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Pesay City

Wednesday, September 20,2006


SESSION NO. 26 Wednesday, September 20,2006

CALL TO ORDER At 3:12 p.m., tlie Senate President, Hon. Manny Villar, called tlie session to order. PRAYER The Body observed a minute of silent prayer. DEFERMENT OF THE ROLL CALL Upon motion of Senator Pangilinan, there being no objection, the- Body deferred the roll call to a later hour. DEFERMENT OF THE APPROVAL OF THE JOURNAL Upon motion of Senator Pangilinan, there being no objection, the Body deferred the consideration and approval of tlie Journal of Session No. 25 to a later hour. DEFERMENT OF THE REFEmNCE OF BUSINESS Upon motion of Senator Pangilinan, there being no objection, the Body deferred the Reference of Business to a later hour. MANIFESTATION OF SENATOR PANGElNA3 Senator Pangilinan stated that Senator Madrigal has requested that she be allowed to take the floor on a matter of personal and collective privilege. SUSPENSION OF SESSION Upon motion of Senator Madrigal, the session was suspended to allow tlie technical staff to set up the audio-visual equipment.

RESUMPTION OF SESSION At 3:19 p.m., the session was resumed MANIFESTATION OF SENATOR ENRILE Senator Eiirile stated that he has directed the printing of a new draft of the anti-terrorism bill because minor corrections had to be made. He assured the Body that he did not make a material alteration of any provision in the bill. PRIVILEGE SPEECH OF SENATOR MADRIGAL Availing herself of the privilege hour, Senator Madrigal delivered the following speech:
A Grand Cover-up: Whitewashing the New Hinase Alias M/T Solar I Case

Last 14 September 2006, the Special Board of Maritime Inquiry (SBMI) of the Deparhnent of Transportation and Communications, through its Secretary, released its findings and recommendations on the largest oil spill in Philippine history. This SBMI report on the tragic incident that
has affected four towns in Guimaras Island and two towns in Iloilo Province, thereby contaminat-

ing fishing grounds, beaches, sea-grass beds and seaweed farms, is a tragedy in itself.
I am appalled by the deliberate haste with which the report was done in a matter of two weeks. This has resulted in a haphazard report, which has only raised more questions rather than answers.

According to the SBMI: Petron is liable for overloading of industrial fuel oil, thereby causing instability of the vessel and rendering it unseaworthy for the voyage; Sunshine Maritime Development, Inc., the alleged disponent owner of the vessel i s also @

It was 3:13 p.m.

390 liable for completely disregarding all mandated regulations, policies and requirements for the seaworthiness of the vessel;


The ship captain is administratively liable for not having the necessary training to handle oil tankers, for making an erroneous decision to set sail from Guimaras despite the bad weather, and failing to ensure the vessels seaworthiness; and MARINA and the Philippine Coast Guard (PCG) were found to have committed lapses in the performance of their duties.

On all counts, the safety nets that should have prevented the New Hinase alias M/T Solar I from sinking in the waters of Guimaras Island on 1 1 August 2006 failed. It was, in ordinary parlance, a systems failure. The failure was overlooked by the SBMI. We ask why? Is it being done to hide from the people the liabilities of the agencies in government, or is it a cover-up or an attempt to whitewash another maritime tragedy? The IiabiliQ o f the vessel crew At the time of the occurrence, the New Hinase alias M/T Solar I was manned by eighteen (1 8) people led by its Master - Captain Norbert0 Aguro. Two of them remain missing and are presumed to have died with the sinking of the vessel.

On paper, these findings are all in order. But are they telling us the real story behind the tragedy? I submit that they are not. The New Hinase alias IWT Solar I was a vessel destined to create havoc. From the moment it entered Philippine waters, its seaworthiness had been severely compromised and prejudiced. Allow me to tell the real story behind this tragedy. I shall begin with a fact - a ship is presumed to be built to be seaworthy. In the case of Santiago Lighterage Corporation vs. Court o f Appeals (GR No. 139629, dated 2 1 June 2004), our Supreme Court defined seaworthiness when it said: A vessel must have that degree of fitness which an ordinary, careful and prudent owner would require his vessel to have at the commencement of her voyage, having regard to all the probable circumstances of it. Thus, the degree of seaworthiness varies in relation to the contemplated voyage. Crossing the Atlantic calls for stronger equipment than sailing across the Visayan sea. It is essential to consider that once the necessary degree of seaworthiness has been ascertained, this obligation is an absolute one, Le., the undertaking that the vessel is actually seaworthy. It is no excuse that the ship owner took every possible precaution to make her so, if in fact he failed. When an unfortunate incident strikes, there are supposed to be safety nets that should prevent its occurrence and ensure the seaworthiness of the vessel. These maritime safety nets consist of the following:
- The crew of the vessel; - The ship owner; - The cargo owner; and - The government of the flag state.

We know that while Captain Aguro had completed the Advance Training Program on Chemical Tanker Operations, he did not have Advance Training on Oil Tanker Operations which is required for the Master on board an oil tanker. Thus, his Certificate of Competency (COC) limits him to serve on board chemical tankers only. He has had experience as Master on board foreign-flagged chemical and LPG tanker vessels, but none on board an oil tanker,
The SBMI, in their report, said that this lack of training and qualifications of the captain of the vessel was further compounded by his making an erroneous decision to set sail from Guimaras despite the mildly inclement weather, and failing to ensure the vessels seaworthiness. A maritime expert from MIT has offered the following opinion, which I would like to read into the record: Nearing the southern tip of Panay, the vessel developed a starboard list after being battered by waves (obviously wave heights in excess of her freeboard) that can damage and compromise exposed deck fittings such as vent valves, etc. Correctly, the captain sought shelter in Iloilo but could not drop anchor as the windlass was grounded. So, afloat and drifting, the crew pumped out the chain locker and other spaces to bring the ship to even keel. I do not know if the captain satisfied himself that after pumping out to the vessel, what was the cause of the list or ingress of water. Did he deal with and feel safe enough to continue the voyage? It is my opinion that the vessel #



at that time had already sustained some structural failure not normally noticed except through an underwater inspection. The vessel should not have sailed without first carrying out repairs on the windlass and verifying the cause of the listing. The ship was no longer seaworthy by virtue alone of not being able to anchor because of the windlass deficiency. Quite often, against the better judgment of a captain on the scene, pressures are brought to bear that compel the vessel to take shortcuts and suffer the consequences. These can be the demands from the owner or cargo owners and oftentimes aggravated due to incentive bonuses to deliver the goods. This professional opinion of a former tanker owner and tanker engineer, as well as other information that we have come into light, suggests that the sinking of the vessel was not due to her lacking a double hull for she had a double bottom. It is almost certain that water entered the cargo compartments or other spaces causing the vessel to lose buoyancy. Doublehulled vessels offer some protection but only in the event of shallow water grounding or minor collisions at low speeds. This is especially true of small vessels such as our inter-island tonnage where the keel to inner bottom distances are not significantly deep.

