THE Department of Energy (DOE) highlighted the need for the Philippine government to have a unified stand in dealing with the arbitration case filed against it by Shell Philippines Exploration B.V. (SPEX) to ensure that the best interests of the Filipino people will be served.
“The DOE will exhaust all possibilities and avenues to study options and bring before the President recommendations that will have one objective: to protect and serve the best interests of our country and the Filipino people,” DOE Secretary Alfonso Cusi said.
“We welcome this as an opportunity for the national government to effect real change and to come up with definitive and clear-cut policies in dealing with our partners,” Cusi said.
SPEX holds 45 percent of Service Contract 38 and is the operator of the Malampaya gas project. The other members of the Malampaya consortium are Chevron Malampaya LLC with 45 percent and government-owned PNOC Exploration Corp. with 10 percent.
SPEX filed an arbitration case on July 20 before the International Center for Settlement of Investment Disputes in Washington, D.C. over its tax dispute with the Philippine government.
The case stems from a 2009 Commission on Audit (COA) finding that the Malampaya consortium owes the government P54.14 billion in unpaid corporate income taxes. Although the consortium appealed the findings, COA dismissed its petition.
In the arbitration case filed, SPEX is challenging COA’s interpretation of the computation of the 60-40 sharing of proceeds from the Malampaya Project.
“The trust and confidence of foreign investors in the stability and certainty of our investment laws and regulations that the government, for a long period of time, has painstakingly built and nurtured, has been greatly damaged,” it said.
DOE’s Cusi said, “This issue is not the concern of the Department of Energy nor of the Executive branch alone. The Supreme Court, the Commission on Audit and even Congress have a stake here too.”
“In the end, a nationalistic approach is necessary to make a unified stand. This is in line with the Duterte administration’s vision of unity in our country,” he said.
He added that the DOE will recommend to the President the necessity of aligning government institutions to work together and act consistently.