Saturday, September 3, 2016

Do's and Don'ts of "System Change"


Do's and Don'ts of “System Change”


            “System Change” is the transformation of the fundamental structure of the state, that is usually linked to politics and the economy.[i] It involves revolutionary changes in the structure of government and the key economic policies. It usually includes major revisions of the constitution and the laws.

            “System Change” becomes imperative when the existing system fails to generate jobs for the poor, protects the monopolies of the rich, enables family dynasties to rule, manufactures election results, institutionalizes graft and corruption, perpetrates selective justice, rewards criminality, distorts history to hide the ugly truth, and closes avenues for genuine reform.
           
            To ensure that “System Change” leads to meaningful social transformation, these guidelines are suggested to assist the people and their delegates in reaching a general agreement, on which structures and policies to change in order to promote the general welfare and ultimately the common good. 

            The suggested Do's and Don'ts are as follows:
1.     DO discuss proposed changes in orderly manner,
2.     DO focus discussions on structural and policy issues that matter,
3.     DON'T divert discussions to peripheral issues that don't matter,
4.     DO use available language when general agreement is reached,
5.     DON'T use new language unless necessary,
6.     DO consult lawyers and English scholars to review language,
7.     DO record discussions for future reference.

            While the subject of “System Change” includes both the constitution and the major statutory laws (such as the Local Government Code and the Organic Act for the Autonomous Region in Muslim Mindanao), these guidelines discuss only the constitution for brevity.
           

1.     DO discuss proposed changes in orderly manner.

            Meetings of importance always have an agenda. Otherwise, everyone will rise to take the floor and talk about his or her own favorite topic. When the meeting adjourns, no one present will know what it was all about. This is so regardless of whether the meeting is physical in a town hall or board room, or virtual in cyberspace.

            Accordingly, it is elementary that serious discussions about “System Change” must begin with an agenda. Anyway, if the majority of the participants do not like the agenda presented, they are free to change it.

            Regarding the agenda for discussion, this paper recommends for adoption the content outline of the 1973 Constitution as the agenda items for any serious forum on “System Change”. Why? It is because the 1973 Constitution covers the basics with short and simple statements. Moreover, it is the ONLY Philippine Constitution drafted by ELECTED delegates INDEPENDENT of the authority of a foreign power.

            The 1973 Constitution consists of a Preamble and 17 Articles, i.e. National Territory, Declaration of Principles and State Policies, Citizenship, Bill of Rights, Duties and Obligations of Citizens, Suffrage, President and Vice-President, National Assembly, Prime Minister and Cabinet, Judiciary, Local Government, Constitutional Commissions, Accountability of Public Officers, National Economy and the Patrimony of the Nation, General Provisions, Amendments, Transitory Provisions.

            The Preamble and 17 Articles make a total of 18 subjects outlined for discussion.

            If participants want to omit certain subjects from the outline, let them explain.

            If participants want to add new subjects to the outline, let them explain.

            If participants want a totally different outline with nothing in common with the 18 subjects for discussion, let them explain.

            If participants want an “uncodified” or “unwritten” constitution, just like in the United Kingdom, let them explain.


2.     DO focus discussions on structural and policy issues that matter.

            The ultimate purpose of “System Change” is to improve the lives of the people and change the economy and politics for the better. Accordingly, we should focus our energies on issues that matter. These are the changes that promise to make tectonic shifts in society.

            This paper believes that the structural and policy issues that matter include the following:

            1. Proposed liberalization of restrictions on foreign investments; the proposition seeks to generate jobs for the poor through massive capital infusion; it also seeks to dismantle the monopolies of the rich through open competition; finally, it seeks to dismantle the cartels of government suppliers and contractors through the entry of new independent players;

            2. Proposed shift from the “presidential form” of government to a “parliamentary form”; in other words, the shift from “individual rule” to “collective rule”; the proposition seeks to loosen the grip of oligarchs over the national government; it also seeks to establish a lean but strong national government;

