WHY FINE US? FLO Water cites force majeure in latest tiff with MIWD

By: Emme Rose Santiagudo

FLO Water Resources cited “force majeure” (unforeseen or superior force) as the reason why it should not be penalized for delivering “discolored water” to Metro Iloilo Water District (MIWD).

Flo Water, which delivers 15,000 cubic meters daily (cmd) to MIWD, disconnected its supply on June 5, 2019 to protest the P1.5-million fine imposed by the MIWD for failure to pass the color test which is part of the water quality parameters in their bulk water supply contract (BWSC).

MIWD slapped a P1,589,452.34 fine on FLO Water for delivering dis-colored water from April 7-16, 2019.

The discolored water was caused by the “molasses spill” incident at the Universal Robina-Sugar and Renewable Division in San Enrique, Iloilo which contaminated Jalaur River, the main water source of FLO Water’s treatment plant at Bungco, Pototan, Iloilo.

According to MIWD legal counsel Roy Villa, water color, as indicated by the physicochemical analysis, is considered one of the water quality parameters in their contract.

But even before the disconnection happened, FLO Water has been claiming that they should be exempted from the penalties imposed by MIWD due to the eventuality of “force majeure”.

“Force Majeure” under Article 10 of the BWSC refers to “any event or circumstance or combination thereof that wholly or partially prevents or unavoidable delays any party in the performance of its obligation under the agreement, but only to the extent that such events and circumstances are not within reasonable control, directly or indirectly, of the affected party and could have not been avoided even if the affected party had taken reasonable care”.

Citing the concept of “force majeure” in a letter to MIWD dated April 29, 2019, FLO Water Operations Manager Joseph Dalmacio requested the water district to reconsider the monetary fine since the discolored water was caused by irresponsible waste disposal into the river and the occurrence of the El Niño phenomenon.

FLO Water also argued that “various plants and facilities” such as Universal Robina, Iloilo Rehabilitation Center, the Bureau of Fisheries and Aquatic Resources and households spew wastewater directly into the Jalaur River.

Moreover, the occurrence of dry spell due to the El Niño phenomenon resulted in a decrease in the river’s water level, FLO Water said.

“The result of this is that the river becomes highly concentrated (with waste) which is now the biggest hurdle of the water treatment. The El Niño phenomenon this 2019 alongside the irresponsible disposal of waste to the river by Universal Robina, among the other contaminators, had confronted problems in treating the river water,” the Florete-led firm added.

FLO Water said the failure to meet the required color standards “was not within our complete control because the condition of the river at that time and even up to this day is largely affected by the El Niño and by the parties that dispose their waste to the river.”

VIOLATION

On May 20, 2019, Flo Water’s legal counsel, ACCRA Law, issued a statement on the unilateral and unjustified deduction of P1.5 million from the April 2019 billing of its client FLO Water which is a violation of the BWSC.

“FLO Water is entitled to claim an exemption from damages and penalties arising from its failure to pass the color test as the same are attributable to the waste disposal into the water treatment plant’s water which coincided with the El Niño. Had it not been for the El Niño, water levels would have been higher and there would be no difficulty in passing the color test. FLO Water’s product water passed all other categories of the water quality standard, including the bacteriological test. Hence, the water delivered by Flo Water was safe for human consumption,” the law firm said.

ACCRA Law also emphasized that MIWD was duly informed of the product water quality hence, FLO Water is entitled to the payment of the amount of water delivered.

“MIWD cannot pretend that it was not informed of the color quality of the water delivered during the contested period. In fact, MIWD’s representatives instructed Flo Water to exert extraordinary efforts to correct the color problem of the water delivered during the contested period,” they said.

Moreover, Flo Water argued that they already delivered the required monthly volume of bulk water for the month of April 2019, therefore, the ownership thereof was transferred to MIWD as soon as it passed thru the point of delivery as stated under the BWSC.

“Despite of its knowledge of the foregoing water quality issues, MIWD did not stop FLO Water from delivering the bulk water required under the BWSC. All in all, any unauthorized and unilateral deduction from the monthly billing for April 2019, is irregular, improper and highly unjust. MIWD’s unilateral withholding of payment due on the contested period should have not been made because of the Force Majeure Clause in the BWSC,” they emphasized.

 

WRONG UNDERSTANDING?

But, Villa stressed in previous interviews that they are just complying with the contract.

He added that they cannot just exempt FLO Water from the penalty because they will again face another notice of disallowance by the Commission on Audit (COA) just like before when a similar incident happened and they let FLO Water off the hook.

Villa said FLO Water cannot cite force majeure to skirt its liabilities and responsibilities.

“Kon maghambal kita force majeure, indi ibig sabihin na once may El Niño, automatic force majeure na dayon. For purposes of the application of the force majeure principle, dapat ang isa ka bagay indi mo gid ma-avoid and ma-prevent. In their case, maskin may natural phenomenon but ma-avoid mo man lang ang isa ka bagay nga ma-cause damage, indi mo na ya ma-question because of force majeure. A question of force majeure is a question of fact,” Villa stressed.