DOJ again flexes legal muscle in water row

MANILA, Philippines (UPDATED) – The Department of Justice (DOJ) is again flexing its legal muscle in justifying its renegotiation of water concession agreements, as well as the unilateral revocation of the contract extensions originally set for 2037.

In light of legal ambiguities in the DOJ's actions, Justice Undersecretary Markk Perete said there should be a "liberality" in favor of the government.

"From this starting point, should liberality be used in favor of the concessionaire to the detriment of the public and the government?" Perete told reporters on Thursday, December 12.

On revoking the extension

The concession agreements of Maynilad and Manila Water will expire in 2022, but during the term of former president Gloria Macapagal Arroyo, the contracts were extended to 2037.

Amid the renegotiation and arbitration row, the DOJ recommended revoking the extension.

Justice Secretary Menardo Guevarra said there was no clause in the agreements that provide for extensions.

"While there are provisions pertaining to early termination, there are none on extension beyond the original period," said Guevarra.

Asked whether the silence of the contracts on extension explicitly mean prohibition, Guevarra invoked public policy.

"It’s dangerous to adopt a policy of what is not expressly prohibited is impliedly allowed," said Guevarra.

One of the major public-private partnerships ever, Perete said the festering row over water concessionaires does not intend to "discourage private investments, much less to repudiate valid partnerships with the private sector."
 
"But such partnerships should not take precedence over the law and the public interest," Perete said.

Renegotiation

On the order of President Rodrigo Duterte, the DOJ is now revising the current agreements to remove onerous provisions like the prohibition on the government to interfere in rate setting, and the clause on business taxes being passed on to consumers.

Guevarra claimed that Maynilad and Manila Water "have never denied the existence of inequitable provisions in the water concession agreements."  

But the P10 billion arbitration win of the concessionaires speak of their legal insistence on that validity of the provisions, although both companies have conceded and said they will no longer demand payment. Guevarra said the DOJ was not involved in the arbitration that the government lost, only the Office of the Solicitor General (OSG).

Once again, Duterte gets the backing of the DOJ to maneuver the legalities of a shocking action, even without securing orders from the court. (READ: PH government admits it's unable to take over water operations)

"The burden of taking action based on an interpretation of the contract is assumed by the executive. In assuming that burden, it need not obtain prior court approval," said Perete.

"Only in case of disagreement will resort to judicial intervention prove necessary," added Perete. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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