“A Time of Misfortune”
Joe Pallugna
The month of April brought ot only bad news but the worst news, a story of woe. The sad news is that Hanjin, the company that was supposed to build a 400 hectare shipyard at Villanueva, Misamis Oriental has withdrawn from the project. Last Saturday, all the Koreans left and brought with them all their equipment and loaded on barges and bid their mega project in our province goodbye. And so the 40,000 jobs for welders and carpenters and masons and drivers and crane operators and engineers are gone.
The reasons for the withdrawal are reportedly complicated and insurmountable. One is that Hanjin allegedly failed to obtain a Environmental Compliance Certificate (ECC). The problem arose when the Philippine company which worked for the documentation of the Hanjin project failed to forewarn Hanjin of the basic requirement for an ECC, of a social impact study, and of the need to relocate present occupants to acceptable sites for human resettlement.
Another problem arose out of the issue of the supply of electricity from Napocor and Steag coal-fired power plant. Hanjin wanted to pay only for electricity it actually consumes but Napocor reportedly wanted to peg a minimum consumption rate. The issue involves millions of pesos a year in terms of actual electricity payments. With this thorn in the project, Hanjin decided to withdraw.
A third issue that pushed Hanjin off the cliff was the issue of landownership. Phividec is only allowed to lease lands to companies which are called locators within the industrial estate. Phividec is not allowed to sell lands to any locator companies. Thus, Hanjin will be forced to rent forever the lands over which they will be investing billions of dollars in equipment, infrastructure and machinery. On the contrary, the Subic Industrial Estate and the Bataan Export Processing Zone are reportedly allowed to sell lands to Hanjin. That is the reason why Hanjin decided to pull out and just expand their Subic and Bataan existing shipyards.
The other reason for the Hanjin pullout is the reported demand of the Senate to summon the President and the chairman of the board of Hanjin to appear before the said body and justify Hanjin’s failure to obtain ECC before commencing their projects. A couple of senators were said to have insisted on the summons which insulted the culture and the reputation of Hanjin executives.
And the sore loser in this Hanjin debacle are the people of Mindanao who lost the projected 40,000 jobs and skills training and the side economic benefit that would have resulted from the Hanjin project. It is a very said story of how politics among the Senators and the myopic insistence of the government regulatory agencies like DENR and EMB to have only gotten into the required ECC after the Hanjin project has started to be implemented, instead of having assisted Hanin to comply with the ECC requirements, that has resulted in the Hanjin loss.
The efforts of the local governments of the municipalities of Villanueva, Tagoloan, Jasaan and the entire province of Misamis Oriental headed by Governor Oca Moreno and the congressmen of the province and Mayor Tinnex Jaraula and Vice Mayor Dongkoy Emano to convince President Gloria Arroyo to salvage the Hanjin project would hopefully bring fruit and positive results. But after what Hanjin had gone through and the sad experience of having been harassed, is a sad lesson that both Hanjin and the Filipino people should learn from.
The loss of 40,000 projected jobs that hanjin woul have provided is not a small matter. And the disappointment that Hanjin also experienced from the Philippine setting is neither a minor one. However, the biggest loser in all these hanjin debacle is the Philippine society, in general, and the Misamisnons and Kagayanons and Mindanaoans in particular.
There is only one remedy to avoid this unfortunate situation and that is, for the President of the Republic to exercise her moral ascendancy, executive fiat, political influence and chjarismatic powers to bring back Hanjin into Mindanao and prevent an economic walkout that could have caused more severe and dismal effects on our economy in the decades to come.
The Hanjin withdrawal is a nightmare. I hope it will remain to be a sad dream of which, when I wake up in the morning, will go away like the morning mist. For it becomes reality, the nightmare will become an economic monster of proportions never ever imagined. And I also hoped that the hanjin debacle will be the last and people will learn that there is always a price to pay for all the stupidity that we commit upon ourselves.
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My comment: I think its too presumptuous that the biggest loser of this debacle are the Misamisnons and Kagayanons. I think the biggest loser in this all are the politicians like Governor Moreno, CDO Mayor Tinnex Jaraula and VM Emano but more particularly on Governor Moreno. He was boasting, gloating in fact of the projected employment potential of Hanjin Shipyard which is a whooping 40,000 jobs. Now, Moreno is like a “basing sisiw.” He looked like a clown. He no longer have the face to show to the people of Misamis Oriental after the botched project. For sure, his opponents are rejoicing, laughing and ridiculing him in silence. Expectedly, his political opponents will pounce this issue against him in the coming elections and I doubt if Moreno can weather it.
Also big losers are the contractors of supplies and manpower agencies which hoped to cash on this multibillion project. “Kwarta na, naging bato pa.”
Joe Pallugna’s column is a little bit emotional that he missed some legal points. Emotions may have gotten the better of him since he intimated on the right of Hanjin to own lands. Pallugna is a lawyer. He is supposed to know the law on the matter. The Constitution provides it. No foreign company can own land only lease it. So what is the fuss about owning lands located in Phividec? Pallugna’s comparison to Subic is inconclusive since he himself wrote that Subic selling property to Hanjin are merely “reported.” I will make an article on this hopefully in the coming days when the emotions of people will settle down.