            3. Proposed shift from the “mayor type” of local government to a “council type”; in other words, the shift from individual rule to collective rule; the proposition seeks to loosen the grip of family dynasties over local governments in the provinces, cities and municipalities; it also seeks to establish lean but strong local government units;

            4. Proposed shift from a “unitary state” to a “semi-federal” or “federal state”; in other words, regional decentralization through regional authorities, autonomous regions or sub-states; should regional decentralization be applied to all regions or only to certain regions such as the Muslim dominated areas in Mindanao and the Cordilleras? if applied to all regions, should a uniform structure be adopted, or should we allow different structures to be adopted in different regions; the proposition seeks to empower the regions to develop their respective economic strengths;

            5. Proposed legal recognition of the Southern Sultanates, without vesting them with government powers, just like in the United Kingdom and Japan; the proposition seeks to reverse the suppression of a cultural heritage and legitimate social institution; it also seeks to strengthen the legal standing of the Sultanate of Sulu to negotiate improved proprietary compensation from Malaysia for the possession of Sabah.

            Among these issues, this paper believes that the proposed liberalization of restrictions on foreign investments is the most urgent. Why? It is because this particular proposition has direct and immediate consequences on job generation and poverty alleviation.

            Notably, it takes about Php190,000.00 to employ one rank-and-file employee for one full year in Makati City.[ii] This estimate includes the applicable daily minimum wage and benefits, social security and the proportionate cost of modest office space and utility charges used for the employee. On the other hand, it takes about Php100,000.00 to employ one employee for one full year in Region I which has the lowest daily minimum wage rate.[iii]

            Out of the estimated population of 101,802,706 for 2015,[iv] some 41,322,000 (41%) are in the labor force.[v] Out of the labor force, some 2,483,000 (6%)[vi] are unemployed[vii].

            If we multiply the number of workers unemployed (2,483,000) by the lowest estimated cost of employing one worker for one year (Php100,000.00), we have the staggering amount of Php248,300,000,000 representing the total cost required to employ all the unemployed for just one year.

            Where will we get that kind of money? From the government? The oligarchs? The family dynasties?

            Besides, there has apparently been no empirical data showing that the foreign investment restrictions spread throughout the legal system to protect the business interests of the local elite actually promote the national interest.

            In the construction industry for example, where the government regulator (Philippine Contractors Accreditation Board) continues to impose the 60% nationality requirements[viii] even in the absence of constitutional or statutory bases[ix], the Department of Labor and Employment (DOLE) reports that only about 26.86% of the industry players pay the applicable minimum wage, while only about 43.89% of them comply with the occupational safety and health requirements[x]. Are these the kind of business entities that deserve government protection against foreign competitors? Are we not supposed to protect the Filipino workers instead by allowing the entry of new business competitors so that the workers have a wider choice who to work for?

            Another example is the mining industry where there is large scale mining and small-scale mining. In large scale mining, foreign investors are allowed under financial and technical assistance agreements, or as minority 40% shareholders in mining companies.[xi] In small mining, only Filipino investors are allowed to the full extent of 100%.[xii] In any case, based on available data for 2015, the Department of Environment and Natural Resources (DENR) reports that while only about 2.2%  (or 22 out of 999) of large scale mining companies nationwide have suspension orders[xiii], about 10.45% (or 14 out of 144) of the small-scale mining companies have cease and desist orders in the CALABARZON area. Thus, there is really no assurance that the Filipino nationality of business enterprises engaged in mining result in better protection of the Philippine environment.

            The controversial restrictions on foreign investments have been in our constitution for the past eighty (80) years since 1935. Are we supposed to wait for another eighty (80) years to see if these restrictions actually benefit the greater majority of our people?

            We can learn from the United States on how to deal with foreign investors. They have an inter-agency mechanism that screens foreign investments to protect their national security[xiv]. In 2006, the Government of the United States used this screening mechanism to block the acquisition of Sequoia Voting Systems of California by the Venezuelan-owned Smartmatic International.[xv] Here in the Philippines, the same Smartmatic International has already taken technical control of our automated elections for the years 2010 and 2013. Election reform advocates continue to be helpless in holding this Venezuelan company to account for the disablement of various system safeguards.


