Former Environment and Natural Resources Secretary Michael Defensor's ties to two mining companies that recently bagged a multimillion-dollar exploration deal with a Chinese firm was slammed by administration critics and activist groups Friday, questioning whether he used his government connections in securing the contract.
Black and White Movement (BWM), a critic of the Arroyo administration, said the government has no "delicadeza" (sense of propriety) when it gave the go-signal for the signing of the deal between China's Jiangxi Rare Earth and Rare Metals Tungsten Group and Filipino companies NiHAO Mineral Resources Inc. and Geograce Resources Philippines.
Defensor's links to NiHAO and Geograce were revealed during the signing Thursday of the $150-million joint venture agreement for mineral exploration in Botolan, Zambales between the two companies and Jiangxi.
Defensor is chairman of NiHAO and a director in Geograce.
President Arroyo witnessed the signing of the deal in Chengdu in Sichuan province.
BWM spokesman Vicente Romano said the deal also showed the lack of propriety on the part of Rene Puno, brother of Interior Secretary Ronaldo Puno, who also has links to the two firms.
Romano said that even if Defensor would argue that he has no government post at the moment, he already knew that the signing would take place long before. The BWM spokesman added that Defensor should not have accepted the post of task force chief to oversee the opening of Ninoy Aquino International Airport's Terminal 3.
After handling the task force, Defensor is now overseeing the Northrail project for the government.
Romano also said that the deal is also a conflict of interest, and he suspectd that ithe deal is also part of the government's investments deal with the Chinese government like Northrail, Southrail, and the NBN projects.
He also lamented the fact that foreigners would be exploiting the country's natural resources, and that he would not be surprised if there is also a sort of "tongpats" or share in the earnings in the deal.
Nothing wrong if no gov't post
In response, Defensor said there is nothing wrong with the mining deals since he no longer has any government position. He recently quit as chief of the task force that worked to open the long-mothballed NAIA Terminal 3.
"For the record, you can still have a business when you're in government as long as it's not directly connected, or you're not in the Cabinet," he said.
"Whoever is trying to put a spin on this story is doing a great injustice, not to me but to the innocent shareholders and the country which will benefit from this," Defensor said.
The former environment chief said negotiations with the Chinese partners "happened even before the board of directors elected me as chairman."
Escudero: Deal done in 'bad taste'
Meanwhile, opposition lawmaker Sen. Francis Escudero said that even if the deal looks legal, the deal would appear to be done in bad taste in the eyes of Filipino citizens.
Escudero challenged the people and companies to publicly present the details of the planning process in the deal. He singled out Defensor, whom he challenged to disclose if the deal was ironed out during his term as environment chief or whether contacts at the department were used to help the deal progress.
At present, a proposal in the Senate regarding amendments to the Anti-Graft and Code of Ethical Standards of Public Officials is pending. The Senate is planning to include in the changes specific rules on who is covered by the prohibition of entering deals with the government.
According to the law, only the families and relatives of the president, vice-president and other high-ranking elected officials up to the fourth degree of consanguinity are included in the rule, and relatives of cabinet members are not yet included.
Environment group: Deal 'suspect'
Meanwhile, militant environmental group Kalikasan-People's Network for the Environment (Kalikasan-PNE) said that the mining deal "stinks to the high heavens," and that it has a "glaring anomaly" in it.
"It is baffling how a small mining company and without track record in the mining industry like Geograce could get multi-million mining deals with big foreign mining companies and how these mining companies of Mike Defensor were given hundreds of thousands of hectares of mineral lands by the Arroyo government," Clemente Bautista, national coordinator of Kalikasan-PNE, said.
The group said Geograce has been in the red, incurring a net loss of P17.18 million during the first quarter of 2008, and it is also questioned the "mediocre" company's "lucrative" mining deals.
"It seems that the present government is selling the country's patrimony to foreign companies but not without ensuring that local allies also get a huge share of the plunder," Bautista said.
The group called on Congress to investigate the background and operation of NiHAO and Geograce.
"The presence of high government officials and their relatives in these mining transactions could be a sign that the Arroyo administration and its cronies are making profit out of the country's mineral resources without being mindful if these projects would be beneficial to community or not," Bautista added.
Palace defends deal
Malacañang, however, defended the deal, saying that the deals are "private business investment ventures" on the part of Defensor.
"Should we not see the other side of the picture? That's a negative view that raises speculations na napaboran si Mike Defensor. But these are private business investment ventures and whether it's Mike Defensor who is the owner or Jess Duerza you should welcome it," Press Secretary Jesus Dureza told reporters.
He also said the deal's critics should be thankful because these deals would bring in investments and jobs for Filipinos.
He added there is nothing wrong with these deals as long as there was no influence pedding in securing these deals. -- With reports from Maricar Bautista and RG Cruz, ABS-CBN News