House Bill No. 2203

by dlsn on Mon Mar 23, 2009 2:39 pm

This HB seeks to amend Section 4 of Republic Act (RA) 9184 with respect to its scope and application on government procurement activities. It limits the coverage of RA 9184 on treaties or international or executive agreements only to those entered into by the government prior to the enactment of said law. The proposed amendment to Sec. 4 of RA 9184 reads as follows:

SEC. 4. Scope and Application. - This Act shall apply to the Procurement of Infrastructure Projects, Goods, and Consulting Services, regardless of source of funds, whether local or foreign, by all branches and instrumentalities of government, its department, offices and agencies, including government-owned and/or controlled corporations and local government units, subject to the provisions of Commonwealth Act No. 138. Any treaty or international or executive agreement affecting the subject matter of this Act ENTERED INTO BY the Philippine Government BEFORE THE PASSAGE OF THIS ACT shall be observed.

This HB was introduced on the 14th Congress by Honorable Representative Joseph Emilio A. Abaya.

You may read the complete text of this HB by clicking here.

by shobe on Mon Mar 23, 2009 5:05 pm

I think the intention of Congressman Abaya in coming up with HB 2203 is answered or will be answered with the approval (hopefully) of the new IRR which covers all procurement activities of the government, regardless of source of funds.

Considering this development initiated by the GPPB, I honestly think it would be safer to leave R.A. 9184 at peace. Wink

Amending one provision of the law will undoubtedly result to more "unnecessary," "scary," and "dangerous amendments". pale

Please allow me to share the reason why Congressman Abaya wants to pursue this amendment...

Abaya vs Ebdane G.R. No. 167919 February 14, 2007

Supreme Court held:

Under the fundamental principle of international law of pacta sunt servanda,73 which is, in fact, embodied in Section 4 of RA 9184 as it provides that "[a]ny treaty or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a signatory shall be observed," the DPWH, as the executing agency of the projects financed by Loan Agreement No. PH-P204, rightfully awarded the contract for the implementation of civil works for the CP I project to private respondent China Road & Bridge Corporation.

PS
Supreme Court did not rule in his favor.

by RDV @ GP3i on Tue Mar 24, 2009 2:53 pm

shobe wrote:I think the intention of Congressman Abaya in coming up with HB 2203 is answered or will be answered with the approval (hopefully) of the new IRR which covers all procurement activities of the government, regardless of source of funds.

Considering this development initiated by the GPPB, I honestly think it would be safer to leave R.A. 9184 at peace. Amending one provision of the law will undoubtedly result to more "unnecessary," "scary," and "dangerous amendments".

If the reason of Cong. Abaya in proposing for that amendment of Sec.4 is because the SC did not rule in his favor (in Abaya vs. Ebdane), therefore, he wanted that only those treaties, executive or international agreement entered into prior to January 2003 "shall be observed" under the fundamental principle of international law of pacta sunt servanda, i don't know how the approval of the new IRR will hope to answer his concern.

The draft/new IRR, the coverage of which already includes foreign-funded projects, will still be subject to Section 4 of RA 9184 (observance of pacta sunt servanda).

This brings me to my other comments on the draft IRR, specifically in the definition of term international agreement and in the coverage of the IRR, about the apparent expansion of the definition of international agreement which has been defined by the SC in that Abaya vs Ebdana case as "a contract or understanding, regardless of nomenclature, entered into between the Philippines and another government in written form and governed by international law, whether embodied in a single instrument or in two (2) or more related instruments."

But in the draft IRR, is refers to "a contract or understanding, regardless of nomenclature, entered into between the Government of the Philippines and another government or international financing institution in written form and governed by international law, whether embodied in a single instrument or in two (2) or more related instruments."

Therefore, my interpretation of the coverage of the draft IRR, observance of pacta sunt servanda principle is expanded even to agreements with IFIs which may not even fall under the SC definition of international agreement.

Although, I qualified in my posts that, not being a lawyer myself, it may be included still under international law.

