Pandacan oil depots saga goes on
BIZLINKS - Rey Gamboa () - June 5, 2009 - 12:00am

There is something unsettling when a local ordinance that had been passed more than eight years ago, reaffirmed by another ordinance, challenged and eventually upheld by the highest court in the land is upturned with just a flick of a pen. What happened?

In November 2001, The City of Manila passed Ordinance 8027 in line with its long-term plan to come up with a comprehensive land use plan for the city. In particular, it sought to rezone the densely populated Pandacan district by calling for the immediate relocation of the oil depots.

I had still been with Pilipinas Shell Petroleum Corp. then and we immediately made representations with City Mayor Lito Atienza on the repercussions of hastily closing down the depots that was integral to the petroleum product distribution throughout the country.

To do so in haste, we told the good Mayor, would create an economic paralysis since more than half of the country’s oil products pass through the Pandacan depots and its closure would create critical shortages in Metro Manila as well as create the perfect breeding ground for instability of product pricing.

To the credit of Mayor Atienza, on June 2002, the City of Manila through the intercession of the Department of Energy entered into a memorandum of understanding with the oil companies in which the three parties agreed that at that time “the scaling down of the Pandacan Terminals was the most viable and practicable option.”

Atienza’s unwavering position

But for not one moment did Mayor Atienza waver to the ultimate intention of the ordinance. In fact, while the MOU committed to a 40-percent reduction of operations at the terminal and the establishment of joint operations by the three companies, Mayor Atienza was insistent about having a clearer timeline that would commit the oil companies leaving Pandacan for good.

Meanwhile, in response to a case filed with the Supreme Court to intervene on a perceived non-compliance of the 2001 ordinance, the high tribunal in its March 7, 2007 decision penned by Justice Renato Corona ordered Manila City Mayor Atienza to immediately relocate the oil terminals of Pilipinas Shell, Petron and Chevron (formerly Caltex).

The oil companies reasoned out that the local government had passed a new ordinance that extended their stay in Pandacan for seven more years. It seemed that on June 16, 2006, or four years after the MOU had been signed, the local government passed Ordinance No. 8119 giving the oil companies seven more years to relocate to a new site.

This effectively extended the stay of the Pandacan depots till 2014, or by more than a decade since the original ordinance of 2001 was passed. However, in February of 2008, the high court issued a final ruling for the oil companies to move out of Pandacan.

Feeding on fears

A month before, a tragic accident involving the explosion of an oil tanker carrying diesel and gasoline just about a kilometer outside the gates of the Shell depot happened, in the process claiming the life of a person driving his vehicle.

This misfortune had been one of the points raised in the Supreme Court’s 78-page decision, giving weight to the feared dangers of having the oil industry’s central operating nerve in the midst of a highly populated area.

The high court’s decision gave the oil firms a 90-day non-extendible period to submit to the Manila regional trial court a comprehensive plan and relocation schedule to ensure the orderly transfer of assets.

Nothing much had been heard since the Court’s ruling. The oil companies were able to wiggle out of the deadline set and apparently the new members of the City Council and the new leadership in Manila had other plans rather than implement and complete an initiative identified with the previous administration headed by Mayor Atienza.

New City Hall occupants, new initiative

Out of the blue, a new initiative regarding Pandacan was unveiled as the city council passed Ordinance 7177 and with some drama was signed by Mayor Fred Lim. The new ordinance put to naught all the time and effort spent by the members of High Court in putting out a 78-page decision calling for the removal of the oil depots from Pandacan.

The reason behind the crafting and passage of Ordinance 7177 have all but brushed aside the High Court’s views regarding the threats of having more than 300 million liters of highly flammable and highly volatile products which include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and fuel oil in a densely populated area like Pandacan.

Height of flip-flopping

More importantly, though, Ordinance 7177 demonstrates and represents the vacillating and unpredictable decision making powers that lie in the hands of our local government officials.

This is precisely one of the biggest concerns of business in the Philippines – when laws are crafted based on the whim or self-interest of the incumbents. And in the case of local governments, which are vulnerable to the shorter three-year elective terms, the flip-flopping may be more pronounced.

It also does not help that the wheel of justice turns slowly in the Philippines. If there is ever a challenge raised regarding the latest ordinance with any of the courts, be sure that any decision will take at least two to five years, with the possibility that it may again be overturned by the issuance of a new ordinance by the new incumbents.

In this latest round, Mayor Lim has called on the “wisdom” of several Cabinet members (representing the Departments of Energy, Labor and Employment, Trade and Industry, and Defense) who all have roundly given their support for the signing of Ordinance 7177 and favoring the oil companies’ stay.

Mayor Lim said he had also consulted with other sectors, namely the Church and the residents. Did he also see the wisdom of their voices? The city mayor has said it had been a difficult decision on his part, but that he remains steadfast in his principle that “nobody is above the law and that the safety, security and well-being of the people are of paramount consideration in making a judgment call.”

For the sake of his constituents, we hope the good mayor made the right decision. Or, shall we wait for a new Manila City Hall occupant?

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at For a compilation of previous articles, visit

  • Latest
  • Trending
Are you sure you want to log out?
Login is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

or sign in with