Another look at conflict of interest

President Marcos Jr.’s recent appointments in government offices that will supervise and regulate the country’s energy industry had raised conflict of interest issues.

It arose initially when he appointed Raphael Lotilla, a former independent director of Aboitiz Power Corp., as secretary of the Department of Energy. Then he named Monalisa Dimalanta, an erstwhile chief legal counsel and compliance officer of the same company, as chair of the Energy Regulatory Commission (ERC).

Although these appointments generally drew positive response from the business community, some concerns were raised about their ability to effectively perform their assigned tasks in light of their past professional ties with Aboitiz Power.

The company is a major player in the energy sector, so it is inevitable that Lotilla and Dimalanta would, in the course of their work, have to deal with it and render decisions that would affect its operations.

More so in the case of the ERC which decides on issues that relate to the timely delivery of energy resources to consumers and the pricing of their products and services.

The ERC’s mandate is, among others, to balance the interests of energy suppliers, who are entitled to a fair return on their investments, with the right of the public to avail of their output at reasonable prices.

Those matters seldom (if at all) intersect and so, as past experiences have shown, the ERC always found itself in a “damned if you do and damned if you don’t” situation in price-setting issues.

A conflict of interest is said to arise “when an individual’s personal interests—family, friendships, financial, or social factors—could compromise his or her judgment, decisions, or actions in the workplace.”

The critics of the two appointments assume that their past employment relationship with Aboitiz Power may influence their decision-making process. It’s a carryover of the Filipino trait of “utang na loob” or debt of gratitude.

To avoid a conflict of interest issue on their appointments, the President could have named other people whose professional qualifications or work experience have nothing to do with energy, or who are strangers to the industry.

The plus side to that appointment is the appointees would be bringing a new perspective to their jobs and would not be influenced by past bureaucratic policies and practices.

Since they would be coming in from the cold, they would need some time to familiarize themselves with the responsibilities of the job through briefing sheets or meetings with outside consultants.

But considering the exigencies of the times and the need for sufficient energy resources to perk up the economy, the country can ill afford that luxury of time and work adjustment.

Clearly, Lotilla and Dimalanta are no babes in the woods, so to speak, on energy matters. They have extensive experience, more so in Lotilla’s case for having served as energy secretary of former President Gloria Macapagal Arroyo.

Thus, they are able to hit the ground running from day one and would not have to go through a learning curve or a getting-to-know-you period in their offices.

Is there a possibility that their past ties with Aboitiz Power may, directly or indirectly, influence their decision-making process on matters that affect it or its competitors?

Yes, but they would have to do it at the risk of indelibly staining their personal and professional reputation.

Since the availability of and the cost of energy are gut issues to Filipino households due to their impact on daily life, their actions or decisions on those matters would be closely watched and monitored by the public.

That attention could be more intense because their past association with Aboitiz Power may get into the picture in case controversial energy issues arise in the future.

In the meantime, they should be given the chance to prove their worth and show that the perceived conflict of interest in their appointment has no basis. INQ

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