task force anti-apeco - the inconvenient truth about apeco - executive summary (draft).doc

8/14/2019 Task Force Anti-APECO - The Inconvenient Truth About APECO - Executive Summary (Draft).doc

1/8

THE INCONVENIENT TRUTH ABOUT APECOAN ECONOMIC BRIEFING PAPER ON THE AURORA PACIFICECOZONEExecutive Summary Version as of 24 April 2013Task Force Anti-APECO

(NOT FOR QUOTATION)

What is APECO?

APECO, or the Aurora Paciic Eco!o"ic #o!e a!$ Free%ort Authorit&, is a

',*+hectare s%ecia eco!o"ic -o!e a!$ ree%ort curre!t& .ei!/ .uit i!the "u!ici%ait& o Casi/ura!, Aurora0

First created as the Aurora Special Economic one !ASEA" #y the passa$e of %&A&'4'0 in 200() and amended throu$h %&A& 100*3 in 2010) A+E,- today encompassesfive !." #aran$ays /ithin ,asi$uran

o +arcel on Aurora mainland composed of r$ys& i#et Esteves !4'5

hectares"6o +arcel on the San delfonso +eninsula coverin$ r$y&s San delfonso) ,o7o

and ,ulat !12)42( hectares"&

8he #uddin$ transshipment hu# aims to attract enou$h local and forei$n investmentto transform the municipality into a self9sustainin$ industrial) commercial) a$ro9industrial) tourist) financial and investment centre&

+roponents claim A+E,- /ill alleviate poverty in ,asi$uran) $enerate employmentfor province of Aurora) improve livin$ conditions of residents) raise local economicproductivity and spur industriali7ation throu$hout :ortheastern +hilippines&

Rairoa$e$ Histor&, U!ou!$e$ Pro1ectio!s

n 2005) %epresentative ;uan Ed$ardo ouse ill 102'3proposin$ the creation of a .009hectare free trade 7one in the +rovince of Aurora&Senator Ed$ardo An$ara filed the similar Senate as Senate ill 2503& oth #ills /ereapproved&

I! 223, co!soi$ate$ .i 4as si/!e$ i!to a4 as Re%u.ic Act No0 52

creati!/ the Aurora 6%ecia Eco!o"ic #o!e Authorit& (A6E#A)0 There 4ere!o 6e!ate heari!/s, oor $e.ates, or e7e! a NE8A stu$& to 1usti& itscreatio! a!$ atte!$a!t e9%e!ses0

n 200') ,on$& ;uan Ed$ardo ouse ill 5213 and Sen& Ed$ardoAn$ara filed Senate ill 340*& 8hese amended %& A& '4'0 #y expandin$ the area ofthe eco7one to 12)'23 hectares) to #e ?no/n as the Aurora +acific Economic andFreeport one !A+E,-"& 8he consolidated #ill /as approved on 05 -cto#er 200'&

I! A%ri 2'2, co!soi$ate$ .i a%se$ (!ot si/!e$ .& the Presi$e!t) i!toa4 as Re%u.ic Act '22:*, "or%hi!/ A6E#A ro" a ;22+hectare ree tra$e-o!e to the "assi7e ree%ort o APECO, co7eri!/ ',* hectares oa/ricutura < orest a!$s0

From 200* to 2012 A+E,- has #een officiallyunderta?in$ the follo/in$ pro@ects)havin$ received a total of P':,3:3,*;3022in the national #ud$et

o ,onstruction of the A+E,- ,orporate ,ampuso Acuisition of %i$hts for San delfonso +eninsula


2/8

o Acuisition of a#out 1.0)000 m2 lot as site of A+E,- ,ampuso +lannin$Besi$n9A+E,- Site evelopment +ac?a$eo Nayon alikasan>ousin$ +ro@ect /ith :ational >ousin$ Authority !:>A"

