…but City Mayor Lim keeps mum about controversial clause in JVA

Governor Edgar Chatto Friday appeared “ to have pierced the veil of corporate fiction” as he tore apart a controversial entry in the Joint Venture Agreement  providing for a “confidentiality clause”. In a brave disclosure of what many thought of the governor at the receiving end of the s…t out of the fan, Chatto faced the issue of confidentiality in a manner befitting a seasoned politician. It was gathered that one provision of the JVA between a private entity and the provincial government is the confidentiality clause that prohibits both parties to disclose whatever details are stipulated in the contract to operate the water and electric utilities owned by the province. In a deal sealed in 2001, the Salcon Group bought 70% of the province’s stake of the two utilities then known as Provincial Public Utilities Department (PPUD). With the remaining 30%, the province is left as the minority owner of the two utilities.

WHAT CAUSES THE FIASCO?

The current fiasco that led to the expose’ of a confidential clause in the JVA was prompted by the representation of City Mayor Dan Neri Lim to have the document produced to give flesh to a petition he filed before the Bohol Light Co Inc. asking for a rate increase in power rates involving city consumers. BLCI is a creation out of the JVA between the Salcon Group and the province then represented by former governor Rene Relampagos now first district congressman. The release of the JVA became moot and academic after the Energy Regulatory Commission ordered its availability to Mayor Lim so that the rate petition hearing would go on as scheduled. The ERC has set last Monday the hearing of the rate increase petition and it was during the same occasion that ERC Commissioner Ma. Teresa Castaneda ordered the release of the JVA documents. As a tickler for details, Gov. Chatto went through the process of having the Sangguniang Panlalawigan made the decision to give a copy of the JVA to Mayor Lim. With the ball in the court of the SP, Provincial Legal Officer John Mitchell Boiser came into the picture to give his legal advice that the decision to release the JVA would come from the Salcon Group through a board resolution.

That triggered an impasse with Mayor Lim keeping up the pressure to release the document. Until the ERC commissioner solved the stand off by ordering Monday the Salcon lawyer to release the JVA papers to Mayor Lim. The papers were released but not until the Salcon lawyer extracted from Mayor Lim the commitment to adhere to the provision of the confidentiality clause. Keeping his word at the instance of the Salcon lawyer, Mayor Lim did honor his part of the bargain by keeping mum about the explosive issue of confidentiality attending the joint venture agreement. This was noted during Mayor’s Lim radio program yesterday where the feisty city executive refused to touch with a ten-foot pole the issue of confidentiality clause of the JVA. But it seems that the battle waged by Mayor Lim and the city government to obtain a copy of the controversial joint venture agreement (JVA) was far from over although the same document was already released. Monday’s public hearing was called by the ERC after BLCI withdrew its first application for increase on a technicality.

During the hearing, the intervenors led by the mayor and Councilors Nerio Zamora II, Doni Piquero and Bebiano Inting again raised the unresolved question on the legality of the BLCI especially considering its refusal to provide a copy of the JVA. They pointed out that the city council had unanimously passed two separate resolutions addressed to Gov. Chatto and the provincial board through Vice Gov. Concepcion Lim requesting them to provide copies of the JVA and minutes and other documents during the deliberation of the issue. While the SP turned over a copy of the minutes of the final deliberation, Chatto refused to do the same with the JVA itself, electing to pass it on to the board and leaving the decision to release it to the legislative body. During the oral arguments in the public hearing, however, ERC Commissioner Castañeda would not accept the protestations of BLCI lawyer Remigio Michael Ancheta in a vain attempt to withhold a copy of the document. Castañeda said Ancheta’s refusal to give his copy to the intervenors will at best delay the turn-over since she would be willing to give the document from her own files she left in Manila.

Sensing the futility of his position, Ancheta decided to give his own copy thereby ending a protracted battle for the document which became an interesting sidebar to the issue over the controversial sale of the Provincial Public Utilities Department (PPUD) to the Salcon Group during the administration of then governor and now Rep. Relampagos and Chatto who was then vice-governor.

Lim acknowledged the importance of the event saying that the acquisition of the JVA is “a moral victory” for the people and all those who fought to obtain it. “It is a slap to Gov. Chatto, BLCI and all those who maintained that the (JVA) is not a public document, one thing which we stressed since the start,” he added. The mayor said Castañeda sustained their position which is a boon to the principle of public accountability. “Now that we have a copy, we will know how the cooks were able to fry in our own lard,” he added. At the same time, Lim cautioned the people against lowering their guard saying that the war is not over yet. During the same hearing, Castañeda disregarded the temporary restraining order issued by the Regional Trial Court to the petitioners who sought to hold the public hearing in abeyance pending resolution of the prejudicial issues they are raising. The mayor said that while he is not opposed to a legitimate increase like many consumers, the prejudicial issues surrounding the controversial sale and operation of the utilities must be resolved. “We are studying our legal options because definitely we will not stop until the injustice suffered by the people of Tagbilaran is not rectified,” the mayor added.

GUV’S BEEF ON CONFIDENTIAL CLAUSE

Trying to create the impression that he was on top of the controversial situation, Chatto said if anybody tried to question the confidential caption in the contract of sale, the assurance was that the province was ably represented in the Salcon board. Therefore, Chatto added, for the information of everybody, those who made claims of the confidentiality of the contract should know as lawyers would that commercial transactions are incorporated with a confidentiality clause. This means, he added, they are just ordinary transactions. While delivering his piece on the issue, Chatto noticed lawyer Salva Diputado as having nodded as he stressed the point on confidentiality because as a lawyer he was familiar with confidentiality clauses which are inserted in deals of worldwide companies. It was Diputado who raised the confidentiality issue during Friday’s edition of “Kita ug ang Gobernador”. Gov. Chatto added: Try searching the internet and all discussions of confidentiality clauses are found there.

Citing the province’s representation in the Salcon board, Chatto said anything that will prejudice the province’s stake in the joint venture will be addressed promptly. He said through this representation, the right of public servants to defend “our position in the province must be there all the time and that is what we in the provincial government is doing”. He added: we are exercising precisely our right to oppose the rate increase for light precisely because of that particular concern for our people and that is within the law, perfectly within the law”. Elaborating on the issue of the province opposing the proposed increase of the light company, Chatto said when the stake of the province was being compromised in the exercise of the government’s function of proprietary right, the local government will not hesitate to side with majority of the people who own 30 percent of the two utilities. In a rare display of agreeing in a particular issue with Mayor Lim, Chatto said the city executive was right in petitioning the rate increase saying as leaders “we can be partners in depending the interest of the people”