Groups call on RP, Austrian governments to annul “toxic debt”

QUEZON CITY, Philippines – Two broad coalitions of citizens’ groups called today on both the national government and the Austrian government to annul a half a billion peso “toxic debt” that financed a failed Department of Health (DOH) project involving the importation of twenty-six medical waste incinerators for DOH-run hospitals in the country.

The Ecological Waste Coalition of the Philippines (EcoWaste) and the Freedom from Debt Coalition (FDC) said during the public launch of the “Stop Toxic Debt Campaign” that the loan, which was contracted in 1997 between Bank Austria and the Philippine Department of Finance (DOF), will have to be paid until 2014.
But the incinerators, which Greenpeace Southeast Asia claimed in an earlier report were substandard and did not meet the emission levels guaranteed by the supplier, had all been retired in 2003, when the incineration ban promulgated by the Philippine Clean Air Act of 1999 (CAA) took effect.
The loan financed the DOH’s project dubbed “The Austrian Project for the Establishment of Waste Disposal Facilities and Upgrading of the Medical Equipment Standard in DOH Hospitals.” It was originally intended to provide development assistance to Philippine hospitals in the area of medical waste management.
In 1997-1998, the incinerators with capacities of 300-500 kg of waste/day, a major component of the project, were set up in the various DOH-run hospitals throughout the country.
The payments on the loan’s principal have commenced in 2002 and the loan now represents a two-million dollar per year debt burden for the Philippines until 2014.

Toxic technology, Burning Money

According to Von Hernandez, Campaigns Director of Greenpeace Southeast Asia, the incinerators exported by Austria to the Philippines were of such low quality that they would never have been allowed to operate in Austria. The incinerators, however, were granted an exemption from the Environmental Impact Assessment process by the Department of Environment and Natural Resources (DENR).
A subsequent assessment of the incinerators’ emissions, jointly conducted by the DOH and the World Health Organization (WHO), revealed extremely high emissions.

According to Ronnel Lim, EcoWaste Coalition researcher: “Even if the incineration ban of the CAA never took effect, the incinerators’ emissions were outrageously high there was simply no way to defend them. In the joint DOH- WHO emission test conducted on one of the incinerators, the dioxin emission was a whopping 870 times the limit set by the CAA.”

FDC secretary-general Milo Tanchuling pointed out that the incinerator loan is a classic example of an illegitimate debt that was ““incurred to finance an ill-conceived development project that posed danger to our environment and the people.”
“Such debt is unacceptable and must not be honored. We call on the Austrian government to cancel and on the national government to repudiate the loan,” added Tanchuling.
Hernandez of Greenpeace Southeast Asia also called for the deal to be rescinded: “Filipinos will not tolerate being at the receiving end of toxic technologies. It is totally outrageous that we are paying for an obsolete and deadly technology. We are being cooked in our own juice.”
Bishop Julio Labayen, joining the two coalitions, also vowed to bring the campaign to cancel the incinerator debt to Austria. He also appealed for the DOH and the Department of Finance to closely look into the loan agreement and seek ways to divert the loan payments to environmentally-friendly, non-burn medical waste treatment technologies instead.
Bishop Julio Labayen said that what makes the loan unconscionable is that the Philippine government is practically throwing money away at the same time that it is progressively cutting back on health outlays.
In the past 10 years, the DOH’s budget as a percentage of the total national budget has decreased from about 2.53% in 1998 to just over 1% this year. Health expenditures have perennially lost out to debt service payments and national defense on the government’s priority list.

EcoWaste Coalition
Unit 320, Eagle Court Condominium, Matalino St.
Quezon City, Philippines
+63 2 9290376