Court stops town from closing 5 shipyard firms opposed to reclamation project

CEBU CITY––Owners of five shipyards have sought the court’s intervention after executives of Consolacion town in northern Cebu refused to give them permits to operate to pave the way for the plan to reclaim 235.8 hectares in consortium with a private corporation.

The Regional Trial Court in Mandaue City, Cebu on Thursday issued a status quo order after officials of Consolacion town promised not to close the shipyards until the main case was resolved.

“The municipality will not disturb the existing business operations of the petitioners until the main case is resolved,” said Judge Allan Francisco Garciano of RTC Branch 83.

Consolacion Mayor Joannes Alegado said in an interview that he didn’t want to inconvenience the shipyard operators and it was about time the foreshore area they were occupying is reclaimed and given to the next generation.

“I will not close the shipyards until December 31, 2021,” he added.

Lawyer Paulo Sucalit, Consolacion legal officer, however, clarified that what the parties agreed to was not to disturb the shipyards until the main case is resolved.

“We give our word that we will not close the shipyards nor will we issue a cease-and-desist order against them until this case is over,” he said.

The municipal government has planned to use the foreshore area occupied by the shipyards as part of their proposed La Consolacion Seafront Development Project, a 238.5-hectare reclamation project in consortium with La Consolacion Seafront Development Corp.

Shipyard owners learned about the project only last January when the mayor’s mother, Vice Mayor Teresita Alegado, held a public scoping about the project in Barangay Tayud.

When they applied for business permits, the validity was good only for six months, apparently in deference to the scheduled project inauguration in August.

When their business permits expired on June 30, the shipyard operators filed a petition for certiorari and prohibition in court to stop the municipal government from closing them down.

Named respondents were Mayor Alegado and Judith Pepito of the town’s Business Permits and Licensing Office.

The petitioners were the Philippine Rigid Construction Corp., Fortune Shipworks Inc., Nagasaka Shipyard Inc., PKS Shipping Co. Inc., and Uni-Orient Pearl Ventures.

In their 54-page petition, they said their business permits were valid only until June 30, even if they had complied with the requirements for a full-year permit and paid regulatory fees and taxes.

When they asked for an extension, the respondents told them in a letter that they could no longer continue operating due to the expiration of their tenurial instrument and that their foreshore area “would be made a part of the La Consolacion Seafront Development Project.”

In their petition, the shipyard companies said the officials’ refusal to issue a business permit valid for one year was a “blatant contravention” of provisions under the law.

Under the Ease of Doing Business and Efficient Service Act of 2018, they said all business permits were supposed to be valid for one year to prevent abuse.

They also pointed out that in previous years, they were not required by the municipal government to submit a lease agreement with the Department of Environment and Natural Resources for the use of the foreshore area and proof of ownership of their drylands.

They pointed out that the submission of a tenurial instrument for business permit application was not within the jurisdiction of Consolacion but with DENR and that it was not stipulated in their tax code.

The closure of the petitioners’ shipyards would result in the termination of at least 372 employees and lead to the “crippling if not destruction of the local and national shipyard industry.”

They said the closure of the shipyards in Consolacion, which serviced about 70 percent of the ships plying the Visayas and Mindanao, would not only affect the shipping industry but also the traveling public.

“The closure of petitioners’ shipyards would mean hundreds of vessels will have to look for other places every year for drydocking and afloat repair services,” they added.