BORACAY Random Notes By Noel Cabobos
The brouhaha of the poorly-managed garbage on Boracay Island only brought into fore the role of an influential businessman in the name of Leon Chan of Solid Merchandise, the father of Richard Chan Lek who owns and manages RLCL Construction Trading which is a big-time quarry operator in Ibajay, Aklan. His being an incorporator of ECOS Sanitary Landfill and Waste Management Corporation speaks well of the gamut of influence that dictated the operations of ECOS and the related businesses that sprouted in the process.
Back in 2017, RLCL had put up a batching plant, an equipment used to mix the constituent parts of sand and gravel for large projects, at Sitio Bil-at in Brgy. Yapak. This alone is already flawed because the batching plant was established in that part of the island without any permit from the DENR and the local government of Malay.
Since the batching plant produces ready mixed concrete products, RLCL became the major supplier of aggregates and concrete products of DPWH during the road projects of Boracay when the Task Force took over for the rehabilitation works.
Solid Merchandise and RLCL Construction Trading also served as the contracting firms on the P50 Million road opening project in Bulabog, the first road project undertaken by the Task Force which was inaugurated by Cabinet Secretaries. This part of Bulabog area, however, is still being claimed by a certain Juvy Villanueva Gross.
The two firms also worked as sub-contractors on the first section of the road project in Cagban to Kipot (AKY station). The general contracting company, MGB Construction, was given a considerable amount of “royalty fee,” A-1 sources told this writer.
In addition, both RLCL and Solid were able to directly supply construction materials to building owners who had been given the ECC by the DENR. This led to the total death of small-time suppliers’ business on the island.
As the Task Force is winding up its rehabilitation works, constructions came to a slow pace which also resulted to the minimal need of aggregates which RLCL regularly bring into the island. Moreover, the production of the batching plant slowed down due to the unavailability of vacant lots to be used as stockyard for the stockpile.
But since RLCL cannot just stop the operation of the batching plant primarily because it has to make wise use of its daily inbound 10-wheeler trucks–the same trucks that haul the collected garbage into the so-called Sanitary Landfill at Brgy. Kabulihan in the mainland Malay–it has to continue operating the plant to serve its purpose.
Yes, this is the reason why the aggregates are stockpiled at the LGU-owned central MRF at Brgy. Manoc-manoc. In a research made by this writer, around one (1) hectare of the MRF site has been turned into a stockyard for said aggregates.
BORACAY STAKEHOLDERS HIT ECOS IRR
In a position paper addressed to Acting Mayor Frolibar Bautista, Boracay stakeholders called the Implementing Rules and Regulations (IRR) of ECOS “complicated and complex.”
“The group of stakeholders believes that the IRR should be considered and properly discussed with the respective establishments so as to clarify any concerns our members and other establishments in the island have. Together as a group we aim to come together and hopefully be able to thresh out all our concerns with your good office,” part of the statement read. The manifesto was signed by BFI Chairman Dioniso Salme, PCCI-Boracay President Elena Brugger, Pollution Control Officers-Boracay Chairman RM Lobaton, and Compliant Associations of Boracay (CAB) Director Joebert Cocjin.
As of this writing, this writer learned that the mayor hasn’t responded yet to the position paper, which was signed and presented to the office of the mayor by said groups of stakeholders on Nov. 21, last year. Furnished are the Boracay Inter-Agency Rehabilitation Management Group, Office of the Provincial Governor, DILG-Malay, CENRO, Boracay Compliance Field and Monitoring Ofice, and Punong Barangays of Manoc-manoc, Balabag, and Yapak.
Very clearly, the group of stakeholders are lamenting at the indicated item in the IRR which shows that ECOS shall, itself, be the one collecting the garbage fee directly from the establishments on Boracay.
Section 3 of the ECOS IRR denotes that biodegradable waste products shall be paid with P10 per kilo (tipping and hauling included), while the tipping fee for special hazardous waste shall be P80 per kilo plus a fee of P560 per kilo for the hauling. For its part, the tipping fee for debris and other construction materials shall be P2 per kilo plus an added fee of P5 per kilo for the hauling.
Stakeholders who asked for anonymity decried the rates saying, “How in the hell they were able to come up with such enormous pricing? That is so unreasonable? They are about to kill the business entities on the island with these excessive rates!”
THE COA REPORT
In an Audit Observation Memorandum released by the Commission on Audit dated Feb. 12, 2019, State Auditor III Merle Maglunob and State Auditor IV Loda Ocheda, after reviewing the transactions under the Public-Private Partnership Agreement between ECOS and the Local Government of Malay, pointed out that:
“Disbursements on hauling of Solid Waste and the Management and Operations of an Eco-tourism, Engineered Sanitary Landfill undertaken as a Public-Private Partnership (PPP) activity should have been under R.A. 9184, otherwise known as the Government Procurement Act, thus, casting doubt on the propriety, validity and correctness of the transactions.”
