Legislation in the world of PPPs

Legislation in the world of PPPs

  • Supremacy of the fundamental law. Yes, PPP is a constitutional policy. It is a declared principle and state policy under the 1987 Constitution that “The State recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments.” PPPs cannot go out of existence by an act of Congress or by local councils.
  • Laws and regulations mirror this policy. As early as 1990, the stated policy of the build- operate-and-transfer (BOT) law was categorical and emphatic. In no uncertain terms, Congress then declared that the State recognizes the indispensable, not just important or critical, role of the private sector as the main engine for national growth and development. Simply put, there is no national development without the private sector. This constitutional policy is also reflected in the template ordinance being pushed by the Department of the Interior and Local Government.
  • They also supply details. While the basic law sets the policy and framework, it does not provide the “what, who, how and when”. Acts of Congress, like the BOT law, Government Procurement Reform Act, Corporation Code and Civil Code, supply the basic details, primarily what the law is, while administrative agencies, local governments included, provide the details.

For example, while the 1991 Local Government Code authorizes local governments to enter into joint ventures, it does not spell out the requirements and procedures. Local legislative councils, through local legislation, determine these. Close to 100 provinces, cities and municipalities and all the barangays of Bataan province have made such choice.

Not execute and adjudicate. Under the system of separation of powers, lawmaking is set apart from law-executing and adjudicating. The Executive branch and the courts, respectively, have those powers.

Lawmaking bodies set PPPs in motion by the vesting of the authority, while national government agencies, government corporations and local governments, following the law, prioritizes and selects the private-sector proponent, signs the contract, issues the award and manages the contract. For local PPPs, the local councils must authorize the local chief executive to sign the PPP contract.

While it can investigate in aid of legislation or exercise oversight powers, Congress cannot direct the execution or nonexecution of contracts. Congress can amend or repeal PPP laws but Congress cannot contravene the Constitution, impair contracts nor provide a retroactive effect of laws curtailing contracts and rights created under then existing laws.  The courts resolve controversies pertaining to the laws themselves, the actions of the agencies and liabilities of the officers.

A single person or institution cannot wield all these powers. Lawmaking is just one aspect of a cycle and system.

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