LWUA’s takeover in MCWD ‘not valid,’ says OGCC
OGCC Logo
CEBU CITY, Philippines — The Metropolitan Cebu Water District (MCWD) board of directors (BOD) have finally attained their “peace.”
This was after the Office of the Government Corporate Counsel (OGCC) released their clarificatory opinion and second opinion about the “partial takeover” and the appointment of the interim board of directors of the Local Water Utilities Administration (LWUA) over MCWD.
In the document signed by Solomon Hermosura, government corporate counsel, and Owen Vidad, government corporate attorney and officer-in-charge of the OGCC’s Team Environment and Water, the corporate counsel said that “the instant partial takeover of intervention of LWUA in MCWD is not valid.”
A copy of the document, which was issued on May 9, was shared with the members of the media on Tuesday, May 14.
READ MORE:
MCWD vs Rama, 5 others: Raps filed against Cebu City mayor, execs
LWUA-appointed general manager barred from entering MCWD building
New MCWD acting general manager appointed by LWUA
OGCC discussion
The OGCC’s response was based on MCWD’s letter dated April 16, 2024, where they said that “the conditions for the LWUA’s partial takeover or invention in MCWD are patently absent” with corresponding grounds.
The Government Counsel said that “there is no finding of default on the part of MCWD in the payment of its loan obligation with the LWUA.”
“MCWD [has] not even furnished a copy of LWUA BOT (board of trustees) Resolution No. 35 which allegedly contains the basis of LWUA’s partial takeover or intervention. MCWD manifested that it is not in default in the payment of its loan and has no arrears in its amortizations,” the OGCC said.
There was also no mention of “any default” by MCWD in the LWUA letter dated March 15, 2024.
The counsel added that the water district was not even notified of the said default or had given the chance to correct it.
“It appears that the LWUA automatically resorted to partial takeover or intervention, thereby not according MCWD due process. It was only through the LWUA letter dated 15 March 2024 personally handed by the designated members of the Interim Board of Directors that MCWD was first informed of the LWUA’s partial intervention and of said Resolution No. 35,” the OGCC added.
Another ground that the OGCC considered was that the LWUA “violated its own Policy Guidelines on Intervention by automatically resorting to a partial takeover or intervention without any finding of default of the water district and without any showing that the basic requirements of due process have been complied with.”
Consequent to the considerations they presented, the OGCC said that the LWUA’s partial takeover or intervention in MCWD “is not consistent with the provisions of PD No. 198.”
They added that the partial takeover or invention was also “outside the purview of Sections 36 and 61(e) of PD No. 198.”
“Thus, the instant partial takeover or intervention of LWUA in MCWD is not valid,” the OGCC said.
READ MORE:
LWUA takes over MCWD’s policy-making functions for six months
MCWD ‘condemns’ LWUA, City Hall for ‘atrocious disruption’
At ‘peace’
After learning of the OGCC’s opinion, MCWD Chairman Joey Daluz III, said on behalf of the BOD, that they are at “peace.”
“Now that’s a peace time and we’ll just savor that and go on with our work kay mas bug-at ning atong giatubang nga problema karon. It’s just that the feeling nga wala na’y manghilabot nato especially nga ang mayor si Raymond na and we have the OGCC opinion and I think our men and women sa MCWD are very happy with this development,” Daluz said in a press conference on Tuesday.
(Now that’s a peace time and we’ll just savor that and go on with our work because what problems we are facing now are really challenging. It’s just that the feeling that there will be no one who will interfere with us especially that the mayor now is Raymond and we have the OGCC opinion, and I think our men and women in MCWD are very happy with this development.)
Moreover, the MCWD said in a separate statement that the recent OGCC opinion has “reaffirmed” that the water district “is on the right track in adopting a status quo” as well in continuing to recognize the Daluz-led BOD “amid the challenges it faced in relation to the LWUA takeover.”
READ: LWUA claims Rama has no authority to remove MCWD directors
Previous OGCC opinion
To recall, last March 15, LWUA implemented a partial takeover of the Metropolitan Cebu MCWD and appointed an interim Board of Directors (IBOD) based on LWUA Resolution No. 35, without prior notice to the water district.
Consequently, the MCWD questioned LWUA’s move and sought an opinion from the OGCC on the validity of the takeover.
The Presidential Decree No. 242 mandates that any conflicts or claims that occur exclusively among government entities, including government-owned or controlled corporations, are to be resolved or decided administratively by either the Secretary of Justice, the Solicitor General, or the Government Corporate Counsel, based on the nature of the issues and the specific government offices involved.
On March 26, the OGCC rendered an opinion on the exercise of LWUA’s power to take over or intervene in the operations and management of the water district, including policymaking.
ALSO READ: MCWD adopts ‘status quo’ amid LWUA’s partial intervention
This opinion, however, posed different interpretations from the lens of MCWD and LWUA.
The opinion underscored that while LWUA has that power, it is not absolute and must be exercised with caution and prudence, within the limits imposed under PD No. 198.
LWUA then claimed that their intervention was based on MCWD’s loan default, but the OGCC stated that the existence of default on the part of the borrower water district must be established, and the district must be given the opportunity to cure the default.
Referring to the provisions of Sections 36 and 61(e) of PD 198, LWUA can only take over MCWD in the event of default in the payment of its loan obligation.
Section 61(e) of PD 198 states that “When a loan is made to a local water utility, the entire amount of such loan shall be funded and set aside to assure completion of the subject for which such loan was granted.”
The MCWD argued that with the OGCC’s opinion and LWUA’s failure to establish MCWD’s loan default and afford the water district due process, the intervention of LWUA is improper, and the suspension of the Daluz-led board is unwarranted.
However, on April 2, 2024, LWUA issued a statement saying that the OGCC’s opinion affirmed the validity of their takeover.
Now, after finally receiving the second opinion from the OGCC, the water district “hopes” that LWUA, its appointed IBOD, and appointed OIC-GM, Lawyer Joselito Baena “will cease to cause confusion in the operations of MCWD.”
MCWD’s assistant General Manager for Administration, Lawyer Elson Englis, said that the MCWD does not consider LWUA as their “enemy.”
“We believe they also have roles to regulate the water districts. What we questioned is the process, the way they enforced the takeover,” English said.
CDN Digital already asked for the LWUA’s statement but they have yet to respond as of this posting.
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of Cebudailynews. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