3.     DON'T divert discussions to peripheral issues that don't matter.

            The real challenge of “System Change” lies in facing head-on the structural and policy issues that matter. Other matters short of the major structural and policy issues are merely peripherals. They serve no purpose except to divert or dilute the focus of the people and their delegates.       

            For example, Article II of the 1987 Constitution already declares as state policy the promotion of social justice[xvi], the respect for human rights[xvii], the primacy of education[xviii], and the protection of the family[xix]. Apparently not content with these declarations, the framers proceeded to incorporate entirely new Articles on Social Justice and Human Rights[xx], Education[xxi] and Family[xxii].

            Did these new Articles add anything not covered or justified by the basic declaration of state policy? Did these new clauses improve our lives? The answer is obviously in the negative.

            It is bad enough that the framers failed to address the more important structural and policy issues that would have improved our economy and politics. It is worse that they instead gave us an illusion of a better life, writing lengthy but empty statements that add nothing to what we already have.


4.     DO use available language when general agreement is reached.

            Crafting new language, even though existing language is available, is like re-inventing the wheel. It is a waste of time.

            Moreover, new language brings with it judicial uncertainty. While the meaning of past and present language may have been settled by the courts already, new language is still open to future judicial interpretation. 
           
            Notably, we do not exist in a vacuum. We have a wealth of organic acts, both past and present, that may provide suitable templates for the appropriate language. These organic acts are as follows: 1899 Malolos Constitution (establishing a parliamentary system), Philippine Bill of 1902 (establishing a municipal government), 1935 Constitution (establishing a presidential system), 1943 Constitution (establishing a presidential system), 1973 Constitution (establishing a semi-presidential system), 1973 Constitution as amended in 1976 (establishing a supra presidential system), 1986 Constitution (establishing a revolutionary government), and 1987 Constitution (establishing a presidential system).

            For example, if the general agreement were to establish a presidential form of government, we can use as template either the 1935 Constitution, 1943 Constitution or the 1987 Constitution. We can also refer to the 1787 Constitution of the United States as additional material. If the general agreement were to establish a parliamentary form of government, we likewise have a ready template in the 1899 Constitution, and some reference to the parliamentary features of the 1973 Constitution.


5.     DON'T use new language unless necessary.

            The exceptions that may justify efforts at crafting of new language are when the existing language is erroneous, vague, or of a policy that needs to be modified or reversed, or when there is no precedent available.

            For example, the 1973 Constitution defined national territory to include “other territories belonging to the Philippines by historic or legal title”. The definition was a deliberate modification of the old definition under the 1935 Constitution which included only “all territory over which the present Government of the Philippine Islands exercises jurisdiction”.

            The apparent purpose of the modification under the 1973 Constitution was to strengthen the sovereign claim of the Philippines to the territory of Sabah based on historic or legal title.

            Notably, former President Marcos laid claim to the Kalayaan Group of Islands in the South China Sea (now West Philippine Sea) based also on history, among other grounds, pursuant to the modified definition of territory under the 1973 Constitution.[xxiii]

            Moving forward to the 1987 Constitution, the framers this time reduced the coverage and weakened the basis of the nation's territorial claim, purportedly to improve relations with Malaysia. In return, Malaysia was expected to take favorable action on the proprietary claim of the Sulu Sultanate for adjustment of the yearly compensation due from the former's possession of Sabah.

            Twenty-eight (28) years later today, the Sulu Sultanate continues to complain that Malaysia has ignored their proprietary claim.

            To remedy this anomaly, we will need to change the present definition of national territory and revert back to the language of the 1973 Constitution. This will give both the Philippines and the Sulu Sultanate a stronger legal position to negotiate for what is due from Malaysia.

