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ISSUES CONCERNING THE GOOD GOVERNANCE OF RRC ELECTRICAL ACCREDITED

CONSTRUCTION UNDER ANECO INC.

A Research Paper
Presented to
The Faculty of Business Administration Program of
Father Saturnino Urios University
Butuan City

In Partial Fulfilment
Of the Requirements for
BACC212 Corporate Social Responsibility and Good Governance

BACLAO, STEPHAN CRISTER


BARTIDO, LOVELY ROSE
CUBILLAS, CHAINDY MARIE
CAPARAS, JAYVEE MONETTE
CAGAMPANG, JENNY ROSE
ENDINO, MAY
LANTINGAN, KENO
RESEARCHERS

2019
CHAPTER 1

1.1 RATIONALE

The purpose of this study is to generate a good deal of good governance by the employees' safety
of RRC Construction under ANECO Inc. answering the question of employees whenever they can get any
incentives just like health benefits when there’s something wrong happen in their working hours, as well
as coping with the need of the skilled works since they are dealing with risky tasks to do so. As good
governance became a part of the business world, it requires the organization to cater the responsibilities to
their employees. It may vary from a company to establish a good governance, but it could attract more
skilled workers and customers where integrating the safety and the responsibility that cater the needs of
the employees and customers who are affected of the business operation. The business chosen studying
the Issue Concerning the Good Governance of RRC Electrical Accredited Construction under Agusan Del
Norte Electric Cooperative, Incorporated.

In the world of business, operational performance management is the alignment of all business
units within an organization to ensure that they are working together to achieve core business goals.
There are different objectives or factors that enables one to measure on how to solve the issue concerning
the risky operation of a business. There are factors affecting the good governance of RRC which led the
researchers to spill the trigger. The following are the factors that could help the researchers to find out the
issue concerning of:

• Benefits of the workers

• Financial assisstance towards unexpected phenomena

• Avoidance of the Risk and Peril of business operation; and

• Strategy to eliminate the environmental and societal stress.

The above mentioned are the key elements to attain recommendation of the researchers towards the
issues. These factors can be use with the analyzation, conclusion and the connections of the statement of
the problem.
The researchers chose to study the Issues Concerning the Good Governance of RRC Electrical
Accredited Construction under ANECO Inc. Due to its high risk of work place which demands to have a
good benefits for the sake of the workers. It could be costly yet it could also be both financially and
concerning relationship between good governance. The RRC Construction initiate the good governance
for the benefits of the people involved in business operation such as; linemen, foreman, lead man, and
customers however, it should be improved. The main reason of RRC is to serve social and economic
goals. However, simple it may sound but it takes time to analyze what kind of good governance they are
going to implement in order to ascend more than it used to.
1.2 THE PROBLEM AND ITS BACKGROUND

Electricity is considered as a necessity in the lives of every individual. As it is part of the business
world, electricity have a long way of becoming the most resourceful and a high risk of employment that
requires the social responsibility. “As electric goes bigger and wider, power always brings with it
responsibility” according to Theodore Roosevelt (2016), which means that a company who generated a
certain electrical businesses operated in the town or in the region must have responsibility in the workers
especially in their Electrical Linemen where they can prioritize safety on the job and they’ll let the people
settled first, before operating the electrical interruption.

Utility work is essential for keeping electricity running into our homes, but it is also highly
dangerous. Linemen risk falls, electric shocks, burns, and other injuries while on the job every day, and
these incidents can even be fatal. According to U.S. Department of Labor (2014) “As a lineman, you can
understand the magnitude of the hazards you face and take workplace safety measures to keep yourself
and those around you safe. This will allow you to wake up every day and do the work that serves your
community”. Even if you have been working as a lineman for decades, it’s still essential to know these
risks. This will ensure that you are taking clear safety measures and following best practices for line work
but with the help and coordination with the company and contractors as well.

