Bayan Muna asks SC to stop sovereign guarantees to Maynilad, MWC

MANILA, Philippines — Going to court just as households in parts of Metro Manila were dealing with water supply interruptions, militant lawmakers asked the Supreme Court, on Tuesday, to stop government from paying out a total of P82.44 billion in sovereign compensation to water concessionaires Maynilad Water Services Inc. and Manila Water Company.

In a 60-page petition, Bayan Muna party-list Representatives Neri Colmenares and Carlos Isagani Zarate asked the high court to void the arbitration clause in concession agreements the government had entered with Maynilad and Manila Water through regulator Metropolitan Waterworks and Sewerage System (MWSS) for being “illegal and unconstitutional.”

They also asked the high court to nullify the sovereign guarantee accorded private utility firms for actual and potential losses incurred in utility contracts, saying this has been violating “the people’s constitutionally assured due process rights and essentially thwarts the powers of the Supreme Court and the MWSS to regulate public utilities.”

Maynilad, which supplies Metro Manila’s West Zone, is currently demanding from government P3.44 billion in sovereign compensation for supposed revenue losses it had suffered from Jan. 1, 2013 to Feb. 28, 2015 for the suspension of the enforcement of rate hikes it had through arbitration proceedings.

Despite its loss in the arbitration proceedings meanwhile, Manila Water, supplier for the East Zone, is seeking P79 billion in compensation for “potential revenue losses” from this year until the end of its 25-year contract in 2037 “resulting from having to lower water rates following the unfavorable decision from the arbitration panel.”

“This absurd injustice is a direct assault on the people’s constitutional right to due process, because the people who will be burdened by the arbitration panel’s decision, are not allowed the opportunity to participate in arbitration proceedings that have become a private affair between the parties to an agreement,” said the lawmakers.

They asked the high court to strike down the arbitration clause (Article 12) in the concession agreements, saying this in effect encroached upon MWSS’ regulatory powers.

“… [S]aid provision now allows an Arbitration Panel to reverse the decision of a duly empowered regulator to fulfill its function under the law. It supplanted the law by granting another entity the power to
regulate rate increase as it did in fact grant the arbitration panel the control over the decisions of the MWSS, as if it has the power to regulate the regulator,” read the petition.

Impleaded in the petition were MWSS, Manila Water, Maynilad, President Aquino and Finance Secretary Cesar Purisima.

The petition’s end game is to stop further water rate hikes and for public funds to be used for sovereign compensation.

“… A rate hike in public utilities services such as water rates, is inflationary in nature increasing the production cost of goods and services using water.  Once imposed, it will impact on the entire country and cannot be taken back.  There is no reimbursement for inflation,” read the petition.

“We are currently taxed to death. We should not allow our taxes to be used to pay for the income tax of the rich and the powerful. Immediate reprieve from this Court is implored,” the lawmakers said in their plea.

They called the sovereign guarantee “an imposition and a deprivation against the people without their consent,” which has been “an affront” to the “Constitution and civil laws.”

The petitioners asked the high court to immediately issue a temporary restraining order or a writ of preliminary injunction to stop “such grave and irreparable illegal impositions.”  SFM