ADVOCACY MINDANOW: The inside story of Cebu Pac settlement

DAVAO CITY (MindaNews/24 July) — FULL SETTLEMENT —A few days ago , a team coming from the head office of Cebu Pacific in Manila flew to Davao City and met at a downtown hotel with a group of passengers of Flight 5J 971. After some preliminaries, checks were given to each of the passengers present that day. And they voluntarily signed quit claims or waivers so both parties could put total closure to an unfortunate incident and move on. The amount written on each check represents financial assistance and in full settlement of that incident last June 2 when the Cebu Pacific aircraft , upon landing during a rainy day, skidded out of the runway of the Davao International Airport and stuck its nose on the mud. Some 165 passengers, although no one was physically injured, suffered from shock and others obviously traumatized—and angry—because of the incident.

Last Thursday, about five weeks after the incident, the Cebu Pacific team met with the initial group of passengers in Davao City and informed them of a financial assistance that would be given equally to all 165 passengers. Since not all the 165 passengers were there last Thursday, Cebu Pacific also announced that it would schedule releases on other days so the rest of the passengers could receive their own checks, if they so wish.

NON-DISCLOSURE CLAUSE –I was in Manila that day when Andrew Bautista, president of the “Flight 5J 971 Crash Victims Association” and Atty. Robert de Leon, the group’s legal counsel met with its members at Royal Mandaya Hotel in Davao City and announced to the media that a fair and satisfactory settlement had been forged with the airline company. When asked about the amount, the group which earlier demanded P1 million each for the passengers, declined to give details except to say that the amount was “reasonable” and that they were “happy”.

THE AMOUNT —No sooner had the reporters returned to their respective desks to write their stories when I received, while still in Manila, text messages inquiring whether it was true that I helped “broker the deal”. Evidently, someone mentioned my name as having assisted in arriving at a settlement. One flash report said: “A former government official acted as broker,” clearly referring to me. Of course, I had no choice but to confirm that indeed, I helped facilitate the settlement. However, I declined to give details as I had to defer to the better judgment of the passengers on agreeing to the non-disclosure clause in their agreement with Cebu Pacific. I am sure rumors about the actual amount involved must now be circulating in the grapevines or in whispers, but nonetheless, the non-disclosure clause must be observed. (And to my friends who still keep asking, please don’t persist because even if I whisper to you an amount, it is not authorized, not accurate nor reliable unless both the affected passengers and Cebu Pacific consent to its release. And if you quote me, I will deny it! Hahaha!)

WHY SECRET? — The initial announcement of a settlement was immediately welcomed. But as the day wore on and more reports started coming out and unfolding in the media in the succeeding days, there were a few raised eyebrows. Why the secrecy? Some friends even asked whether there were secret deals cut? And I expect more speculations will arise within the next few days about the “deal”.

GIVING CONTEXT –I have therefore decided, without consulting either Cebu Pacific and the representatives of the passengers with whom I engaged during the course of the negotiations, that for the sake of transparency and fair play, I will disclose some important events that preceded Thursday’s distribution of checks — hoping to provide context to the so-called “financial settlement”. Of course, I am not at liberty to disclose all details but I will stick to the highlights, mindful of the non-disclosure agreement.

A MAN NAMED LANCE —A bit of a flashback first to 15 years earlier. It was in February, 1998 when I first met LANCE GOKONGWEI, then a young scion of business tycoon JOHN GOKONGWEI. He just came fresh from graduate school abroad when we met in Cagayan de Oro. I was then the newly assumed Presidential Assistant of Mindanao under President Ramos who was into his final year in office. Lance must be about 30 years old then and had just started to take over the management of Cebu Pacific.

SIMPLE MAN — Despite his credentials and obvious financial position, he struck me as a simple man. And he remained that way up to this day. I once saw him several years ago hurriedly going to a moviehouse unescorted to catch the last full show at the Gokongwei’s “Robinsons” at Ortigas with his wife, bringing some “baon” , a water jug and an umbrella precariously tucked under his arms.

Fast forward to today, 15 long years after that first encounter with Lance.

When I went to visit him in his office a few days ago in the Cebu Pacific complex at the airport area, it was a simple, box-type cramped cubicle that could fit only a round table. His working desk was similar to those of his other officers and clerks. I had to push aside what looked like organic veggies and some “baon” wrappings spread on top of his table. He was in an informal but serious huddle with some staff in the hallway. He is a hardnosed, hardworking, no-frills guy, at ease and usually in denims and slacks. The last time I met him was in Malacanang about 3 years ago when he received a presidential citation, in behalf of his father.

By the way, while I was writing this piece, my daughter and “forever Executive Assistant” NING, told me that when she flew to Bangkok in 2007 and while waiting at the NAIA pre-dep area to board her Cebu Pac flight, she noticed a familiar-looking man with a backpack, in denims who quietly stood up and took the long line to board just like the other passengers. No one at the boarding gate noticed that it was the “boss” and owner himself. Ning realized it only when the flight attendant who of course recognized him, greeted him and had him seated at the front row.

FACILITATOR — Just after the June 2 incident of Flight 5J 971, I wrote a published article and said, among other things, that knowing Lance in my previous dealings with him and for “having a heart in the right place” , I felt confident that he would navigate the situation and steer Cebu Pacific from that unfortunate incident. Lance emailed me after reading my column. I emailed back. And to make the story short, I volunteered to help “facilitate things” since the passengers were mostly my fellow Dabawenyos who remained very critical and rightfully aggrieved. And an indignant public at the sidelines, as well.

