AKBAYAN Rep. Mayong Aguja

Archive for the ‘Speeches’ Category

JPEPA’S WASTES TRASHES OUR FUTURE

Posted by tin on November 6, 2006

JPEPA’S WASTES TRASHES OUR FUTURE

JUNK JPEPA!

IBALIK ANG DANGAL NG PILIPINO, IPAGLABAN ANG KINABUKASAN NGAYON!

I rise on a matter concerning the disturbing features of the recently signed Japan-Philippines Economic Partnership Agreement (JPEPA), a bilateral preferential trade treaty between Japan and the Philippines that seeks to remove barriers to investments and the trade of goods and services between the two countries. The JPEPA is the first bilateral trade agreement entered into by the Philippines since the 1946 Parity Amendment with the United States.

The Philippine government peddles the JPEPA as a means for the entry of an unlimited number of our health workers and caregivers to Japan. However, a closer scrutiny at JPEPA reveals that not only are we trading goods and services with Japan, we are also allowing the entry of toxic wastes to our already ailing environment.

History of the JPEPA and earlier attempts to look into the JPEPA

The JPEPA is the Philippine component of the Initiative for Japan-ASEAN Comprehensive Economic Partnership, which was proposed by Prime Minister Koizumi to ASEAN in January 2002. In May 2003, the Philippine Coordinating Committee (PCC), headed jointly by DTI Senior Undersecretary Thomas G. Aquino and DFA Undersecretary Edsel Custodio, was created to study and negotiate the proposed JPEPA. Formal negotiations between the Philippines and Japan commenced in February 2004.

In November 2004, following complaints that the DTI had denied requests for a copy of the full text of the proposed JPEPA as well as government announcements that the JPEPA would be signed by the first quarter of 2005, this Representation together with Congressman Erin Tanada of Quezon Province called for an inquiry into the JPEPA.

During the various hearings held by the Committee on Globalization, it became apparent that the JPEPA was no ordinary trade agreement, but a ground-breaking treaty that would set the tone for all future bilateral trade agreements.

The PCC revealed that the JPEPA would cover a wide range of trade issues, including:

· Trade in Goods, both industrial and agricultural;

· Trade in Services, Movement of Natural Persons;

· Rules of Origin;

· Investment;

· Intellectual Property;

· Customs Procedures and Paperless Trading;

· Competition Policy and Emergency Measures;

· Government Procurement;

· Dispute Avoidance and Settlement; and

· Bilateral Cooperation.

Philippine trade law experts Justice Florentino Feliciano and Professor Meilou Sereno – who were part of the government legal team reviewing the JPEPA – testified before the Committee on Globalization that the JPEPA is a “mega-treaty”, such that it is a combined Bilateral Investment Treaty and Bilateral Free Trade Agreement that adopts many key features of the North American Free Trade Agreement (NAFTA) that took all of ten (10) years to negotiate before finally being signed by the United States, Canada and Mexico.

Justice Feliciano and Prof. Sereno warned the Committee that such a combined treaty would have difficulties that are “twice as large, twice as formidable” than if they were negotiated separately, and thus, the Philippine government needs to be “twice as awake, twice as vigilant” in determining whether the country is indeed ready to undertake a treaty of this nature. Prof. Sereno likewise stated that the implications of JPEPA are “very far-reaching”, and may possibly require full-bodied legislation and/or amendments to existing legislation; thus, the Philippine government should not be rushed into concluding and ratifying the JPEPA.

Invoking the right of access to information

As early as the first hearing on February 28, 2005, the Committee on Globalization requested the PCC’s chief negotiator, DTI Undersecretary Aquino, to furnish the Committee with copies of the full text of the latest draft of the JPEPA. However, despite repeated requests by the Committee – which were reiterated in subsequent Committee hearings and even during the budget hearing of the DTI in November, 2005 – Undersecretary Aquino refused to act on the request, saying that the negotiations were still ongoing. During the DTI budget hearing, Undersecretary Aquino even asserted that it would be necessary to secure the permission of the President before the full text of the JPEPA can be disclosed.

When it became evident that no information would be forthcoming from Undersecretary Aquino, and in view of the alarming indications that the Philippine government seemed bent on concluding the JPEPA without full disclosure to Congress or to the public, this Representation wrote to the other members of the PCC and requested for information on the status of the JPEPA negotiations and copies of the full text of the latest draft of the JPEPA. However, this proved to be futile as well. The other members of the PCC referred me to Undersecretary Aquino, saying that the latter would be in the best position to respond to the request for information. In Usec Aquino’s own letter-response dated November 2, 2005, I was informed that the PCC would be able to provide a copy of the latest draft legal text of the agreement “once the negotiations are completed and as soon as a thorough legal review of the proposed agreement has been conducted.”

Having exhausted all possible administrative means to compel the disclosure of the JPEPA, and in the light of newspaper reports that the Philippine government would be signing the JPEPA in December 2005 on the sidelines of the WTO Ministerial Conference held in Hong Kong, we decided to take the matter up to the Supreme Court.

