TRO rears ugly head
“Certain industry groups, however, said cheaper rice imports entering the country would affect local farmers and they sought an injunction from the SC.
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Daily Tribune“Certain industry groups, however, said cheaper rice imports entering the country would affect local farmers and they sought an injunction from the SC.
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The temporary restraining order (TRO) threw a scare on the Department of Agriculture after some interest groups sought a Supreme Court (SC) order to halt the reduction in the tariff on imported rice.
The Palace on 20 June issued Executive Order (EO) 62 reducing the tariff on the staple grain from 35 percent to 15 percent as part of measures to bring down rice prices in the market.
The government is aiming for a P6 to P7 per kilo reduction in the price of rice as a result of the lower import charges.
Certain industry groups, however, said cheaper rice imports would affect local farmers and they sought an injunction from the SC.
The worry of Agriculture Secretary Francisco Tiu Laurel Jr. is that a 60-day TRO on EO 62 may result in a drastic reduction in rice supply, thus, raising prices again.
The bulk of the monthly inflation surges lately were due to the persistently high rice prices.
The previous Congress passed the Rice Tariffication Law (RTL) which opened up importation at a 35 percent tariff, which was the rate that economic managers then considered a balance between protecting local farmers and encouraging traders to import.
The monopolists in the grains industry, however, launched a vicious campaign against the RTL by creating a condition where the law would not achieve its objective.
Rice prices remained high which prompted the government to move for the reduction of the tariff.
“If a TRO is issued, no (importers) will import. They will just use their remaining stocks. The buffer stock (of rice) will be sold out by the time the TRO is lifted. We will have a bigger problem,” Laurel explained.
“A court order will hurt us. Once a TRO is filed, and assuming 60 days will be granted, the retail prices of rice will not go down,” he added.
Laurel said the mere report that EO 62 had been issued caused traders to unload their stocks, expecting the influx of lower priced imports.
He said a TRO will keep grain prices high.
The scourge of a TRO was also felt in the energy sector when not long ago the Court of Appeals (CA) imposed a TRO on the Energy Regulatory Commission (ERC) to halt a directive of the regulator against higher electricity prices.
In effect, it was the CA that granted the increase sought by power producers instead of the ERC, which was effectively stopped from performing its functions by the court order.
The executive branch had long complained of court intervention which affects purely business decisions since it scares away investors who are troubled by the prospect of contracts being arbitrarily overhauled through a court order.
The CA’s TRO on the ERC involved a contract between an electricity distributor and the generation companies that obtained the deals to supply power through a bidding.
After securing the contracts, called power supply agreements, the power plant operators turned around and cited a “change in circumstances” and sought an adjustment in the price fixed in the agreement.
The ERC said the provisions of the contracts should be followed, which was a given.
Yet, the court reversed the ruling through its injunction power, which is an encompassing authority that some legal experts said exceeds even the constitutional mandate of the President.
The SC will, however, apply its wisdom to the consequences of a court action infringing on an executive decision.
