MANILA, Philippines – The National Food Authority (NFA) under the direction of former Administrator Orlan Calayag did not favor a rice cargo handler of 205,000 metric tons of Vietnam rice in exchange for a bribe, said Dennis Guerrero, Chief of Staff of Agriculture Secretary Proceso Alcala and former special assistant to Calayag.

In a press briefing on Monday, August 26, Guerrero called the accusation “baseless and malicious” and announced he was taking a leave of absence so as not to embroil Alcala in the controversy.

Earlier that day, Food Security Secretary Francis Pangilinan told Ted Failon on radio station DZMM that Calayag, Guerrero and other NFA officials are being investigated on the allegedly anomalous dealing.

The case refers to the NFA’s importation of 205,000 MT of rice from Vietnam that arrived in May 2013. Vietnam Southern Food Corporation (Vinafood II for short), the Vietnam-owned company NFA is buying rice from, originally subcontracted DYS Seair Worldwide, Inc (DYS) to be the cargo handler of the rice. The cargo handler is tasked with moving the imported rice from the ports to NFA warehouses.

But NFA allegedly told Vinafood II not to hire DYS and instead contract the services of Avega Brothers Shipping Corporation (Avega Brothers).

Guerrero chided Pangilinan for not discussing the allegations with him before going to the media.

“The honorable secretary…has gone to media and just announced that we will be investigated but we did not receive the courtesy of being informed of that beforehand.”

He “hopes” for an apology from the secretary, one that Pangilinan declined to give.

In a text message to Rappler, Pangilinan said, “I will just let the results of the investigation speak for itself.” 

What happened

Suppliers like Vinafood II are supposed to choose from a list of cargo handlers accredited by NFA. In this case, only Avega Brothers was accredited, said Pangilinan.

“We are studying if there should have been a bidding. Because if only one is accredited, then bidding is not competitive,” he said.

The requirements for accreditation also seemed “tailor-fit” to ensure only Avega Brothers would be accredited, he observed.

Avega Brothers was reportedly already paid the P1.08 billion *(US$24.6 million) cost of the contract.

But Guerrero stressed that NFA did not force Vinafood II to use Avega Brothers for cargo handling instead of DYS. They had to intercede after DYS failed to provide required documents as proof of their legitimacy as subcontractors, he said.

DYS failed to provide NFA with articles of incorporation, financial statement, list of officers, list of trucks, tax clearance and operations plans.

“It was our duty as responsible NFA officials to do this, especially in light of reports of diversion of NFA rice during previous importations. There were even reported cases that the NFA importation was being used as a cover for illegal private rice importation,” explained Guerrero.

A few weeks before the rice was supposed to arrive, there was still no replacement for DYS. Senior NFA officials recommended Avega Brothers “for having satisfactorily undertaken cargo handling in the past.”

Vinafood II accepted NFA’s recommendation.

“The agreement was not a very difficult agreement to arrive at because every party knows their interests and they wanted to make sure of the smooth delivery of NFA rice,” said Guerrero.

‘No bidding required’

The deal struck between Vinafood II and Avega Brothers does not require bidding based on the Procurement Act (Republic Act 9184), said Guerrero.

The NFA’s contract with Vinafood II says that Vinafood II must pay for the transport of the rice without cost to NFA.

In arrangements like this, the cargo handling contract is only between the cargo handler (Averga Brothers) and supplier (Vinafood II). The money paid to Averga Brothers came from Vinafood II, not the government, he stated.

It was only due to time pressure that NFA made one “tried-and-tested” recommendation. The intervention was justified, Guerrero said, because it was to safeguard the importation.

Subsequent developments also convinced the NFA that DYS could not be trusted.

In a meeting to discuss the operational details of the May 2013 importation, Guerrero said a certain “Manny Santos” attended saying he was the owner of DYS. Santos, said Guerrero, also owns or has interests in two companies involved in illegal rice importation – Jade Brothers Farm and Livestock Inc and Medaglia de Oro Trading.

He was summoned to Senate Committee hearings for his alleged involvement in illegal importation and is also an associate and broker of alleged rice smuggler Davidson Bangayan, also known as David Tan.

“What do you think would have happened if the NFA allowed DYS to undertake cargo handling?” asked Guerrero.

Leave of absence

To spare Secretary Alcala of the controversy hounding him, Guerrero announced he will take a leave of absence from his post as Chief of Staff.

“I am aware that there are many forces who might think of taking advantage of this situation to force his ouster…It would be a sorry loss for the administration if he would be unjustly dragged into this situation,” he said.

As of writing, Guerrero has not informed Alcala of his decision. – Rappler.com

*1 USD = Php 43.84