Taking the JPEPA to Court

Cong. Tanada and this Representation, together with fellow Akbayan representatives Etta Rosales, Risa Hontiveros-Baraquel, CIBAC representative Joel Villanueva, our party-list Akbayan! Citizens Action Party, peasant organization Pambansang Katipunan ng mga Samahan sa Kanayunan (PKSK), national labor center Alliance of Progressive Labor (APL), as well as individuals representing farmer, worker, fisherfolk, youth, and consumer interests filed an urgent petition for mandamus and prohibition with the Supreme Court last December 9, 2005, and asked for the issuance of a temporary restraining order to prevent the Philippine government from pushing through with the signing of the JPEPA.

The petition for mandamus is premised on the people’s right to information on matters of public concern, and the right of the people to effective and reasonable participation at all levels of social, political and economic decision-making. The petition also invoked the power of Congress, through the Senate, to effectively exercise its role in treaty-making and foreign relations under Art. VII, Sec. 21 of the Philippine Constitution.

We asked the Supreme Court to order the PCC to disclose the full text of the JPEPA at the soonest possible time and prior to the signing of the treaty, to afford the Senate ample time and opportunity to fully review the JPEPA and study the full extent of its implications before deciding on whether to concur in it or reject it. We asserted that the Senate cannot and should not be a mere rubber stamp to the President’s act of ratifying what might very well be a bad deal for the Philippines.

In his Comment filed with the Supreme Court in May 2006, Solicitor-General Antonio Nachura argued that the JPEPA falls within the ambit of executive privilege and is therefore exempt from disclosure. He argued that the power to negotiate treaties belongs exclusively to the Executive Branch, and that the right of the people to participate in decision-making is observed through consultative processes, and is protected when the Senate exercises the power to concur in treaties. This implies that the right of the people to participate in decision-making insofar as international trade treaties is concerned is not exercised directly but merely through the Senators.

The Solicitor-General likewise argued that the Supreme Court has no jurisdiction over the case, and that the only time that the Court can come in is when the treaty has been concluded and its constitutionality questioned in a proper case. He likewise asserted that the issuance of a temporary restraining order to restrain the signing of the JPEPA would constitute undue interference.

In our Reply, we pointed out that the PCC failed to provide any legal basis to justify why the text of the JPEPA should be considered a state secret that is privileged and exempt from disclosure. They likewise pointed out that the Solicitor-General’s assertion that the power to negotiate international trade treaties belongs exclusively to the Executive Branch is contrary to the Constitution, since the regulation of commerce is an inherently legislative function.

We likewise asserted that the people’s right to participate in economic decision-making under the Constitution is self-executory and is to be exercised directly by the people, and not simply through their representatives in Congress. They likewise asserted that the non-involvement of the Filipino people in the JPEPA negotiation process effectively results in the bargaining away of their economic and property rights without their knowledge and participation, in violation of the due process clause under the Constitution. Negotiation of international trade treaties such as the JPEPA should be a collaborative undertaking of both the executive and legislative branches working as co-equals, with the active involvement of the Filipino people, and that such a synergistic model is fully supported by the provisions of the Philippine Constitution.

Race against time

The Supreme Court case managed to delay the signing of the treaty by almost an entire year. However, without the full text being released to the public, the JPEPA was finally signed by President Arroyo and Prime Minister Koizumi in Finland on September 9, 2006, on the sidelines of the Asia-Europe Summit.

Up to the last few days leading up to the signing of the JPEPA, the DTI refused to reveal the full text of the agreement to Congress, despite the earlier promises of Undersecretary Aquino to provide a copy of the latest draft legal text of the agreement “once the negotiations are completed and as soon as a thorough legal review of the proposed agreement has been conducted.” It was only when the DTI was threatened with the revocation of its budget that it made moves to provide Congress with copies of the JPEPA. But even then, the offer came too late. The DTI eventually furnished Congress with copies of the JPEPA on Monday, September 11, 2006, the first working day after the treaty was signed.

As earlier pointed out by Justice Feliciano and Prof. Sereno, the JPEPA indeed is a comprehensive treaty, with over 1,500 pages of text and annexes, and covering a broad range of trade matters. However, an initial review of the JPEPA already reveals that the Philippines may have indeed agreed to a bad deal.

Philippines, a dumping site for Japan’s wastes

One of the most alarming initial findings on the JPEPA are indicators that the Philippine government has agreed to make the Philippines a dumping ground of Japan’s waste products. Under the JPEPA, tariff rates on clinical waste, municipal waste, sewage sludge, waste pharmaceuticals, and the like are scheduled to be reduced to 0% as soon as the treaty comes into force and effect. Under the JPEPA, should there be importers wanting to bring in toxic waste shipments from Japan, the Philippines has no choice but to receive Japan’s waste products into the country. This runs counter to the Basel Convention on Transboundary Movement of Hazardous Wastes of which both the Philippines and Japan were signatories. Local laws such as the Philippine Clean Air Act (RA 8749), Toxic Substances and Hazardous and Nuclear Wastes Control Act (RA 6969), Ecological Solid Wastes Management Act (RA 9003), and An Act to Safeguard the Health of the People and Maintain the Dignity of the Nation by Declaring it a National Policy to Prohibit the Commercial Importation of Textile Articles Commonly Known as Used Clothing and Rags (RA 4653), also prohibit the importation of the wastes included under JPEPA.

