Writing in the Dark

(I’m uploading this in the middle of a storm, when I have no electricity and no DSL wifi at home. I’m using Globe’s extremely-inefficient mobile data. So I apologize for this bring abbreviated, no graphics, etc.)**

The BENECO members who plan to show up in force at the first of three AGMA dates this Saturday, June 3, have to very focused on what they want to accomplish.

I think it would be futile to expect that the AGMA would be an occasion to “express their strong opinion” about the wrong way that BENECO’s affairs are going, or even to denounce persons they think are responsible for ruining their cooperative.

No one, least of all the Interim Board appointed by NEA, is interested in their opinion. The enforcers of NEA’s “step-in rights” to interfere with BENECO’ operations have their marching orders, and those are not subject to alteration by the Members’ grievances and sentiments.

Instead, the Members should assert THEIR own agenda at the AGMA, in as much as the Interim Board did not accept any suggestions from them anyway—despite that pretentious announcement that anybody wanting to add any item to the agenda should just submit those matters to the “Board Secretary.” Perhaps you missed the subtext of that: “joke only!”

Here’s a sampling of what I think should be pushed by the Members at the AGMA:

THE INTERIM BOARD SHOULD FAST-TRACK THE “WINDING UP” ACTIVITIES OF NEA IN ITS EXERCISE OF “STEP-IN” RIGHTS OVER BENECO.

The law does not contemplate the intervention of NEA in the operations of an “ailing” cooperative to be an indefinite open-ended process. It gave NEA a strict non-extendible period of 90 days within which to restore management and control of an EC to its Members through their democratically-elected Board of Directors. The “Task Force BENECO” a.k.a. Interim Board with its useless “accessory” secretary, cannot stay there as long as they like.

The reason for this is simple: NEA is UNQUALIFIED to run a power retail and distribution system. This is according to the EPIRA Law itself, which divided the power industry into four sectors: GENERATION, TRANSMISSION, DISTRIBUTION and SUPPLY—and NEA is not an active player in any of these sectors.

The role given to NEA by the EPIRA Law is that of a procurement guarantor for small electric cooperatives buying their supply from the Wholesale Electricity Spot Market (WESM). That is essentially a banker’s role and for that purpose EPIRA raised NEA’s capital stock to P15-BILLION. It’s a moneybag institution, that’s all.

But in practical terms, NEA knows nothing about running an electric cooperative. It has no capability to undertake engineering tasks, such as line maintenance and repair, and is clueless about billing and collection. Don’t be impressed by those rare instances when NEA sends “emergency teams” to calamity-stricken areas to help restore power service. Whenever NEA does that, it just BORROWS technical crews from the adjacent electric cooperatives. NEA may have a well-stocked hardware yard bristling with poles, transformers and giant coils of cable. But all it knows to do is ship these to electric cooperatives, but it doesn’t maintain any capability to install these.

So keeping BENECO under the control of people with no clue how to run an EC is unsound, inefficient and ridiculous.

THERE SHOULD BE A MEMBERS’ INDEPENDENT AUDIT OF BENECO’S BOOKS.

I suspect that someone will present a heavily-redacted Financial Statement of BENECO at the AGMA, one that doesn’t show how much BENECO owes to its power suppliers, and the status of repayment amortizations on all its outstanding loans. It might show an uptrend in billings, which anyone can just presume anyway given the development and construction frenzy happening in Baguio today.

Some sort of annual budget might also be shown, but one that will conveniently omit any details about contingency spendings racked up by BENECO in funding the “step-in” activities of NEA in addressing this manufactured crisis for BENECO.

In order for the Members to meaningfully participate in the fiscal management of their cooperative, they need reliable baseline data. So far, all they have been told is that their directors were naughty, charging their restaurant meals during meetings to BENECO’s account (but why not?), using their allowances and other emoluments (in short, money owing to them) to pay for chattel mortgages on vehicles with zero subsidy from BENECO—all of these mashed up together to weave a sensational narrative of “widespread corruption.” So “widespread” in fact that up to now the NBI could not come up with any criminal charge that could stand up to scrutiny after NEA endorsed the result of its audit on BENECO months ago.

Poor NBI, what are they to do? Those NBI investigators are probably saying to NEA, “Eh kung kayo na nga mismo walang mahanap na kaso, kami pa’ng paghahanapin nyo?”

At the very least, the Members are entitled to see those audit results, but they shouldn’t be bound to receive it as gospel truth. That audit was undertaken not for the purpose of “discovering” corruption but to support an advance conclusion of corruption, which NEA under Juaneza needed as leverage to bambozzle the board into accepting its “manok” for BENECO GM.

So if those audit results are NOT publicly released, or confidence on its credibility is exceedingly low, the Members should be able to commission an independent audit of BENECO’s books by a private auditing firm answerable only to the Members.

THERE SHOULD BE ADOPTED A PERMANENT POLICY RESOLUTION THAT BENECO WOULD BE MAINTAINED A COOPERATIVE IN PERPETUITY.

Contrary to public misconception, conversion of BENECO into either a stock cooperative under the CDA or a stock corporation under the SEC is NOT mandatory.

All these eager beavers pushing for BENECO’s “conversion” into a CDA-registered cooperative are doing it to escape the overbearing regulatory interference of NEA. They prefer to be under the CDA which is a “harmless”, toothless body that cannot even slap you on the wrist. All the CDA is interested in are that BENECO submit reportorial compliances but it has no disciplinary jurisdiction over its board of directors and management officers. That’s what BENECO wants, an atmosphere of total freedom, as opposed to being kept on a tight leash by NEA.

