G.R. No.
188456 – H. HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROMEL R. BAGARES, ALLAN JONES
F. LARDIZABAL, GILBERT T. ANDRES, IMMACULADA D. GARCIA, ERLINDA T. MERCADO,
FRANCISCO A. ALCUAZ, MA. AZUCENA P. MACEDA, ALVIN A. PETERS, suing as taxpayers
and as concerned citizens v. COMMISSION ON ELECTIONS REPRESENTED BY HON.
CHAIRMAN JOSE MELO, COMELEC SPECIAL BIDS AND AWARDS COMMITTEE REPRESENTED BY
ITS CHAIRMAN HON. FERDINAND RAFANAN, DEPARTMENT OF BUDGET AND MANAGEMENT
REPRESENTED BY HON. ROLANDO ANDAYA, TOTAL INFORMATION MANAGEMENT, INC., AND
SMARTMATIC INTERNATIONAL, INC.
Promulgated:
September
10, 2009
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SEPARATE CONCURRING OPINION
PUNO, C.J.:
Prefatory Statement
The broad power to determine whether there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the government[1] is
exercised with full appreciation by the judiciary of the proper limits of its
role in our tripartite form of government. We should take care that this expanded power is
not used as a license for courts to intervene in cases involving matters of
policy woven with constitutional and legal questions. Since time immemorial, courts have deferred to
the wisdom or logic of legislative choices and technical determinations. It is
as it should be.
By
this paradigm, we do not abdicate our fundamental responsibility in annulling
an act of grave abuse of discretion in the guise of judicial restraint, but neither
do we permit the overarching use of judicial power as to amount to judicial
tyranny.
A. The Case
The petitioners brought this case for Certiorari,
Prohibition and Mandamus to declare that public respondents Commission on
Elections (COMELEC), and the COMELEC-Special Bids and Awards Committee
(COMELEC-SBAC), committed grave abuse of discretion amounting to lack or excess
of jurisdiction when it awarded the 2010 Automated Elections Project to private
respondents Total Information Management, Inc. (TIM) and Smartmatic
International, Inc. (Smartmatic). Petitioners ask the Court to strike down as
null and void the July 10, 2009 contract between public respondent COMELEC and
private respondents for being contrary to the Constitution, statutes, and
established jurisprudence.
On June 7, 1995, Congress passed Republic Act No. 8046 adopting an Automated Election System (AES) in
the Philippines. RA 8046 authorized
COMELEC to conduct a nationwide demonstration of a computerized election system
and allowed the poll body to pilot-test the system in the March 1996 elections
in the Autonomous Region in Muslim Mindanao (ARMM).
On December 22, 1997, Congress enacted Republic Act No. 8436[2] (RA
8436), otherwise known as the “Election Modernization Act” authorizing COMELEC
to use an AES for the process of voting, counting votes and canvassing or consolidating
the results of the national and local elections. It also mandated the poll body
to acquire automated counting machines (ACMs), computer equipment, devices and
materials, and adopt new electoral forms and printing materials.
The COMELEC, however, was
not able to implement the AES for the positions of President, Vice President,
senators and parties, organizations or coalitions participating under the
party-list system throughout the entire country, as provided in RA 8436. The automation was limited to the
provinces of Lanao
The COMELEC was not also able to implement an AES in the May 2001
elections due to time constraints. But on October 29, 2002, the COMELEC adopted Resolution 02-0170, which resolved to
conduct biddings for the three phases of the AES: Phase I, voter registration and validation system; Phase II, automated counting and
canvassing system; and Phase III,
electronic transmission. The COMELEC awarded Phase II for the provision of the
ACMs to the Mega Pacific Consortium (MP Consortium). The Information Technology
Foundation of the Philippines (ITFP), among others, petitioned this Court to
declare null and void the award of the contract to the MP Consortium. In Information Technology Foundation of the
Philippines v. COMELEC,[3] this
Court held that the contract was void for failure to establish the identity,
existence and eligibility of the alleged consortium as a bidder; the ACM’s
failure to pass the tests of the Department of Science and Technology (DOST);
and the ACM’s failure to meet the required accuracy rating as well as
safeguards for the prevention of double counting of precinct results.
On January 23, 2007, Congress passed Republic Act No. 9369 (RA 9369),
amending RA 8436. It specified the modes
of implementing the AES, i.e., either
paper-based or a direct recording electronic (DRE) system, for the process of
voting, counting of votes and canvassing/consolidation and transmittal of
results of electoral exercises. It also provided
that for the next election, the AES shall be used in at least two highly urbanized
cities and two provinces each in Luzon, Visayas and Mindanao.[4] In
addition, it provided that with respect to the May 10, 2010 elections and
succeeding electoral exercises, the system procured must have demonstrated
capability and been successfully used in a prior electoral exercise here or
abroad. However, participation in the
2007 pilot exercise shall not be conclusive of the system's fitness.[5]
Again, the AES was not
implemented in the May 2007 elections due to lack of funds and time constraints. But the AES was used in the August 11, 2008 ARMM elections, where both DRE and the paper-based Central Count
Optical Scan (CCOS) machines were used.
On March 5, 2009, Republic
Act No. 9525 (RA 9525)[6] was
passed by the House of Representatives and the Senate, appropriating the sum of
Eleven Billion Three Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00)
for an AES to be used in the May 10, 2010 automated national and local elections.
From March 13 to 16, 2009, the COMELEC published and
posted an invitation for vendors to apply for eligibility and to bid for the
procurement of counting machines, including the supply of ballot paper;
electronic transmission services using public telecommunications networks;
training; technical support; warehousing; deployment; installation; pull-out;
systems integration; and overall project management to be used in the
automation of the counting, transmission and canvassing of the votes for the
May 10, 2010 synchronized national and local elections.
On March 18, 2009, the COMELEC issued
the Terms of Reference/Request for Proposal for Solutions, Terms &
Conditions for the Automation of the May 10, 2010 Synchronized National and
Local Elections (TOR/RFP), as promulgated in COMELEC Resolution 8591, dated
March 11, 2009, with the following components:
a. Component 1: Paper-Based Automated
Election System
1-A. Election Management System (
1-B. Precinct-Count Optical Scan (PCOS) System
1-C. Consolidated/Canvassing System (CCS)
b.
Component 2:
Provision for Electronic Transmission of Electronic Results using Public
Telecommunications Networks
c.
Component 3:
Overall Project Management
On March 19, 2009, eleven prospective
bidders obtained bid documents from the COMELEC for the automation of the 2010
elections.
On March 23, 2009, RA 9525 was signed
by President Gloria Macapagal-Arroyo appropriating P11,301,790,000.00 as
supplemental appropriation for an automated elections system and other
purposes.
On March 27, 2009, the COMELEC
conducted a Pre-Bid Conference for the automation of the counting, transmission
and canvassing of votes for the May 10, 2010 elections.
On April 23, 2009, TIM and Smartmatic
entered into a Joint Venture Agreement (JVA) to form the joint venture known as
Smartmatic TIM Corporation.
On May 4, 2009, seven suppliers
submitted their formal bids. The COMELEC-SBAC declared all the seven bidders
ineligible for failure to comply with the pass/fail criteria of the COMELEC.
Upon motion for reconsideration of the suppliers, three consortiums were
reconsidered by the COMELEC-SBAC, namely Indra Consortium, Smartmatic-TIM,
AMA-ESS and the Gilat Consortium. After evaluation of their technical
proposals, the COMELEC-SBAC declared Indra Consortium and Smartmatic-TIM to
have passed.
The COMELEC-SBAC then proceeded with
the opening of the financial proposals. The Technical Working Group (TWG)
evaluated and reviewed the financial proposals of Indra Consortium and
Smartmatic-TIM. On June 3, 2009, the COMELEC-SBAC recommended to the COMELEC en banc the award of the Contract for
the Provision of an Automated Election System for the May 10, 2010 Synchronized
National and Local Elections (Automation Contract) to the joint venture of
Smartmatic-TIM. Smartmatic-TIM was found to have the lowest calculated responsive
bid (LCRB); and to have passed all the eligibility, technical, and financial
requirements. The COMELEC-SBAC noted that Smartmatic-TIM’s machines passed all
the tests and systems evaluation with an accuracy rating of 100%. This finding was
verified and validated in the post-qualification proceedings. The total bid of
Smartmatic-TIM amounting to Seven Billion One Hundred Ninety-one Million Four Hundred
Eighty-four Thousand Seven Hundred Thirty-nine and 48/100 Philippine pesos (P7,191,484,739.48)
was found by the COMELEC to be within the approved budget for the contract of Eleven
Billion Two Hundred Twenty-three Million Six Hundred Eighteen Thousand Four
Hundred and 0/100 Philippine pesos (P11,223,618,400.00).[7]
On June 8, 2009, the COMELEC Advisory
Council[8]
submitted its observations on the procurement proceedings of the SBAC, with the
conclusion that these were transparent and in conformity with the law and the TOR/RFP.
It noted that Smartmatic-TIM had a 100%
accuracy rating. The Advisory Council has the mandate to participate as non-voting
members of the COMELEC-SBAC in the conduct of the bidding process for the AES.
On the same date, June 8, 2009, the
Office of the Ombudsman, which had previously created Task Force “Poll
Automation”,[9] submitted its “Process
Audit Observation Report.” The Ombudsman
Task Force also found the above proceedings and systems to be consonant with
the Constitution, procurement laws, and RA 9369.
The Parish Pastoral Council for
Responsible Voting (PPCRV) representative likewise submitted a report, which
concurred with the final report of the COMELEC-SBAC.
On June 9, 2009, the COMELEC en banc promulgated Resolution No. 8608,
confirming Smartmatic-TIM as the bidder with the LCRB and awarding the contract
for the automation of the elections on May 10, 2010 to the joint venture.
On June 10, 2009, the COMELEC awarded
the contract to Smartmatic-TIM to supply 82,000 Precinct Count Optical Scan
(PCOS) machines to be used in the 2010 elections. Subsequently, Jose Mari
Antuñez, the President of TIM, informed COMELEC Chairperson Jose Melo that TIM
was withdrawing from the partnership with Smartmatic, due to irreconcilable
differences and loss of confidence. The scheduled signing on June 30, 2009 of
the Automation Contract between COMELEC, Smartmatic and TIM did not take place.
Following a series of discussions,
Smartmatic and TIM were able to settle their internal dispute.
Smartmatic and TIM then caused the
incorporation of their joint venture, pursuant to the JVA. On July 8, 2009, the Securities and Exchange
Commission (SEC) issued a Certificate of Incorporation to Smartmatic TIM
Corporation.
On July 10, 2009, the Smartmatic TIM
Corporation entered into the Automation Contract with the COMELEC. The contract
price was P7,191,484,739.48.
The petition at bar raises the
following --
B. Issues
1. Whether RA 8436, as amended
by RA 9369, requires the conduct of a pilot exercise as a condition precedent
to the full nationwide automation of the election.
2. Whether RA 9525 has impliedly
repealed the pilot testing requirement.
3. Whether Smartmatic and TIM
entered into a valid joint venture agreement.
4. Whether any nationality
requirement is applicable.
5. Whether the AES chosen by
the COMELEC complies with the “prior successful use” qualification set forth in
Section 12 of RA 8436, as amended.
6. Whether the PCOS machines
offered by the Smartmatic-TIM Consortium satisfy the minimum system capabilities
mandated by Section 6 of RA 8436, as amended.
C. Discussion
A
touchstone of our Constitution is that critical public policy judgments belong to
the legislative branch, and the Court must not unduly intrude into this
exclusive domain.
In
enacting RA 8436 (Election Modernization Act) on December 22, 1997, the legislature
has clearly chosen the policy that an AES shall be used by the COMELEC for the
process of voting, counting of votes and canvassing/consolidation of results of
the national and local elections.[10] It decided to put an end to the manual conduct
of our elections that has frustrated the honest casting of votes by our
sovereign people.
In
the pursuit of its objective, the legislature defined what it considered an AES
and provided the standards for its implementation. It further determined the
minimum functional capabilities of the system and delegated to the COMELEC the
development and adoption of a system of evaluation to ascertain that the
minimum system capabilities would be met.
The
policy decision of Congress to adopt an AES is not under question. It is the
manner the COMELEC is implementing the AES that is assailed by the
petitioners. The first issue is whether the conduct of an AES in at least two highly
urbanized cities and two provinces each in Luzon, Visayas and Mindanao is a
condition precedent to the nationwide implementation of the AES.
c.1 The conduct of the pilot exercise of the
AES is a condition
precedent to its
nationwide implementation
Whether
the conduct of the pilot exercise of the AES is a condition precedent to its
nationwide implementation involves the correct interpretation of Section 5 of
RA 8436. The interpretation of Section
5, RA 8436, as amended, is nothing less than a brain twister. It appears like a Rorschach inkblot test, in
which petitioners and respondents assign meaning to certain words as though
they were deciphering images formed by inkblots. Using the same word of the law, they arrive at
different conclusions.
Thus,
the petitioners interpret the word shall
in the first proviso of Section 5, RA 8436, as amended, to support their thesis
that the pilot exercise of the AES is a condition precedent prior to its full
implementation. The proviso states that “the [automated election system] shall be used in at least two highly urbanized cities and two provinces
each in Luzon, Visayas and
Similarly,
the respondents interpret the word shall
in the last sentence of the provision, which states that “in succeeding
regular national or local elections, the [automated election system] shall be implemented nationwide,”[12] and
submit that the pilot exercise of the AES is not a condition precedent. Further, they contend that the use of the AES
in at least two provinces and two highly urbanized cities each in Luzon,
Visayas and Mindanao refers only to
the national and local elections immediately following the passage of RA 9369, i.e., the May 2007 national and local
elections. They argue that this was just an acknowledgment by Congress that
there was not enough time or funds to conduct a full nationwide automation of
the May 2007 election.
The respondents’ reading of Section 5
disregards the tenor of the entire provision. A rational reading of the entire
provision will show that the different parts isolated and then interpreted by
the respondents are connected by the conjunctions provided, that and provided,
further that and provided, finally
that. These conjunctions signify that the clauses that follow the
conjunction are a pre-requisite or a condition to the fulfillment of the
previous clause. The words provided,
that mean the same as “as long as,” “in order that,” and “if only.” Thus,
the provision should be read and understood as follows:
Part 1: To carry out the above-stated policy, the Commission on Elections, herein
referred to as the Commission, is hereby
authorized to use an automated election system or systems in the same
election in different provinces, whether paper-based or a direct recording
electronic election system as it may deem appropriate and practical for the
process of voting, counting of votes and canvassing/consolidation and
transmittal of results of electoral exercises:[13]
Provided,
That
Part 2: for the regular national and local elections, which
shall be held immediately after the effectivity of this Act, the AES shall be used in at least two
highly urbanized cities and two provinces each in Luzon, Visayas and
Provided,
further,
Part 3: That local government units whose officials
have been the subject of administrative charges within sixteen (16) months
prior to the May 14, 2007 elections shall not
be chosen:
Provided
finally,
Part 4: That no area shall be chosen
without the consent of the Sanggunian of the local government unit
concerned. The term local government unit as used in this provision shall refer
to a highly urbanized city or province.