When the JPEPA took a beating through the media, both the Japan and the Philippine governments justify the inclusion of the controversial provisions in the JPEPA saying that existing domestic and international environmental laws would be observed accordingly. Unfortunately the governments’ statements is not an assurance that the Philippines will not be a dumping ground for Japan’s wastes. As experience has shown, in 1999, even when the Basel Convention and RA 6969, were in full force and effect, 122 containers declared as “recyclable paper”, which turned our to be clinical wastes arrived at the Port of Manila. If indeed it was the intention of the parties to follow international and local environmental laws, such provisions should not have been included in the first place.

Legally speaking, there is likewise the possibility that the provisions of the JPEPA will supersede the Basel Convention prior Philippine environmental laws that this House has painstakingly approved under the principle that binding treaties constitute the law of the land. Case law provides that in the event of irreconcilable conflicts the later enactment would supersede the earlier one. The language of Article 4 of the JPEPA on the Review of Law and Regulations likewise reveals the intent of the JPEPA to amend or repeal laws that would affect the implementation and operation of this agreement.

Touch, move?

Although it is an upset that the JPEPA has already been signed, it is far from being a done deal as far as the Philippines is concerned. The JPEPA is not yet in force and effect as approval by 2/3 of the Senate is necessary before it can be fully implemented. We call on the Senate to carefully determine the full implications of the JPEPA on the country’s trade, environmental, economic, and foreign policies and laws.

It must be remembered, that aside from waste products, there are other issues that should be pointed out regarding JPEPA, particularly the inclusion of the ‘Singapore issues’ in JPEPA. These are the very same concerns that the Philippines and other developing countries rejected in the WTO’s Cancun Ministerial in 2003. Why then, institutionalize something that we rejected in the WTO? It begs to question the consistency of our trade policy (if we have any). Developing countries have opposed the “Singapore issues” precisely because these are limitations on the right of developing countries to freely chart their domestic economic policies. Outside the WTO, this bilateral agreement hastily concluded puts the Philippines as a weaker developing country in an inherently disadvantageous position against a stronger developed Japan.

Dancing the JPEPA

While the Administration has been pushing for Charter Change that will in effect abolish the Senate, they should be reminded that it was thru the failure of the Executive to fully disclose the contents of the JPEPA before it was signed that the agreement now is under attack. Fortunately for us, it is the Constitutional mechanism of checks and balance, prescribing that Senate ratify international treaties entered into by the Executive, that can save us from this destructive deal.

Given this circumstances at which the JPEPA has been hastily concluded, shrouded in secrecy without meaningful participation of the Filipino people, and with provisions disadvantageous to our people and our environment, at this point it would be wiser to JUNK JPEPA altogether. Any effort to advance an agreement between the Philippines and Japan should include the participation of the Filipino people.

Negotiating with the people

In line with this, together with Cong. Erin Tanada, we in Akbayan urge this House to pass the bill creating the Philippine Trade Representative Office that will strengthen coherence in trade and development policy formulation and recognize the people’s right to access information and to participate effectively in economic decision-making by influencing the outcome of international trade treaty negotiations, not only for JPEPA but in subsequent trade negotiations.

Ito po yung totoong People’s Initiative, kapag ang ating mga mamamayan na ang lumalapit sa atin upang pag-usapan ang mga isyung may kinalaman sa kanilang kabuhayan, kalusugan, at kapaligiran. Wag po natin silang tanggihan. Ito po ang esensya ng demokrasya, upang bigyang tinig ang ating mga manggagawa, magbubukid at mangingisda sa pagsusulong ng kanilang kabuhayan na sya ring magsusulong ng ating pambansang pag-unlad. Huwag po nating hayaan na tayo ay maging imbakan ng basura, at yurakan ang ating pagkatao. Isulong natin ang isang polisiya sa pangangalakal bilang isang sambayanang isinasaalang-alang ang kapakanan ng bawat Pilipino ngayon at bukas. Sama-sama po nating “Ibalik ang Dangal ng Pilipino, at Ipaglaban ang Kinabukasan Ngayon”.

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Posted in Speeches, Trade/WTO | 13 Comments »

Drowning in crisis : A look into the privatization of water services

Posted by tin on September 19, 2006

Drowning in crisis : A look into the privatization of water services

Nine years after the water distribution function of the Metropolitan Waterworks and Sewerage System (MWSS) was auctioned off to private corporations, the Philippine government and Metro Manila’s water concessionaires have nothing to show but skyrocketing rates, unmet service obligations and heavier debt burdens. The supposed model for private sector participations (PSP) or public-private partnership (PPP) in the global water industry has become a classic example of a water crisis solution that proves to be worse than the problem it claims to address.

Meant to address the country’s “looming water crisis,” the said privatization effort was carried out under the auspices of the World Bank with its own investment arm called the International Finance Corporation (IFC) serving as consultant of the Ramos administration. Promising greater efficiency and lower water rates under a privatized setup, the MWSS case became the most massive water privatization project in Asia.