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That the ship is registered in Panama; That Sunshine Maritime Development, Inc. does not own the vessel. They are only the disponent owners of the vessel, and they are only lease purchasing it. According to the August 24, 2005 decision of MARINA granting the Certificate of Public Convenience (CPC), Solar I is being leased from New Hinase Maritime S.A. for a period of only eight years or up to December 2009.

This is supported by the fact that based on the records of the French classification society - Bureau Veritas - the ship is owned by New Hinase Kisen Inc., and not Sunshine Maritime Development, Inc. How can a ship that is of foreign registry ply Philippine waters carrying Philippine cargo owned by a corporation with substantial government interest? This act is a violation of Section 6 of Republic Act 9295 which provides that, No foreign vessel shall be allowed to transport passengers or cargo between ports or places within the Philippine territorial waters, except upon the grant of a special permit by the MARINA when no domestic vessel is available or suitable to provide the needed shipping service and public interest warrants the same. What were the considerations involved in allowing the vessel to carry cargo along Philippine waters? Is the exception now the rule? Assuming that the vessel was chartered under a bareboat program, the MARINA should still be held accountable for violating its own rules. Under MARINA Memorandum Circular No. 42, series of 1998, a company may be allowed to bareboat charter a maximum of two (2) vessels only; in excess of the two, the company must place an additional paid-up capital based on the size of the vessel, a qualification that Sunshiue Maritime Development, Inc. failed to comply with. And I wish to add that these vessels were not even bareboat chartered. We do not know under what rule, what law, or what regulation these vessels were really given Philippine flag because her papers also show that there is much confusion. The liability o f the cargo owner The owner of the cargo, Pelron, has been silent on how it engaged the vessel. Was the vessel time-chartered? Was it on a contract of affreightment? On a consecutive voyage charter? Or a single charter?

On the other hand, double-hulled vessels are more prone to retain explosive gases in the void spaces and therefore more dangerous especially when carrying flammable and volatile petroleum products. Cataclysmic explosions can wreck a tanker and cause a major oil spill.
The liability of llie ship owner Who is the real beneficial owner of the vessel? How was the vessel brought into the country? Was she chartered and, if so, where are the enabling documents to allow for taxes and fees including a waiver to engage in cabotage trade?

Was the vessel imported into the country? Was the vessel bareboat chartered to Philippine operators and, if so, under what authority? Were the appropriate taxes, such as the 4.5% taxes, paid?
This is what we know so far. During the hearing conducted last August 4 by the Committee on Environment and Natural Resources, the owners of Sunshine Maritime Development, Inc., admitted the following:


392 During the hearing, they showed us a fixture note. But the fixture note is nothing but a note of charter that does not give the terms and conditions under which the vessel was contracted by Petron. In any case, any of these types of charter vests some control in Petron as to the movement of the vessel, how to prosecute a voyage, where to load, where to discharge cargo, and even which type of cargo to carry and the quantities to load. The fact that the SBMI has established that Petron overloaded the vessel proves its liability. The New Hinase alias Solar I was found to be overloaded considering that it left Bataan with a draft of 5.1 meters, when it was only supposed to have a draft of 4.85 meters. This in itself compromised the water tightness of the vessel because the higher the draft the lower the ship goes into the water. Draft refers to the distance between the bottom of the tanker and the portion that is level with the water line. An increased draft means a heavier load. Petron was found to have overloaded the tanker because it was only supposed to fill it up to 98% capacity but computations showed it loaded the New Hinase alias Solar I up to 98.7% thus, increasing the draft. The tanker also lost its reserve buoyancy after it was allowed by MARINA to load more weight compared to that allowed by the private classification society, Bureau Veritas. The Bureau Veritas recommended load line was 1,220 millimeters but the MARINA-approved certificate allowed Solar I a mere 700 millimeters load line. The lower the load line, the more weight the vessel could carry. The SBMI also found that the compartments in the front of the vessel were filled with approximately 75 tons of seawater, while the top deck was filled with about 200 tons of seawater, thereby increasing the load on the tanker and contributing to its sinking. They needed more ballasts because the tanker would have lifted if the water was not put. This is a technical issue which shows us how closely and how dangerously MARINA has been allowing this boat to overload and to flaunt Philippine and international maritime rules. This fact of overloading the vessel cannot be downplayed in the light of evidence gathered by a remotely-operated underwater vehicle that surveyed the wreck and found a triangular hole

WEDNESDAY, SEPTEMBER 20,2006 on the portside of the New Hinase alias Solar I along with scratches and open valves on its cargo hold. If Petron allowed this overloading, did it also allow the pilferage of its own cargo in the open sea or before the vessel reached port? As a corporation in which our people have substantial interest, this is a clear case of economic sabotage.

