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Duterte eyes economic sabotage vs water firms

December 04, 2019 - Wednesday 6:12 PM by Lovely Carillo

Article Banner Image WATER FOR LIFE. A boy fills a plastic container with water in the Valenzuela suburb of Manila, part of Maynilad Water Services Incorporated concession to provide water services for half of the Philippine capital. JAY DIRECTO / AFP

Is economic sabotage a dead law? 

Some legal minds would like to think so given the law’s vagueness and wide coverage, and considering the rarity of economic sabotage cases filed with the Department of Justice (DOJ), but there are those who believe the law is still applicable.

“I don’t think so. It is still applicable law unless repealed or rendered unconstitutional by court decree,” lawyer Philip John Pojas, a Political Law professor at Cor Jesu College of Law in Digos, Davao del Sur, told Mirror.

WATER DISTRIBUTION RESPONSIBILITY. It is the obligation of  a water concessionaire to distribute sufficient water and make it available for consumers at all times.   Photo shows workers of the Davao City Water District doing emergency repair works to restore water supply in the affected areas.  ARJOY M. CENIZA 

Former Securities and Exchange Commission (SEC) Chairperson Perfecto Yasay was accused of it when he suspended trading at the Philippine Stock Exchange sometime in 2000 due to stock manipulation. Duterte also threatened to file economic sabotage charges over the Mile Long property sometime in 2017.

Even Senator Lito Lapid sought to expand the coverage of economic sabotage to include those involved in investment scams in connection with the get-rich scams that became widespread in Davao and General Santos City just a few months ago.

Economic sabotage has once again gained popularity after President Rodrigo Duterte threatened to sue water concessionaires Manila Water Co. Inc. and Maynilad Water Services Inc. with an economic sabotage over irregularities in the concession agreements the firms signed with the government in 1997.

In a report by the Philippine News Agency, Duterte said he wants all those involved in the onerous contract to experience life in prison.

“Bakit pumayag ang mga senador diyan? Marami ‘yan sila (Why did the senators agree to that? There are many of them). And we will expose them and I will insist that they be tried for economic sabotage,” Duterte said.

“Pag 'di nila tanggapin 'yung kaso na ‘yan (If they don’t accept the case). I’ll tell the Supreme Court now, now is the time that we talk seriously...Ito ifa-file ko ‘to (I will file this case)...economic sabotage and I will arrest them,” he added.

Duterte’s frustration was due to the apparent one-sidedness of the agreements, which prevented the government from interfering with the water distribution responsibilities.

“Sila ang distributor, atin ang tubig (They’re the distributors, we own the water). In the contract, the water is categorized not as a natural resource but as a commodity. At sa contract, hindi Republic of the Philippines,” he added.

Justice Secretary Menardo Guevarra, who was instructed by Duterte to review the water concession agreements, earlier said DOJ "found a dozen provisions that were deemed onerous or disadvantageous to the government and the consuming public.''


NEED FOR  SERVICEABLE HEAVY  EQUIPMENT. This heavy equipment is being used for deep excavations by water distributors to keep potable water flowing for public consumption. ARJOY M. CENIZA

One of the most notable onerous provisions in the concession agreement, Guevarra said, was the prohibition against government interference in rate-setting and the provision on indemnity for possible losses in the event of such government interference.

Due to the two provisions, the government was ordered by the Singapore arbitration court to pay Maynilad about P3.6 billion and, recently, P7.4 billion to Manila Water as compensation for losses and damages.

Guevarra said another onerous provision is the extension of these contracts to 2037 considering that the extension was granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022.

While there is no single specific provision in the Revised Penal Code that defines the crime of economic sabotage, there are various laws that classify certain acts as economic sabotage including the Labor Code provision that considers illegal recruitment an act of economic sabotage (PD 2018) when committed by a syndicate or in large scale.

Lawyer Salvador Moya, author and lecturer, directed Mirror to Presidential Decree 1866 and the many amendments to check on economic sabotage. True enough, many PDs and letters of instructions issued by then President Ferdinand Marcos mentioned economic sabotage including swindling committed by a syndicate. Economic sabotage has also been related to RA 10845 or agricultural smuggling that weakens the economic system.

In the meantime, Duterte asked Finance Secretary Carlos Dominguez III and Solicitor General Jose Calida to “craft a new contract that is really favorable to government”. 

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