Dispute halts Hanjin operations in Misamis Oriental
A row over an environmental permit has forced South Korea's Hanjin Heavy Industries to halt construction of a $2 billion shipyard in Misamis Oriental in the southern Philippines, local and company officials said on Friday.
Myong Goo Kwon, Hanjin's managing director at the project site on the southern island of Mindanao, said in a letter that the company was being forced to halt work on the project due to an "improper and questionable" order from a government unit.
"The HHIC Mindanao's team for the shipyard complex project inside the PIA estate will withdraw effective April 29, 2008," Myong said in the letter to the state-owned Phividec Industrial Administration (PIA) last month.
Hanjin's Mindanao shipyard is being built on a 442-ha lot inside the Phividec Industrial Estate on Mindanao's northern tip and was expected to be completed in 2017.
It is one of the biggest investments in the Philippines' troubled southern region, where communist and Muslim insurgencies have stunted economic development.
The new facility will have a capacity of 830,000 tons per year when completed, generating 45,000 new jobs.
The mayors of two towns in Misamis Oriental province on the northern tip of Mindanao said they had ordered Hanjin to secure environmental clearances before it could clear some 400 hectares of coconut, corn and vegetable fields as well as some houses.
About 50,000 hectares of coconut and vegetable had been cleared before Hanjin stopped work on April 28, leaving 5,000 workers and heavy equipment sitting idle.
Oscar Moreno, the province's governor, said the work stoppage was likely to be temporary.
"What they (Hanjin) told me is that they wanted to wait for issuance of all pertinent permits before proceeding with the operations just to avoid any more conflict," Moreno told reporters, saying Hanjin had a "minor" misunderstanding with some mayors.
But, the national police in Manila has stepped into the controversy, forming a special team to investigate alleged bribery, extortion and intimidation.
Paulino Emano, Tagoloan town mayor where Hanjin is building the shipyard, has claimed he was offered 400 million pesos ($9.4 million) by Hanjin officials to set aside the environmental clearance and allow them to continue with the project.
Hanjin, on the other hand, has filed complaints with the provincial governor that local officials had allegedly intimidated company officials and staff.
Residents in the areas affected by the clearing said they were happy about the work stoppage.
"We are not against development because Hanjin will give us jobs anyway," said Eugene Payusan, leader of a workers' group hired by the South Korean shipyard to clear farms and residential areas.
"We are also fighting for the fair and just treatment of the affected households. There should be just compensation, not empty promises."
Hanjin is building another shipyard in the Philippines, in the Subic Bay freeport zone, northwest of Manila, and is expected to complete the majority of its $1.68 billion investment there this year.
Construction of the facility is due to be finished by 2011.
Capacity constraints in Korea have forced Hanjin to look overseas for expansion. Estimated annual exports from its Subic facility were expected to reach at least $2.5 billion by 2016, equivalent to 40 ships, from about $521 million this year.
Hanjin's Subic facility has received orders for 28 container vessels, three bulk carriers and two oil tankers as of June 2007. Reuters
Myong Goo Kwon, Hanjin's managing director at the project site on the southern island of Mindanao, said in a letter that the company was being forced to halt work on the project due to an "improper and questionable" order from a government unit.
"The HHIC Mindanao's team for the shipyard complex project inside the PIA estate will withdraw effective April 29, 2008," Myong said in the letter to the state-owned Phividec Industrial Administration (PIA) last month.
Hanjin's Mindanao shipyard is being built on a 442-ha lot inside the Phividec Industrial Estate on Mindanao's northern tip and was expected to be completed in 2017.
It is one of the biggest investments in the Philippines' troubled southern region, where communist and Muslim insurgencies have stunted economic development.
The new facility will have a capacity of 830,000 tons per year when completed, generating 45,000 new jobs.
The mayors of two towns in Misamis Oriental province on the northern tip of Mindanao said they had ordered Hanjin to secure environmental clearances before it could clear some 400 hectares of coconut, corn and vegetable fields as well as some houses.
About 50,000 hectares of coconut and vegetable had been cleared before Hanjin stopped work on April 28, leaving 5,000 workers and heavy equipment sitting idle.
Oscar Moreno, the province's governor, said the work stoppage was likely to be temporary.
"What they (Hanjin) told me is that they wanted to wait for issuance of all pertinent permits before proceeding with the operations just to avoid any more conflict," Moreno told reporters, saying Hanjin had a "minor" misunderstanding with some mayors.
But, the national police in Manila has stepped into the controversy, forming a special team to investigate alleged bribery, extortion and intimidation.
Paulino Emano, Tagoloan town mayor where Hanjin is building the shipyard, has claimed he was offered 400 million pesos ($9.4 million) by Hanjin officials to set aside the environmental clearance and allow them to continue with the project.
Hanjin, on the other hand, has filed complaints with the provincial governor that local officials had allegedly intimidated company officials and staff.
Residents in the areas affected by the clearing said they were happy about the work stoppage.
"We are not against development because Hanjin will give us jobs anyway," said Eugene Payusan, leader of a workers' group hired by the South Korean shipyard to clear farms and residential areas.
"We are also fighting for the fair and just treatment of the affected households. There should be just compensation, not empty promises."
Hanjin is building another shipyard in the Philippines, in the Subic Bay freeport zone, northwest of Manila, and is expected to complete the majority of its $1.68 billion investment there this year.
Construction of the facility is due to be finished by 2011.
Capacity constraints in Korea have forced Hanjin to look overseas for expansion. Estimated annual exports from its Subic facility were expected to reach at least $2.5 billion by 2016, equivalent to 40 ships, from about $521 million this year.
Hanjin's Subic facility has received orders for 28 container vessels, three bulk carriers and two oil tankers as of June 2007. Reuters
Labels: hanjin, misamis oriental
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