Download treaties, government procurement and good governance

TREATIES, GOVERNMENT
PROCUREMENT AND GOOD
GOVERNANCE
Prof. H. Harry L. Roque, Jr.
Council Member, International Criminal Bar (Bar Association of ICC Counsels)
Counsel, International Criminal Court, The Hague
Chairman, Center for International Law
Professor, UP College of Law
Presidential Assistant for Human Rights, I.B.P.
ZTE NBN CONTROVERSY:
 US$300+
Million project for a National
Broadband Network
 Project proponent was ZTE Corporation
of China, designated by the PRC and to
be funded by the Chinese Exam-Bank
 No bidding as justification was Section
4 of RA 9184 of the Government
Procurement Reform Act
 Position
of the Executive: The fact that
ZTE is a Government Owned and
Controlled Corporation (GOCC) and the
fact that the loan agreement was
between RP and another GOCC, the
Chinese Exim-Bank made it an
Executive Agreement or a Treaty and
thus, exempt from public bidding.
Controversies surrounding ZTE Contract:
1. Overpriced and no Bill of Materials
2. violative of policy in telecoms law and ecommerce law that telecommunications
must be privatized;
3. no prior monetary board concurrence since
this will increase foreign indebtedness;
4. No certificate of availability of funds which
according to the Auditing Code of the
Philippines renders contract null and void.
NORTHRAIL CONTRACT
 US$500
million+ rail project from
Valenzuela to Malolos, Bulacan
 Project proponent as designated by
PRC was CNMEG
 No bidding as executive invoked
section 4, RA 9184
Other objections by UPLC:
1. overpriced per Sen. Miriam DefensorSantiago;
2. No Bill of materials;
3. No prior concurrence of Monetary board,
albeit with “approval in principle”
4. No certificate of availability of funds
5. Social and monetary costs of relocating
informal settlers
 Section
4, RA 9184
“AN ACT PROVIDING FOR THE
MODERNIZATION, STANDARIZATION
AND REGULATION OF THE
PROCUREMENT ACTIVITIES OF THE
GOVERNMENT AND FOR OTHER
PURPOSES”

Section 4: Section 4. Scope and Application.This act shall apply to the Procurement of
Infrastructure Projects, Goods and Consulting
Services, regardless of source of funds, whether
local of foreign, by all branches and
instrumentalities of government, its departments,
offices and agencies, including governmentowned and/or-controlled corporations and local
government units, subject to the provisions of
Commonwealth Act No. 138. Any treaty or
international or executive agreement affecting the
subject matter of this Act to which the Philippine
government is signatory shall be observed.
 Vienna
Convention on the Law of
Treaties: A treaty is a written agreement
between states and governed by
international law
 Query:
Are GtoG Contracts Treaties or
International Agreements?

Bayan Muna vs. Zamora: On
constitutionality of VFA: A treaty, however is
called, an international agreement or an
executive agreement, is a treaty. Hence,
whether or not the VFA was concurred in by
the US Senate, it remains valid as a treaty as
it is not for the Philippines to inquire on the
constitutional requirements that must be
observed by foreign states
 CJ
PUNO Dissenting: there is a
substantial difference between a Treaty
concurred in by the US Senate and all
other international agreements. VFA,
insofar as it may allow for perpetual
“visits” is unconstitutional.
 Abaya
vs. Ebdane: Whether or not
JBIC funded projects are covered by the
rule in RA 9184 prescribing for price
maximum ceilings
 Section
31, RA 9184:
Section 31. Ceiling for Bid Prices. - The
ABC shall be the upper limit or ceiling
for the Bid prices. Bid prices that
exceed this ceiling shall be disqualified
outright from further participating in the
bidding. There shall be no lower limit to
the amount of the award.
Held:
1.
2.
Project questioned, Catanduanes
Circumferential road, was bidded out prior to
the effectivity of RA 9184. Hence, said law is
inapplicable.
In any case, said project was amongst those
identified in an Exchange of Notes between the
Japanese ambassador and the Philippine
Secretary of Finance that will be funded by the
JBIC. Hence, it is procurement through a treaty
or an executive agreement and therefore, the
terms of the Exchange of Notes should prevail.
Thus JBIC rules shall apply.
 Vibal
Publishing vs. Hon Fernandez
and Kolonwel Trading: RA 9184
covers Whether or not World Bank
funded Projects
 Held:
Yes. World Bank funded projects
are governed by World Bank guidelines.
They fall thus under section 4 of RA
9184
 NORTHRAIL
(RTC): Is the contract
between two GOCC’s and the loan
agreement between RP and Chinese
EXIMBANK in the nature of treaties and
should the project proponent, CNMEG,
a Chinese GOCC, be immune from
local jurisdiction?
Held (Interlocutory):
1. Agreements are NOT treaties
2. CNMEG not entitled to immunity from
suits.
LEGAL ISSUES FOR ZTE:
In conformity with the Abaya ruling, GRP
belatedly entered into an “Exchange of
Notes” identifying projects to be funded by
the Chinese EXIMBANK to include Northrail,
NBN and cyber Education projects. Should
belated entry into this exchange of notes
trigger the application of section 4 of RA
9184?
2. Should the nature of a procurement contract
as entered into by the GRP in the form of a
treaty preclude the application of RA 9184?
1.
Policies as laid down in RA 9184:
Section 3. Governing Principles on
Government Procurement.
(a) Transparency in the procurement process
and in the implementation of procurement
contracts.
(b) Competitiveness by extending equal
opportunity to enable private contracting
parties who are eligible and qualified to
participate in public bidding.
(c) Streamlined procurement process that
will uniformly apply to all government
procurement. The procurement
process shall simple and made
adaptable to advances in modern
technology in order to ensure an
effective and efficient method.
(d) System of accountability where both
the public officials directly or indirectly
involved in the procurement process
as well as in the implementation of
procurement contracts and the private
parties that deal with government are,
when warranted by circumstances,
investigated and held liable for their
actions relative thereto.
(e) Public monitoring of the procurement
process and the implementation of
awarded contracts with the end in view
of guaranteeing that these contracts
are awarded pursuant to the provisions
of this Act and its implementing rules
and regulations, and that all these
contracts are performed strictly
according to specifications.
 Vienna
Convention on the Laws of
Treaties: Evidence of consent to be
bound by the terms of a treaty is
through signature, unless the signature
requires ratification. In which case,
consent to be bound is through the
ratification of a treaty.
 Pimentel
vs. Executive Secretary: can
the President be compelled to transmit
the signed Rome statute of the ICC to
the Senate for concurrence by the latter
so that the treaty may become valid and
binding?
Held: No. The act of ratification is a
purely executive function and may not
be controlled by mandamus.
Salonga et al. vs. Smith: Whether the VFA,
insofar as it amends our rules on criminal
procedures on the issue of custody of a US
serviceman charged with anon-service
related offense is constitutional.
 In
Re Garcia: A treaty that allowed
Filipino and Spanish lawyers to practice
in the Philippines and Spain is
unconstitutional for infringing on the
sole power of the court to regulate the
power of law.
 In
Re Cunanan: An act of Congress
legislating for a lower passing grade in
the bar is unconstitutional for infringing
on the power of the court to regulate
admission to the bar.