in interpreting the Constitutional provision, the intent of the Constitutional Framers is as paramount as the plaintext, and if mass media, advertising, and telco ownership were discussed in the same breath, then their intent may be shared across the three mentioned fields.

And here we note our first revelation: the concept of “ownership.” As the mandate for mass media was 100%, there really was little if any room to discuss what “ownership” implied therein. It was in the allied discussions on telcos and advertising where the opportunity arose.  In debating telco equity ownership,  Commissioner Villacorta, for example, was keen for the Commission to distinguish the difference between “foreign investors whose goal is to make their investments yield the highest possible returns and those foreign multinationals that do not only want to make money but also want to control and dominate the local economy.” It would end with Commissioner Rosario Braid withdrawing the inclusion of telcos in the draft Sec. 11 in order to avoid protracted debate, even mentioning that “we can always turn to multinational financing, if necessary.”

Granted, the debate was on telcos, but it does parallel what Rappler and the SEC face now with the PDR dilemma: whether or not with the conditionality Omidyar’s PDRs would constitute investment or equity. Again, we leave the corporate debate to others. Yet Villacorta’s words, reflecting concerns of the Philippine Chamber of Communications, and the debate they sparked, clearly show that even then as now, the Framers can accept investments without equating it to ownership. But as Villacorta distinguished, there is a difference of intent between investment and control, and what the Constitution prohibits is control. Deciding on what constitutes control is admittedly within the SEC’s jurisdiction, being the regulatory agencies for corporate entities.

And with that we move to the second revelations—and this is more critical to the debate regarding press freedom—the concept of “regulation.” And now with Presidential Spokesperson Harry Roque’s statement suggesting Rappler can continue operating by simply accrediting as a “blogger”, it is an important revelation.

Rationale for Filipino ownership and control

The rationale for the 100% Filipino ownership/control mandate arose out of the important role advertising, mass media, and telecommunications play in society; hence the reason why the three were discussed together, and given successive provisions in the draft General Provisions. Citing Commissioner Braid’s sponsorship speech of the draft, “Communication and information provide the leverage for power.” Whether by the New Society dictatorship, or by consumerist multinational firms, Braid cited communication’s ability to homogenize and control a population, and the need of provisions in the constitution to avert the possibility of social disaster. The vision—and Braid indeed identified it as such, a “vision of society”—is that of both a free and nationalist Filipino society enabled by mass communications whose liberty and order was ensured by Filipino control over the concerned outfits.

Yet there the vision broke down with the devil of details. Granted, the 100% mass media ownership passed with little debate, to reiterate—but as noted, the ownership of advertising and telcos generated a lot of debate on the same concept. And as to the question of mass media and regulation, alarm bells rang.

The year1987 did not know as yet the Internet; all there was was the trimedia: newspapers, TV, and radio. And here, while discussing the difference between mass media in general, advertising, and telcos, Commissioner Padilla made an important distinction between TV/radio on the one hand, and newspapers on the other: the capacity of the government to regulate. “Mass media, when referring to TV and radio, requires licensing or at least the allocation of certain channels, but print media or the newspapers are not subject to any licensing and that is so because that is part of the freedom of the press which should not be curtailed nor impaired.” This would be echoed by Commissioner Ople: “In the case of broadcast media, it is understood that these are licensed… but only with respect to the allotment of bands of frequencies. And this really has nothing to do with the regulation of contents. But in the case of newspapers, may I have the assurance of the committee, in line with the previous questions of Commissioners Bernas and Aquino, that there will be no attempt to compel newspapers to register for the purpose of doing business, since in this country right now anybody may publish without the requirement of registration except for strictly business purposes, let us say, in the SEC or in the Bureau of Domestic Trade.” (Aside: yes, he got the assurance.)

(MindaViews is the opinion section of MindaNews. Tony La Viña of Cagayan de Oro City is former Dean and currently professor at Ateneo School of Government, as well as Constitutional Law professor of Xavier University, University of the Philippines College of Law, Polytechnic University of the Philippines College of Law, De La Salle University College of Law, San Beda Graduate School of Law, Lyceum College of Law and Pamantasan ng Lungsod ng Maynila Graduate School of Law. He was also a member of the government peace panel negotiating with the MILF from January to June 2010 following the aborted signing of the already initialed Memorandum of Agreement on Ancestral Domain in 2008.  Christian Laluna is an Ateneo Law School graduate and a long-time collaborator of Prof. La Viña)

Tomorrow: Balancing constitutional norms in the Rappler case



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