Wake Up, Philippines!


Posted in Editorial, Supreme Court Decisions by Erineus on May 9, 2009

Updated May 09, 2009 12:00 AM

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Public safety comes first, so the Supreme Court has affirmed with finality its ruling that the oil depot in Manila has to go. The SC affirmed the validity of Manila City Ordinance 8027, declaring the 36-hectare area in Pandacan where the oil depot sits as a commercial area that must be cleared of the fuel terminals used by the “Big 3” — Petron Corp., Pilipinas Shell Petroleum Corp. and Chevron Philippines Inc.

The SC had originally ordered the shutdown of the depot in February last year “to protect the residents of Manila from the catastrophic devastation that will surely occur in case of a terrorist attack on the Pandacan terminal.” The ruling is appreciated by residents of Pandacan and neighboring areas. But the incident should also prod the government to improve zoning regulations to prevent a repeat of this controversy.

The “Big 3” had fought the ordinance all the way to the Supreme Court, and their arguments cannot be taken lightly. Both the Spanish colonial government and the Americans who took over had designated Pandacan as an industrial zone. With this classification, the oil companies built their storage and distribution facilities in Pandacan a century ago, and a housing facility for the workers was built around the site. Over the years manufacturing plants moved out of the district while the number of private homes grew.

Relocating to a still unspecified site and building a new depot will cost the oil companies billions of pesos. Once they select a new site, there is no guarantee that they will be able to build their depot. The project could be opposed by residents worried about environmental and public safety hazards. The oil companies have said that a depot built too far away from Metro Manila could raise pump prices in the nation’s premier region.

Investors have long complained about the uncertainty of doing business in this country, with legitimate contracts being overturned and rules being changed after a lot of money has been poured into certain projects. Though the circumstances are slightly different in the case of the Pandacan oil depot, this is another addition to the growing pile of cautionary tales for foreign investors in the Philippines.

In the past decades, new industrial areas have been developed around the country and the government has invited foreign investors to bring their business to those special zones. The government should make sure that those who respond to that invitation will see their investments protected.