Domestic shipping lines present laundry list of concerns to transport agencies

• Domestic shipping lines met with new heads of the Maritime Industry Authority and Philippine Ports Authority to raise their concerns and offer recommendations

• The laundry list was submitted by the Philippine Inter-island Shipping Association, Philippine Liner Shipping Association and Philippine Petroleum Sea Transport Association

• Issues included long-standing as well as fresh ones on operations and competitiveness of domestic shipping, and tariffs under PPA’s Port Terminal Management Regulatory Framework

Domestic shipping lines presented a laundry list of concerns and recommendations in a meeting with the new heads of the Maritime Industry Authority (MARINA) and Philippine Ports Authority (PPA).

The list included long-standing and fresh issues such as the need to streamline government transactions and document requirements; enhance government’s electronic capability to allow for greater e-transactions with stakeholders; provide incentives for domestic shipping; and review tariffs under the PPA Port Terminal Management Regulatory Framework.

The Philippine Inter-island Shipping Association (PISA) and its member associations Philippine Liner Shipping Association (PLSA) and Philippine Petroleum Sea Transport Association submitted the list to new MARINA Administrator Hernani Fabia. The meeting was also attended by Transport Undersecretary for Maritime Elmer Francisco Sarmiento, PPA officer-in-charge and assistant general manager for operations Francisquiel Mancile, as well as other MARINA and PPA officials.

To MARINA, the groups recommended the following:

• Include domestic shipping under “critical infrastructure” when crafting implementing rules and regulations of Republic Act No. 11659 (An Act Amending Commonwealth Act 146 or the Public Service Act [PSA]), to require reciprocity before any foreign player can own more than 50% of a domestic shipping company. One of the safeguard measures under RA 11659 is the reciprocity clause, which prevents foreign nationals from owning more than 50% of capital in industries considered as critical infrastructure unless the country of such foreign nationals accords reciprocity to Philippine nationals;
• Provide financial support to aid domestic shipping companies in complying with the International Maritime Organization’s global 0.5% sulfur cap on marine fuel oil when it gets implemented in January 1, 2025. PISA noted that low sulphur-fuel oil costs three times more than the currently used fuel, thus entailing additional costs that will be passed on the consumer, ultimately leading to elevated cost of food, manufacturing, and agricultural and consumer goods;
• Accredit domestic ship captains to perform as harbor pilots of their ships. PISA has been pushing for optional pilotage for domestic ships since ship captains, who are licensed harbor masters, have mastered the peculiarities of ports they have been calling on regularly, are more familiar with the vessels they steer, and have accountability for their ships, unlike pilots;
• Review the memorandum circular on minimum safe manning, reduce manning complement for certain types of vessels and include this in the update of the Philippine Ship Safety Rules and Regulations;
• Streamline government transactions and document requirements and enhance electronic capability to allow for electronic transactions with stakeholders, including the submission of documents, provision of services, and receipt of payments, among other transactions;
• Institutionalize a Philippine government-class for ships – similar to Japan’s – exclusive to domestic shipping;
• Remove overlapping roles of MARINA and the Office for Transportation Security in ship security mandates;
• Require maritime schools to provide training ships for their students’ onboard training, or for government to reimburse domestic shipping lines through tax credits for providing onboard training to cadets;
• For MARINA to repeal the 10-centavo per liter levy on transshipment of persistent oil in bulk; and
• Include incentives for domestic shipping in the Strategic Investment Priority Plan under the Corporate Recovery and Tax Incentives for Enterprises Act as incentives under the Domestic Shipping Development Act of 2004 expired in 2014.

To PPA, the group raised these issues:

• Tariff under PPA’s Port Terminal Management Regulatory Framework (PTMRF). PLSA has been opposing implementation of tariffs under PTMRF, questioning the reasonableness and basis of the tariff and issues encountered by shipping lines in relation to its implementation;
• The Unified Electronic Ticketing System/Centralized Ticketing System, which the groups oppose due to its possible adverse effect on domestic shipping with passenger operations; and
• New shore reception facility/waste reception fee order issued in 2020, which PISA said was imposed without public consultation with domestic and international shipping lines. PISA said the new order increased garbage fees by three to four digits.

The groups also requested PPA to review rules on accreditation and issuance of permit to operate, including guidelines for a requirement to plant mangroves as a pre-condition for the issuance of accreditation.

With the passage of RA 11659, which includes seaports as a public utility thereby limiting its rate of return to 12%, the groups said “it may be worthy” to review PPA’s revised methodology and formula for adjusting the cargo-handling tariff.

Moreover, they asked PPA to review policies on mandatory pilotage for domestic shipping that has already been brought to the attention of the ports authority and MARINA many times.  – Roumina Pablo

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