A little of administrative law in PPP law

There are other laws that have a bearing on PPPs. One such cluster of laws would be laws pertaining to administrative agencies, i.e. administrative law (AL). For PPP stakeholders, practitioners and regulatory agencies, they must be mindful of the Administrative Code of 1987 and enabling instruments of administrative agencies (AAs). While there are commonalities, every AA has its peculiarities—name, purpose, geographical jurisdiction, relationship with other AAs, structure, corporate powers, rule-setting and quasi-judicial powers, among others.

These two sets of laws are intrinsically linked with each other. To illustrate, the Department of Tourism (DOT), which is an AA governed by its charter or creating law, (1) can undertake a tourism PPP project under any of the modalities listed in the BOT law. However, it cannot pursue a reclamation project because this is not within its mandate nor can it enter into a JV for that tourism project because national government agencies are not covered under the Neda JV Guidelines.

The reason the DOT cannot reclaim and enter into JVs demonstrates two AL principles, i.e., (2) nondelegation of powers and (3) subordinate legislation. To expand the powers of the DOT through administrative fiat, like a DOT memorandum circular, would be to arrogate unto itself legislative powers reserved to Congress. Further, all rules and policies issued, and contracts entered into by the DOT must not be inconsistent with its charter and other laws and regulations.

While the DOT cannot enter into JVs, the Tourism Infrastructure and Enterprise Zone Authority (Tieza), being an implementing arm of the former, can. However, the DOT cannot cancel Tieza contracts, even if the Tieza board is chaired by the DOT secretary, since the latter is an attached agency of the former and not under its control. (4) Administrative relationship between AAs is a hallmark AL characteristic.

For the DOT and Tieza properties, they can be leased out, lease being a PPP modality. Unlike BOT law-modalities and JVs, which are governed by specific policies and procedures, there are no guidelines for long-term straight leases. In the exercise of (5) administrative discretion and for as long as no law is violated, the DOT and Tieza can adopt their respective lease guidelines. The guidelines could provide for a definition of lease, the lease conditions and requirements, and the procedures for selecting the lessee-private sector proponent.

This regulation, if so worded, would be classified as a supplementary-procedural rule like the BOT law IRR and Neda JV Guidelines. This requires publication to become effective and if questioned, direct recourse to courts can be made without seeking reconsideration from the DOT or Tieza. The three other features of AL are captured here—(6) rule-making powers of AAs, (7) judicial review and the applicability of the (8) rule of non-exhaustion of administrative remedies.

These eight AL principles and features are all must-know in PPPs.