Since utility workers face some of the most dangerous tasks in the industry, the Agusan del Norte
Electric Cooperative, Inc. (ANECO) has offered good governance. ANECO, Inc. has been formed in
accordance with the provision of Presidential Decree or PD 269 under the National Electrification
Administration (NEA). It was incorporated on February 12, 1977. In its operation, ANECO distributes
power to the two (2) cities Butuan and Cabadbaran and ten municipalities that comprise the rest of
Agusan del Norte namely, Las Nieves, RTR, Santiago, Tubay, Magallanes, Jabonga, Kitcharao, Nasipit,
Buenavista and Carmen. ANECO, Inc. is serving almost 137,000 member-consumers in the entire Butuan
City and Province of Agusan del Norte. ANECO has four electrical accredited contractors; the RRC,
MAXTERS, YBES and BCH. These contractors are sub-partners of ANECO in business operation. These
contractors are also considered as proprietor because they provide skilled workers such as; lineman with
full accreditation and certificates of conduct and knowledgeable enough, since this kind of work is prone
into danger. The RRC composed of 15 skilled workers, MAXTERS has 30 workers, YBES has 10 and
BCH has 20 skilled workers that contributed the success of operation and reputation of ANECO for how
many years.
These contractors has different governance and the researchers chose RRC since it is second among
four contractors that provide effective good governance in their workers and customers. In addition, the
researchers chose the RRC for having transparency and accountability of their information, for they also
believed that this research will not only help the researchers, but also their business, future researchers
and customers for them to gain public confidence.

RRC Construction was established during 2007, they operated their business more than ten years
from now. According to Mr. Joseph B. Cubillas the foreman and the spokesman of RRC Construction,
“Corporate Social Responsibility is a hard-edge decision of our business. Not because it is a nice thing
to do or this is what people are forcing us to do but it is because it is good for our business and to our
customers as well”. Despite of all the decisions made in order to attain CSR, there were several things to
consider which supports the idea of David Suzuki.

Suzuki (2013) stated: “The voluntary approach to CSR has failed in many cases”

The voluntary approach he meant was directly related to RRC decision especially on the first five
years of operating their business. They failed on implementing the CSR because of the financial crisis and
their earnings before, it wasn’t cater the resource allocation of the CSR. With that, the Management
involves managing the process by which raw materials, labor and energy are converted into goods and
services. People skills, creativity, rational analysis and technological knowledge are all important for
success in operations management. Morever, it could also be used not only to production in business but
also to the capability of operations.
1.3 THEORETICAL FRAMEWORK

Considering that a good governance needs to be developed furthermore for the good of the
business, an improvement is highly needed. Governance theories have to do with the various perspectives
of governance and how they evolve. Bjork and Johansson’s Theory of Good Governance is an example
on why does the company needs a good and a firm on its governance execution.

Johansson (2011) stated: “Good governance is about how people are treated not merely as
customers or consumers but as citizens, who have the right to hold their governments to account for the
actions they take or fail to take. The demand for efficiency in the public sector should not be allowed to
lead to bad service. When there is bad service, citizens have the right to protest and hold politicians
accountable.”

Moreover, this theory can be used for integrating a good governance, by finding how can solve the
unintentional phenomena in operational performance work in the RRC Construction under the ANECO,
we should be able to construct certain suggestions as to how the business could possibly develop
furthermore in terms of their operations and governance. Supporting this framework, the Operations
Management Theory by Taylor (1911) gives an evaluation as to how a business should give benefit and
insured the workers in terms of their operations. It is concerned with controlling the production of process
and business operations in the most efficient manner possible. As to Reginaldo R. Calo Construction,
their business should follow the certain responsibilities. One of those responsibilities is ensuring the
business operates efficiently, both in terms of preserving the safety of the linemen and the people around
them during their operation. It is necessary to meet the satisfaction of their employee’s benefits to gain the
highest public confidence and legal affairs.

Young (1994): “Good governance theory is aimed at achieving efficiency in public service
delivery, encouraging competition, privatization, civil service reforms, decentralization, out-sourcing of
services.” Sheng (2008) added, “It will be duly emphasized that good governance theory is geared
towards enhancing ways and means by which state bureaucracies carry-out state activities and utilize
state resources so as to protect individual and personal liberties.”

The direct quotation of Young and Sheng added was quite connected to the deal of governance by
RRC due to its lacking of concerns to its workers. Somehow, in operating a business the number one goal
that is needed to set is on how to aim at achieving efficiency in company’s service to its employees. This
theory would allow the RRC to be motivated enough to enhance its governance in terms of uplifting their
workers to avoid risk contacts and a financial assistance and insurance to serve as a weapon in the
forthcoming.

According to Kaufman, Kraay and Mastruzzi (2006): “Rule of law is an important principle of
good governance theory, which guarantees equity, fairness and justice in the society. Good governance
theory stipulates complete entrenchment of individual and group rights and unbiased observance of the
laws.”

Since the workers are the heart of the company, an employer must take care of their people in order
to get public confidence. Here in the Philippines, there is a law abiding employees to have its financial
assistance in terms of unintentional events such as; fall in confined spaces, fires and explosions,
environmental and social stress, it could be use against RRC if ever they will not enhance their
governance especially the benefits of the worker. The following Republic Act of the Philippines would
support the right of employees needed.

