Further Amending The Charter Of The Philippine National Oil Company (PNOC) As Provided For In Presidential Decree No. 334, As Amended, And For Other Purposes

Case Overview and Summary

Summary of Presidential Decree No. 927

Declaration of Policy (Sec. 2):
- Promote industrial and economic development through effective utilization of energy.
- Assure adequate supply of oil, petroleum products, power, and energy.

Creation, Name, Domicile, and Term (Sec. 3):
- Creates the Philippine National Oil Company (PNOC) as a corporate body.
- Defines "oil or petroleum operations" and "energy resources exploitation".
- Principal office determined by the Board of Directors.
- Term of 50 years, renewable for another 50 years.

Purposes (Sec. 4):
- Provide and maintain adequate and stable supply of oil and petroleum products. (Sec. 4a)
- Promote exploration, exploitation, and development of local oil, petroleum, and other energy resources. (Sec. 4b)
- Foster conditions conducive to balanced and sustainable economic growth related to oil, petroleum, and energy operations. (Sec. 4c)

Powers and Functions (Sec. 5):
- Undertake exploration, exploitation, and development of all energy resources in the country. (Sec. 5a)
- Establish and maintain petroleum and energy base territories with duty-free ports, airports, telecommunications, power, and water supply. (Sec. 5b)
- Lease portions of the petroleum and energy base to private entities for warehousing, logistical centers, fabrication, repair facilities, and personnel housing. (Sec. 5c)
- Undertake all forms of petroleum or oil operations and energy resources exploitation. (Sec. 5d)
- Enter into contracts, with or without public bidding, for various aspects of oil, petroleum, and energy operations. (Sec. 5e)
- Borrow money from local and foreign sources for operations. (Sec. 5f)
- Invest funds in any activity related to its purposes, including government bonds and securities, and organize subsidiary corporations. (Sec. 5g)
- Purchase, hold, alienate, mortgage, pledge, or dispose of shares and securities of other corporations. (Sec. 5h)
- Hold lands and acquire rights over mineral lands in excess of statutory limits for private entities. (Sec. 5i)
- Engage in export and import business of oil, petroleum, energy, and derivatives. (Sec. 5j)
- Acquire and dispose of assets, real or personal, as necessary for business. (Sec. 5k)
- Establish and maintain communication systems without separate franchise. (Sec. 5l)
- Determine organizational structure, number of officers and employees, and their salaries. (Sec. 5m)
- Establish and maintain offices, branches, agencies, subsidiaries, correspondents, or other units as needed. (Sec. 5n)
- Exercise the right of eminent domain as necessary. (Sec. 5o)
- Enter private lands for geological or geophysical studies related to exploration and exploitation, subject to payment. (Sec. 5p)
- Acquire easements over public and private lands necessary for operations, subject to just compensation. (Sec. 5q)
- Establish and maintain a technical educational system for manpower development. (Sec. 5r)
- Adopt by-laws, corporate seal, and perform other necessary acts for attainment of objectives. (Sec. 5s, 5t, 5u)

Governing Body (Sec. 6):
- Governed by a 9-member Board of Directors appointed by the President of the Philippines for 3-year terms.
- Chairman of the Board and President appointed by the President of the Philippines.
- Other officers appointed by the Board.

Duties and Responsibilities of Chairman and President (Sec. 8):
- Exercise powers and perform duties as provided in the by-laws or vested by the Board.

Auditor (Sec. 11):
- Commission on Audit appoints an Auditor and staff, subject to Board approval.
- Auditors of PNOC-owned or controlled corporations appointed by their respective boards.

Appointment, Control, and Discipline of Personnel (Sec. 12):
- Board appoints officers and employees, fixes compensation, benefits, working hours, and employment conditions.
- Board grants leaves of absence, disciplines and removes personnel for cause.
- Board establishes and maintains recruitment and merit system for PNOC and affiliates.