Germany’s Fraport flexes muscle

Germany’s Fraport flexes muscle

The Philippine Star 02/13/2005

Marichu Villanueva

Fraport AG of Germany, one of the major shareholders of the Philippine International Air Terminals Co. Inc. (Piatco), has decided to flex its diplomatic muscle in pressing for immediate compensation from the Philippine government for their investment in the Ninoy Aquino International Airport Passenger Terminal 3 (NAIA-3) project.

The German government, through German Ambassador Axel Weishaupt, formally presented to the Department of Foreign Affairs (DFA) a démarche in support of the compensation claims of Fraport against the Philippine government.

A démarche is a diplomatic move, counter-move or maneuver manifested by an ambassador to the host government.

The German government’s démarche was contained in a three-page aide-mémoire dated Jan. 25 and addressed to Executive Secretary Eduardo Ermita, who chairs the Cabinet Oversight Committee on the NAIA-3 project.

In the aide-mémoire, the German government supported the petition of Fraport to the Philippine government for just compensation "in accordance with international law, specifically the provisions of the Philippine-German Agreement for the Promotion and Reciprocal Protection of Investments" signed on April 18, 1997 in Bonn.

Presidential Spokesman Ignacio Bunye released to Palace reporters yesterday a copy of the aide-mémoire as well as the reply statement of the Philippine government, through Foreign Affairs Secretary Alberto Romulo.

Bunye disclosed that the Palace decided to make public the démarche after it received information that the German ambassador would call a press conference to present their support for Fraport’s bid.

Following the decision of President Arroyo to void the Piatco contract, which was subsequently upheld by the Supreme Court, Fraport sued the Philippine government before the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC.

A separate case was also filed by Piatco and Fraport before the International Chamber of Commerce (ICC) in Singapore.

Romulo, however, said the ambassador expressed his government’s confidence that the Philippine government will confirm its commitment for just and fair compensation.

At this point though, the Pasay City regional trial court (RTC) is still in the process of resolving the amount of compensation for the builders of NAIA-3.

"Such a solution is important to the interest of avoiding a burden to Philippine-German relations and in ensuring that the international reputation of the Philippines as a location for investments is not impaired," Weishaupt stated.

Weishaupt, in his aide-mémoire, expressed the German government’s concern over the expropriation of NAIA-3, saying it is not encouraging German businesses to invest in the Philippines.

"However, the German government would greatly appreciate a mutually satisfactory solution with regard to the expropriated investments by Piatco and Fraport AG in NAIA-3," he added.

source: Philippine Star