DENR Pays Contractor More than $1 M,
Extends Faulty Air Pollution Project
Re-electionist
administration solon among those in hot water
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
Bulatlat
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:
-
Ateneo de Manila
University, Katipunan Road, Quezon City
-
Bureau of Broadcasting
Services, Marulas, Valenzuela City
-
Philippine Air Force, Clark
Airfield, San Fernando City, Pampanga
-
Polytechnic University of
the Philippines, Sta. Mesa, Manila
-
Cavite State University,
Indang, Cavite
-
NAMRIA Compound, Fort
Bonifacio, Taguig City
-
Bureau of Plant Industry,
Los Bańos, Laguna
-
Provincial Veterinary
Office, Batangas City
-
New Bilibid Prison,
Muntinlupa City
-
Valle Verde Subdivision,
Pasig City (mobile van)
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
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