Manila Water: Strict adherence to transparency, good corporate governance

MANILA, Philippines -  Putting people at the center of operations and strict adherence to transparency and good corporate governance have earned for Manila Water Co. Inc. another feather on its cap: The 1st Asian Excellence Recognition Awards 2011 from the Hong Kong-based Corporate Governance Asia Magazine.

The award cites the company’s outstanding efforts in investor communications, business ethics, corporate social responsibility, environmental practices and financial performance.

The magazine also bestowed the Best Chief Finance Officer award on Luis Juan B. Oreta, Manila Water’s CFO and Treasurer for the improvements he implemented in the company’s procurement, bidding and other financial systems, which brought about a more transparent, open and highly competitive bidding process that also resulted in a rapid expansion of suppliers and service providers.

Oreta joined Manila Water in January 2009, after a six-month stint with Integrated Microelectronics Inc. (IMI), the most global of all Ayala Group companies which was hard hit by the effects of the global financial crash of 2008-2009.

Dealing with thousands of mostly low-skilled and low-salaried workers in IMI many of them women, he said that the lessons at IMI on human relations were put to good use when he transferred to Manila Water.

“Business decisions and policies are all about people. So when I took over as CFO of Manila Water, I made sure that my decisions were based on how to improve trust and confidence of our stakeholders and shareholders through openness and transparency,” Oreta told The STAR.

When he took over as CFO of Manila Water, the company had almost completed the first part of its mission of improving water production (by replacing old pipes with new ones, reducing non revenue water and improved business relations with all the communities it served in the east zone) and was on an expansion mode to other areas of the country as well as in Vietnam and India.

The biggest hurdle now for the company is raising investments for the expansion of its wastewater treatment and tapping the Laguna Lake as a new source of raw water, which in 2010 reached P9.6 billion in capital expenditure (capex), Oreta said.

“You can only generate this amount if your investors, who are mostly foreign, feel comfortable with what you are doing and how you program their money and this can only be achieved through openness, transparency and full disclosure,” Oreta said.

He said a company must disclose to its investors negative incidents like if it was fined or penalized even before the agency imposing the penalty can even do so. “You will earn the trust and respect of your investors if you give them full disclosure rather than only the rosy news,” Oreta said.

Oreta said the company makes it a point to gather all suppliers and service providers to a general meeting each year and announce the programs and projects that the company will embark on long before the bidding is scheduled to give them time to prepare for the bidding.

“I want to have as many competitive bidders for all our projects and programs so that we will be able to get the best price and the best quality of deliverables for our customers,” Oreta said.

Manila Water already operates 35 wastewater treatment plants, processing used waste before being discharged in the rivers and waterways. But Oreta said this is just 30 percent of total wastewater produced by water users in Metro Manila. He wants the ratio of water used and treated to be equal or that every cubic meter used is immediately treated, But this entails massive investments, he said.