Police Power Digests (even).docx

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships adversely affected by Republic Act No. 1180, petitioner, vs. JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasuer of Manila, respondent. [G.R. No. L-7995. May 31, 1957.] Issue: W/N the act was approved in violation of the constitutional requirements of due process and equal protection of the laws. If so, is this a legitimate exercise of the police power? Held: It must not be overlooked, in the first place, that the legislature, which is the constitutional repository of police power and exercises the prerogative of determining the policy of the State, is by force of circumstances primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law promulgated in the exercise of the police power, or of the measures adopted to implement the public policy or to achieve public interest. Police power is far-reaching in scope, and it is almost impossible to limit its sweep. It derives its existence from the very existence of the State itself, and does not need to be expressed or defined in its scope. It is said to be co-extensive with self protection and survival, and as such it is the most positive and active of all governmental processes, the most essential, insistent and illimitable. Especially is it so under a modern democratic framework where the demands of society and of nations have multiplied to almost unimaginable proportions; the field and scope of police power has become almost boundless, just as the fields of public interest and public welfare have become almost all-embracing and have transcended human foresight. So it is that Constitutions do not de ne the scope or extent of the police power of the State; what they do is to set forth the limitations thereof. The most important of these are the due process clause and the equal protection clause. The conflict between police power and the guarantees of due process and equal protection of the laws is more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing is the essence, or the indispensable means for the attainment of legitimate aspirations of any democratic society. There can be no absolute power, whoever exercises it, for that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy. So the State can deprive persons of life, liberty or property, provided there is due process of law; and persons may be classified into classes and groups, provided everyone is given the equal protection of the law. The test or standard, as always, is reason. The police power legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and means. And if distinction or classification has been made, there must be a reasonable basis for said distinction. A. Equal Protection of Laws vis-à-vis Police Power

The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the object to which it is directed or by territory within which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such class, and reasonable grounds exist for making a distinction between those who fall within such class and those who do not (2 Cooley, Constitutional Limitations, 824-825). The practices resorted to by aliens in the control of distribution, as already pointed out above, their secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their customers and of the ultimate happiness of the people of the nation of which they are mere guests, which practices, manipulations and disregard do not attend the exercise of the trade by the nationals, show the existence of real and actual, positive and fundamental differences between an alien and a national which fully justify the legislative classification adopted in the retail trade measure. These differences are certainly a valid reason for the State to prefer the national over the alien in the retail trade. We would be doing violence to fact and reality were we to hold that no reason or ground for a legitimate distinction can be found between one and the other. The SC is fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not the product of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and determination of the people, thru their authorized representatives, to free the nation from the economic situation that has unfortunately been saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in the interest of the public, any of the national security itself, and indisputably falls within the scope of police power, thru which and by which the State insures its existence and security and the supreme welfare of its citizens. Broadly speaking, the power of the legislature to make distinctions and classifications among persons is not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of discretion, and a law can be violative of the constitutional limitation only when the classi cation is without reasonable basis. In addition to the authorities we have earlier cited, we can also refer to the case of Lindsley vs. Natural Carbonic Gas Co. (1911), 55 L. ed., 369, which clearly and succinctly de ned the application of equal protection clause to a law sought to be voided as contrary thereto: ". . . '1. The equal protection clause of the Fourteenth Amendment does not take from the state the power to classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in that regard, and

avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. “ The question as to whether or not citizenship is a legal and valid ground for classification has already been affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case of Gibbons vs. Ogden, it was held that, "Aliens are under no special constitutional protection which forbids a classification otherwise justified simply because the limitation of the class falls along the lines of nationality. That would be requiring a higher degree of protection for aliens as a class than for similar classes of American citizens. Broadly speaking, the difference in status between citizens and aliens constitutes a basis for reasonable classification in the exercise of police power." (2 Am. Jur. 468-469.) These limitations on the qualifications of aliens have been shown on many occasions and instances, especially in times of crisis and emergency. We can do no better than borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the distinction between the alien and the national, thus: ". . . It may be judicially known, however, that aliens coming into this country are without the intimate knowledge of our laws, customs, and usages that our own people have. So it is likewise known that certain classes of aliens are of different psychology from our fellow countrymen. Furthermore, it is natural and reasonable to suppose that the foreign born, whose allegiance is first to their own country, and whose ideals of governmental environment and control have been engendered and formed under entirely different regimes and political systems, have not the same inspiration for the public weal, nor are they as well disposed toward the United States, as those who by citizenship, are a part of the government itself. Further enlargement, is unnecessary. I have said enough so that obviously it cannot be affirmed with absolute confidence that the Legislature was without plausible reason for making the classification, and therefore appropriate discrimination against aliens as it relates to the subject of legislation. . . ." The classification in the law of retail traders into nationals and aliens is actual, real and reasonable. All persons of one class are treated alike, and it cannot be said that the classification is patently unreasonable and unfounded. Hence, it is the duty of this Court to declare that the legislature acted within its legitimate prerogative and it cannot declare that the act transcends the limits of equal protection established by the Constitution. B. Due process vis-à-vis Police power The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power, Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for the accomplishment of the legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there

sufficient foundation or reason in connection with the matter involved; or has there not been a capricious use of the legislative power? Can the aims conceived be achieved by the means used, or is it not merely an unjustified interference with private interest? These are the questions that we ask when the due process test is applied. It has been stated by the highest authority in the United States that: ". . . And the guaranty of due process, as has often been held, demands only that the law shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the subject sought to be attained. . . ." xxx xxx xxx "So far as the requirement of due process is concerned and in the absence of other constitutional restriction a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without authority either to declare such policy, or, when it is declared by the legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial determination to that effect renders a court functus officio. . . ." (Nebbia vs. New York, 78 L. ed. 940, 950, 957.) Another authority states the principle thus: ". . . Too much significance cannot be given to the word 'reasonable' in considering the scope of the police power in a constitutional sense, for the test used to determine the constitutionality of the means employed by the legislature is to inquire whether the restrictions it imposes on rights secured to individuals by the Bill of Rights are unreasonable, and not whether it imposes any restrictions on such rights. . . ." In Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, xes this test of constitutionality: "In determining whether a given act of the Legislature, passed in the exercise of the police power to regulate the operation of a business, is or is not constitutional, one of the first questions to be considered by the court is whether the power as exercised has a sufficient foundation in reason in connection with the matter involved, or is an arbitrary, oppressive, and capricious use of that power, without substantial relation to the health, safety, morals, comfort, and general welfare of the public." The framers of the Constitution could not have intended to impose the constitutional restrictions of due process on the attainment of such a noble motive as freedom from economic control and domination, thru the exercise of the police power. The fathers of the Constitution must have given to the legislature full authority and power to enact legislation that would promote the supreme happiness of the people, their freedom and liberty. It would do well to refer to the nationalistic

tendency manifested in various provisions of the Constitution. Thus in the preamble, a principal objective is the conservation of the patrimony of the nation and as corollary thereto the provision limiting to citizens of the Philippines the exploitation, development and utilization of its natural resources. And in Section 8 of Article XIV, it is provided that "no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines." The nationalization of the retail trade is only a continuance of the nationalistic protective policy laid down as a primary objective of the Constitution. The Legislature is primarily the judge of the necessity of an enactment or of any of its provisions, and every presumption is in favor of its validity, and though the Court may hold views inconsistent with the wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative power. Furthermore, the test of the validity of a law attacked as a violation of due process, is not its reasonableness, but its unreasonableness, and we nd the provisions are not unreasonable. The law in question is deemed absolutely necessary to bring about the desired legislative objective, i.e., to free the national economy from alien control and dominance. It is not necessarily unreasonable because it affects private rights and privileges (II Am. Jur., pp. 1080- 1081). The test of reasonableness of a law is the appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose into effect. Judged by this test, the disputed legislation, which is not merely reasonable but actually necessary, must be considered not to have infringed the constitutional limitation of reasonableness. A cursory study of the provisions of the law immediately reveals how tolerant and reasonable the Legislature has been. The law is made prospective and recognizes the right and privilege of those already engaged in the occupation to continue therein during the rest of their lives; and similar recognition of the right to continue is accorded associations of aliens. The right or privilege is denied only to persons upon conviction of certain offenses. C. Conclusion Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real actual threat and danger to national economy posed by alien dominance and control of the retail business and free citizens and country from such dominance and control; that the enactment clearly falls within the scope of the police power of the State, thru which and by which it protects its own personality and insures its security and future; that the law does not violate the equal protection clause of the Constitution because suf cient grounds exist for the distinction between alien and citizen in the exercise of the occupation regulated, nor the due process of law clause, because the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation and reasonably protects their privilege; that the wisdom and ef cacy of the law to carry out its objectives

