Dark side of property boom

MANILA, Philippines – The past few years have seen an unprecedented expansion in the property sector, so much so that Congress even passed the REIT law—for Real Estate Investment Trust-—to democratize the ownership of realty and development companies while boosting capital formation in the country.

Despite the considerable delays in the implementation of the REIT law, owing to the Department of Finance’s concerns about its revenue impact for the government considering the substantial incentives for REIT investors, the sector has galloped the past two years. Indeed, there doesn’t seem to be a major city in Metro Manila, not to mention outside it like Cebu, Davao or Iloilo, where no new development is rising.

The frenetic pace has understandably given rise to anxiety over a property bubble, similar to the United States. But such fear has been overtaken by a more urgent crisis: the apparent laxity of regulators in enforcing rules and guidelines in the construction sector. It’s a problem that has not been limited to fly-by-night or small-time developers, as the recent Eton residential condominium tragedy in the heart of Makati’s business district has shown.

Eton is as pedigreed as they come in the property sector. While the Ayalas have ALI, the Henry Sy group has its SMDC, the Tys of Metrobank group have Federaland and the Gokongweis their Robinson Land Corp., tobacco and airline magnate Lucio Tan put up Eton a little later than the others but has caught up nonetheless with its building frenzy. It has an impressive portfolio of quality projects, offering some of the most competitive terms to buyers.

Unfortunately, as the recent Eton Greenbelt Residences accident that killed 10 construction workers when their overloaded gondola plunged 21 floors down, there are indications the regulators, both from national and local agencies, have not quite been on the ball in monitoring the dizzying pace of development.

The Department of Labor and Employment (DOLE) on Friday reset, for the second time, its release of a task force report on what really happened in the Eton case, but initial details of labor probers, as well as those by Makati City Hall, indicate some lapses in the process by which developers manage big-ticket projects that are governed by strict global standards.

National compliance weak

This shouldn’t be surprising, because, it turns out that despite its booming infrastructure sector—a sector that will see yet even more action in the next five years as the Aquino administration anchors growth on it—the Philippines lags behind many of its peers in complying with international treaties on occupational safety and health standards.

The International Labor Organizations (ILO) in its decent work agenda, has adopted more than 100 conventions in all, of which around 70 promote occupational safety and health in workplaces. And how many does Manila, which likes to tout its being an outstanding UN member, comply with? It has ratified only 33 of the total 100-plus ILO conventions, and has not ratified a single treaty that ensures occupational safety and health of workers, particularly those in dangerous workplaces such as construction.

The core ILO conventions on occupational safety and health include C155 and R164, known as the Occupational Safety and Health Convention and Occupational Safety and Health Recommendation, adopted respectively in 1981.

These were revised and updated in 2006, now known as C187, or the Promotional Framework for Occupational Safety and Health Convention; and R197, or the Promotional Framework for Occupational Safety and Health Recommendation.

The ILO database of the ratifications of these conventions, however, showed that most of those that ratified are developed countries from Europe like Belgium, the Netherlands, Luxembourg and Sweden.

The price of such apathy is high. A recent study of the ILO showed 6,300 people die every day as a result of occupational accidents or work-related diseases, or at least 2.3 million deaths per year.

Most of these work-related deaths and injuries take a heavy toll in developing countries like the Philippines, where estimates put 10 million people as engaged in hazardous work activities.

“Throughout the world, the poorest and least protected—often women, children and migrants—are among the most affected,” said the ILO report.

Nicon Fameronag, spokesman of the DOLE, said although the Philippines has not ratified any treaty on occupational safety and health of workers, it is fully aware and has been implementing measures to ensure workers’ safety.

He said Department Order 13 issued by the DOLE in 1998 contains guidelines on occupational safety and health in the construction industry.

Under the Labor department’s order, a construction company is required to submit a list of measures to be implemented under the occupational and health safety program during construction.

The list of measures—such as the placing of signages of equipment, protective personnel equipment such as boots and hard hats—must be submitted to the DOLE’s Bureau of Working Conditions (BWC).

Approval by BWC “of the construction firm’s occupational and safety program is a prerequisite to acquiring a Mayor’s permit for the construction of an establishment,” said Fameronag in an interview with the BusinessMirror.

The subcontractor of Eton, however, apparently did not submit to BWC the list of occupational and safety measures for workers. That omission should have been flagged by City Hall, but wasn’t. “It surprised us that Eton’s subcontractor was granted a Mayor’s permit without the BWC approval, which is required under the labor rules,” said Fameronag.

Contractors face blacklist

Meanwhile, 21 contractors and subcontractors of Eton Properties Philippines Inc. may be blacklisted from the Philippine Contractor Accreditation Board, according to Fameronag.

On Friday, he said, Eton Properties submitted the Occupational Health and Safety Program; and Construction Safety Manual of their hired contractors and subcontractors.

Sources in the construction sector said, however, that Eton’s contractor’s problem isn’t isolated. Because of the pressure among contractors and suppliers of even big players to meet completion deadlines, there are unchecked violations of the child-labor and other laws, including those setting minimum daily wage in Metro Manila at P402 a day; and requiring the registration of workers with the Social Security System, PhilHealth) and Pag-ibig Fund.

Labor Secretary Rosalinda Baldoz has expressed support for the Philippines’ ratification of ILO Convention 187 to ensure the safety and health of Filipino workers in about 800,000 establishments. She also ordered the promotion of Zero Accident Program in all workplaces through linkups of the government, employers, workers and nongovernment organizations.

Until that happens, though, those glitzy brochures of some of the country’s biggest developers will continue to mask the dark underside of this boom—the human toll as property giants rush into a bustling market. –Estrella Torres and Sara Susanne D. Fabunan, Business Mirror