The Argentine Supreme Court Held That the Rules of Access to Public Information Is Applicable to YPF

On November 10, 2015, in re: “Giustiniani, Rubén Héctor c/ Y.P.F. S.A.”, the Argentine Supreme Court of Justice (the “Supreme Court”) granted an amparo action (a summary proceeding aimed at guaranteeing constitutional rights) filed by the Federal Senator for the Province of Santa Fe, Rubén Héctor Giustiniani, against Y.P.F. S.A. (“YPF”) to obtain from YPF the full copy of the investment project agreement which such company entered into with Chevron Corporation (“Chevron”) for the joint exploitation of unconventional hydrocarbons in the Province of Neuquén. YPF had informed the investors certain general terms of the agreement to comply with Argentine Securities Commission regulations, but it had not disclosed all the terms and conditions of the transaction.

The main issue considered by the Supreme Court was to determine if the provisions of Decree No. 1172/2003 which regulates the access to public information were applicable to YPF, to ultimately decide if YPF was obliged to provide information under the terms of such regulations.

In the decision, three of the four Justices who currently comprise the Supreme Court, ruled that “(…) YPF S.A. operates under the jurisdiction of the Argentine Executive Branch” and, consequently, “is one of the entities that, being under the jurisdiction of the Argentine Executive Branch, is obliged to comply with the provisions of decree 1172/03 for public information matters”.

1. Background and precedents

The “Giustiniani” ruling is grounded on the text of the American Declaration of the Rights and Duties of Man, the American Convention on Human Rights, and the International Covenant on Civil and Political Rights, since they grant the right to seek and receive information, as well as decisions issued within the General Assembly of the United Nations, reports of the Inter-American Commission on Human Rights, judgements of the Inter-American Court on Human Rights and precedents of the Supreme Court.

Among its precedents, the Supreme Court mentioned its decision of December 4, 2012 issued in the case “Asociación de Derechos Civiles”. In such precedent, the Supreme Court granted the claim filed by an NGO against a public entity that is not owned by the Federal Government, the Argentine Institute of Social Services for Retired and Pensioned (Instituto Nacional de Servicios Sociales para Jubilados y Pensionados or “PAMI”), to obtain access to information related to budget allocations to fund official advertising. In the “Asociación de Derechos Civiles” case, the Supreme Court grounded its decision directly on the international and constitutional provisions that grant access to public information and the public disclosure of government activity, as well as on the Rules of Access to Public Information approved by Annex VII of Decree No. 1172/2003 (the “Rules”). Regarding the applicability of the Rules to PAMI, the Supreme Court specially considered the public nature of the activities that PAMI carries out, rather than the legal status of such entity.

2. The “particular legal status” of YPF

The Rules provide that they are applicable “within the scope of organisms, entities, companies, corporations, agencies and any other entity which operates under the jurisdiction of the Argentine Executive Branch”.

The Supreme Court ruled that YPF was obliged to comply with the Rules given that it operates under the jurisdiction of the Argentine Executive Branch.

To reach such conclusion, the Supreme Court considered the particular legal status of YPF derived from the control of the Executive Branch over YPF, highlighting the role that the Executive Branch plays in its operations. As provided by the Supreme Court, said control consists in the capacity of the Executive Branch to determine substantially all matters which require the approval of the majority of shareholders, including the appointment of most members of the board of directors and the direction of the company’s operations. The Supreme Court specified that such control is evidenced by: (a) the expropriation of 51% of its capital stock; (b) the exercise by the Executive Branch of the voting rights over the expropriated shares; (c) the prior temporary intervention of the company ordered by the Executive Branch, and the appointment of its intervenor; (d) the appointment of the General Manager of YPF by the Executive Branch; and (e) the appointment of the then Vice Minister of Economy as director of YPF.

The Supreme Court also considered that in the Decree No. 1189/2012 -which regulates the supply by YPF of gasoline and lubricants for the fleet of official cars, ships and planes- it is mentioned that YPF is part of the national public sector.

The Supreme Court pointed out the provision set out in section 15 of Law No. 26,741, which specifies that administrative legislation or regulations governing the administration, management and control of companies or entities in which the Federal or provincial states have participation are not applicable to YPF. The ruling holds that there would not be legal conflict in this case provided that such section of Law No. 26,741 exempts YPF of the internal and external control that several agencies of the Federal State may carry out, whereas the Rules provide for the access to public information which could be claimed by any citizen. Therefore, the Supreme Court considered that “it does not seem possible to extend the scope of a provision clearly aimed to the economic and operative efficiency of the defendant to the extreme of exempting it completely from the obligations to grant and respect the right to access information which is protected constitutionally and conventionally”.

3. The role of public interest

In the “Giustiniani” case, the Supreme Court emphasized that even when the entity from which the information is requested is neither a public nor a state agency, such entity is obliged to disclose the requested information if the interests that it manages and carries out are public.

In addition to the qualification as an entity subject to the jurisdiction of the Executive Branch, the decision of the Supreme Court was based on the fact that section 1 of Law No. 26,741 declared of public interest for the Federal Government to achieve self-sufficiency in hydrocarbons’ supply, as well as the exploration, exploitation, industrialization, transport and commercialization of hydrocarbons. The decision also mentioned Decree No. 530/2012 as far as it underlines the role of YPF in the supply of gasoline and its significance for the purposes of granting economic development with inclusion.

However, it is arguable that solely for the fact of performing hydrocarbon activities and being holders of hydrocarbon concessions on its own would lead to the conclusion that oil and gas companies act with state capacity or that they carry out public functions. There are reasonable arguments to hold that carrying out an activity of public interest should not be regarded at the same level as carrying out a public service.

Consequently, it is our understanding that even when it was not expressly mentioned in the “Giustiniani” judgement, the special role granted to YPF under section 16(a) of Law No. 26,741 (“strategic contribution of YPF to the achievement of the goals of this [law]”) had a special importance in the decision. We understand that section 11 of the Hydrocarbons Law which provides that state companies are essential components to achieve self-sufficiency also had an impact in the ruling.

These reasons would be sufficient to establish a difference between the situation of YPF and the situation of other oil private companies which are not controlled by the Federal State.

4. The exceptions to the obligation to provide information

When considering the exceptions to the obligation to provide the requested information when there are trade, technical or scientific secrets, as provided in several laws, the Supreme Court determined that the evidence requirements were not met in this case.  The defendant did not show detailed evidence of the damage the disclosure of the information would cause, and therefore did not prove a legitimately protected secret.

5. The individuals and entities bound to the obligation of granting access to public information

The dissenting vote of Justice Highton de Nolasco, based on the opinion of the Solicitor General, declared the nullity of the procedure on the grounds of absence of participation of Chevron.

However, the majority voted in the sense of considering that section 2 of the Rules clearly and precisely identifies the individuals and entities which are bound to the obligation of granting access to public information and, consequently, if a request is rejected, the judicial action must be filed and aimed only against the entity bound to the obligation.

Therefore, the Supreme Court resolved Chevron participation in the procedure was not necessary. Especially considering that, as provided by the ruling, Chevron knew or should have known the publicity regime to which its counterparty (YPF) was subject to.

6. Closing remarks

It is our understanding that the “Giustiniani” ruling has to be analyzed in the context of the special situation of YPF, the role it was given in the market and the purpose which has guided its operations as of the expropriation of its shares by the Federal Government.

Consequently, there are reasonable arguments which would prevent the application of this precedent to other companies of the oil and gas and energy sectors.