Part 5: In succeeding regular national or
local elections, the AES shall be implemented nationwide.[14]
In this light, Section 5 should be interpreted to mean that
the COMELEC is authorized to use an AES as long as the following requisites are
complied with: (1) for the regular national and local elections, which shall be
held immediately after the effectivity of the Act, the AES shall be used in at
least two highly urbanized cities and two provinces each in Luzon, Visayas and
Mindanao; (2) that local government units whose officials have been the subject
of administrative charges within sixteen months prior to the May 14, 2007
elections shall not be chosen; and (3) that
no area shall be chosen without the consent of the Sanggunian of the local
government unit concerned. And, when the above conditions are complied with,
the AES shall be implemented nationwide in succeeding regular national and
local elections.
The
last sentence of the provision which provides that “[i]n succeeding regular
national or local elections, the AES shall be implemented nationwide” may appear
as not connected to the enumeration of requirements for the use of an AES. But this does not mean that it can be read in
isolation and independently from the rest of the provision. Section 5 expressly
declares that the COMELEC's authority to use the AES on a nationwide scale is contingent
on the prior conduct of partial automation in two provinces and two highly
urbanized cities each in Luzon, Visayas and Mindanao.
Likewise, the word “pilot testing” may
not have been used in the provision, but the intent to test the use of an AES
is evident in its text. The mandatory nature of the initial conduct of an
automated election in two provinces and two highly urbanized cities each in
Luzon, Visayas and Mindanao is highlighted by the use of the word shall. That this is a condition
precedent before a full nationwide automated election can be used in the succeeding
elections is buttressed by the use of the words provided, that. Thus, the COMELEC is authorized to use an AES,
provided that the AES is first used in two provinces and two highly urbanized
cities each in Luzon, Visayas and Mindanao, after which, in the following regular
national and local elections, the AES shall be implemented nationwide.
Pushing
to the limit their argument that pilot testing is not a condition precedent to
the conduct of an AES, the respondents rely on Section 12 of RA 8436, as
amended, which provides thus:
SEC. 12. Procurement of
Equipment and Materials. – To achieve the purpose of this Act, the Commission
is authorized to procure, in accordance with existing laws, by purchase, lease,
rent or other forms of acquisition, supplies, equipment, materials, software,
facilities and other services, from local or foreign sources free from taxes
and import duties, subject to accounting and auditing rules and regulations. With respect to the May 10, 2010 elections
and succeeding electoral exercises, the system procured must have demonstrated
capability and been successfully used in a prior electoral exercise here or
abroad. Participation in the 2007 pilot exercise shall not be conclusive of the
system's fitness. (Emphasis supplied)
The respondents press the point that Section 12, supra, indicates that pilot testing in the May 2007 elections is not a
mandatory requirement for the choice of an AES to be used in the May 2010
elections, nor is it a prerequisite for the full automation of the May 2010
elections, since the system’s capability may have been used in an electoral
exercise abroad. Respondents also
contend that since participation in the 2007 pilot exercise is expressly
declared as inconclusive of the system’s fitness, then the non-use of the PCOS
machines in the 2007 electoral exercise is not a bar to the implementation of a
full nationwide automation in the 2010 elections.
With
due respect, the respondents have a murky understanding of the last sentence of
Section 12. It merely states that “[p]articipation
in the 2007 pilot exercise shall not be conclusive of the system's fitness.” It does not say that participation of the procured
system in the 2007 pilot exercise is not a condition precedent to the full
nationwide implementation of the AES. The section says in unadorned language that
as long as the system procured –presumably for the May 2007 elections – has
been shown to have demonstrated capability and has been successfully used in a
prior electoral exercise here in the Philippines or abroad, the system may also
be used in the May 2010 and succeeding elections. In fine, the subject of the section
is the fitness of the system procured for the May 2007 automated pilot exercise;
it has no relation to the issue of whether the pilot exercise is a condition
precedent to the implementation of full nationwide automated elections.
The
deliberations of the Joint Congressional Oversight Committee on [the] Automated
Election System (Joint Committee on AES)[15] should
further enlighten us on the purpose of the last sentence in Section 12 of RA
8436, as amended: that “[p]articipation in the 2007 pilot exercise shall not be
conclusive of the system's fitness.” They
reveal that the purpose is simply to avoid a situation in which the choices of
machines and the kind of AES to be used in the 2010 elections would be limited
to those that were piloted in the 2007 elections.
Thus,
Senator Richard Gordon explained
that the purpose behind the statement that participation in the 2007 pilot
exercises was not conclusive of the system’s fitness was to ensure that newly developed technology may still be considered for
the 2010 elections, even though it was not tested in the 2007 pilot exercise.
Representative Teodoro Locsin
concurred in the same view. Thus:
THE CHAIRMAN (SEN. GORDON). Precisely that was placed there so that you can get newly discovered machines or
newly invented machines that can be utilized so that in the 2010 elections
it would have been tried in an example here in our country.
THE CHAIRMAN (REP. LOCSIN). I think the purpose of this was any bidder who can
prove and who has already carried out an electoral exercise- sure, of course,
he has a leg up of all other but that’s not conclusive which assumes that
others who have not the same experience will be allowed to also bid. (Emphasis
supplied.)[16]
Representative
Locsin elucidated that participation in the pilot-exercise was not conclusive
of the system’s fitness, because pilots were easier to do than national
exercises. This was also to emphasize that those who participated in the pilot
exercise were not to be preferred over those who were not able to participate
in the pilot exercise. Thus:
THE CHAIRMAN (REP. LOCSIN). Although this is a detail, if I may ‘no, I
think you are just doing your best that you just read what it says. It simply
says that, I think, everyone is entitled to put their bid. Your (sic) have the discretion to decide
whether or not they have the capability. A company may have had many exercises
in
The respondents also have an erroneous reading of the use
of the word “pilot exercise” instead of “pilot testing.” They claim that the
use of the word “pilot exercise” instead of “pilot testing” is indicative of
the intention to only initially use or employ the AES in the 2007 elections
rather than make it a condition precedent. Again, this submission is not sustained by the
deliberations of the Senate. “Pilot-exercise” was used in the law instead of
“pilot-test” to avoid the notion that a test must first be passed in the 2007
elections in order to continue with the use of the AES as a mode of conducting
the succeeding elections. The lawmakers wanted to avoid the use of the word
“test,” so that in case the AES to be used in the 2007 elections did not well perform
as planned, still, the automation of the elections in the next elections would
proceed. This intent is reflected in the
debate between Senator Richard J. Gordon (Senator Gordon) and Senator Manuel A.
Roxas II (Senator Roxas) over an amendment to Section 5 of RA 8436, proposed by
the latter. Senator Roxas proposed to
add the words “on a test basis” to refer to the use of an AES. The amendment is
as follows:
Section 5. Authority to Use
an Automated Election System. – To carry out the above-stated policy, the
Commission on Elections, herein referred to as the COMELEC is hereby authorized
to use ON A TEST BASIS AN automated election system x x x.[18]
(capitalization in the original.)
Senator Roxas wanted to use the word “test,” so that after
a “test” of the AES in the 2007 elections, Congress would know whether the
implementation of the 2007 national and local AES was successful. Thereafter, Congress would decide whether the
AES – as a mode of conducting elections – should still be used for the successive
elections. This is clear from the following exchange of remarks between Senator
Roxas and Senator Gordon:
SENATOR ROXAS. In any event, Mr. President, I would like now
to go to line 18 and read into the Record
the proposed amendment. Again, as I said earlier, so as not to confuse
those who are following the language, I will deliberately not read the word
“test” subject to whatever happens to that word in subsequent debate and
dialogue.
The proposed amendment reads:
THE FURTHER IMPLEMENTATION OF AN AES OR AES TECHNOLOGY
SHALL BE DECIDED UPON BY CONGRESS, THROUGH A JOINT RESOLOUTION, UPON
RECOMMENDATION OF THE OVERSIGHT COMMITTEE. FOR THIS PURPOSE, THE OVERSIGHT
COMMITTEE SHALL CONDUCT COMPREHENSIVE EVALUATION PERFORMANCE OF SAID AES OR AES
TECHNOLOGY DURING INITIAL IMPLEMENTATION OF RESULTS WITH MANUAL TABULATION. IT
SHALL THEN MAKE APPROPRIATE RECOMMENDATIONS TO CONGRESS ON WHETHER ANY FURTHER
IMPLEMENTATION SHALL BE CONDUCTED OR OTHERWISE. IN CASE OF FURTHER
IMPLEMENTATION AND THE INCREMENTAL COVERAGE BY ALL AES SHALL NOT BE MORE THAN
TEN PERCENT (10%) OF THE TOTAL COVERAGE IN TERMS OF NUMBER OF DISTRICTS.
That is the proposed amendment, Mr. President. The
proposed amendment, first, from a comprehensive perspective seeks to revert
back to Congress the judgment whether the implementation of the AES in 2007
national and local elections was successful or not.
As envisaged in the bill, Mr. President, we are leaving
to the Comelec the decision to choose the appropriate technology that will be
implemented. There will be a series of advisory or a number of advisory and
TAHEC bodies that will hopefully inform that decision.
x x x x
SENATOR GORDON. I
thank the distinguished gentleman from Capiz, Mr. President. I know he tried to
amend this with sincerity, but I also would like to maintain that this is not a
test, first and foremost, because he speaks of a test, and I know he has
already stated what word to use. As I pointed out, the words to be used should
be: The Automated Election System will be implemented in the province he has
already spoken about.
But, upon the other hand, I am concerned about “shall be
decided upon by Congress through a joint resolution,” referring to line
18,--before the implementation of an AES. I am removing the word “test”,
--“before the implementation of AES technology shall be decided upon by
Congress.”
Mr. President, that line speaks volumes. The mother bill
that we are amending which is enacted in 1987 decided a policy that we are
going to go on an automated election. In other words, if we follow the logic
here, we are practically saying: “Well, we may be changing our mind. Maybe we
are not in automation mode again.” This very line suggests and clearly states
that: “Hey, it is going to go back to Congress.” And, in fact, through a joint
resolution, which I think cannot even be done because Congress amends even
without this suggestion. It can amend even without these lines. It can amend
the law if it chooses to do so. Which means that after the Automated Election System,
if we feel that we no longer want to have an automated election system,
Congress cannot at anytime say: “No, we are no longer in that mode.”
What our bill provides is that we are already on this
heuristic notion, if I may use a word I learned in school a long time ago,
which is a trajectory that is headed towards a particular direction aimed at
modernizing the election by way of AES. And we have put in the safeguards the
minimum requirements and by so doing, after the election has been conducted, the
Comelec which is the agency, whether we like it or not, that has been mandated
by the Constitution to run our elections simply goes on and says: “All right,
we will expand upon the recommendation of the AES, along with the oversight
committee.”
Now, if that is the case, Mr. President, there is no need
to go back to Congress. But if Congress sees it fit, as I pointed out, we are
not obviating that possibility. If Congress sees it fit, they can amend it.
But as far as I am concerned, I think the rule should be
that we are on an automated rule should be that we are on an automated election
mode and we should not say continue on with it.
But as far as I am
concerned, I think the rule should be
that we are on an automated election mode and we are on an automated election
more and we should continue on with it. But we should not say after the
exercise, parang lumalabas na test, we will now go back and decide whether we
are still on an automated election mode and say we might be going back to
manual. x x x We have debated on the automated, we passed this on the past
period of debate and we have already decided that we are continuing with the
trajectory of automated election. I would not want to go back again to a
situation where Congress will say, “We are changing his (sic) mind.” Although, it is within its prerogative anyway at any
time. (Emphasis supplied; capitalization in the original.) [19]
Senator
Roxas’ amendment which contained the word “test,” was rejected. The reason is
not because the partial use of the AES in the 2007 election was not considered as
a condition precedent to its full implementation in the 2010 elections. Rather,
it was because the use of the word “test” would have implied that Congress
would still have to decide whether the conduct of the AES had passed its
requirements; whether an AES should still be continued in the succeeding
elections; or whether, based on the “test,” the conduct of the elections should
revert to manual.
Senator
Gordon further made it clear that the reason why the AES should first be
implemented in certain parts of the country – and not immediately throughout
the entire country – was that “a big bite must not be taken right away.”[20] The
implementation of the system must be done in phases: first, it must be piloted in
parts of the
SENATOR GORDON.
x x x x
Mr. President, this is precisely why we are starting the
automation in two provinces and two cities so that we do not take a big bite
right away. And I accepted the amendment of the Minority Leader precisely
because we want to make sure that the
bite is sufficiently enough for us to be able to run the automation. x x x
We trust the Comelec but we verify the system because we are hamstrung by the
constitutional provision that the Comelec is the one that is principally in
charge of running the elections, but at the same time, we have an Advisory
Council, composed of our experts, to guide them. (Emphasis supplied) [21]
x x x
x
Now, the sample is
only two provinces and two cities, Mr. President, so that we would be able to
get a gauge. x x x (Emphasis supplied)[22]
x x x So, it is
really an automated system that we advocate and, obviously, the two provinces
and two cities for Luzon, Visayas and
In
sum, both from the words of RA 8436, as amended by RA 9369, and its legislative
intent, it is clear that an AES shall be conducted; and that the COMELEC is
authorized to implement the AES, provided that it is initially piloted in two
highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao.
c.2 Be that as it may, the enactment
of RA 9525 has impliedly repealed
the Pilot Exercise Requirement
In a shift in stance, it is argued by
the respondents that RA 8436, which requires that a piloting of the AES be used
in at least two provinces and two highly urbanized cities each in Luzon,
Visayas and Mindanao before a full nationwide automation of the elections can
be conducted, has been impliedly repealed by the enactment of a later law, RA
9525. They proffer the view that RA
9525,[24]
appropriating P11,301,790,000.00 for the conduct of an AES in the May 10, 2010, is for the full implementation of automated elections
in 2010. They argue that when RA 9525 was enacted on March 5, 2009, Congress was
aware that there was no pilot exercise conducted in two highly urbanized cities
and two provinces each in Luzon, Visayas and Mindanao; and despite this failure,
Congress still appropriated the entire amount of P11,301,790,000.00 for
the full nationwide implementation of the AES in the May 2010 elections. By the enactment of the P11,301,790,000.00
supplemental appropriation, the respondents claim that Congress conveyed the
intention to proceed with full nationwide automation and do away with the requirement
of conducting a pilot exercise. The respondents also rely on the deliberations
of the Senate and the House of Representatives to support their thesis.
