Duterte threatens water firms with 'economic sabotage' charges

MANILA, Philippines — A furious President Rodrigo Duterte on Tuesday threatened to file charges against water concessionaires whom he accused of "screwing" Filipinos, saying the concession deals they signed with the government are "milking" Filipinos by the billions.

Duterte said the concession contracts of Manila Water and Maynilad are disadvantageous to the public because they prohibit the government from adjusting water rates.

He said the deals treated water not as a natural resource but as a commodity.

"I will file economic sabotage (charges) and I will arrest them, all of them....I will let them experience how it's like to go to jail. If they drag me, I will join them in prison. There's no problem. I have nothing to lose," the president said in a speech during the signing of two laws in Malacañang.

"I am sorry, I'm ready to go but I won't go out without a bang. I will expose the rich who made money at the expense of the nation," he added.

Economic sabotage

The Revised Penal Code does not define the crime of economic sabotage although there are laws that classify certain acts as economic sabotage.

RA 10845, which deals with agricultural smuggling and which was enacted in 2016, defines "any act or activity which undermines, weakens or renders into disrepute the economic system or viability of the country or tends to bring out such effects."

Economic sabotage is also mentioned in letters of instruction and presidential decrees by ousted dictator Ferdinand Marcos.

Among those laws are PD 173, which considers faking Land Transportation Office documents and plates as economic sabotage, LOI 1359 (hoarding and other crimes), PD 1689 (estafa or swindling) and PD 2018 (illegal recruitment).

PD 1689  penalizes with life imprisonment "swindling (estafa) committed by a syndicate consisting of five or more persons formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme" if the fraud  "results in the misappropriation of money contributed by stockholders, or members of rural banks, cooperative, "samahang nayon(s)", or farmers association, or of funds solicited by corporations/associations from the general public." 

'Lopsided' agreement

Duterte also vowed to run after officials who backed the contracts, which he described as "tagilid (lopsided)."

"Why did the senators agree with that (contract)? I'll expose them. I insist that they be tried for economic sabotage...Now is the time we talk seriously abouot the buying of cases," the President said.  

"I will make them — their life hereon very, very, very miserable."

The Metropolitan Waterworks and Sewerage System was privatized in the late 1990s and, MWSS says on its website, "the responsibility to operate and improve waterworks system was passed on to the two private consortia in conformity to the Concession Agreement."

"This contractual agreement was entered into by the Republic of the Philippines through the MWSS, the Maynilad Water Services Inc. for the West Zone and the Manila Water Company, Inc. for the East Zone."

Duterte said he has ordered Solicitor General Jose Calida and Finance Secretary Carlos Dominguez III to draft a new contract that is "really favorable" to the public and to the government.

"Give it to them. This is the amended contract. Accept it or nothing to it," the president said.  

Duterte made the remarks days after a Singapore-based court ordered the Philippine government to pay P7.39 billion in compensation to Ayala-led Manila Water for the losses the company incurred from the rejected water rate increases since 2015.

Manila Water has said it has "a right to indemnification for actual losses suffered by it on account of the Republic’s breach of its obligation."

Duterte claimed Manila Water bagged the legal victory because the company is "part of the club" but did not elaborate. He said the Philippines lost the case because it interfered in the company's application for rate hike.

"We cannot raise or lower the rates. They are the only ones who can do it. Our water, we cannot control the price to which we collect — to deliver the water to the people," he said.

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Duterte also accused water concessionaires of reneging on their obligation to provide water treatments.

"With regard to water treatment, they've been colleciting for years to treat water before it flows to Manila Bay...but there is no treatment taking place, you animals. If you don't do it, believe, me...I will show Filipinos how to slap millionaires," he said.

Duterte also lambasted opposition senator Franklin Drilon, who earlier told him to be cautious in reviewing government deals. Drilon, a former Justice secretary, has said no country or entity would sign deals with the Philippines if the sanctity of contracts is not respected.

Drilon warned in April that “existing and binding contracts cannot simply be classified as onerous and cancelled,” saying there is a procedure within the contract if the government wants out.

"Otherwise, no country or entity would enter into contracts with us because we cannot be trusted to honor our obligations," Drilon also warned.

"Senator Drilon, are you one of those who crafted the contract? I'm asking you," Duterte said on Tuesday.

"I am not scaring you. But if I fall, I would bring you with me."

Earlier this year, Duterte threatened to terminate the contracts of Manila Water and Maynilad because of water service interruptions that hounded parts of Metro Manila and Rizal province. He has also ordered his legal team to review all state contracts to determine which of them are disadvantageous to the government.

Duterte to ABS-CBN: You're out

Duterte also slammed the Lopezes, the owners of broadcast giant ABS-CBN, and vowed to block the renewal of their network's franchise.

"ABS-CBN has been a protector of your vested interest," he said.

"Your franchise will expire next year. If you are expecting it to be renewed, I'm sorry. You're out."

Duterte has accused ABS-CBN of swindling for allegedly not returning his his money even if his campaign advertisements did not air.

He has also chided the network for allegedly peddling "garbage" stories to discredit him.