WHEREAS, the Philippine and Austrian Governments signed an ATS199.96 million (equivalent to PhP503.65 million) loan agreement for the acquisition of medical waste incinerators from Austria for the use of 26 government hospitals under the control of the Department of Health (DOH) in the Philippines.

WHEREAS, the loan agreement, endorsed by the Austrian Embassy and signed by the Bank Austria and the Philippine Department of Finance (DoF), provided for a repayment scheme of 24 equal semi-annual installments with an interest rate of four (4) percent every year beginning 2002 until 2014. The annual debt payment for the project is around US$2 million per year.

WHEREAS, the incinerators brought to the Philippines in 1997 by the Austrian supplier, Vamed Engineering, were of poor quality contrary to its claim that it was "state of the art", not even passing the emission levels the supplier guaranteed. A subsequent comprehensive emission test conducted by the Philippine Department Of Health and the World Health Organization (WHO) showed that the incinerators emitted unconscionable amounts of pollutants, with dioxin and furan emissions, in one case, exceeding the Philippine environmental standards by eight hundred seventy (870) times.

WHEREAS, in 2003, all 26 incinerators were retired to comply with the provision of the Philippine Clean Air Act of 1999 phasing out incinerators for medical wastes within three years after the effectivity of the law. Despite this, the Philippine government continues to pay US$2 million (PhP100 million) a year to the Austrian government for the medical waste project. Payments for the incinerator loan this year account for 25 percent of the Philippine Government's health budget on addressing backlog in infrastructure, and are almost equal to what it will spend for all local health programs and the prevention of emerging diseases.

WHEREAS, Austria joined the European Union in 1995 wherein Austria was required not only to accept EU standards, legislation and policies but also to enforce and implement it into national laws. In 1997, when Austria and the Philippines signed the said loan agreement, the controlling relevant EU legislation on it was the EU Council Directive 94/67/EC of December 16 1994 concerning the incineration of hazardous waste, which regulates, among other pollutants, dioxins and furans. The Austrian incinerators provided to the Philippines exceeded the EU limits on emissions.

WHEREAS, the continued payment of the Philippines for debts and/or "obligations which were highly perceived as illegitimate continue to eat up a large sum of the government's resources which could have been allotted to important social services like education and health. As of 2008, total health budget is only PhP22.9 billion compared to the PhP295.75 billion, which was automatically allocated to debt interest payments alone.

WHEREAS, two to three poor Filipino patients share one hospital bed in many of the government hospitals, seven out of 10 Filipinos especially in the rural areas die without seeing a doctor or a health worker. Freed resources from the cancellation of illegitimate loan projects could have been used to reduce child mortality, avert maternal deaths and combat life-threatening diseases; expand other health programs; purchase medicines and hospital beds; hire additional health workers; or, ecologically process or treat infectious or pathological waste without incineration.

WHEREAS, last 23 of May 2001, countries all over the world signed the Stockholm Convention, a global treaty that seeks to protect human health and the environment from the harmful impacts caused by persistent organic pollutants (POPs). The Convention identifies waste incinerators as significant sources of four of the initial list of 12 POPs being targeted for reduction and elimination, specifically dioxins, furans, hexachlorobenzene and polychlorinated biphenyls. Signatories to the Convention, including Austria and the Philippines, agreed to prohibit and/or take the legal and administrative measures to prevent the production, importation and exportation of POPs.

WHEREAS, the 14th Philippine Congress in their passage of the 2008 National Government Budget included a special provision that clearly calls for the suspension of interest payments to loan agreements challenged as fraudulent, wasteful, and unnecessary pending their investigation, renegotiation and condonation. The Austrian Medical Waste Incinerator Loan Project was included among the list of other loan agreements whose interest payments amounting to a total of PhP5 billion were suspended.

WHEREAS, the Government of Norway last 2006 unilaterally and without conditions cancelled US$80 million in debts owed by 5 countries: Egypt, Ecuador, Peru, Jamaica and Sierra Leone concerning the controversial Norwegian Ship Export Campaign which operated from 1976 to 1980. The Norwegian Government cited a failed development policy lacking in proper needs assessment and a proper risk analysis as pretexts for the cancellation. As a result, it clearly set the precedent for creditor governments to share responsibility for debts that have only financed flawed projects or projects that clearly undermine a nation and its people's interests.

THEREFORE, we the undersigned, duly elected parliamentarians of the 14th Philippine Congress officially request the Government of the Republic of Austria to cancel its ATS199.86 million loan for the Austrian Medical Waste Project in the Philippines.

WE also urge the Austrian government to return, in any way possible, to the Filipino people the cumulative total payments made by the Philippine Government so far,  notwithstanding other dues that may be accorded to the Filipino people in relation to damages caused by the defective incinerators.

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