On
the other hand, the petitioners counter that there was no implied repeal of the
requirement of pilot testing of the AES in two provinces and two highly
urbanized cities each in Luzon, Visayas and Mindanao. They cite Section 2 of RA 9525, viz.:
Section 2. Use of Funds. - The amounts herein appropriated shall be
used for the purposes indicated and subject to: (i) the relevant special
and general provisions of Republic Act No. 9498, or the FY 2008 General
Appropriations Act, as reenacted, and subsequent General Appropriations Acts,
and (ii) the applicable provisions of Republic Act No. 8436, entitled: "An Act Authorizing the Commission on Elections to Use
an Automated Election System in the May 11, 1998 National or Local Elections
and in subsequent National and Local Electoral Exercises, Providing Funds
Therefor and for Other Purposes", as
amended by Republic Act No. 9369: Provided, however, That disbursement of the amounts herein
appropriated or any part thereof shall be authorized only in strict compliance
with the Constitution, the provisions of Republic Act No. 9369 and other
election laws incorporated in said Act so as to ensure the conduct of a
free, orderly, clean, honest and credible election and shall adopt such
measures that will guaranty transparency and accuracy in the selection of the
relevant technology of the machines to be used on May 10, 2010 automated
national and local election. (Emphasis supplied.)
The
petitioners stress that Section 2 provides that the amount appropriated shall
be used for the implementation of the May 2010 automated elections, subject to the applicable provisions of
RA 8436, as amended. They further emphasize that Section 2 states that the
disbursement of the amount appropriated or any part thereof shall be done only
in strict compliance with the
Constitution, and the provisions of RA 9369 and other election laws. Thus, the petitioners
conclude that the mandatory requirement of pilot testing was not repealed but reiterated
by Congress in said section.
The
petitioners further argue that implied repeals are not favored, and two laws
must be absolutely incompatible before an inference of implied repeal may be
drawn. They contend that RA 9525 is not
totally inconsistent with the requirement of pilot testing in Section 5 of RA
8436, as amended, such that the provisions of RA 9525 must be interpreted and
brought into accord with the old law.
To
resolve this issue of implied repeal, the Court must first determine whether it
was the intent of Congress to push through with full nationwide automation of
the elections in May 2010. RA 9525 is unclear whether Congress appropriated P11,301,790,000.00
for the conduct of full or partial automated elections, or whether it intended
the automated elections to be conducted nationwide or only in the pilot areas. To clear this uncertainty, the Court should resort
to the deliberations of the Senate and the House of Representatives, as well as
the hearings of the Joint Committee on AES.
Let
us first look at the deliberations of the House
of Representatives when it considered House Bill 5715 (HB 5715), entitled “An
Act Appropriating the Sum of Eleven Billion, Three Hundred One Million, Seven
Hundred Ninety Thousand Pesos as Supplemental Appropriations for an Automated
Election System and for Other Purposes.
From the deliberations, the assumption of the members of the House of
Representatives who engaged in the debate was that the appropriation was for a
full nationwide implementation of the AES in the May 2010 elections.
Thus,
in the sponsorship speech of Representative Junie Cua of the Lone District of Quirino, he stated that the
appropriation was for the full nationwide automation of the May 2010 elections,
viz.:
REP. CUA. x x x x
For your consideration, my dear esteemed colleagues, I
have the privilege of submitting the budget of the Commission on Elections for the automation of the 2010 national and
local elections.
Out of the budget proposal of P11.3B, the COMELEC is
proposing to spend about P8.2B for the lease of election automation equipment.
This will cover the cost of 80,000 Precinct Count Optical Scanners or PCOS that
will be deployed throughout the country.
These devices will count hand-marked ballots that will be printed on ballot
paper costing a total of P1B. We will be spending about P78B on ballot boxes.
Once the ballots are so counted, the results will then be electronically
transmitted to the public quicker than any quick count in our election history
and for this, we need P400M.
And finally P1.7B, more or less, will then be spent to
ensure that everything goes smoothly through the strong project management and
associated services that the COMELEC will put in place. (Emphasis supplied.)[25]
x x x
x
As
AKBAYAN Party-list Representative Risa
Hontiveros-Baraquel (Representative Hontiveros-Baraquel) was asking clarificatory
questions to Representative Junie Cua, she also stated that the appropriation
was for the conduct of the automated elections of the entire country and not
merely a region therein, viz.:
REP. HONTIVEROS-BARAQUEL. x x x x
In the budget breakdown presented by the COMELEC in our
committee hearing, the amount for operating expenses was P50 million, which is
only equal to the operating expenses for the ARMM elections. And, since this would be a national elections,
not just in one region of our country, I asked then, “Shouldn’t the amount
be more in the vicinity of one or one-and-a-half billion pesos?” There is – part
of the response was in the remarks column of the COMELEC, where they noted that
some of the operating expenses, the transmission costs, would be carried by
public TELCOS. (Emphasis supplied.) x x
x
x x x
x
REP. CUA. Yes,
Mr. Speaker, after consulting with the technical people of the commission, I
understand that the Lady is correct that what was originally allocated for
operating cost or transmission cost was 50 million. But after reevaluating the
cost breakdown, they have increased this to 200 million, Mr. Speaker, Your Honor.
Yes, 200 million, Mr. Speaker.[26]
(Emphasis supplied)
HB 5715 was approved on the third
reading, with 193 members of the House of Representatives voting in the
affirmative, one voting in the negative, and one abstention.
We
have also examined the deliberations of the Senate which constituted itself into a Committee of the Whole to
consider HB 5715. The debates confirmed
that the senators were also of the understanding that the appropriation of P11.3
billion was for the full nationwide automation of the May 2010 elections.
In
the same vein, the members of the Joint
Committee on AES took it as a given that the May 2010 elections would be
implemented throughout the entire country. The September 1, 2008 hearing of the
Joint Committee on AES took up the COMELEC evaluation report on the automated
elections held in the ARMM. Senator Loren
Legarda asked the Chairperson of the COMELEC Advisory Council, Mr. Ray Anthony Roxas-Chua III, regarding the cleansing of
the list of voters; in the process of doing so, she assumed that the 2010
elections were to be full automated. Thus:
SEN. LEGARDA. x
x x x
So therefore, if I understand
correctly, the cleansing of the voters list through the enactment of a new law
and the funding from Congress is essential because it is a partner towards the
automation, complete automation, by
2010. Is that correct? (Emphasis supplied.)[27]
Representative Edcel Lagman held the same assumption, as he asked the following
question:
REP. LAGMAN. Mr. Chairman, how many machines and
allied equipment do you need for the nationwide
implementation of the automation by 2010? (Emphasis supplied.)[28]
During the
September 9, 2008 hearing of the Joint Committee on AES, Senator Edgardo Angara had an exchange with Chairman Melo. It was unmistakable from the exchange that
not only did the Congress contemplate a full nationwide automation of the May
2010 elections, but also that the approval of a budget of P11.3 billion
was meant for the conduct of a full nationwide automation of the 2010
elections, and not a partial or a pilot of the AES in selected areas.
SEN. ANGARA. Mr. Chairman, yesterday the Finance
Committee of the Senate started the budget hearing. So, in the Senate we are
already beginning to do that.
Now
let me just ask before I say something more. Has the budget of the Comelec been
heard in the House?
MR. MELO. Not
yet.
SEN. ANGARA. Good!
Good, good, because that is your window of opportunity. You’ve got to catch the
House hearing on the budget because it’s better that your proposed budget for
the elections of 2010 are incorporated in the House itself. Of course, we can
supplement it in the Senate but, as you know, the Senate cannot tap the
President’s Budget. So it’s better that we negotiate it in the House.
The presentation yesterday by the Budget
Secretary is you will have about 3.8B for 2010. And the 3.8B, billion (sic), also includes registration,
etcetera, etcetera so it does not exclusively…And when we asked, “Is this enough for full automation?” Secretary
Andaya was frank enough. “No, no. This is the figure that they submitted to us
four years ago and we are really expecting a submission of a revised cost of
computerization.”
This
is why I think you must seize the opportunity. And I would suggest very
strongly that the advisory committee sit down with potential bidders and really
go over every single figure in that costing because it’s going to be
unfortunate that this will not push through. Automation will not push through
simply because it’s so expensive that there’ll be such a huge public outcry against
it. Whereas, you and I know that this may be one good way to have clean
elections and speedier results announced in our country. That’s why I think
it’s very important that you bargain hard and I hope that the suppliers will
see also the public service element in this experiment; that I hope they won’t
even cut a profit out of this transaction because if you are successful, I
think this will be one of the biggest use of their technology at 45 million or
35 million voters. I don’t know if there’s any other country who has that
number of voters using this particular technology.
So,
in terms of selling point, this will be one of their strongest selling points.
So I urge the representatives of the vendors to consider that very strongly
even if they have to donate a substantial portion of that cost for the sake of
democracy, ‘di ba?[29] (Emphasis
supplied.)
Indeed, several times during the hearings of the Joint Committee on AES,
the members pointed out that full nationwide elections would be conducted on
May 10, 2010, viz.:
MR. TOLENTINO.[30] Yes, Sir.
The
costing here would be the purchased (sic)
price. And if we base it on the rate that we sued for the ARMM elections, the
lease cost would be 70 percent of the total budget.
THE CHAIRMAN (SEN. GORDON). Well, I got thrown off
because there is an allegation made by Mr. Dizon that says that they can make
it for 14 to P18 billion, is that correct?
MR. DIZON. Yes,
Mr. Chairman.
THE CHAIRMAN (SEN. GORDON). …DRE machines…
MR. DIZON. Yes,
Mr. Chairman.
THE CHAIRMAN (SEN. GORDON). …for
the entire country, right?
MR. DIZON. Yes,
Mr. Chairman. That’s approximately 37 million voters.[31]
(Emphasis supplied.)
In the March 4,
2009 hearing:
THE CHAIRMAN (SEN. ESCUDERO). The only thing I am raising this (sic), Mr. Chairman, is without
violating inter-chamber courtesies, we are talking here of 40, nearly 50
million voters and you are transmitting a vote located thousands of kilometers
away in an area we are not even sure if there is signal, dahil kung wala
ibababa ho physically iyong balota mula duon sa presinto para dalhin o
maglalagay kayo ng satellite, hindi ko ho alam kung ano ang gagawin ninyo, wala
pa ho tayo doon. x x x So, please, bear with us as your Oversight Committee
attempts to sift through all of these various inputs and information and try to
find some rhyme or reason into it and justify
perhaps our action of the proposed full automation for the 2010 elections.
x x x (Emphasis supplied.)
x x x x
THE CHAIRMAN (SEN. ESCUDERO). And as final point, Mr. Chair, I would like
to make of record what we discussed. Kindly also look into the possibility, Mr.
Chairman, fully automated tayo, OMR
kayo, as you proposed, but in addition to electronic transmission, can’t we
have an OMR at the provincial level to count the ERs to be produced by our OMRs
at the precinct or collapsed precinct level either OMR that can count ER or OMR
that can count an encrypted CD from the PCOS located in the collapsed precinct
so that you will have a hard copy of the ER at the provincial level which you
can easily adopt once you go to the site?
x x x[32] (Emphasis supplied.)
So it was during
the February 2, 2009 hearing of the Senate
Committee on Finance for the appropriation of P11.3 Billion for the
May 10, 2010 AES, viz.:
MR. ROXAS-CHUA. Your Honor, Your Honor, the basis
for this is really the ARMM election because we used similar structure. It was
also a lease with an option to purchase and this is where we came up with the
70 percent price for the lease with the option to purchase. That is the
structure that we used and there was successful bidder so we used that as a
basis, as the cost structure for this
next election.
THE CHAIRMAN.[33] Hindi. Siyempre doon sa ARMM,
kinocompartmentalized (compartmentalize) ninyo per province. O, Maguindanao,
you will use DRE. The rest we will use COS. Oo. So, localized. Ito nationwide ito.[34]
The Comment-in-Intervention of the
Senate of the Philippines also affirmed the congressional intention to
implement a full nationwide automation of the elections this May 10, 2010. It categorically
stated that the approval of the supplemental budget of P11.3 billion for
the upcoming May 10, 2010 elections was not merely for a pilot test, but for a
full nationwide implementation of the AES.
In
the case at bar therefore, there is unmistakable evidence of the legislative intent
to implement a full nationwide automation of the May 2010 elections. It is
impossible to give effect to this intent and at the same time comply with the
condition precedent of conducting pilot exercises in selected areas. The irreconcilability
between Section 5 of RA 8436, as amended, and Section 2 of RA 9525 is apparent for
Congress could not have maintained the requirement of a pilot exercise as a
condition precedent to full automation when it had made it absolutely clear
that it wanted to push through with a full nationwide AES this May 2010.
Laws
of Congress have equal intrinsic dignity and effect; and the implied repeal of
a prior by a subsequent law of that body must depend upon its intention and
purpose in enacting the subsequent law.[35] What
is necessary is a manifest indication of a legislative purpose to repeal.
Repeal by implication proceeds from the premise that where a statute of a later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect.
c.3
COMELEC’s Award of the Automation
Contract to the Smartmatic-TIM
Consortium Not Attended by Grave
Abuse of
Discretion
The petitioners attribute grave abuse
of discretion amounting to lack or excess of jurisdiction to the COMELEC for
awarding the 2010 Elections Automation Project to Smartmatic TIM Corporation,
on four grounds, viz.:
1. Private Respondents Smartmatic and TIM allegedly did
not execute and submit a valid joint venture agreement evidencing the
existence, composition and scope of their joint venture, in violation of the
COMELEC’s own bidding requirements and this Court’s ruling in Information Technology of the Philippines,
et al. v. COMELEC, et al.;[36]
2. Even granting that such an agreement was submitted,
the joint venture is nevertheless illegal for having been constituted in violation
of the nationality requirement, i.e.,
60%-40% Filipino-foreign equity ceiling;
3. The AES chosen by the COMELEC does not comply with the
“prior successful use” qualification set forth in Section 12 of RA 8436, as
amended; and
4. The PCOS machines offered by the Smartmatic-TIM
Consortium do not satisfy the minimum system capabilities mandated by Section 7
of RA 8436, as amended.
Preliminarily,
it should be underscored that RA 8436, as amended by RA 9369, does not mandate
the use of any specific voting equipment. Instead, the law gave COMELEC the sole
power to prescribe the adoption of the most suitable technology of demonstrated
capability[37] as it may deem
appropriate and practical,[38]
taking into account the situation prevailing in the area and the funds available
for the purpose.[39] Absent any capricious and
whimsical exercise of judgment on the part of the COMELEC, its determination of
the appropriate election technology, as well as the procedure for its
procurement, should be respected. Our judicial
function is merely to check and not to supplant the judgment of the COMELEC; to
ascertain merely whether it has gone beyond the limits prescribed by law, and not
to exercise the power vested in it or to determine the wisdom of its act.[40]
c.4 Valid JVA was duly submitted
The
petitioners claim that private respondents Smartmatic and TIM submitted a
“sham” joint venture agreement during the bidding process. The claim is premised
on the following allegations: (i) that although Smartmatic and TIM were awarded
the Automation Contract by the COMELEC on June 9, 2009, it was only on July 6,
2009 (or twenty-seven days later) that they were able to “thresh out their
serious differences,” sign and thereafter submit their incorporation papers to
the Securities and Exchange Commission; and (ii) that the provisions of the JVA
do not sufficiently establish the due existence, composition and scope of the
Smartmatic-TIM joint venture.
