By Elyssa Lopez
Philippine Center for Investigative Journalism
It only took a day after President Ferdinand “Bongbong” Marcos Jr. was proclaimed winner by Congress in the May 2022 elections for his camp to name the Cabinet members who will compose the administration’s economic team. By the time the president was inaugurated, the public had more or less a picture of what his economic policy would be.
It’s a stark contrast to how the Marcos administration handled the Cabinet posts crucial to overseeing the two crises affecting the daily lives of Filipinos and will affect the lives of generations to come: the climate emergency and power insufficiency.
The appointees who will lead the Department of Environment and Natural Resources (DENR) and the Department of Energy (DOE), Antonia “Toni” Yulo-Loyzaga, a long-time academic, and Raphael “Popo” Lotilla, a known name in the energy industry, respectively, were named two weeks after the president took over Malacañang.
“When Marcos Jr. came into power, the economy was really prioritized, and that was seen in their choice of cabinet members. They were the first ones [to be named]. They are now already following a plan,” Greenpeace Philippines director Lea Guerrero said. “But for the climate crisis we don’t see anything like that [yet]… which is a pity.”
Stakeholders agree the chiefs of the energy and environment departments are challenged to craft and implement policies that will prepare the country for the decade most critical to climate change action. In an April 2022 report, the Intergovernmental Panel on Climate Change (IPCC) emphasized that governments and industries must act “now or never” to ensure global temperatures do not rise above 1.5 degrees celsius. This requires “major transitions in the energy sector,” which ultimately means the abandonment of fossil fuels.
The Marcos administration has yet to lay down its energy or environmental policy.
During the campaign period, Marcos did not share concrete plans about the two sectors, only broad pronouncements on the possibility of tapping into nuclear energy to ensure power sufficiency. In his inaugural speech, the president also said the country would “do its part” in cleaning up due to its contribution to plastic pollution, but did not mention specific plans. His appointments to the environment and energy departments provide the first glimpse of his policies in both sectors.
For Greenpeace, the appointment of Loyzaga leads to “high expectations” that the DENR would have a more visible role in climate action, especially with the new secretary’s previous work in the advocacy sector. Guerrero said that during the Duterte administration, the DENR operated like “business as usual,” and did not make major changes in policies despite the climate crisis.
“What we need is an agency in the government that is willing to steer the conversation within the administration… on climate action,” Guerrero said. “Climate action is a multi-agency effort, and we need to see the DENR pushing for it.”
In her first speech as environment secretary, Loyzaga said she wanted leadership in the department that would work “across silos” invested in a “scientific risk-based approach,” and ultimately, one that would address the impacts of climate change. Civil society groups welcomed her remarks.
“We need to combat the climate emergency through practical climate change adaptation measures, the use of science to approach national scale as well as local scale impacts of climate change,” Loyzaga said on Thursday, July 21, during the DENR turnover ceremony. “We live in a multi-hazard environment, not just from natural hazards, but from industrial, as well as what we call natural technological hazards.”
Such pronouncements are expected from Loyzaga given her background in research and science. She served as director of the Manila Observatory, a non-profit research institution based at the Ateneo de Manila University, for nine years. The Observatory was established by the Jesuits in the 19th century and had been researching on the country’s weather, vulnerability to climate change, and disaster resilience. Loyzaga herself wrote a number of journal articles and books on these topics.
She led various research projects as Observatory director, including the Coastal Cities at Risk (CCaR), which the National Geographic described as an “international project aimed at building capacity for climate change adaptation in five coastal megacities.”
“She was director during Typhoon Haiyan, so… we must realize now she brings in this deep and probably a very personal understanding on what it means to respond to these disasters brought about by climate change, and also how we can prevent such things from happening again,” Jaybee Garganera, national coordinator of Alyansa Tigil Mina, said in an interview with the ABS-CBN News Channel, days after Loyzaga’s appointment was announced.
Reminiscent of Gina appointment
To be sure, the Duterte administration had a DENR that acted as a staunch watchdog and critic of the mining industry, when the late Regina “Gina” Lopez was secretary. Her short-lived stint in the department saw an unprecedented audit on the country’s biggest mining companies that led to temporary suspensions and even closures. But the big moves she made in terms of environmental protection stopped as soon as she was thumbed down by the Commission on Appointments.
