Introduction to DTI’s Proposed Reforms
The Department of Trade and Industry (DTI) is taking significant steps to amend the Contractors’ License Law, aimed at addressing potential conflicts of interest within the Philippine Contractors Accreditation Board (PCAB). This initiative follows the resignation of key PCAB officials embroiled in a controversy linked to anomalous flood control projects.
Understanding the Conflict of Interest
Trade Secretary Cristina Roque stated that the current legal framework does not explicitly prohibit PCAB board members from simultaneously functioning as active contractors. This loophole creates a glaring conflict of interest, which has raised concerns about the integrity of the board’s operations.
In light of these issues and the recent resignations of several PCAB officials, including those accused of running their own construction firms while holding positions in the board, Roque emphasized the need for legislative reform. “The laws need to be changed also,” she said, underscoring the importance of evolving regulations in response to current challenges.
Current Legal Framework and Qualifications
Under Republic Act (RA) No. 4566, each PCAB board member must have a minimum of ten years of experience in the contracting industry, be a Filipino citizen and resident for at least eight years, be at least 35 years of age, and possess good moral character. However, these qualifications may not sufficiently safeguard against conflicts of interest, as highlighted by ongoing Senate investigations.
Senate Investigations and Accusations
Senator Panfilo Lacson, leading the Senate panel investigating the flood control issue, accused PCAB members Arthur Escalante and Erni Baggao of violating Republic Act No. 6713. This law stipulates that public officials are prohibited from owning or controlling private enterprises or engaging in the private practice of their profession while serving in a public capacity.
Lacson pointed out that both officials were allegedly running their construction companies while simultaneously fulfilling their duties on the PCAB, thereby securing lucrative government contracts, which raises significant ethical concerns.
DTI’s Response and Investigative Measures
Despite their resignations, Roque confirmed that the three officials would still be subjected to an ongoing investigation by the DTI’s fact-finding body. The DTI is collaborating with the Department of Public Works and Highways (DPWH) and the newly formed Independent Commission for Infrastructure (ICI) to ensure comprehensive investigations into the matter.
In an effort to restore transparency and accountability, Roque has placed CIAP and PCAB under her direct supervision. Doris Gacho and Sergie Retome have been appointed as acting executive directors to oversee the management of these organizations until permanent replacements are appointed.
Proposed Legislative Changes
On the legislative front, Senator Erwin Tulfo has introduced Senate Bill No. 1373, which aims to amend the Contractors’ License Law to eliminate potential conflicts of interest. The proposed bill would disqualify owners, stockholders, or officers of construction companies with government transactions from being PCAB board members. Moreover, it stipulates that if a conflict of interest arises, the concerned member must divest their interest within 30 days.
Conclusion
The DTI’s initiatives to reform the Contractors’ License Law represent a crucial step towards ensuring the integrity of the PCAB and promoting ethical standards in the construction industry. With ongoing investigations and proposed legislative changes, the DTI aims to foster a more transparent and accountable framework, thereby strengthening public trust in government contracting processes.