As
to the first allegation, it should be noted that the TOR/RFP made by the
COMELEC does not require that a joint
venture bidder be incorporated upon the
submission of its bid. Section 2.2.4 of Part IX (B) of the TOR/RFP declares
“[m]anufacturers, suppliers and/or distributors forming themselves into a joint
venture [...]” as eligible to participate in the bidding for the 2010
Automation Project, without any incorporated vs. unincorporated dichotomy. That the TOR/RFP does not
specifically call for incorporation at the time of the bidding is significant,
because Philippine law admits of a distinction between simple joint ventures
and ordinary corporations.[41] In Aurbach, et al. v. Sanitary Wares
Manufacturing Corporation, et al.,[42] a
joint venture was likened by this Court to a partnership, thus:
The legal concept of a joint
venture is of common law origin. It has no precise legal definition, but it has
been generally understood to mean an organization formed for some temporary
purpose. It is hardly distinguishable from the partnership, since their
elements are similar – community of interest in the business, sharing of
profits and losses, and a mutual right of control. The main distinction cited
by most opinions in common law jurisdiction is that the partnership
contemplates a general business with some degree of continuity, while the joint
venture is formed for the execution of a single transaction, and is thus of a
temporary nature. This observation is not entirely accurate in this
jurisdiction, since under the Civil Code, a partnership may be particular or
universal, and a particular partnership may have for its object a specific
undertaking. It would seem therefore that under Philippine law, a joint venture
is a form of partnership and should thus be governed by the law of
partnerships. The Supreme Court has however recognized a distinction between
these two business forms, and has held that although a corporation cannot enter
into a partnership contract, it may however engage in a joint venture with
others. (Citations omitted.)
But any
remaining doubt as to the need for incorporation is dispelled by Bid Bulletin
No. 19[43] and
Bid Bulletin No. 22,[44]
issued by the COMELEC-SBAC to provide clarifications to prospective bidders.
Both documents acknowledge that a bid by a joint venture may be made either
through a joint venture corporation (JVC) or an unincorporated joint venture (UJV). Bid Bulletin No. 19 provides, in
relevant part:
[Question/Issue:] If the bidding will be made through an
unincorporated joint venture (UJV), and the UJV wins the bid, can the UJV
partners subsequently assign the contract, after its award, to a newly-formed
joint venture corporation (JVC) registered with the Securities and Exchange
Commission? The registered JVC will assume all rights and obligations of the
UJV. Does Comelec have any requirements for allowing such assignment to the
JVC?
[Answer/Clarification:]
Under the General Conditions of Contract, Sec. 26.1, “The supplier shall not
assign his rights or obligations under this contract in whole or in part except
with the Procuring entity’s prior written consent.” x x x
x x x x
[Question/Issue:] If the bid
will be made through a joint venture (JV) (either
a UJV or a JVC), is the JV required also to submit a Tax Identification No.
and Value Added Tax (VAT) registration?
[Answer/Clarification:]
Please see Bid Bulletin No. 13. (Emphasis supplied.)
Likewise, Bid Bulletin
No. 22 states as follows:
[Question/Issue:] How does
Joint Venture apply to our group in order to follow the requirement that
Filipino ownership thereof shall be at least sixty percent (60%)?
[Answer/Clarification:] The
60% Filipino participation refers to capital ownership or the Filipino
contribution in the pool of financial resources required to undertake a
government project. In an unincorporated joint venture, determination of the required
Filipino participation may be made by examining the terms and conditions of the
joint venture agreement and other supporting financial documents submitted by
the joint venture. (Emphasis supplied.)
The only
restriction imposed on a UJV bidder (vis-à-vis a JVC bidder) by the TOR/RFP and
the Bid Bulletins is that the COMELEC should consent before the UJV could
assign its rights to the Automation Contract to the newly formed JVC. The
records show that Smartmatic and TIM complied with the consent requirement.
After emerging as the winning bidder, they incorporated the Smartmatic TIM
Corporation, the corporate vehicle through which the joint venture is to be
carried out.[45] COMELEC acquiesced to
this arrangement, for it subsequently entered into a contract with this JVC for
the Automation Project.
The petitioners next assert that the JVA
does not sufficiently establish the due existence, composition and scope of the
Smartmatic-TIM joint venture, in violation of our ruling in Information Technology of the Philippines,
et al. v. COMELEC, et al.:[46] that
“in the absence of definite indicators as to the amount of investments to be
contributed by each party, disbursements for expenses, the parties’ respective
shares in the profits and the like, it seems to the Court that this situation
could readily give rise to all kinds of misunderstandings and disagreements
over money matters”; and that “[u]nder such a scenario, it will be extremely
difficult for Comelec to enforce the supposed joint and several liabilities of
the members of the ‘consortium.’” According to the petitioners, Smartmatic and
TIM did not submit documents to show “the full identity of the entity it is
dealing with,” and “who controls the money, how much did each of these entities
invest to (sic) the alleged joint venture, and who has control over the decision[-]making process of the
alleged joint venture.”
A cursory glance at the JVA belies the
petitioners’ posture. The agreement indicates in a thorough and comprehensive
manner the identity, rights, duties, commitments and covenants of the parties,
as well as the purpose, capitalization, and other pertinent details in respect
of the joint venture, thus:
1. Smartmatic and TIM are the members of the joint
venture.[47]
2. The purpose of the JVC is to carry out and perform jointly,
severally and solidarily the obligations of TIM and Smartmatic arising from
being declared the winning bidder in the public bidding for the Automation
Project, which obligations are spelled out in the [TOR/RFP] released by the
COMELEC.[48]
3. The authorized capital stock of the JVC is one
billion, three hundred million Philippine pesos (P1,300,000,000.00),
divided into one billion, three hundred million common shares at one peso (P1.00)
par value.[49] The capital contribution
of TIM is equivalent to sixty percent (60%) of the shares to be issued by the
JVC, with Smartmatic contributing the residual forty percent (40%).[50]
4. The
contributions[51] of the parties are as
follows:
a. TIM – (i) the value-added services pertaining or
related to canvassing units, systems integration, transmission and such other
services as required by the Automation Project and as indicated in the
[TOR/RFP]; (ii) services pertaining or related to logistics, deployment, and
manpower; (iii) hardware, software, ballot paper, consumables and such other
services as may be requested by Smartmatic; and (iv) local support staff as may
be required under the circumstances.
b. Smartmatic – (i) the development, manufacture and/or
supply of [electronic voting machines], other machines and equipment, software,
technology and systems; (ii) overall project management as required by the
Automation Project and as indicated in the [TOR/RFP][52]; and
(iii) any other activity not expressly written in the JVA or assigned to TIM.
c. Both parties – (i) technical services and/or
assistance to carry out the purpose of the JVC; (ii) financial assistance to
the JVC; and (iii) additional capital contributions, as may be requested by the
Board of Directors.
5. TIM shall be entitled to nominate and elect 60%, and
Smartmatic shall be entitled to nominate and elect 40%, of the Board of
Directors of the JVC.[53]
6. The EXCOM shall consist of at least three (3)
Directors, two of whom must be Directors nominated by TIM, with the other
nominated by Smartmatic.[54]
7. Profits are to be distributed to TIM and Smartmatic as
may be determined by the Board of Directors under Article 4.5 or by the
Shareholders under Article 5.3 of the JVA, taking into account the financial
requirements of the JVC with respect to working capital.[55]
8. Any dispute or disagreement that may arise between the
parties in connection with the JVA shall first be settled through mutual
cooperation and consultation in good faith. Any dispute or disagreement that
cannot be amicably settled between the parties shall be submitted to arbitration
in
9. TIM and Smartmatic are jointly and severally liable to
the COMELEC for the obligations of each of TIM and Smartmatic under the TOR/RFP,
should they be awarded the contract for the Automation Project.[57]
Trapped
in their own “Catch-22,” petitioners’ invocation of Information Technology is
misplaced. The facts of that case are
entirely different. In the main, no JVA
or document of similar import was submitted during the bidding process to the COMELEC in Information Technology. The only “evidence” as to the existence of
the alleged joint venture was a self-serving letter expressing that Mega
Pacific eSolutions, Inc., Election.com, Ltd., WeSolv Open Computing, Inc., SK
C&C, and ePLDT and Oracle System (Philippines), Inc. had agreed to form a
consortium to bid for the Automation Project. This notwithstanding, the COMELEC
awarded the contract to the “consortium.” And the Court pointedly ruled:
The
To assure itself properly of
the due existence (as well as eligibility and qualification) of the putative
consortium, Comelec's BAC should have examined the bidding documents submitted
on behalf of MPC. They would have easily discovered the following fatal flaws.
x
x x x
In the case of a consortium
or joint venture desirous of participating in the bidding, it goes without saying
that the Eligibility Envelope would necessarily have to include a copy of the
joint venture agreement, the consortium agreement or memorandum of agreement – or a business plan or some other instrument of similar import – establishing the due existence, composition and scope of such
aggrupation. Otherwise, how would Comelec know who it was dealing with, and
whether these parties are qualified and capable of delivering the products and
services being offered for bidding?
In the instant case, no such instrument was submitted to Comelec during
the bidding process. This fact can be
conclusively ascertained by scrutinizing the two-inch thick "Eligibility
Requirements" file submitted by Comelec last October 9, 2003, in partial
compliance with this Court's instructions given during the Oral Argument. This
file purports to replicate the eligibility documents originally submitted to
Comelec by MPEI allegedly on behalf of MPC, in connection with the bidding
conducted in March 2003. Included in the file are the incorporation papers and
financial statements of the members of the supposed consortium and certain
certificates, licenses and permits issued to them.
However, there is no sign
whatsoever of any joint venture agreement, consortium agreement, memorandum of
agreement, or business plan executed among the members of the purported
consortium.
The only logical conclusion is that no such agreement was ever
submitted to the Comelec for its consideration, as part of the bidding process.
It thus follows that, prior the award of the Contract, there was no
documentary or other basis for Comelec to conclude that a consortium had
actually been formed amongst
So, it necessarily follows
that, during the bidding process, Comelec had no basis at all for determining
that the alleged consortium really existed and was eligible and qualified; and
that the arrangements among the members were satisfactory and sufficient to
ensure delivery on the Contract and to protect the government's interest.
x
x x x
At this juncture, one might
ask: What, then, if there are four MOAs instead of one or none at all? Isn't it
enough that there are these corporations coming together to carry out the
automation project? Isn't it true, as respondent aver, that nowhere in the RFP
issued by Comelec is it required that the members of the joint venture execute
a single written agreement to prove the existence of a joint venture. Indeed,
the intention to be jointly and severally liable may be evidenced not only by a
single joint venture agreement, but also by supplementary documents executed by
the parties signifying such intention. What then is the big deal?
The problem is not that there are four agreements instead of only one. The
problem is that Comelec never bothered to check. It never based its
decision on documents or other proof that would concretely establish the
existence of the claimed consortium or joint venture or agglomeration. It
relied merely on the self-serving representation in an uncorroborated letter
signed by only one individual, claiming that his company represented a
"consortium" of several different corporations. It concluded forthwith
that a consortium indeed existed, composed of such and such members, and
thereafter declared that the entity was eligible to bid.
x
x x x
In brief, despite the
absence of competent proof as to the existence and eligibility of the alleged
consortium (MPC), its capacity to deliver on the Contract, and the members'
joint and several liability therefor, Comelec
nevertheless assumed that such consortium existed and was eligible. It then
went ahead and considered the bid of MPC, to which the Contract was eventually
awarded, in gross violation of the former's own bidding rules and procedures
contained in its RFP. Therein lies Comelec's grave abuse of discretion. (Emphasis and underscoring supplied.)[58]
To make
matters worse, the COMELEC in Information
Technology awarded the bid to the “consortium” despite some failed marks
during the technical evaluation.[59]
In the case at bar, the Smartmatic-TIM Consortium passed the technical
evaluation.
It is thus readily apparent that the
joint venture of Smartmatic and TIM is not attended by any of the deficiencies
of the MP “consortium,” as the agreement in the instant case states with
precision the “exact nature and scope of the parties’ respective undertakings,
commitments, deliverables and covenants.”[60] The petitioners’ repeated recourse
to Information Technology betrays a highly myopic and constricted
view.
c.5
No nationality requirement is violated
Petitioners also contend that the joint venture agreement
of TIM and Smartmatic violates the Filipino-foreign equity ceiling, the Anti-Dummy
Law and COMELEC’s own bidding requirements.
I
concur fully with the ponencia of Mr.
Justice Velasco on this point. There is no constitutional or statutory
provision classifying the lease or provision of goods and technical services
for the automation of an election as a nationalized activity. To be sure,
Section 12 of RA 8436, as amended by RA 9369, explicitly authorizes the COMELEC
to procure supplies, equipment, materials, software, facilities, and other
services from foreign sources, as follows:
SEC. 12. Procurement of Equipment and Materials. – To
achieve the purpose of this Act, the Commission is authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of
acquisition, supplies, equipment, materials, software, facilities and other
services, from local or foreign
sources free from taxes and import duties, subject to accounting and
auditing rules and regulations. With respect to the
Petitioners
cannot rely on Executive Order No. 584 (EO 584), containing the Seventh Regular
Foreign Investment Negative List, which cites “contracts for the supply of
materials, goods and commodities to [a] government-owned or controlled
corporation, company, agency or municipal corporation” as limited to forty
percent (40%) foreign equity. The reliance cannot be countenanced in light of
two basic principles of statutory construction.
First, leges posteriores priores contrarias
abrogant. In case of
an irreconcilable conflict between two laws of different vintages, the later
enactment prevails.[61] The rationale is simple: a later law
repeals an earlier one because it is the later legislative will.[62] RA 9369, which allows the COMELEC to
procure AES supplies and equipment from foreign sources, became law in 2007,
whereas EO 584 is an executive issuance in 2006.
Second, lex specialis derogat generali. General legislation must give way
to special legislation on the same subject, and generally is so interpreted as
to embrace only cases in which the special provisions are not applicable.[63] In other words, where two statutes
are of equal theoretical application to a particular case, the one specially
designed therefor should prevail.[64] RA 9369 specifically covers a
well-defined subject (i.e., procurement
for election automation), whereas EO 584 has a more universal scope.
In sum, there is no
constitutional or statutory Filipino-foreign equity ceiling to speak of, and
the Anti-Dummy Law does not find application to the case at bar.
Nonetheless, I wish to clarify
certain matters.
It appears that in preparing the
bidder eligibility requirements, the COMELEC, exercising the discretion granted
by Section 12 of RA 8436, as amended by RA 9369, adopted the guidelines that
were set forth in the Implementing Rules and Regulations of RA 9184 (The
Government Procurement Reform Act). Thus, in Sections 2.2.1 to 2.2.4 of Part IX
(B) of the TOR/RFP, the COMELEC invited the following to bid for the Automation
Project:
(1)
Duly licensed
Filipino citizens/proprietorships;
(2)
Partnerships duly
organized under the laws of the
(3)
Corporations duly
organized under the laws of the
(4)
Manufacturers,
suppliers and/or distributors forming themselves into a joint venture, i.e., a
group of two (2) or more manufacturers, suppliers and/or distributors, that intend
to be jointly and severally responsible or liable for a particular contract,
provided that Filipino ownership thereof shall be at least sixty percent (60%);
and
(5)
Cooperatives duly
registered with the Cooperatives Development Authority.
