Introduction
The Department of Trade and Industry (DTI) is advocating for significant amendments to the Contractors’ License Law to tackle potential conflicts of interest. This move comes in the wake of the resignation of key officials from the Philippine Contractors Accreditation Board (PCAB) amid allegations of irregularities in flood control projects. Trade Secretary Cristina Roque highlights an urgent need for reform to ensure accountability and transparency within the contracting industry.
Understanding the Need for Reform
Currently, the law does not explicitly prevent PCAB board members from being active contractors themselves, a loophole that has raised eyebrows regarding ethical governance. Secretary Roque stated, “The laws need to be changed also. But of course, just like all laws, we have to keep changing them as time goes by.” This sentiment emphasizes a proactive approach to governance, reflecting the government’s commitment to revitalizing the construction sector amid ongoing scrutiny.
The Legal Framework
Under Republic Act (RA) No. 4566, those appointed to the PCAB must fulfill specific qualifications, which include a minimum of 10 years of experience in the contracting business and good moral character. However, the absence of clear stipulations regarding conflicts of interest poses challenges to the independence of board members, with allegations surfacing that some members were concurrently running their own construction firms that have secured government contracts.
Recent Controversies
Senator Panfilo Lacson spearheads an investigation into the flood control issues, targeting PCAB members Arthur Escalante and Erni Baggao for violating ethical standards outlined in RA No. 6713. The senator has raised specific accusations that these officials managed their businesses while overseeing the award of government contracts. In his view, such actions clearly constitute a conflict of interest and undermine public trust in the regulatory body.
Resignations and Consequences
Following the controversy, the implicated officials, including Herbert Matienzo, the executive director of both PCAB and the Construction Industry Association of the Philippines (CIAP), stepped down from their positions. Despite their resignations, Secretary Roque confirmed that investigations would continue under the DTI’s oversight, aiming to restore integrity within the sector.
Steps Towards Greater Transparency
The DTI is actively collaborating with the Department of Public Works and Highways (DPWH) and the newly established Independent Commission for Infrastructure (ICI) to enhance oversight in contract awarding and compliance checks. Roque emphasized the importance of ensuring that all contractors are held accountable for their practices, stating, “We’ve already spoken about what they need from us. We also have a fact-finding body to ensure that we check on the contractors that were given to us that we should check.”
New Leadership in PCAB and CIAP
In an effort to stabilize leadership following the resignations, Roque appointed Doris Gacho and Sergie Retome as acting executive directors of CIAP and PCAB, respectively. These appointments will remain until permanent replacements are chosen in accordance with the Civil Service Commission (CSC) guidelines.
Proposed Legislative Changes
In the Senate, Senator Erwin Tulfo has filed Senate Bill No. 1373, aimed at amending the Contractor’s License Law with enhanced regulations to prevent conflicts of interest. The proposed amendments include disqualifying any individual who holds ownership or a significant role in a construction company engaged in government transactions from being appointed to the PCAB. The bill also stipulates that any conflict of interest that arises during a board member’s tenure must be resolved through divestment within a specified timeframe.
Conclusion
The DTI’s push for PCAB reform underscores a critical need for ethical governance in the construction industry. By addressing conflicts of interest and strengthening oversight mechanisms, the government aims to bolster transparency and integrity within public contracting. As the legislative process unfolds, these reforms could reshape the landscape of construction governance in the Philippines, ensuring that public interests are prioritized above all else.
