This story
was taken from Bulatlat, the Philippines's alternative weekly
newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VII, No. 10, April 15-21, 2007
DENR Pays Contractor
More than $1 M, Extends Faulty Air Pollution Project
Metro Manila's
residents have an air monitoring project that is faulty, non-functional and
generally useless for the past four years, but which will be inexplicably paid
for and even extended.
BY LISA ITO A cabinet
secretary and a re-electionist legislator are among those in hot water due to
highly questionable transactions related to an air pollution monitoring project
worth more than $6 million. According to
environmental activists, the proponents of the Ambient Air Network Project are
the Department of Environment and Natural Resources (DENR) and a private joint
venture. They called for an impartial investigation into the project due to what
they said were “suspicious actions” of senior government officials like DENR
Secretary Angelo Reyes and Rep. Edcel C. Lagman (1st district, Albay)
who is currently seeking re-election. In a press
conference last April 14 organized by the Kalikasan Peoples' Network for the
Environment (Kalikasan PNE), environmental activists Clemente Bautista, Jr. (Kalikasan-PNE
National Coordinator) and Joey Papa (Bangon Kalikasan Movement) presented a
complaint sent to the Office of the Ombudsman regarding the project which
involved the setting up, maintenance, and operation of 10 air monitoring
stations meant to measure ambient air (or air outside and surrounding an air
pollution source location) and pollutants such as sulfur dioxide, nitrogen
oxides, carbon monoxide, ozone, particulate matter and total suspended solids.
The eleven stations are located in
the following areas: Termination
Recommended The contract
amounting to $6.163 million was awarded to a joint venture between Emissions
Technology Inc., a Guam-based company, and its local partner Industromach Inc. (ETI-IMACH)
in November 2002.
DENR already paid $770,376.84 for the “Operation & Maintenance” portion of the
contract. From November 2003 to October 2004, ETI-IMACH received the payment
through monthly instalment of $64,198.07. ETI-IMACH continued to receive the
monthly payments even during the times when the 10 stations did not operate
simultaneously. On February
14, 2005, IMACH officially withdrew from its partnership with the ETI, citing as
reasons the ETI's misrepresentation with regard to its expertise in ambient air
monitoring, its use of unreliable equipment, unilateral deviation of contract
obligations, project management conflicts, overcharging local expatriate and
local personnel rates and non-payment of IMACH's project operation and
maintenance expenditures. In November
2004, the Environmental Management Bureau (EMB) recommended the suspension of
the payment for the project's operations and maintenance in light of the
contractors’ failure to complete the rehabilitation and improvement of all 10
stations and to address nagging technical and legal issues. “Contract
termination is strongly recommended. The DENR, as purchaser, is allowed to
terminate in whole or in part the contract, if in its judgement the ETI-IMACH
has engaged in corrupt or fraudulent practices. The misrepresentation that is
has foisted upon the DENR is fraudulent and termination is warranted,” a memo
signed by Engr. Ely Anthony R. Ouano and Luiciano G. Hornilla reads. The memo
continues that the ETI-IMACH has defaulted in its “fraudulent misrepresentation,
its failure to timely deliver and operationalize the monitoring stations, the
poor quality of data generated by these stations, and in general, the failure of
the system to function in accordance with the terms of the contract.” Atty. Armi
Jane Roa Borje, OIC for the DENR Undersecretary for Legal Affairs, concurred
with the EMB's position. On October 17,
2006, the EMB and the DENR's legal departments recommended to Secretary Reyes
the termination of the contract. DENR
Turnaround Despite the
suspension of payments and recommendations to end the contract, the DENR agreed
to continue with its transactions with ETI. On December 13, 2006, the DENR and
the ETI agreed that the latter should be paid more than $1 million and that the
project could be extended for another year. The agreement
stated that the DENR-EMB shall pay ETI immediately the full amount of
$1,027,169.12, representing the November 2004 to February 2006 billings (16
months); $368,780.90 for the annual two-percent completion fee and monthly
payment for O&M amounting to $64,198.07 for nine months from April 7, 2007 to
December 7, 2007; and $577,782.63 for other expenditures.
