MEL STA.MARIA | Why the SEC decision closing Rappler is wrong, seriously undermines press freedom

January 16, 2018 - 6:33 PM
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(Atty. Mel Sta. Maria is the Dean of the Far Eastern University Institute of Law and professor at the Ateneo de Manila School of Law)

(UPDATED) The Securities and Exchange Commission (SEC) en banc decision revoking the certificate of incorporation of Rappler Inc. and Rappler Holdings Corporation violates the freedom of the press. The SEC’s resolution stated that the scheme by which the two companies allowed foreigners to invest in Rappler is in violation of the constitutional foreign equity prohibition on mass media.

But is there a violation?

None. The resolution is a stretch if only to make the situation fall within the ambit of the 1987 Constitution’s proscription on “ownership and management” by foreigners of “mass media.”. The SEC arguments do not provide a solid basis for unconstitutionality.

This can be easily illustrated.

First, “mass media” is not defined in the Constitution. To determine its meaning, the SEC used certain laws and other legal documents. This was a faulty approach. It is a well-entrenched rule that, in case of ambiguity of a constitutional provision, “the proper interpretation depends more on how it was understood by the people adopting it than the framers of the constitution.” This has been the consistent pronouncement of the Supreme Court. On February 2, 1987 when the Constitution was ratified by the Filipino people, there was no institutional news reporting through the internet. Accordingly, “internet” as a platform for news could not have been contemplated by the people and by the constitutional framers as within the phrase “mass media”. Hence, it cannot be within the constitutional prohibition.

Second, a careful examination of the SEC decision shows no categorical statement that there was a direct violation of the “ownership” requirement under the Constitution. However, the reasoning seems to be along the lines of a circumvention of the “management” requirement. Circumvention means that the parties employed a scheme through which the said Filipino entities ostensibly did not relinquish their management-powers but, in effect, they did so. As basis, it cited the contractual stipulation where Rappler was required to get the approval of the foreign investors in any amendment in the corporation’s article and by-laws.

This inference is unduly indiscriminate. The SEC could have just interpreted the questionable stipulation as not including acts of management controlling the day-to-day affairs of Rappler as the Constitutional prohibition is, by law, deemed embedded in and part of the contract. That would have solved it.

But it did not do so. Instead, the SEC made an unqualified overkill-interpretation without distinguishing the kind of amendment or alteration involved. Because if, for example, the amendment refers to a mere change in the name of the corporation, that would not have been a substantial act of “management” that entailed some form of company-control violating the constitution.

Third, as an alternative remedy, the SEC could have only voided that part of the contract which was constitutionally infirm and left the rest effective. This is significant especially considering that the overall purpose of the company is clearly news-dissemination falling within the protected exercise of the freedom of the press. Clearly , such approach is a less onerous or restrictive resolution that could have been made without infringing the exercise of a more fundamental right.

There is a reason why, aligned with all the other great fundamental freedoms – expression, speech, association and religion – the press is protected under the Bill of Rights, that part of the constitution providing rights which, generally, are off-limits to government intrusion. The tension between the press and the government must not wane. There is no way for democracy to survive but for the press to be provocatively curious, compellingly inquisitive, antagonistic, disturbing, skeptical, and annoying to politicians and the whole government machinery. Only a robust and critical press can provide the citizenry much impetus to be genuinely and consistently concerned in public affairs.

The probable closure of Rappler is a big blow to freedom of expression and of the press. The manner by which the Securities and Exchange Commission went so far as to totally rule for the revocation of the articles of Rappler Inc. and Rappler Holdings Corporation is the kind of government act that will foment notions of a creeping dictatorship through institutional connivance. It endangers our freedom.