PCCI opposes gov’t audit of oil firms

The country’s biggest trade group urged both local courts to reconsider their decision ordering the Commission on Audit (CoA) to open the financial books of the three biggest oil companies amid allegations of price fixing.

In a statement, the Philippine Chamber of Commerce and Industry (PCCI) said private audit firms instead should have been commissioned for the oil firms.

The move could create concerns among investors in the country, the group said.

The PCCI also urged the Supreme Court (SC) to reconsider an order that would reclassify the land on which the Pandacan oil terminals stand that in effect would compel the “Big 3” oil companies, Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron Philippines to relocate their oil depots.

The Manila court last April 27 ordered Department of Energy (DoE) to review the books of the three oil companies through the CoA, the Bureau of Internal Revenue, and the Bureau of Customs to resolve allegations that the three have been colluding to overprice petroleum products since 2003.

Judge Silvino Pampilo Jr. cited “a strong public interest” and “a need to uncover the mystery of frequent increases in petroleum products” as reasons to open the books of the Big 3.

The PCCI said while it supports public clamor for transparency on fuel prices, it also does not want the local investment climate to deteriorate if the government audits the private oil firms.

“The constitutional mandate of the Commission on Audit limits its auditing power on private companies to those who are engaged in public utilities subject to the government’s rate-fixing powers and those who, in one way or the other, receive subsidies or equity directly or indirectly from government. The move to use the CoA to audit the three oil companies would send only send wrong signal to all investors doing business in the country, or those intending to do so,” PCCI president Edgardo Lacson said.

“Our position is for the three private international oil companies to be audited by reputable private auditing firms in compliance with the directive and supervision of the DoE,” added Lacson.

PCCI also expressed concern over the SC’s decision for the enforcement of Manila Ordinance 8027 that reclassified the area of the Pandacan terminals from industrial to commercial.

“Though we respect the ruling of the high court in this case, we are also worried about its implications to investor confidence and the economy as a whole in the long run,” PCCI chairman Miguel Varela said.

He said giving a blanket, absolute, and unfettered affirmation of the local government in its power to declare zoning may be too injurious to the competitiveness of the country in attracting investors.

Varela added that “while cities have the power to reclassify land, this must be consistent with an integrated and comprehensive land use plan and must not be discriminatory.”

The group expressed belief that arbitrary spot-zoning ordinances would only make the business environment unpredictable and unattractive to investors.

Allowing local governments to spot-zone everywhere will not ensure industries continuous tenure in the areas in which they operate, which is a serious disincentive to investments.

Lacson said “industries will not spend millions of pesos in a particular city or province if a local government unit can effectively kick them out anytime by re-classifying the area where their office, factory, or establishment is located.” –Ayen Infante, Daily Tribune