The Freedom from Debt Coalition (FDC) condemned the recent ruling by the Permanent Court of Arbitration in Singapore ordering the government to pay P7.39 billion for supposed losses and other arbitration related costs incurred from June 1, 2015 to November 22, 2019.
“The public should be warned that we are not just being asked to compensate Manila Water. Maynilad also has similar claims. Between them, they are claiming immediate compensation totaling P10.8 billion for denied rate hike petitions after winning in international arbitration. But in the case of Manila Water, that’s just the tip of the iceberg,” Rene Ofreneo, FDC president said today.
Metro Manila’s two water concessionaires filed several arbitration cases stemming from a dispute following the rate-rebasing done in 2013. In the first set of cases, Maynilad won
while Manila Water lost.
“Can you imagine, after losing the arbitration case and being ordered to stop forcing their customers to shoulder the company’s income taxes in 2015, Manila Water turned around and asked government to pay them a total of P79 billion until 2037? That amount supposedly represents the income they stand to lose until the end of the extended concession term. Basically, they are asking government to shell out money on the basis of income projections. But even a small “kikiam” vendor can tell you income projections don’t always materialize. Why should public funds be used to guarantee the profits of a private corporation?” Ofreneo asked.
FDC explained that Manila Water’s claim is based on the Letter of Guarantee issued by the Philippine government in favor of the company which basically commits the government to compensate them should they fail to realize their expected profits.
“FDC has long warned of the lopsided nature of the contract favoring corporate interests over people’s needs,” Mae Buenaventura, an FDC officer said.
“This is the face of corporate impunity. On top of economic sabotage, the water concessionaires should be charged with violating the Covenant on Economic, Social and Cultural Rights, of which the Philippine government is a state party.”
As a state party to the Convention, it is the legal obligation of the Philippine government to call out and censure violators, including non-state actors.
Citing General Comment No. 15 of the international treaty adopting the right to water, Buenaventura stressed that “The human right to water is vital to a life of human dignity. It is a requirement for the realization of other human rights.”
FDC recalled that the “disadvantageous contract” with the water concessionaires came with Metro Manila’s water privatization in 1997.
“Since then, consumers have borne increasing water rates of over a thousand-fold, including shouldering the water companies’ tax obligations. Yet Manila Water and Maynilad has not kept their part of the deal to provide adequate and sustained supply of drinking water. The recent Metro Manila-wide water crisis is clear evidence of their failure,” Flora Santos, an informal sector leader and president of the women’s group, Oriang, added. “We have been and continue to be punished for a deal that makes a commodity out of a need as essential to life as water.”
FDC noted Indonesia’s reversal of Jakarta’s water privatization, which was modeled after Metro Manila’s, upon finding the corporate contracts disadvantageous to Indonesian consumers.
“We support the effort to scrutinize these agreements because they are clearly onerous. When the Ramos government signed these agreements in 1997, and the Arroyo government extended them by another 15 years, they basically threw Metro Manila’s water consumers under the proverbial bus. Our government basically promised that any loss suffered by the water companies would be shouldered by taxpayers. To add insult to injury, consumers were already being made to shoulder the corporate income taxes of these giant corporations,” FDC Executive Director Zeena Manglinong said. FDC called for the immediate scrapping of the Concession Agrements and the reversal of the privatization of Metro Manila’s water services.