Nobody in BENECO will admit this, of course. Baka marinig ng NEA. But in fact, NEA was always aware of BENECO’s intention, which is why it came up with that joint memorandum of agreement with the CDA sometime in December 2021 to “harmonize” jurisdictional conflicts between them. Almost right after that, they came out with that joint statement recognizing Marie Rafael as the legitimate BENECO GM—a move that blindsided the conversion advocates in BENECO, including its MCO’s. The moral lesson of the experience was that if push comes to shove, the CDA’s support to BENECO‘s conversion and registration with them will collapse faster than a folding umbrella in a hurricane.

However, that is beside the point as far as BENECO was concerned. Transferring its affiliation from NEA to CDA was not really seen as an opportunity for improved business operation, but only for a more liberal climate in which to do business. So it doesn’t matter if the CDA was dickless so long as it provides some semblance of coverage that BENECO can use as a foil against interference in its operations, “You can’t touch this.”

Instead, we all know what happened next, of course. NEA invaded South Drive a second time—this time no longer in the ungodly hour of 2:00 A.M. but in the janitorial-opening time of 7:30 A.M.

NEA then installed its own “sleeper cell” right in the heart of the BENECO management itself—buying that advantage at an unbelievably cheap price of simply discarding Marie Rafael who had, by then, become totally useless to them anyway.

But the MCO’s were so seething in their juvenile hatred for Rafael that they would—and did—accept ANYTHING in exchange for banishing Rafael to, as it turned out later, the glitzier and more lucrative position of international resource generation manager for DSWD—as a Special Assistant to DSWD Secretary Rex Gatchalian.

If you check out the woman’s FB page nowadays, you’ll salivate with envy at how she now rubs elbows with the international diplomatic community EVERYDAY.

Meanwhile, back in Baguio, it’s all smooth-sailing for NEA in pursuing the flagship program of the BBM Administration—wealth generation through the disposal of government non-performing assets and conversion of government equity in private companies (like BENECO) into auctionable assets.

And by this depressing happenstance, BENECO was brought ever closer to the brink of privatization than it has ever been throughout its entire history. It cannot expect any help from the CDA in staving off this looming disaster because it turns out this body is even more subservient to NEA than all electric cooperatives combined.

Back to my point of securitizing BENECO’s future as a cooperative. In my opinion (which is very unpopular) conversion to the CDA is the WORST ALTERNATIVE for BENECO.

Clearly, it has not and will not result in BENECO’s liberation from NEA. What conversion eager-beavers do NOT tell Members is that NEA regulation is inescapable because any financial assistance, loans or government subsidies for rural electrification can only come THROUGH NEA—that’s a function reserved to it by law.

Even after Congress standardized and institutionalized state subsidy for the Sitio Electrification Program (SEP), for example, where did the government park all the money? In the NEA budget, of course. There is no legal way for Congress to allocate money directly to private persons or companies (such as EC’s, including BENECO). Even those famous “million bonuses” given to outstanding athletes winning gold medals in the Olympics, SEA Games, etc. get their windfall through the Philippine Sports Commission.

The biggest difference between CDA and NEA is this: CDA is only a registration body, NEA is a subsidy conduit and loan-broker.

The CDA has no money, and is not about to get any from Congress anytime soon. All we’re after in going for CDA registration is deliverance from the yoke of NEA—but it is abundantly clear now that using the CDA as ‘protection’ from NEA is like hiding from a hail of bullets behind a haystack.

Clearly, there are myriad ways to tinker with BENECO’s character as a business organization and many of these are gentle slopes that eventually lead to investor-based privatization—including conversion with the CDA. Anyone who tells you otherwise is lying.

The only thing that can truly guarantee that BENECO remains a public cooperative owned by its Members is an EXPRESS RESOLUTION to that effect. BENECO is ALREADY a full-fledged special cooperative under PD 269. There are no privatization conversion provisions in P.D. 269. The conversion it talks about under Article 32 refers to a situation where a PRIVATE COMPANY wants to convert INTO a cooperative–NOT the other way around.

There are many smartasses and know-it-alls out there who will sneer and say what good will a mere Resolution of Policy Declaration do?

You have no idea of the power of a declaration once it has become seasoned by time.

The nation of Israel traces its origin to the Balfour Declaration, which is really nothing but a letter handwritten by an English Lord to the British parliament expressing his personal assessment that the Palestine region be ceded to the Jewish people to turn into a Jewish homeland. That’s it—a letter that in today’s legal and forensic standards will probably not even yield any more binding significance than an ordinary affidavit.

Pass a Resolution permanently barring NEA from converting BENECO into a profit company like Meralco–FOREVER.

If you pass a Members Resolution expressing the Members unequivocal declaration of policy that BENECO be kept a public cooperative IN PERPETUITY now, our Philippine Supreme Court will read it 10, 15 or 20 years from now and have no choice but to rule that “the unequivocal expression of sovereignty in an ancient document may neither be negated nor discarded lightly without it being an affront to the very essence of democracy itself.”

If you must know, this is precisely what the general memberships of SSS and GSIS are now endeavoring to do. They want a National Resolution adopted by the Members, through REFERENDUM, expressing the sense of the Membership that no monies of these retirement institutions be used, allocated or handled in any way BY THE GOVERNMENT to underwrite such projects as the Maharlika Wealth Fund.

That effort has to be undertaken OUTSIDE the framework of government supervision because if you let government help, that’s like putting the goat to work tending the cabbage patch.

Which, by the way, happens to be the very situation obtaining in BENECO right now. * (TO BE CONTINUED)