The liability o f government

Beyond the liabilities of the crew, the ship owner and the cargo owner, the greater liability rests on the agencies of government mandated by law to ensure compliance with safety standards and regulations. To the SBMI that conducted the investigation, the liabilities are mere lapses. This is condemnable. I shall not mince words in calling this report as another bureaucratic exercise of whitewashing and covering up the truth to evade liability. This tragedy has resulted in the death of a child from inhalation of toxic fumes emitted by the oil spill, the death of two crew members, and substantial damages to the environment and the Filipino people which are beyond pecuniary estimation. These are not just lapses, These are serious crimes which deserve punishment. I base this on the following facts which cannot be denied:

MARINA allowed the registration of the vessel without exercising due diligence. In the Certificate of Vessel Registry Number 047182 dated 14 April 2005, we note that there is no mention at all that the vessel was modified or reconverted. If only the MARINA had diligently done its duty, they could easily have seen that the New Hinase alias Solar I was a reconverted vessel. It was first built in 1987 as Chie Maru No. 8 and christened New Hinase. This is the name that the ship carries. According to Lloyds Register of Shipping Vessels, the AUT Solar I or the New Hinase was initially a tanker in 1988 named Chie Maru. In 1989, it was reconverted into a chemical tanker under the name New Hinase. From a chemical tanker, it may have been reconverted again into an oil tanker presumably in the Philippines. This is where the MARINA, Sunshine Maritime and Petron, especially Sunshine Maritime, had promised to give us the general arrangements and specification plans of the vessels but they

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393 By allowing the New Hinase alias Sofar I to travel despite its suspension from class, MARINA directly violated Section 22 of Republic Act No. 9295 which provides that, Allvessels, whether newly built or previously owned, which are acquired on or aj%r the effectivity of this Act, shafl be classiped by a government-recognized classification society on the date of acquisition prior to its operation in the domestic trade. The tragedy here is just that it was classed but upon suspension from class which is public knowledge and if I, myself, and my staff, can see through the Internet that it was suspended, why did MARINA not know this or did they knowingly allow the vessel to trade?

have not done so. We have subpoenaed these in the Committee on Environment and Natural Resources. This is highly questionable and anomalous. As they say, ilng laki, ang haba at ang bigat ng barko ny pabago-bago. We no longer know the true dimensions and specifications of this vessel because of conversions and reconversions. We know for a fact that it is not being used as a chemical tanker in the Philippines. It is being used as an oil tanker.

Is it just possible that the vessel during conversion here in the Philippines may have had structural alterations, Le., enlargement of tank spaces, removal of separation bulkheads? If so, were these carefully assessed to insure that the hull girder strength, structural integrity and stability characteristics were maintained or altered to meet the contemplated service? Were there tests performed after conver-sion, and sea trials conducted to ascertain that the statistical stability, deadweight and load line are in accordance with current class and state regulations?

MARINA allowed the vessel to ply Philippine waters despite the fact that this vessel was suspended from its class by the classification society, Bureau Veritas. This is shocking. This is highly anomalous. The New Hinase alias Solar I was suspended from its class by Bureau Veritas from December 29,2005 to July 2006, and yet when it was suspended, it was allowed to travel and move cargo 18 times from the port. We have the records. We went to the port and gathered the PPA records. It was allowed by MARINA to move I8 times from the Port of Lamao, Limay, Bataan to various points of destination such as Iloilo, Cagayan de Oro, Davao, Cebu, Iligan and Leyte. Under normal circumstances, a vessel that has been suspended from its class should be grounded and not allowed to travel according to both Philippine and international rules and regulations. This is consistent with international law provisions such as the United Nations Convention on the Law of the Seas (UNCLOS). Under UNCLOS, once a ship is registered, the flag state has certain duties laid out. In particular, under Article 94, the flag state must effectively exercise itsjurisdiction and control in administrative, technical and social matters over shipsflying itsfrag and take such measures for shipsfrying itsflag as are necessary to ensure safety at sea....

MARINA allowed the registration of the vessel despite the fact that it was only provisionally classed by the international classification society, Bureau Veritas. The Provisional Classification Certificate No. MNLO/JBL/20060125917 AM, the ship, New Hinase alias Sofar 1. owned by New Hinase Kisen Co., Ltd., was merely provisionally classed for its hull and machinery only from April 2006 to October 2006. But the records show that this vessel has been trading for the past 2-1/2 years in Philippine waters. MARINA allowed the registration of a foreign-owned vessel. All documents prove that it is foreign-owned. In the Certzpcado Internacional de Arqueo or the International Tonnage Certificate No. 690871 issued by the Panama Bureau of Shipping, the port of registry of the New Hinase alias Solar I is Panama. This is in violation of Section 6 of Republic Act No. 9295 and its implementing rules and regulations issued on November 30, 2004, which provides that, No foreign vessels shaff be allowed to transport passengers or cargo between ports or pfaces within the Philippine territorial waters, except upon the grant of a special permit by the MARINA when no domestic vessel is available or suitable to provide the needed shipping service and public interest so warrants.

MARINA allowed the vessel to ply Philippine waters despite the fact that its Cargo Ship Safety Construction Certificate had already expired on June 7,2006. The oil spill occurred on August 11, 2006. This is in violation of Section 5, Rule VI of the Implementing Rules and Regulations of Republic Act No. 9295 which requires that, XI1 ships are required $

394 to carry on board the relevant or applicable ship safety certijkates as specified in Section 7. I . 7 o f Rules JV. Under Section 7.1.7, subsection a.2.a., a cargo ship safety certificate is required.



Department of Foreign Affairs; Philippine National Police; Coast and Geodetic Survey Department of the National Mapping Research and Information Agency (NAMRIA); and Bureau of Fisheries and Aquatic Resources.

... . . .

MARINA allowed the overloading of the vessel. The tanker also lost its reserve buoyancy after it was allowed by MARINA to load more weight compared to that allowed by the Bureau Veritas. The Bureau Veritas recommended load line was 1,220 millimeters but the MARINA-approved certificate allowed the New Hinase alias Solar I to have a load line of a mere 700 millimeters. The lower the load line, the more weight the vessel could carry and, therefore, overloading.

. . .

The overlapping of functions and competition among these agencies has only resulted in confusion. While the MARINA, under Republic Act No. 9295, is the principal government agency tasked with the development of the shipping industry, it is undermanned and not technically competent. There are 600 ports all over the country, and yet there are only a total of 500 people in MARINA. MARINA is being manned by technocrats and not by marine experts. They merely rubberstamp licenses and certificates without understanding the responsibility of ship-safety.

