The Subic Bay Metropolitan Authority (SBMA) leadership conundrum

Much has been discussed in the mainstream and social media about the leadership row in the Subic Bay Freeport Zone (SBFZ). Both the Chairman, Martin Diño, and the Administrator, Atty. Wilma Eisma, have been appointed by the President.

Without wading into this highly-charged debate, let us trace the root of the leadership impasse.

In 1992, Republic Act (RA) No. 7227 was enacted, providing that:

“(d)    Chairman/Administrator. — The President shall appoint a professional manager as administrator of the Subic Authority with a compensation to be determined by the Board subject to the approval of the Secretary of Budget, who shall be the ex officio chairman of the Board and who shall serve as the chief executive officer of the Subic Authority: provided, however, that for the first year of its operations from the effectivity of this Act, the mayor of the City of Olongapo shall be appointed as the chairman and chief executive officer of the Subic Authority.” (Section 13)

The law’s Implementing Rules and Regulations (IRR), promulgated immediately thereafter, carries the same language, to wit:

“(d) Chairman/Administrator - The president shall appoint a professional manager as administrator of the Subic Authority with a compensation to be determined by the Board subject to the approval of the Secretary of Budget, who shall be the ex officio chairman of the Board and who shall serve as the chief executive officer of the Subic Authority: Provided, however, That for the first year of its operation from the effectivity of this Act, the mayor of the City of Olongapo shall be appointed as the chairman and chief executive officer of the Subic Authority.” (Section 13)

For 12 years, there was only one Chairman and Administrator in SBMA, until then President Gloria Arroyo issued Executive Order (EO) No. 340 in 2004, splitting the position and separating and delineating the respective powers and functions of Chairman and Administrator. 

Noticeably, EO 340 states that the Chairman is the head of the agency, to wit:

“The SBMA Chairman shall be the head of the agency and as such, shall have the following powers, functions and duties:

a. To preside at all meetings of the SBMA Board;

b. To ensure that all policies, directives, plans and programs formulated by the SBMA Board are faithfully carried out by the Administrator as Chief Executive Officer of the SBMA; and

c. To exercise such powers and perform such functions and duties as the President may direct, or as may be assigned to him by the SBMA Board.” (Section 2)

On the other hand, EO 340 also provides, that:

“The Administrator, who shall be the Chief Executive Officer of the SBMA, shall have the following powers, functions and duties:

a. To execute, administer and implement the policies and measures approved and adopted by the SBMA Board;

b. To directly administer and supervise the operations and day-to-day business activities of the SBMA;

c. To represent the SBMA in all dealings with offices, agencies and instrumentalities of the Government and with all persons and entities, public or private, domestic or foreign, unless otherwise directed by the President or by the SBMA Board;

d. To execute, on behalf of the SBMA, all contracts, agreements and other instruments affecting the interests of the SBMA duly approved by the SBMA Board;

e. To direct and supervise the preparation of the agenda for the meetings of the SBMA Board;

f. To preside at the meetings of the SBMA Board in the absence of the Chairman; and

g. To exercise such other powers, functions and duties as may be provided in the By-Laws and as may directed by the President or assigned to him by the SBMA Board.” (Section 3)

Thus, there is now the head of agency in the person of the Chairman, and the CEO who is no other than the Administrator.

But can the President issue an executive act of this nature? The consolidated cases of Lokin vs. Comelec, et. al. (GR Nos. 179431-32; 180443) resolved by the Supreme Court (en banc), is instructive. In this case the high court reiterated the long-established rule, hence: “It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. Indeed, administrative or executive acts shall be valid only when they are not contrary to the laws or the Constitution.”

Whether or not EO 340 is consistent with RA 7227 is the main question then. 

The current situation also invites other important legal concerns, such as the scope and breadth of the definition of “head of agency” and the application of the doctrine of operative fact.

In the final analysis, only the President can dispense a just and mutually acceptable resolution on this festering dispute between the contending parties. Because the courts may not be so kind. Dura lex sed lex. In the meantime, SBFZ investors and residents, and SBMA employees, can only wait and watch with bated breath.