By: Isidro E. Cacho Jr., IEMOP Head of Corporate Strategy and Communications Department

The power crisis experienced in the Philippines in the 1990s triggered the enactment of RA 9136 or the Electric Power Industry Reform Act (EPIRA). The vertically integrated structure of generation, transmission, and in some parts of the country, distribution of electricity, was undertaken by National Power Corporation (NAPOCOR). NAPOCOR suffered from revenue losses due to subsidies and large debts and thus the government was no longer able to support the setting up of new capital-intensive power plants.

As a response to this crisis, the Congress and the policy markets formulated RA 9136 or the Electric Power Industry Reform Act (EPIRA). EPIRA reformed the power industry to allow private investors to put up generation facilities and compete in the business of supplying electricity. This competitive environment under a regime of fairness, transparency, and public accountability was intended to ensure reasonable, if not lower, prices of electricity in the country. The EPIRA also provided for the unbundling of electricity costs and removed subsidies making the cost of electricity very transparent to end-users. Moreover, it enabled end-users to have a choice when it comes to the supply of electricity to their households.

To facilitate the entry of competition into the power industry, EPIRA mandated the establishment of Wholesale Electricity Spot Market (WESM). WESM enabled generating companies to sell their electricity to private distribution utilities and electric cooperatives regardless of a contract between them. It also reduced the barriers to entry for putting up generating plants.

Moreover, WESM gave more flexibility to distribution utilities whether to buy from counterparty generators through a power supply agreement (PSA) or through the spot market. Energy procured through PSA is subject to the approval of the Energy Regulatory Commission (ERC) while those bought from the WESM are driven by real-time interaction of supply and demand. WESM prices are generally low when there is sufficient supply and low demand. However, when the cheaper plants (like coal, geothermal, or natural gas pants) become unavailable and demand becomes high (like during summer months), more expensive plants (like diesel plants) set the price, resulting to an increase in market prices.

WESM also provided the framework for the retail competition and open access (RCOA). RCOA enables end-users to have the power of choice from whom to buy their electricity. To date, those end-users with 500 KW demand and up are eligible to participate in RCOA. Ultimately, EPIRA’s goal is to implement RCOA to all household consumers.

At the center of these processes is the Independent Market Operator (IMO). The EPIRA set forth that within one year of commercial operations, the WESM should be operated by an IMO. EPIRA further provided that this IMO must be jointly endorsed by the DOE and the Electric Power Industry participants. This significant provision ensures that the market regime of the WESM will not be influenced by any market participant. EPIRA intended that competition will not be hampered by the commercial and business interests of the sellers and buyers in the market. Its objective is to ensure that transparency will not be compromised and that the process of determining the electricity price every trading interval will strictly follow the WESM Rules and the methodology approved by the Energy Regulatory Commission (ERC).

In 2006, the WESM went on commercial operations under the autonomous group market operator – Philippine Electricity Market Corporation (PEMC). PEMC was tasked to initially set up and operate the WESM. PEMC was led by a 15-man board mostly from the stakeholders (generation, transmission, supply, and distribution) and was chaired by the Secretary of the Department of Energy. This arrangement was intended to be temporary until the establishment of the Independent Market Operator.

In 2018, after due consultation with all stakeholders, the Department of Energy (DOE) and the electric power industry participants jointly endorsed the transfer of WESM operation to the Independent Electricity Market Operator of the Philippines (IEMOP). Thus, eleven years after being mandated by EPIRA, the operation of the WESM was finally transferred to an IMO.

Through an independent entity operating WESM, stakeholders and the public are given confidence that there is no conflicting interest in the management of the power market. The IEMOP’s Board of Directors are individuals that are not affiliated with the power industry stakeholders. Hence, the decisions made in the conduct of market operations are pursuant to the best interest of the whole power industry and is not influenced by any market player.

The operations of IEMOP further ensures fairness in Market Operations. An Independent Market Operator, not being affiliated with any of the stakeholders, guarantees that the WESM is operated in a manner that is fair to all stakeholders, regardless of their market share or influence.