REPUBLIC ACT NO. 772 - AN ACT TO FURTHER AMEND ACT NUMBERED THREE
THOUSAND FOUR HUNDRED AND TWENTY-EIGHT, "AN ACT PRESCRIBING THE
COMPENSATION TO BE RECEIVED BY EMPLOYEES FOR PERSONAL INJURIES, DEATH OR
ILLNESS CONTRACTED IN THE PERFORMANCE OF THEIR DUTIES", AS AMENDED BY ACT
NUMBERED THREE THOUSAND EIGHT HUNDRED AND TWELVE AND BY
COMMONWEALTH ACT NUMBERED TWO HUNDRED AND TEN PROVIDING FOR ITS
ADMINISTRATION BY A WORKMEN'S COMPENSATION COMMISSIONER; AND
PRESCRIBING HIS POWERS AND DUTIES.

Section 4. Injuries not covered. — Compensation shall not be allowed for injuries caused: (1)
by the voluntary intent of the employee to inflict such injury upon himself or another person; (2) by
drunkenness on the part of the laborer who had the accident; and (3) by notorious negligence of the
same."

Section 13. Medical attendance. — Immediately after an employee has suffered as injury or
contracted sickness and during the subsequent period of disability, the employer shall provide the
employee with such medical, surgical, and hospital services and supplies as the nature of the injury or
sickness may require.
REVIEW RELATED LITERATURE

The review related literature below is to support the idea of the researchers in terms of enhancing
a good governance. According to Idada (2012), the theory of good governance seeks to promote
effectiveness and efficiency as well as stable and predictable growth through public service institutions,
the theory of democracy or democratic governance deals with political freedom, equal right and justice as
main focus. In their studies it is ore focus on the quest of good governance in Nigeria which studying on
how to enhance the good governance of an institution. The theory of Good Governance serves as their
supporting frame for their study.

According to Kaufman, Kraay and Mastruzzi (2006): “Rule of law is an important principle of
good governance theory, which guarantees equity, fairness and justice in the society. Good governance
theory stipulates complete entrenchment of individual and group rights and unbiased observance of the
laws.” This statement pertains to idea that an employee must have the same treatment in the top
management even though they are labeled by their positions, the equality and fairness above all is the
most important key to have a good governance. In addition, the good governance must also consider
equity and inclusiveness.

Grindle and Harrison (2005). “Equity and Inclusiveness is an important principle of good
governance theory. The principle guarantees the following: dignity of the human person, equal
rights and freedom from any discrimination. It is all embracing and encompassing for all
members of the society. It also emphasizes the well-being of the society which is generally
nurtured by the sense of belonging to the society by all citizens as well as a feeling of
belongingness as stakeholders in the society. This principle stipulates that the various groups
especially the most susceptible to attack must not only be protected but also given opportunity to
enhance their well-being. This therefore stipulates or ensures that every citizen is given equal
access to better his or her lot and also to enhance his or her well-being in the society.”

It is not only setting with the idea of Grindle and Harrison but also it corresponds the idea of Cole and
Kelly (2011) which states that Effectiveness is primarily the process of doing right things while efficiency
is primarily the process of doing things right. Therefore, the principle as it applies to good governance
means doing right things and doing things right within the society by the government, using the resources
available. It emphasizes that governance must come up with action plans which address the necessities of
the society as the resources available are put into the best use. Whereas, efficiency as an element of good
governance theory embraces the long-lasting use of god-given resources of the society and most
especially environmental protection, the principle of effectiveness emphasizes the good use of the natural
resources of the society by the government.

According to (Gisselquist, 2012) “Strategic vision is another important principle of good


governance theory. The principle of strategic vision stipulates that the government should
be liberal and futuristic in its thinking about governing issues. A government is said to be
good, when it takes a liberal and futuristic direction on governing matters or issues, with
the urgency required and also with the knowledge of history, culture and sociology of the
direction. The principle emphasizes the need for a good government to envisage future
challenges based on the present and future implications.”

According to Koffi Annan (1997), this principle guarantees all subjects a stake in the future of their
society in all ramifications. This is because the principle of strategic vision is all about securing the future
and planning for the multi-various uncertainties and unforeseen contingencies attendant to it. A good
government should be strategic and futuristic in its planning, direction and orientation. They defined the
business as an example for using Operations Management Theory. Moreover they stated:

“Operations Management Theory refers to the strategies used in structuring and


administering business practices to create the highest level of efficiency in an
organization. The ability to convert materials and labor into goods and services
in the most efficient way possible is what maximizes profits.”