But for a few innocuous
stylistic changes, this enumeration is an exact reproduction of Section 23.11.1[65] of the Implementing Rules and
Regulations of RA 9184.
Per Smartmatic TIM Corporation’s
Articles of Incorporation, there is no question that the JVC complied with the
60-40 equity ceiling provided under the TOR/RFP. Out of a total paid-up capital
of P1,130,000,000.00, TIM contributed sixty percent (60%) thereof
(equivalent to P678,000,000.00), while Smartmatic paid the remaining
forty percent (40%) (equivalent to P452,000,000.00).
The petitioners, however, allege that
the sixty percent (60%) interest of TIM in the JVC was merely simulated. They
point to certain provisions in the JVA as denoting that effective control over
Smartmatic TIM Corporation was given to Smartmatic. Specifically, petitioners
assail the following:
(1)
The mandatory
presence of at least one of the nominated Directors of Smartmatic to establish a
quorum of the Board of Directors, pursuant to Article 4.3[66] of
the JVA;
(2)
The veto power in
the Board of Directors granted by TIM to Smartmatic to authorize certain
important financial and technical actions, pursuant to Article 4.5[67] of
the JVA;
(3)
The mandatory presence of the Director
representing Smartmatic to establish a quorum of the Executive Committee (EXECOM),
pursuant to Article 4.7[68] of
the JVA; and
(4)
The sole right of
Smartmatic to nominate the (a) Chairman of the Board, (b) the Treasurer, and
(c) the Corporate Secretary, and TIM’s corresponding duty to elect said
nominees, pursuant to Articles 4.10[69] and
4.11[70] of
the JVA.
But far
from establishing the tyranny of the minority, these provisions may be viewed
as legitimate minority protection
devices. Through them, Smartmatic sought to protect its huge investment in
the Automation Project. Without these protective provisions, Smartmatic would
be helplessly exposed to the risk of being outvoted on significant corporate
activities and decisions – including decisions on technical matters falling
within its field of expertise, for which it is primarily responsible (as
against TIM) under the express terms of the COMELEC’s bidding rules[71] and the Automation Contract[72] itself. If that would come to pass,
Smartmatic could not perform its part of the Contract and the end result would
be the ruin of its investment.
To
be sure, our lawmakers wanted the foreign joint venture to be autonomous in
carrying out its technical functions, and intended to protect it from the whims
and caprices of the non-expert majority. This can be gleaned from the
MR. MELO. Here is a
scenario, Your Honor. Scantron, for instance and a Philippine Company, they
have an agreement, an agreement, joint venture agreement.
THE CHAIRMAN (REP. LOCSIN). And
the one who carries it out will [be] Scantron even if it’s 40 percent?
MR. MELO. Scantron, let us
say, wins. After they win, after Scantron wins, now, the two, they form a
company.
THE CHAIRMAN (REP. LOCSIN).
Yes. But do you – will you check that
the ones who will carry out the project will be, in the case of Smartmatic, the
guys who actually conduct elections in Venezuela and not some local boys who
are just, you know, dreaming that they can do it?
MR. MELO. But the contract
will now be awarded in favor of the new company?
THE CHAIRMAN (REP. LOCSIN).
Yes. But who will implement it?
MR. MELO. Yes, we will make
them jointly and severally liable.
THE CHAIRMAN (REP. LOCSIN).
I’m not really worried nor do (sic) am
I concerned about punishing them up after the failure of elections. I would just really want to make sure that
the guys who will run this will not be the local boys but the foreign boys who
have actually done it abroad. I don’t want amateurs, you know, trying to
prove yes, the Filipino can.
MR. MELO. Yes, Your Honor,
precisely. This is speaking my mind alound (sic).
Let us say, a foreign company goes into a partnership who (sic) are co-venture (sic) in system with a Philippine
company. The Philippine company is
usually taken for its expertise in the dispersal of the machines because [the
foreign company] does not need another technical company expert in computers.
THE CHAIRMAN (REP. LOCSIN).
It’s the deployment of the machines.
MR. MELO. Deployment. x x x
(Emphasis supplied)[73]
***
THE CHAIRMAN (SEN.
ESCUDERO). x x x What legal methodology,
memorandum or agreement will you be requiring to make sure that it’s the
foreigner who knows how to run it, who will actually run the [show] and not be
outvoted each time within the company, 60-40? I mean [the Filipino company]
can promise that, “Hindi ho, sila ang nakakaintindi, sila bahala, kami roll-out
lang.” But what assurance do we have and what legal document do you intend to
require insofar as this is concerned? (Emphasis supplied)[74]
***
THE CHAIRMAN (REP. LOCSIN). x
x x As I said, one of the most compelling arguments for the big guys to win,
the foreigners, is that they have a reputation to defend. No Filipino has a
reputation to defend in IT. In IT, there’s none. The problem here is, as
Senator Escudero said, a 60 percent joint venture partner. Are there any provisions you have made that would prevent them from
interfering in the technical aspects of the electronic elections? What if you
have the majority partners dictating how it will be done?
x x x x
THE CHAIRMAN (REP. LOCSIN). You will have to put really strict
sanctions on any interference by the majority partner in the judgment of the
minority partner in implementing the majority project. I don’t know how
that’s done though. (Emphasis supplied)[75]
***
THE CHAIRMAN (REP. LOCSIN).
The question we were asking – Our apprehension here, Senator Escudero and
myself, is that, will the 60 percent which has no track record and is Filipino
and may have political affiliations, would they be in a position to influence
the 40 percent minority that is the expert in electronic elections? Would the
60 percent be able to compromise the integrity of the 40 percent?
MR. RAFANAN.[76]
Do you say, sir, bidder with political connections?
THE CHAIRMAN (REP. LOCSIN).
That’s just an example. What we’re
saying is that a 40 percent track record – the track record of the 40 percent
partner, say, Sequoia or whatever. I mean, no question. They’re qualified but
they’re always in a minority position in the joint venture company. What if the
majority Filipino tells them to compromise the integrity? What measures do you
take? (Emphasis supplied)[77]
***
THE CHAIRMAN (SEN.
ESCUDERO). x x x So, ang tanong ko[,] you’re awarding [the contract to] a
company with a track record although may minority, minority lang siya. How sure are you na hindi siya didiktahan
nung 60 percent na walang track record, walang experience, so useless yung
requirement natin na may track record ka hindi naman siya ang masusunod, ang
masusunod yung may-ari ng 60 percent na Filipino na walang track record at
walang kaalam-alam presumably.
x x x x
THE CHAIRMAN (REP. LOCSIN).
Senator Enrile, our worry is that the 60 percent may dictate on the expert 40
percent. Would a joint venture contract
be able to provide some autonomy to the 40 percent expert so that they cannot
be interfered with?
THE SENATE PRESIDENT. x x x
[A] joint venture is a matter of contract. You have to – apart from the legal
requirement, you have to embed into the joint venture contract the obligation of
each of the joint venturer.
THE CHAIRMAN (SEN.
ESCUDERO). So, essentially...
THE SENATE PRESIDENT. Including their voice in the joint venture.
THE CHAIRMAN (SEN.
ESCUDERO). So, essentially nga ho[,] we are bound and doomed to award this
contract to a company majority of which will be owned by individuals or another
company that has no track record to speak of? Kasi yung obligasyon na nating
i-award iyang 60/40 sa Filipino company, we are obligated by law, that’s what
you’re saying, to award it to a company majority of which will be owned by a
company or individuals without any track record whatsoever?
THE CHAIRMAN (REP. LOCSIN). But Senator Enrile, can the Comelec require
a particular joint venture contract that would specify the particular
obligations of the parties and in some cases that obligation would be – would
protect the minority’s integrity in conducting the election?
x x x x
THE CHAIRMAN (SEN.
ESCUDERO). x x x [F]or you to require or impose a requirement saying that the
40 will control the 60 is a circumvention, if at all, of the 60/40 rule as
well.
THE CHAIRMAN (REP. LOCSIN). But would it not be a circumvention, say,
for voting purposes for control of the corporation but not for the purely
technical aspect of conducting an electronic election to protect the integrity
of that undertaking?
THE CHAIRMAN (SEN.
ESCUDERO). Without arguing that point, I may tend to agree with that point but
the fact is, legally the question is how will you be able to overcome it?
THE CHAIRMAN (REP. LOCSIN).
Can you require that in your terms of reference?
MR. MELO. I suppose, Your Honor. You’re the expert
here, Manong Johnny. But in the joint venture, can it not be provided that the
foreign company shall have exclusive say on the technical aspect?
THE SENATE PRESIDENT. Puwede iyon.
MR. MELO. Iyon.
THE SENATE PRESIDENT. You
can insist [on] that.
MR. MELO. Yes.
THE SENATE PRESIDENT. The Comelec can impose that.
MR. MELO. Yes, insofar as the technical aspect is
concerned, it’s only – it’s the foreign company, the supplier of the computers,
of the machines which will have exclusive say. And so the dispersal or the
deployment of the machines will be another matter. (Emphasis supplied.)[78]
The petitioners find particularly repugnant Smartmatic’s
veto power in the Board of Directors in respect of certain key financial and
technical actions. In my view, however, this is but a fair and reasonable check
against possible abuses by the majority stockholder. As Smartmatic is the joint
venture partner having the greater experience in automated elections, it deemed
it necessary to reserve to itself the veto power on these important financial
matters so as not to compromise the technical aspects of the Automation
Project. As far as matters other than
those provided in Article 4.5 are concerned, Smartmatic does not have any veto right. This is clear
from Article 4.4, which provides as follows:
4.4 Resolution on matters
other than those set forth in Article 4.5 below shall be adopted by the vote of
the majority of the Directors present and constituting a quorum, except as
otherwise provided by law.
The same
conclusion may be obtained from the deliberations of the Senate Committee on
Constitutional Amendments, Revision of Codes and Laws. The following exchanges
from their
THE CHAIRMAN. I went through
your JVA and I found some provisions peculiar and interesting. In your JVA[,
it] states that no board resolution shall be passed – in the first place, three
members of the board will belong to TIM, local, two members of the board will
belong to Smartmatic, foreign, so 60-40 naman talaga iyon. My question is,
under your JVA[,] it says no resolution shall be passed unless TIM with three
votes, presumably majority already, can secure the vote of Smartmatic, vice
versa. But vice versa is expected because you only have two votes. If TIM needs
to secure one more vote from you before they can do anything, number one, there
is a potential for a deadlock. Number two, is that not effective control or
veto power over the company that essentially overrides or circumvents the 60-40
requirement?
MR. FLORES. No, sir. That’s a standard practice to
protect minority investors and it only relates to certain key decisions not to
the whole development of the project.
THE CHAIRMAN. Major
decisions?
MR. FLORES. Yes, sir.
THE CHAIRMAN. We discussed
this before[,] Chairman Melo, remember?
MR. MELO. Yes, Your Honor.
Precisely at that time it was the suggestion of the committee, the Oversight
Committee that major decisions or decisions concerning technical matters,
concerning the machines will have to be made by Smartmatic. They cannot be
controlled by the local partner because, otherwise, baka ho hindi naman expert
‘yung local partner sa ano – so we follow that.
x x x x
THE CHAIRMAN. But my
question is, still there is a 60-40 requirement. What if ayaw pumayag ng
Smartmatic? So does the local company have effective control over the joint
venture company? x x x
MR. RAFANAN.[80]
Sir, concerning decisions that will pertain to technical problems or
trouble-shooting problems in the election, we are providing in the contract
that these matters will be entrusted to the foreign corporation which is
Smartmatic International.
THE SENATE PRESIDENT. I assume that this provision in their
agreement, between the joint venturers[,] is a function of trust between them.
I suppose they have just met in this particular venture and so they do not know
each other very well, so the foreign company will naturally protect – want to
protect itself that it will not be ousted from the venture in case of – You
know, you are dealing here with a certain magnitude of financial benefits. So I
suppose that is intended to protect themselves.
x x x x
THE CHAIRMAN. Sir, I’ll give
you an example.
THE SENATE PRESIDENT. As
collectivity ha.
THE CHAIRMAN. This is what
they will on requiring [Smartmatic’s] one vote even if TIM, the local company,
already has three votes. Approval of operating capital expenditures and budgets
for the year; approval of financial statements; election or removal of
corporate officers – [We are] not talking technical here yet. x x x Approval of
financial plans; borrowing, etcetera. Entering into or terminating an agreement
involving technology transfer; delegation of powers to directors, officers and
delegation of powers to committees. x x x
x x x x
THE CHAIRMAN. Financial, appointing of officials.
THE SENATE PRESIDENT. Yes, if they can be removed, if they do not
have that veto power, the 60 percent can kick them out after they get the
contract.
x x x x
THE CHAIRMAN. But wherever
it is coming from...
THE SENATE PRESIDENT. As a lawyer, from my experience, we have
done that before in many cases in order to protect, to be fair, to be equitable
to the people who are coming here for the first time or who are dealing with
people that they do not know very well.[81]
(Emphasis supplied.)
Petitioners also find objectionable Smartmatic’s sole right
to nominate the Treasurer, Corporate Secretary and the Chairman of the Board,
and TIM’s corresponding duty to elect said nominees. However, the objection
conveniently disregards the fact that, to maintain the balance of power, TIM in
turn has the sole right to nominate the President and Chief Executive Officer
and the Assistant Corporate Secretary of the joint venture corporation.[82] Pursuant to Article 4.11 of the JVA,
Smartmatic is in fact obliged to cause its Directors to vote for the officers
chosen by TIM. Moreover, as an added means to protect their respective
interests in the joint venture, Smartmatic and TIM further agreed that for the
validity of the resolutions contained therein, all certifications to be issued
must bear the signatures of both the Corporate Secretary and the Assistant
Corporate Secretary.[83]
In
fine, the provisions assailed by Petitioners are reasonable under the
circumstances and should be upheld as legitimate minority protection devices.
c.6
“Prior Successful Use” qualification
has been
complied with
The petitioners postulate that the
PCOS machines offered by the Smartmatic TIM Corporation have not been
successfully used in an electoral exercise in the
Optical scan or “Marksense”
technology has been used for decades for standardized tests such as the Scholastic
Aptitude Test (SAT).[85] The optical scan ballot is a
paper-based technology that relies on computers in the counting and canvassing
process. Voters make their choices by using a pencil or a pen to mark the
ballot, typically by filling in an oval or by drawing a straight line to
connect two parts of an arrow.[86] The ballots are counted by scanners,
which may be located either at the precinct (in “precinct-count” systems) or at
some central location (“central-count” systems).[87] If ballots are counted at the
polling place, voters put the ballots into the tabulation equipment, which scans
and tallies the votes.[88] These tallies can be captured in
removable storage media, which are transported to a central tally location or are
electronically transmitted from the polling place to the central tally
location.[89] If ballots are centrally counted,
voters drop ballots into sealed boxes; and, after the polls close, election
officials transfer the sealed boxes to the central location where they run the
ballots through the tabulation equipment.[90]
The central-count system (via the
CCOS machines) was used during the 2008 elections in all the provinces of the ARMM
except in Maguindanao. The COMELEC Advisory Council – created by RA 9369 to
recommend to the COMELEC the “appropriate, secure, applicable, and cost-effective
technology” to be used in the automation of elections – deployed various
monitors from the DOST, PPCRV and Consortium on Electoral Reforms to observe
the usability of the technologies used in the ARMM elections as well as to observe
the electoral process in general.[91] The CCOS machines were assessed
before and during the actual elections, and the COMELEC Advisory Council
eventually determined that these machines sufficiently complied with the
minimum systems configuration specified in Section 6 of RA 9369.[92]
In light of this background, the question is whether the central-count
system used in 2008 may be considered as substantial compliance with the “prior
successful use” qualification set forth in Section 12 of RA 8436, as amended.
