Righting Wrongs Ombudsman

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By Neil Honeyman

An Independent View

Friday, May 3, 2013

I AM concerned about the performance of the Ombudsman. When PNoy announced the appointment of Conchita Carpio Morales during his SONA, there was genuine and sustained applause. We were all hoping for a revamped Ombudsman’s office that would operate with passion, energy and tenacity. But results have been disappointing. We gain the impression of a department of supercilious lawyers reading the affidavits of others and saying, as it is easy to say, that there is not enough evidence to secure a conviction with certainty. The Ombudsman’s office under Morales is not performing better than that of her predecessor, the unimpeached Merceditas Gutierrez.

Dropping cases vs Department Education (overpriced noodles) and AFP (a wide-ranging culture of corruption) is regrettable. PNoy was elected on the basis that he would reduce corruption. He is not succeeding to penetrate the systemic corruption that prevails in many departments and he is not receiving the help we are entitled to expect he would get from the Ombudsman.

The creation of the Ombudsman’s office was one of the more innovative components of the 1987 Constitution. Its purpose was not exclusively to file criminal charges against alleged wrongdoers. One of the more significant functions was to determine the cause of ‘inefficiency, red tape, mismanagement, fraud and corruption’ and to make recommendations for ‘their elimination and the observance of high standards of ethics and efficiency.’ We are not seeing that the Ombudsman is doing this. Perhaps the Constitution creates its own problems. It specifies that the Ombudsman and his Deputies must be members of the Philippines Bar. Why? We need managers or consultants who have a proven track record of pro-actively identifying and implementing necessary changes. This is not an arena for lawyers. It is the resistance to change by the nefarious ones that is causing PNoy’s ‘straight path’ philosophy to be unimplemented.


The Ombudsman’s office, costing over P1 billion in public money each year, is failing to live up to its Constitutional mandate.

Ceneco 2

On 22 April I wrote an article about the need for Ceneco to have external checks and balances in order to ensure necessary protection for Ceneco’s member consumers.

We believe that at the heart of what seems like capricious price fluctuations of our electricity is the contract signed by Ceneco/ERC with Kepco Salcon towards the end of 2007. Current Ceneco Board Members could provide consumers with much needed help if they re-visited the contract to see if it is a fair contract.

The contract contains clauses in which Ceneco has to pay more if coal prices increase. This means that Ceneco, not Kepco, takes the risk of coal price hikes.

But coal prices can also decrease as they have been doing recently. Does this mean that Kepco passes on the savings to Ceneco?

We are pleased that Atty Vicente Petierre representing the City of Bacolod is challenging a P204 million charge which Ceneco wishes to impose on consumers as a result of a less-than-transparent deal it made with Panay Energy Development Corp (PEDC).

At a meeting held at the office of the Energy Regulatory Commission (ERC) in Manila last week, Petierre reached first base. PEDC and Ceneco have been asked by ERC to file a formal offer of evidence on or before May 3 and the city government of Bacolod is to file its comment on this offer by May 17.

Whatever the result, we hope that Ceneco will recognize that it should operate with more transparency in future.


Last Friday’s article that Universal Robina Corp (URC) is building a US $35 million ethanol distillery plant at Manjuyod, Negros Oriental is good news. US $ 35m (P1.4b) is a substantial investment and we trust that URC’s initiative produces good returns.

Constructing the plant will generate several hundred jobs so the beneficial impact on the local economy will be substantial.

The plant is due to start operations in March 2014 and should be running at full capacity in time for the sugar industry to meet the challenge of the introduction of the ASEAN free trade policy in 2015.

According to Renato Cabati, General Manager of Universal Robina Sugar Milling Corporation (URSUMCO), the plant will produce 30m liters of ethanol annually. This is substantial when we recognize that, at present, the Nation’s production of bioethanol is only approximately 80 million liters. At least 400 million liters are required to meet the recently introduced mandate of the Department of Energy (DoE) that gasoline should contain 10% ethanol.

The commercial aspects are challenging since although DoE requires petroleum companies to give preference to ethanol produced within the Philippines, it will be necessary for our bioethanol industry to be competitive by 2015. ASEAN rules are likely to require any member country not to discriminate against the products of any other country (the corollary of discriminating in favor of our own products). The downside of our membership of ASEAN is a slight loss of sovereignty which we hope and believe is more than offset by the benefits of a smoothly operating free trade area.

* * *

‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’ - Adam Smith (1723-1790), Wealth of Nations, (1776)

Published in the Sun.Star Bacolod newspaper on May 03, 2013.


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