Aboitiz Power [AP] has 3 hydro plants forcibly shutdown by LGU

Now this issue has definitely escalated into something that will grab the attention of Aboitiz Power [AP 25.00 2.25%] and of the other renewable power producers operating in the area, or that are operating under similar circumstances with respect to documents of consent and agreement with local indigenous people.

Barkadans will remember that the story started last week when the National Commission on Indigenous Peoples - Cordillera Administrative Region (NCIP-CAR) and the Bakun Indigenous Tribes Organization (BITO) both issued a shutdown order to three run-of-river hydroelectric facilities owned by AP’s subsidiary, operating in Bakun (Benguet province). The NCIP and BITO alleged that AP’s subsidiary, Hedcor, had violated a consent agreement that Hedcor had signed with the local indigenous tribes prior to operations.

Then, the Department of Energy (DOE) issued a letter of its own to Hedcor, instructing that the facilities should ignore the shutdown order from NCIP and BITO, on the argument that DOE’s mandate to supply electricity during a pandemic gives the DOE the authority to make such a suggestion. The most recent turn of events came after the Bakun LGU “forcibly shut” the facilities by enforcing the original NCIP/BITO shutdown order. According to AP, the Bakun LGU didn’t recognize the DOE letter as being anything more than a “reminder”.

MB BOTTOM-LINE

This kind of drama gets played out all the time in power projects, especially ones that are related to hydro. It’s a classic application of the whole “needs of the many outweigh the needs of the few” thing (the saying was popularized by Spock from Star Trek) that is persuasive on the surface, but that gets kind of muddled the more one thinks about it.

For starters, in Star Trek, Spock voluntarily gave his life to save his friends and crewmates. He had the opportunity to weigh the risks and rewards, and make the choice for himself about the value of the needs of the few (or the “one”), and the value his sacrifice would provide to the many. Here, the Bakun indigenous people appear to have weighed the risks and rewards and decided for themselves that it was not worth their sacrifice, based on whatever line of reasoning they’d like to use.

Then, the DOE and AP came in and said, “sounds great, Spock, except we think you should die for us”. Yeah, that’s a little dramatic, but I don’t think it follows that the DOE should be able to compel “consent” by anyone to do anything just because they’re struggling to figure out the Luzon power grid. Perhaps the DOE does have the authority to compel the operation of the facilities, but it makes sense that it should take more than a letter from the DOE, citing only its mandate to provide power during a pandemic, to exercise that authority.

This is going to get spicy, and it has the potential to set a precedent for the power dynamics between power producers and indigenous people -- for better or for worse.

--

Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.