With due respect, I answer in the
affirmative. It is obvious that the PCOS and CCOS machines are based on the same
optical scan technology. The sole difference is that the PCOS machines dispense
with the physical transportation of the ballots to the designated counting
centers, since the votes will be counted in the precinct itself and the results
electronically transmitted to the municipal, provincial and national Board of
Canvassers. Tellingly, but for their sweeping and convenient conclusion that
“[e]ven if a PCOS [machine] is an OMR [Optical Mark Reader] [machine],
nevertheless[,] it is totally different from a CCOS [machine],” the petitioners
were silent on this point.[93]
In any event, the AES procured by
COMELEC for the 2010 elections has been successfully used in prior electoral
exercises in (i) New Brunswick, Canada; (ii) Ontario, Canada; and (iii) New
York; the United States of America. The petitioners nevertheless question the
certifications submitted to this effect, arguing that these were issued not to
the Smartmatic-TIM joint venture, but to a third party – Dominion Voting
Systems.
I find this argument meritless, for it
foists unto the law an imaginary requirement. As the COMELEC correctly
observed, what the law requires is that the system must have been successfully utilized in a prior electoral
exercise, not that the provider (i.e.,
Smartmatic TIM Corporation) should have been the one that previously used or
employed the system. Considering that the system subject of the certifications
is the same one procured by the COMELEC for the 2010 elections, the prior
successful use requirement has been adequately met. At any rate, the clear
terms of the Licensing Agreement between Smartmatic and Dominion Voting Systems
indicate that the former is the entity licensed exclusively by the latter to
use the system in the
c.7
COMELEC’s determination as
to minimum systems capabilities
of
the PCOS machines must be
respected
This Court is neither constitutionally permitted nor
institutionally outfitted to conduct a cost-benefit analysis of the system or of
the nuances of the available technology. It is ill-equipped
to deal with the complex and difficult problems of election administration.
This inordinately difficult undertaking requires expertise, planning, and the
commitment of resources, all of which are peculiarly within the province of the
legislative and the executive branches of government.
The
petitioners contend that the PCOS machines do not comply with the minimum
system capabilities[94] set forth by Section 6 of RA 8436,
as amended. Then, in an entirely speculative exercise, they conjure a
perturbing series of doomsday scenarios that would allegedly result from using
this particular technology: ‘unaddressed logistical nightmares,’ ‘failure of
elections,’ and ‘massive disenfranchisement.’
Let
me preface my discussion of this issue by accentuating once more the core of RA
8346, as amended: the COMELEC, an independent Constitutional Commission armed
with specialized knowledge born of years of experience in the conduct of
elections, has the sole prerogative to choose which AES to utilize.[95] In carrying out this mandate,
Section 6 of the same law directs the COMELEC to develop and adopt, with the
assistance of the COMELEC Advisory Council, an evaluation system to ascertain
that the minimum system capabilities are met.
The
COMELEC did in fact adopt a rigid technical evaluation system composed of
twenty-six criteria, against which the procured AES was benchmarked by the TWG
to determine its viability and concomitant security.[96] In this regard, the TWG ascertained
that the PCOS machines “PASSED all
tests as required in the 26-item criteria,”[97] as follows:
|
ITEM[98] |
REQUIREMENT |
REMARK /
DESCRIPTION |
|
1 |
Does the system allow
manual feeding of a ballot into the PCOS machine? |
Yes. The proposed PCOS
machine accepted the test ballots which were manually fed one at a time. |
|
2 |
Does the system scan a
ballot sheet at the speed of at least 2.75 inches per second? |
Yes. A 30-inch ballot was used in this test.
Scanning the 30-inch ballot took 2.7 seconds, which translated to 11.11
inches per second. |
|
3 |
Is the system able to
capture and store in an encrypted format the digital images of the ballot for
at least 2,000 ballot sides (1,000 ballots, with back to back printing)? |
Yes. The system captured
the images of 1,000 test ballots in encrypted format. Each of the 1,000 image
files contained the images of the front and back sides of the ballot,
totaling 2,000 ballot sides. To verify the captured
ballot images, decrypted copies of the encrypted files were also provided.
The same were found to be digitalized representations of the ballots cast. |
|
4 |
Is the system a fully
integrated single device as described in item no. 4 of Component 1-B? |
Yes. The proposed PCOS is a
fully integrated single device, with built-in printer and built-in data
communication ports (Ethernet and USB). |
|
5 |
Does the system have a
scanning resolution of at least 200 dpi? |
Yes. A portion of a
filled[-]up marked oval was blown up using image editor software to reveal
the number of dots per inch. The sample image showed 200 dpi. File properties of the
decrypted image file also revealed 200 dpi. |
|
6 |
Does the system scan in
grayscale? |
Yes. 30 shades of gray were
scanned in the test PCOS machine, 20 of which were recognized, exceeding the
required 4-bit/16 levels of gray as specified in Bid Bulletin No. 19. |
|
7 |
Does the system require
authorization and authentication of all operators, such as, but not limited
to, usernames and passwords, with multiple user access levels? |
Yes. The system required
the use of a security key with different sets of passwords/PINs for
Administrator and Operator users. |
|
8 |
Does the system have an
electronic display? |
Yes. The PCOS machine makes
use of an LCD display to show information: ·
if a ballot may
be inserted into the machine; ·
if a ballot is
being processed; ·
if a ballot is
being rejected; ·
on other
instructions and information to the voter/operator. |
|
9 |
Does the system employ
error handling procedures, including, but not limited to, the use of error
prompts and other related instructions? |
Yes. The PCOS showed error
messages on its screen whenever a ballot is rejected by the machine and gives
instructions to the voter on what to do next, or when there was a ballot jam
error. |
|
10 |
Does the system count the
voter’s vote as marked on the ballot with an accuracy rating of at least 99.995
%? |
Yes. Two rounds of tests
were conducted for this test using only valid marks/shades on the ballots.
20,000 marks were required to complete this test, with only one (1) allowable
reading error. 625 ballots with 32 marks
each were used for this test. During the comparison of the PCOS-generated
results with the manually prepared/predetermined results, it was found out
that there were seven (7) marks which were inadvertently missed out during
ballot preparation by the TWG. Although the PCOS-generated results turned out
to be 100% accurate, the 20,000-mark [requirement] was not met thereby
requiring the test to be repeated. To prepare for other
possible missed out marks, 650 ballots (with 20,800 marks) were used for the
next round of test, which also yielded 100% accuracy. |
|
11 |
Does the system detect and
reject fake or spurious, and previously–scanned ballots? |
Yes. This test made use of
one (1) photocopied ballot and one (1) “re-created” ballot. Both were
rejected by the PCOS. The test for the rejection of
previously-scanned (sic) ballots
was done during the end-to-end demonstration. |
|
12 |
Does the system scan both
sides of a ballot and in any orientation in one pass? |
Yes. Four (4) ballots with
valid marks were fed into the PCOS machine in the four (4) portrait
orientations specified in Bid Bulletin No. 4 (either back or front, upside
down or right side up), and all were accurately captured. |
|
13 |
Does the system have
necessary safeguards to determine the authenticity of a ballot, such as, but
not limited to, the use of bar codes, holograms, color shifting ink, micro
printing, to be provided on the ballot, which can be recognized by the
system? |
Yes. The system was able to
recognize if the security features on the ballot are “missing”. Aside from the test on the
fake or spurious ballots (Item No. 11), three (3) test ballots with tampered
bar codes and timing marks were used and were all rejected by the PCOS
machine. The photocopied ballot in
the test for Item No. 11 was not able to replicate the UV ink pattern on the
top portion of the ballot[,] causing the rejection of the ballot. |
|
14 |
Are the names of the
candidates pre-printed on the ballot? |
Yes. Two sample test
ballots of different lengths were provided: one (1) was 14 inches long while
the other was 30 inches long. Both were 8.5 inches wide. The first showed 108
pre-printed candidate names for fourteen (14) contests / positions, including
two (2) survey questions on gender and age group, and a plebiscite question. The other showed 609
pre-printed candidate names, also for fourteen (14) positions, including
three (3) survey questions. |
|
15 |
Does each side of the
ballot sheet accommodate at least 300 names of candidates with a minimum font
size of 10, in addition to other mandatory information required by law? |
Yes. The 30-inch ballot,
which was used to test Item No. 2, contained 309 names for the national
positions and 300 names for local positions. The total pre-printed names on
the ballot totaled 609. This type of test ballot
was also used for test voting by the public, including members of the media. Arial Narrow, font size 10,
was used in the printing of the candidate names. |
|
16 |
Does the system recognize
full shade marks on the appropriate space on the ballot opposite the name of
the candidate to be voted for? |
Yes. The ballots used for
the accuracy test (Item No. 10), which made use of full shade marks, were
also used in this test and were accurately recognized by the PCOS machine. |
|
17 |
Does the system recognize
partial shade marks on the appropriate space on the ballot opposite the name
of the candidate to be voted for? |
Yes. Four (4) test ballots
were used with one (1) mark each per ballot showing the following pencil
marks: ·
top half shade; ·
bottom half
shade; ·
left half
shade; and ·
right half
shade[.] These partial shade marks
were all recognized by the PCOS machine. |
|
18 |
Does the system recognize
check marks on the appropriate space on the ballot opposite the name of the
candidate to be voted for? |
Yes. One (1) test ballot
with one check mark, using a pencil, was used for this test. The mark was
recognized successfully. |
|
19 |
Does the system recognize x
marks on the appropriate space on the ballot opposite the name of the
candidate to be voted for? |
Yes. One (1) yes ballot
with one x mark, using a pencil, was used for this test. The mark was
recognized successfully. |
|
20 |
Does the system recognize
both pencil and ink marks on the ballot? |
Yes. The 1000 ballots used
in the accuracy test (Item No. 10) were marked using the proposed marking pen
by the bidder. A separate ballot with one
(1) pencil mark was also tested. This mark was also recognized by the PCOS
machine. Moreover, the tests for Items No. 17, 18 and 19 were made using
pencil marks on the ballots. |
|
21 |
In a simulation of a system
shut down, does the system have error recovery features? |
Yes. Five (5) ballots were
used in this test. The power cord was pulled from the PCOS while the 3rd
ballot was in the middle of the scanning procedure, such that it was left
“hanging” in the ballot reader. After resumption of the
regular power supply, the PCOS machine was able to restart successfully with
notification to the operator that there were two (2) ballots already cast in
the machine. The “hanging” 3rd ballot was returned to the operator
and was able to be re-fed into the PCOS machine. The marks on all five (5)
were all accurately recognized. |
|
22 |
Does the system have
transmission and consolidation/canvassing capabilities? |
Yes. The PCOS was able to
transmit to the CCS during the end-to-end demonstration using [a] Globe prepaid
[i]nternet kit. |
|
23 |
Does the system generate a
backup copy of the generated reports, in a removable data storage device? |
Yes. The PCOS saves a
backup copy of the ERs, ballot images, statistical report and audit log into
a Compact Flash (CF) card. |
|
24 |
Does the system have
alternative power sources, which will enable it to fully operate for at least
12 hours? |
Yes. A 12-volt 18AH battery
lead acid was used in this test. The initial test had to be
repeated due to a short circuit, after seven (7) hours from start-up without
ballot scanning. This was explained by TIM-Smartmatic to be (sic) caused by non-computable wiring
of the battery to the PCOS. A smaller wire than what is required was
inadvertently used, likening the situation to incorrect wiring of a car
battery. Two (2) COMELEC electricians were called to confirm TIM-Smartmatic’s
explanation. The PCOS machine was
connected to regular power and started up successfully. The following day, the
“re-test” was completed in 12 hours and 40 minutes, starting from the
initialization to the printing of the reports. 984 ballots were fed into the
machine. The ER, as generated by the PCOS[,] was compared with the
predetermined result, showing 100% accuracy. |
|
25 |
Is the system capable of
generating and printing reports? |
Yes. The PCOS prints
reports via its built-in printer[,] which [reports] include: 1. Initialization Report 2. Election Returns (ER) 3. PCOS Statistical Report 4. Audit Log |
|
26 |
Did the bidder successfully
demonstrate |
Yes. An end-to-end
demonstration of all proposed systems was presented, covering: ·
importing of
election data into the ·
creation of
election configuration data for the PCOS and the CCS using ·
creation of
ballot faces using ·
configuring the
PCOS and the CCS using the EMS-generated election configuration file; ·
initialization,
operation, generation of reports and backup using the PCOS; ·
electronic
transmission of results ... : o
from the PCOS
to city/municipal CCS and to the central server; o
from the
city/municipal CCS to the provincial CCS; o
from the
provincial CCS to the national CCS; ·
receipt and
canvass of transmitted results: o
by the
city/municipal CCS from the PCOS; o
by the
provincial CCS from the city/municipal CCS; o
by the national
CCS from the provincial CCS; ·
receipt of
transmitted results by the central server from the PCOS |
We cannot close our eyes to the fact that the TWG’s
technical evaluation of the AES was corroborated by knowledgeable and impartial
third parties: the law-mandated Official Observers. In their respective reports
to the COMELEC, the PPCRV and the Office of the Ombudsman found the system
procured and the attendant COMELEC proceedings to be consistent, transparent,
and in consonance with the relevant laws, jurisprudence and the terms of
reference.[99]
Accordingly,
I do not find any grave abuse of discretion on the part of the COMELEC in
awarding the Automation Contract to the Smartmatic TIM Corporation. It has
approved the PCOS system, and we are bereft of the right to supplant its
judgment. Hoary is the principle that the courts will not interfere in matters that
are addressed to the sound discretion of government agencies entrusted with the
regulation of activities coming under their special technical knowledge and
training.[100] Our disquisition in the seminal case
Sumulong v. COMELEC[101] again finds cogent application:
The Commission on Elections
is a constitutional body. It is intended to play a distinct and important part
in our scheme of government. In the discharge of its functions, it should not
be hampered with restrictions that would be fully warranted in the case of a
less responsible organization. The
Commission may err, so this court may also. It should be allowed considerable
latitude in devising means and methods that will insure the accomplishment of
the greater objective for which it was created – free, orderly and honest
elections. We may not fully agree with its choice of means but unless these are
clearly illegal or constitute gross abuse of discretion, this court should not
interfere. Politics is a
practical matter, and political questions must be dealt with realistically – not from the standpoint of pure
theory. The Commission on Elections, because of its fact-finding facilities, its
contacts with political strategists, and its knowledge derive from actual
experience in dealing with political controversies, is in a peculiarly
advantageous position to decide complex political questions.
x x x x
There are no ready-made
formulas for solving public problems. Time and experience are necessary to
evolve patterns that will serve the ends of good government. In the matter of
the administration of the laws relative to the conduct of elections, ..., we must not by any excessive zeal take away
from the Commission on Elections the initiative which by constitutional and
legal mandates properly belongs to it.