Former general Roy Cimatu, who replaced Lopez in 2017, was hands-off in the mining industry. Instead, he focused on waste management. There were cleanups of Boracay Island and Manila Bay, a portion of which was covered by artificial white sand and is now known as the “Dolomite beach,” which has been criticized to be a threat to marine life. He also adopted controversial stances on waste treatment as he institutionalized co-processing and waste-to-energy projects. Both practices are frowned upon by activists and labeled as “false solutions” to the waste problem.
Some stakeholders floated the idea that Loyzaga’s appointment was reminiscent of former President Duterte’s move to install Lopez in the DENR, as both came from the advocacy sector. Back then, Lopez’s appointment was also lauded by environmentalists and activists.
“I think the challenge here is how Secretary Loyzaga will strike a balance…, especially in the context of the climate emergency, and reversal of the policies on the mining industry,” said Gerry Arances, executive director of local thinktank Center for Energy, Ecology, and Development (CEED).
In 2021, the Duterte administration lifted the moratorium on new mining agreements and reversed Lopez’s administrative order that banned open-pit mining. At that time, the government said the move would help the country’s economic recovery, as it incurred more pandemic-related debts.
In a press briefing in June, President Marcos hinted at the possibility of tapping the extractive industry for more government revenues as it looks at exporting “partially processed ore.” There is only one nickel ore processing plant in the country and it directly exports to its partner in Japan. The local nickel mining industry has been planning to develop a nickel ore processing market, as demand for the material grows with the rise of electric cars. Nickel mining has led to deforestation of some parts of Palawan, according to a PCIJ report.
For Ian Rivera, national coordinator of the Philippine Movement for Climate Justice, the main hurdle for the new environment secretary is “challenging big businesses.”
“The problem [we have now] is the overarching policies on the liberalized economy, the policies of the utilization of our natural resources are very, very liberalized. [The question is, is] our DENR secretary up to the task of challenging the interests of these big businesses?” Rivera said.
In her speech at the environment department, Loyzaga also mentioned the need to “protect indigenous species,” and in the same vein mentioned the possibility of “harness[ing]” these resources for the “benefit” of the country. The statement raises questions on where she stands on the destructive nature of mining.
Loyzaga, after all, is no stranger in the private sector. Her most recent role was as president of the National Resilience Council (NRC). Based on its website, the council serves as a platform that connects local government units, academics, and the private sector in pursuing disaster resilience projects. It conducts leadership programs and courses on disaster preparedness for local government leaders. The NRC counts SM Prime Holdings, San Miguel Corp., and the Carlos P. Romulo Foundation as funding partners. Hans Sy, chairman of SM Prime Holdings, serves as co-chair of the private sector in the NRC.
Garganera said Loyzaga has one advantage that the late Gina Lopez didn’t have: close ties with the first family. “If the rumors are true, that she was supported and endorsed by the first lady, then I think that’s a powerful source of support,” he said in a televised interview with ABS-CBN News. “I think this also shows… how the politics of the Marcos family can affect this nomination.”
Adoption of renewable energy
For Greenpeace, Loyzaga should begin her work by adopting the recommendations of the landmark report of the Commission on Human Rights (CHR) on the world’s first National Inquiry on Climate Change, published in May.
The report declared that climate change is a human rights issue. Recommendations included penalizing carbon majors – big oil and gas producers – for the harm they had caused to communities and the environment, compensating victims, and providing legal protection to environmental defenders and climate activists.
The main recommendation of the CHR however is the complete phase-out of coal power. “Apart from not promoting fossil fuels, States should also discourage dependence on them,” the report said.
The work of the DENR and DOE will be closely intertwined during the Marcos Jr. administration, as the new energy secretary is also expected to initiate the shift to renewable energy, not just for environmental reasons, but for economic ones as well.
“We urge him (Energy Secretary Raphael Lotilla) to make the coal moratorium permanent to affirm the country’s commitment to clean energy as envisioned in our Nationally Determined Contribution (NDC) under the Paris Agreement,” said lawyer Pedro Maniego Jr., senior policy advisor of the Institute for Climate and Sustainable Cities (ICSC).
“As evidenced by decades of insufficient, expensive and unreliable power supply and compounded by the impacts of record fossil fuel prices recently, our overdependence on fossil fuel plants, particularly Coal Fired Power Plants (CFPPs), have proved to be economically disastrous,” he said.
The DOE is targeting renewable energy to account for 35% of the country’s power generation mix by 2030, and 50% by 2040. Environmentalists and civil society groups have already criticized the targets for being “not ambitious.” The same groups are also wary that Lotilla’s recent affiliations in the energy industry may influence his new role and renewable energy policy.
