SC urged to stop enforcement of Chinese loan for Kaliwa Dam project

Mike Navallo, ABS-CBN News

Posted at May 09 2019 09:06 PM

SC urged to stop enforcement of Chinese loan for Kaliwa Dam project 1
Environment and indigenous groups have opposed a deal involving a Chinese corporation because of its effects on the environment, wildlife, food supply, ancestral domains and the people living in the Kaliwa Dam area. File/Kara Santos, ABS-CBN News

MANILA—Makabayan bloc lawmakers, environmentalists and indigenous peoples on Thursday urged the Supreme Court to stop the enforcement of a $211-million Chinese loan for the Kaliwa Dam project.

Makabayan lawmakers France Castro, Carlos Zarate, Ariel Casilao and senatorial candidate Neri Colmenares filed a petition for prohibition with the high court seeking to prevent the government from implementing its Preferential Buyer’s Credit Loan Agreement on the New Centennial Water Source-Kaliwa Dam Project with China.

The loan, an official development assistance from China, will cover 85% of the project cost pegged at around P12.2 billion.

Petitioners claimed the deal violates several provisions of the 1987 Constitution.

The Makabayan bloc was joined by groups such as Bagong Alyansang Makabayan, KATRIBU Kalipunan ng Katutubong Mamamayan ng Pilipinas, Center for Environmental Concerns, Kalikasan People’s Network, AGHAM Advocates of Science and Technology and Protect Sierra Madre.

Named as respondents in the petition were President Rodrigo Duterte, Executive Secretary Salvador Medialdea, Metropolitan Waterworks and Sewerage System (MWSS) administrator Reynaldo Velasco, Finance Secretary Carlos Dominguez III, National Economic and Development Authority Secretary Ernesto Pernia, Justice Secretary Menardo Guevarra, and Office of the Government counsel Elpidio Vega.

The petitioners alleged that the loan agreement did not have prior approval by the Monetary Board and several provisions of the loan agreement violate the 1987 Constitution such as the confidentiality clause, the choice of Chinese law as governing law, the selection of an arbitration tribunal in Hong Kong, and the waiver of sovereign immunity over assets of MWSS as borrower and the Philippine government as guarantor.
“Petitioners allege that these assets could include those important to the Filipino people, such as MWSS properties which supply our water, dams, ports, energy resources, etc. depending on the interpretation of the Chinese tribunal applying Chinese law,” the petition said.

“Further, assuming that the Borrower’s (MWSS) property is insufficient to answer for the loan, then other vital properties of the State located in the Philippine territory, the GRP being the Guarantor under the Loan Agreement, would surely be made to account for these unpaid loans,” it added, reiterating their position in the Chico River irrigation project.

The petitioners also said the condition in the loan agreement awarding contracts to Chinese contractors goes against the policy preferring Filipinos under the Constitution and the Procurement Reform Act which requires public bidding.

The MWSS had earlier said the Kaliwa Dam is a done deal, which has been awarded to state-managed China Energy Engineering Corp.

These are the same arguments the Makabayan bloc used to question the Chico River irrigation project, which also involved a Chinese loan.

But Colmenares said the petition against the Kaliwa loan agreement also includes possible impact on the areas affected by the project.

Environment and indigenous groups have opposed the deal because of its effects on the environment, wildlife, food supply, ancestral domains and the people living in the area.

“Itong petition sa Kaliwa Dam, mas malaki ang emphasis nito sa impact nito sa indigenous people at sa environment. Kasi maraming nagreklamo, noong bago naming ifile, na mga katutubo na nagrereklamo na tatamaan sila ng Kaliwa Dam,” Colmenares said.
“Ito ay nakita na sa mga dam na ginawa ng Tsina doon sa Myanmar na kung saan marami, halos binaha nila ‘yung isang area na twice as large as Singapore. Maraming mga katutubo at mamamayan ang napinsala.”

Colmenares had also sounded the alarm against what he considers onerous terms of the deal — the loan bears an interest rate of 2%, with a management fee of 0.3% and commitment fee of 0.3% per annum, payable in 26 equal installments within 20 years.

In contrast, the proposal of Osaka-based Global Utility Development Corp. (GUDC) to build a weir or low dam would cost $140 million (P21 billion) but it will shoulder the full amount under a build-operate-transfer contract for 25 years.

Critics also pointed out that the Japanese dam will not flood nearby villages or force them to evacuate because it is only 7 meters high, unlike the Chinese dam which is 62 meters high.

Construction of the Kaliwa Dam is expected to be completed by 2023.