Favila announces creation of investment ombudsman

In an attempt to encourage investments in the country, Trade and Industry (DTI) Secretary Peter B. Favila has announced the creation of an investment ombudsman who will oversee graft charges against government officials perceived to be blocking investment activities.

With the ombudsman in place, Favila said the government hopes more investments will come in as bureaucracy will be lessened. Initially, the ombudsman will hold office at DTI and will focus on complaints against local government units.

Favila, however, refused to name the ombudsman saying only that the chosen ombudsman is a female. "I am not in the position to say who right now." He said the new ombudsman will be announced in the coming weeks.

During his term of office, former President Estrada has already issued an executive order (EO) mandating the creation of the Office of the Investment Ombudsman.

EO 180 ordered the abolition of the Council for Investments, creation of the office of the Investment Ombudsman and renaming and refocusing the One-Stop Action Center of the Board of Investments (OSAC) to become more responsive to the needs of investors.

In order to further attract investors, the government has likewise studied legal obstacles businessmen are facing when putting up businesses in the country.

"The main source of delay is the legal issues sometimes that’s why there are snags in the project," said Romulo L. Neri, socioeconomic planning secretary and National Economic Development Authority (NEDA) director general.

Late last year, NEDA in cooperation with the Supreme Court conducted a legal forum and discussed legal issues and bottlenecks affecting infrastructure projects, determined the legal consequences of these issues, and recommend measures to facilitate implementation of public infrastructure projects.

"Who would want to invest in us with all those legal problems. Every time we have a project, the project is considered illegal or null and void," Neri noted.

Neri cited the Ninoy Aquino Terminal 3 as an example. "That’s $600 million worth of facilities and we are not using it," he said.

The mothballed terminal was ready for operation in 2003 but legal battles between the National Government and the contractor Germany’s Frankfurt Airport Services Worldwide (Fraport) delayed the airport’s opening.

The Supreme Court has declared the contract between the government and Fraport null and void.

"You end up with very expensive building facilities that you cannot use. It is economically wasteful," Neri explained.

"One thing is, before we can start a project we clear the legal obstacles. They should be well defined so we can address them."

For his part, Fortunato R. Abrenilla, NEDA Legal Staff director said the forum consolidated all the legal issues and problems on the implementation of infrastructure projects because infrastructure projects have sometimes been vulnerable to various legal interpretations.

"For instance, the procurement law, which aims to streamline the procurement process, sometimes becomes a cause of delay due to over-regulation of the process, and the patent inconsistencies between the law and the existing procurement guidelines of foreign funded agencies," he explained