REGULATING THE HIRING OF RETIRED OR RESIGNED REGULATORS

REGULATING THE HIRING OF RETIRED OR RESIGNED REGULATORS

The good news is, we have laws that aim to prevent former employees or officials of regulatory agencies from being immediately hired by the companies they used to regulate. The bad news is, we seem to have no clear and effective system for monitoring whether these former regulators eventually end up working for those same companies—maybe not right away, but sooner or later.

And here’s the even worse news: the government is practically powerless to do anything if these “new hires” are compensated in cash or through secret bank accounts. Paper trails vanish quickly when the payment is designed to be invisible.

In the private sector, it’s much stricter. As I recall, there are explicit rules that prevent retired or resigned employees from joining competitors for at least one year. This is mostly to protect trade secrets—certain formulas, proprietary processes, client lists. Even if such clauses aren’t written into an employment contract, violators can still be pursued under industrial espionage or data privacy laws.

In government, however, the stakes are different—and arguably more serious. Here, it’s not just trade secrets at risk, but public safety and public trust. Imagine a regulator approving a dangerous product today, knowing full well they’ll be rewarded with a cushy corporate job tomorrow.

This is not a far-fetched scenario. In the United States, there have been documented cases of officials in the Food and Drug Administration (FDA) being bribed to approve medicines that should never have reached the market. And it’s not just about medicines—food products, chemicals, even construction materials can slip through the cracks when the system is corrupted.

We’d be naïve to think this could never happen in the Philippines. In fact, the danger is all too real: food and drug items that are unsafe for consumption, or industrial products that put lives at risk, could still be approved if the right palms are greased. And regulators aren’t the only ones vulnerable to this “revolving door” problem—judges and justices could also be tempted to rule a certain way with the promise of a future reward, whether in the form of a job, a consultancy, or some other financial arrangement.

So, what exactly does our law say? Republic Act No. 6713, the Code of Conduct and Ethical Standards for Public Officials and Employees, prohibits public officials from having a financial or material interest in any transaction that requires the approval of their office. They also can’t engage in private business that conflicts with their duties. The law says they can’t be a board member, officer, or substantial stockholder of a company whose interests could be opposed to their official functions.

Here’s the catch: RA 6713 doesn’t explicitly say that you can’t join a regulated company after leaving your post. It does, however, imply that conflict-of-interest rules still apply if you use insider knowledge or influence gained from your former role. Agencies can impose cooling-off periods, but this is not standardized across the government.

Enforcement? On paper, the Office of the Ombudsman and the Civil Service Commission (CSC) are tasked with investigating and penalizing violators. There’s even Memorandum Circular No. 17 (1986), which reiterates that government employees can’t engage in private practice without written permission. But as any honest observer will admit, rules without rigorous monitoring and enforcement are just ink on paper.

So how do we close this loophole? First, regulatory agencies should adopt mandatory post-employment restrictions, such as a one- to three-year ban on joining companies they once regulated. This is already standard practice in many countries. Second, there should be a public registry of former regulators and their subsequent employment—accessible to journalists, watchdog groups, and citizens.

Third, whistleblower protections must be strengthened so that insiders can safely report any under-the-table arrangements. Fourth, there should be an independent oversight body—separate from the agencies themselves—to monitor compliance and investigate suspicious career moves.

Regulatory capture—the process by which private interests co-opt the agencies meant to oversee them—is a serious threat to governance. Without strict rules, we’re essentially telling regulators: “Go ahead, approve what you want today. Your reward will be waiting for you tomorrow.”

If the private sector can protect its interests by imposing hiring restrictions on former employees, surely the public sector can do the same—especially when public health, safety, and trust are at stake.

In the end, this is not just a legal issue, but a moral one. Public office is a public trust. That trust shouldn’t be traded away for a paycheck, whether it’s paid in the open or hidden in a secret account.

Ramon Ike V. Seneres, www.facebook.com/ike.seneres
iseneres@yahoo.com, senseneres.blogspot.com

10-05-2025