The Anti-Red Tape Authority (ARTA) has released the results of its re-evaluation of the Philippine Ports Authority’s (PPA) proposed container registration and monitoring system, declaring the program to be an added burden on port users and recommending instead a search for more cost-effective alternatives
ARTA in its report released on July 25, 2023 said it has completed its re-evaluation of the PPA’s Regulatory Impact Statement (RIS) on the proposed Implementing Operational Guidelines (IOG) of PPA Administrative Order (AO) No. 04-2021 upon the request of various stakeholders to be affected by the proposed regulation.
AO 04-2021, entitled “Policy on the Registration and Monitoring of Containers,” is the controversy-laden order prescribing the registration and monitoring of containers under the Trusted Operator Program-Container Registry Monitoring System (TOP-CRMS).
ARTA said it reevaluated the RIS “considering recent data/information gathered from PPA and concerned private stakeholders.”
“A key concern for re-evaluation was the PPA’s statement during a June 2023 consultation meeting, stating that there is currently no port congestion. This contradicts the system’s intended purpose, as stated in the submitted RIS,” said ARTA.
No sound basis
In a July 25 letter to PPA general manager Jay Daniel Santiago signed by ARTA Secretary Ernesto Perez, it was pointed out that “it has been established, and as also admitted by PPA, that there is no congestion inside PPA-regulated ports.”
Thus, “there is no sound legal and empirical basis to establish the need for the new regulation,” the letter continued.
In addition, “the fees associated with the implementation of the TOP-CRMS will entail additional costs to stakeholders, particularly in relation to the utilization of PPA-authorized Container Staging Facility outside the ports,” it further stated.
At the same time, “the collection of additional fees through requiring the stakeholders to register with the TOP-CRMS for them to be accredited, highlights the conflicting mandates of the PPA as regulator and port operator,” said ARTA.
Although ARTA noted that the TOP-CRMS is preventive for future congestion, “the costs of implementation for the industry should be thoughtfully considered.”
ARTA recommended that PPA “explore cost-effective alternatives to address potential congestion without burdening stakeholders.”
But it also said the final decision to implement the regulation rests with the PPA and the PPA Board.
“The RIS re-evaluation results may be used as a reference in determining whether the proposed regulation will be a viable intervention to implement/adopt or not, revised accordingly, replaced, or scrapped altogether,” ARTA said.
ARTA’s Perez firmly asserted that the results of the re-evaluation were final, impartial, and not influenced by external factors.
He stated, “Our re-evaluation was diligent, and it stands as our final recommendation, unless either party provides relevant additional documents.”
Rejected from the start
PPA AO 04-2021 sets the policy for the registration and monitoring of containers entering and leaving PPA ports, including the scheduling, loading, unloading, release and movement of all containers.
It aims to generate a record of accountability to “enable PPA to monitor the movement of containers from the time of entry, discharge, return and storage, and re-export,” with the objective of preventing smuggling.
Further, the order “shall apply to all containers originating from foreign ports that will be unloaded at government and/or private ports under the administrative jurisdiction of the PPA.”
Since PPA AO 04-2021 was issued in late 2021, it has only received flak from various stakeholders about the regulation’s potential to “negatively impact port operations and disrupt the delicate balance of commerce at the port.”
Trade, industry and transport and logistics groups issued a solidarity statement in May 2022 seeking the “immediate revocation” of the order as it “threatens to cripple the transport and logistics industries and the national economy as a whole.”
In January 2023, trade and business groups again sought the scrapping of the order, arguing that the regulation would only add undue cost burdens to businesses and consumers amid runaway inflation and container delays.
In opposing PPA AO 04-2021 and its IOG, they said the order directly encroached on the function of the Bureau of Customs (BOC), which is already tasked to monitor the movement of containers inside and outside the port.
Moreover, the BOC’s monitoring activity is supplemented by the E-TRACC, a real-time monitoring system of containerized cargoes using GPS-enabled electronic locks.
Further, the customs body is already implementing the container identification and accountability program of the World Customs Organization Cargo Targeting System (WCO-CTS), requiring all foreign shipping lines operating in the Philippines to submit in advance their container and import shipment information to the WCO-CTS.
The trade groups also expressed doubts that PPA AO 04-2021 would help prevent smuggling because it only covers the ports managed by the Authority.
The groups likewise believed that container monitoring by PPA would further inflate costs.
“Other than the container insurance cost of PhP980 plus VAT, there will also be a service fee of PhP3,520 plus VAT per container for use of the staging facility beyond the first three days,” the oppositionists said. “This is in addition to the accreditation fees to be paid by the shipping line, trucks and insurance companies. Ultimately, all these costs will be passed on to the end consumer.