Germany backs fight vs graft but wants Fraport issue settled

MANILA, Philippines - The German government fully supports the anti-corruption campaign of the Aquino administration and does not want bilateral ties to be set back by the continuing dispute over the third terminal of the Ninoy Aquino International Airport (NAIA), a ranking German official said the other day.

“We appreciate the efforts of the current administration to fight corruption,” Werner Hoyer, minister of state of the German Foreign Office, told The STAR. “It’s going to be a long fight.”

Hoyer said it would be “irresponsible” to make the many aspects of bilateral ties dependent on the dispute, currently under international arbitration, between the Philippine government and German airport operator Fraport AG. He also said Germany should not align itself with those involved in wrongdoing.

But Hoyer, together with German Ambassador Christian-Ludwig Weber Lortsch, emphasized the need to get the Fraport issue out of the way through a final settlement.

“We must move on,” Hoyer told The STAR.

He said that until his trip to Manila, he had not even heard of Fraport’s Philippine partner PIATCO (Philippine International Air Terminals Co.), builder of the NAIA-3, whose corruption-tainted contract was cancelled by the government. Fraport is demanding compensation for its investment.

Weber-Lortsch hosted a dinner at the German embassy residence Friday night for the visiting state minister after a day of talks with Philippine government officials led by Foreign Secretary Albert del Rosario, Justice Secretary Leila de Lima and Transport and Communications Secretary Mar Roxas.

The NAIA-3 issue was among the issues discussed, the Germans said, but nothing was firmed up on how the dispute might be settled soon.

At the dinner, Hoyer and Weber-Lortsch both lauded the two countries’ shared values of democracy and the Aquino administration’s focus on good governance, transparency and the rule of law.

Weber-Lortsch reiterated that while the dispute over NAIA-3 has not affected German investments already in the Philippines, with a number of them even expanding operations, the unresolved dispute kept away new investors, including major companies that could participate in the public-private partnership (PPP) program of the Aquino administration.

During his meetings with Philippine officials, Hoyer also discussed bilateral trade as well as German ties with the Association of Southeast Asian Nations (ASEAN). Germany wants to be a participant in the East Asia Summit. It also wants the European Union to forge a free trade agreement with ASEAN, but the regional grouping can have such pacts only with individual states.

DFA: Fraport issue should be treated separately

DFA spokesman Raul Hernandez said Del Rosario also made it clear that “the issue of Fraport should be treated separately from the bilateral relations.”

Hernandez, however, did not give a categorical answer when asked if the impasse over NAIA-3 was raised during the meeting between Del Rosario and Hoyer.

He said Del Rosario added that the Fraport issue may be discussed when he visits Germany.

“Secretary Del Rosario said they talked about his visit to Germany but the date has not been firmed up yet and also they focused on enhancing the bilateral agenda and bringing the relations to the next higher level,” Hernandez said.

The German embassy declined to comment on a local court’s decision on NAIA-3, saying neither the German government nor a German company is party to the expropriation case.

A Pasay City regional trial court, in its ruling in May, set the just compensation for the expropriation of NAIA-3 at $175.7 million.

The embassy, however, said “a negotiated agreement between all parties involved would be the best way out of the present impasse.”

Weber-Lortsch urged the new administration “to do away with the ghosts of the past” created by the NAIA-3 project and bring the parties involved to the negotiating table to facilitate a “legal, fair and timely solution for an inherited problem.”

He said the legal dispute could continue for years because no final judgment has been passed on the controversial deal, leaving the urgently needed infrastructure project shelved by lawyers instead of being finished by engineers.

He added that the Philippine Supreme Court ruling is clear that no acts of ownership are allowed until full payment of just compensation by the government to PIATCO and its investors.

In its Dec. 23 ruling, the International Center for Settlement of Investment Disputes in Washington also reinstated Fraport’s right to file an arbitration and compensation case against the Philippine government. – With Pia Lee-Brago