Metro garbage problem rooted in money, politics

Philippine Center for Investigative Journalism (First of two parts)

President Arroyo is again in a bind. But this time it has nothing to do with the visiting US troops or the Abu Sayyaf.

Rather, it concerns a matter that seems mundane but whose stench may hound Mrs. Arroyo — and the rest of the country — even long after she has left Malacañang Palace.

The issue is garbage, and the President is under pressure to decide, once and for all, whether or not to approve the immediate implementation of a $360-million (P18-billion) incineration project that will burn 3,000 tons of trash a day, almost half the total amount of garbage produced daily by Metro Manila.

If she disapproves it, she upsets a company that has connections with a few members of her administration and some of her political allies. She may also run afoul of the many local officials who have a liking for big waste management projects such as this, and whose support she needs if she aims to run again in 2004.

But if she approves it, she will be up against the environmentalists who have long highlighted the toxic emissions of incinerators. Moreover, she will have a hard time reconciling such a decision with the 1999 Clean Air Act, which bans the use of incinerators, as well as the Ecological Solid Waste Management Act, which she had signed into law last year.

Some observers consider the President’s dilemma as a litmus test of her commitment to finding a thoughtful and long-term solution to Metro Manila’s perennial garbage problem.

Then again, they say, that commitment seems to have already wavered, especially in the last several months. As in the past, politics and the lure of lucre are again proving to be hindrances to a sound garbage policy.

Good omen

Many had thought it a good omen that Mrs. Arroyo had chosen to sign the Solid Waste Management Act — also known as Republic Act 9003 — as one of her very first acts as President.

Mrs. Arroyo herself had said that the landmark law would "address the major causes of the current garbage crisis in Metro Manila," and that her administration aimed to institute "mechanisms of waste minimization, resource recovery, appropriate collection and transport services, and environmentally-sound treatment and disposal."

But one year after, RA 9003 is nowhere near the early implementation stage. No budget has been allotted for an environment-friendly garbage management plan, and local governments have ignored the law that orders them to implement a garbage-segregation program and develop recycling sites.

There has also been an intense lobby from the executive department for Congress to repeal a provision banning the use of incinerators in the Clean Air Act. Some senators, including Senate President Franklin Drilon, have expressed openness to a possible amendment of the 1999 law. The Solid Waste Management Act, which explicitly excludes incineration from the options available for solid waste management, could face similar amendments.

Greenpeace Southeast Asia campaign director Von Hernandez accuses the Metro Manila Development Authority (MMDA), mayors and other government officials of "willfully sabotaging RA 9003." He alleges that most mayors "deliberately refuse to collect garbage efficiently to create a crisis and thus, force the public to buy the idea of quick-fix solutions like incinerators and landfills."

Like other activists, Hernandez says that some local executives earn "huge kickbacks and commissions," from waste-management projects. A former government official attests to this, adding that aside from the companies that win the project contracts, the biggest gainers are public officials who get a cut from having awarded the contracts. The cuts range from 10 to 40 percent of the contract cost, says the former official, although some opt for a monthly retainer, shares of stock, or a seat in the board of the firm that bagged the contract.

The setup is such that the more garbage brought to dumpsites or to incineration plants, the more money is generated for companies and corrupt officials. Observers say this is why recycling is unpopular among local officials. Not only would it mean a potentially tedious educational campaign, recycling would also mean less garbage to be dumped — just 20 percent of the original total.

The sums of money involved in garbage disposal are staggering, considering that local governments normally spend three percent to 15 percent of their annual budget for solid waste management. City budgets in Metro Manila can reach more than P1 billion, as Quezon City did in 1998. The MMDA alone spends about 40 percent of its budget, which happens to be P666.5 million for this year, on garbage disposal.

This is why companies bend over backwards to find an inside track in government — national and local — that would give them the edge in landing a garbage contract. This is also why they will not give up easily even when the project has been judged to be ecologically unsound and hazardous to the people’s health.

Most of these could be said as well of government officials who put personal interests before that of the community, say activists.

Incineration question

Should Mrs. Arroyo give the green light to the incineration project, many local officials, even those outside of Metro Manila, would probably be very happy. They may see such an approval as a signal for them to embark on similar programs with similarly steep price tags. That, activists say, translates to huge commissions for officials.

The incineration project dates back to the Ramos administration. But it has never gotten off the ground because of questions regarding the validity of the 25-year contract with Jancom International, which had won the right to implement the project in a 1997 public bidding, as well as those regarding that method of disposal itself.

Even the World Bank has spoken out against incinerators, citing high operating costs and environmental risks. Incinerators are known to emit over 200 toxic or potentially toxic substances, including dioxin and furans, which are chemicals that cause cancer, birth defects, and neurological disorders.

Although the Ramos administration awarded the incineration contract to Jancom, Ramos didn’t sign it. Instead, it was endorsed to the Estrada administration for approval.

But Robert Aventajado, head of the Greater Metropolitan Manila Solid Waste Management Committee (GSWMC), refused to honor it saying it was not a perfected contract. And even if it was, he said, it still could not be implemented because of the passage of the Clean Air Act.

