SEC Adm. Case No. 08-12-268 Anselmo Candado vs. International Mission, Inc.

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SEC Building, EDSA, Greenhills, Mandaluyong City Securities and Exchange Commission Republic of the Philippines Department of Finance

In the Matter of:

ANSELMO CANDADO, Appellant,

versus - SEC En Banc Case No. 08-12-268

(SEC EPD Case No. 12-2994)

MISSION, INC., INTERNATIONAL Appellee. JUSTICE

DECISION

Department ("EPD", for brevity) of the Commission dated 6 August 2012, the dispositive portion of which states as follows: Before the Commission is the assailed Order of the Enforcement and Prosecution

"IN VIEW OF THE FOREGOING, an Order is hereby rendered:

212 of the Revised Penal Code and Batas Pambansa Blg. 39 FOR LACK OF JURISDICTION. Complainant Anselmo Candado is urged to bring the said 1. DISMISSING the complaints filed by Anselmo Candado against International Justice Mission, Inc. for violations of R.A. 3019 viz Articles 210, 211, 211-A and complaints before proper courts of law.

2. DISMISSING the compiaints filed by Anselmo Candado against International Justice Mission, Inc. for violations of Section 6 (L) (2) of P.D. No. 902-A, as amended and paragraphs 7 and 9 of Section 134 of the Corporation Code FOR LACK OF MERIT.

issued a License to Transact Business in the Philippines ("License", for brevity) by the Commission on 22 June 2001 with a specific purpose "to provide Christian ministry that advances the scriptural mandate to help people suffering injustice and oppression. International Justice Mission ("IJM", for brevity) is a foreign corporation and was

operated exclusively for charitable, religious or educational purposes. Its mission is to Commonwealth of Virginia provides that IJM is a nonprofit corporation and shall be Its primary purpose as stated under its Articles of Incorporation issued by the

: SEC Registration No. A200108166.

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provide a Christian ministry that advances the Scriptural mandate to help people suffering injustice and oppression who cannot rely on local authorities for relief. IJM shall records of reported injustice and oppression; and (3) by developing and maintaining an accomplish these purposes by documenting human rights violation through the following: (l) by providing a mechanism, expert investigation and verification services, and independent evaluation and monitoring services; (2) by preparing reports and evidentiary information network.

2012 assailing the Order issued by EPD. The Commission issued an Order dated 17 September 2012 requiring IJM to file its Reply-Memorandum to which it complied on 1 October 2012. Appellant Anselmo Candado filed its Memorandum of Appeal dated 29 August

THE FACTS

National Police based on a report by the IJM that it was engaging in human trafficking CAFE", for brevity) was raided by the Officials of the City of Manila and the Philippine and sex slavery of minors. The next day the City of Manila issued a Closure Order of LA CAFE.3 By way of a brief background, the appellant's business Los Angeles Cafe ("LA

appellant's business, "shutting down" appellant's business by making false statements to the Mayor of Manila and falsifying the signature of former U.S. Secretary of State Colin Complaint with the EPD claiming that IJM should be shut down and be charged Powell in its application for the License. criminally for defrauding the government of taxes, sabotaging "legal businesses" such as On 21 March 2011, the appellant filed an unverified and undated Letter

by EPD on even date denied it conducted a raid and rescue operations which resulted in brevity], Department of Social Welfare and Development ["DSWD", for brevity]. the issuance of the Closure Order of LA. CAFE.IJM, however, stated that it "provides Scripture, namely, to help people suffering injustice and oppression' (as stated in the SEC License)." Furthermore, it achieves this purpose by: (i) informing the authorities the public; (iii) training public justice workers (e.g. Department of Justice ["DOJ", for National Bureau of Investigation ["NBI", for brevity] and Philippine National Police Christian ministry' in the sense that [it provides] a service mandated by Christian about possible crimes so that they can verify facts and take proper action; (ii) educating ["PNP", for brevity]); and (iv) mobilizing intervention for victims by supporting In response to the Letter-Complaint, IJM in a Letter dated 2 March 2012 received

3 Memorandum on Appeal, (Affidavit of Complaint of the appellant) Annex "A"; p. 91-98, Records. 2 Article 3 of the Articles of Incorporation of IJM; p. 134, Records. p. 1-2, Order of EPD; p. 15-16, Records.