The MARINA officials who knowingly or unknowingly facilitated these acts should be held criminally and administratively liable. Our laws are clear. Section 3 of Republic Act No. 3019 otherwise known as the Anti-Graft and Corrupt Practices Act, punishes and declares as unlawful the act of causing any undue injury to any private party, including the Government, or giving any private party any unwarranted benefits, advantage or preference, in the discharge o f his official administrative or judicial functions through manifst partiality, evident bad faith, or gross inexcusable negligence. All these woes besetting the maritime industry are the result of the apparent absence of any clear delineation of responsibility in maritime administration. It is so fragmented that there is competition as to different functional jurisdictions. The lack of inter-agency cooperation and coordination are the primary causes of why a safe shipping industry can hardly make strides forward. We have an alphabet soup of government agencies undertaking maritime administration, namely: Philippine Coast Guard; Maritime industry Authority (MARINA); Philippine Ports Authority; Maritime Training Council (established pursuant to the Letter of Instruction No. 1404 signed by President Marcos on January 11, 1984); National Maritime Safety Coordinating Council (established pursuant to Executive Order No. 314 signed by President Ramos on March 28, 1996);

I submit that a comprehensive review on the maritime industry is in order. The absence of laws on safety standards in the Philippines shipping industry is not the only reason why the maritime industry is being compromised.
We have many laws, good laws, both Philippine and international. It is the lack of coordination and enforcement of these laws. And, as the endless maritime disasters have proven, this has led to further corrupt practices which result in the loss of life and the reckless and wanton destruction of our environment and natural resources. Let us begin with the matters which demand resolution. With regard to the incident involving the New Hinase Alias Solar I , I therefore ask that:

The Ombudsman conduct a fact-finding investigation on why MARINA allowed a foreign-registered vessel managed by a flyby-night company without any proven track record to transport cargo in Philippine waters, when there are legitimately registered Philippine vessels available; the circumstances on why it allowed a reconverted vessel to operate in Philippine waters; and why it allowed a vessel with a crew holding expired certifications and lacking training to operate an oil tanker. Pending investigation, I ask that the Ombudsman place the concerned officials under preventive suspension. The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) conduct


395 Finally, I ask that the Senate consider a review on the respective mandates, duties and responsibilities of the MARINA and the Philippine Coast Guard. Republic Act No. 9295, by giving back to MARINA most of the monitoring responsibilities, has effectively emasculated the Coast Guard. Yet, the agency that took over the functions of the Coast Guard, being MARINA, seems to prove ineffective in the enforcement of the law. Where the Executive has substituted rhetoric for substantive action, not much can be done, except to deny the Executive credit for behavior for which little if no credit is due. We have all marveled at bow Filipinos from all walks of life have tried mightily, and sincerely, to do something, anything, to lend a helping hand. From hair donations, everyone has been willing to do something. But it is the governments job to harness our national energies, consolidate our national effohs, and provide direction to our official activities. The Executive has focused, as it always does, on what is on the surface, in this case, the oil slick, without thinking of the many other things it ought to consider, and without a coordinating effort to consolidate the various actions that must he done. I would even go as far as saying that the Secretary of the Environment displayed instincts more environmentally sound than the Chief Executive. He said, and rightly so, that bacterial agents should be used for cleaning up the oil spills and not chemical detergents. But the President of the Philippines has given more consideration to Pehon, it seems, than she has to either our scientific or environmental communities; she has been more interested in appearing busy, than applying herself to coordination, evaluation and action. The incident involving the New Hinase alias Solar I is a microcosm of our state of affairs. Whether it be the issue of extrajudicial killings, human rights abuses, charter change and electoral reforms, the Executive has chosen instead to ride the waves and ensure its own political survival to the detriment of the people.

an investigation on Sunshine Maritime Development Inc., particularly its payment of taxes and duties in connection with the entry of a foreign-registered vessel plying Philippine waters. The Securities and Exchange Commission (SEC) to pierce the veil of corporate entity of Sunshine Maritime to determine its real owners and ensure prosecution under the AntiDummy Law; A special board of inquiry should be created. At this point, we cannot trust MARINA and the Philippine Coast Guard to make an independent determination of the cause and circumstances of the sinking of the vessel, because it is perhaps due to their negligence and corruption that this incident was allowed to happen. Over the long - term, I ask that the Senate seriously consider the passage of a bill creating an Oil Spill Liability Fund based on the United States Oil Pollution Act. Under the Oil Pollution Act of 1990, the owner or operator of a facility from which oil is discharged (also _known as the responsible party) is liable for he costs associated with the containment or cleanup of the spill and any damages resulting from the spill. The Environmental Protection Agencys (EPA) first priority is to ensure that responsible parties pay to clean up their own oil releases. However, when the responsible party is unknown or refuses to pay, funds from the Oil Spill Liability Trust Fund can be used to cover removal costs or damages resulting from discharges of oil. In the United States, the primary source of revenue for the fund is a reasonable charge on a per barrel fee on imported and domestic oil. Other revenue sources for the fund include interest on the fund, cost recovery from parties responsible for the spills, and any fines or civil penalties collected.

I believe that my distinguished colleagues will be particularly interested in the establishment of such a fund. There is much to do, and much that can still happen, and much will need to be undertaken if -we are to make up for the Executives having been caught so flat-footed by this disaster.

I also ask that the Senate act on the pending maritime conventions that have yet to be ratified. According to reports, there are 48 maritime conventions and treaties, and yet the Philippines has ratified only 11.

So we must take up the slack, we must provide leadership where there is none, and we must look to the interest of our maritime industry, our confused and demoralized maritime authorities, and a frightened and outraged citizenry. We must lead, we must act, we must deliberate and be deliberate in doing what is required of us.
In the end. this too shall uass and the unrighteous shall fall.




