Similar red flags

In waging war against the two major water concessionaires, President Duterte railed against what he said were onerous provisions in their contracts amounting to a surrender of the country’s sovereignty.

“In that contract, ‘pag mabasa mo (if you read it), our country surrendered everything to Manila Water and to Maynilad — everything, including the sovereignty,” the President said in a visit to typhoon victims in Legazpi City, Albay, in early December.

“Hindi ko ito masikmura (I cannot take it) … We have lost the sovereignty, we bargained it away,” he added.

In the same month, during a visit to earthquake victims in M’lang, North Cotabato, Mr. Duterte said the 1997 water concession agreement considered water as a commodity and not a natural resource, which he added was a “really crooked way of interpreting the Constitution.”

The concession agreement, the President fumed, contained a “prohibition against government interference in rate-setting” as well as a provision on indemnity for possible losses in the event the government interfered in setting the water rates.

It is certainly well within the President’s responsibilities to make sure that government contracts are above board and do not contain provisions unfair to the public, especially over a critical resource such as water for the residents of Metro Manila, Cavite and Rizal.

But, at about the same time that the President was invoking the issue of sovereignty in lashing out at the two local water companies, the issue was strangely absent in his cheer-leading for another water deal — the P18.7-billion New Centennial Water Source-Kaliwa Dam Project awarded by his administration to the Chinese.

Red flags eerily similar to what Mr. Duterte has been denouncing in the Manila Water-Maynilad case have been raised about the Kaliwa Dam deal by many observers.

For one, according to Bayan Muna Rep. Carlos Zarate, the deal provides that any dispute or default in payments will be decided in a court in Beijing using Chinese laws. The contract, Zarate said, imposes an admission on the part of the Philippines that the agreement does not violate any of its laws.

“Worse, it provides that any dispute such as a delay or default in payment shall be resolved by the China International Economic and Trade Arbitration Commission and shall be governed by the laws of China. It even imposes that the venue shall be in Beijing.”

Similarly, human rights lawyer Neri Colmenares, in filing a suit at the Supreme Court against the Kaliwa Dam project, charged that the deal was laden with onerous provisions detrimental to the people: “The conditions have been dictated by China, from the interest rates, choice of contractor and workers, an affirmation by the (Department of Justice) secretary on the legality of the loan, confidentiality of the terms of the agreement, and in case of default, China can take over a property of the Philippines in exchange.”

The lopsided framework is not limited to Kaliwa. Retired Supreme Court senior associate justice Antonio Carpio has warned against other infrastructure projects funded through Chinese loans such as the $62-million Chico River project.

“In case of default by the Philippines in repayment of the loan, China can seize, to satisfy any arbitral award in favor of China, ‘patrimonial assets and assets dedicated to commercial use’ of the Philippine government,” Carpio said in a forum in March 2019.

The Chico River deal, signed several months before Kaliwa Dam, is expected to be the template for all other Chinese loans to the Philippines, he said.

Aside from its questionable provisions, the Kaliwa Dam project would also displace the indigenous peoples living in the areas to be inundated by the dam. Yet, despite these concerns, the President has forcefully pushed for the project, even warning the courts not to dare issue any temporary restraining orders.

When details of the secret Kaliwa deal were first bared in April last year, a piqued Mr. Duterte ordered a sweeping review of all government contracts to “determine whether there are onerous provisions… that would put the Filipino people in disadvantage or in violation of the Constitution,” said his spokesperson.

That was the first and last time the public heard about the order; no other information would come from Malacañang as to how many and which contracts were given a second look, and what the results of the review were.

Apparently, the problematic Kaliwa Dam deal has emerged unscathed from that supposed dragnet, because now it’s all systems go — and damn any questions about sovereignty. But shouldn’t it be that what’s sauce for local “oligarchs” is sauce, too, for foreign “friends”?