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government agencies, when requested, with rescue operations, legal work, psycho-social counseling, and other rehabilitation and reintegration services

revoke or suspend the franchise or registration of IJM upon any ground of law, for serious misrepresentation of what a corporation can do and for violation of Foreign concocted false information regarding the human trafficking and sex slavery of minors, and relayed the same to police authorities. The appellant prayed that the Commission Agents Act" for not registering as a foreign agent.7 On 9 March 2012, the appellant filed an Affidavit of Complaint claiming that IJM

March 2012 praying that the EPD finds probable cause to file a Petition for Revocation of which it is authorized under the License and being unfit to transact business in the Philippines, through the following acts: License to Do Business against the IJM for transacting business outside the purpose for A Supplemental Complaint dated 27 March 2012 was filed by the appellant on 28

1) by projecting to the public as a legal organization that handles the prosecution of cases through the filing of a "Request to Prosecute" with the under its Articles of Incorporation which provides that is operating for "charitable, religious or educational purposes". Office of City Prosecutor of Manila, which is outside the purpose stated

2) by conducting itself as a "human rights agency" without mention of its Christian ministry or Scriptural mandate in the official website of IJM;

3) violating Section 6 of Article II, 1987 Constitution which provides for the to IJM's trafficking of persons mission and conducting an investigation fo lawful authorities, which includes surveillance and evidence gathering as well as prosecution of criminal cases in court; inviolability of the separation of church and state by providing and conducting seminars and training programs to the DOJ and NBI with respect

4) violation of Anti-Graft and Corrupt Practices Act' in relation to Articles 210] officials by conducting seminars and training programs to the above- 211, 211-A and 212 of the Revised Penal Code for bribing government mentioned government agencies, their officials and employees regarding trafficking of persons mission; and

5) Violation of Foreign Agents Act for not registering as a foreign agent.

License is "to provide Christian ministry that advances the scriptural mandate to help In its Answer to the Supplemental Complaint, IJM claims that the purpose in the

: Pars. 7 and 9 of Sec. 134 of the Corporation Code, respectively. 5 Memorandum on Appeal, (Letter of IJM) Annex "B"; p. 89-90, Records. Batas Pambansa Blg. 39 (1979). Memorandum on Appeal, (Letter-Complaint of the appellant) Annex "A"; p. 91-98, Records. Republic Act 3019 (1960).

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people suffering injustice and oppression." IJM denies that this statement delimits the purpose of the business since Section 45 of the Corporation Code includes all powers conferred by the said Code, the Articles of Incorporation and such powers as are Regulations Implementing the Anti-Trafficking in Persons Actio ("IRR", for brevity) requires IJM, a NGO member of Philippine Inter-Agency Council against Trafficking and deliver to appropriate authorities' evidence of suspected human trafficking and assist necessary or incidental to the exercise of the powers so conferred. As such, IJM conducts these trainings to fulfill its mission. Furthermore, IJM states that the Rules and ("IACAT", for brevity), to assist government agencies to give training programs, obtain victims.

that the appellant, as a foreign agent, did not register with DOJ. the appellant reiterates its Prayer mentioned in the Supplemental Complaint. However, the appellant amplifies its argument that IJM violated the Foreign Agents Act by claiming In its Reply to the Answer to the Supplemental Complaint ("Reply", for brevity).

that the seminars, trainings and materials provided by IJM to authorities, judges, government did the following: (i) recognized and aided IJM in its pursuit human trafficking cases; (ii) made the IJM a part of the IACAT; and (iii) entered into prosecutors and other government officials are considered "benefits". In return, the Memorandum of Agreements with IJM. IJM also appears before judges and prosecutors in pursuing human trafficking cases. Lastly, when IJM pursues human trafficking cases with the aid of the government, the former is able to collect donations and grants. Anti-Graft and Corrupt Practices Act and Articles 210, 211, 211-A and 212 of the Revised Penal Code through the bribery of government officials. The appellant claims Moreover, the appellant likewise amplifies its argument that IJM violated the

the allegations of the appellant and praying for the dismissal of the Supplemental Complaint. In its response to the Reply, IJM filed the Sur-Reply dated 4 June 2012 denying

Section 6 (L) (2) of P.D. No. 902-A, as amended and paragraphs 7 and 9 of Section 134 dismissing the complaint that IJM violated the Anti-Graft and Corrupt Practices Act in relation Articles 210, 211, 211-A and 212 of the Revised Penal Code and the Foreign Agents Act for lack of jurisdiction. EPD also dismissed the complaint for violations of of the Corporation Code for lack of merit. An Order dated 6 August 2012 was issued by the EPD, as above stated.

Hence this appeal.

