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A House bill that seeks to strengthen government oversight over local charges imposed by international shipping lines gained support from various government agencies and stakeholder groups
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House Bill 4933 also aims to empower government institutions in promoting efficient, competitive and reliable logistics services
Various government agencies and stakeholder organizations expressed support for the passage of a House bill seeking to strengthen government oversight function over the imposition of local charges by international shipping lines.
Those who threw their support to House Bill No. 4933 at the Lower House Committee on Transportation (COTr) hearing were officials from the Department of Transportation (DOTr), Maritime Industry Authority (MARINA), Department of Trade and Industry (DTI), Department of Interior and Local Government, Department of Public Works and Highways, National Economic and Development Authority, Philippine Competition Commission, Bureau of Customs (BOC), Subic Bay Metropolitan Authority, Poro Point Management Corporation, Phividec Industrial Authority, Cagayan Economic Zone Authority, and Export Development Council.
While manifesting support for the measure, the Bureau of Internal Revenue said it would defer to its parent agency, the Department of Finance, which has yet to submit a position paper.
Stakeholder groups that expressed approval of the bill include the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc.; Supply Chain Management Association of the Philippines, Portusers Confederation of the Philippines, Asian Terminals Inc., and Royal Cargo Inc.
The World Shipping Council, which represents various international container carriers, also submitted its position paper.
Filed by Representative Bernadette Herrera-Dy of Bagong Henerasyon Party List, HB 4933, also known as the International Maritime Trade Competitiveness Act, aims to ensure government oversight of the imposition of domestic charges by international shipping lines and related business practices, and empower government institutions in promoting an efficient, competitive, and reliable logistics services.
In its explanatory note, HB 4933 said “excessive and unnecessary fees, charges and surcharges imposed as origin and destination charges as well as unconscionable fees imposed on the management of empty containers by international shipping lines” undermine the country’s competitiveness.
These charges impact the economy as they increase the cost of importing raw materials and intermediate goods; jack up prices paid by the domestic consumer; impair government collection of correct taxes; and undermine the privity of obligations and contracts principle, the measure said.
Similar bills had been filed in previous Congresses. The last one, HB 10575, was passed by the Lower House January 2022 on third and final reading but did not reach the bicameral conference committee.
During the HB 4933 hearing, Transport Undersecretary for maritime Elmer Francisco Sarmiento said DOTr supports the bill’s enactment, noting it is in support of President Ferdinand Marcos Jr.’s mandate and socio-economic agenda to reduce transportation costs.
MARINA Legal Service director Atty. Sharon Aledo said her agency supports the bill but proposed the inclusion of several provisions, such as budget appropriation, provision of training and capacity building, and additional manpower to assist MARINA – one of the implementing agencies under the bill – in enforcing the proposed measure.
DTI-Supply Chain and Logistics Management Division assistant division chief Jonathan Cabaltera reiterated his division’s support for the bill, which he said will uphold fair and transparent shipping charges to promote competitiveness of Philippine shipping and protect the import and export sectors.
He added that HB 4933 will address the longstanding problem of excessive and unreasonable shipping charges imposed by international shipping lines.
BOC Assessment and Operations Coordinating Group deputy commissioner Edward James Dy Buco said the bureau is already coordinating with other agencies to implement some provisions of HB 4933, such as the accreditation and activation of container depots and promulgation of rules and regulations for container yards.
PUCP’s Julita Lopez noted that the addition of more agencies and private sector representatives to the MARINA Board “may lead to possible delays and setbacks” as it might take much time and effort even just to get a quorum during meetings.
On container deposits, Lopez recommended their non-imposition. She explained some shipping lines no longer collect container deposits because the guarantee and fee for insurance already cover the containers.
AISL president Patirck Ronas said the bill is “an honest attempt to strike a good balance between the interest of Philippine stakeholders and international shipping lines.”
Ronas, however, said that “extreme caution should be exercised in defining its oversight functions and for government to conduct an in-depth study on how the US Federal Maritime Commission (FMC) discharges its duty in ensuring a competitive and reliable international transportation supply system affecting Philippine import and export trade.” The FMC is an independent federal agency that is responsible for the regulation of ocean-borne international transportation of the United States.
Ronas pointed out that charges imposed by shipping lines locally are recognized globally and are not only practiced in the Philippines. He added that other countries or transportation authorities do not actually prohibit local charges “but simply act as an oversight.”
He explained that carriers are not privy to the condition of sale between the buyer and the seller. He noted that INCOTERMS (International Commercial Terms) specifies who is responsible for paying and managing the shipment, insurance, documentation, cost of clearance and other logistical activities and that the carrier is only a component of the INCOTERMS when adopted by both the buyer and the seller.
HB 4933 will apply to all aspects affecting the imposition of shipping charges by international carriers arriving at or originating in Philippine ports.
Under the bill, all port or terminal operators, international carriers, non-vessel operating common carriers (NVOCC), and forwarders should inform MARINA of their regular shipping charges and fees, and publish the same in a newspaper of general circulation. No charges or fees should be imposed beyond the published rates.
No new or initial rate or change in an existing rate that results in increased cost to the shipper may become effective earlier than 30 days after the submission to the MARINA of such new shipping rates, except when allowed by MARINA for a reasonable or good cause.
No local charges or surcharges, except for internationally accepted surcharges, fees for value-added services, and behavioral charges such as late payment fee and container insurance, should be charged by international shipping lines or their agents, freight forwarders and NVOCCs on Philippine consignees and shippers. The imposition and parameters of such imposition must be clearly defined in the contract of carriage and subscribed to by the shipper or consignee.
Moreover, no detention charges in the return of empty containers should be imposed by shipping lines when the delay is caused by them. For this purpose, international shipping lines must ensure that the delivery order always indicates the container depot where the empty container owned by the shipping lines must be returned.
Any demurrage fee or detention charge should not constitute a direct or indirect lien on container deposits or on other cargoes or shipments covered by a separate transaction of the same shipper or consignee.
MARINA may allow the imposition of container deposits only if forwarders or agents of international shipping lines implement an expeditious procedure in refunding the same within a non-extendible period of 15 days from the return of the container; there are clear and fair standards for deductions made known by such forwarders or agents to the other party prior to engagement; and there is actual proof that a container deposit has been paid before any deduction is made.
MARINA will accredit sea freight forwarders such as NVOCC, international freight forwarders and other similar maritime enterprises. It will also exercise supervision over sea freight forwarders, domestic freight forwarders, and other similar maritime enterprises including the ship agents and their representatives, branches, offices or subsidiaries of international shipping lines to ensure the reasonableness of their rate-setting mechanism for local fees and charges, and compliance with existing laws, rules and regulations relating to standards of safety, quality and efficiency of operation.
The MARINA Board will formulate a National Logistics Efficiency Policy (NLEP) to ensure the efficiency of customs and border management, quality of trade and transport infrastructure, competence of logistics services, their ability to track and trace consignments, and the competitiveness of shipping prices. The NLEP will serve as a guide in the formulation and issuance of the rules, regulations, and programs of the implementing agencies specified in the proposed measure.
A technical working group that will harmonize all inputs and position papers on HB 4933 submitted to Committee on Transportation will be created. – Roumina Pablo