Moreover, the IEMOP ensures that WESM is operated in a transparent manner, in accordance with prevailing policies and regulations. All activities and transactions pertaining to the market operations are generally published in the market information website (www.iemop.ph) for transparency. Undeniably, having an Independent Market Operator at the helm of the Philippine WESM will clearly benefit ordinary consumers through its unbiased and competitive operations. Consequently, these benefits will support the country’s objectives towards a robust and sustainable economic growth.

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This year, the Asia Responsible Enterprise Awards (AREA) celebrates its 10-year anniversary milestone championing the most exceptional CSR programs across Asia. Over the last decade, AREA is proud and honored to be the advocate in encouraging and inspiring business leaders and enterprises to take on their responsibilities in creating a better world for all.

Enterprise Asia, the organizer of AREA, is pleased to recognize 69 outstanding award recipients who exemplified determination and perseverance despite the trying times. The AREA awardees have demonstrated relentless dedication to responsible business practices amidst the ongoing pandemic.

Widely regarded as the gold standard for CSR and sustainability practice, the AREA is the most prominent CSR recognition program across Asia initiated by the region’s leading NGO, Enterprise Asia. With over 500 winners from more than 19 countries since its launch, the AREA aims to recognize and honor Asian businesses and leaders for championing sustainable and responsible business practices. This year, an impressive number of 205 nominees from 16 countries were short-listed in the final round of judging and only 69 were accorded as award recipients.

Richard Tsang, president of Enterprise Asia, stated in his welcome speech, “Today, the majority of a company’s long-term value includes components such as innovation, intellectual capital and culture. Thus, a strong ESG strategy is an important element of a broader long-term value strategy that is tied to a business’ purpose and vision for recovery and success moving towards the post COVID-19 world.” He further mentioned that “sustainability cannot be looked at in isolation. It is akin to engineering a whole new system and cultivating a new way of life. It is a tough balancing act because there will be conflicts, compromises and trade-offs.”

Since 2011, AREA has recognized businesses from various industries while honouring their achievements in the seven categories of Social Empowerment, Investment in People, Health Promotion, Green Leadership, Corporate Governance, Circular Economy Leadership and Responsible Business Leadership.

The winners for the Responsible Business Leadership Category which recognize leaders who are strong advocates for responsible entrepreneurship and at the forefront of promoting sustainable practices and in promoting the sustainability agenda within their organizations and their communities include Shuang-Lang (Paul) Peng, chairman and CEO of AU Optronics Corp.; Joseph Huang, chairman of E.SUN Commercial Bank; Richard M. Tsai, chairman of Fubon Financial Holding Co., Ltd.; Pitak Ratchakitprakarn, president and CEO of PTG Energy Public Company Limited from Thailand; and Chun-Chi Chou, founder of Sinyi Group from Taiwan.

Among the notable winning projects from the Health Promotion Category is Far Eastern Big City Shopping Malls Co., Ltd.. Its program, ‘Big City, Big Health – A Healthy Community Platform for All Ages’, focuses on devoting its resources to the segments of blood donation, liver disease prevention, and health promotion for all ages. The company held record-breaking blood donation campaigns, funded liver health forums to promote liver disease prevention, and organized over 160 activities promoting health for all ages last year.

The joint initiative of Taipei Lung Shan Temple, Liver Disease Prevention and Treatment Research Foundation, Taiwan, YUAN High-Tech Development Co., Ltd., and Realtek Semiconductor Corporation was also a part of the winning recipients for the Health Promotion Category. Their program, ‘For Peace, For Health, Ten Thousand People Together to Protect Our Livers!’, broke the Guinness World Record for the most people completing a health survey in 12 hours in Taipei, Taiwan on Oct. 31, 2020. The program sought to improve healthy liver awareness and all participants were offered free health checkups after completing the survey.

