The Commission on Audit is treading on dangerous ground in seeking to void a public-private partnership of the Bureau of Immigration for the production of alien certificate of registration identity cards, known as ACR I-Cards, according to a consumer group.
Issued to foreign nationals staying in the Philippines for more than 59 days, ACR I-Cards are microchip-based identification cards with biometric security features that are being produced by Datatrail Corp. under a build-operate-transfer contract validated by the Department of Justice, the PPP Center and the National Economic and Development Authority.
“While COA is the guardian of public funds, it has no vested authority to cancel a BOT contract that is 100-percent funded by private funds. Its call on the BI to take over the facilities, fixtures and equipment for the ACR I-Cards by unceremoniously voiding the contract with Datatrail Corp. sends a cowering chill to all investors,” said Jake Silo of Consumerism and Transparency in Nation Building or Action.
“The BOT law entirely vests the authority to pass upon all aspects of a BOT contract, including legalities and compliance with approval processes upon the Neda ICC,” Silo said.
Silo said “the COA decision is not self executory because a BOT agreement, by law, automatically provides for an arbitration provision.”
“The contract termination will proceed only after full compliance with the procedures set forth by both parties in the Arbitration provision is complied with,” he said.
The COA decision will have to be enforced thru courts of law and the government will not only suffer huge financial losses, but legal defeat, embarrassment and irreparable loss of credibility in the business community, Silo said.
The Philippine government has paid billions of pesos in damages over unwarranted cancellation of contracts, and it is almost certain that the ACR I-Cards case will be the next drain on government coffers.
Five Neda resolutions and four DOJ opinions across three administrations have affirmed the validity of the ACR I-Cards contract and its subsequent extension to 2024.
The COA ordered the contract voided because in its view, the 10-year agreement should have lapsed in 2013 and the extension granted was grossly disadvantageous to the government. It also claimed that the contract extension had not been approved by Neda.
However, a 2007 decision rendered by then-Justice secretary Raul Gonzalez invalidated COA’s findings.
“Since as determined by the Neda ICC [Investment Coordination Committee]-Technical Board, the revised financial proposal was within the ICC-determined reasonable rate of return (i.e., internal rate of return of equity) of 19-24 percent, the extension of the contract term to 21 years, notwithstanding, it can be safely said that the proposed variation cannot be considered as change in government undertaking much less a variation that can avoid the proposed variation,” Gonzalez said in an opinion issued on March 6, 2007.