No legal basis for PPA container monitoring system, says ARTA

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  • The Anti-Red Tape Authority found “no sound legal and empirical basis to establish the need” for the Philippine Ports Authority container registry and monitoring system
  • ARTA recommends that the PPA instead explore “cost-effective alternatives” to address potential congestion without burdening stakeholders
  • Fees associated with system implementation will entail additional costs for stakeholders, ARTA said
  • The recommendation followed an ARTA re-evaluation of PPA’s regulatory impact statement on the system’s proposed implementing rules
  • The final decision on implementing the regulation remains with PPA and the PPA Board

The Anti-Red Tape Authority (ARTA) found “no sound legal and empirical basis to establish the need” for the Philippine Ports Authority (PPA) container registry and monitoring system.

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

The recommendation followed an ARTA re-evaluation of PPA’s regulatory impact statement (RIS) on the system’s operating rules based on PPA Administrative Order (AO) No. 04-2021.

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

AO 04-2021 prescribes 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 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.

READ: 24 groups ask Marcos to junk container monitoring policy

ARTA said the 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.”

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

No sound basis

In ARTA’s transmittal letter of the re-evaluation report dated July 25, the agency highlighted that while Article IV, Section 6 (a) of Presidential Decree (PD) No. 857 mandates PPA to prescribe rules and regulations, procedures, and guidelines governing the establishment, construction, maintenance, and operation of all ports in the country, including the adoption of necessary measures to remedy congestion in any government port, “there is no sound legal and empirical basis to establish the need for the new regulation and to intervene in instances where evidence identifies an issue or a need for intervention following Principle 2 of the Philippine Good Regulatory Principle.”

Under Section 2.1 of Principle 2, “Regulators should only intervene in instances when evidence supports that regulations will address the issue or lead to benefits.”

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

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.

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.

READ: ARTA clears PPA container monitoring system

ARTA on March 3 sent to PPA the result of its evaluation of the agency’s 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” – Roumina Pablo