Inconsistent rules hurting business
The Legislative-Executive Development Advisory Council, chaired by President Marcos and composed of representatives of Congress and the Cabinet, has decided to prioritize the amendment of the Foreign Investors' Long Term Lease Act.
Introduced by Senate President Francis Escudero, the bill seeks to reinforce the opening of the economy to foreign investments by extending the lease of private lands, excluding agricultural lands, to foreigners from a maximum of 75 years to 99 years.
Republic Act 7652 currently allows the longterm lease of private lands by foreigners, who are not allowed to own land in the Philippines, for 50 years, renewable for another 25 years.
In his bill, Escudero explained that the proposed measure would also ensure that the operative act of registration of lease contracts renders the same binding against third persons and protects the lease contract from collateral attack, or from alteration, modification or cancellation unless otherwise performed through a direct proceeding in accordance with the law.
This, he said, would ensure the stability, integrity and security of lease contracts, promote ease of doing business, enhance investor confidence and contribute to the development of the Philippine economy. He added that it is the policy of the State to ensure the reliability of investors' lease contracts to guarantee stability and return on investment.
This is exactly the issue raised by a German consortium, which claims that after being wooed to invest in the Philippines by taking advantage of the 50-year lease, extendible by another 25 years, under the Investors' Lease Act, the government has decided to go another way and cut the lease period short.
The current row between the government and its solid waste disposal contractor has just become messier after the Metro Clark Waste Management Corp. (MCWMC), developer and operator of the Kalangitan sanitary landfill in Capas, Tarlac, filed before the Office of the Ombudsman graft and administrative charges against top executives and officials of the Bases Conversion and Development Authority (BCDA), Clark Development Authority (CDC), and the Department of Environment and Natural Resources ( DENR) for graft and corrupt practices, unethical conduct and grave misconduct and conduct prejudicial to the best interests of the service.
MCWMC filed the complaint after BCDA, through CDC, served notice that it was no longer renewing its lease contract with the private firm over the 100-hectare property situated in Tarlac, where the latter constructed the modern sanitary landfill facility.
According to the firm, the 50-year lease could have been extended for another 25 years under the Investors' Lease Act but was instead cut short to October 2024.
BCDA was also accused of allegedly favoring at least 10 waste management companies, chosen without public bidding, to undertake the waste management and disposal needs of more than 150 local government units (LGUs), excluding MCWMC from the list provided by respondents to the LGUs to undertake their waste disposal.
It claimed that the actions of the respondents are unreasonable, unfair and oppressive against the German consortium represented by MCWMC, that after being encouraged and invited to invest, and actually investing millions of dollars, they will just cut short the lease term.
Earlier, this writer reported how residents, businesses and industries in Central Luzon, the Ilocos region,and the Cordillera Administrative Region are now worried about an impending major garbage crisis. The Kalangitan facility is said to be the country’s first and most advanced engineered sanitary landfill, and the largest in the three regions.
More than 4,000 tons of waste are brought to this landfill daily from 121 municipalities in eight provinces, namely Pangasinan, Nueva Ecija, Tarlac, Pampanga, Bulacan, Zambales, Bataan and Benguet.
MCWMC earlier explained that its lease agreement with CDC is valid until 2049. Company executive vice president Vicky Gaston said that their contract with CDC has two components: the service contract, which pertains to MCWMC's exclusive right to provide waste management services to locators inside the Clark Special Economic Zone, and the lease contract, which grants the firm the right to use the 100-hectare property for an integrated waste management center.
She said that it is only the exclusivity clause that is expiring in October, but the lease is not, since pursuant to the Investors' Lease Act, MCWMC is granted a lease period not exceeding 50 years, renewable once for another 25 years.
To clarify the issue, the company filed a case before the Angeles City Regional Trial Court last June for reformation of the instrument so that the contract can accurately reflect the intention of the parties, and so that the court can determine the correct period for the lease.
BCDA and CDC have proposed a plan to convert this landfill into a tourism-oriented development project. They said that the 100-hectare property will be rezoned under the New Clark City Master Development Plan, claiming that maintaining a sanitary landfill is no longer consistent with the government's vision to transform New Clark City into a premier investment and tourism destination.
BCDA earlier identified three waste management facilities in Pampanga that may replace the Kalangitan landfill, but LGU officials expressed concern that these will be more costly and less efficient for the LGUs concerned.
Environmental officers from 121 LGUs have already raised their concerns over the impending closure in a petition sent to DENR Secretary Ma. Antonia Yulo- Loyzaga, where they pointed out that the facility is the only landfill in the region that meets the environmental standards set by the Ecological Solid Waste Management Act.
These LGUs have also expressed concerns that the closure would pose environmental and public health risks to millions of residents in their regions. They asked for the DENR's immediate intervention to maintain the landfill’s operations pending sustainable and long-term solutions.
Changing the rules midstream is hurting our economy. The BCDA and CDC should know better.
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