Expect a final Supreme Court (SC) ruling on petitions to compel concessionaires Maynilad Water Services and Manila Water Co. to comply with an obligation in their contracts to put up water treatment facilities as Chief Justice (CJ) Diosdado Peralta said a resolution will be “expedited.”
Under Republic Act (RA) 9275 or the Philippine Clean Water Act (CWA), the utility firms were required to provide wastewater treatment facilities and to connect sewage lines in all establishments.
In a decision issued on 4 August 2019, the SC penalized Manila Water and Maynilad as well as water regulator Metropolitan Water Works and Sewerage System (MWSS) with fines of almost P2 billion each for not complying with the law.
The sanction included P322,102 a day subject to a further 10 percent increase every two years as provided under Section 28 of RA 9275 against the three entities until they have fully complied with the decision. Both firms and the MWSS sought a reconsideration of the SC decision.
Peralta acknowledged that wastewater treatment facilities and sewerage systems are vital to ongoing efforts to rehabilitate the waters of Manila Bay.
“I will confer with the member-in-charge to fast track the resolution of the motion for reconsideration,” Peralta told reporters.
DU30 sought fair deal
Previously, President Rodrigo Duterte lashed at both concessionaires for collecting fees for services they never rendered to their customers in the capital region.
Mr. Duterte, in an exclusive interview by Daily Tribune last July 2019, said that the public can sue the two water companies for plunder for their failure to provide services, particularly the establishment of treatment plants.
In October of the same year, the President threatened that the government can take over operation of the water companies if they continue to fail to address water supply shortage.
Manila Water and Maynilad even threatened to pass on the cost of the SC penalty by floating the possibility of a 780 percent rate increase.
“You are correct, Maynilad and Manila Water should actually construct the sewerage system. That would really clean the water that comes from the households because unfortunately within the five year period that they were supposed to construct the sewerage system, they did not do anything. That is why the Court imposed fine, that is P200,000 a day until they comply,” Peralta said.
The tribunal’s 2019 ruling affirmed a Court of Appeals (CA) decision which found the water concessionaires liable.
Under the CA decision, MWSS and the two concessionaires were required to provide wastewater treatment facilities and to connect sewage lines in all establishments, including households, to an available system within five years upon the effectivity of the law on 6 March 2004.
Jointly, severely liable
Based on the SC ruling, “Maynilad shall be jointly and severally liable with the MWSS for a total amount of P921,464.184 and “Manila Water Co. Inc. shall be jointly and severally liable with MWSS for the same amount.”
The Court said the amount covers the period from May 2009 to date of promulgation.
Fifteen days were given to petitioners upon receipt of the decision to pay the fine.
The SC also imposes a legal interest of six percent per year until the decision is fully satisfied.
In their petitions, both Manila Water and Maynilad argued that based on the SC ruling on 18 December 2018 or the Manila Bay decision, they have until 2037 to comply with their obligation under Section 8 of the CWA.
Maynilad added that it would be “legally and physically impossible” to comply with the SC’s directive within a five-year period.
Collective responsibility raised
It pointed out that the Court should not pin the responsibility to provide centralized sewerage system to water concessionaires only as the law operates under a framework of “collective responsibility.”
The petitioner said other government agencies such as the Department of Health, Department of Environment and Natural Resources (DENR), Department of Public Works and Highways (DPWH) and local government units also have obligations under Section 8 of the CWA.
It also pointed out that aside from government agencies, private third parties’s actions and inactions have also contributed to the legal impossibility of strict compliance of Section 8 of the CWA as mandated by the SC ruling.
These include the refusal of establishments and households to have their existing sewerage lines connected to available sewerage systems; refusal of commercial and industrial establishments to install pre-treatment facilities needed before interconnection.
Huge outlays face concessionaires
Based on its financial projections, Maynilad said it would have to spend more than P149 billion using 2019 prices to put up sufficient wastewater facilities to meet 100 percent sewerage coverage by 2022.
Meanwhile, Manila Water also warned that the accelerated establishment of a complete centralized sewerage system is expected to cause a huge increase in water prices by P26.70 per cubic meter or 780. 18 percent increase in current water rates.
The two water firms have asked for the conduct of an oral argument on the issue, but the SC has yet to act on it.
Peralta said he was informed by DENR Secretary Roy Cimatu that Manila Water and Maynilad are already constructing wastewater treatments both in the south and northside of the metropolis.
“I have not seen the places, but one of these days when we will conduct an inspection in accordance with the continuing mandamus that we issued, I think we will try to visit those two places if indeed they already constructed or how much they have done in the construction of the waste waters in Manila Bay, definitely,” Peralta said.