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AISL: PPA container registration system encroaches on BOC mandate

  • The Philippine Ports Authority’s proposed container registry and monitoring system is redundant and encroaches on the jurisdiction of the Bureau of Customs, according to the Association of International Shipping Lines
  • AISL said BOC already has a system for accounting and monitoring the movement of containers
  • It said PPA should not pre-empt bills on container deposit and container maintenance fees currently being tackled in the Lower House

The Association of International Shipping Lines (AISL) said the Philippine Ports Authority’s (PPA) container registry and monitoring system is redundant and encroaches on the jurisdiction of the Bureau of Customs (BOC).

In an October 15 letter addressed to PPA Port Management Office-NCR South port manager Eligio Fortajada, AISL general manager Atty. Maximino Cruz said PPA Administrative Order (AO) 04-2021 “clearly encroaches on the jurisdiction” of BOC.

Under Customs Administrative Order (CAO) No. 08-2019, the customs agency already has a system for accounting and monitoring the movement of incoming and outgoing containers. CAO 08-2019 is in keeping with provisions of the 1972 Customs Convention on Containers, Revised Kyoto Convention, and other international standards in relation to the Customs Modernization and Tariff Act (CMTA).

BOC’s Electronic Tracking of Containerized Cargo (E-TRACC) System also “supplements and beefs up BOC’s monitoring capability,” AISL said.

It said E-TRACC, currently being implemented for export containers, “has an efficient and effective GPS-based monitoring and real-time tracking of container transfers” to offdock container freight stations, customs bonded warehouses, and economic and freeport zones.

READ: PPA to require registration of foreign boxes, container insurance

PPA AO 04-2021, which was issued early this month, calls for the registration and monitoring of all containers—including their scheduling, loading, unloading, release and movement—that enter and leave ports under PPA jurisdiction.

Under the order, containers also need to be covered by a container insurance policy in lieu of the container deposit and container maintenance fee.

PPA Port Operations and Service Department manager Atty. Hiyasmin Delos Santos earlier said that that they do not intend to duplicate existing systems but plan to interface the proposed system with them. She added that when a container enters the port, it falls under the jurisdiction of PPA as mandated under Presidential Decree 857. She noted that BOC’s mandate is to collect duties and taxes, while PPA’s mandate is to regulate the movement of containers within the port.

In addition, AISL said the proposed system will “unnecessarily” duplicate the container identification and accountability program of the World Customs Organization Cargo Targeting System (CTS) being implemented by BOC.

AISL noted all foreign shipping lines operating in the Philippines have been complying with CTS requirements for advance submission of container and import shipment information since November 2019.

BOC’s CTS, implemented through Customs Memorandum Order No. 48-2019, requires foreign carriers and their authorized agents to submit the cargo declaration and manifest in advance.

Duplicating BOC’s work

AISL said the PPA-proposed system likewise duplicates the monitoring of overstaying containers being performed by BOC as part of its revenue collection and anti-smuggling responsibilities as mandated under the CMTA. The group noted that BOC has onsite offices and personnel in all ports of entry, as well as in various customs facilities and warehouses.

Shipping lines, terminal operators, arrastre operators, and private port operators already comply with BOC’s mandatory report requirements on foreign containers that move through their facilities including discharge, load, gate-in and gate-out activities, the association said.

Further, foreign containers discharged in Manila international terminals but transferred to ports under the jurisdiction of independent port authorities such as Subic Bay Metropolitan Authority, Cebu Port Authority, and PHIVIDEC Industrial Authority are outside the scope of PPA AO 04-2021.

“This (issue) constitutes a substantial gap in the proposed container monitoring under the said PPA system,” AISL noted.

The association is seeking clarification on how the system will:

  • accurately identify containers based on ownership (whether carrier-owned, shipper-owned or leased containers);
  • monitor movement of empty containers within the terminals and accurately identify laden containers destined for foreign transhipment; and
  • efficiently monitor and track containers arriving in/departing from major ports that are outside PPA jurisdiction, and those containers that are laden.

AISL sought assurances of no terminal disruption while the tracking device is being installed on the container.

It is also asking how the PPA policy squares with objectives of Republic Act No. 11032 (Ease of Doing Business and Efficient Government Service Delivery Act of 2018), considering the perceived duplication of functions in monitoring, the possible disruption of terminal operations, and additional cost to stakeholders.

Further, the group questions if the proposed system will “make the premier ports in Manila competitive vis-à-vis its ASEAN counterparts” and if it will facilitate trade.

As for the replacement of the container deposit and container maintenance fee being collected by foreign shipping lines with a container insurance policy, AISL said it has “always been consistent with its view that whether or not a container deposit or container maintenance fees is required depends entirely on the commercial decision of international shipping lines.”

It noted one of its member carriers does not require the posting of a container deposit while others have special arrangements with their customers.

A pre-emptive move?

“It is also important to note that the subject of container deposit and container insurance are among the major issues being discussed in the TWG [technical working group] meetings of the House Committee on Transportation on House Bills Nos. 4316 and 4462,” AISL said.

Thus, the association recommends that PPA “not preempt the action to be taken by the House lest it will be construed that the PPA is arrogating unto itself the role as a regulatory body of international shipping lines, a subject matter that is still under deliberation by the Philippine Congress.”

READ: House bills propose standardization of foreign carriers’ charges

HBs 4316 and 4462 both seek to regulate and standardize the local charges imposed by foreign shipping lines operating in the Philippines.

United Portusers Confederation of the Philippines, Inc. president Nelson Mendoza, in a statement to PortCalls, said while he welcomes the proposed PPA registration and monitoring system, he hopes the accompanying fees will not be a concern for stakeholders.

Mendoza noted the collection of container deposit is a private and mutual agreement between the carrier and shipper or carrier and consignee, and that it is only a “guarantee for the safe return of the container,” with consignees and shippers entitled to a full refund when the containers are returned safely to shipping lines.

READ: Forwarders, brokers welcome PPA’s container insurance requirement

Philippine Multimodal Transport and Logistics Association, Inc. president Marilyn Alberto earlier said they would welcome the container insurance as long as the premium cost was reasonable. – Roumina Pablo

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