Prior to 1997, the World Bank was already active in the Philippine government’s privatization efforts through various conditionalities that were supposedly part of its loan packages. As early as 1984 for instance, the Bank has granted the Philippines a loan assistance amounting to $300 million on the condition that a number of public enterprises will be restructured and that the state’s participation in the economy will gradually be limited. This shift in the WB’s paradigm was so successful that by the 1980s, it was already active in promoting the “privatization of banks, mining companies, telecommunications, transportation, electricity.” By the following decade, the “privatization of water was added to the World Bank’s policy prescription.”

Armed with a paradigm of free market economics, the World Bank sought to put it into practice and saw the privatization of the MWSS as the perfect opportunity to do so. Initially, the idea of privatizing the said water utility was an attractive proposition, especially since MWSS was perceived to be both corrupt and highly inefficient. Prior to privatization, for instance, the company had a non-revenue water (NRW) level of 58% which was caused by leakages and pilferage from its badly maintained piping system. This was further aggravated by the fact that MWSS was only able to provide water supply at an average of 16 hours a day to 67 % of its 11 million coverage-population in Metro Manila and the surrounding provinces. Furthermore, the water utility was heavily indebted, with an outstanding obligation of $800 million.

It is this last item that made privatization so attractive for the government since it could now pass on these liabilities to the private sector and ease itself of some of its debt obligations. What made it even more pressing was that by the mid-1990s, the government discovered that the country would face an imminent water crisis, and that water demand would increase by as much as 42%. To address this situation, the country would require $7.5 billion in investments to finance infrastructure repair and the improvement of the MWSS —an amount that the government simply did not have.

Privatizing MWSS

Republic Act 8041 or more commonly known as the National Water Crisis Act of 1995 was approved by the Philippine Congress. The said law called for the adoption of urgent and effective measures to address the water crisis. It also gave President Ramos emergency powers to facilitate the privatization of the MWSS at the soonest possible time.

The Philippine government contracted the IFC to design the privatization of the MWSS for a fee of $6.2 million. In return, the IFC designed a “concession-type model covering water treatment, distribution, tariff collection, facility improvement and overall management.” Apart from following the recommendations made by the IFC, the Philippine government also decided to follow the “Paris model” by dividing the MWSS service area into the East and West Zones in order to “break up the monopoly and allow regulators to check the performance of one concessionaire against that of the other.”

In January 1997, the Maynilad Water Services, Inc. (Maynilad/MWSI) and the Manila Water Company, Inc. (ManilaWater/MWCI) emerged as the winning bidders for the MWSS concession’s West and East Zones, respectively. Maynilad is a partnership between global giant Suezand local elite Benpres Holdings while Manila Water is owned by a group of investors that includes the transnational United Utilities and leading local firm Ayala Corporation. As designed by the IFC, the MWSS privatization took the form of a concession contract: private companies would manage and use existing facilities to provide water and wastewater services to Metro Manila residents, in exchange for revenues they would gain from users’ fees.

Water tariffs drastically fell after privatization — 43.5 percent in the West Zone and 73.6 percent in the East Zone. But public elation would not last long. Within two years, Maynilad and Manila Water got the first of many tariff hikes that would come in only seven years under the privatized setup. Other burdens have since multiplied for consumers while the concessionaires continue to enjoy risk-free business.

Manila Water Company Inc.

In 1998, Manila Water and the MWSS Regulatory Office (RO) came to an impasse because the firm wanted to change one of the bid parameters — the so-called market-based cost of capital (after taxes payable by the concession business). The RO refused, as this would have improved Manila Water’s original bid more than a year after the bidding had been finalized. Arbitration ensued, and eventually, the Appeals Panel ruled in favor of Manila Water. This decision cast doubt on the integrity of the whole bidding process in 1997. For East Zone customers, in particular, it laid the basis for retroactive increases in water rates, as well as increases to be granted to Manila Water in the years to come.

From the application of various cost adjustment mechanisms, Manila Water charged consumers in 2005 an additional PhP2.18/cubic meter (m3), bringing its rates up to PhP17.83 or close to a 670 percent increase from its original bid price of PhP2.32. The MWSS Board approved this rate despite questions over a rate of return that is far beyond the limit set by law on public utilities.

Maynilad Water Services Inc.

Despite exclusive distribution rights to the provision of full waterworks services in the West Zone, Maynilad was already financially bleeding in 2000 with losses estimated at PhP3 billion. Maynilad did not want the contract mechanism that spread out the recovery of forex losses over the life of the contract, so it pushed for a new mechanism to automatically recover forex losses from consumers in just 15 months through the Accelerated Extraordinary Price Adjustment (AEPA). Foreign Currency Differential Adjustment (FCDA) authorizing the recovery of current and future forex losses arising from debt servicing of dollar-denominated loans of MWSS and Maynilad’s was also included in the contract.

