Marites Dañguilan Vitug
Published 10:26 AM, Oct 31, 2014
Facing the Supreme Court are questions on a justice’s
integrity, judicial overreach, and military modernization. Justice Presbitero
Velasco is suspected of being biased and partial to SM Land Inc.
MANILA, Philippines – A multi-billion-peso prime property,
stretching to 33 hectares in the upscale Bonifacio Global City, is at the
center of a dispute before the Supreme Court. This case has raised issues far
beyond the sprawling piece of real estate: a justice’s integrity, judicial
overreach, and the modernization of the military.
At odds here are SM Land Inc and the Bases Conversion and
Development Authority (BCDA). The giant developer sued BCDA in January 2013 for
supposedly changing the rules late in the day, from a competitive challenge to
public bidding, when SM Land was already deep in negotiations with the
government agency over its unsolicited proposal. SM Land cried foul, saying
that the BCDA had violated a contract.
SM Land offered to pay P38,500 per square meter or a total
of P12.7 billion.
In August 2014, the Supreme Court (SC) ruled in favor of SM
Land. SC Justice Presbitero Velasco, chairman of the 3rd Division, penned the
decision, arguing that SM Land “has the right to a completed competitive
challenge…” citing joint venture guidelines of government and BCDA’s acceptance
of SM Land’s unsolicited proposal. Three voted with Velasco – Justices Diosdado
Peralta, Martin Villarama, Jose Mendoza – while one dissented, Justice
Marvic Leonen.
SC Justice Presbitero Velasco issued 3 versions of a TRO
stopping the BCDA from proceeding with the public bidding. All of these were
dated on the same day, January 9, 2013, and received by the BCDA on 3 separate
days.
Leonen found the majority’s decision narrow. He cast the
spotlight on public interest, saying that government is not “contractually
bound to complete the competitive challenge…In a situation where there can be
many possible bidders where the first offer is lower than the potential floor
for open competitive bidding may be disadvantageous to public interest.”
The BCDA claimed at the time that it could get a minimum bid
of P40,000 per square meter, higher than that of SM Land’s, through public
bidding.
The property up for privatization is occupied by the
Bonifacio Naval Station and the Marines.
Red flag: 3 TROs
Something strange, however, happened on the way to this
decision. Velasco issued 3 versions of a TRO stopping the BCDA from proceeding
with the public bidding. All of these were dated on the same day, January 9,
2013, and received by the BCDA on 3 separate days. We obtained copies of these
TROs.
The first version directed the BCDA to carry out the
TRO…”until further orders from the Court.” BCDA received this on January 9,
2013.
The next day, another TRO was sent to BCDA, sounding more
urgent. It added a new phrase, “effective immediately” and retaining “until
further orders from this court.” This time, the process server asked the BCDA
if he could pull out the documents he had given them the previous day. In its
motion for reconsideration (MR), the BCDA narrated that it refused, finding the
whole thing “curious.”
That was not the end of it. On January 11, 2013, a 3rd and
final version of the TRO reached the BCDA. It was practically the same as the
second version.
“The ruse attempted by the Process Server, coupled with the
several variants of the same order, give Respondents cause for concern,” the
BCDA said. “…the Process Server’s bid to recall the original order that was
served is stealthy and highly irregular, a subterfuge unbecoming of such an
august institution.”
We asked lawyers if the issuance of multiple versions of a
TRO is common. They say this is unusual, a rarity in the annals of the
Philippine Supreme Court.
Accountability
The BCDA filed a motion to inhibit, asking Velasco to recuse
himself because they deemed him no longer impartial. Using strong language, the
BCDA said, “…the haste and the reckless manner by which the TROs were served
and re-served create an impression of bias and manifest partiality in the minds
of the respondents and erode their faith in the Honorable Court.”
The Court denied this.
The BCDA pinned accountability solely on the head of the 3rd
Division, who has the power to issue TROs. But it triggers questions about how
the Court works.
Normally, majority in the Court, whether division or en
banc, approve TROs. Was the decision to issue a TRO subjected to a discussion
in the division? Could the issuance of incorrect TROs have been avoided?
The public will most likely not get answers to these
questions because internal deliberations of the Court are kept confidential.
Judicial overreach
In its MR filed in September 2014, the BCDA broadened its
case with a new argument: that the Court has encroached upon the powers of the
executive. It built its case by showing that questions hounded the integrity of
the previous process and that it was within the powers of the Office of the
President to “exercise control” over all the executive departments – including
changing the mode of disposition of government properties.
‘…the haste and the reckless manner by which the TROs were
served and re-served create an impression of bias and manifest partiality in
the minds of the respondents and erode their faith in the Honorable Court.’ –
BCDA
When he took over, President Aquino suspended the
privatization and development of the 33-hectare property via competitive
challenge or “Swiss Challenge” as part of a wide-ranging policy review and due
diligence process. Fort Bonifacio was not singled out; the Food Terminal Inc
complex and the Subic-Clark-Tarlac Expressway were subjected to the same rigor.
In 2012, Aquino decided that the Bonifacio property should
be opened to public bidding.
In its narration, the BCDA said that “a shadow was cast on
the integrity of the process” because the previous board appeared to have
rushed approval of the unsolicited proposal of SM Land days before the May 2010
elections.
“The undue haste by which the award was made was a cause for
concern of the newly appointed directors and for President Aquino himself,” the
BCDA wrote.
Moreover, the offer of SM Land was way below the market
value of the land. The BCDA cited the recent appraisal by Cuervo Appraisers
placing the cost of each square meter at P78,000. Besides, the BCDA pointed
out, SM Land can participate anew, this time in a public bidding.
Fund for armed forces
Another factor that gives this case a sharp public-interest
dimension is the beneficiary of the sale: the military. A substantial chunk of
the billions of pesos that will be generated from the privatization will be
used to modernize the Armed Forces. (50% of the income will go to the AFP and
an equal amount to the BCDA.)
This issue gains more traction as the security situation in
Southeast Asia remains volatile in the light of China flexing its muscles.
The Department of National Defense has asked the Court
permission to intervene; this has yet to be acted upon.
In its “comment in intervention,” the DND said it will be
“heavily injured” by SM Land’s petition. It asked the Court to lift the TRO.
En banc case?
With all these issues swirling over the case, the BCDA asked
the 3rd Division to refer it to the en banc. In 2013, the 3rd Division
denied the BCDA’s motion, but it persisted and filed an MR which remains
unresolved to this day.
The BCDA said that the suit filed by SM Land involves the
constitutionality of a presidential order and, as such, should be decided by
the en banc, as the Constitution provides. The internal rules of the Court
echo this.
In past practice, a vote of 3 out of 5 members of a Division
is needed to elevate a case to the en banc. This rule is currently being
reviewed by the Court.
In a separate move, BCDA CEO Arnel Casanova wrote all the
justices early October requesting them to take up the case. “The peculiarities
of the case, public interest, the Constitution and the Internal Rules of the
Supreme Court allow this,” he wrote in an 8-page letter, copies of which were
given to President Benigno Aquino III and Defense Secretary Voltaire Gazmin.
“SMLI [SM Land Inc] is effectively calling on the Honorable
Court to diminish the President’s exercise of his power of control,” Casanova
said. “There is no doubt that the issue under question here is the …validity of
President Aquino’s order…to terminate the competitive challenge process and
instead proceed with a public and transparent bidding…to best serve the interest
of government.” –
Editor's Note: Marites Vitug has written extensively on the
Supreme Court, and has written 3 books on it. She obtained information on her
own, independent of her spouse who is a part-time consultant with the BCDA.
