A midst al l the protests and displeasure of workers in

local water districts (LWDs) against Senate Bil l No. 2997, Senator Edgardo Angara assures that said bil l wil l not abolish the more than 500 LWDs during a meeting with PAWD officers last July 18, 2012 at the Intercontinental Hotel Manila.

Angara: “ LWDs will not be abolished”

Senator Angara, who authored the said bill, clarified that his bill, also known as the Water Sector Reform Act of 2011, will not eliminate LWDs but instead will seek reform in the water sector by creating new bodies to govern, administer, and supervise water allocation distribution and rationalization in the country.

Aside from the creation of new water authorities, the senator said that the bill will also seek to establish an incentive scheme to promote and encourage investment in the water industry.

Under the proposed incentive scheme, water service providers, developers, and operators will be entitled to income tax holiday, duty free importation of machinery, equipment and materials; special realty tax rates on equipment and machinery, net operating loss carry, among others.

“The bill will also give attention to water supply and sanitation as 34% of Filipinos does not have access to potable water. Septage collection and treatment is also a priority”, said Senator Angara.

T he Phil ippine Association of Water Districts (PAWD) formally submitted its posit ion paper to the Office of the President,

questioning the legality and validity of Executive Order Nos. 24 and 65 which prescribe the rules to govern the compensation of the members of the Board of Directors/Trustees in government-owned and controlled (GOCCs), including local water districts (LWDs).

PAWD doubts legality of EOs 24 and 65

In its letter addressed to Executive Secretary Paquito Ochoa, Jr., the association maintains that E.O. Nos. 24 and 65 totally contravene the provisions of Republic Act No. 10149 otherwise known as the “GOCC Governance Act of 2011” that expressly excludes the LWDs from the application of said law. Section 4 of said law provides:

“Section 4. Coverage. This Act shall be applicable to all GOCCs, GICPs/GCEs, and all governmental financial institutions, including their subsidiaries, but excluding the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts, economic zone authorities, and research institutions: Provided, that in economic zone authorities and research institutions, the President shall appoint one-third (1/3) of the board members from the list submitted by the GCG.”

The letter argues that R.A. No. 10149 adopted the scheme set forth in E. O. No. 24 for fixing the limits of compensation that shall be received by the members of the Board of Directors of the GOCCs. Thus, Section 23 of the Act provides:

“Section 23. Limits to Compensation, Per Diems, Allowances and Incentives. The charters of each of the GOCCs to the contrary notwithstanding, the compensation, per diems, allowances and incentives of the members of the Board of Directors/Trustees of the GOCCs shall be determined by the GCG, using as a reference, among others, Executive Order No. 24 dated February 10, 2011; Provided, however, That Directors/Trustees shall not be entitled to retirement benefits as such directors/trustees.”

The letter explains that since Section 23 is taken in conjunction with Section 4 of the GOCC Governance Act of 2011, then it is logical that the intent of the Legislature is to make the compensation scheme provided under the assailed E.O. No. 24 inapplicable to LWDs. With the enactment of R.A. 10149, Section 5

(From right) PAWD President Alfredo Silva and PAWD Chairman Gilbert Camaligan discuss PAWD’s position on E.O. Nos. 24 and 65 with Honorable Michael G. Aguinaldo, the Deputy Executive Secretary for Legal Affairs of the Office of the President. PAWD’s Legal Committee Chair Lindley Santillan and PAWD Secretary Carlos Santos, Jr. also attended the meeting last July 26, 2012 at the Malacañan Palace.

Angara assures LWDs... page 2

PAWD doubts legality... page 2

1

of E. O. No. 24 was automatically deemed repealed, for this provision specifically states that members of the Board of Directors of LWDs shall be covered by the E. O. and that separate rules shall be issued with respect to them. Thus:

“Section 5. Local Water Districts - Members of the Board of Directors/Trustees of Local Water Districts shall likewise be subject to the policies and principles set forth herein. Separate rules pertaining to classification and compensation of members of the Board of Directors/Trustees of Local Water Districts shall be issued for this purpose.”

The position paper also asserts that the Executive Order Nos. 24 and 65 are null for they also directly contradict with the provisions of Presidential Decree No. 198, the charter that creates and primarily governs local water districts. PAWD justifies that under the P.D. No. 198, the Board of Directors of the LWDs is given the sole authority to fix the per diem which shall be received by their members for every board meeting actually attended by them. It is only when the amount fixed by them exceeds P150.00 that the LWDs need to secure the approval of the LWUA. The law specifically provides that:

Senator Angara (center) discussed S.B. No. 2997 with the PAWD leaders including (from left) President Silva, Chairman Camaligan, Former Chairman and current Spokesperson Villasan and Secretary Carlos Santos, Jr. on July 18, 2012 at the Intercontinental Hotel Manila, Makati City.

W i th the apparent r ise of competit ion by profit-oriented water uti l i t ies in the countryside, PAWD President Alfredo Silva,

through a memorandum circular, urged al l local water districts (LWDs) to priorit ize expansion of water and sanitation services to their covered communities.

PAWD President urges LWDs to shape up

The president’s appeal came after the PAWD leadership was alerted of various incidents concerning partnerships between Local Government Units (LGUs) and private water utilities to construct and operate water distribution system in some municipalities under water districts’ respective areas of jurisdiction.