As a result of the contract amendment, rates rose by more than 60 percent. Even after the 15-month period (which should have ended in December 2002), Maynilad continued to charge consumers for the AEPA. It also persisted in collecting the FCDA, despite failure to remit concession fees since March 2001. These unauthorized collections by which the concessionaires continue to overcharge consumers amounted to a hefty PhP10 billion during the first quarter of 2004. This issue remains unresolved to this day. Maynilad has even, in 2005 raised its water rates to PhP30.19/m3. This redounds to a 51.6 percent increase from the current average of PhP19.92/m3 or a more than 500 percent rise from its original bid of PhP4.96/m3 in 1997.

Because of Maynilad’s refusal to pay concession fees, the government has been incurring new loans to avoid defaulting on maturing loans of the MWSS. For even as the utility’s old debts have been assumed by the concessionaires, they remain in government’s name. Payments are supposed to be sourced from the concession fees. All told, Maynilad’s non-payment of its long overdue concession fees, now amounting to more than PhP10 billion, has forced MWSS to incur more debts from bridge financiers to finance maturing obligations, in its attempt to avoid default.

A continuing tradition of subsidizing private business risks

At no point (at least to public knowledge), has government through the MWSS Board significantly questioned the wrong assumptions and projections of the concessionaires, nor put them to task for their corporate mismanagement and inefficient operations.

Actual billed water volumes and revenues of Manila Water from 1997 to 2000 fell short of projections by PhP586 million or 12 percent below expectations. IFC’s consultants knew but chose to ignore the firm’s unrealistic targets for reducing non-revenue water and generating revenues. These included demand projections that were 45 percent higher than what earlier studies indicated and overly optimistic targets of halving Non-Revenue Water (NRW) within five years. Despite the huge capital investment that the latter target would have required, Manila Water also committed itself to operating at a cumulative loss of US$ 496 million or a negative cash flow in the first ten years of operations.

As for Maynilad, it should be recalled that in 2001, government simply accepted Maynilad’s only argument for its heavy foreign exchange losses: the Asian financial crisis. Maynilad instead got a quick and ill-deserved breather from the AEPA, skirting contract provisions that unexpected foreign exchange losses be collected (with interest) from consumers on a staggered basis, over the life of the contract.

The firm was never put to task for overestimating revenues, underestimating costs and failing to cushion itself for some fall in the dollar-peso exchange rate, considering the events brewing in the region. Maynilad was way off its projected operating expenses of PhP5745 million for 1997 – 2000, and actually spent PhP8629 million for this period. One explanation surfaces in the high costs of production and operations from the dollar-denominated expenses for foreign consultants and management contracts. A consultancy report from Thames Water revealed that Maynilad allocated 60 percent of its capital expenditures to paying for consultancy fees of its affiliate companies such as First Philippine Balfour Beatty and Meralco Industrial Engineering Services Corp. More basic errors have emerged. Maynilad has admitted that it miscalculated the length of water pipes in the West Zone by 1,200 kilometers; this turned out to be 3,700 kilometers instead of the MWSS estimate of 2,500 kilometers.

Additional taxpayers’ burdens and the “public utility” issue

Both Manila Water and Maynilad concessionaires are currently on a tax holiday and will only begin remitting taxes to government in 2006 and 2007, respectively. Nonetheless, payments for tax remittance are already being collected from consumers because these are factored in when determining water rates. Further, a Supreme Court decision early last year against public utilities charging their income tax payments to consumers would have provided relief to taxpayers, along with the ruling’s stress on the existing law setting a maximum of 12 percent rate of return of the book value of public utilities’ assets. But the concessionaires found a way out of this too.

Government and the concessionaires went into a debate on what public utilities are. Relying merely on opinions presented by framers of the MWSS privatization, the Technical Working Group created to resolve the issue persuaded the MWSS Board and RO to issue resolutions formally identifying the concessionaires as mere agents and contractors and not as public utilities. This must have been cause for celebration, particularly for Manila Water whose rate of return for 1999 was revealed by a Commission on Audit report to have reached 40.92 percent, or 28.92 percent higher than the allowable 12 percent. This translates to profits of about PhP281 million.

Continuing inefficiencies affecting water rates and water quality

The lowering of water rates is heavily premised on the concessionaires’ capacity and efficiency to bring down Non-Revenue Water levels. This has not happened. Supposedly more efficient than Maynilad, Manila Water has been unable to solve rising NRW percentages. Manila Water’s target was to bring down NRW in the East Zone to 16 percent by 2001 from 45.2 percent in 1997, but this only rose to 48 percent in 1997 and again climbed to 52.66 percent in 2002.

The same can be said for the West Zone. While it can be argued that the 1997 crash did cost Maynilad large foreign exchange losses and affected its ability to repair leaking pipes, this does not totally explain why its Non-Revenue Water percentages rose from 57.4 percent in 1997 to 67 percent in 2000. Had Maynilad addressed what is largely causing its high NRW levels – pilferage and billing problems – this would have reduced its losses from 1997-2000.