INTERPELLATION OF SENATOR R O U S Asked by Senator Roxas on the current status of the oil cargo and the vessel and what remains to be done, Senator Madrigal replied that there must be a thorough investigation into the incident. She surmised that the ship was overloaded as there was apparently a plan to pilfer oil midway in the voyage which compromised the load line and as a result, the vessel took in water which grounded the windlass, an electrical apparatus that brings up or down the anchor. As regards her statement that all the oil in the tanker has spilled into the sea, Senator Madrigal stated that the maritime experts that she consulted believed that it was so, given the magnitude of the oil spill.

that apparently, the classification society made certain recommendations to the ship owner and to MARINA regarding Solar I but these were not followed. Senator Roxas believed that the plethora of supervisory agencies handling maritime affairs might have been a factor behind the tragedy that befell the Solar I even as he noted that the Philippines has gained notoriety for being the site of some of the worst maritime disasters. As regards the proposal to create a fund similar to the Oil Spill Liability Trust Fund (OSLTF), Senator Roxas asked whether the ship owners would be mandated to set aside a certain amount of money per barrel of oil being handled. Senator Madrigal replied that it might not work because the owners of Sunshine Maritime Development, Inc., as well as its assets, have not been identified. She doubted that the ,vessel even has full P & I coverage. She pointed out that in the case of the Alaska oil spill caused by Exxon Valdez, Exxon was made to pay for the damages. Asked about the International Oil Pollution Corporation Funds, Senator Madrigal said that the expense for the oil spill cleanup could be reimbursed from the Fund; however, it is not immediately recoverable. ROLL CALL Upon direction of the Chair, the Secretary of the Senate, Oscar G. Yabes, called the roll, to which the following senators responded: Arroyo, J. P. Madrigal, M.A. Biazon, R. G. Magsaysay Jr., R. B. Osmeiia 111, S. R. Cayetano, C.P.S. Pangilinan, F. N. Ejercito Estrada, J. Ejercito Estrada, L. L. P. Pimentel Jr., A. Q. Enrile, J. P. Recto, R. G. Flavier, J. M. Revilla Jr., R. B. Roxas, M. Gordon, R.J. Villar, M. Lacson, P. M. Lapid, M.L.M. With 19 senators present, the Chair declared the presence of a quorum. Senator Drilon was on official mission abroad. Senator Defensor Santiago was on sick leave, for anorexia. Senators Angara and Lim were absent.#

On whether there was a way to determine if any oil was left, Senator Madrigal disclosed that the latest recording of the ROV submersible showed a man-made triangular hole at portside that could have been used to siphon off the oil. She also cited reports indicating that there were barges alongside the ship before it sank.
With regard to the calculation on the overload, Senator Roxas stated that the ship left Bataan with a draft of 5.1 meters when it was supposed to have a draft of only 4.85 meters. Senator Madrigal replied that a decrease of one foot in the load line means an increase in the draft which consequently works against the stability and trim of the vessel such that a subtle movement of the oil cargo would magnify the momentum of the vessel and cause it to lose stability more quickly than under normal circumstances. Upon further queries, Senator Madrigal explained that an additional load of 0.7% to a vessel with a load of 98% means that the tankers deck is nearly parallel with the water. Asked whether a classed ship is given a certification of seaworthiness, Senator Madrigal explained that when a ship is classed, it means that it has fulfilled certain machinery requirements but it does not mean that the vessel is structurally seaworthy. She added that a ship is classed upon leaving the dockyard but not after having undergone conversions. She expressed concern that MARINA overlooked a faulty conversion of Solar I which was merely suspended from class and given provisional classification and safety certificates. Moreover, she said




REMARKS OF SENATOR CAYETANO Senator Cayetano commended Senator Madrigal for conducting her own investigation into the Guimaras oil spill in spite of the lack of documentation on Solar I, adding that the information presented in the speech would be useful to the Committee on Environment and Natural Resources in the preparation of its report. Relative thereto, Senator Cayetano also informed the Body that as mentioned by Senator Madrigal in her speech, an oil spill liability fund would be proposed by the Committee and the funding would be sourced from a charge per barrel fee. She said that the Committee was also considering bills amending marine pollution laws but it requires further study. She disclosed that the Committee would first sponsor the oil spill liability fund but it would continue to work on the other issues related to the Guimaras oil spill. In closing, she observed that the extensive study conducted by Senator Madrigal on the matter appeared to be more comprehensive than the findings of the SBMI. INTERPELLATION OF SENATOR OSMERA

the depth to which a ship sinks when loaded, while the draft indicates the point - lines on the sides of the ship - at which the water level should not exceed. On the 250-millimeter difference between a draft of 5.1 meters and 4.85 meters, Senator Madrigal stated that it means the vessel was 250 millimeters above the load line. Senator Madrigal admitted that the situation was indeed confusing because the recommended load line of the Bureau Veritas for Solar I was 1.2 meters and that of MARINA, 700 millimeters. She said that she would study the conversion figures and the general arrangement plans to know why the Bureau Veritas allowed a bigger load line, why there is a big difference between the MARINA load line and that of the Bureau Veritas, and why the ship left with a draft of 5.1 meters when it was only allowed 4.8 meters. She noted that at one time or another, New Hinase or Chie Maru changed its gross tonnage, and when the vessel sailed as Sola? I , it used the gross tonnage of Chie Maru. Considering that the recommended load line of Bureau Veritas was 1,220 millimeters and that of MARINA, a mere 700 millimeters, Senator Osmefia believed that it is quite miniscule for a 2,000 deadweight tanker and it is therefore prone to take in water. Asked why the valves were left open, Senator Madrigal replied that according to the SBMI, a few valves had to be opened to repair the windlass, an apparatus that hauls the anchor, and the water entered through the ,valves. Since the valves were not big, Senator Osmefia asked how two tons of seawater could enter unless the vessel was already under water. Senator Madrigal replied that the ship listed very quickly. What is confusing, she said, was that a seaworthy and airtight ship would have listed but not sank because the water intake would have been limited to the first compartment with the open valves. She said that even maritime experts are at a loss to explain why the ship sank so quickly because it would not have sunk if the other compartments were airtight. Asked on the findings of the initial investigation, Senator Madrigal replied that apparently, the vessel J was compromised in its reconversion. She stated that $

Senator Osmefia noted that the Senate had undertaken similar investigations on maritime disasters such as the sinking of the Gretchen I in 1996 and another vessel in Calapan, Mindoro which resulted in the loss of hundreds of lives. He recalled that the Senate had even taken the MARINA and the SBMI to task for being remiss in their duty. For instance, he said that the MARINA had antedated a Certificate of Public Convenience it issued to one of the ships to show that it had been given permission to operate prior to the date of the accident contrary to statements of witnesses, Asked whether the Solar I had been issued a CPC before the accident, Senator Madrigal replied that the vessel has a CPC which is valid until December 10, 2009. She noted that a lot of MARINA requirements had been changed to make it easier for the ship owners to comply. Upon further queries, Senator Madrigal explained that Solar I had undergone an annual inspection but that its safety certificate had expired, hence, the ship was operating in violation of maritime safety rules.

