When steel men play hardball

The court is always a recourse for an aggrieved business rival. Any regulatory agency operates under the law, and its moves can be questioned before a judge if seemingly unfair. But there are rules to this, to ensure free enterprise. A complainer must show proof of acute urgency and irreparable damage. And if exacting an injunction against a competitor, a cash bond must be put up for reparation in case the court errs in judgment.

All this was broken, cries one party in Makati’s biggest trade lawsuit today. Steel Corporation of the Philippines thus is seeking to bar Judge Rommel Baybay from further hearing the case on which rests its billions of pesos in investments, and more in taxes of opponents. For good measure, SCP also sued the jurist before the Supreme Court for bias and undue haste in stopping the government from honoring long-awarded duty incentives.

The tiff arose sometime in June. The Filipino Galvanizers Institute, a steelmakers’ alliance, sued the government for granting SCP way back May 2000 zero-tariff privilege in importing hot-rolled coil, a manufacturing raw material. Held respondents were the Board of Investments, Bureau of Customs, Department of Trade and Industry, and Office of the President. The FPI claimed the privilege gave SCP undue advantage over users of cold-rolled coil raw material, which has three-percent import duty.

SCP in truth bagged the BOI incentive for investing P13 billion in the new hot-rolled coil technology under steep conditions of the Iron and Steel Industry Act of 1991. The grant, from three to zero percent, took six years to get. Before that, the National Economic and Development Authority had consulted SCP’s rivals, who put up no resistance. The FGI instead wangled from Malacañang in July 2000 a parallel slash of cold-rolled coil tariff from seven to only three percent. The four-point benefit effectively wiped out SCP’s venture incentive, raising eyebrows in the Estrada administration, but SCP opted to grin and bear it. Early this year the revenue-starved Arroyo government mulled a return of the seven-percent tariff on cold-rolled coil. Seeing futility perhaps in lobbying for retention, the FGI went to court to end SCP’s five-year old grant.

The timing is one of the points raised by SCP to block a temporary restraining order. It said the passage of five long years was proof enough that there was no urgency in FGI’s claim. The latter also failed to present evidence of staggering business loss, a requisite for a TRO.

But that wasn’t what rankled SCP. It said it got no prior notice of the suit, and thus was unable to witness the raffling to Judge Baybay. When it finally learned of the case and sought the judge’s inhibition because he is "a frat brod" of FGI’s lawyers, SCP was ignored. In the ensuing hearing for the TRO, government counsels and SCP requested but were denied more time to prepare briefs. A plea to tape the proceedings, because transcripts took too long to type and the next hearing date was too close, was also nixed.

The TRO issued, FGI asked for a permanent injunction to follow. In that hearing, SCP said, the judge coached the rival’s witness. So it filed a second motion for his inhibition, along with a complaint to the Supreme Court. There now lies the stalemate, waiting for a break that could make or unmake future incentives to investors, as well as the price of steel products.

Meantime, government must decide whether to re-impose the seven-percent duty on cold-rolled coil, from which it used to net half-a-billion pesos a year. Come to think of it, government already has lost P2 billion in the four years of lower duties, with no new investments as replacement.

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Virgilio Garcillano’s claim to have conversed as well with Opposition figures during the 2004 canvassing may at first look like mudslinging. But the admission of Senators Juan Ponce Enrile, Jamby Madrigal and Loren Legarda, and Rep. Francis Escudero to have indeed chatted with him alters the story.

The Opposition says that theirs were mere "chance encounters" with Garcillano, while President Gloria Arroyo’s were purposeful, improper, illegal talks with her election nominee. They need to explain the difference.

No law bars candidates from talking with election officers. Anyone who has ever run for position, whether in high government or a lowly civic club or student union, knows that a candidate naturally would seek such officer’s advice in case of doubts or action in case of fraud. The Opposition cannot simply claim innocence for itself and crime by the Administration in committing the same acts.

The Gloria-gate wiretap already puts the Opposition at an advantage. The tape itself, because illicitly acquired, would be inadmissible as evidence in court, including impeachment. But its contents could supply leads that a diligent accuser can pursue to persons, places and events that may prove election cheating.

But then, the Opposition is lazy, Sen. Joker Arroyo says. In lieu of meticulous investigation and prosecution, it prefers to agitate street actions or issue press statements for Ms Arroyo to resign, which she refuses to do. In the process it scoffs at history and belittles an institution, the House of Representatives, that made impeachment possible, against all odds in 2000.

The Opposition is demanding that Vice President Noli de Castro step down too on the presumption that he benefited from Ms Arroyo’s fraud. In short, guilt not by commission but by association. It will take more legwork than lip action to make that stick. Sloth, it must be recalled, is one of seven deadly sins.

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