May 30, 2008 at 2:41 am
It is not presumptuous for the author to say that the biggest losers are the people in Mindanao.I think the article is just and correct in some points.It is easy for other people who have jobs and live comfortable lives to say that it is ok to lose such investments.You’re view is too political and I can’t sense an ounce of concern for the development of our Philippines.Our country today does not need politicians,we need leaders and people who have vision for the future of our country. I don’t agree on some
points of his article but he is right that something is wrong with our government today.Don’t be too radical on your ideas!You should think about the future of your own country and weight everything accordingly.
June 20, 2008 at 3:25 pm
Driving away big investors
Jose C. Sison
Philippine Star
Vigilance is truly necessary nowadays because of the rampant graft and corrupt practices committed in just about any deal or project where the government has a say one way or the other. The prevailing presumption is that in any multi-million peso/ dollar undertaking, dirty money changes hands; that government officials and/or powerful, influential persons are on the take. This mindset is caused by the administration itself because of the many perceived anomalies that have remained unresolved due to cover up attempts.
Unfortunately however this vigilance has sometimes been abused and converted into a political tool by the opposition especially in the legislative branch. The political opposition has acquired a predilection to investigate and always smells something fishy in any big ticket projects. The impression readily formed in the public mind is that they just also want to have a slice of the delicious pie.
This is so noticeable in the ongoing ruckus surrounding the ship building projects of the Korean firm Hanjin Heavy Industries and Construction Co. Inc. (HHIC) in Subic, Zambales and Misamis Oriental.
Actually Hanjin has been doing development projects here since 1973. The press has not just focused on its company background. Hanjin then was known as Hanil Development Corporation. The company changed its name from Hanil to Hanjin only in 1994. This is the same company that has successfully completed numerous development projects in our country tremendously benefiting us now. In fact “Hanil” always rings a bell to me as the only foreign contractor that dared to operate in rebel infested areas and risking their valuable equipments thereby contributing to the significant country side economic development so vital in solving peace and order problems.
In Misamis Oriental itself where the company is now putting up a shipbuilding facility, it constructed the Iligan-Cagayan-Butuan Road in 1973 during those dangerous times of insurgency in Mindanao. Today that road is still cited as one of the country’s best highways. It is also the same company that successfully completed the Manila LRT (Light Rail Transit) Line 2 System, the Batangas Container Terminal and the Manila North Harbor Development.
The goodwill and reputation it has established here with the considerable number of development projects it has successfully completed somehow raise doubts on the veracity and accuracy of the anomalies that it is now being accused of. The company cannot simply afford to risk its reputation by committing the alleged wrong doings attributed to it. The charges seem to have been blown out of proportion and given so much media hype so attractive to grandstanding Senators.
Of course if Hanjin has transgressed our laws, it should be investigated and held liable. But what is happening now is that because of too much publicity, the company has already been pictured as involved in a bribery/extortion on the construction of the shipbuilding facility Mindanao and in an environmental degradation for building its employees’ housing facilities allegedly in the heart of a dense forest in Subic.
Thus a mere meeting between Hanjin’s Project Manager and the Tagoloan and Villanueva Town Mayors in Mindanao has immediately been interpreted as an attempt to bribe the said town officials with a P400 million contract. What transpired in the meeting actually concerns the possibility of hiring local contractors in the hauling of aggregates on a competitive basis so as to help said contractors generate business. In fact the PNP has declared the matter closed with the submission of sworn statement by the parties involved that neither bribery nor extortion happened. In any case, this issue is better left for resolution by the prosecution and the courts rather than by the Senate especially because of the attendant publicity being generated.
On the other hand numerous articles have been published in various newspapers about the alleged irregularities in the construction of the apartment site of its employees in a forest area in Subic allegedly containing about three hundred or more trees. But as it turns out the site is more or less located in the same area previously used by the US Navy as an ammunition depot and later used as a depot or factory by two other locators. Without verifying first that only about 43 trees were cut, reckless accusations and finger pointing are already made.
Critics have also tried to harp on the premature start of the apartment construction before securing the DENR Environmental Clearance Certificate. They did not first find out that Hanjin’s investment in SBMA could not have been finalized without first providing accommodations to the Koreans who would supervise and train Filipino workers thereby prompting SBMA to give the go signal taking into consideration that the area was anyway already used by the US Navy and two other locators.
The point here is that if ever there are short cuts done or irregularities committed then let them be rectified to assure that our laws are complied with and our environment duly protected. But these steps can be done without too much publicity that may eventually result in driving away big time investors like Hanjin.
In building the Subic Shipyard facilities alone, Hanjin’s initial investment for Phases I and 2 amounts to US$1.6 billion. The shipyard has a capacity of 80,000 tons/year up to 550,000 tons capable of building large-scale vessels such as 12,000 TEU Container such that by year 2017 its sales would reach US$3.9 billion generating employment of about 30,000 at its peak.
The Mindanao shipbuilding facility on the other hand will generate income and employment also for 30,000 workers. Hanjin will most likely spend P4.6 billion a year during peak time. Labor constitutes 40% of shipbuilding cost that goes directly to the workers’ pockets. With the US$60 million price tag on the first vessel for example, around $24 million or P984 million would go to workers salaries. The lives of the people in Northern Mindanao would surely improve especially considering that said shipbuilding facility would generate more business and tourism.
Indeed the construction of these shipyards would put the Philippines on the list of countries with the largest facilities after Korea, Japan and China. The world will thus be taking notice of the Philippines as an investment option.
Let us not squander these opportunities by engaging again in politics and resorting to those useless and grandstanding investigations “in aid of legislation” that may drive away big time investors like Hanjin that has reportedly been repeatedly cited as the World’s Outstanding Shipbuilder.