Nationalism wins in SEC decision vs Rappler

FILIPINOS have been so accustomed to lawbreakers, especially in the corporate sector, that when government enforces the law we are so pleasantly surprised, but also appreciative of the fact that our regulatory agencies are now showing some courage in going against special interest groups.

Such is the case with the recent decision of the Securities and Exchange Commission (SEC) to order the closure of the news website Rappler for violating the constitutional restriction on foreign ownership of mass media. Article 16, Section 11 of the Philippine Constitution is very clear on this: “The ownership and management of mass media shall be limited to citizens of the Philippines.”

There are no ifs or buts here. Foreign ownership and management of mass media, including online news organization Rappler, is not allowed in the Philippines. According to the SEC, Omidyar Network (a firm of eBay founder Pierre Omidyar) and another US firm North Base Media, had investments in Rappler Inc. through Rappler Holdings Corp., disguised through a scheme called Philippine Depositary Receipts (PDRs).

The documents for the biggest amount of PDRs, held by Omidyar Network, even had a provision that clearly gave it a veto power over Rappler’s corporate decisions.

This violated “constitutional and statutory foreign equity restrictions in mass media,” the SEC concluded after its detailed investigation that took a year, and after Rappler officials’ arguments were heard.

SEC has revoked Rappler’s incorporation papers and declared that Omidyar Network’s purchase of PDRs were fraudulent transactions under the Securities Regulation Code as they granted legal control and financial returns to a foreign entity. It said that the PDRs issued to Omidyar Network gave it sufficient control and power over Rappler, in effect, making it “subservient” to Omidyar Network.

Rappler said that it will fight the SEC ruling in court, and they have every right to do so – this is a free country, legal redress is available to all. But this case is not about press freedom. We have the freest press in the world, too free in my opinion. This is about giving due respect to the laws of our land, and following it to the letter.

Filipinos living abroad boast about how organized and disciplined people are in developed countries in the US and Europe. But this is because there is a strong adherence to, rooted in the fears of penalties when caught, the laws of their adopted country. Here at home, many powerful people have been flaunting the law for decades (including tycoons not paying the proper taxes) and getting away with it.

If you don’t like any law or constitutional provision, ask your legislators to file a bill that will change it or support charter change. But until then these are our laws, including the 1987 Philippine Constitution that was created by during the administration of former President Corazon Aquino, and which specifically banned foreign ownership and management of mass media.

Many countries around the world, including the US, ban foreign media ownership. We remember how Australian Rupert Murdoch was forced to acquire American citizenship when he wanted to acquire Metromedia, a network of television stations (launching eventually, the Fox TV Network) as well as half of 20th Century Fox Film Corp. Under US laws a foreigner may not own a broadcast license.

Mass media have tremendous power to mold and shape public opinion that it is in the state’s interest to regulate them and enforce the law. We should not be naïve about how the media can be used by destabilizers, both local and foreign, in order to bring down the government and grab power for themselves. It was thus disturbing to read that Rappler’s investor, Omidyar Network, was allegedly involved in the 2014 coup in Ukraine that ousted pro-Russia President Viktor Yanukovych. Filipinos cannot allow a similar thing to happen in our country.

The much-admired former Prime Minister of Singapore Lee Kuan Yew had always been critical of the freewheeling ways of the Philippine media, which he said aped the skepticism and cynicism of American media. He said that our local press, which was based on the US model, enjoyed all the freedoms but it failed the Filipino people.

“A partisan press helped Filipino politicians to flood the marketplace of ideas with junk, and confused and befuddled the people so that they could not see what their vital interests were in a developing country,” he said.

Lee, who was able to transform Singapore into a developed FirstWorld country in just a generation, was of the belief that mass media “can create a mood in which people become keen to acquire the knowledge, skills and disciplines of advanced countries. Without these, we can never hope to raise the standards of living of our people.”

I think everything boils down to love of country. Only with a strong nationalist spirit as shown by our Asian neighbors can we break out of the colonial mold that has been keeping us from reaching our full economic and political potential.