On the difference between a draft and a load line, Senator Madrigal said that a load line indicates




according to experts, something was compromised in the conversion of the ship from an oil tanker to a chemical tanker and, again, to an oil tanker when it came to the Philippines. She pointed out that the big question is whether the vessel was reconverted in the Philippines and, if so, who did the reconversion. She said that she has not received the documents that she had requested from MARINA officials. Asked whether MARINA officials were asked where the ship was converted, Senator Madrigal replied that during the hearings, the MARINA officials said that the ship was converted in Japan. She said that the Philippine Trigon Shipyard was the last dry dock from which Solar I came out. Senator Osmeiia believed that it was the reconversion that compromised the seaworthiness of the ship as there are very strict rules on ship conversion in Japan. Asked whether water entered the starboard side of the vessel, Senator Madrigal replied in the affirmative. Senator Osmeiia said that a ship should have a center line division inside the various compartments between the starboard side and the portside. Senator Madrigal stated that she would study the general arrangement plans of Solar I. Asked which particular law should be amended in order to prevent similar accident in the future, Senator Madrigal replied that Republic Act No. 9295 should be revisited since it transferred most of the monitoring functions of the Philippine Coast Guard to the MARINA which has only SO0 personnel, none of whom is a captain, to monitor 600 ports nationwide. Senator Osmeiia suggested that the law be amended to empower MARINA to deputize the PCG to carry out the monitoring functions for its stead. For her part, Senator Madrigal expressed the need for some reforms within MARINA to provide for a very strong technical maritime group as she believed that the PCG would not take lightly being ordered around by bureaucrats. On whether an insurance company would cover a ship that has violated several provisions of the insurance policy, Senator Madrigal opined that the company should not cover a ship that has broken every conceivable safety law.

On the matter of Petrons liability coverage, Senator Madrigal said that the concerned officials have not yet submitted the necessary documents.

Senator Osmeiia requested Senator Madrigal to ask her staff to research on Asian countries that have an oil spill trust fund from which they can immediately disburse funds for chemical dispersal or cleanup operations, which could be the basis for the crafting of the proper legislation. Senator Madrigal said that she would look into Singapores maritime laws which are very strict even in the disposal of daily wastes. Senator Osmeiia expressed concern that the lives of the people and their livelihood would be affected by the oil spill for the next several years. He expressed the need for solutions, which are being employed even by third world countries, to ensure that these people would be compensated for the loss of livelihood. Senator Madrigal stated that she would look into the matter. Senator Osmefia pointed out that the cost of lost livelihood would be 100 times more than the cost of oil cleanup but the government does not seem to be paying too much attention to the victims ofthe oil spill. He said that some mayors have bared that somebody close to Malacaiiang has been sending officers to affected towns asking the people not to sue Petron. Senator Madrigal believed that a class action suit against Petron would galvanize the government into compensating the people for loss of livelihood. Senator Osmeiia underscored that certain public officials should also be sued for gross negligence. Asked whether it would be a violation of the cabotage law should Sunshine Maritime be found to be majority-owned by Japanese nationals, Senator Madrigal replied in the affirmative. Senator Osmeiia surmised that an influential person must have been involved in the issuance of the certificate of public convenience to a ship that is majority-owned by Japanese nationals, contrary to law, and he was looking forward to obtaining additional information on this matter. At this point, Senator Madrigal stated that the provincial government of Guimaras led by Governor Nava has filed a class action suit against Petron and Sunshine Maritime. Senator Osmeiia said that he&



would like to see some civilians and NGOs file a class action suit and he would be willing to assist them. He said that it is common knowledge that public officials can easily be pressured by the Palace. Senator Madrigal stated that legislators should take matters into their own hands in empowering the NGOs and the civil society to right an injustice. The Senate, she added, should find a way to make MARINA liable for gross negligence as proven by some documents, and file the case in the office of the Ombudsman. She noted that Mr. Benny Lim, one of the top tanker owners and operators, has left the Philippines after selling all his companies because he was disgusted with the state of the shipping business in the Philippines. On the sad state of the maritime industry, Senator OsmeRa bewailed that no regulatory agency is in above suspicion of corruption, but unfortunately, the Body could not do anything about it because no one is willing to come forward and expose the anomalies. Senator Madrigal pointed out that a Filipino ship owner can no longek get a decent charter because MARINA changed a lot of its regulations to favor foreigners. She revealed that in the past, one had to be a bona fide ship owner to bareboat charter a certain number of ships but at present one need only to increase his capitalization to bareboat charter a ship. Senator Osmeiia agreed that capital contrihution, unless it is deposited with MARINA in the form of a bond, is an empty requirement because it can easily be withdrawn after registration with SEC. Relative thereto, Senator Madrigal informed the Body that the minimum paid-up capital is P7 million for bareboat chartering two vessels; an additional P1 million for 6,000 gross tons; P2 million for 6,000 to 25,000 gross tons; and P2.5 million for 25,000 gross tons and above. Replying to further queries, Senator Madrigal explained that deadweight ton is the difference between the light tonnage and the load line, while the gross ton is the registered tonnage which is the common measure for internal volume; light tonnage is the scrap value of the vessel while a ships cargo capacity is less than its total deadweight ton. She said that only the Philippines uses gross tonnage instead of deadweight tonnage as a measuring standard.