Due regard to the independent character of the Commission, as ordained
in the Constitution, requires that the
power of this Court to review the acts of that body should, as a general
proposition, be used sparingly, but firmly in appropriate cases. We are not
satisfied that the present suit is one of such cases. (Emphasis supplied.)
As the
ultimate guardian of the Constitution, we have the distinguished but delicate
duty of determining and defining constitutional meaning, divining
constitutional intent, and deciding constitutional disputes.[102]
Nonetheless, this power does not spell judicial superiority (for the
judiciary is co-equal with the other branches) or judicial tyranny (for it is
supposed to be the least dangerous branch).[103] Thus, whenever the Court exercises
its function of checking the excesses of any branch of government, it is also
duty-bound to check itself.[104] The system of divided and
interlocking powers of the branches of government are carefully blended so as
to produce a complex system of checks and balances that preserve the autonomy
of each branch, without which independence can become supremacy.
Petitioners
disparage the technical test and end-to-end demonstration conducted by the
COMELEC for having been done merely for media mileage. This baseless accusation
is easily dismissed by repairing to the presumption of regularity of official
acts. As we ruled in The
Appropriately, the
Constitution invests the COMELEC with broad power to enforce and administer all
laws and regulations relative to the conduct of an election, plebiscite and
other electoral exercises. In the discharge of its legal duties, the COMELEC is
provided by the law with tools, ample wherewithal, and considerable latitude in
adopting means that will ensure the accomplishment of the great objectives for
which it was created — to promote free, orderly and honest elections.[105]
Conceived by the charter as the
effective instrument to preserve the sanctity of popular suffrage, endowed with
independence and all the needed concomitant powers, COMELEC deserves to be
accorded by the Court the greatest measure of presumption of regularity in its
course of action and choice of means in performing its duties, to the end that
it may achieve its designed place in the democratic fabric of our government.[106]
(Emphasis supplied.)
The COMELEC is a constitutional body, mandated to play a
distinct and important role in the governmental scheme. In the performance of
its constitutional duties, it must be given a range of authority and
flexibility, for the art of good government requires cooperation
and harmony among the branches. We may not agree fully with the choices and
decisions that the COMELEC makes, but absent any constitutional assault,
statutory breach or grave abuse of discretion, we should never substitute our
judgment for its own.
c.8
No abdication by the COMELEC
of its duty to enforce election laws
The petitioners assert that the
COMELEC abdicated its constitutional duty to enforce and administer all laws
relative to the conduct of elections, and to decide all questions affecting
elections when it entered into the Automation Contract with Smartmatic TIM
Corporation.
Article
3.3 of the contract for the 2010 Elections Automation Project provides:
Article 3.3 The
PROVIDER shall be liable for all its obligations under this Project, and the
performance of portions thereof by other persons or entities not parties to
this Contract shall not relieve the PROVIDER of said obligations and
concomitant liabilities.
SMARTMATIC, as the joint venture partner with the greater track
record in automated elections, shall be
in charge of the technical aspects of the counting and canvassing software and
hardware, including transmission configuration and system integration.
SMARTMATIC shall also be primarily responsible for preventing and
troubleshooting technical problems that may arise during the election.
The PROVIDER must provide to SMARTMATIC at all times
the support required to perform the above responsibilities. (Emphasis
supplied.)
Petitioners
claim that under this Article 3.3, the COMELEC has surrendered to Smartmatic
the supervision and control of the system to be used for the AES in violation
of section 26 of RA 8436.
The
petitioners also refer to COMELEC Bid Bulletin No. 10,[107] which was made an integral part of
the Automation Contract by virtue of Articles 21.1 and 21.4 of the contract.[108] Bid Bulletin No. 10 provides that
the “digital signature shall be assigned by the winning bidder to all members
of the Board of Election Inspectors (BOI) and the city, municipal, provincial
or district Board of Canvassers (BOC).” Since Smartmatic would have access to
the digital signatures and would
have the authority to assign the access keys to the BEI and BOC, the
petitioners readily conclude that the COMELEC has abdicated its constitutional
mandate to enforce election laws. What the petitioners failed to consider is
that, although the digital signature shall be assigned by the winning bidder,
Bid Bulletin No. 10 further provides that the certificate of authority for the
digital signatures must still be approved by the COMELEC. Thus, the COMELEC retains control over the process of generation and
distribution of the digital signatures.
Abdication
denotes a relinquishment or surrender of authority, which has not been done by
the COMELEC. Part II of the TOR/RFP
provides:
The Commission on Elections (COMELEC), through its
Bids and Awards Committee (BAC), is currently accepting bids for the lease,
with an option to purchase, of an automated election system (AES) that will
meet the following needs:
x x x x
6. A complete solutions provider, and not just a
vendor, which can provide experienced and effective overall nationwide project
management service and total customer support (covering all areas of project
implementation including technical support, training, information campaign
support, civil and electrical works service, warehousing, deployment,
installation and pullout, contingency planning, etc.), under COMELEC supervision and control, to ensure effective and
successful implementation of the Project. (Emphasis supplied.)
The
COMELEC identified the type of technology, specifications and capabilities of
the system to be used in the 2010 elections; and the bidders were required to
submit their bids in accordance with the COMELEC’s stipulations. All the choices made by the winning bidder
were to be subject to approval by the COMELEC, and “the final design and
functionality of the system shall still be subject to [its] final customization
requirements.”[109]
It
is clear that the COMELEC has not abdicated its constitutional and legal
mandate to control and supervise the elections.
Smartmatic and TIM are merely service providers or lessors of goods and
services to the Commission. Indeed,
Article 6.7 of the Automation Contract, provides that “the entire process of
voting, counting, transmission, consolidation and canvassing of votes shall be
conducted by COMELEC’s personnel and officials.”
This
control and supervision by the COMELEC was assured in the
“THE CHAIRMAN. Will you
deputize the workforce of the winning bidder? Or are you going to deputize by
way of additional technological support the students?
MR. TOLENTINO. It would be
the students, Mr. Chairman, whom we will deputize.
With respect to the providers (sic) technical support, we consider them as partners. So, there is
really no need for us to deputize them because the supervision and control over
the counting center would be solely on the part of the Comelec.
THE CHAIRMAN. Pero pwede ho
nilang pakialaman ‘yung makina, hindi po ba? Puwede nilang kalikutin ‘yon,
galawin ‘yon, kasi nga – kung may palpak, di ba?
So they’re employees of Smartmatic without any
counterpart authorization or deputization from Comelec. So, anyone can just
walk in [and] say, “I am an employee of Smartmatic. Something is wrong with the
machine. I’ll check it.”
MR. TOLENTINO. No. It
doesn’t work that way, Mr. Chairman.
First of all, aside from our EO who would be going around
all over the municipality to check on the polling centers, Comelec aside from
our Information Technology Department personnel, would also be going around to
determine the status of the machines on election day.
And I am even sure that the watchers of the political
parties and the candidates will [not] allow anyone to touch a machine if he is
not a member of the Board of Election Inspector (sic).
THE CHAIRMAN. But sir, the
workforce of on-site technicians are not allowed to touch the machines?
Something is wrong with the machine, who is authorized to...
MR. TOLENTINO. Yes, sir.
Only when there is a problem with the machine.
THE CHAIRMAN. Precisely my
point, sir. So, then these people be at least known to Comelec.
MR. TOLENTINO. Yes, Mr.
Chairman. In fact, they’ll be given appropriate identification cards...
THE CHAIRMAN. From Comelec.
MR. TOLENTINO. Yes, Mr.
Chairman.
THE CHAIRMAN. That was my
question, sir. Because you said a while ago, they’re employees only of
Smartmatic and you have BEI, anyway.
So, ... under the
control and supervision din sila ng Comelec.
MR. TOLENTINO. Yes, Mr. Chairman.
THE CHAIRMAN. Yes.”
(Emphasis supplied.)[110]
Finally,
the power and duty of the COMELEC to administer election laws and to have
control and supervision over the automated elections is not incompatible with
the decision to subcontract services that may be better performed by those who
are well-equipped to handle complex technological matters with respect to the
implementation of the AES. The
subcontractor cannot act independently of the COMELEC.
D. Conclusion
We are not unaware of the many
doomsday scenarios peddled by doubting Thomases if the coming May 2010
elections will be fully automated. To
downgrade these scenarios, let it be emphasized that the PCOS System procured
by COMELEC is a paper-based system. It has a provision for system auditability and
a voter-verified paper trail. The official ballots may be compared with their
digital images stored in the memory cards. All actions done on the machine are
stored and can be printed out by the BEI chairperson as an audit log, which
includes time stamps. And in the event of problems arising from non-functioning
PCOS machines, the official ballots cast in the precincts, which have
previously been fed into the locked ballot box, could be used for a manual
recount. With these safeguards, the fear of automation failure should not
overwhelm us.
We have been bedevilled in the past
by elections that are not free, fair and honest. These elections have made a mockery of our
democracy for they frustrated the sovereign right of the people to choose who
ought to rule them. These elections have
also resulted in instability of governments whose legitimacy has been placed in
doubt. All these elections were
conducted manually. For the first time,
we shall be conducting our May 2010 elections through full automation. To be sure, full automation will not
completely cleanse the dirt in our electoral system. But it is a big forward step which can lead
us to the gateway of real democracy where the vote of the people is sacred and
supreme.
Accordingly, I vote to DISMISS the
petition.
REYNATO
S. PUNO
Chief
Justice
[1] constitution, Art. VIII, Sec. 1.
[2] An Act
Authorizing the Commission on Elections to Use an Automated Election System in
the May 11, 1998 National or Local Elections and in Subsequent National and
Local Electoral Exercises, providing funds therefor and for other purposes.
[3] G.R.
No. 159139, January 13, 2004, 419 SCRA 141.
[4] Republic Act No. 9369 (2007), Sec.
6, amending Republic Act No. 8436 (1997), Sec. 5.
[5] Republic Act No. 9369 (2007), Sec.
12.
[6] An Act Appropriating the Sum of Eleven Billion Three
Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00) As
Supplemental Appropriations for an Automated Election System and for Other
Purposes.
[7]
COMELEC Resolution No. 8608, In The Matter Of The Report/Recommendation
Of The Special Bids And Awards Committee Relative To The Award Of The Contract
For The May 10, 2010 Automated Elections, 09
June 2009.
[8] The COMELEC Advisory Council is chaired by Ray
Anthony Roxas-Chua III (from the Commission on Information and Communications
Technology) and its members are Geronimo L. Sy (from the Department of
Education), Fortunato De La Pena (from the Department of Science and
Technology), Manuel C. Ramos, Jr. (from the University of the Philippines),
Renato B. Garcia (from the Philippine Electronics and Telecommunications
Federation, Inc.), Lilia C. Guillermo (from the Chief Information Officers
Forum, Inc.), Ivan John E. Uy (from the Philippine Computer Society), Henrietta
T. De Villa (from the Parish Pastoral Council for Responsible Voting) and Andie
C. Lasala (from the Commission on Electoral Reforms).
[9] The Task Force is composed of Orlando C.
Casimiro, Evelyn Baliton, Rafael Rodriguez Hipolito, Gina Lyn Lucas, Mary
Rawnsle Lopez, Judy Anne Doctor-Escalona, Manolette Eugenio, Mary Antonette
Yalao, Marina Demetrio, Hilario Fabila, Jr. and Marian Candelaria.
[10] Republic Act No. 8436 (1997), Sec. 6.
[11] Republic Act No. 8436 (1997), Sec. 5.
[12] Id.
[13] Id.
[14] Id.
[15] The Joint Congressional Oversight Committee on Automated Election System
was created pursuant to Section 27 of RA 8436, as amended. It was formerly
chaired by Senator Richard Gordon, and now by Senator Francis Escudero. The
former Senate Members are: Senator Juan Ponce Enrile, Senator Edgardo Angara, Senator
Lito Lapid, Senator Loren Legarda, Senator Manuel Roxas II, and Senator M.A.
Consuelo Madrigal. The present Senate members are: Senator Loren Legarda,
Senator M.A. Consuelo Madrigal, Senator Manuel Roxas II, Senator Francis
Pangilinan, Senator Alan Cayetano, and Senator Aquilino Pimentel. The House
Panel is composed of: Representative Teodoro Locsin, Representative Edcel
Lagman, Representative Rufus Rodriguez, Representative Abdullah Dimaporo,
Representative Martin Romualdez, Representative Abigail Binay, and Representative Roman
Gabriel Tecson Romulo.
[16] TSN,
Joint Congressional Oversight Committee on Automated Election System, March 11,
2008, I-2, p. 30.
[17] TSN,
Joint Congressional Oversight Committee on Automated Election System, March 11,
2008, pp. 34-35.
[18] Record of the Senate, Vol. 3, Session No. 23,
September 13, 2006, pp. 133-134.
[19]
[20]
[21]
[22]
[23]
[24] An
Act Appropriating the Sum of Eleven Billion Three Hundred One Million, Seven
Hundred Ninety Thousand Pesos, March 5, 2009.
[25] Deliberations of the House of Representatives, February 4, 2009, pp.
21-22.
[26] Id. at pp. 69-71.
[27] TSN,
Joint Congressional Oversight Committee on Automated Election System Hearing on
September 1, 2008, Part II-2, p. 74.
[28] Id. at Part V-2, p. 104.
[29] TSN, Joint Congressional Oversight Committee
on Automated Election System Hearing on September 9, 2008, Part II-1, pp.
21-23.
[30] Mr. Jose Tolentino is the Executive Director of COMELEC.
[31]
[32] TSN,
Joint Congressional Oversight Committee on Automated Election System Hearing on
March 4, 2009, Part V-2, pp. 117-118.
[33] Senator Edgardo Angara.
[34] TSN,
Hearing of the Senate Committee on Finance, February 2, 2009, Part IV-1, p. 4.
[35] Te v.
[36] Supra note 3.
[37] RA 9369, Section 1 states:
“Section 1. Section 1 of Republic Act No. 8436 is hereby amended to read as follows:
"Section 1. Declaration of Policy –
x x x
The State recognizes the mandate and authority of the Commission to prescribe the adoption and use of the most suitable technology of demonstrated capability taking into account the situation prevailing in the area and the funds available for the purpose."” (Emphasis supplied)
[38]
“Sec. 6. Section 6 of Republic Act No. 8436 is hereby amended to read as follows:
"Sec. 5. Authority to Use an Automated Election System. - To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: x x x" (Emphasis supplied)
[39] Supra note 37.
[40] Mr.