6i"uta!eous&, %ro1ects 4ere aso .ei!/ u!$erta=e! .& APECO that

utii-e$ u!$s ro" other /o7er!"e!t oices, &et %ro"ote$ i! the "e$ia asits o4!& 8hese undeclared pro@ects) costin$ a%%ro9i"ate& P'05 .iio!) include

o APECOs P142-million 1.2 km airstripin r$y& Esteves) ,asi$uran) funded#y the epartment of 8ransportation and ,ommunications and ,ivil AviationAuthority of the +hilippines !to #e follo/ed #y a +'29million 0&39?m airstripextension"

o APECOs P63-million port improvement project in r$y& i#acon$),asi$uran) funded throu$h the +hilippine +orts Authority !to #e follo/ed #y a+2&49#illion international seaport construction pro@ect"

o The P1.66-illion !aler-Casi"#ran hi"h$a% leadin$ to/ards A+E,-)funded #y loans from the Corean Economic evelopment ,ooperation Fund&

o A P3&.&-million 'loo( control project implemented in ,asi$uranDs,ala#$an river throu$h the provincial +>) /hich involved uarryin$operations that provided mineral materials for A+E,-Ds airstrip

o A P1&.&-million maric#lt#re 'ish ca"e park initiated /ith the ureau ofFisheries and Auatic %esources) and promoted as an A+E,- livelihoodpro@ect

o The P3).&-million ho#sin" project funded #y the ,on$ressional Funds ofthe one istrict of Aurora) promoted locally as an A+E,- pro@ect forindi$enous peoples&

CONC>U6IONA+E,-Ds existence) from its creation to its implementation) has #eencharacteri7ed #y a visi#le disre$ard for due process& 8he uestiona#ility of its le$islationand the non9transparency of its #ud$et disclosures is indicative of ho/ A+E,- has failed#asic $overnance standards of transparency) accounta#ility) inclusiveness andeffectiveness more $enerally&

U!easi.e, U!sae a!$ U!4orth&

Feasi.iit& stu$ies o! APECO are !o!+e9iste!t) as admitted #y the incum#ent,hief Executive -fficer !,E-" himself) Atty& Galcolm Sarmiento) in a letter to theoffice of Senator Ser$io -smeHa dated 20 :ovem#er 2012& 8his lac? has remaineddespite prior petitionin$ from Senators durin$ 2010 and 2011 ud$et deli#erationsin the Ipper >ouse for A+E,- to commission such feasi#ility studies&

8he lac? of feasi#ility studies underlines the fact that there are serious uestionsre$ardin$ A+E,-Ds remote location) the inte$rity of its position alon$ trade routes)and its $eneral safety&

o *n'rastr#ct#re +e'icit. 8he roads and #rid$es leadin$ to ,asi$uran remain

poorly maintained and untena#le for most forms of pu#lic or privatetransportation& +o/er lines supplyin$ electricity and telecommunicationsaccess are similarly lac?in$) as ,asi$uran is located off the :A+-,-%electricity $rid) /hich is li?ely to hamper intensive industrial and commercialactivity&

o ,at#ral #lnerailit%.n a Senate >earin$ on A+E,- dated 03 -cto#er2011) Arch& Felino +alafox) ;r&) the former planner of A+E,-) testified that thesoil of the site chose for A+E,- is made of clay and sand thus prone to soilerosion and floodin$& Similarly) studies #y the local $overnment of ,asi$uran


3/8

and the E:%9GJ attest that most areas in ,asi$uran are prone to flashfloods) landslides and road /ash9outs that isolate the area for /ee?s&

o #lnerailit% o' Corporate Camp#s.8he same studies from the ,asi$uranJI sho/ed the corporate campus is hi$hly prone to soil erosion andliuefaction /ithin 2. years) endan$erin$ not only the residents #ut thepersonnel of A+E,-&

A+E,-Ds location /ithin trade routes hampers its accessi#ility and the feasi#ility forinvestors to set up shop /ithin the eco7one&

o ocation /emoteness an( ,on-Pro0imit% to arkets.8ravelin$ to,asi$uran ta?es very lon$ hours) on avera$e 10911 hours per trip) due to itsisolated location and the rou$h) undeveloped roads

o an( Con'licts.8he JI) residents) and concerned sectors said that A+E,-too? over private lands) not pu#lic lands& Gultiple affidavits from the residentsof ,asi$uran and the San delfonso +eninsula illustrate the rampant disre$ardfor existin$ and to9#e processed applications for ,ertificates of Ancestralomain 8itle !,A8s") ,ertificates of and -/nership and Acuisition!,-As") and the Inte!rate" #ocial Forestry Certificates of #te$ar"s%i&Contracts !SF9,S,Ds"& 8hese competin$ land claims may li?ely place hi$her

uncertainty amon$ investors as to the ready accessi#ility of land for theirproposed pro@ects&