During the second quarter meeting of the PAWD Executive Council in Tacloban City, it was reported that many LGUs are inclined to said kind of joint venture due to the lure of a royalty or share their municipalities may collect and also the assurance of the expansion of water services to un-served barangays that are supposed to be provided by water districts.

One of the bases being cited for the legality of said partnerships is the Supreme Court’s landmark case entitled “MCWD vs. ADALA” G.R. No. 168914 which ruled Section

Early this year, the said bill, which claims that the water district model of P.D. No. 198 has failed, drew the ire of LWD workers that prompted intense campaigns condemning the misleading allegations.

As stated in PAWD’s position paper, the abolition of more than 500 LWDs, employing about 20,000.00 employees and serving around 3.5 M households with estimated population of twenty-five (25) million in the cities and municipalities outside Metro Manila, will seriously affect the services of the LWDs which have been serving successfully in the countryside for more than three (3) decades and will demoralize public service which has deleterious effect in the civil service, and will aggravate the rising unemployment in this country.

Some LGUs where LWDs operate, through resolutions, have also expressed support to the LWDs in their battle to secure their existence and continue fulfilling their mandate to provide safe, adequate and affordable water to their concessionaires.

S.B. No. 2997, which is still in the public hearing stage, is the counterpart of House Bill No. 5497 authored by Rep. Romero Federico Quimbo and Rep. Karlo A.B. Nograles.

Curiously, PAWD supports the pending Senate Bill No. 2641 which is also authored by Senator Angara. Said bill is a counterpart of various bills such as Senate Bill No. 611 (by Senator Jinggoy Estrada), H.B. No. 1679 (by Rep. Rufus Rodriguez and Rep. Maximo Rodriguez, Jr.), H.B. No. 4137 (by Rep. Bernadette Herrera-Dy and Rep. Sonny Angara) and H.B. No. 4282 (by. Rep. Feliciano Belmonte, Jr. and Rep. Neptali M. Gonzales). Said bills propose the establishment of the Water Regulatory Commission (WRC) to rationalize the economic and administrative regulations of all water utilities, including their licensing and fixing of tariff rates, but tolerating and allowing the existence and continuous operation of water districts and other service providers.

2

Angara assures LWDs... from page 1

PAWD President Alfredo Silva gives updates to the Executive Council members during their 2nd quarter meeting last July 19, 2012 at the Oriental Hotel in Tacloban City.

Senator Eduardo Angara (extreme right) assures the PAWD leadership that he and his son, Rep. Sonny Angara, supports the cause of LWDs and that his bill will, instead of abolishing LWDs will even strengthen and improve their services.

47 of Presidential Decree 198 as unconstitutional and irreconcilable with Article XIV Section 5 of the 1973 Constitution, therefore prohibiting exclusive franchises to water districts. This provision has also been substantially reproduced in Article XII Section 11 of the 1987 Constitution.

As decided by the Supreme Court, water districts do not enjoy the exclusive franchise to operate a water system in their respective areas of jurisdiction which paves the way for an open enterprise to private water utilities.

As stated in Memorandum Circular No. 6, s. 2012, the president urged all member-water districts to employ all kinds of efforts to improve their water supply and sanitation services mainly by reaching un-served and under-served areas in their respective jurisdictions.

In this way, according to the President, water districts will not only be in a good position to avoid competition from profit-oriented private entities but they will also live up to their billing as the best management model for a water utility company mandated to serve Filipinos in the countryside with safe, adequate, and affordable water .

PAWD doubts legality... from page 1

“Section 13. Compensation. Each director shall receive a per diem to be determined by the Board, for each meeting of the Board actually attended by him, but no director shall receive per diems in any given month in excess of the equivalent of the total per diem of four meetings in any given month. Any per diem in excess of One Hundred Fifty Pesos (P150.00) shall be subject to the approval of the Administration. In addition thereto, each director shall receive allowances and benefits as the Board may prescribe subject to the approval of the Administration.” (As amended by Sec. 7, PD 768; R.A. 9286)

With the provided arguments, PAWD hopes that it will result to new presidential issuance regaining the LWD’s directors’ vested right to per diem as they play a crucial role in the decision-making in LWDs.

EDITORIAL STAFFARTURO G. VILLASAN

Chairman

MA. TERESA C. COMBATIRManaging Editor

KARLO CEASAR C. ABARQUEZReporter

ADVISERSGILBERTO D. CAMALIGAN

ALFREDO S. SILVA

Philippine Water Operators’ Partnership Program. The PAWD leadership represented by (from right) President Alfredo Silva, Chairman Camaligan, and WOP Committee Chairman Armando Paredes (extreme left) signs the Memorandum of Understanding with the Development Alternatives Incorporated/Philippine Water Revolving Fund Follow-on Program (DAI/PWRF-FP) represented by its Chief of Party Alma Porciuncula. The MOU is for the continuation of the Philippine Water Operators’ Partnership Program which aims to improve the performance of water districts, enabling them to reach un-served areas, upgrade the level of services, and to ensure reliable and cost efficient operations of water supply and sanitation services. It also aims to continue strengthening PAWD institutionally to represent and address industry level strategic concerns and issues; and to better serve the capacity building requirements of water districts in a sustainable manner. The MOU signing was held on July 20, 2012 in Tacloban City. (Karlo Abarquez)