Together, these theories can both make a methodology as to how the RRC Construction improved
their governance as in line with the business world. The Operations Management Theory evaluates how a
business behaves in their operations and can be used during the course of the study. While using the
Theory of Good Governance after the study, to create development actions for the said business.
1.4 STATEMENT OF THE PROBLEM

The study focuses on determining the Issues Concerning the Good Governance of RRC Electrical
Accredited Construction under Agusan Del Norte Electric Coperative, Inc. Furthermore, the study will
answer the following questions below:

1. To what extent is the effectiveness of the Good Governance of the RRC Construction under
Agusan Del Norte Electric Coperative, Inc.

• Falls in confined spaces

• Fires and explosions

• Environmental and social stress

2. How RRC Construction gives accreditation to their workers and customers in terms of
unexpected phenomena such as; risk and peril?

3. What makes the RRC reliable and one of the most trusted contractor among all four
constructions of ANECO?
1.5 DEFINITION OF TERMS

CSR. Corporate Social Responsibility

Risk. It refers to possible expose of someone or something valued to danger, harm, or loss.

Fatal. It refers to leading of something or someone to failure and disaster.

Necessity. It refers to the quality or state of being necessary.

Essential. It refers to absolutely necessary; extremely important.

Proprietor. It refers to the owner of a business, or a holder of property.

Transparency. It refers in a business or governance context, is honesty and openness.

Accountability. It refers to the obligation of an individual or organization to account for its activities,

accept responsibility

Various. It refers to having or showing different properties or qualities.

Efficient. It refers to prevent the wasteful use of a particular resource.

Public Confidence. It refers to the trust of a customer to the industry.

Inclusive. It is including or covering all the services, facilities, or items normally expected or required.

Assessment. The evaluation or estimation of the nature, quality, or ability of someone or something.

Negligence. It is failure to take proper care in doing something.

Peril. It is expose to danger or threaten.


Fundamental. Forming a necessary base or core; of central importance.
CHAPTER 2

2.1 ANALYSIS

In view of the foregoing analysis on the theory of good governance, the time-tested principles of
the theory will be adopted in evaluating governance in the context of Issues Concerning the Good
Governance of RRC Electrical Accredited Construction. The researchers used qualitative type of research
in order to define and provide various perspective on how the RRC Electrical Accredited Construction
deals with the arising issues in their business. After conducing interview and gathered several data, it
helps the researchers to come up and attain the answers of the following questions served. Since the
research focuses on Issues Concerning the Good Governance of RRC Electrical Accredited Construction
with the help of the statement of the problem and the factors affecting their business, the assessment that
the researchers noticed is improving their good governance in terms of the benefits of the workers which
pertains to the employees’ health benefits and insurances.

Mr. Cubillas said, “Our contractor provides us health benefits but however, sometimes there is
inconsistent in implementing it. It is not only the fault of our contractor but sometimes, my co-workers
aren’t interested in conducting it as some of us are just minimum wage earner, which will lessen their
salaries because of deductions.” In behalf of the researchers, it maybe the possible response of the
workers, but the contractor is obligated to persuade the health benefits and insurances since their work is
prone into danger which may resulted in falls in confined spaces, fires and explosions, environmental and
social stress. The second is financial assistance towards unexpected phenomena which pertains to the
ideas concerning to arising issues such as casualties of injuries. The researchers suggested to awaken
them to have its own insurances just like Health, Medical, Life and Death Insurance.

According to RRC Contractor, “Our business encompasses the need to have financial assistance
towards unexpected events especially if this event is from our construction’s fault. We would not turn
around our obligations since it would cause distortion of our reputation”. The researchers are fully
supporting the idea of the entity for it could not only help their business but also the employees and
customers. If ever the RRC will not follow the Republic Act No. 772 under Section 4. Injuries not
covered. — Compensation shall not be allowed for injuries caused: (1) by the voluntary intent of the
employee to inflict such injury upon himself or another person; (2) by drunkenness on the part of the
laborer who had the accident; and (3) by notorious negligence of the same." and Republic Act No. 772
under Section 13. Medical attendance. — Immediately after an employee has suffered as injury or
contracted sickness and during the subsequent period of disability, the employer shall provide the
employee with such medical, surgical, and hospital services and supplies as the nature of the injury or
sickness may require.