This decision drew flak from
environmental activists. “This recent
turnaround by the DENR is a shame and an ethical aberration, considering how
scores of rank-and-file and technical personnel have judiciously evaluated the
project, found it lacking in merit and have stood by their decisions, as the
documents pertaining to this case prove,” Bautista said. “What is the
justification for the DENR's major and sudden decision twist? Why does the DENR
continue to accommodate the truant ETI, which has continually misrepresented
itself, reneged on its contractual obligations, duped its local partner and
refused to comply with the DENR's very own requirements? Who is to gain from the
continuation and the extension of an anomalous and obviously non-functional
project?” he asked. Highly
Prejudicial These
incidents prompted IMACH Managing Director Eduardo L. Mendoza to send a
complaint to the Office of the Ombudsman. Mendoza said that the terms of the
latest agreement were highly prejudicial to the government. “This
transaction should merit a full-blown investigation…as it does the payment of
millions of dollars allocated for that component of a loan package extended by
the Asian Development Bank (ADB) under its Clean Air Program,” Mendoza wrote in
a complaint received by the General Investigation Bureau-A of the Office of the
Ombudsman on March 21, 2007. “Setting aside
my company's interest in this transaction...I have decided to come out and
expose the truth about the Ambient Air Project in the hope that those liable
would be held to account for their actions and participation,” Mendoza wrote.
“The project was a useless and expensive failure. It clearly did not succeed in
producing credible data on air pollution aimed to be used in monitoring and
mitigating air pollution plaguing Metro Manila,” he said. The
deterioration of air quality in Metro Manila has already been cited as a grave
environmental and health problem that should be correctly addressed. Metro
Manila's air is reported to carry a high level of particulate matter which
exceeds World Health Organization (WHO) standards by two or three times,
according to IBON Foundation. Conflict of
Interest For his part,
Representative Lagman who is currently running for a second term previously
served as legal representative for ETI-IMACH during the start of the project and
received amounts of $60,000, $63,255, $100,000, $40,000 and $100,000 on various
dates from 2002 to 2003. These represented his initial lawyer's fee, his success
fee for the awarding of the contract and the last three amounts as partial
payment for marketing expenses, respectively. After his
election to the House of Representatives during the 2004 national elections,
Lagman continued to personally attend meetings related to the project in 2005
despite his active participation in two impeachment proceedings in Congress,
even stating that it was his intention to mediate between the ETI and EMB on the
financial issues of the contract. He even requested the EMB to convey his
concern to the DENR top management and to pay what is due ETI before the budget
hearing started in October 2005, Bautista noted. Lagman was
also listed as present during the February 14, 2005 meeting at the DENR where
IMACH formally announced its withdrawal from the joint venture. On October 27,
2005, ETI wrote to Undersecretary De Castro to inform him that it has instructed
its bank to withhold the processing of the bank guarantee upon the advice of.
Lagman who stated that the submission of performance bond can be deferred
pending the favorable resolution of concerns stated in his letter dated October
6, 2005. “These actions
of Lagman betray his real interest in arguing against the termination of the
[project] and securing for ETI this highly prejudicial agreement with the DENR,”
Mendoza said. “Lagman's
presence at the meetings is questionable and anomalous, as even the Congress'
House Rules state that a solon should not be directly or indirectly financially
interested in any contract with a government agency during his term in office,”
Bautista added.
Bautista cited Part II, Section 8
of House Rules of the House of Representatives on the question of
Immunities, Limitations and Disqualifications, which states:
A Member shall not hold any other office or
employment in the Government, or any subdivision, agency or instrumentality
thereof, including government-owned or controlled corporations or subsidiaries,
during his/her term without forfeiting his/her seat in the House. A Member shall
not also be appointed to any office created or the emoluments thereof increased
during the term of such Member.
A Member shall not personally appear as
counsel before any court of justice,
the Electoral Tribunals, or any quasi-judicial or administrative body,
or be directly or indirectly financially
interested in any contract with, or in any franchise or special privilege
granted by the Government, or any subdivision, agency or instrumentality thereof,
including any government- owned or controlled corporation, or its subsidiaries,
during his/her term of office. A
Member is similarly prohibited from intervening in any matter before any office
of the Government for his/her pecuniary benefit or where he/she may be called
upon to act on account of his/her office.
(italics ours). Clean air,
Clean Candidates
Kalikasan-PNE’s Bautista stressed
that the issue was foremost an issue of good governance.
“In effect, Metro Manila's residents have an air monitoring project that has
proved to be faulty, non-functional and generally useless for the past four
years, but which will be inexplicably paid for and even extended,” Bautista
said. “We want clean air and clean electoral candidates. This case violates the
principles of good governance and only reinforces the reality that a project may
be approved by government agencies and be even extended for as long as one has
powerful backers among the Arroyo administration. If (the latter) cannot even
implement an efficient project to monitor air quality, how can we even expect it
to solve the greater problems of massive air pollution and climate change?”
Bulatlat © 2007 Bulatlat
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Re-electionist
administration solon among those in hot water
Bulatlat