Hanjin withdraws training center project in Mindanao

MANILA, Philippines – Faced with negative publicity and other legal constraints, Korean shipbuilder Hanjin Heavy Industries and Construction Co. Inc. (HHIC) withdrew the construction of its permanent training center in Mindanao.

In a letter addressed to Phividec Industrial Authority (PIA) administrator Ninfa Along-Albania, HHIC managing director Myung Goo Kwon said that the company’s Mindanao project team would withdraw from the PIA Estate starting yesterday.

“We are constrained to take this step in view of the numerous adversities that beset the company’s initial operation, to wit: negative and undue publicity on Hanjin project both in Subic and in Mindanao; local disturbances in the operation of the project; outstanding ROW (right of way) clearance and unfavorable actions therefrom,” Myung said.

According to Hanjin officials, the Misamis Oriental provincial government, which has jurisdiction over the PIA Estate, has issued a stop work order against the firm.

The company said they intended to speed up construction of the Mindanao shipbuilding complex in order to start its operations within the year.

The company added that it had already established a temporary training center where the potential shipbuilders were being trained even before the signing of the least contract with PIA.

According to Hanjin officials, their plan to fast track the project has been shelved after the provincial government issued the order.

Hanjin claimed they are forced to review their entire investment schedule following the issuance of the order.

The officials admitted the controversy that arose from their condominium project in Subic also led them to be more “cautious.” 

The Senate has also conducted its own investigation into the condominium project, which was said to have violated the country’s environmental laws.

“Recently there are a series of investigation and hearings by the Senate and everyday there are articles in the media denouncing and condemning Hanjin. Nobody refers to the brighter side such as more than 10,000 employment and the near completion of the first ship which will be the first container ship and largest ship ever manufactured and to be exported by the Philippines, etc.,” according to Hanjin.

Malacañang said it is looking into ways to facilitate the resolution of the problem being faced by HHIC in Misamis Oriental.

Deputy presidential spokesperson Lorelei Fajardo said she personally got the assurance of HHIC president Jeong Sup Shim that the company would continue doing business in the country.

Shim disclosed the “temporary demobilization” in the construction of the permanent training center was related to environmental compliance certificate and business permit issues.

“He assured us that they would still pursue the project but for the meantime they have to stop for a while because they have to comply with the requirements of the (provincial government),” Fajardo said.

“We’re already discussing about it so that we can see how we can give assistance between the LGU and Hanjin at the same time,” she added.

Fajardo stressed the situation with HHIC is temporary. She said Shim has assured her the project would continue, including the company’s lease contract with the PIA.

“These are the things that we have to look into. We cannot blame the LGU, they just wanted to make sure that everything is complied with and everything is in order,” Fajardo said.

She said the Misamis Oriental provincial government might have exercised caution following the incident in Subic, which is being investigated by the Senate.

Fajardo said Malacañang understands the opportunity costs involved for Hanjin and appealed to all concerned parties to facilitate the processing of the necessary documents.