Probe on $6 million DENR Air Monitoring Network Project sought

April 14, 2007

Probe on $6 million DENR Air Monitoring Network Project sought; Re-electionist administration solon among those in hot water

Environmental activists today urged a government probe on a $6 million air pollution monitoring project between the Department of Environment and Natural Resources (DENR) and a private joint venture, expressing grave concern over highly-questionable transactions and suspicious actions of senior government officials, including DENR Secretary Angelo Reyes and a prominent administration congressman.

In a press conference held this morning by Kalikasan Peoples' Network for the Environment (Kalikasan PNE), environmental activists Clemente Bautista, Jr. and Ester Perez de Tagle Concerned Citizens Against Pollution (COCAP) presented a complaint sent to the Office of the Ombudsman regarding the DENR's Ambient Air Network Project, which involved the setting up, maintenance, and operation of ten (10) air monitoring stations meant to measure ambient air (or air outside and surrounding an air pollution source location) and pollutants such as sulfur dioxide, nitrogen oxides, carbon monoxide, ozone, particulate matter and total suspended solids.

The contract, amounting to US$6,163,000.00, was awarded to a joint venture between Emissions Technology Inc., a Guam-based company, and its local partner Industromach Inc. (ETI-IMACH) on November 2002. However, on February 14, 2005, IMACH officially withdrew from its partnership with the ETI, citing as reasons the ETI's misrepresentation with regards to its expertise in ambient air monitoring, its use of unreliable equipment, unilateral deviation of contract obligations, project management conflicts, overcharging local expatriate and local personnel rates, and non-payment of IMACH's project operation and maintenance expenditures.

On November 2004, the Environmental Management Bureau (EMB) recommended that the payments for the project's operations and maintenance by suspended in light of the contractors failure to complete the rehabilitation and improvement of all ten stations and to address nagging technical and legal issues. On October 17, 2006, the EMB and the DENR's legal departments recommended to Sec. Reyes the termination of the contract.

Despite the suspension of payments and recommendations to end the contract, the DENR has agreed to continue with its transactions with ETI. Last December 13, 2006, the DENR and the ETI, through a meeting with Sec. Reyes, agreed to pay to ETI more than $1,117,864.13 million worth of unsettled billings and to possibly extend the project for another year.

These incidents prompted IMACH Managing Director Eduardo L. Mendoza to send a complaint to the Office of the Ombudsman. Mendoza argued that the terms of the latest agreement were highly prejudicial to the government.

"Setting aside my company's interest in this transaction...I have decided to come out and expose the truth about the Ambient Air Project in the hope that those liable would be held to account for their actions and participations", Mendoza wrote. (Please refer to the letter of Industromach Incorporated dated 16 March 2007 and the briefer prepared by Kalikasan PNE).

"This transaction should merit a full-blown investigation by the [Office of the Ombudsman] involving as it does the payment of millions of dollars allocated for that component of a loan package extended by the Asian Development Bank (ADB) under its Clean Air Program as well as the highly suspicious actions of senior officials of the DENR and the participation of a prominent member of the Lower House of Congress," Mendoza wrote in a complaint received by the General Investigation Bureau-A of the Office of the Ombudsman on March 21, 2007.

The solon referred to by Mendoza is administration Cong.Edcel C. Lagman, representing the 1st district of Albay and currently running for a second term.

Lagman previously served as legal representative for ETI-IMACH during the start of the project and has received amounts of $60,000, $63,255, $100,000, $40,000 and $100,000 on various dates from 2002 to 2003, representing his initial lawyer's fee, his success fee for the awarding of the contract, and the last three amounts as partial payment for marketing expenses, respectively.

After his election to the House of Representatives during the 2004 national elections, Cong. Lagman continued to personally attend meetings related to the project in 2005 despite his active participation in two impeachment proceedings in Congress, even stating that it was his intention to mediate between the ETI and EMB on the financial issues of the contract. He even requested the EMB to convey his concern to the DENR top maangement and to pay what is due to ETI before the budget hearing started in October 2005, Bautista noted.

"These actions of Cong. Lagman betray his real interest in arguing against the termination of the [project] and securing for ETI this highly prejudicial agreement with the DENR," Mendoza said.

"Cong. Lagman's presence at the meetings is questionable and anomalous, as even the Congress' House Rules state that a solon should not be directly or indirectly financially interested in any contract with a government agency during his term in office," Bautista said.


"It's a useless and expensive failure," Bautista said of the project. "The failure to produce credible data on air pollution will not go in the way of mitigating, but in fact worsen, the state of air pollution plaguing Metro Manila. This will only pose more threats to the peoples' health, as we have no way of

"If the Arroyo administration can not even implement an efficient project to monitor air quality, how can we even expect it to solve the greater problems of massive air pollution and climate change?" Bautista said.

"We want clean air and clean electoral candidates. This case violates the principles of good governance and only reinforces the reality that a project may be approved by government agencies and be even extended for as long as one has powerful backers among the Arroyo administration, irregardless of whether it contributes to the welfare of the environment or not," he added.

Meanwhile, Joey Papa of Bangon Kalikasan Movement warned of the continuing threat of air pollution, which the project has failed to efficiently monitor to date.

"The deterioration of air quality in Metro Manila is already a grave environmental and health problem that should be correctly addressed. Metro Manila's air is reported to carry a high level of particulate matter which exceeds World Health Organization (WHO) standards by two or three times. The WHO itself lists Metro Manila as among the most polluted cities in the world, next to Mexico City, Shanghai, and New Delhi, Shanghai," he said. ###