After carefully examining the financial transactions between ECOS and the local government of Malay, the COA stated:
“PPP should have been a tool to minimize the government spending. It should address the limited funding resources for local infrastructure or development projects for the LGU thereby allowing the allocation of public funds for other local priorities.”
The COA report emphasized that with the disbursements made by the local government of Malay in favor of ECOS, the transactions can be construed as “simple procurement of services and should follow the Revised Rules and Regulations of RA. 9184.”
It can be gleaned from the records of the COA that initial payment transactions of the local government of Malay already showed huge sum of money that changed hands just within months. Consider the following:
For the months of August and September 2018, ECOS charged the Municipality of Malay and was paid a hefty P10,511,030.14 for the hauling of residual wastes to the Sanitary Landfill. Also on that month of September, ECOS charged and was paid P2,956,949.77 for the operation of the Sanitary Landfill. For the month of October, ECOS charged and was paid P7,409,451.37 only for the hauling of Residual Wastes to Sanitary Landfill while a separate P2,844,489.73 has been paid for the operation of the Sanitary Landfill. By the month of November, ECOS charged the Municipality of Malay with another P10, 618,202.25 for the hauling of Residual Waste and, again, a separate P3,118,764.11 for the operation of the Sanitary Landfill. Comes December last year, ECOS charged the Municipality of Malay a whooping P11,077,850.25 for the hauling of Residual Waste in addition to a separate P3,177,043.10 for the operation of the Sanitary Landfill.
Yes, we paid ECOS a total of P51,713,780.72 for five fucking months alone! To date, it’s now over a hundred million and look at the on-and-off garbage collection and the sorry state of the sanitary landfill…just disgusting!
“The principle of a PPP activity as defined and described above cannot be observed on this kind of transactions. The Private Sector (ECOS) should have been responsible in financing for operation and maintenance of the particular undertaking normally without cost for the LGU,” stated the COA report.
VOID FROM THE VERY BEGINNING
The contract between ECOS Sanitary Landfill and Waste Management Corporation and the Municipality of Malay is a kind of contract which is null and void at its inception and therefore has no force and effect or is equivalent to nothing.
First, this contract is peppered with defects and with onerous provisions that go against the law and the interest of the people of Malay. The COA findings, for one, is a testimony that the essence of a Public-Private Partnership has been twisted at their instance to suit the whims and caprices of the contracting parties.
Another issue that should be highlighted here is the fact that during the submission of an “unsolicited proposal” (since this agreement was a product of an unsolicited proposal), other companies (not ECOS) were submitted during the initial submissions of the proposal. ECOS is basically a new organization and therefore has no track record to speak about. For a contract of this magnitude, the law is keen on track record as a threshold for capacity of contracting parties to enter into a contract.
In this case, ECOS, being a new company was not able to demonstrate its capacity to enter into a contract. It appears that ECOS used the names of other companies during the initial phase of document submissions just to comply with several legalities in order to be valid.
Municipal Ordinance No. 295 otherwise known as “An Ordinance adopting guidelines and procedures for entering into Public-Private Partnership Agreements with the Municipality of Malay” was very specific that one of the requirements for a private company to inter into a contract with the Malay LGU is that it should be able to submit at least three (3) years of audited financial statement. ECOS cannot comply with this requirement so it has to use the name of other companies.
Again, I have to emphasize that ECOS is a new company and was only established after it got a “go-signal” from the Sangguniang Bayan that the agreement has been given a “green light”.
To make matters worse, the Sangguniang Bayan did not activate the Public-Private Partnership Selection Committee (PPP-SC) which is part and parcel in the determination of the validity of the proposal. The PPP-SC, under the Ordinance, is responsible for all aspects of the pre-selection and selection process including its publication. Which is also why no publication has been conducted thereafter. The publication is very important in this case to invite comparative proposals to ensure the conduct of competitive challenge.
Worst, the signed contract or agreement was not returned to the Sangguniang Bayan for Ratification.
Until now, one of the main issues that remains is who are the personalities behind ECOS? Well, people on the frontline are so silent. This question was even the subject of a tirade from veteran journalist and Boracay stakeholder Johnny Dayang during the January 4 visit of DENR Secretary Roy Cimatu to thresh out the problems hounding the uncollected garbage on Boracay. Stakeholders have been asking ECOS frontliners—Alex Carlo Magno and Miguel Tiu—as to who are the incorporators of ECOS but they are steadfast at not revealing any of them. I’ve heard they promised the Boracay Foundation that they will be submitting documents including the incorporation papers, which BFI is still awaiting ‘til now.
Well, I am waiting for it as well. For now, the only information I know is that ECOS incorporators are composed of Richard Chan Lek, his wife, his sister, his brother-in-law in the person of Miguel Tiu, and the couple Oliver and Corazon Zamora. (Comments are welcome at firstname.lastname@example.org)