In 2022 Atradius DSB issued insurance policies for a number of banks and Boskalis for the largest transaction ever covered by export credit insurance in the Netherlands.
The project aims to establish a new international airport in the Philippines. This is crucial for the country as the current airport is positioned in the middle of the capital Manilla, it has only one runway and a designed capacity of 25 mln travelers. That is not enough for the 64 mln travelers that want to use it nowadays.
We got involved in this project during the summer of 2020. At this time, it became clear that the project started in accordance with local legislation. However, Atradius DSB can only insure a project if it adheres to international standards. Because of the gap between the Philippine legislation and international standards, Atradius DSB could not support this project.
The project owner, San Miguel Aerocity Inc (SMAI), took this signal very serious and asked us to support them to raise the project up to international standards. Because the top management of SMAI was supporting this journey, Atradius DSB got confident this improvement would be possible. The project owner, Boskalis and Atradius DSB hired international consultants to support them on their way forward.
It has been an intensive and time-consuming journey for all parties involved, but very worthwhile. It already led to large improvements for local communities and nature values. We would like to highlight the two most important improvements:
Resettlement of people in the project area is taken care of in Philippine laws and was performed in the right way by the project. One of the gaps in Philippine law is the compensation for people that worked in the project area and lost their income. The project owner wanted to repair this and actively looked for these people to provide them with compensation and livelihood restoration. The first phase of the project hired and trained around 800 Philippine workers. About a quarter of them comes from the nearby communities.
The project also made plans for extensive nature compensation to make up for the biodiversity loss due to the project. Parts of the project location are now functioning as temporary enhancement areas for migratory birds. These areas will be available to bridge the time that it will take to implement the final compensation areas. It took a while to get them up and running but now some of them are functioning very well.
Atradius DSB monitors the progress for the duration of the insurance policy. This means that we will receive updates on a bi-weekly basis and independent consultants perform quarterly site visits. Atradius DSB has visited the project themselves two times. During our last visit, SMAI showed a significant improvement within the team over the past year. SMAI invested both in new team members and in capacity building by hiring international experts.
Ms Cecile Ang, project manager from SMAI, on this project states, “SMC is not looking to make easy money”. Next to their core business on beverages and food products, they want to improve the country by performing infrastructural, power and water supply projects. It makes Ang proud if people profit from these projects. Ang explains, “We were already willing to go beyond local standards. With the help of our international partners, we are making this project our finest example. Working the international way is more troublesome, but also very rewarding in the long run”. Ms Ang shows much interest in the new developments by taking part in many of the meetings during both site visits.
I personally learnt a lot about the international standards and new ways of working. It has taken me out of the traditional way of working I was used to. In the Philippines we say ‘Pwede na’ (enough is enough), but that is not enough for this project. Without the involvement of the lenders group we would only have planted trees or bought carbon credits to compensate the nature loss. Now we are working to create new nature in the Manila Bay area.
An important lesson to be learnt from this endeavor is that new projects need to follow international standards from the very start. Mistakes made at the start of the project are still highlights in negative publications about the project. The publications easily ignore the enormous improvement of the project during the past years. That does not do justice to all the efforts taken, which benefit the local communities and migratory birds.
This is the project where our involvement has led to the most significant improvement of the local situation. It is the most rewarding of all the projects I have been working on in the past 10 years.
Ms. Ang admited that the project brought her many headaches. However, she is still happy they started this journey and is determined to bring it to a good end. She is also convinced that if SMAI is able to perform a large project like this in accordance with international standards, many other smaller projects in the Philippines will be able to do so as well. Ang will disseminate this message wherever she can. This is clearly an extra win out of the efforts that were put into this project by all involved parties.
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