INTERPELLATION OF SENATOR PIMENTEL Senator Pimentel expressed appreciation for Senator Madrigals exposition on the Guimaras oil spill as it clarified many things. In reply to his queries, Senator Madrigal disclosed that according to MARINA regulations, Solar I should be manned by a minimum of 16 people but there were actually 18 crew members and two surveyors on board. She confirmed that the two extra passengers were Petron employees who were assigned to prevent the pilferage of the oil cargo. Moreover, she agreed that the discrepancy in the report whether the surveyors survived or not should he investigated as their testimony would be relevant in the light of the findings that the vessel bore signs of pilferage. She added that a relevant question would be what the surveyors were doing in Guimaras when there was no loading and unloading hut barges were reportedly seen alongside the vessel before it sank. She affirmed the observation that there was more than meets the eye about the accident but the SBMI could not dig deeper into it given its very limited powers to investigate. She charged that from day one, there was a concerted effort to mislead the public with information that have no hearing on the sinking of the ship. On her thesis that the ship no longer contained oil when it sank, Senator Madrigal stated that most ship captains and tanker experts concurred with the findings of the Japanese expert that it was impossible for the ship to have sunk if it still had oil as the oils buoyancy would have compensated for the waters weight. She said that the ship would have merely listed had there been oil in the other airtight compartments. On the matter of the cleanup, she pointed out that the emergency effort did not suffice, especially because the government acted 11 days after the accident and there was a cover-up that misled everyone, including the Senate, into thinking that so much money was needed to salvage the vessel and recover oil when in truth all the oil is gone. Moreover, she deplored the fact that there was no lead agency in the cleanup and the people, in their zeal to pressure the mangroves, destroyed them. On the capacity of some bacterial agents, through bioremediation, to cleanse the oil slick, Senator Madrigal said that bacterial agents are more expensive than chemical dispersants, but t h e s e N



would clean up the oil instead of merely dispersing if and letting it sit in the bottom of the sea or on the coral reef. Adverting to Section 6 of Republic Act No. 9295 (Domestic Shipping Development Act of 2004), Senator Pimentel pointed out that the law provides that, Wo foreign vessels shall be allowed to transport passengers or cargo between ports or places within the Philippine territorial waters, except upon the grant of special permit by the MARINA when no domestic vessels are available or suitable to provide the needed shipping service and public interest warrants the same.

In reply to a query, Senator Madrigal confirmed that the president of Sunshine Maritime admitted during the last hearing that they were merely disponent owners or owners in name only because the ship, which was of Panamanian registry, was reflagged to the Philippines.
Senator Pimentel agreed to the observation that the existence of so many government agencies having to do with maritime administration is causing a lot of confusion that might have led to the nonimplementation of the rules that should not only safeguard but also enhance the maritime industry. With so many agencies poking their fingers into the maritime industry, he supposed that the locals who are involved in the industry do not find any encouragement to venture their capital to revive the shipping industry. Senator Madrigal agreed, saying that a few shipping companies favored by the administration have expanded by leaps and bounds since 2001, while other companies that have been in the Philippines for a long time had left because of MARINAS blatant favoritism and unequal application of maritime safety laws and regulations. Senator Pimentel underscored the need for a clear definition of the functions of the agencies so that they could be placed under one umbrella which shall have supervisory functions. Senator Madrigal agreed, stating that according to the Philippine Coast Guard reports, vessels apprehended for incomplete certificates, reasoned out that they were under the authority of MARINA which issued their certificates. Senator Pimentel remarked that this gave some of the agencies the excuse to pass the buck and point the finger at other agencies. He suggested that Senator Madrigal make the appropriate proposal to rationalize the functions of the agencies. Senator Madrigal asserted that the main problem is not the absence of laws on safety standards but their enforcement. Senator Pimentel agreed, as he cited the P1-billion fund to augment the drive against corruption which is not the solution to cleaning up the government, the solution being the proper implementation of the law. He reiterated the need to be clear as to which agency has the responsibility of enforcing maritime laws so that people would know which agency is to be blamed if there is a discrepancy between the nature of their duties and the way they are discharging their duties. In view of the need to ratify certain international covenants relative to the Philippine shipping industry,$

In reply to the point raised by Senator Pimentel, Senator Madrigal said that there are many bona fide Philippine ship owners who own tankers capable of transporting Petron products. She expressed the need to revisit R.A. 9295 in light of the issues that have cropped up as a result of the accident. Recalling that MARINA laws were much more stringent when she was still working full-time in the shipping industry, she said that she was surprised how easy it has become to reinterpret these with so many loopholes even in their implementation. She lamented how MARINA, which supposedly would contribute so much to Philippine maritime progress, has encouraged the crooks to come to the Philippines while discouraging the bona fide ship owners from remaining.
Senator Pimentel likewise noted that the Cargo Ship Safety Construction Certificate of Solar I had already expired on June 7, 2006. Senator Madrigal confirmed that it was not simply negligence but a criminal act on the part of MARINA to allow the vessel to sail. Senator Pimentel said that this is why he could not understand how the SBMI would consider the circumstances leading to the sinking of the vessel as mere lapses. He pointed out that causing any undue injury to any private party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of ones official administrative or judicial function through manifest partiality, evident bad faith or gross inexcusable negligence is a violation of the Anti-Graft Law. Senator Madrigal agreed, saying that she likewise questioned the ownership of Solar I to determine whether there was violation of the Anti-Dummy Law, in view of the fact that Japanese nationals have been given many privileges in the Philippines,


40 1

Senator Pimentel requested the Senate leadership to clarify with Senator Defensor Santiago, chair of the Committee on Foreign Relations, bow long she intends to be excused from the sessions so that remedial measures could be provided. He expressed the need for Congress to push for, facilitate, and fast-track the development of the maritime industry, adding that the Committee on Foreign Relations should act on pending international conventions as soon as possible. Senator Madrigal stated that some maritime experts believed that President Macapagal Arroyos suggestion for the establishment of a highway for ships would not be workable as ship navigation is dependent on weather conditions. She said that with respect to maritime conventions, the Senate has ratified only 14 out of the 52 conventions. Senator Pimentel expressed hope that the Committee on Environment and Natural Resources could come out with a definitive report on the Guimaras oil spill at the soonest possible time. SUSPENSION OF SESSION With the permission of the Body, the Chair suspended the session.

Bill No. 1491 is a second referral, and those of House Bill No. 3409 and Senate Bill Nos. 2452 and 2453 are third referrals. REFERENCE OF BUSINESS The Secretary of the Senate read tbe following matters and the Chair made the corresponding referrals: BILL ON FIRST READING Senate Bill No. 2468, entitled AN A C T FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, OTHERWISE KNOWN AS THE PROVINCIAL WATER UTILITIES ACT, AS AMENDED, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES


It was 5t58 p.m.

