Port users, agencies back bills regulating foreign carriers’ charges

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  • Various government agencies and stakeholders’ groups threw support two house bills seeking to regulate and standardize local charges imposed by foreign shipping lines
  • The Department of Trade and Industry will submit a draft bill for the proposed Philippine Shippers’ Act, which calls for expanding MARINA’s powers to include authority and jurisdiction over international shipping lines and freight forwarders
  • DTI also proposes an oversight committee that will serve as policymaking body on international shipping and transport logistics issues
  • The Lower House Committee on Transportation has approved the creation of a technical working group to consolidate the bills

Various government agencies and stakeholders’ groups are supporting the passage of house bills (HB) seeking to regulate and standardize local charges imposed by foreign shipping lines operating in the Philippines.

The agencies that manifested support for HBs 4316 and 4462 are the Philippine Ports Authority, Maritime Industry Authority (MARINA), Department of Justice-Office for Competition, National Economic and Development Authority (NEDA), Department of Transportation (DOTr), and Department of Trade and Industry (DTI).

They revealed their position during a virtual public hearing on April 30 presided by the Lower House Committee on Transportation (COTr).

Also in favor of the bills were stakeholders’ groups present during the hearing, including the Supply Chain Management Association of the Philippines; Port Users Confederation of the Philippines, Inc.; Philippine Multimodal Transport and Logistics Association, Inc.; and Chamber of Customs Brokers, Inc.

READ: House bills propose standardization of foreign carriers’ charges

HB 4316, filed by Bagong Henerasyon Partylist representative Bernadette Herrera-Dy, seeks to regulate and standardize local charges imposed at both origin and destination by foreign shipping lines. The measure is meant to comply with existing laws and obligations and contracts and the International Commercial Terms (Incoterms).

On the other hand, HB 4462, filed by Ang Probinsyano Partylist representative Ronnie Ong, mandates the Maritime Industry Authority (MARINA) to promote fair and transparent destination and other shipping charges among freight forwarders and agents of international shipping lines.

In her explanatory note, Herrera-Dy said the “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.

Ong in his explanatory note said that “despite being an important national concern and despite our neighboring countries already issuing regulations on similar problems, the same, however has not been squarely addressed by the Philippine government.”

He noted that government inaction can be attributed to the fact that no government agency is “owning up to the responsibility of addressing the high international shipping costs.”

Problematic till now

MARINA Maritime Legal Service Division OIC-chief Atty. May Maureen Dizon said their agency supports the bills “as both seek to address the long time issue on shipping charges.”

NEDA director Richard Emerson Ballester said they fully support the bills as these are aligned with the Philippine Economic Development Plan and National Transport Policy.

DTI assistant secretary Mary Jean Pacheco, during the hearing, noted several interventions have been tried in the past two years to resolve the issue of foreign shipping line charges “but the solution really is legislative in nature.”

A joint administrative order between DTI, DOTr, and Department of Finance to regulate local charges by foreign carriers was drafted in 2019, and was planned to be turned into an executive order to give it more teeth. Both attempts did not prosper as there is no law to support the directives.

Last year, a Shippers’ Protection Office (SPO) was created as a temporary measure to protect the public during a state of national calamity “from the impact and effects of exorbitant and unreasonable shipping fees resulting in increased prices for domestic consumers.”

But proceedings under the SPO are non-litigious and summary in nature, and the office cannot penalize shipping lines.

Pacheco said DTI will submit to COTr for consideration a draft bill for the proposed Philippine Shippers’ Act, which is aligned with HB 4462 and supports expansion of MARINA’s powers and functions to include authority and jurisdiction over maritime enterprises such as international shipping lines and international freight forwarders.

READ: DTI bill regulating foreign carriers’ charges may be ready by end Jan—trade exec

DTI also proposes creation of an oversight committee to be called the Philippine Shippers’ Board, which will be a policy-making body that will act on all issues and concerns on international shipping and transport logistics.

Returning container deposits

The Association of International Shipping Lines (AISL), meanwhile, said among the provisions of the bills they view favorably is the one on the return of container deposits.

AISL president Patrick Ronas, during the hearing, said they’ve had several consultations with other stakeholders’ groups where it was agreed that container deposits should be returned within 15 days after the empty container has been returned. He noted, however, that some foreign shipping lines have been unable to do so.

AISL general manager Atty. Maximino Cruz, also during the hearing, said they tried to explain during membership meetings the rising complaints about the return of container deposits.

He noted, however, “that is the most we can do because basically, this return of container deposit” is a “commercial decision of each member line.”

The return of container deposit has been a long-standing industry issue tackled in various dialogues. Previous moves to address the concern, such as by creating a cash bond, fizzled out.

Meanwhile, Cruz said there are also provisions in the bills “wherein we have to comment on, specifically when it comes to the jurisdiction of the Bureau of Customs (BOC) to regulate the imposition of destination charges.”

Cruz noted that while BOC, under Section 1226 of the Customs Modernization and Tariff Act, can supervise third parties, which includes shipping lines, this is not absolute and has to be harmonized with the powers of BOC under Section 202 of the same law.

He noted that AISL is more inclined for MARINA to regulate destination charges.

Other provisions that AISL will comment on in its position paper is the use of INCOTERMS to determine the behavior of the carrier, and the nature and purpose of demurrage and detention and why these are imposed by shipping lines.

COTr during the hearing approved the creation of a technical working group to consolidate HBs 4316 and 4462. The TWG will be composed of the concerned government agencies and stakeholders’ organizations.

No counterpart bill on foreign shipping line charges, however, has been filed in the Senate. – Roumina Pablo