            A tabular comparison of the different definitions of national territory follows for reference:

1935 Constitution
1973 Constitution
1987 Constitution
Article I, Section 1. The Philippines comprises all the territory ceded to the United States by the Treaty of Paris concluded between the United States and Spain on the tenth day of December, eighteen hundred and ninety-eight, the limits which are set forth in Article III of said treaty, together with all the islands embraced in the treaty concluded at Washington between the United States and Spain on the seventh day of November, nineteen hundred, and the treaty concluded between the United States and Great Britain on the second day of January, nineteen hundred and thirty, and all territory over which the present Government of the Philippine Islands exercises jurisdiction. (emphasis supplied)
Article I, Section 1. The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all the other territories belonging to the Philippines by historic or legal title, including the territorial sea, the air space, the subsoil, the sea-bed, the insular shelves, and the submarine areas over which the Philippines has sovereignty or jurisdiction. The waters around, between, and connecting the islands of the archipelago, irrespective of their breadth and dimensions, form part of the internal waters of the Philippines. (emphasis supplied)
Article I. The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around between, the connecting the islands of the archipelago, regardless of their breadth and dimensions, from part of the internal waters of the Philippines. (emphasis supplied)

            Another example, the 1987 Constitution declares the principle that “sovereignty resides in the people and all government authority emanates from them.” (emphasis supplied)[xxiv] Curiously however, the same Constitution thereafter declares that the goal of the Armed Forces of the Philippines “is to secure the sovereignty of the State and the integrity of the national territory.” (emphasis supplied)[xxv]

            So where does sovereignty reside now? in the Filipino people comprised of 100 million natural persons? or in the Republic of the Philippines which is a juridical person that exists solely by legal fiction?

            There is an obvious error here by the framers that can only be rectified by using new corrective language. If the term is used as a noun, then yes sovereignty resides in the people. If however the term is used as an adjective, then that is when we say that our country is a sovereign state.

            Still another example, the 1987 Constitution apparently sought to carry over the past prohibition against foreign ownership of land. Unfortunately for the framers, they crafted new language even when they could have adopted the old language under the 1973 Constitution.

            A comparison of the relevant constitutional provisions follows:

1973 Constitution
1987 Constitution
Section 8. All lands of public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. With the exception of agricultural, industrial or commercial, residential, or resettlement lands of the public domain, natural resources shall not be alienated... (emphasis supplied)
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated... (emphasis supplied)

Section 9. The disposition, exploration, development, exploitation, or utilization of any of the natural resources of the Philippines shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital which is owned by such citizens... (emphasis supplied)
Section 2... The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. (emphasis supplied)


Section 3... Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.

Section 14. Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. (emphasis supplied)
Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. (emphasis supplied)

            Thus, under the 1973 Constitution, it was clear that private land may be transferred only to Filipinos or corporations owned 60% by Filipinos, because they were the only persons qualified to acquire or hold lands of the public domain.
            On the other hand, under the 1987 Constitution, it is unclear if private land may be transferred only to corporations owned 60% by Filipinos, because Section 3 does not say so, and Section 2 apparently refers to mining rather than to the acquisition of lands of the public domain.
            There is another lapse here by the framers that can only be corrected by using new clarificatory language.

            For the record, this paper does not believe that the various constitutional prohibitions against foreign direct investments promote the national interest. Anyway, this particular belief is beside the point here. This example is made to show that using new language, despite the availability of existing language, may actually result in ambiguity.


6.     DO consult lawyers and English scholars to review language.

            Whether we like it or not, the constitution is a legal instrument. In fact, it is no ordinary legal instrument. It is the highest or supreme law of the land. All other statutory laws, implementing rules and regulations, administrative orders and local ordinances will be null and void if these instruments contradict the constitution.

            Accordingly, since the constitution is a legal instrument, it is only prudent that the people through their delegates seek the assistance of lawyers in writing or reviewing the language intended to express what has been agreed upon.

            Apart from the lawyers, it is also useful to seek the assistance of English scholars, assuming that the constitution will be written in English. They can help much in simplifying the otherwise lengthy and winding language of lawyers. English teachers make good English scholars.