,ontrary to A+E,-Ds pro@ections) there is a severe lac? of demand for the eco7oneDsofferin$s and services /ithin its position in the island of u7on) not to mention itsposition /ithin the tradin$ routes of the Asia9+acific re$ion&

o ismatche( aor #ppl%.%esidents do not have appropriate s?ills for the?ind of employment A+E,- /ill provide& i?ely @o#s to #e offered to theresidents !such as construction9#uildin$" are merely contractual) /hich do notpromise sta#le employment& A+E,-Ds plans to outsource ualified employees)as su$$ested #y former ,E- %o#erto Gathay in the Senate >earin$ of 03-cto#er 2011) co!tra$icts the e9%ress "a!$ate o the a4 to %ro7i$ee"%o&"e!t to resi$e!ts&

o *mpracticalit% 'or Cons#mers an( To#rists' A+E,-Ds distance andinaccessi#ility /ill most li?ely drive consumers to simply floc? to moreaccessi#le free ports or eco7ones) such as the Su#ic ay Free +ort or ,lar?evelopment ,orporation&

CONC>U6ION8he non9existence of necessary feasi#ility studies and comprehensiveplans for A+E,- su$$est that it is not economically via#le& ,ompared to its proponentsDoptimism) various o#stacles place dou#ts that A+E,- /ill succeed as a free port&

Fro" Faiure to Faiure Faut& a!$ Ar.itrar&I"%e"e!tatio!

Since the passa$e of %&A& '4'0 in 200() A+E,-Ds operations have #ecome notoriousfor their ar#itrariness) irre$ularity and lac? of accounta#ility&o ,o cons#ltation an( permission 'rom resi(ents o' a''ecte( s.n a

clear violation of (ocal Go)ern*ent Co"e #ec +,c. +/. an" +0'A+E,-authorities displayed i$norance of securin$ residentsD consent viaconsultation in the Senate ud$et >earin$ of 11 -cto#er 2011& ,onsultationprocess must secure permission of concerned parties !JI and sectors" /hich A+E,- failed to execute at all&


4/8

o ,o oe(ience to set (irections an( plans.n the same Senate ud$et>earin$ of 11 -cto#er 2011. former ,E- Gathay admitted that A+E,-exceeded ori$inal location !i&e& mainland" and operated in municipal /aters&%&A& 100*3 stipulated that A+E,- is only supposed to cover the mainland&

o ,o ECC5 no permits5 no st#(ies.JIs of the affected municipalitiesreported that A+E,- #y9passed $overnment reuirements for conductin$

studies and acuisition of necessary permits for various su#pro@ects of theeco7one& 8here /as) moreover) no approved @oint @urisdiction of municipal/aters #et/een A+E,- and JIs&

For a its h&%e a!$ %u.icit&, the %ro1ects o%erate$ .& the eco-o!e aie$to ta=e o a!$ re"ai! !o!+o%eratio!a0

o Casi/ura! @aricuture Par= Pro1ect a!$ 6ea4ee$ Pro1ect

APECO R%etoricn a 1' Fe#ruary 2013 press statement) former ,E-%o#erto Gathay said #oth pro@ects aim to help fisherfol? increase income#y raisin$ $rouper species !e&$& #an$us and tilapia" and plant sea/eeds&

In Reality1A+E,- does not o/n) has not funded) and did not operate thepro@ect& t merely too? credit from a partner initiative that the ,asi$uranJI had /ith the ureau of Fisheries and Auatic %esources !FA%"

/hose former local head /as current A+E,- ,E- Galcolm Sarmiento&orse) the mariculture par? pro@ect /as %re7ious& assesse$ as$a!/erous#y the municipal $overnment of ,asi$uran) after the fishca$es /ere put up& t has induced #ro/nish colorin$ of its ad@acent areas)prolon$ed floods /ithin ,asi$uran and /orsened pollution of surroundin$/aters&

As per present testimonies of the ,asi$uran JI and residents) the fishca$es /ere dama$ed #y 8yphoon +edrin$ durin$ Septem#er 2011& 8hepromised additional fish ca$es have not #een erected to this day&

o 6er7icea.iit& o the Air%ort

APECO R%etoric18he eco7oneDs official /e#site and Senator An$araDspress release in the +hilippine aily nuirer reported that the airport /ill

