ARTA puts “final nail in the coffin” of PPA container monitoring policy, say industry groups

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ARTA puts “final nail in the coffin” of PPA container monitoring policy, say industry groups
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  • 3 industry associations welcomed results of the Anti-Red Tape Authority’s re-evaluation of the Philippine Ports Authority’s policy on container registry and monitoring system
  • The ARTA report found no legal basis for the proposed PPA policy
  • It also recommended that PPA look for a cost-effective alternative to the system
  • The Alliance of Concerned Truck Owners and Organizations, Association of International Shipping Lines and Alliance of Container Yard Operators of the Philippines said the results of ARTA’s re-evaluation “unequivocally highlighted the multiple flaws in PPA’s proposition”
  • PPA said it will study its options

The Anti-Red Tape Authority (ARTA) “unequivocally put the final nail in the coffin” of the proposed Philippine Ports Authority (PPA) container registry and monitoring system, three industry groups said.

In a statement, the Alliance of Concerned Truck Owners and Organizations (ACTOO), Association of International Shipping Lines (AISL) and Alliance of Container Yard Operators of the Philippines (ACYOP) welcomed results of ARTA’s re-evaluation of the regulatory impact statement (RIS) on PPA proposed rules covering PPA Administrative Order (AO) NO. 04-2021.

READ: No legal basis for PPA container monitoring system, says ARTA

AO 04-2021 contains the policy on registration and monitoring of foreign containers entering and leaving PPA ports. It requires foreign containers to register in PPA’s Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS) and to secure a container insurance policy.

The system, which has met widespread opposition from stakeholders, has been indefinitely suspended since January by the PPA Board.

The associations said the ARTA report highlights “unequivocally” the proposition’s “multiple flaws” even as they “hailed ARTA’s decision as a savior for the industries affected by TOP-CRMS.”

They said: “The business community commends ARTA’s unwavering dedication to protecting the interests of stakeholders and fostering a conducive environment for economic growth as mandated by the Ease of Doing Business Law or Republic Act 11032.”

ACTOO, AISL and ACYOP are part of 24 business groups that recently sent an open letter to President Ferdinand Marcos, Jr. asking him to immediately revoke PPA AO 04-2021. In that letter they reiterated several “unresolved issues” against the policy and TOP-CRMS.

AISL president Patrick Ronas said ARTA’s recommendation “fully aligns with the concerns raised by industry operators, who firmly believe that the PPA’s proposal would have detrimental effects on the economy.”

Ronas emphasized that PPA AO 04-2021 would have added P35 billion to annual importation costs and fueling inflation in the Philippines once more.

ACTOO director Rina Papa echoed Ronas’ statement: “ARTA’s recommendation is in perfect alignment with what our group has consistently pointed out – the inefficiency, duplicity, and detrimental effects of PPA’s TOP-CRMS on truck owners and operators.”

PPA, in a statement over the weekend, said it will study its options.

“As far as PPA is concerned, ARTA already issued a Good Practice RIS with a 36/40 rating for the TOP-CRMS program. ARTA has not retracted nor recalled the rating which they previously issued and at the same time deferred to PPA whether or not to continue with the implementation of the TOP-CRMS program. We really don’t know what was the purpose of that ARTA memo nor its value or its effect on the previously issued Good Practice RIS rating. PPA submitted all required documents to ARTA, sometimes twice even, and they even consulted all stakeholders including oppositors before they issued the Good Practice RIS. The situation has not changed so we really don’t understand what happened or what was the motivation of ARTA for subsequently issuing the said memo which only brought more confusion,” PPA general manager Jay Santiago said.

On March 3, ARTA sent to PPA results of an evaluation of the agency’s (PPA) RIS, which garnered a score of 36 out of 40 or a “good practice” rating, which means it has “elements where analysis or the process were not of exceptional quality and could have been improved.”

Stakeholders later wrote ARTA about alleged inaccuracies in PPA’s RIS compared to actual ground data.

ARTA in its reevaluation report issued on July 25 said it found “no sound legal and empirical basis to establish the need” for PPA’s TOP-CRMS.

It recommended that the port agency instead explore “cost-effective alternatives” to “address potential congestion without burdening stakeholders”.

While PPA noted the system is “preventive for future congestion,” ARTA said “costs of implementation for the industry should be thoughtfully considered.”

ARTA said fees associated with system implementation will entail additional costs for stakeholders, particularly in relation to the use of PPA-authorized container staging facility outside the ports.

The collection of registration fees for accreditation with TOP-CRMS “highlights the conflicting mandates of the PPA as regulator and port operator,” ARTA pointed out.

The agency also found PPA’s statement during a June 2023 consultation meeting that there is currently no port congestion “contradicts the system’s intended purpose, as stated in the submitted RIS.”

Further, the agency noted that PPA submitted its RIS for ARTA’s assessment only after the issuance of AO 04-2021 and the award of the TOP-CRMS contract to the joint venture of NEXTIX, Inc. and Shiptek Solutions Corp.

Despite its findings, ARTA pointed out the “final decision on implementing the regulation rests with the PPA and the PPA Board.”

ARTA director general Ernesto Perez asserted its “meticulous re-evaluation” — requested by various stakeholders to be affected by the proposed regulation — was impartial and not influenced by external factors.

“Our re-evaluation was diligent, and it stands as our final recommendation, unless either party provides relevant additional documents,” Perez said.

ARTA said it remains open to “considering new evidence that could impact the evaluation outcome, reflecting their commitment to transparency and fair, evidence-based decision-making”.

PPA earlier said TOP-CRMS will address the long-standing issue on the return of container deposits imposed by foreign shipping lines, as well as manage the return of foreign empty containers.

ARTA said the re-evaluation process is based on several grounds and considered input and data from both government agencies and private stakeholders.

The re-evaluation process is pursuant to ARTA’s mandate to review the proposed regulation by the PPA under Section 17 (g) of Republic Act No. 11032, or the Ease Doing Business Law. The re-evaluation report was released to relevant agencies on July 25, 2023. – Roumina Pablo