Fined

Manila Water, Maynilad and the Metropolitan Waterworks and Sewerage System were ordered by the Supreme Court to each pay a fine of P921.4 million for violating the Clean Water Act. The decision affirmed a 2013 Court of Appeals ruling upholding an order issued by the DENR.

The ruling was upheld by unanimous vote. This will be a landmark case.

The High Court ordered the respondents to pay the fine within 15 days from receipt of the decision. Failing to do so, they will each pay P322,102 per day subject to a 10 percent increase after two years.

At least one of the water concessionaries indicated they would file a motion for reconsideration. Considering the unanimity behind the ruling, the chances for such a motion prospering is nil. 

This is the second time this year the two water concessionaires are being financially penalized. The first time was when severe water shortages hit the metropolitan region. Although the shortages were blamed on drought, the two companies were contractually obligated to ensure adequacy of water supply.

The financial penalties will be more than painful for the two concessionaries. They may feel the law imposed obligations on them that are very difficult to comply with. But the law, be it harsh, is the law.

The Clean Water Act requires the concessionaires to provide wastewater treatment facilities and to connect to sewage lines all establishments and homes within five years after the law takes effect. That law took effect on March 6, 2004.

Exactly five years after, as the law provided, the DENR ordered the concessionaries penalized. The concessionaries went to court. Last week, over a decade since, the Supreme Court ruled.

If the water distribution companies attempt to comply with the law, they will have to put in massive investments to ensure that all wastewater is treated before being returned to the environment. They face hefty fines on a continuing basis if they do not.

After all, they have been collecting money for that purpose the last 22 years.

Environment

We can never clean up Manila Bay until we have a fully functioning water treatment system for the metropolitan area.

Lito Atienza realized this when he was secretary of the DENR and tried cleaning up both the Manila Bay and the Laguna de Bay. In both crucial bodies of water, waste was continuously flowing in.

The contract for the two water concessions required them to set up water treatment facilities. In fact, from the very start, fully 20 percent of the water bill customers get went to sewage treatment. But since their contracts commenced in 1997, the two concessionaries have done little to set up water treatment facilities.

As DENR secretary, Atienza issued a department order in 2009 fining the two companies P200,000 per day until they set up the treatment plants. This continuing fine is the basis for the High Court ruling. He used the expiration of the five-year grace period provided for by the 2004 Clean Water Act as the opportunity to fine the concessionaires as a method for forcing them into compliance with their contractual obligations.

Prior to that, the two concessionaries had borrowed money from the World Bank, using its climate change facility, supposedly to build treatment plants. The loans were covered by sovereign guarantees to bring down the cost of money. That makes government party to the borrowing. The two water companies owe their customers an explanation as to how the money was used.

Likewise, the two need to explain to their customers how the money collected for water treatment was used. The fact that they procured trucks to suck our wastewater from establishments does not qualify as water treatment. No one knows where the wastewater is dumped.

A few months ago, the metropolitan area experienced severe water shortages. That would not have happened if water treatment kept the lake clean. Laguna de Bay is, in fact, our biggest fresh water reservoir – except that it is heavily polluted and wastewater continues to drain into it every day.

Currently, government is engaged in an ambitious program to clean up Manila Bay. That will be an exercise in futility unless all wastewater from the megalopolis is treated before being released to the bay.

Atienza dreams of a Mega Manila with ample fresh water from Laguna de Bay and a Manila Bay filled with tourist attractions. Those dreams will remain distant unless we are able to institutionally deal with water treatment as dutifully as Singapore does.

The recent Supreme Court ruling will, we hope, set into motion a process where we are able to arrest environmental degradation, enforce regulations across the board and compel corporations to abide by their contractual obligations.

Things might have been better for all parties concerned if the two concessionaries accepted the penalties imposed by the DENR in 2009 and proceeded to build the treatment facilities they are obliged to do by contract. Instead of doing that, they chose to fight the department order in court. That began a decade-long court saga that ended only this week with the historic Supreme Court ruling.

Why the two companies chose to bring the matter to court instead of comply with clear contractual obligations is an issue worthy of a public hearing. It will take us many more years from today to fully complete a real wastewater treatment system for Mega Manila.

Meanwhile, customers of two concessionaries will dutifully pay that 20 percent of the bill that is supposed to cover construction of the treatment plants.