"The private contractor has now morphed into a monster."
"The private contractor has now morphed into a monster."
It is not really a case of the Department of Foreign Affairs assigning to APO Production Unit, Inc, (APUI) the printing of the Philippine passports, but a case of contracting its assignment to private contractor United General Expression Corp. (UGEC). The sleuth work by Rigoberto D. Tiglao has blown right unto on the face of the Aquino administration. Maybe had that Spanish mestizo millionaire Iñigo Zobel who got the award of printing of our passport not absconded with the data, Secretary of Foreign Affairs, Teodoro Locsin, Jr. would not have blown the whistle that instantly saw operators of the harebrained Noynoy Aquino administration squirming like worms.
Originally, the electronic printing of our passport was assigned to APUI despite an existing agreement between the Bangko Sentral ng Pilipinas and Francois-Charles Oberthur Fiduciary (FCOF) of France. If Secretary Locsin used the word “autopsy” to determine the cause of the mess, he will realize that the yellows slowly nibbled at the contract involving the production of our passports. Their followers in the Senate began to holler as if to ask what happened. But no one asked why such a security-related task of the government was devolved from the BSP like the printing of our money, BIR and documentary stamps and seals, land titles, etc.
The issue of security-related functions of the government is now raised, for it seems the government that descended after 1986 has their inherent hatred of the government. They devolved almost all functions to the private sector, always giving the consistent alibi that the government they wish to capture is run by corrupt elements without saying that privatization is their way to allocate the fruits of their so-called democracy and freedom to their selected minions. Yen Makabenta wrote, quoting former DFA secretary Perfecto Yasay, “that the problem began when then DFA secretary Albert del Rosario in 2015 awarded the printing of electronic passport to APUI despite an existing agreement between the BSP and FCOF”.
To be exact, on Oct. 5, 2015, while the FCOF contract with BSP was subsisting and even as the MREP (machine readable electronic passports) continued to be fully compliant with the standards of ICAO, the DFA awarded the production to a new e-Passport system to APUI, a government printing facility without bidding on condition that no part of the contract can be subcontracted or assigned to a private printer. In violation of this condition, the APUI engaged the services of United Graphics Expression Corporation (UGEC) which is reportedly owned by Zobel. After given the go-signal by Secretary Del Rosario in October 2015, Milagros Alora, then chairman of APUI, contracted UGEC for the printing of new e-Passports.
APUI was under the supervision of Herminio “Sonny” Coloma, then secretary of the Presidential Communications Operations Office (PCOO) of the Noynoy Aquino administration. According to Yasay, Coloma lobbied for the transfer of the passport printing from the BSP to APUI. Nobody thought that the move was preparatory to the privatization in the printing of our passport by UGEC until DFA Secretary Albert del Rosario ordered in 2015 “without compelling reason” to remove the printing of the passport from the APUI.
From our understanding of the facts, it cannot be said that in assigning the printing of passport was a contract between APUI and the DFA in a sense that it was awarded to a private entity. APUI is a state-owned corporation. Rather, APUI was simply given its rightful task of printing security-related documents and papers considered sensitive to the country’s national security. It possibly enjoyed a semi-autonomous status from the BSP. Probably because of the status its head, Alora, at the instruction of DFA Secretary Del Rosario, ventured out to entertain the notion she was given the go-signal to contract out the production and printing of our passports to UGEC.
As one would say, it was Coloma who paved the way for the violation of the law, while Del Rosario implemented it despite the clear prohibition not to subcontract said undertaking to a private entity because of the security risk involved. Tiglao, quoting Yasay said, “objecting to the awarding of the contract to private firm by APUI, on legal and moral ground—that the award wasn’t bid out to get competitive prices and that the huge profit from the contract would be going only to a private firm. The contract is estimated to generate at least P1 billion for UGEC if it remains the passport printer for10 years, which is the length of the term of DFA’s contract with the APUI.”
In the initial joint congressional inquiry into the passport mess last March, lawmakers noted that the joint venture has earned UGEC a least P630 million in profits annually for the past three years, its investment amounting to only P193 million. The contract being enormously profitable, UGEC was prompted to announce a plan of listing its shares in the stock market.
Nonetheless, there remain unanswered questions that need to be clarified. First, if APUI is under the supervision of the Presidential Communications Operations Office headed then by Coloma, then how come it was DFA Secretary del Rosario who ordered Alora, the head of APUI, to enter into a contract with UGEC? Second, it is not the huge profit that is being generated in the printing of passport, or a question of legal and moral ground that it did not go through the required bidding process, but of devolving the government of its basic function like printing of sensitive data to private contractors.
The irony of it is that the private contractor has now morphed into a monster. It has not only become a powerful lobbyist that exerts influence to members of Congress who might attempt to investigate its background, that of the owner, Zobel, and its stockholders. It is this threat of not being renewed of its lucrative contract why UGEC is possibly holding hostage the data of more than 70 million Filipino passport holders. It does not only hold a monopoly to print a crucial document that could declare one a Filipino citizen or prevent him from leaving or entering the country.
According to Tiglao, Zobel, whose wealth he mostly inherited, also owns a secretive Haldane Investment based in the tax-haven island of Vanuatu. This means that while UGEC is enjoying the largess of the 3 million OFW and Filipinos dual passport holders whose fee goes right into the bank account of a Spanish mestizo in cahoots with some shadowy foreign capitalists. UGEC has to be reminded that the government can demand the return of the data because they remain the property of the government and their custody of the data is only on the basis of a contract to outsource the printing of passport, which by any angle, is questionable as illegal.