Justice Kapunan’s Concurring Opinion, AKBAYAN
– Youth, et al. v. Commission on Elections, G.R. No. 147066, March 26, 2001,
citing Lansang vs. Garcia, 42 SCRA
448 (1971).
[41] JG Summit Holdings, Inc. v. Court of Appeals, et al., G.R. No.
124293, September 24, 2003.
[42] G.R. No. 75875, 15
December 1989, 180 SCRA 130.
[43] Issued on April 18, 2009.
[44] Issued on April 20, 2009.
[45] The incorporation of a JVC was done pursuant to Article 2 of the Joint Venture Agreement which provides, in relevant part:
“2.1. In the event that COMELEC declares the bid tendered by TIM and SMARTMATIC to be the winning bid for the Automation Project, the parties hereto shall incorporate, or cause to be incorporated, the JVC which shall be names “TIM SMARTMATIC CORPORATION”, or any other name acceptable to the parties which may be allowed by the SEC.
2.2. The JVC shall be the corporate vehicle through which the joint venture of TIM and SMARTMATIC shall be carried out for the purpose set forth in Article 2.3 hereunder. The JVC shall be the entity which shall enter into a contract with the COMELEC for the Automation Project of the 2010 National Elections.
x x x x”
[46] Infra.
[47] Joint Venture Agreement, Chapeau states:
“This Joint Venture Agreement (“the Agreement”)
is made and entered into this 23rd day of April 2009 at Makati City,
Metro Manila by and between:
TOTAL INFORMATION MANAGEMENT CORPORATION,
a corporation duly organized under the laws of the Republic of the Philippines,
with address at 5600 South Superhighway corner Arellano Street, Makati City,
Philippines, represented herein by its President and Chairman of the Board, Mr.
Jose Mari M. Antunez (“TIM”);
–and –
SMARTMATIC INTERNATIONAL CORPORATION, a
corporation organized and existing under the laws of Barbados, with address at
N° 4 Stafford House, Garrison Savannah, St. Michael, Barbados W.I. BB 14038,
and a fully-owned subsidiary of SMARTMATIC INTERNATIONAL HOLDING, B.V., a
corporation duly organized and existing under the laws of [the] Netherlands,
represented herein by its authorized representative, Mr. Juan C. Villa, Jr. (“SMARTMATIC”)
x
x x x” (emphasis in the original)
[48]
[49]
[50]
[51]
[52] The TOR/RFP specifies, in relevant part:
“COMPONENT 3
OVERALL PROJECT MANAGEMENT
x x x x
The scope of the work is to assist
the COMELEC in ensuring the successful implementation of the Project.
The project management services
component of the 2010 National and Local Elections Project shall include:
1. Project management, including team
organization and implementation schedule
2. Physical site design, preparation
and operationalization
3. Quality control and assurance
4. Change management, including voter
education and training
5. Risk management and contingency
planning
6. Configuration management
x x x x
[53] Joint Venture Agreement, supra note 47, Article 4.1.
[54]
[55]
[56]
[57]
[58] Information Technology of the
[59]
[60]
[61] David v. Commission on Elections, et al., G.R. No. 127116,
[62]
[63] Leveriza v. Intermediate Appellate Court,
157 SCRA 282 (1988), citing Sto. Domingo v. de
[64] Id, citing Wil Wilhensen Inc. v.
Baluyot, 83 SCRA 38.
[65] Under Section 23.11.1 of the Implementing Rules and Regulations of RA 9184, the following are qualified to bid in the procurement of goods:
(1) Duly licensed Filipino citizens/proprietorships;
(2) Partnerships
duly organized under the laws of the
(3) Corporations
duly organized under the laws of the
(4) Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a group of two (2) or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular contract, provided that Filipino ownership or interest of the joint venture concerned thereof shall be at least sixty percent (60%); and
(5) Cooperatives duly registered with the Cooperatives Development Authority (CDA).
It must be noted that this enumeration does not appear in the text of RA 9184 itself. However, I will desist from inquiring into whether the Implementing Rules and Regulations unduly enlarged the scope of the law, for this case is not the proper avenue to rule on this issue. It suffices to say that (i) RA 9184 does not impose a mandatory Filipino-Foreign equity ceiling for the procurement of goods, as to bring into application the Anti-Dummy Law in this case, and (ii) the eventual adoption into the TOR/RFP of the text of the IRR was made by COMELEC in the free exercise of its discretion.
[66] Article 4.3 provides:
“4.3 A quorum for a meeting of the
Board of Directors shall require the presence of at least three (3) Directors, Provided, that at least one (1) Director
nominated by each of TIM and SMARTMATIC are present.”
[67] Article 4.5 provides:
“The following acts of the Board of
Directors of the JVC shall require the authorization and approval by the
affirmative vote of at least three (3) Directors, one (1) of whom must be a
Director nominated by TIM and one (1) of whom must be a Director nominated by
Smartmatic:
a) Approval of the operating and capital
expenditures budgets for each fiscal year, including the setting of relevant
policies and guidelines for implementation of the capex program, as well as any
expenditures in excess of the approved capex budget and any deviation from the
policies and guidelines pertinent thereto;
b) Approval of the audited financial
statements;
c) Election or removal of the corporate
officers, and senior officers with a rank of Vice-President or higher, the
terms and conditions of their employment, and the adoption of, or change in,
their compensation package, including per
diems and bonuses;
d) Approval of the financial plan for
each fiscal year, embodying the approved borrowing limits of the Corporation,
as well as any borrowings in excess of said limits;
e) Entering or terminating any
agreement involving technology transfer;
f)
Delegation
of powers and duties to individual directors or officers, and delegation of
powers to committees;
g) Approval of any contract between the
JVC and TIM or SMARTMATIC, involving more than Philippine Pesos: Ten Million
Pesos (PHP10,000,000.00), with the exception of (i) those contracts
contemplated under this Agreement; (ii) those contracts for the purchase,
supply, lease or other kind of contract with respect to equipments (sic) or services to be provided by
SMARTMATIC reflected in the budget approved by the Board of Directors; and
(iii) those contracts for the purchase of raw materials, supplies and spare
parts required by the JVC in the ordinary course of business, Provided always, that the terms and
conditions of such contracts shall be competitive with those being offered by
other suppliers; and
h) Any matter not specified in the
agenda set forth in the notices of the Board meetings.”
[68] Article 4.7 provides:
“4.7 The Board of Directors may
create an EXCOM which shall consist of at least three (3) Directors, two must
be Directors nominated by TIM and another must be a Director nominated by
SMARTMATIC.
A quorum at any meeting of the EXCOM
shall require the presence of a majority of the entire membership of the EXCOM,
Provided, that at least one (1)
Director representing TIM and one (1) [D]irector representing SMARTMATIC are
present.
The EXCOM will have the authority to
pass upon and decide any matter, which may be delegated to it by the Board of
Directors, except the important matters and actions provided in Article 4.5
above and Article 5.3 of this Agreement.
Every decision of at least a
majority of the members of the EXCOM at which there is a quorum present shall
be valid as a corporate act.”
[69] Article 4.10 provides:
“4.10 At all times while this
Agreement is in effect, SMARTMATIC shall have the right to nominate the
following officers:
a. Chairman of the Board;
b. Treasurer; and
c.
Corporate
Secretary.”
[70] Article 4.11 provides:
“4.11 The parties shall cause their
respective Directors to vote the individuals nominated by TIM and SMARTMATIC in
accordance with Articles 4.9 and 4.10 hereof. In case of resignation,
retirement, death or disability of any officer, the party that nominated the
officer whose resignation, retirement, death or disability occasioned the
vacancy shall nominate the individual to fill such vacancy, and the parties
agree to cause its nominee Directors to vote to elect to the position vacated
the individual nominated by the party which nominated the officer who resigned,
retired, died or was disabled from office.”
[71] The relevant portion of the Instructions to Bidders of SBAC Bid Bulletin No. 21 provides:
“(e) The JV
member with a greater track record in automated elections shall be in-charge of
the technical aspects of the counting and canvassing software and hardware,
including transmission configuration and systems integration; x x x”
[72] Section 3.3 of the Automation Contract provides in relevant part:
“x x x x
SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and systems integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the election.
x x
x x”
[73] TSN,
Joint Congressional Oversight Committee on Automated Election System, April 20,
2009, pp. 61-63.
[74]
[75]
[76]
Atty. Ferdinand Rafanan is the Director of the Law Department of the COMELEC.
He is also the Chairman of the COMELEC SBAC.
[77] Supra note 73, p. 71.
[78]
[79] This was supposed to be a hearing of
the Joint Committee on AES, but Representative Locsin (Chair of the House
Panel) was indisposed and was not able to attend. As such, only the Senate
Committee on Constitutional Amendments, Revision of Codes and Laws was
convened, with the understanding that the records of the hearing were to be
reproduced in the Joint Committee on AES.
[80] Mr. Ferdinand Rafanan is the Head of the
COMELEC Legal Department.
[81] TSN,
Senate Committee on Constitutional Amendments, Revision of Codes and Laws, June
23, 2009, pp. 40-45.
[82] Article 4.9 provides:
“4.9 At all times while this Agreement
is in effect, TIM shall have the right to nominate the following officers:
a. President and Chief Executive
Officer; and
b. Assistant Corporate Secretary.”
[83] Joint Venture Agreement, Article 4.12.
[84] Section 12 of RA 8436, as amended, sets forth the prior successful use qualification as follows:
“SEC. 12. Procurement of Equipment
and Materials. — To achieve the purpose of this Act, the Commission is
authorized to procure, in accordance with existing laws, by purchase, lease,
rent or other forms of acquisition, supplies, equipment, materials, software,
facilities and other services, from local or foreign sources free from taxes
and import duties, subject to accounting and auditing rules and regulations. With respect to the May 10, 2010 elections
and succeeding electoral exercises, the system procured must have demonstrated
capability and been successfully used in a prior electoral exercise here or
abroad. Participation in the 2007 pilot exercise shall not be conclusive of
the system's fitness.” (Emphasis supplied)
[85]
Daniel P. Tokaji, The Paperless Chase: Electronic Voting and Democratic Values,
73 Fordham L. Rev. 1711 (2005), citing
Eric A. Fischer, Voting Technologies in the
[86]
[87]
[88] U.S. General Accounting Office, Elections: Elections Voting Offers Opportunities and Presents Challenges (GAO Report No. GAO-04-766T) (2004). Note that the AES procured by COMELEC from Smartmatic TIM Corporation entails the electronic transmission of the tally results from the polling place to the central tally location.
[89]
[90]
[91] COMELEC Advisory Council Post-election Report on the Use of Automated Election System (AES) in the 2008 ARMM Elections Submitted to the Joint Congressional Oversight Committee on Automated Election System and the Commission on Elections (October 2008), at 4.
[92]
[93] As a
point of clarification, the CCOS machines used during the 2008 ARMM elections,
as well as the PCOS machines offered by the Smartmatic TIM Corporation for the
2010 elections, do not use the
Optical Mark Reader (OMR) technology. This is evident from the statements of
COMELEC Executive Director Jose M. Tolentino during the
“MR. TOLENTINO. So there are three technologies recommended by the Advisory Council [for the 2010 elections]. We have the Direct Recording Electronic or the DRE wherein all that the voter has to do is to press a touchpad or a touchscreen. In the ARMM, with – the voters pressed the photograph of the candidate of his choice.
The two other technologies would
be the Precinct Count Optical Scan and Central Count Optical Scan. You’ll note
that the last two are both optical scans, meaning they scan the ballot and they
actually take photographs of the ballot. The
only difference being the precinct count would be at the precinct level while
the central count would be installed or machines installed at the voting
center.
x x x x
MR. TOLENTINO. x x x x
And we also included a small slide on the difference between the optical scan and the OMR. Everybody thinks that OMR and optical scan are one and the same and they are the same only with respect to the use of a paper ballot. However, the optical scan scans the entire ballot while OMR reads marks only. [An] important feature there would be, in an optical scan, the system can take the photograph of the ballot which is actually a second paper trail of the ballot.
THE CHAIRMAN [SEN. ANGARA]. Which one did you test during the…
MR. TOLENTINO. We called it OMR, but actually in the ARMM,
it was already an optical scan.
THE CHAIRMAN. OMR?
MR. TOLENTINO.
Yeah, we called it the OMR but actually the system is already an optical scan.”
(Emphasis supplied.)
[94] The law specifically requires that the AES to be procured by COMELEC must at least have the following functional capabilities:
(a) Adequate security against unauthorized access;
(b) Accuracy in recording and reading of votes as well as in the tabulation, consolidation/canvassing, electronic transmission, and storage of results;
(c) Error recovery in case of non-catastrophic failure of device;
(d) System integrity which ensures physical stability and functioning of the vote recording and counting process;
(e) Provision for voter verified paper audit trail;
(f) System auditability which provides supporting documentation for verifying the correctness of reported election results;
(g) An election management system for preparing ballots and programs for use in the casting and counting of votes and to consolidate, report and display election results in the shortest time possible;
(h) Accessibility to illiterates and disabled voters;
(i) Vote tabulating program for election, referendum or plebiscite;
(j) Accurate ballot counters;
(k) Data retention provision;
(l) Provide for the safekeeping, storing and archiving of physical or paper resource used in the election process;
(m) Utilize or generate official ballots as herein defined;
(n) Provide the voter a system of verification to find out whether or not the machine has registered his choice; and
(o) Configure access control for sensitive system
data and functions.
[95] See Sections 1 and 5 of RA 8436, as
amended.
[96] The TWG was composed of twenty-two
(22) representatives from the COMELEC – Information Technology Department,
COMELEC – Internal Audit Office, the offices of each of the COMELEC
Commissioners, the
[97]
Systems Evaluation Consolidated Report and Status Report on the
Post-Qualification Evaluation Procedures,
[98]
[99] Official Observer’s Report on the
AES Bidding Process by Dr. Arwin A. Serrano of the PPCRV (Annex 10 of Public Respondents’ Memorandum); Observation
Report of the Ombudsman Task Force: “Poll Automation” (Annex 11 of Public Respondents’ Memorandum).
[100] See Espinosa
v. Makalintal, 79 Phil. 134 (1947); Coloso
v. Board of Accountancy, 92 Phil 938 (1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes, G.R. No. L-19828,
[101]
G.R. No. 48609,
[102] Duenas v. House of Representatives Electoral Tribunal, et al., G.R. No. 185401,
[103]
[104]
[105] Citing Cauton v. COMELEC, G.R. No. L-25467,
[106] Citing
Aratuc v. COMELEC, G.R. Nos.
L-49705-09,
[107] Issued by the COMELEC-SBAC on
[108] Article 21- Contract Documents
21.1 “Contract Documents” refers to the following
documents, and they [sic] are hereby incorporated and made integral parts of
this Contract:
x x x x
21.4 This Contract, together with the Contract
Documents, constitutes the entire agreement between the parties. x x x
[109] Request for Proposal, Part IV, item 33.
[110] TSN, Senate Committee on Constitutional
Amendments and Revision of Codes and Laws, June 23, 2009, pp.95-97.