POSTSCRIPT / January 5, 2006 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Now it's the rape of RP criminal justice system

VFA NOT A TREATY: That the US Senate has not ratified the RP-US Visiting Forces Agreement — in contrast to its having been concurred in by the Philippines’ treaty-ratifying Senate — is not a minor detail.

This failure of the US Senate to give its advice and consent tells us how the US government regards the VFA. It also tells us how we should regard it in the spirit of justice and reciprocity.

Aside from treaties, which require a two-thirds affirmative vote of the US Senate, the US President enters into other forms of “international agreements” without need for Senate advice and consent.

The US Chief Executive also concludes “executive agreements” without submitting them to the Senate. He also makes “congressional-executive agreements” requiring only the approval of a simple majority in each House of Congress, rather than a two-thirds majority in the Senate as in the case of treaties.

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RAPE, ONCE MORE: Although ratified as a treaty by the Philippine Senate, the VFA is not a treaty in the eyes of the US. It is a notch lower — it is, to them, only an executive agreement.

That discrepancy could pose a problem. Note that Section 25 of Article XVIII (Transitory Provisions) of our Constitution says that “foreign military bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the Senate xxx and recognized as a treaty by the other contracting State.”

Despite its not being recognized as a treaty by the other contracting State, the VFA has been embraced by our Senate and the rest of government as a treaty and is now being invoked to justify the continued stay in the US embassy — which is American territory — of the four US servicemen accused of rape in Olongapo City.

The VFA runs counter to the Constitution (Section 13 of Article III — Bill of Rights) by allowing the release on recognizance to foreign authorities of non-bailable persons accused of the heinous crime of rape that could draw a death sentence.

This is rape all over again, with Philippine leaders acting like the Filipino driver of the GIs abetting this rape en flagrante of the Philippine judicial system.

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BIDDING TERMS: President Gloria Arroyo assured us two things some time back: (1) that the Napocor will finally break even in 2005, and (2) the terms of reference for the bidding out of the generating units of the National Power Corp. will be published on Dec. 8 (last year yet!)

The first prediction is likely to come true. It should, considering that the government had absorbed a big chunk of the outstanding debts of Napocor, which means the burden has been passed on to poor Juan Pasang Krus.

The second item about bidding terms appears to be just another promise. It was probably the most convenient reply to my asking then when Napocor will ever be privatized as promised in presidential pronouncements and in the law.

I marked Dec. 8 on my calendar, but almost one month after that date I still cannot find the terms of reference for Napocor’s being bid out.

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LIP SERVICE: Even if the country’s fiscal health cries for Napocor’s privatization — if only to get the graft-ridden utility out of our lives forever — many power industry insiders have noticed resistance to it from within the firm itself.

Many officers, including NPC President Cyril del Callar, pay lip service to it but seem to be doing everything to ensure it does not happen, at least not according to the original intent of Epira (Electric Power Industry Reform Act).

The original intent of Epira is to phase out direct and indirect government involvement in the power industry and create a climate that will attract private capital. This frees up massive amounts of capital and government guarantees now being lavished on Napocor instead of on health, education and infrastructure for the masses.

Again, delivery falls short of the promises. Implementation of the law privatizing Napocor has been grievously delayed — on purpose, some quarters think.

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OBSTRUCTIONS: Bidders are aghast to see that while it is offering its power plants for sale, Napocor cannot show clear ownership titles to the sites of the plants. Many plants even lack permits and environment clearances needed to operate.

These are routine details that, if properly addressed, could have improved the value of the plants, facilitated privatization and maximized the proceeds accruing to the government.

Why are these details neglected? Is Napocor President Cyril del Callar really serious in privatizing the state firm? Or is he part of the mafia that reportedly wants an extended life for the firm so the gang could continue playing lucrative games at the expense of the Filipino people?

Sources say that the author of that infamous unsigned memo for government takeover of Meralco is a top official of Napocor. Of course poor Del Callar is now denying that he had anything to do with it.

Whatever he says, that memo had betrayed the dark plot of the Napocor mafia and their supporters high up in Malacanang.

With Epira languishing more than three to four years off track, the Manila Electric Co. (Meralco) looks like it is being starved so that the vultures in Napocor and in government can feast on its carcass.

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QUICKSAND: Take another look at Executive Order 474, which encroaches on the powers of Energy Secretary Rafael Lotilla, making him virtually powerless.

The EO will give its designated head, Energy Undersecretary Peter Abaya, broad powers to take charge not only of DoE matters but also of oil and gas exploration, currently handled by the Philippine National Oil Corp. and the privatization of power which is the responsibility of the Private Sector Assets and Liabilities Management Corp. (PSALM)

In effect, a mere executive fiat tries to overturn several laws (the law creating the Department of Energy and other agencies, and Epira, among them). Many businessmen have been heard saying this EO is unconscionable and unconstitutional. It is also superfluous.

Abaya has admitted having inserted inputs to the EO, but denied that he was out to ease out Lotilla. Whether Executive Secretary Eduardo Ermita admits that Lotilla was bypassed in the drafting of the EO is beside the point.

Even Rep. Joey Salceda, the Palace’s economic adviser, says that EO 474 is a policy quicksand since it “would give vast powers to an individual without accountability over a strategic industry which spawned the country’s monumental follies — the Bataan Nuclear Power Plant and the independent power producer (IPP) deals.

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SQUEEZE PLAY: Back to the planned takeover of the Meralco, whose story is instructive.

Toward the end of the Estrada administration as the peso continued to depreciate and oil prices rise, Napocor and Meralco were forced by energy officials to defer passing cost increases to consumers since the popularity of President Estrada was waning at the height of his impeachment.

There was an unhealthy buildup of deferred charges for both Napocor and Meralco. As the new Arroyo administration came to power, there were huge amounts of deferred charges waiting to be included in the electricity rates.

Add to this was the refusal of Napocor to dispatch Meralco’s independent power producers (IPPs), insisting that the ten-year contract be followed. That is the Contract for Sale of Electricity (CSE) providing that Meralco buy from Napocor a specified amount of electricity from 1994 to 2004.

Vowing not to allow the repetition of the causes of the power crisis of the 1990s, Napocor and Meralco contracted their respective IPPs to meet the demands.

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WRONG ADVICE: Then the peso devalued by 100 percent and an overcapacity of power plants began to appear. Although the level of surplus capacity was not of abnormal proportions, the delays in Napocor’s transmission and the jostling for limited transmission capacity led to the less than optimal dispatch decisions being taken.

By this time, however, electricity rates began to jump. Under the circumstances, Meralco said that Napocor was unfairly favoring their own plants in violation of laws mandating non-discriminatory open access.

Instead of solving the problem, Malacanang made the situation ordered the lowering of the PPA by 85 centavos/kwh. This further destroyed the Napocor revenue base.

The cost of this political gamble was placed in an Amcham report at $500 million since the new rates did not represent real market prices. President Arroyo appears to have been given the wrong, and costly, advice.

And President Arroyo appears to be again taking the wrong and damaging advice with regard to the proposed government takeover of Meralco.

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(First published in the Philippine STAR of January 5, 2006)

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