Problems with expansion of service and access

The MWSS prides itself with a progressive tariff structure. In a situation, however, where the majority is not connected to the piped network, only those with water connections can claim benefits. Meanwhile, connection charges of about more than PhP4,000 remain prohibitive for large numbers of poor households. Aside from cash flow problems, a continuing disincentive to connect to the network is the poor quality of water and service itself (e.g., intermittent water supply, heavily silted water, etc.) being experienced by Maynilad and Manila Water customers. Consumers with already limited incomes are forced to buy bottled water or spend more on fuel costs from constantly boiling supposedly safe piped water.

Proffered as the solution to Metro Manila’s water problem and to the ballooning liabilities of the MWSS, water privatization has proven to be just the opposite, turning out to be a medication that is far worse than the disease. Since 1997 for example, water rates have increased by 500% to 700%, with Maynilad pegging it at Php32.93 per cubic meter and their East Zone counterpart setting it at Php19.73 per cubic meter. Such increases, however, were made without significant improvements in their service delivery and without even accomplishing some of their major commitments when they entered into the Concession Agreement.

Furthermore, water supply targets remain unmet since the two concessionaires’ service areas are only able to supply water for less than 21 hours a day. Maynilad, moreover, is only able to supply water to 5.2 million people, which is way below their original target of 6.7 million. Manila Water, on the other hand, pledged to deliver water to 4.3 million people, but their actual operations can only provide water supply for 3.2 million residents. And neither were they able to address water pilferage and leakages, with NRW levels as high as 52.66% in 2002.

Neither was privatization able to address the health concerns surrounding water service delivery, as indicated in the cholera outbreak that occurred in October 2003 in the service areas of Maynilad. The said incident affected 800 people from Tondo, Malabon and Caloocan, killing eight (8) of their residents.

Maynilad placed the blame on the residents themselves, stressing the number of illegal connections and the “unsanitary habits” of their supposed customers. Further scrutiny, however, revealed that the outbreak was brought about by the sheer inefficiency by West Zone concessionaire, which allocated a mere Php8.96 billion for the maintenance and rehabilitation of their piping system instead of their targeted Php23 billion. It was also discovered that the water pressure in the affected areas was relatively low, making the entry of contaminants even more probable.

Government has also been at the losing end of this arrangement, since it now has to shoulder the debts of Maynilad apart from addressing its own maturing liabilities. Moreover, MWSS also had to spend Php230 million for the legal services that it requested during its early termination dispute with Maynilad. As a result, the ailing government agency is now in an even worse situation, posting a budget deficit of Php5.6 billion in 2002 and an estimated Php4.5 billion budget deficit in 2004.

Surprisingly, the World Bank has not put the concessionaires to task for all their failures and unfulfilled promises. Rather, it still nurtures the belief that privatization is the answer and that the private sector will be able, sooner or later, to get its act together through the Invisible yet magnanimous Hand of the market. Yet, nine years into the privatization of MWSS, the Hand of the World Bank has yet to extend its saving grace and salvage Metro Manila from the scourge of rising prices and deteriorating services.

I now ask this body to review our public utilities law, primarily through an investigation and inquiry on the government’s effort to privatize Metro Manila’s water. Water is basic human right supposedly protected by international treaties and domestic laws. But nine years of having private corporations at the helm of the water distribution system has only resulted in abuses and dehumanizing conditions wherein people have to resort to trade-offs between other basic needs and the rising cost of water services. This automatically excludes the poor majority and thus, defeats the very reason why the government and international finance institutions placed water services in private corporations’ hands.

Let me end this speech by expressing our disgust and strong condemnation over the way the IMF-WB treated our fellow Filipinos in their on-going high level talks in Singapore. Social activists Prof. Walden Bello and Princess Nemenzo were earlier issued accreditation by the IMF-WB to join their meeting only to be given a hasty notice that they are no longer allowed to attend such talks. The IMF-WB cannot just show its utter disrespect to our countrymen, much less remain unaccountable for their failure to reconstruct an honest-to-goodness water delivery system in Metro Manila.

 

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Nursing our Nurses: Protecting our exploited nurses in New York

Posted by tin on September 4, 2006

NURSING OUR NURSES:

Protecting our exploited nurses in New York

Privilege Speech of Akbayan Rep. Mayong Aguja on the Sentosa Victims delivered at the House of Representatives on September 4, 2005

Mr. Speaker, esteemed colleagues, I rise today to bring to you the issue of our nurses who after years of nursing education in the country, and after a grueling endeavor to find employment abroad find themselves still unjustly treated. With the growing demand for nurses worldwide, nurse staffing and recruitment agencies have proliferated both here and abroad. Nurse recruiters have been aggressively inviting nurses to work overseas, especially in the United States, with promises of free housing, insurance, medical and dental benefits, immigration assistance, free review and application for exams, and other bonuses. Such attractive offers prove irresistible for Filipino nurses. However, complaints have been piling up about nurse staffing and recruitment agencies not living up to their promises or are misrepresenting information.

Let me tell this body of the case of 26 nurses and a physical therapist—all our kakababayans who went to New York in search of greener pastures but all found themselves unjustly treated. All of them were recruited by Sentosa Recruitment Agency. Sentosa is a Manila-based agency recruiting Filipino Nurses for SENTOSA CARE GROUP – the biggest privately-owned healthcare group in downstate New York. It claims to recruit nurses for direct placement in healthcare facilities in the said area in the US.

