Golez: Purchase of defense equipment from China must comply with AFP Modernization Act procedures
Philippines with US$500 million loan may buy military hardware from China arms firm
South China Morning Post
http://www.scmp.com/news/asia/diplomacy/article/2094364/philippines-500-million-loan-may-buy-military-hardware-china):
“Roilo Golez, a former lawmaker and naval officer, said he saw no problem buying arms from China.
Sec. 14. AFP Procurement System. — The DND-AFP shall strengthen its systems and procedures for equipment acquisition, taking into account new requirements under the AFP modernization program. Contract negotiations and equipment acquisition shall be treated as two sequential but separate steps, each requiring the separate decision of the Secretary of national Defense. The decision making process for equipment acquisition shall start at the appropriate service command and submitted to the AFP Weapons systems Board, while contract negotiation shall start at general headquarters AFP level. In its system and procedures for equipment acquisition, the provisions of Presidential Decree No. 1594, as amended, and other applicable laws shall apply.
“As long as it meets the procedures laid out under the armed forces modernisation programme and the end users are consulted.” Golez said.
What does the AFP Modernization Act say?
REPUBLIC ACT NO. 7898
AN ACT PROVIDING FOR THE MODERNIZATION OF THE ARMED FORCES OF THE PHILIPPINES AND FOR OTHER PURPOSES.
SECTION 1. Short Title. — This Act shall be known as the "AFP Modernization Act.”
Section 4 (b) Capability, material, and technology development. — The AFP modernization program entails the development and employment of certain capabilities that can address the assessed threats: Provided, That the acquisition of air force, navy and army equipment and material of such types and quantities shall be made in accordance with the need to develop AFP capabilities pursuant to its modernization objectives: Provided, further, That the acquisition of new equipment and weapons systems, shall be synchronized with the phase-out of uneconomical and obsolete major equipment and weapons systems in the AFP inventory: Provided, even further, That no major equipment and weapons system shall be purchased of the same are not being used by the armed forces in the country of origin or used by the armed forces of at least two countries: Provided, furthermore, That only offers from suppliers who are themselves the manufacturers shall be entertained: Provided, finally, That no supply contract shall be entered into unless such contract provides for, it is clear and unambiguous terms, an after-sales services and the availability of spare parts.
"That no major equipment and weapons system shall be purchased of the same are not being used by the armed forces in the country of origin or used by the armed forces of at least two countries.”
The above must be strictly followed in considering the major equipment and weapons systems to be purchased. I understand the condition “used by the armed forces of at least two countries are strict delimiting conditions based on past AFP purchases.
The procurement process must start at the service command level and not from above. There should not be a situation where the service commanders are awakened one morning and told by higher authority: "Here are what you need!”
There was an instance back in 15th Congress (2010-2013) when there was an attempt from outside the AFP to introduce certain defense equipment during the plenary debate on the AFP budget in 2010 to pressure the AFP. I stood up and questioned that attempt citing this provision of the AFP Modernization Law. The Chairman of the House Appropriation Committee at that time was then Cong. Jun Abaya who readily concurred with me and that killed the attempt.
I am glad that Defense Secretary Lorenzana has been quoted in the news as follows, indicating that the DND is likewise invoking the law:
"We don't know yet because we are going to involve the Army, Navy, and the Air Force, what equipment they need," the defense chief said.
"We are not going to choose for them. They are going to choose for themselves, what they need from the Chinese defense industry.”
I have my gut feel that the matter of acquiring major defense equipment from China will be like a camel passing through the eye of a needle if our service commanders know what’s good for the service.
And finally, since this is a foreign loan matter, this should pass through congressional scrutiny as it would affect the country’s debt service obligation, a big chunk of the annual appropriations act.
The Philippine government may buy up to US$500 million worth of weapons and other defence assets from one of China’s largest arms dealers, as Manila looks to ease tensions with Asia’s top economic power.
Philippines Defence Secretary Delfin Lorenzana said a letter of intent for the purchase from Poly Technologies would be signed in Beijing on Monday on the sidelines of the ‘Belt and Road’ summit attended by President Rodrigo Duterte.
“They (China arms manufacturers) have equipment that is to Nato specifications, which is what we are using, so that’s okay,” he told South China Morning Post ahead of the summit.
Since 1950, the US has accounted for about 75 per cent of the Philippines’ arms imports, according to a database from the Stockholm International Peace Research Institute.
Duterte has said Russia and China were willing arms suppliers after the United States refused to sell some weapons to his country because of human rights concerns.
China has also made available to the Philippines a US $500 million long-term soft loan in addition to US$14 million worth of small arms and boats for free in December.
The Philippines letter of intent is non-binding and Lorenzana said his country had not yet decided what type of hardware it was shopping for.
He said the next step was to send a team from the Philippines defence forces to Beijing.
“They are going to choose for themselves, what they need from the Chinese defence industry,” Lorenzana told reporters in a briefing in Beijing late Sunday.
“And after that, we’ll go from there. We are not saying that we will buy from them or we will not buy from them but if we need anything from the Chinese defence industry then we’re going to procure using the loan that they are going to offer to us.”
Poly Technologies is a subsidiary of China Poly Group - a central government-administered state enterprise originally founded by the People’s Liberation Army.
In 2013, it was one of four Chinese companies that faced US sanctions for allegedly breaching a US law designed to hamper the development of weapons of mass destruction by Iran, North Korea or Syria.
The sanctions mean that no US government department or agency may enter into procurement contracts with the companies or assist them.
Poly Technologies said it had never helped any countries or regions develop banned weapons.
Duterte visited China last October after bilateral relations had soured over the South China Sea under the previous Philippine administration of Benigno Aquino.
Duterte has been accused by critics of taking a defeatist position on China and on defending Philippine sovereignty. He considers his approach to be pragmatic and says challenging China risks triggering war.
The detente has seen China commit to three infrastructure projects and pledge to donate two bridges, according to Philippine ambassador to China Jose Santiago Santa Romana, without giving an investment figure.
“I think we should separate our dispute from the South China Sea from our relationship with the Chinese,” Lorenzana added.
Duterte critic Roilo Golez, a former lawmaker and naval officer, said he saw no problem buying arms from China.
“As long as it meets the procedures laid out under the armed forces modernisation programme and the end users are consulted.” Golez said.
Additional reporting by Reuters and Bloomberg
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