appear to us to be plainly evident — as a matter of fact it seems not only appropriate but actually necessary — and that in any case such matter falls within the prerogative of the Legislature, with whose power and discretion the Judicial department of the Government may not interfere; that the provisions of the law are clearly embraced in the title, and this suffers from no duplicity and has not misled the legislators or the segment of the population affected; and that it cannot be said to be void for supposed con ict with treaty obligations because no treaty has actually been entered into on the subject and the police power may not be curtailed or surrendered by any treaty or any other conventional agreement. The petition is hereby denied, with costs against petitioner. Paras, C.J., Bengzon, Reyes A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur. Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No. 78742, 79310, 79744, 79777, [July 14, 1989], 256 PHIL 777-827. J. CRUZ Issue: Whether or not the taking of property under the said laws is a valid exercise of police power or of the power of eminent domain. Held: There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain. Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with the latter being used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a police purpose has long been accepted Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale

may be agreed upon by the parties. It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law. But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation. The requirement for public use has already been settled for us by the Constitution itself. No less than the 1987 Charter calls for agrarian reform, the purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State adopt the necessary measures "to encourage and undertake the just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they till." The second, Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private lands under the police power. As held in Republic of the Philippines v. Castellvi, there is compensable taking when the following conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government. Issue: W/N the mode of compensation under the CARP Law is unconstitutional? The contention of the petitioners in G.R. No. 79777 is that the mode of payment and compensation is unconstitutional insofar as it requires the owners of the expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed.

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation. The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority project of the government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they also intended that the just compensation would have to be paid not in the orthodox way but a less conventional if more practical method. There can be no doubt that they were aware of the financial limitations of the government and had no illusions that there would be enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers. We may therefore assume that their intention was to allow such manner of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed of the entire amount of the just compensation, with other things of value. Issue: W/N there is denial of equal protection clause? Held: Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class. Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed.33 The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights. It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as

distinguished from those of a particular class require the interference of the State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have been laid down by the Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined is the validity of the method employed to achieve the constitutional goal. Issue: W/N the assailed measures violate due process by arbitrarily transferring title before the land is fully paid. Held: The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. 57 No outright change of ownership is contemplated either. Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected. WHEREFORE, the Court holds R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional objections raised in the herein petitions. [G.R. No. 89572. December 21, 1989.] DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS) an DIRECTOR OF CENTER FOR EDUCATIONAL MEASUREMENT, petitioners, vs. ROBERTO REY C. SAN DIEGO and JUDGE TERESITA DIZON- CAPULONG, in her capacity as Presiding Judge of the Regional Trial Court of Valenzuela, Metro Manila, Branch 172, respondents. J. Cruz ISSUE: Whether or not the three flunk rule is a valid exercise of police power. HELD: Yes. The police power is validly exercised if (a) the interests of the public generally, as distinguished from those of a particular class, require the interference of the State, and (b) the means employed are reasonably necessary to the attainment of the object sought to be accomplished and not unduly oppressive upon individuals. The proper exercise of the police power requires the concurrence of a lawful subject and a lawful method. The subject of the challenged regulation is certainly within the ambit of the police power. It is the right and indeed the responsibility of the State to insure that the medical profession is not infiltrated by incompetents to whom patients may unwarily entrust their lives and health. The method employed by the challenged regulation is not irrelevant to the purpose of the law nor is it arbitrary or oppressive. The three- flunk rule is intended to insulate the medical schools and ultimately the medical profession from the intrusion of those not qualified to be doctors. While every person is entitled to aspire to be a