Atty shobe, being a lawyer, can you clarify the matter with me?

by shobe on Tue Mar 24, 2009 3:45 pm

This brings me to my other comments on the draft IRR, specifically in the definition of term international agreement and in the coverage of the IRR, about the apparent expansion of the definition of international agreement which has been defined by the SC in that Abaya vs Ebdana case as "a contract or understanding, regardless of nomenclature, entered into between the Philippines and another government in written form and governed by international law, whether embodied in a single instrument or in two (2) or more related instruments."

But in the draft IRR, is refers to "a contract or understanding, regardless of nomenclature, entered into between the Government of the Philippines and another government or international financing institution in written form and governed by international law, whether embodied in a single instrument or in two (2) or more related instruments."

Hi Sir RDV. A later ruling of the Supreme Court [G.R. No. 175608
(DBM-PS) and the Inter-Agency Bids and Awards Committee (IABAC), vs Kolonwel Trading] held that:

The question as to whether or not foreign loan agreements with international financial institutions, such as Loan No. 7118-PH, partake of an executive or international agreement within the purview of the Section 4 of R.A. No. 9184, has been answered by the Court in the affirmative in Abaya, supra. Significantly, Abaya declared that the RP-JBIC loan agreement was to be of governing application over the CP I project and that the JBIC Procurement Guidelines, as stipulated in the loan agreement, shall primarily govern the procurement of goods necessary to implement the main project.

Under the fundamental international law principle of pacta sunt servanda, which is in fact embodied in the afore-quoted Section 4 of R.A. No. 9184, the RP, as borrower, bound itself to perform in good faith its duties and obligation under Loan No. 7118- PH. Applying this postulate in the concrete to this case, the IABAC was legally obliged to comply with, or accord primacy to, the WB Guidelines on the conduct and implementation of the bidding/procurement process in question.

by RDV @ GP3i on Tue Mar 24, 2009 3:59 pm

Hi, atty shobe:

In that case, I will have to yield to your better understanding of the law, including international law. I thought, the definition of "international agreement" was streched a bit beyond what was spoken by the Supreme Court. In the case of Abaya vs. Ebdana, if I remember it right, the Supreme Court has qualified the Loan Agreement as an international agreement coupled with some Exchange of Notes. Maybe I need to read the case of the DBM-PS IABAC vs Kolonwell a little more to see how the pacta sunt servanda principle was applied in that case.

by engrjhez® on Tue Mar 24, 2009 10:42 pm

For the purposes of some readers, the term pacta sunt servanda is defined as follows:

Pacta sunt servanda (Latin for "agreements must be kept"), is a brocard, a basic principle of civil law and of international law. In its most common sense, the principle refers to private contracts, stressing that contained pacts and clauses are law between the parties, and implies that non-fulfilment of respective obligations is a breach of the pact. The general principle of correct behaviour in commercial praxis — and implies the bona fide — is a requirement for the efficacy of the whole system, so the eventual disorder is sometimes punished by the law of some systems even without any direct damages incurred by any of the parties.

With reference to international agreements, "every treaty in force is binding upon the parties to it and must be performed by them in good faith". Pacta sunt servanda is based on good faith. This entitles states to require that obligations be respected and to rely upon the obligations being respected. This good faith basis of treaties implies that a party to the treaty cannot invoke provisions of its municipal (domestic) law as justification for a failure to perform.

The only limit to pacta sunt servanda are the peremptory norms of general international law, called jus cogens (compelling law). The legal principle clausula rebus sic stantibus, part of customary international law, also allows for treaty obligations to be unfulfilled due to a compelling change in circumstances.

http://en.wikipedia.org/wiki/Pacta_sunt_servanda

PS. Seems like Reputation Ratings have been activated already. Thanks Admin for adopting the idea! Very Happy

House Bill No. 2203

House Bill No. 2203

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Re: House Bill No. 2203

Re: House Bill No. 2203