Supreme Court affirms P404M fine on water firms

Supreme Court affirms P404M fine on water firms | Daily Tribune

The Supreme Court upheld in a final decision its 2019 order on Maynilad, Manila Water, and the Metropolitan Waterworks and Sewerage System to pay a total fine of P404 million for violating the Philippine Clean Water Act since 2009 due to the concessionaires' failure to invest on sewerage facilities required under the Philippine Clean Water Act.

The SC gave the two private firms and the government regulator 15 days to settle their obligations with the government.

The amount was far less, however than what was imposed in SC's initial decision.

MWSS was included in the original ruling of the Department of Environment and Natural Resources in its assessment that the regulator failed in its mandate that contributed to the degradation of the Pasig River and Manila Bay.

The high court's resolution made public on 18 October and written by Associate Justice Ramon Paul Hernando denied the appeals filed by the MWSS and the two water concessionaires although it lowered the fines and interest charges.

"Manila Water shall be jointly and severally liable with Metropolitan Waterworks and Sewerage System for a base amount of P30,000 per day of violation counting from 7 May 2009 until 21 January 2022, in the total amount of P202,256,756.22," it said.

An exactly similar liability applied to Maynilad and MWSS.

If it goes unpaid, SC said the fines "shall be subject to a 10 percent increase every two years beginning 7 May 2009 until 21 January 2022, following Section 28 of the law."

The SC also imposed a six percent legal interest per year on the total amount of fines from the finality of the resolution until full payment.

"The total amounts herein indicated shall be deducted from the amount of fines already paid by petitioners, if any, and the difference, if any, shall be returned to them," it said.

The high court, in its 2019 decision, found the two water firms and MWSS to have violated section 8 of the Clean Water law as they failed to put up sewage lines and treatment facilities during the period.

It was the Daily Tribune that brought to then President Rodrigo Duterte's attention the absence of investments in sewage facilities despite the concession agreements of MWSS and Maynilad, and another between the regulator and Manila Water requiring such infrastructure.

Both concessionaires were also found collecting sewage service charges in the monthly bills but without doing anything to set up the facilities.

"The water concessionaires don't have water treatment facilities, they have been duping customers," the President told Daily Tribune in a pre-State of the Nation Address exclusive interview on 12 July 2019.

"If you say that they have been collecting for so many years, it would amount to plunder. We have to ask everybody to provide a new system of sewage so that they can collect the water and big pipes that would run and go to the water treatments," Mr. Duterte then declared.

Fine halved

In August 2019, the tribunal voted 12-0 to impose fines on the water concessionaires.

The SC initially announced that the voting was 14-0 but later corrected this to 12-0 because Associate Justices Diosdado Peralta and Andres Reyes Jr. abstained.

The amount then was higher at P921 million each for Maynilad and Manila Water, which were held jointly liable with MWSS.

"Maynilad shall be jointly and severally liable with the MWSS for a total amount of P921,464,184 covering the period 7 May 2009 to date of promulgation. Manila Water Co. Inc shall be jointly and severally liable with MWSS for the same amount and period," according to the original ruling.

The SC en banc had voted unanimously to uphold a 2011 decision of the Court of Appeals but the penalty then was only P29.4 million since it covered only 2009.

The case stemmed from a Department of Environment and Natural Resources directive in 2009 which sanctioned the concessionaires for the sewage facilities breach in its covered areas.

If the MWSS, Maynilad and Manila Water are still not compliant with Section 8 of the Clean Water Act, they have to pay an additional P322,102 a day until full compliance with the law, goes the original ruling.