Third is the avoidance of the risk and peril of business operation, the RRC Construction
integrated the avoidance by determining first what are the purpose of their operation. There are somehow
three elements of purposes; the replacement of rotten poles and massive clearing, relocation of mobile
substation, and line rehab. Before the RRC take the action they provided facebook and radio
announcements about when, where and who are the affected people of their operation. Relocating the
people to avoid and eliminate environmental and societal stress that would refer to affected barangay.
“The replacement of rotten poles are to lessen the casualties of a pole to falls unexpectedly which could
possibly affect the houses and any certain properties of individual. Relocation of mobile substation and
line rehab is to either putting the wires as high as 20 to 30 feet and putting it underground to avoid
human contact that would result to electric short circuit or even massive burning, fires and explosions”
as Mr. Cubillas added. Therefore, an attempt will be made to contextualize the theory of good governance
in RRC Construction by providing the needs of the employees and other business buddy. The researchers
analyzed that the RRC did their best to implement the good governance however it depends on their entity
if they will get along credit and apply the suggestions of the researchers.
2.2 PROPOSAL AND RECOMMENDATION

At a similar time, all corporation are becoming concerned about their own sustainability and what
are the term really means. Sustainability is of course fundamental to a business and its continuing
existence. Before the business operates, the entity should know who they value. The RRC Construction
set their priorities aside from giving satisfaction to their customers, they assess the risk reduction. The
risk reduction is a risk management techniques by implementing goals which measures and prevent
actualizing risks or minimizing the number that could actually happen to avoid casualties and costs.

The researchers recommend to improve the issues concerning the good governance of RRC
Construction since it requires more safety measures such as;

• Benefits of the workers

• Financial assistance towards unexpected phenomena

• Avoidance of the Risk and Peril of business operation; and

• Strategy to eliminate the environmental and societal stress.

“Everyone have rights to pursue their own ends, but with the right responsibilities and obligations it
helps the company to ascend” said by Crowther (2004). The researcher understand that the RRC
Construction integrate objectives of their business such as; Maximizing Cash Flow, Profit Maximization,
Maximizing Service Provision, Long-term Stability, and Sustainability. Despite of these things they did
not forget to implement CSR as it requires sufficient funds. The researchers believe that it would not only
help them but helping their entity as well.
2.3 CONCLUSION

Having analysed the issues and critical factors for good governance, the position of RRC
Construction in terms of good or bad governance can be better understood as summarised below:

While good governance in behalf of RRC Construction, they provided health benefit such as;
PAG-IBIG, SSS, PHILHEALTH and insurance. However, what makes it in between of good and bad
governance it’s because it needs improvement because of the inconsistency as what have stated by Mr.
Cubillas, one of the employee of RRC and a lead man of the team. It will be concluded that no matter
what, good governance does exist in RRC Construction but it should be improve for reasons. Therefore,
to have good governance in a company especially in RRC that deals with risky tasks, governance reforms
in line with the principles of good governance theory which are strongly recommended to them. All the
principles of good governance theory must be embraced in all ramifications, ranging from responsible
leadership, efficiency and effectiveness, tolerance to free, fair and credible treatment among others. To
have good governance practice in RRC, the governance must reflect all the principles of good governance
theory.
2.4 REFERENCES

Aras,G and Crowther, D. 2009c. ‘Corporate Governance and Corporate Social Responsibility in Context’,
in G. Aras and D. Crowther (eds), Global Perspectives on Corporate Governance and Social
Responsibility (forthcoming). Aldershot: Gower.

Bjork, P.G. and Johansson, H.S.H. (2001). Towards Governance Theory: In Search for a Common
Ground. Bjork-Johnson 2001 pdf. IPSA. http://unoacademia.ch/webdav/site/
development/shard/development/mdv/sutienauxcours0809/E721governance/2.1

Gleick, J. 1988. Chaos: Making a New Science. London:Heinemann

Harrison, G. (2005). The World Bank, Governance and Theories of Political Action in Africa. British
Journal of Politics and International Relations, 7(2), 240-60.

Idada, W. and Uhunmwangho, S.O. (2012). Problems of Democratic Governance in Nigeria: The Way
Forward. Journal of Sociology and Anthropology, 3(1), 49- 54.

Kaufmann, D.,A. Kraay. And Mastruzzi, P.(2006). Governance Matters. World Bank Policy Research
Working Paper 2296.

Mill, J.S. 1863. Utilitarianism, Liberty and Representative Government. many edtions.

Sheng, Y.K. (2008). What is good governance?. United Nations Economic and Social Commission for
Asia and the Pacific (UNESCAP).Retrieved on March 12, 2013 from http://www.unescap.org.

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