DOJ rules international airfreight not subject to nationality requirement
November 11, 2004
The Department of Justice has ruled that an international airfreight forwarding company need not comply with the sixty percent nationality requirement for the operation of a public utility if it is not operating or conducting its business in the country pursuant to the R.A. 776 otherwise known as The Civil Aeronautics Act of the Philippines.
In a five-page legal opinion, Justice Secretary Raul Gonzalez clarified the conflicting opinions given by the DOJ on the different occasions to settle the issue.
“In view of the great significance of foreign air-cargo operations in attracting investment, creating jobs and spurring economic growth, “ Gonzalez said, “there is a need to issue a definitive opinion consistent with the Constitution.”
He further stated that this is to ensure uniformity in the application of laws and regulations to all stakeholders in the field of international air transportation particularly in the field of international airfreight forwarding.
Gonzalez made this opinion pursuant to President Macapagal-Arroyo’s ten-point agenda where it mentioned that there is a need to develop a business hub outside of Metro Manila particularly the Subic-Clark area. The President aims to make it the most competitive international service and logistics center in the Southeast Asian Region.
Several international airfreight companies like the Federal Express, United Parcel Service and DHL are operating as indirect air carriers with expansions at Clark and Subic.
The Justice Secretary has overturned an earlier opinion issued on 25 May 2004 declaring that the national requirement stated in the 1987 Constitution applies to international airfreight forwarders. Their nature as domestic air carriers, will serve all those who wish to avail of their services and are, therefore, public utilities and should therefore comply with the constitutional and statutory provisions.
In justifying his opinion, Gonzalez cited an earlier opinion dated September 11, 1946 that the nationality requirement applies only to domestic air commerce and/or air transportation, and does not apply to international air freight forwarders.
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