From their website, the said recruitment agency promises the following benefits, all are but too enticing for any Filipino nurse:

· Direct-hiring

· Competitive salary ranging from $21 to $35 per hour

· Medical coverage

· Dental coverage

· Relocation and Housing allowances

· Free Malpractice Insurance

· Paid Vacation days

· Paid Sick days

· Paid Birthday

· Paid Holiday

· Free Airfare from Manila to New York

· Reimbursement of fees for processing certification and licensures

· Generous Shift Differentials, Flexible 8 and 12 hours Schedules

· Paid Study Leave

· Free housing to all new Immigrant Nurses.

The 26 nurses were sponsored to work as immigrant workers. They arrived in the United States as immigrants, some as early as 2004, and some others, as recent as last quarter of 2005. The lone physical therapist was sponsored as a nonimmigrant worker.

When these healthcare professionals arrived in the United States, they were all surprised to find out that most of them were made to work for a nursing home facility different from the nursing home facility that sponsored them, meaning a different facility from what was submitted to the POEA.

Interestingly, Sentosa Recruitment Agency is a single proprietorship under the name of Francis Luyun, who presently works for one of the NY nursing homes owned and/or managed by Bent Philipson, a Danish citizen and a permanent resident of the United States. The petitioning employers of the nurses and the physical therapist are various nursing home facilities owned and/or managed by Bent Philipson. Mr. Philipson owns and/or manages many nursing home facilities in the New York area, probably more than twenty all in all. In addition to the nursing home facilities, Philipson likewise owns and/or manages Sentosa Care, LLC, a healthcare management company based in Woodmere, NY. One of the nursing home facilities (Woodmere Rehab) that sponsored most of the nurses is likewise located in Woodmere, NY.

All of them (without exception) were not compensated by any of the nursing homes that supposedly sponsored them, whether their worksite assignment was their petitioning employer or not. All of them were paid by Sentosa Services or Prompt Nursing Employment Agency. In effect, they were all made agency nurses or agency physical therapist of Sentosa Services/Prompt Nursing Employment Agency, which they were told was also owned and controlled by Bent Philipson.

Those nurses who received health insurance coverage got the same, not from their petitioning employers, but from Prompt Nursing Employment Agency. The nurses complained that some of them were not reimbursed their licensure and certification expenses. A couple of the nurses complained that they were not reimbursed their plane fare from Manila to New York.

All of the nurses complained that they were told, even while they were still in the Philippines, that upon their arrival in the United States, they could start working immediately as registered nurses as their limited permits to practice nursing had already been processed. To their surprise, their limited permits had not been processed yet at the time of their arrivals. A few got their limited permits about three weeks after their arrival. Most of them got their limited permits or licenses a couple of months later.

Some of the nurses were made to work initially as “clerks” and were paid $12 to $14 per hour. The prevailing wage rate for a nurse is around $24 per hour. The nursing home facilities where the nurses worked were paying much more than that ($35 to $45 per hour) to their staff nurses.

The nurses all complained that their working hours were reduced from 37.5 hours to 35 hours per week. Some of them were not paid for actual hours worked; some of them were underpaid their hourly rates; some of them were not paid night shift differentials; some of them were not paid holiday pay. These nurses all complained to their supervisors and employers, either verbally by phone or formally, by letters or e-mail messages, about the underpayment or non-payment of their wages and other employment benefits. They also complained about patient healthcare issues, such as understaffing and the lack of proper and complete orientation or training. But all of their concerns and issues were ignored and not satisfactorily addressed by their employers / worksite assignments / supervisors.

The nurses’ complaint were referred by the NY Consulate General, to a pro bono counsel. On April 6, 2006, thru their counsel, the nurses filed charges for discrimination against their respective petitioning employers, Philipson, Sentosa Care, LLC, and Prompt Nursing Employment Agency, before the Office of Special Counsel for Immigration-Related Unfair Employment Practices of the US Department of Justice in Washington, DC.

The nurses and the physical therapist likewise submitted their resignation letters sometime thereafter, to be effective immediately. Their resignations were premised on the substantial breach by their employers of their employment agreements.

On April 11, 2006, Philipson and his group of companies filed a complaint against the nurses/physical therapist for breach of contract, and against the counsel and one of Sentosa’s competitors (Juno Healthcare Staffing Services, Inc.) for tortious interference of contracts. A TRO was issued by the Judge but only to enjoin the nurses, Juno and their counsel from “soliciting” other employees of the Sentosa group of companies to resign from their employments.

Other Sentosa employees, who were also victims of the same discrimination and exploitation suffered by the 26 nurses and the physical therapist, told the group that they would also be willing to file charges against Philipson and his group of companies. The new complainants executed their Affidavits. On the day the counsel was supposed to file the charges before the US Office of Special Counsel, he received a faxed letter from them informing us not to file the charges as they “fear for their lives”.