7.     DO record discussions for future reference.

            If the process of constitutional reform is by constitutional convention, constituent assembly or constitutional commission, the deliberation of delegates and hearing of resource persons are documented in due course. If however the process is by people's initiative, there are no fixed rules on documentation. It is here in a people's initiative that extra effort is required to document the process.

            If apart from face-to-face interaction, the people's inputs are also sought directly through social media, then the delegates or proponents must also find innovative ways and means to document the exchange views and information.

            We must remember that the constitution is a legal instrument. In case of conflicting interpretations, the courts will resolve the conflict by reviewing the records of deliberations and hearings, among other ways and means. If there are no such records, then it is possible that the courts will reach a conclusion much different from that intended by the framers.




This material was written ex-gratia by Demosthenes B. Donato
for Tanggulang Demokrasya (Tan Dem), Inc.
All intellectual property rights are granted to the public domain.
10 September 2016. Makati City, Philippines.


 Disclaimer: The views and opinions expressed in this material are those of the author
and do not necessarily reflect the official policy or position of TanDem.



[ii]The figure is based mainly on the minimum wage under Wage Order No. NCR-20, the applicable social security premiums and the estimated cost of office space and utilities.
[iii]The figure is based mainly on the minimum wage under Wage Order No. RB1-16, the applicable social security premiums and the estimated cost of office space and utilities.
[iv]  Worldometers (www.Worldometers.info)
Elaboration of data by United Nations, Department of Economic and Social Affairs, Population Division. World Population Prospects: The 2012 Revision. (Medium-fertility variant).
[v] Philippines in Figures 2015, Page 63. Data are as of October 2014. Source: Philippine Statistics Authority (PSA). http://web0.psa.gov.ph/sites/default/files/2015%20PIF%20as%20of%20June%202016.pdf
[vi] Philippines in Figures 2015, Page 63. Data are as of October 2014. Source: Philippine Statistics Authority (PSA). http://web0.psa.gov.ph/sites/default/files/2015%20PIF%20as%20of%20June%202016.pdf
[vii] Philippines in Figures 2015, Page 63. Data are as of October 2014. Source: Philippine Statistics Authority (PSA). http://web0.psa.gov.ph/sites/default/files/2015%20PIF%20as%20of%20June%202016.pdf
[viii]PCAB Revised Rules and Regulations Governing Licensing and Accreditation of Constructors in the Philippines dated 31 March 1989, Rule 3, Sec. 3.1.
[ix] SEC Opinion dated 18 April 2001 re construction activity. Exec. Order No. 184, Tenth Regular Foreign Investment Negative List, 29 May 2015.
[x] DOLE-BWC letter of 17 October 2011.
[xi]1987 Constitution, Article XII National Economy and Patrimony, Sec. 2.
[xii]Rep. Act No. 7076, People's Small-scale Mining Act of 1991, Sec. 3(c).
[xiii]DENR-MGB Letter of 04 March 2016. MGB Regional Office No. IV-A CALABARZON, List of Operators for 2014. MGB List of Orders for 2015.
[xiv]See US Defense Production Act of 1950, as amended by FINSA, Section 721 (50 U.S.C. App. 2170). Executive Order No. 11858 (as amended by Executive Order No. 13456), re Foreign Investment in the United States.
[xv]http://www.nytimes.com/2006/10/31/us/politics/31vote.html
[xvi]1987 Constitution, Article II Declaration of Principles and State Policies, Section 10.
[xvii]1987 Constitution, Article II Declaration of Principles and State Policies, Section 11.
[xviii]1987 Constitution, Article II Declaration of Principles and State Policies, Section 17.
[xix]1987 Constitution, Article II Declaration of Principles and State Policies, Section 12.
[xx]1987 Constitution, Article XIII Social Justice and Human Rights.
[xxi]1987 Constitution, Article XIV Education.
[xxii]1987 Constitution, Article XV The Family.
[xxiii]Pres. Dec. No. 1596, Kalayaan Island Group, 11 June 1978.
[xxiv]1987 Constitution, Article II Declaration of Principles and State Policies, Section 1.
[xxv]Id, Section 3.

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