doctor, he does not have a constitutional right to be a doctor. This is true of any other calling in which the public interest is involved; and the closer the link, the longer the bridge to one's ambition. The State has the responsibility to harness its human resources and to see to it that they are not dissipated or, no less worse, not used at all. These resources must be applied in a manner that will best promote the common good while also giving the individual a sense of satisfaction. A person cannot insist on being a physician if he will be a menace to his patients. If one who wants to be a lawyer may prove better as a plumber, he should be so advised and adviced. Of course, he may not be forced to be a plumber, but on the other hand he may not force his entry into the bar. By the same token, a student who has demonstrated promise as a pianist cannot be shunted aside to take a course in nursing, however appropriate this career may be for others. The contention that the challenged rule violates the equal protection clause is not well-taken. A law does not have to operate with equal force on all persons or things to be conformable to Article III, Section 1 of the Constitution. There can be no question that a substantial distinction exists between medical students and other students who are not subjected to the NMAT and the three-flunk rule. The medical profession directly affects the very lives of the people, unlike other careers which, for this reason, do not require more vigilant regulation. The accountant, for example, while belonging to an equally respectable profession, does not hold the same delicate responsibility as that of the physician and so need not be similarly treated. There would be unequal protection if some applicants who have passed the tests are admitted and others who have also quali ed are denied entrance. In other words, what the equal protection requires is equality among equals. The Court feels that it is not enough to simply invoke the right to quality education as a guarantee of the Constitution: one must show that he is entitled to it because of his preparation and promise. The private respondent has failed the NMAT ve times. While his persistence is noteworthy, to say the least, it is certainly misplaced, like a hopeless love. CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON CITY, petitioners, vs. HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal, Quezon City, Branch XVIII; HIMLAYANG PILIPINO, INC., respondents. G.R. No. L-34915. June 24, 1983.] Issue: Whether or not Section 9 of the ordinance in question is a valid exercise of police power. HELD: NOT A VALID EXERCISE OF POLICE POWER. — We now come to the question whether or not Section 9 of the ordinance in question is a valid exercise of police power. The police power of Quezon City is defined in sub-section 00, Sec. 12, Rep. Act 537. Police power is usually exercised in the form of mere regulation or restriction in the use of liberty or property for the promotion of the general welfare. It does not involve the taking or con scation of property with the exception of a few

cases where there is a necessity to con scate private property in order to destroy it for the purpose of protecting the peace and order and of promoting the general welfare as for instance, the con scation of an illegally possessed article, such as opium and rearms. "It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a mere police regulation but an outright con scation. It deprives a person of his private property without due process of law, nay, even without compensation." Police power is defined by Freund as 'the power of promoting the public welfare by restraining and regulating the use of liberty and property' (Quoted in Political Law by Tañada and Carreon, V-II, p. 50). It is usually exerted in order to merely regulate the use and enjoyment of property of the owner. If he is deprived of his property outright, it is not taken for public use but rather to destroy in order to promote the general welfare. In police power, the owner does not recover from the government for injury sustained in consequence thereof. There is no reasonable relation between the setting aside of at least six (6) percent of the total area of all private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals. good order, safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private cemetery to bene t paupers who are charges of the municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries. The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the dead within the center of population of the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177(g) that a sangguniang panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been the law and practice in the past. It continues to the present. As a matter of fact, the petitioners rely solely on the general welfare clause or on implied powers of the municipal corporation, not on any express provision of law as statutory basis of their exercise of power. The clause has always received broad and liberal interpretation but we cannot stretch it to cover this particular taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had incorporated, received necessary licenses and permits, and commenced operating. The sequestration of six percent of the cemetery cannot even be considered as having been impliedly acknowledged by the private respondent when it accepted the permits to commence operations.