RESUMPTION OF SESSION At 5:59 pm., the session was resumed. REFERRAL OF SPEECH Upon motion of Senator Pangilinan, there being no objection, the Chair referred Senator Madrigals privilege speech and the interpellations thereon to the Committee on Environment and Natural Resources as the primary committee, and to the Committee on Public Services as the secondary committee. APPROVAL OF THE JOURNAL AS CORRECTED Upon motion of Senator Pangilinan, there being no objection, the Body dispensed with the reading of the Journal of Session No. 25 and considered it approved, subject to the correctiou made by Senator Pangilinan on page 387, under the caption ADDITIONAL REFERRALS, that the referral of Senate

To the Committee8 on Trade and Commerce; and Economic Affairs




GE BACTERIAL BLIGHT RESISTANT RICE, A GENETICALLY MODIFIED ORGANISM (GMO), WITH THE END IN VIEW OF ENACTING APPROPRIATE LEGISLATION Introduced by Senator M.A. Madrigal To the Committees on Agriculture and Food; and Health and Demography SECOND ADDITIONAL REFERENCE OF BUSINESS COMMITTEE REPORT Committee Report No. 105, submitted by the Committee on Local Government, on House Bill No. 5500, introduced by Representative Sandoval, entitled AN ACT CONVERTING THE MUNICIPALITY OF NAVOTAS INTO A HIGHLY URBANIZED CITY TO BE KNOWN AS THE CITY OF NAVOTAS, recommending its approval with amendments. Sponsor: Senator Lim To the Calendar for Ordinary Business THIRD ADDITIONAL REFERENCE OF BUSINESS

COMMITTEE REPORT NO. 58 ON SENATE BILL NO. 2231 (Continuation) Upon motion of Senator Pangilinan, there being
no objection, the Body resumed consideration, on

Second Reading, of Senate Bill No. 223 1 (Committee Report No. 58), entitled AN ACT AMENDING REPUBLIC ACT NO. 8436, ENTITLED AN ACT AUTHORIZING THE COMMISSION ON ELECTIONS T O USE AN AUTOMATED ELECTION SYSTEM IN THE MAY 11, 1998 NATIONAL OR LOCAL ELECTIONS AND IN SUBSEQUENT NATIONAL AND LOCAL ELECTORAL EXERCISES, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES. Senator Pangilinan stated that the parliamentary status was still the period of individual amendments. Thereupon, the Chair recognized Senator Gordon, Sponsor of the measure, and Senator Osmelia for his amendments. SUSPENSION OF SESSION Upon motion of Senator Pangilinan, the session was suspended.

It was 6:04 p.m.

RESUMPTION OF SESSION At 6:06 p.m., the session was resumed. INQUIRIES OF SENATOR OSMERA Asked by Senator Osmeila whether he has any objection to Senator Roxas amendment that the oversight committee be empowered to evaluate the performance of automation technologies implemented on test basis for the purpose of determining whether any or all of them should be implemented in subsequent elections, Senator Gordon replied that he has no problem with the power of the oversight committee to make recommendations, but he rejected the amendment which requires congressional approval, through a joint resolution, for the further test implementation of an AES technology, on the ground that






this would not be allowed by law, pointing out that in Macalintal vs. Comelec, the Supreme Court held that Congress may not confer upon itself the authority to approve or disapprove the countries wherein voting by mail shall be allowed, as determined by the Comelec pursuant to the conditions provided for in Section 17.1 of R.A. No. 9189. Otherwise, Congress would overstep the bounds of its constitutional mandate and intrude into the independence of the Comelec. He reasoned that he could not accept the amendment of Senator Roxas because it goes to the very heart of the bill which is the automation of the election system; Congress cannot approve a system after its first implementation, then start at the very beginuing to amend it; and the law cannot be amended by a joint resolution for obvious reasons. Moreover, Senator Gordon pointed out that the oversight committee, together with the advisory council, could determine whether the Comelec has done well in implementing the law; and it could recommend amendments to Congress if it believes that the system has not performed as expected.

of Representatives and they are often used when Congress needs to pass legislation to solve limited or temporary problems like providing continuing appropriations for government programs, to address a single important issue, to propose amendments to the Constitution, and to establish commemorative days. However, he pointed out that in Macalintal vs. Comelec, the Supreme Court ruled that, Joint resolutions, although frequently used in the United States, are unheard of in the Philippines ...whether a joint resolution can have the force and effect of a law would depend on whether the organic act would allow it as a mode of enacting legislation or whether it complies with the stricture laid down by the Constitution for the making of a law concerning a particular subject. Senator Osmefia said that he is not qualified to argue the constitutionality or legality of the amendment but he recalled that for the past 11 years, the Senate has adopted resolutions which have the force and effect of law. SUSPENSION OF SESSION Upon motion of Senator Pangilinan, the session was suspended.

Senator Osmefia said that the first part of the amendment that the oversight committee shall make any recommendation it wants to Congress is not objectionable but the second part, which may approve the same by a joint resolution, is unacceptable to Senator Gordon. Senator Gordon expressed the view that a joint resolution would not suffice to amend a law because the Constitution clearly speaks of bills that go through the legislative process of debate, amendments, approval on Second and Third Readings, conference committee, and approval of the conference committee reports by both Houses of Congress. He believed that the joint resolution would be struck down by the Supreme Court as unconstitutional because Sections 26 and 27 of Article VI of the Constitution clearly speak of a bill and not a resolution which does not have the effect of a statute. Senator Osmefia asked Senator Pimentel or Senator Enrile to shed light on the issue given the fact that the Senate has been debating on House Joint Resolution No. 1 without questioning its constitutionality. Senator Gordon stated that in the U.S., joint resolutions may originate from the Senate or House

It was 6:21 p.m.

RESUMPTION OF SESSION At 8:Ol p.m., the session was resumed. Upon resumption, Senator Gordon stated that Senator Roxas would be out of the country the following week and Senator Osmefia has agreed to speak on his behalf. He appealed to the Body to make a commitment to finish the bill by Wednesday as there are other measures to discuss. Senator Roxas expressed hope that he and Senator Gordon would be willing to accommodate each others proposals. SUSPENSION OF CONSIDERATION OF SENATE BILL NO. 2231
Upon motion of Senator Pangilinan, there being no objection, the Body suspended consideration of



Upon motion of Senator Pangilinan, there being no objection, the Chair declared the session adjourned until three oclock in the afternoon of Monday, September 25, 2006.

I hereby certify to the correctness of the foregoing.

It was 8:OS p.m.


011 September

25, 2006