Earlier this month, though, the Supreme Court ruled that the contract was valid. It added, however, that it is "ineffective or unimplementable until and unless it is approved by the President."

Not surprisingly, the decision has frustrated environmentalists. The Koalisyon Linis Basura for Good Governance, a coalition of various citizens’ and cause-oriented groups, also insists there was "conflict of interest" involved, since a Supreme Court Justice, Antonio Carpio, was once the lawyer of Jancom. They have noted as well that Carpio and Solicitor General Simeon Marcelo were former law firm partners.

Interestingly enough, Carpio was also presidential legal counsel during the Ramos administration, which had put together the contract with Jancom in the first place.

In fairness, Carpio, an Arroyo appointee to the High Court, had inhibited himself from the Jancom case.

Carpio and Marcelo did not respond to requests for interviews. But the present lawyer of Jancom — now known as Jancom Environmental Corp. — says there was nothing anomalous about the Supreme Court decision since Carpio had dropped the company as a client prior to his appointment as justice. Says lawyer Manuel Molina: "That was four to six years ago. He (Carpio) was a good lawyer. What’s wrong with that?"

It could well be that Jancom may just have been experiencing a piece of good luck. The Supreme Court decision came while the company and its foreign partner, the global water, waste and entertainment giant Vivendi, were trying to figure out what to do next after the collapse of efforts for a compromise with the government.

At a July 20, 2001 press conference, Mrs. Arroyo announced that the government was working out a compromise with Jancom, which had filed a temporary restraining order against any attempt by the state to proceed with another waste management project for Metro Manila. The President said that Jancom was negotiating with the government to set up a waste-segregation facility.

In truth, what were being discussed at the time were not waste segregation facilities at all but for Jancom to consider a landfill project in the meantime. An insider who was privy to the negotiations between Jancom, Malacañang and the MMDA confirms that Jancom had already agreed to put the incineration proposal "in the backburner, for at least four to five years."

The company was also apparently prepared to push down its tipping fee from the original $60-$90 per ton to $32 for the new landfill. (A tipping fee is the amount paid for every ton of trash thrown in a designated dumping site.) A member of the government panel considered the amount reasonable, noting independent surveys had found that the average tipping fee for a sanitary landfill was $30 per metric ton. This was the figure used by Aventajado’s committee in asking for a budget of P1.9 billion in 2001, calculating 4,000 to 4,500 metric tons of garbage at $30 per ton.

But Jancom spokesman Louie Malixi recounts that just when the company thought everything was already settled, the MMDA came back saying that the government would honor the contract only if Jancom could match the $18.99 per ton tipping fee provided by another waste management company, Pro-Environment Consortium (PEC), which had won a landfill contract under the Estrada administration.

Malixi says the company rejected the MMDA’s demand. "There’s no way we can build a proper landfill at that cost," he says. "Even the US pays $30 to $50 per ton. That’s like saying here’s $5,000 for a Rolls Royce."

Compromise collapse

MMDA Chairman Benjamin Abalos points to Jancom’s "high tipping fee" as the reason behind the collapse of the efforts for a compromise. But Malacañang insiders say it was because of the conflicting ownership of Jancom EC, which is being claimed solely by the Australian-based Jancom International Development Projects Pty. Malixi and lawyer Molina say, however, that Jancom International had agreed to enter into a partnership with Asea Brown Boveri to form EC.

Jancom is obviously pleased with the Supreme Court’s decision on its case. Some observers note that it also does not hurt that the Onyx subsidiary of its partner Vivendi has a local affiliate with sterling connections — Greenline Onyx Envirotech Philippines, Inc. Greenline is owned and headed by Alexander Tantoco, a son-in-law of Executive Secretary Alberto Romulo. The Jancom case would have to pass through the executive secretary, who would then make recommendations to the President.

Said Tantoco: "We are a subsidiary of Vivendi, but we’re only into hauling. We have no relationship with Jancom, which has entered into a partnership with Vivendi. They are into waste-treatment facility. We are not going to benefit from the approval of Jancom’s project. We have nothing to do on that side."

Tantoco admitted that he was worried that Greenline would be linked to Jancom because of Vivendi and that this connection would be raised as an issue against his father-in-law.

Romulo himself said in a telephone interview, "I’m not involved in that issue (Jancom contract), but if it comes to me, I will completely inhibit myself. If it comes to a point where it has to pass through my office, I will not make a recommendation. I think that’s the only thing to do. I will pass on the issue to the DOJ (Department of Justice)."

But granted that the project does get Mrs. Arroyo’s imprimatur, there are still questions as to whether Jancom can actually proceed with the project. The original plan had been to establish municipal solid waste thermal plants, with incineration as the technology, in San Mateo, Rizal, which has been shut down since 2000.

Jancom, however, says it plans to have its site, which will be operated by Vivendi, in Sitio Lobo, Lobo, Magallanes, in a property owned by a solid waste company ECWES. ECWES, which lost a bid to build a landfill in 2000, has political connections of its own, although these belong to the other side of the fence: businessman and longtime Estrada friend Jacinto Ng Sr. and former Cavite Gov. Juanito Remulla. (To be continued)