PTG Energy Public Company Limited emerged as one of the winners under the Social Empowerment category with its program, PT Volunteer Camp, ‘We Care Leave No One Behind,’ concentrates on contributing to the community nearby the company’s operational sites in the development areas of healthcare, education, and environment to empower the villagers’ access to better life opportunities and enable them to grow sustainably with the company. It established the PT volunteer doctor unit and PT creating lungs for the community, and offered eye examinations for the elderly, scholarship, sports equipment and education media deliveries for thousands of villagers.

Bolloré Logistics Singapore Pte. Ltd. is among the exceptional recipients of the Green Leadership Category for its “Powering Sustainable Logistics in Singapore” program. The program contributes to 8 of the United Nations’ Sustainable Development Goals, and the company managed to reduce its greenhouse gas emissions, waste consumables, and water consumption while increasing its recycling rate. In 2020, over 1,500 of the company’s staff were educated on sustainability topics, among which more than 1,300 received formal trainings on the topics.

Prior to the AREA, the International CSR & Sustainability (ICS) Summit 2021 was held in the day. The virtual summit was convened with over 300 C-suite level executives and business leaders from 12 countries.

Themed “Towards an Inclusive and Resilient Future,” the summit provided a regional platform for leading thought leaders and CSR practitioners to explore on pressing topics and recovery actions to rebuild towards a sustainable and resilient world.

The Chairman of Enterprise Asia, Tan Sri Dr Fong Chan Onn, expressed at the summit’s opening that “the crisis has been a sobering wake-up call to the importance of sustainable development and the urgent need to pay more attention to planetary health, similarly to the burning reality of the climate crisis, giving us food for thought about our priorities. I believe that the time for talk is over and we should now focus on real actions. We have the opportunity to reset and reshape the post-pandemic recovery towards a better future.”

Among the speakers were Dr. Niven Huang, Regional Leader for KPMG Sustainability Services Asia Pacific, KPMG Taiwan; Dr. Allinnettes Adigue, Head of the ASEAN Regional Hub and Global Reporting Initiative; Edoardo Gai, Managing Director for ESG Benchmarking, S&P Global Switzerland SA; Paul Marriott, President of SAP Asia Pacific and Japan; Marie Victoria Tan, Executive Director and Group Head of Enterprise Risk Management and Sustainability Unit, Ayala Corp., Philippines; Esther An, Chief Sustainability Officer of City Developments Limited (CDL); Margaret Kim, CEO of Gold Standard; Karina Litvack, Co-Founder of Climate Governance Initiative (World Economic Forum) and Non-Executive Independent Director, Eni SPA; Dr. Naoki Adachi, Executive Director of Japan Business Initiative for Biodiversity, and CEO and Founder of Response Ability, Inc.; Alexandra Tracy, President of Hoi Ping Ventures Hong Kong; Lito T. Tayag, Country Managing Director of Accenture, Inc. Philippines; Dr. Renard Siew, Head of Sustainability of Malaysian Resources Corp. Berhad (MRCB); Jessica Robinson, Founder and Managing Director of Moxie Future and Former Head of Asia at UN-PRI; Andrew WK Chan, Sustainability and Climate Change Leader of PwC’s South East Asian Consulting Services; and Rosemary Addis, Co-Founder and Executive Director of Impact Investing Australia, Senior Advisor to SDG Impact at UNDP.

The AREA 2021 and ICS Summit 2021 are supported by ASEAN CSR NETWORK, China Biodiversity Conversation and Green Development Foundation, Circular Economy Club, CSRone, CSR Universal Org, Global Reporting Initiative, India CSR Network, Malaysian Alliance of Corporate Directors, National Institute of Entrepreneurship and Innovation (NIEI) (Cambodia), The Green Earth, and The Malaysian Chamber of Commerce (HK and Macau) Limited (MAYCHAM). Additionally, AsianNGO, Bangkok Post, Biz Hub Vietnam, BusinessWorld, Commercial Times, Earth.Org, Hong Kong Economic Times, Impact Boom, Kumparan, SME Magazine and Viet Nam News as media partners.

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