Catch monkeys in business

“The direction would be to salvage the present agreement minus the disagreeable provisions.

The plaintive cry of President Rody Duterte about previous administrations tolerating one-sided contracts with the water concessionaires is the same anguish that is elicited by many Filipinos.

“Why did they allow it?” went Rody’s disgust.

The 25-year contracts were signed during the term of former President Fidel Ramos in 1997 but these were prematurely renewed in 2009 or long before these were scheduled to expire in 2022.

The contracts were replete with onerous provisions which taken together amount to plunder, according to Rody.

As a lawyer, the President would know what he is saying despite the fact that plunder is applicable only to public officials.

Rody appears to be building up a case against government lawyers who prepared the contract and officials who were involved in approving these that may go all the way to the top in previous administrations.

The government action on the two water firms, thus, is two-pronged — to prosecute those responsible for the onerous provisions and the drafting of a new deal.

The option to abort the deal may have been put off, considering its backlash on foreign investors that the government is courting.

The water firms made the wrong move of putting pressure on the government to compensate them by seeking international arbitration to enforce the proceeds from the onerous provisions.

The deadlock has ensued as Rody said he will not accede to the tribunal’s order to compensate Manila Water and Maynilad a total P11 billion.

The President said he will send the officials of the companies and their complicit in government to jail, instead, and vowed not to give in to a compromise.

“That’s plunder. That is the classic economic plunder,” Duterte said.

The provisions of the agreements are classic examples of a sweetheart deal since Rody said its provisions were prohibited under the Anti-Graft and Corrupt Practices Act or Republic Act 3019.

“Everything in the anti-graft law is found in that contract. Put them side by side, they’re almost alike,” Rody said.

“I cannot imagine two administrations allowing our sovereignty to be bargained away,” the President lamented.

The water companies are banking on the decision of the Singapore tribunal to still collect the amount that has been awarded as their officials stated that they are willing to spread out the fund.

They miss the fact that Rody will not allow it and that their sole recourse is to agree to a revision of the terms of the agreement.

The Department of Justice (DoJ) said it will come up with new contracts where the faulty provisions are blotted out.

DoJ Secretary Menardo Guevarra said the deal that would be presented would be a government version meaning that negotiations will likely be possible on some provisions.

“We’ll do it within the government first. Once we are ready with our own version of what a good water concession agreement should be that’s the time, we will sit down with the water concessionaires. This will be a composite team of both lawyers from the Office of the Solicitor General, Office of the Government Corporate Counsel, Department of Finance and the DoJ,” Guevarra said.

In effect, the direction would be to salvage “the present agreement minus the disagreeable provisions.”

Businesses demands a level playing field but it should be prepared to work within such an environment.