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By Lakambini A. Sitoy, Karen Capino, Janice
Alonso
(Conclusion)
Harbor Center Terminal has already been hounded
by controversy separate from the Smokey Mountain project. On August
30 The Manila Times ran a report on an alleged attempt to smuggle in
some P35 million worth of rice through the terminal, also known as
Pier 22.
Documents obtained by The Times said the M/V
Astro, a private ship, berthed at the terminal on April 8, 2001,
carrying 35,000 bags of rice from Bangkok, Thailand. The shipment
was consigned to a Cavite concern that reportedly had no business
permit. The alleged shipper’s name did not appear on the list of
the National Food Authority’s grains dealers or retailer
licensees.
from A1
In a press release Harbor Center denied this and
prior reports of smuggling on its premises. It said Michael Romero,
its chief executive officer, had sent an August 25 letter to Customs
Commissioner George Jereos, saying the allegations were
“apparently instigated by parties benefiting from the existing
monopoly in cargo-handling operations in Manila.”
An August 31 Manila Times report quotes Deputy
Customs Commissioner Gil Valera as saying, “[Harbor Center’s]
operation is illegal because it violates the Customs and Tariff Code
of the Philippines.” The Code provides that the Department of
Finance, with the endorsement of the Bureau of Customs, shall issue
a permit to HCT to operate as a private commercial port, not the
Philippine Ports Authority. Harbor Center got a permit to
operate—as a domestic port—from the PPA.
Contract terminated, with conditions
On August 27, 2003, a memorandum of agreement
was signed between the National Housing Authority (NHA) and R2
Builders. It terminated all previous agreements entered into by the
two parties, but provided for partial payment of P250 million to R2
Builders and conveyance of a three-hectare portion of the Vitas
Industrial area to the developer.
The agreement did not put an end to the
controversy. In February the NHA awarded a consortium headed by R2
Builders a P217.9-million contract to complete the Smokey Mountain
project. The NHA board of directors approved the award. The other
members of the consortium were Bauer International Philippines Inc.
and the Philippine Ecology System Corp.
At the time of the new contract, according to
documents obtained by The Times, R2 Builders had finished only 21
buildings with 2,520 units out of the 33 buildings and 2,904 units
it was supposed to put up. Land development for this component was
only 41.86-percent completed.
Constitutional issue
Another issue that needs to be resolved is the
constitutionality of the grant to R2 Builders of reclaimed land.
In her privileged speech at the Senate on August
11, Senator Santiago declared that reclaimed land is part of the
public domain, that public lands can be sold exclusively through a
law enacted by Congress, and that legislation is the only means by
which reclaimed lands can be sold by the government to private
parties.
She cited Article 12 of the Constitution, on the
National Economy and Patrimony, which provides in Section 2 that:
“All lands of the public domain, waters . . . and other natural
resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. . . .”
and in Section 3 that “. . . the Congress shall determine, by law,
the size of lands of the public domain which may be acquired,
developed, held or leased. . . .”
She then cited jurisprudence: the 1960 case of
Ignacio v. Director of Lands (Philippine Reports, vol. 108, p. 335),
which, she said, “first emphasized . . . the principle that
certain public lands cannot be sold without congressional
consent.”
She also cited the 1990 case of Laurel v. Garcia
(Supreme Court Reports Annotated, vol. 187, p. 797), “which
prohibited the sale of the Roppongi property in Japan owned by the
Philippine government.”
To support her contention that reclaimed land is
public domain, she invoked the findings of the 1997 Senate
investigation into the PEA-Amari land deal that three reclaimed
islands off the Manila-Cavite Coastal Road in Parañaque City were
public lands, which the PEA could not alienate in favor of Amari.
She then cited the 2002 Supreme Court ruling on
the PEA-Amari case, Chavez v. PEA and Amari (Supreme Court Reports
Annotated, vol. 384, p. 152): “Since then and until now, the only
way the government can sell to private parties government reclaimed
and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale.”
Santiago would question the legality—the
constitutionality—of a crucial aspect of the Smokey Mountain
Development Project: the “enabling component” itself, the grant
of reclaimed land to R2 Builders that the cash-strapped Aquino
administration had conceived of in 1988 as an incentive for a
developer to begin dismantling the embarrassment that was Smokey
Mountain.
In a reformist mode, Santiago proposed in her
privileged speech a series of steps to transform reclaimed land into
alienable land:
“1. . . . Under the Administrative Code of
1987, the Department of Environment and Natural Resources first
decides whether the lands reclaimed from the sea can be classified
as public agricultural lands. If so, the DENR makes the proper
recommendation to the President.
“2. Under the Public Land Act, Section 8, the
President exercises the authority to classify inalienable lands of
the public domain into alienable or disposable lands of the public
domain. . . .
“3. The government declares that these lands
are no longer needed for public use, public service or quasi-public
use.
“4. Under the Public Land Act, Section 63, the
PEA [Public Estates Authority] asks the DENR for authority to
dispose of the land.
“5. Under the Administrative Code of 1987, the
Department of Environment and Natural Resources, which exercises
supervision and control over alienable and disposable public lands,
issues an authority to the PEA to reclaim areas underwater.
“6. The PEA undertakes the physical
reclamation of areas underwater, whether directly or through private
contractors.
“7. Under the Public Land Act and the
Government Auditing Code, the PEA conducts a public bidding in
selling or leasing these lands, but it cannot sell the lands to
private corporations.
“8. If the public auction fails, a negotiated
sale is allowed, but the Commission on Audit must approve the
selling price.
“9. Under both the [Build-Operate-Transfer]
Law and the Local Government Code, the contractor or developer, if a
corporate entity, can be paid only with leaseholds on portions of
the reclaimed land.
“10. Under the Administrative Code of 1987,
Congress enacts a law which authorizes and approves the conveyance
of real property of the government.”
The bundle of issues surrounding R2 Builders and
the Smokey Mountain project has been referred to the Senate
Committee on Public Accountability, or the blue-ribbon committee.
More than the legality of the contracts in
question, the committee will look into why the developer, through
three and perhaps four administrations, consistently bagged
sweetheart deals with the government, from asset-pool financing to
virtual exculpation of liability for its failures to complete the
Smokey Mountain project.
The committee may recommend the filing of
criminal charges against the parties involved, and then the case
shall go to the office of the Ombudsman, who may then file the case
in the Sandiganbayan, the antigraft court. With the possible
elevation of the case to the Court of Appeals or Supreme Court, it
may take years for what is now being called the Smokey Mountain scam
to be finally resolved.
To the former squatters of Smokey Mountain,
these legal processes will not have much impact on their lives,
except to result in occasional, step-by-step improvements to their
new homes.
One aspect of the trash-heap development project
has at least been fulfilled—they now have roofs over their heads,
for which they are paying socialized rates of up to a third,
according to the MIT study, of what the real estate actually costs.
The government, in a now familiar refrain, shoulders the rest.
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