Juico: Past execs to blame for thermal paper plant project

Manila, Philippines -  Philippine Charity Sweepstakes Office (PCSO) chair Margarita Juico said that the joint venture agreement forged by past officials of the agency with an Australian firm to set up a thermal paper plant in the country is not covered by PCSO’s mandate.

Juico, in a statement, said that the PCSO does not turn its back on its commitments but the agency could not implement any program beyond its mandate.

She was reacting to a suit filed against the agency by TMA Australia Pte Ltd. regarding the cancellation by PCSO’s present board of directors under Juico of a joint venture contract with TMA to build a thermal paper plant in the Philippines.

She said the agreement forged by the past board members “is not within PCSO’s corporate purpose and mandate, and is grossly prejudicial to the interests of PCSO.”

The TMA paper plant was supposed to supply the PCSO with thermal paper that is being used for tickets for the online lottery draws.

“PCSO is the government agency under the Office of the President mandated by law (Republic Act 1169) to provide medical and healthcare related assistance to needy patients and support charities of a national character,” she said.

The PCSO chair said in order to fulfill its humanitarian mission, it raises revenues through the conduct of a nationwide online lottery draw or lotto.

The previous PCSO Board, represented by then general manager Rosario Uriarte, entered into the joint venture agreement with the TMA Group on Dec. 4, 2009 to establish a thermal coating plant, engage in the production and marketing and thermal coated paper, synthetic substrates, and other related products as well as sell these products in the local and international markets.

Under the terms of the contract, PCSO’s primary obligation was to source all its paper requirements from TMA for a period of 50 years.

The contract was to have been managed by a governing board consisting of seven members, with four nominated by TMA and only three by PCSO.

The Senate Blue Ribbon committee investigated last year the TMA project and other contracts entered into by the former PCSO board.

In its report dated Dec. 19, 2011, the Senate found that the joint venture agreement with TMA “should be cancelled and that violations of the Anti-Graft and Corrupt Practices (laws) were in fact committed by members of the former board of the PCSO.”

The report also stated, “The Blue Ribbon Committee supports the move of the current board of the PCSO to cancel this grossly prejudicial contract. Likewise, the case for graft already filed by the members of the current board against the members of the former board who approved this contract should be resolved immediately.”

“The PCSO acted upon the findings and recommendations of the Senate Blue Ribbon Committee when it canceled the contract with TMA,” Juico explained.

She said the report of the Blue Ribbon committee found several problems with the contract with TMA.

PCSO’s legal team found that the joint venture terms are also contrary to the provisions of Republic Act 9184, the Government Procurement Reform Act.

The commitment to purchase all of PCSO’s paper requirements for 50 years from TMA is merely a supply contract disguised as a joint venture agreement and designed to evade the provisions of RA 9184.

This makes the agreement disadvantageous to government and public interest, unfair to other paper suppliers, and results in a monopoly.

Juico said the present PCSO board found those problems “insurmountable” and, in consonance with government’s policies on matuwid na daan, good governance, and transparency, decided not to proceed with the joint venture project with TMA.