Introduction
The Department of Trade and Industry (DTI) is taking significant steps to amend the Contractors’ License Law in response to rising concerns regarding conflicts of interest within the Philippine Contractors Accreditation Board (PCAB). Following the resignation of several top officials amid allegations of improper conduct, these proposed changes aim to promote transparency and uphold ethical standards in the construction industry.
The Need for Reform
Trade Secretary Cristina Roque recently highlighted a critical gap in the existing legislation, indicating that the current law does not specifically prohibit board members from being active contractors. This loophole has the potential to create conflicts of interest, particularly when board members are involved in government contracts. Roque emphasized the necessity of reforming the law to address these issues, stating, “So the laws need to be changed also.”
Background of the Controversy
The controversy arose when two PCAB board members, Arthur Escalante and Erni Baggao, were accused of simultaneously running their own construction firms while serving on the board. Allegations of unethical practices emerged when these officials were found to be securing lucrative government contracts during their tenure. Senator Panfilo Lacson, who leads the Senate investigation into these allegations, pointed out that this conduct breaches Republic Act (RA) No. 6713, which sets forth ethical standards for public officials.
Details of the Proposed Amendments
Under the current Republic Act No. 4566, qualifications for board members include having a minimum of 10 years in the contracting business and being a resident citizen for at least eight years prior to their appointment. However, the new proposals seek to incorporate stricter guidelines that would disqualify owners, stockholders, or officers of construction companies involved in government projects from serving on the PCAB.
Senate Bill No. 1373
Neophyte Senator Erwin Tulfo has introduced Senate Bill No. 1373, which aligns with DTI’s initiative to prevent conflicts of interest. The bill stipulates that if a conflict arises during a board member’s tenure, they must divest their interests within 30 days. This proposal aims to ensure that PCAB members can act impartially and without the influence of personal business interests.
DTI’s Investigative Actions and Future Plans
Despite the resignation of the implicated officials, DTI intends to continue its investigation into the practices of the former board members. Roque mentioned that all three resigning officials would remain under scrutiny while DTI collaborates with the Department of Public Works and Highways (DPWH) and the newly established Independent Commission for Infrastructure (ICI). This ongoing investigation is crucial for restoring public trust in government processes related to construction contracts.
Appointment of New Leadership
Roque has also taken steps to ensure proper oversight of the entities involved, placing the PCAB and the Construction Industry Association of the Philippines (CIAP) under her direct management. Acting executive directors Doris Gacho and Sergie Retome have been appointed to oversee day-to-day operations while searching for permanent replacements in accordance with Civil Service Commission (CSC) guidelines. This move is intended to enhance accountability and transparency within these organizations.
Conclusion
The proposed amendments to the Contractors’ License Law signify a vital effort by the DTI to eradicate conflicts of interest within the PCAB. As these reforms move forward, they promise to cultivate a more ethical environment in the construction industry, ultimately benefiting both contractors and the public. Stakeholders eagerly await the final recommendations for the new board members, which will be submitted to President Ferdinand “Bongbong” Marcos Jr. for approval.