Sometime before the end of April 2006, the nurses filed administrative cases against the Philippine-based Sentosa Recruitment Agency for violations of recruitment rules and regulations before the Philippine Overseas Employment Administration (POEA). The group also filed labor claims against the petitioning employers before the National Labor Relations Commission (NLRC). They also filed criminal cases against Sentosa Recruitment Agency and Luyun for illegal recruitment before the Department of Justice.

POEA Administrator Rosalinda Baldoz signed the preventive suspension order of Sentosa Recruitment Agency on May 24, 2006 based on the complaints filed by the nurses. On June 2, 2006, New York Sen. Charles Schumer wrote POEA Administrator Baldoz and then DOLE Secretary Patricia Sto.Tomas, to look into the case. Philipson is known to be a big political contributor of Sen. Schumer.It seems, the “padrino” system is not unique to the US Senator and Bent Philipson. Unlike Sen. Schumer however who simply asked “to take any actions ..considered appropriate”, the agency’s local “padrino” called up to directly intervene with the case. The nurses and their legal counsel Atty. Felix Vinluan were informed that Secretary Michael Defensor, Presidential Chief of Staff called up the POEA on June 6, 2006 to lift the order of preventive suspension. The nurses were also informed that Sec. Defensor and Con-Gen Cecilia Rebong had a long talk about the Sentosa case on June 7, 2006. Apparently, after the talk the Con-Gen seemed to have washed her hands off the Sentosa case. Similarly, the Labor Attache has not responded to persistent communications of our concerned healthcare professionals regarding their case.

On June 08, 2006, POEA Administrator Baldoz lifted the order of preventive suspension on the basis that there are more than two thousand job orders pending with the Sentosa Recruitment orders with “two thousand Filipino medical workers whose chance to be issued US immigrant visas may be jeopardized”.

To my mind, it seems that we are too busy sending out our workers abroad but fall short of responding to their grievances. The government sends its workers overseas for failing to produce local employment but does not immediately take action to protect them. It seems that the government has turned a blind eye and deaf ear to the injustices against our fellow Filipinos abroad but can easily be influenced by a US Senator.

What is clear in this case is that Sentosa Recruitment Agency violated recruitment rules and regulations of the POEA by engaging in acts of misrepresentation in publishing false information thru their website and flyers and by altering employment contracts approved and verified by the POEA. Even with glaring evidence to prove the allegations, it is clear with the lifting of the suspension order against Sentosa that the POEA does not have the resolve to protect our workers.

It is very sad to note that it appears that the government does not have a clear plan of action for our workers – nurses or not, once they are outside our country. In 2005, OFW Remittances was a whopping USD 10,689,000.0 or 10% of our GNP. Despite this, our OFWs do not receive the protection they deserve. Once abroad, they are left on their own. We in Akbayan, have filed House Bill 2367, An Act strengthening the regulatory functions of the POEA. We all call on our fellow lawmakers in this House for the immediate passage of this bill for the protection of our workers. The same bill manifests the need to monitor overseas employment, apart from the licensing and registration system.

Mr. Speaker, esteemed colleagues, what is bothersome with this case is that these workers are already professionals, registered medical health practitioners here in the country. They sought employment abroad because of poor working conditions for health care professionals here in the country only to find out that their situation abroad could be much worse. It is sad to note that one of the petitioners in this case is 2004 Medical Board topnotcher tuned-nurse who has purposedly left the country to grab the opportunity for a better life. These healthcare workers sought the aid of our government not only for themselves but also for the numerous overseas workers who may be experiencing the same injustices.

Allow me to quote a few statements from the open letter of our nurses released on July 6, 2006:

“Though we are far from home, we are still Filipino citizens and thus we sought protection and assistance from your respective offices. We are not financially affluent or politically well-connected to influence the decisions of those in power, but what we have is the wellness of truth behind our claims. If you cannot give us assistance then to whom to we go to? Are you just going to turn a blind eye and deaf ear to the exploitations and discrimination against you fellowmen? Is the Philippine government willing to settle for mediocrity when something can be done? Or shall we let the media assist us in bringing these issues to the fore?”

All these in consideration, Mr. Speaker, fellow legislators, I call upon this house to investigate this case particularly the action (or lack of it) of the POEA, and the Labor Attache of our Consulate Offices, not only in the United States but in countries where our workers, whether healthcare professionals or not are experiencing similar cases of unjust practices. Similarly, we would also like to investigate the reported influence of politicians on the decisions of the POEA to lift the suspension order against Sentosa Recruitment Agency particularly of US Senator Schumer and Secretary Mike Defensor.

The nursing profession is under fire nowadays with the reported leakage of the recent licensure exam. While we should continue to investigate this case, let us also not forget our nurses and health care professionals we have already sent outside the country. They seek our attention not only for their personal interest but also for the welfare of their fellow Filipino professionals. Let us be reminded that our overseas workers, in whatever country or profession, are still our constituents who deserve our attention and protection. While we in Akbayan, denounce the government policy to actively send out our workers abroad for failing to provide quality local employment, the increasing number of overseas workers deserve our earnest attention.

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