Days after Lotilla was announced as the administration’s nominee for energy secretary, Aboitiz Power Corp. and ACE Exenor Inc. disclosed that Lotilla had resigned as independent director of their respective firms. Aboitiz Power Corp. operates some of the most critical coal-fired power plants in the Luzon grid. Meanwhile, Exenor is the oil-and-gas exploration unit of the Ayala Group.
The private sector has already welcomed Lotilla’s appointment.
“Our main misgiving is that the choice for energy secretary is from industry. Even if he was cleared [by the Department of Justice], for us, it’s more on a technicality than on the spirit of the DOE law. And that law clearly tried to prevent the revolving door between industry and government,” Guerrero of Greenpeace said.
Republic Act 7638, the law that created the DOE, states: “No officer, external auditor, accountant, or legal counsel of any private company or enterprises primarily engaged in the energy industry shall be eligible for appointment as secretary within two years from his retirement, resignation, or separation.”
Mere hours after Lotilla was announced by Malacañang as its choice for energy secretary, the press secretary backtracked and said Lotilla was still a nominee. The justice department later cleared the nomination. “An independent director is not an officer based on the nature, duties, functions and responsibilities vis-à-vis the corporation he serves. It is sui generis in character,” the DOJ said in a statement.
Lawyer Eirene Aguila, co-convenor of the Right to Know Right Now! coalition, echoed the opinion of the justice department, especially as independent directors, under the guidelines of Securities and Exchange Commission, are defined as “free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment.”
“An independent director doesn’t participate in the day-to-day operations [of a company]. And if you analyze that prohibition under the DOE Act, it would seem that the prohibition strikes on those who are involved in the day-to-day [operations]or those who have material interest in the corporation. In my view, the fact that he [Lotilla] is an independent director negates that,” Aguila said.
Deep history in energy sector
Lotilla is no stranger to the DOE. From March 2005 to July 2007, he served as energy secretary under the Arroyo administration. He was also deputy director general of the National Economic Development Authority during the Ramos and Estrada administrations.
As energy secretary during the Arroyo administration, Lotilla oversaw the creation and development of the renewable energy (RE) act. The RE Law was eventually passed in 2008.
“We never saw him as someone who blocked the renewable energy law…” Arances said. “He was more criticized on the country’s energy efficiency at that time.”
In his more than two-year stint as energy secretary, Lotilla saw the implementation of the controversial Electric Power Industry Reform Act (EPIRA), passed in 2001. The law was seen as the government’s solution to the ballooning debts of the National Power Corp. (NPC), which, at the time the law was passed, stood at P851 billion. EPIRA created the Power Sector Assets and Liabilities Management (PSALM) Corp., a government-controlled corporation meant to sell the assets of NPC. Before serving as energy secretary in 2005, Lotilla was president of PSALM.
The EPIRA law envisioned the deregulation of the power industry through the privatization of government assets that would open the industry to retail competition. “But he [Lotilla] didn’t lift a finger on how the EPIRA was implemented. [And] there were many violations on the EPIRA [implementation],” Rivera of PMCJ said.
By the time Lotilla left his post as Energy Secretary, the NPC debt had reached P1.2 trillion. A 2007 PCIJ report found that power generation was concentrated to only four private companies, aside from the government. The report quoted Lotilla attributing the challenges in the implementation of EPIRA to “birth pangs.”
In the same vein, Lotilla called for the need to strengthen the Energy Regulatory Commission to “help minimize the arbitrary exercises of discretionary power” especially as it was hounded by controversy at that time.
For some in civil society, Lotilla’s appointment is still a welcome development, given his extensive experience in the sector. “Lotilla’s nomination as the next secretary of the DOE is a good choice, as he is competent to lead the industry and noted for his integrity,” Maniego of ICSC said.
Aguila said Lotilla’s role as independent director meant that he knew the value of “talking to experts” and “engaging with shareholders.”
“As independent director, your stake is to shareholders… you are there to ensure the board functions according to good governance… hopefully, Mr. Lotilla brings that independent mindset as secretary as well,” she added.
Lotilla was also once nominated to be the next chief justice but turned down the offer, and emphasized that the tradition of seniority must be upheld in the highest court.
Arances of CEED echoed Maniego’s sentiments, but remained “cautiously optimistic.”
“We have concerns on his linkages with the industry, and it’s a shadow lurking [at] Mr. Lotilla’s appointment,” Arances said. “And that is the challenge for him: to belie those concerns.” –PCIJ, July 2022