I. Memorandum on Appeal, (Answer of IJM) Annex "D": p. 38-50, Records. 12 Yd., (p. 7-8, Reply of the Appellant) Annex "E; p. 30-37, Records. 10 Republic Act 9208 (2003)

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and Foreign Agents Act were not filed with the Commission to seek adjudication of any criminal liability on the part of the latter. They were filed to show the conduct of IJM Practices Act in relation to Articles 210, 211, 211-A and 212 of the Revised Penal Code, IJM render it unfit to transact business. Lastly, the appellant claims that EPD did not rule whether the acts are considered undue influence and interference in the prosecution.' which amount to violations of Sec. 6, Art. II of the Constitution, Anti-Graft and Corrupt which would render it unfit to transact business in the Philippines under par. 9 of Sec. 134, Corporation Code. Moreover, EPD did not rule on whether the acts committed by On appeal, the appellant claims the citation of the alleged acts committed by IJM

seminars and training programs to government agencies;14 (ii) for not registering as a foreign agent since it does not fall under the exceptions provided under the Foreign Agents Act; 15 and (iii) interfering in the prosecution by pursuing criminal cases.1 which it is authorized under its License and is unfit to transact business in the Philippines for the following reasons: (i) violation of Anti-Graft and Corrupt Practices Act in relation to Articles 210, 211, 211-A and 212 of the Revised Penal Code for conducting and The appellant argues that IJM is transacting business outside the purpose for

basis for appeal. I filed by the Appellant since the latter did not show any ground or any serious error to justify reversal of the Order issued by the EPD. Furthermore, IJM claims that IJM made false statements and blatantly misrepresents the Order of the Commission to concoct a In response, IJM asks that the Commission dismiss the Memorandum on Appeal

in gross violation of the license granted by the Commission and there was an alleged Banc grants the said Motion and set the case for oral arguments.1 violation of the rights of Filipinos. Thus, the appellant prays that the Commission En requesting the said case be set for oral arguments since there was an alleged violation by the constitutional and statutory provisions which render the appellant unfit to transact business, the Commission cannot allow a foreign corporation such as the appellee to act On 30 October 2012, the appellant filed a Motion to Set Case for Oral Arguments

THE ISSUE

revocation of said License under pars. 7 and 9 of Sec. 134, Corporation Code, IJM are transacted outside the purpose for which it is authorized under its License and renders it unfit to transact business in the Philippines, which would constitute grounds for respectively. The main issue to resolve is whether the above-stated alleged acts committed by

13 Id.: p. 112, Records. I4 Id; p. 109, Records. Is Id; p. 102, Records. I Ia.; p. 102, Records. 8 p. 1-2, Motion to Set Case for Oral Arguments; p. 170-172, Records. p. 1, Reply Memorandum; p. 165, Records.

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THE RULING

arguments as requested in the Motion by the appellant. the Commission En Banc may set the case for oral arguments upon motion and for arguments. Sec. 11-7 of Rule XI, Rules of Procedure of the Commission provides that special reason. The Commission does not see any special reason to set the case for oral Before we begin, the appellant prays in the Motion that a hearing be set for oral

business in the Philippines may be revoked or suspended by the Commission which includes the following grounds: (i) transacting business in the Philippines outside of the purpose or purposes for which such corporation is authorized under its license; and (ii) any other ground as would render it unfit to transact business in the Philippines. As for the main issue in this case, the license of a foreign corporation to transact

discretion to the Commission. If the violation committed by the foreign corporation is that it is axiomatic that all available remedies should be exhausted before imposing upon a corporation the harsh penalty of extinguishing its corporate existence.21 Forfeiture of a not too grave, the penalty of suspension may be sufficient.20 corporation's charter will not be decreed unless no other remedy is available under law. With respect to the second ground, it is a "catch all" provision and gives wide However, it must be noted

if unsupported with evidence. As correctly pointed out by the EPD, what the appellant act of IJM in allegedly providing and conducting seminars and training programs to the investigation, a surveillance and evidence gathering for lawful authorities as well as the prosecution of criminal cases in court, constitutes a grave or serious violation as to render it unfit to transact business. The same, likewise, applies in the cases of the alleged to be considered a wrong or misconduct on the part IJM. IJM should be lauded and praised for their efforts in fighting human trafficking. Thus, a foreign corporation that be "unfit" to transact business in the Philippines. DOJ and the NBI with respect to IJM's trafficking of persons mission, and conducting an violations of the Foreign Agents Act and interference in the prosecution by pursuing provided were mere assumptions and bare allegations that even in administrative cases. supports government agencies in the fight against human trafficking cannot be deemed to criminal cases. The Commission cannot rely on the assertions of the appellant especially such as this, should not be countenanced.23 In fact, such alleged acts cannot be deemed In this case, the appellant has not sufficiently convinced the Commission that the

mentioned acts are transacted outside the purpose for which IJM is authorized under its With respect to the first ground, in the determination of whether or not the above-