#oost the accessi#ility of Aurora for #oth domestic and international airtraffic&

In Reality

Studies commissioned #y the ,asi$uran JI said the airstripDsmeasurement is not at par /ith international standards& Ex9,E-Gathay admitted in a Senate ud$et >earin$ last 11 -cto#er 2011 thatthe airport did not have feasi#ility study and that it /as desi$ned to #eprepared for floodin$ !i&e& earin$ held on 03 -ct 2011) Gathay admitted that themaximum capacity has not #een reached) #ecause there 4ere !ore/uar i/hts 4ithi! the airstri% si!ce 22:0


5/8

8he construction of the airport has $isocate$ a !u".er oishero= a"iies, 4ith o!& a i"ite$ a"ou!t o reocatio!&Accordin$ to residents as /ell as a Senate 8estimoney #y Fr& +eteGontallana) parish priest of the municipality of in$alan) in a Senate>earin$ on 11 :ovem#er 2010) the area #ecomes less ha#ita#le due tofreuent floodin$ caused #y the airstripDs #loc?a$e of the /aterDs

natural flo/&CONC>U6ION8he pro@ects pursued #y A+E,-) despite claimin$ to promote theinterests and /elfare of the people of ,asi$uran) have failed to live up to initialexpectations& 8he lac? of consultation and the incompati#ility of A+E,-Ds pro@ects to,asi$uranDs necessities illustrate their severe ne$lect of plannin$) competence andaccounta#ility&

Irre/uarities U%o! Irre/uarities

The i"%e"e!tatio! o APECOs %ro1ects is characteri-e$ .& "uti%e

a!o"aies08he situation is such that accounts and policies a#out these activitiesare conflictin$) even amon$st A+E,-Ds proponents themselves&

o Purchase o the 6a! I$eo!so I!te/rate$ Forest @a!a/e"e!tA/ree"e!t (IF@A) Ri/hts .& I!$ustries 8e7eo%"e!t Cor%oratio!(I8C)

APECO R%etoric1 n a Senate >earin$ on 11 :ov 2010) A+E,-Ds eputyAdministrator) %amon Fernando and Senator Ed$ardo An$ara claimedthat they #ou$ht ri$hts to protect the area from further lo$$in$ #y the, and preserve the pristine condition of the San delfonso +eninsula&

In Reality1

Accordin$ to the resident A$tas of ,asi$uran) the contract of theFGA sale does not address the real violation of their land ri$hts&Even the very FGA document held #y , denotes that earin$ last 05 Septem#er 200') SenatorAn$ara claimed this pro@ect /as to provide the +s affected #y A+E,-Dsconstructions /ith a resettlement area&

In Reality1


6/8

A+E,- leaders do not a$ree if a #ud$et /as allotted to this pro@ect&hile Senator An$ara claims there is a #ud$et for a resettlementarea)A+E,- ,E- Sarmiento contradicted him in a Senate >earin$last 05 Septem#er 2012) sayin$ he ?ne/ of no such funds allotted fora resettlement area&

n a letter to the +> %e$ional irector dated 05 Gay 2012)

,asi$uran Gayor %eynaldo iton$ /rote that there /ere no Gulti9+urpose uildin$s #uilt as promised #y the pro@ect&

8estimonies #y San delfonso +s attest the housin$ provided forthem /as inappropriate /ith their traditional /ay of livin$) and they/ere deprived of access to sources of livelihood !e&$& sea"& 8hey alsoclaimed some of them /ere #ri#ed #y A+E,- to serve as theeco7oneDs=forest ran$ers=) as /ell as consent to A+E,-Dsimplementation) despite continuous protests from the numerous +communities in r$ys& San delfonso and ,ulat&

CONC>U6ION A+E,-Ds actions reveal serious non9transparency) uestiona#lemethods and ar#itrariness& hile its proponents maintain they are consistent /ith the

$overnin$ principles of %&A&s '4'0 and 100*3) their trac? record sho/s #latantdisre$ard for due process) as reflected in the discrepancies #et/een its $oals andpresent status&

