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BELEAGUERED bosses of the Joint Foreign Chambers (JFC)
will be asked to come back to the Senate and face anew
Sen. Juan Ponce Enrile, this time for hearings on
remedial legislation intended to tighten antitrust
regulations.
“They [JFC
heads] will be called back on the hearings of the
antitrust law,” Sen. Miriam Santiago told reporters
after Friday’s meeting of the Committee on Energy, where
the JFC officials were grilled by senators to explain
why they wrote a letter asking President Arroyo to halt
moves to amend the Electric Power Industry Reform Act (Epira),
when the Epira law is already undergoing amendments in
Congress.
Enrile
chairs a Senate subcommittee tasked to craft legislation
strengthening existing antitrust provisions aimed at
preventing monopolies in restraint of trade, among
others.
In
complaining against the JFC’s unwarranted intervention
in the crafting of Epira amendments, Enrile last week
voiced suspicions that “foreign players are enjoying a
bonanza because certain lawmakers before lacked
foresight, and it resulted in exorbitantly high power
contracts that blocked out competitors of Mirant, for
instance, which has virtually a monopoly in the
generation sector.”
Interpellating Enrile, Sen. Edgardo Angara noted that
Mirant was formerly owned by Enron and used to run the
Pagbilao, Quezon and Sual power plants, but eventually
sold the three plants “because it needed the money to
pay for the fraud committed at the Enron headquarters”
in the United States.
According to Enrile, most of the chambers of commerce
here “are actually enclaves that plot ways of making
more profits out of the pockets and misery of the
people.”
For his
part, Senate Majority Leader Francis Pangilinan said
earlier he was “certain foreign companies and investors
are also interested in bringing power rates down as it
eats up a sizeable amount of their profits and affects
their return on investments.”
But
Pangilinan added that “amendments to the Epira may not
necessarily bring down power costs of gencos [generating
companies], Transco [National Transmission Co.] and
distribution companies like Meralco, and the
cooperatives continue to be inefficient because of lack
of competition.”
Still,
Enrile opined on Friday that some foreign investors
operating in the Philippines “would rather release
negative information about the country to discourage
their competitors from setting up shop and lowering
their own profits.”
The
foreign chambers, however, explained their position in a
one-page letter to the Senate at the start of Friday’s
hearing.
Being
business ambassadors of the Philippines themselves, the
foreign businessmen in the country made it clear they
are only after the establishment of a competitive and
stable business environment here, and did not mean to
offend lawmakers when they aired their views on the
Philippine power industry.
“One of
the prime objectives of our organizations is to foster
closer economic and business relations between our
countries and the Philippines. In order to achieve an
environment conducive to doing business and attracting
new investment to the country, it is essential to have a
competitive and stable business environment,” said the
JFC statement.
The
groups said it is in this context that it raised the
concerns regarding the Philippine power sector, “and
have reiterated the positions we have taken in meetings
with the House leadership and in other fora before.”
The JFC
is an informal organization grouping the chambers of
commerce of the United States, Australia-New Zealand,
Canada and Korea; and the Philippine Association of
Multinational Companies Regional Headquarters.
It
represents more than 2,000 members with substantial
investments in the country and with approximately one
million employees.
The JFC,
whose members are both large power generators and huge
power users, said it continues to encourage more foreign
businessmen to invest in the country.
The
letter it sent to President Arroyo, the JFC said, covers
concerns regarding the Philippine power industry and the
real threat of undersupplies in electricity starting in
2010, which would affect existing and potential
investors.
“The
letter was addressed to the President and not the Energy
Committee chairman of the Senate and the House because
the issues raised were broad and not limited to the
Epira [Electric Power Industry Reform Act] law. Let us
assure you that there was no offense meant,” it said.
The
Epira, the group noted, is a reform legislation that has
no match in the region—once fully implemented, it will
create a competitive electricity market in the
Philippines that should lead to more efficiency and fair
energy costs.
The JFC
met with Energy Secretary Angelo Reyes and other DOE
officials on May 28 and discussed the energy situation
extensively.
It
agreed with the statement of Jose Ibazeta, president of
the Power Sector Assets and Liabilities Management Corp.
(Psalm), that the Epira does not need to be amended
given the progress PSALM is making in privatizating the
NPC generation assets as well as the National Power
Corp.-independent power producer contracts.
This,
the JFC said, is why the group believes it is premature
to amend the Epira at this time.
“Members
of the JFC came to the Philippines to invest because
they saw a climate that honored contracts, was
progressive and clearly intending to create a level
playing field where competition for the best price was
the intention. The JFC believes that a business
environment which encourages competition between the
private parties will generally give the consumer the
best price for power. This is also the reason why the
JFC supports the private-sector initiative to achieve
interim open access now,” the group said.
Hubert
d’Aboville, JFC president, said in the same hearing they
are still willing to come back and face the senators
despite the “tongue-lashing” they received.
Henry
Schumacher, executive vice president of the European
Chamber of Commerce, said at the Senate hearing that
what they are questioning is the move to reduce the
privatization threshold to 50 percent from 70 percent.
The
country should have a competitive market where no one
controls more than 30 percent, he explained. |