SETTLEMENT DONE —In due time, a group of passengers announced that they had formally organized into a registered association in preparation for taking Cebu Pacific to court, if necessary. I requested my nephew, former IBP Davao President Atty. Ceasar “Jikjik” Europa to introduce me to Atty. de Leon, the association’s lawyer. When I was told that Atty. Robert finished his law while working with Philippine Airlines, I thought he would understand the airline business and some of its ramifications. Then I talked with Andrew Bautista, president of the organized group whom I personally knew even before. He is a professional and active in the upscale real estate development sector in the city. He and several family members were passengers of Flight 5J 971. Both welcomed my offer of “facilitation”. Immediately, I touched base with Lance and his team. After some marathon sessions, we succeeded in arriving at a mutually acceptable settlement. The rest is history.

PASSENGERS –What is significant to mention here is that at the very first instance and during my first meeting with Lance and his team in Manila, without any demand yet coming from the passengers, Lance at the very outset already gave clear instructions to extend financial assistance to all the passengers, with a specific amount, irrespective of whether they were asking for assistance or not. Without admitting any liability as the investigations were still on-going, Lance felt that the airline must immediately reach out and commiserate. Lance knew and recognized that the aggrieved passengers deserved full attention and assistance.

P1 MILLION DEMAND —However, there were several developments that intervened. Atty. de Leon who was armed with a Special Power of Attorney (SPA) executed by some passengers (about 40) came forward with a letter of demand asking for P1million per passenger. A demand for more than double that amount, reportedly coming from another group was also monitored.

My facilitation went on high gear, buoyed up by my assessment that both parties appeared reasonable and fair. And that they trusted me to make a fair arrangement.

I was also noticing that Atty. De Leon although adequately covered by written authorities, was getting guidance from the other officers of their association every step of the way. Every time an important matter would be discussed, he would always refer back to his officers before relaying to me their collective position. To a facilitator like me, this was re-assuring knowing that the negotiator I was dealing with was processing the issues bringing along his principals up to speed insuring that when a consensus was arrived at with him, it was as good as sealed. In the case of Cebu Pacific, I was also secure with the thought that although I was meeting with key Cebu Pacific officials most of the time, I could have direct access with the man who would make the final call just in case I needed a lifeline: Lance himself.

In my experience as negotiator, I knew of other difficult situations where the negotiator, after cutting a deal, had to go through the difficult process of still convincing his principals or the persons whom he represented. In the case of Atty. Robert, he did not only carry written authorities, he was consulting with them along the way.

PASSENGERS SPLIT — As my facilitation progressed, some side issues cropped up including public exchanges between two groups amongst the passengers, one group calling itself as ‘VICTIMS” and the other rival group as ‘SURVIVORS” . Both were taking pot shots at each other in the media. Some “behind the scene” competition evidently, was going on with one trying to outdo the other in getting a settlement package from the airline.

Here are a few additional insights I can share.

TRANSPARENCY —For one, transparency was paramount. Even the sensitive matter of the lawyer’s fees, Atty. De Leon insisted that Cebu Pacific be transparent and should directly inform the passengers accordingly when the airline offered to shoulder a nominal amount of legal fees so the passengers would be able to receive the full amount due to them. “I don’t want anyone to suspect that I cut a deal for myself here with Cebu Pacific,” he stressed. Also to help facilitate things, Atty. De Leon said he would inform his members that he would forego of the obligation of his clients on the previously agreed fees due to him so that any amount intended for the passengers be intact and received by them in full. He also insisted that although he and Association President Andrew were duly authorized to receive payments by virtue of the SPAs, the checks must be in the name of and handed personally to the individual passengers themselves. And although Pres. Andrew and Atty. Robert did not mince words against some leaders of the rival “Survivors” group, both of them insisted that any settlement they could get must also include ALL, including their detractors, the “Survivors” (whom they claimed were saying publicly as after reforms only and not money but only to reportedly demand for a much bigger amount later — a report I was not privy about though.)

The “negotiations” by the way, did not pertain exclusively to the financial aspect of the settlement. Some discussions revolved around how Cebu Pacific could work on certain “doables” towards its commitment of learning some lessons from—and for the airline coming out of — this incident as a “better airline”.

I recall there were some stalemate moments too. Both sides had their own non-negotiable points. At one difficult stage, I was even telegraphing to both parties that if no mutually acceptable arrangement could be forged, then I would quietly slip away in the same manner that I had quietly entered the scene.
But at the end of the day, when both negotiating parties were reasonable and fair, there was no reason at all why a mutually acceptable arrangement could not be reached. Thus, it was sealed and done.

BEST OPTION –With all this behind us now, there will be those who will welcome the settlement. And there will be those who will be critical. There will be the usual speculations, both positive and negative. But for those who were directly involved as players in the ball game, putting a total closure to an unfortunate incident like that Flight 5J 971, is the best option available. Of course, it has valuable lessons to learn from, as what Cebu Pacific President/CEO LANCE GOKONGWEI acknowledged and conceded early on. (Lawyer Jesus G. Dureza was government peace panel chair in the negotiations with the MILF under the Arroyo administration from 2001 to 2003 and was later named Presidential Adviser on the Peace Process (2005 to 2008). He heads Advocacy MindaNOW Foundation, Inc. and was recently named publisher of the Davao City-based Mindanao Times. This piece is from his syndicated column, Advocacy MindaNOW).

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