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DOE Releases Rules of Procedure for Administrative Cases in the Downstream Oil Industry

On 8 November 2022, the Department of Energy (“DOE”) released Department Circular No. DC2022-11-0033 or the ‘Rules of Procedure for Administrative Cases in the Downstream Oil Industry’ (“DC2022-11-0033”). The rules apply to all pleadings, practice, and procedure before the DOE, or any other proceeding conducted by the DOE on cognizable matters under Batas Pambansa Blg. 33 (Prohibited Acts Inimical to the Public Interest and National Security Involving Petroleum and/or Petroleum Products) (“BP 33”), Republic Act No. 8479 (Downstream Oil Industry Deregulation Act of 1998) (“RA 8479”), Republic Act No. 9367 (Biofuels Act of 2006) (“RA 9367”), Republic Act No. 11592 (LPG Industry Regulation Act) (“RA 11592”), and other relevant laws and regulations in the downstream oil industry.1 Procedures before the DOE shall be summary in nature and the technical rules of evidence shall not be binding.2 

Under DOE DC2022-11-0033, administrative actions against liquified petroleum gas (“LPG”) industry participants and liquid fuels industry participants are initiated by the DOE through the issuance of a Show Cause Order. The LPG industry participant is then given the opportunity to explain in writing why it should not be penalized ten (10) calendar days from receipt of the order. The DOE may conduct a hearing or outright impose a penalty based on the merits of the written explanation and other available evidence.3 

The DOE will have sixty (60) calendar days from issuance of the Show Cause Order to resolve the case, subject to any instances of force majeure or extraneous circumstances that may arise.4 In addition to other administrative penalties, the DOE may also issue a Preventive Suspension Order for the suspension of the operations of the business of the LPG industry participant.5 

Aside from the DOE, any person or group of persons may also file a complaint with the DOE for administrative violations of BP 33, RA 8479, RA 9367, RA 11592, and other administrative issuances of the Downstream Oil Industry.6 The complaint, along with documentary evidence and affidavits of the witnesses may be filed with the DOE Secretary, the Director of the Oil Industry of the Management Bureau of the DOE, or the Director of the DOE Field Offices, in as many copies as there are respondents, including two (2) copies for DOE records. The DOE may summarily dismiss a complaint based on any of the following grounds: 

  1. The complaint is not a violation of Downstream Oil Industry laws, rules, and regulations or under the jurisdiction of the DOE;
  2. The complaint on its face does not allege any offense against or violation of Downstream Oil Industry laws, rules, and regulations;
  3. The respondent establishment being complained of cannot be identified or traced; or
  4. The complaint does not comply with the requirements in DOE DC2022-11-0033.

If, upon evaluation, the DOE finds a violation of Downstream Oil Industry laws, rules, and regulations, a Show Cause Order containing the specific provision of law violated and directing the respondent to submit a written explanation under oath within fifteen (15) days from receipt, shall be issued and served upon the respondent. Should the respondent fail to submit a written explanation, such failure shall be considered waiver by the respondent of its right to be heard. 

No motions for reconsideration shall be entertained by the DOE except when based on palpable or patent errors. A motion for reconsideration shall be made under oath and filed within fifteen (15) calendar days from receipt of the order, resolution, or decision. Only one (1) motion for reconsideration may be filed.

Finally, an appeal to any order, decision, or resolution of a motion for reconsideration by the Director of Legal Services or the authorized representative of the Secretary in case of the Field Offices may be filed within fifteen (15) days upon receipt of a copy thereof by filing a notice of appeal to the Office of the Secretary of the DOE. The appeal shall be resolved within sixty (60) days, otherwise the appealed order, decision, or resolution shall be deemed affirmed. Meanwhile, the order, decision, or resolution of a motion for reconsideration by the Office of the Secretary is appealable within fifteen (15) days after receipt of a copy thereof to the Office of the President. Any order, decision, or resolution not appealed shall become executory fifteen (15) calendar days after the expiration of the period of appeal. 

1 Section 3, DOE DC2022-11-0033.
2 Section 4, DOE DC2022-11-0033.
3 Section 9, DOE DC2022-11-0033.
4 Section 14, DOE DC2022-11-0033.
5 Section 11, DOE DC2022-11-0033.
6 Section 20, DOE DC2022-11-0033.