21 Decision dated 11 March 2010 in SEC Case No. 02-09-260 (Kabalikat Civicom Assn., Inc. v. Kabalikat +9 Pars. 7 and 9 of Section 134, Corporation Code. 20 Campos and Lopez Campos, Corporation Code, Comments, Notes and Selected Cases, p. 1028 (1981). 23 p. 15, Order of EPD; p. 3, Records. 22 Id. Civic Communicators Network of Bicol, Inc.).

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people suffering injustice and oppression"), we apply the following rules and principles: License (ie. "to provide Christian ministry that advances the scriptural mandate to help

Statutes, contracts and other written instruments (7A Fletcher, Sec. 3640).24 "The rules governing the construction of charters of corporations are, for the most part, the same as those which govern the construction and interpretation of

business is either expressly or impliedly conferred thereby, it does not exist. sec. 743)2s "In the determination of what business may be carried on by a corporation, reference must be had to its charter, and unless the power to carry on a particular (Chiwacla Line v. Disnukes, 87 Ala. 344, 650, 122, 5 LRA 100, cited in Am Jur.

transacted within the purpose for which it is authorized under, and are covered by the scope and coverage of, its License. Moreover, the above-mentioned acts are necessary to ministry that advances the scriptural mandate to help people suffering injustice and oppression". and implied from the nature of the activity it is engaged in - ie. "to provide Christiar. Based on the foregoing, it appears that the above-mentioned acts of IJM are

is required under the IRR to assist government agencies by giving training programs, trafficking, and assisting in preventing trafficking and assisting its victims.26 provides that any person who has knowledge of facts that give rise to a reasonable belief that a person has been trafficked shall immediately report the same to the appropriate trafficking to the appropriate authorities. Moreover, IJM, as a NGO member of IACAT. obtaining and delivering to appropriate authorities of evidence of suspected human authorities. Clearly, Section 22 expressly allows IJM to report any instance of human Additionally, Section 22 of the IRR of the Anti-Trafficking in Persons Act 6 In this case.

24 SEC Letter dated 10 September 1992, addressed to Chemical Industrials of the Philippines, Inc. 25 SEC Letter dated i1 December 1989, addressed to Atty. Milnar T. Lammawin, Omengan Construction & 26 Sec. 20 of IRR of the Anti-Trafficking in Persons Act provides: Development Corporation.

Council. The NGO members of the Council shall have the following roles and responsibilities: "Sec. 20. Roles and Responsibilities of Non-Governm: t Organizations which are Members of the

(a) Assist government agencies in formulating and implementing policies, programs and IEC campaign (b) Assist in capability-building activities of government personnel and share their experiences and (d) Undertake programs and_activities for the prevention, rescue, recovery and reintegration_of the (g) Formulate educational module to address the demand side of trafficking; and (c) Coordinate with concerned government agencies.LGUs and other NGOs_in reporting alleged (e) Document and/or assist in the documentation of cases of trafficking; f Disseminate guidelines to all its network members, local and international, on policies and programs victims of trafficking and other support services for their families; addressing issues on trafficking in persons; perpetrators, rescuing victims of trafficking, and conducting investigation/surveillance, if indicated: against trafficking: expertise in handling trafficking cases;

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at LA CAFE, and provide training programs and seminars as part of capability-building activities an NGO partner contributes to the IACAT IJM did not act outside the purpose authorized under its License since the IRR expressly allows it to report any instance of human trafficking such as what it reported as occurring

lack of merit. The Motion to Set Case for Oral Arguments is likewise hereby DENIED. WHEREFORE, premises considered, the instant appeal is hereby DENIED for

SO ORDERED.

Mandaluyong City, Philippines; 06 June 2013.

TERESITA J. HERBOSA* Chairperson

M ITAH EI/ADIQ M. JAL. mmissioner sone

M A MANUEL HUBERTO B. GAITE Commissioner ANTONIETA F. IBE Commissioner

* On Official Travel

(h) Perform such other tasks as may be agreed upon by the Council." (Emphasis ours)