POSTSCRIPT / July 2, 2006 / Sunday


Philippine STAR Columnist

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Psalm, not just YNN, must explain Masinloc

COSTLY TORTURE: Days ago, a lawyer reported that the US district court in Hawaii has ordered the payment of an initial $2,000 to his clients — some 7,500 victims of Marcosian torture — and proceeded to assail the government for, he said, blocking the payment.

The lawyer should have explained also how much of the $2,000 x 7,500 would go to his pocket, so we can better understand why he was going around peddling the collection story to the media.

Judge Manuel Real of the Hawaii court initially awarded a preposterous $1.9 billion to the torture victims, but after realizing the absurdity of his order, he reduced the amount to $150 million.

The latest twist to the rubber band is that the victims should be paid an initial $2,000 each, if the lawyer’s story is right about Judge Real’s order. In a parallel move in the Congress, P8 billion is being allocated for their compensation as ordered by Real.

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MARCOS SUED: For Filipino taxpayers to understand what is going on, it should be clarified first who was sued by the torture victims. Was it Ferdinand Marcos and/or his estate, or was it the Philippine government?

Since Section 3 of Article XVI (General Provisions) of the Constitution provides that “the State may not be sued without its consent,” I assume that the victims sued not the government but their alleged tormentor, namely Marcos and, for collection purposes, his estate.

That makes sense, because it is not the policy or the business of government to torture its citizens. If any torture had been committed, it was by certain individuals who eventually must answer personally for their misdeeds.

So if the victims sued Marcos et al., Judge Real must force payment from the respondent Marcos and/or his estate. It is absurd for a judge in Hawaii to reach across the Pacific and order the Philippine government to pay a party suing in his sala.

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OVERREACHING: As I have been saying in Postscript the past five years, Judge Real should look for Marcos assets in the pineapple plantations of Hawaii or the entire US and use this wealth to enforce his judgment for payment of damages.

The $700 million or so in unearthed Marcos assets that were transferred from the Swiss banking system to the Philippine treasury never passed through the US and were never within the judicial reach of the judge in Hawaii.

If only for that reason, the judge cannot validly overreach and order that the money now in the Philippine treasury as a trust fund for agrarian reform be used to pay the victims. Wala siyang pakialam (It is none of his business) how we use the money.

So when Judge Real directed that $2,000 be advanced to the victims, whom was he ordering? The Hawaii judge cannot presume to order the Philippine government around.

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NO LEGAL BASIS: For the victims’ lawyers to now go to town saying that the government is blocking payment is not quite right. There is nothing to block, because the court order is invalid or inapplicable from the start.

It is also not legally right that the Arroyo administration make a grand promise to pay the victims, or for the Congress to carve out P8 billion from agrarian reform funds to distribute to them,in compliance with Real’s order

If Congress appropriates P8 billion, what will be the legal basis? Has it examined each and every claim? Is not hearing such claims a judicial function?

Assuming the government decides to pay Marcos torture victims, why only them? What about other victims?

The order of a foreign court cannot be the basis of such disbursement of trust funds. The Philippines should not act as a sheriff of the Hawaii court. Playing that role is not only misplaced charity. It is demeaning.

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PAGING MS OSORIO: We have been focusing on YNN Pacific Consortium, winning bidder for the 600-megawatt power plant in Masinloc, Zambales, that seems to have no money even just for the upfront payment of $227 million to clinch the deal.

There should be corresponding examination of what the Power Sector Assets and Liabilities Management Corp. (Psalm), which oversaw the transaction, has been doing or not doing that led to the stinking Masinloc mess.

Why did Psalm president Nieves L. Osorio allow YNN to bid when it was clear from the very beginning that it has no track record in power generation or distribution and did not have the capacity to pay for the $561-million plant?

It is normal for businessmen to try gaining an advantage or maximizing profits. But on the side of government regulatory agencies, their duties are clearer about protecting public interest and sticking to the law.

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EXPLANATION DUE: There are many indications that Psalm under Ms Osorio was not up to the job. Her agency looked like a willing tool or co-conspirator of YNN, agreeing to its every wish and demand.

Ms Osorio might want to explain some unusual points noted in the YNN transaction. If she was just acting on orders of people above, she should unmask them.

Under the Assets Purchase Agreement, Psalm has the right to terminate the contract if within seven days from its closing date YNN does not pay the down payment (40 percent of its bid price). But Psalm gave YNN almost a month to pay, in violation of the seven-day rule.

Psalm relayed to YNN that it has complied with all conditions in its certificate of closing dated Nov. 25, 2005. It should have demanded immediately from YNN the $227-million down payment, but gave it until Dec. 20, 2005, or almost a month, to comply with its obligation. Why the special treatment?

When YNN still could not pay, Psalm twice extended the deadline from December 2005 to March 2006 and from March 2006 to June 30, 2006, despite the fact that upfront payment was immediately demandable.

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CREDIBILITY LOST: Also, YNN failed to submit the required written evidence from any bank acceptable to Psalm that the funds for the payment of the upfront payment, rentals and option price are complete and immediately ready for delivery. This is another ground for termination of contract, but no such termination occurred.

Under the terms, YNN may not, without Psalm’s written consent, “terminate, amend or modify, or consent or agree to any termination, amendment, or modification of or waive timely performance by, any person of its material obligations under or in respect of the transaction documents.”

But YNN has repeatedly modified the terms of the Asset Purchase Agreement and this appears to be with Psalm’s consent. Ms Osorio must explain why Psalm gave YNN undue advantage at the expense of national interest.

With this Masinloc mess, Psalm has jeopardized the Philippines’ chances of ever showing to the world that we could be trusted in the conduct of our attempts at privatization.

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BAD FAITH: It turned out that YNN was a bidder in bad faith, with no intention of complying with its obligation under the Asset Purchase Agreement. Personnel at the Masinloc plant said no YNN technician even dropped by to check the plant.

It was only a four-month-old company, with a paid-up capital of only P625,000 when it submitted its $561-million bid for Masinloc in November 2004. Why did Psalm allow it to bid in the first place?

YNN had a foreign partner when it won the bidding in December 2004, the Australian Great Pacific Financial Corp., but it backed out soon after for unknown reasons.

The two extensions granted by Psalm gave YNN time to look for a new partner/financier. It found this in Malaysian firm Ranhill Berhad which has agreed to buy out YNN for $8 million and pay all its obligations.

When YNN bid for Masinloc, it knew it was a merchant plant that had no power supply contract with any distributor or consumer, no transition supply contract, transmission, connection contract and other similar contracts for the generation, sale, transmission or distribution of energy/electricity.

It seems this did not matter to YNN since, as it turned out, its game plan was to just turn around and sell its contract.

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WANG-WANG: An exasperated reader, Robert Santos, took time to list the private vehicles he had spotted on the road using police sirens (wang-wang) in violation of the rules.

His list: WFT314, Isuzu Trooper; WRF 447, Mitsubishi L300 or Toyota LiteAce; XKH 253, Nissan Patrol; XED 954, Ford Expedition; UFZ 711, Honda Accord; WKE 754, Daewoo Prince; UEL 493, Toyota Corona; XHJ 321, Ford Expedition; SFZ 607, Nissan Pathfinder; WNG 168, Honda CRV.

The law is clear that private vehicles may not be equipped with such devices. We let these things pass and we soon graduate to allowing bigger violations.

Another irritating sight is that of a heavily tinted vehicle with a private license plate escorted by siren-wailing motorcycle cops pushing the rest of us to the side so some demigod can hog the road and pass unhampered.

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(First published in the Philippine STAR of July 2, 2006)

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