Area$& P'3B i! A!!ua Fore/o!e Ta9es 8ue to Eco-o!eI!ce!ti7es

A+E,- allo/s forei$n direct investors on the eco7one to operate /ith income taxholidays and various other tax #rea?s) on the assumption that the eco7one /ould #eattractive to investors if they need not pay taxes to operate&

>o/ever) separate studies #y UP #c%ool of Econo*ics +rofessor %enato %eside!2005" and pro$ressive economic policy thin?9tan? Action for Econo*ic Refor*s

!2010" sho/ that most such incentives are excessive) leadin$ to lost $overnmentrevenues from uncollected taxes&

orse) these same studies ar$ued that fiscal incentives are not even a ma@orcriterion that potential locators and investors consider in ma?in$ investmentdecisions such as eco7one accessi#ility) infrastructure) land and la#our costs) andsocio9political sta#ility&

Estimates #y %eside !2005" also su$$est that due to these eco7onesD ill9conceivedtax #rea?s) $overnment is currently fore$oin$ pu#lic revenues of approximately PhP'3,*3,;5*,5035 or "ore tha! P'3 BI>>IONa!!ua& an amount /hichcould have #een utili7ed for /elfare services for the Filipino people0

CONC>U6ION8he offer of tax #rea?s #y eco7ones has hardly assured the stimulation

of investment in eco7ones& A+E,-Ds i=e PortIre!e

Since the 1'*0s) eco7ones have #een accused #y officials of the ureau of ,ustomsof tech!ica s"u//i!/ the mis9declaration of imported items) the


7/8


8/8

CONC>U6ION +hilippine o#li$ations to the ASEA: Economic ,ommunity renderthe fiscal and customs incentives of A+E,- moot and academic& ,ontinuedpourin$ of pu#lic funds into A+E,- ma?es poor economic sense for the$overnment&

8ecare a @oratoriu" o! APECOs Bu$/et a!$ Acti7ities

8he multiple concerns) violations of proper $overnance processes) and episodes oflac?luster implementation that have characteri7ed A+E,-Ds operations continue to castdou#t over its capacity to produce positive returns for all the resources funnelled into it&ut even if various indicators su$$est that ,asi$uran /ill li?ely prove to #e a poorlocation for A+E,-) thus posin$ a clear) /asteful drain on pu#lic funds) theimplementation of A+E,- may) moreover) har#or adverse) if unintended) repercussionsfor $overnment throu$h more fore$one revenues stemmin$ from redundant fiscalincentives and freeport smu$$lin$&

We thus reiterate a!$ echo the ca o Tas= Force A!ti+APECO to i"%ose a"oratoriu" o! APECOs acti7ities a!$ e9hausti7e& re7ie4 its $e7eo%"e!ta!$ i"%e"e!tatio! G or the /e!era 4eare o the %eo%e o Casi/ura! a!$Aurora0

,T%is "oc2*ent is only t%e "raft e5ec2ti)e s2**ary of an econo*ic 3riefin! an"&osition &a&er 3ein! &re&are" 3y Task Force Anti-APECO on t%e APECO contro)ersy.an" is not for 62otation 3y *e"ia. researc%ers an" ot%er $riters' For *oreinfor*ation a3o2t t%e 3riefin! &a&er an" t%e APECO iss2e. &lease e*ail

7erik'cr289!*ail'co*

,Task Force Anti-APECO is a coalition consistin! of &ro*inent ci)il society !ro2&s. s2c% as t%e Cat%olic Bis%o&sConference of t%e P%ili&&ines-National #ecretariat for #ocial Action. :2stice an" Peace ,CBCP-NA##A. #i*3a%an!(in!ko" n! Bayan ,#(B. PAI#AMA1 T%e National Confe"eration of #*all Far*ers; an" Fis%ers; Or!ani8ations. t%e#a)e #ierra Ma"re Net$ork Alliance ,##MNA. t%e Fait%-Base" Con!ress A!ainst I**oral 4e3t ,FCAI4. t%eAssociation of Ma7or Reli!io2s #2&eriors. an" ot%er or!ani8ations< to!et%er $it% t%e Prelat2re of Infanta' Con)ene"since +=>=. $e ai* to raise a$areness on t%e sit2ation of *ore t%an ?=== fa*ilies in A2rora t%reatene" 3y t%eA2rora Pacific Econo*ic Zone'

task force anti-apeco - the inconvenient truth about apeco - executive summary (draft).doc

Documents