PPA bars Manila North Harbour from engaging in international trade

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North_Harbor_2_MinesManila North Harbour Port, Inc. (MNHPI) may not handle foreign trade at its North Harbor facility because its contract is for the provision of domestic terminal services only, according to the Philippine Ports Authority (PPA).

The PPA ruling is in response to recent Bureau of Customs (BOC) orders which allowed MNHPI to handle international vessels and cargo, putting the two government agencies on a collision course.

“MNHPI is prohibited from providing terminal services to foreign vessels at Manila North Harbor. Accordingly, foreign vessels cannot proceed to Manila North Harbor for purposes of anchorage and/or docking at its berths and unloading of their cargoes, among others,” PPA Memorandum Order (PMO) No. 08-2016 said. The June 21 order was signed by PPA officer-in-charge and assistant general manager for Operations Raul Santos and took effect immediately.

The port authority cited Section 4.02, Article IV of the Contract for the Development, Management, Operations, Maintenance of the Manila North Harbor between PPA and MNHPI, which “expressly provides that MNHPI shall provide and undertake domestic terminal services only at the Manila North Harbor.” MNHPI’s 25-year contract was granted by PPA in 2010.

But even prior to the release of the PPA ruling, the BOC orders were already questioned by a PortCalls source at the agency.

READ: BOC orders giving North Harbor authority to handle foreign cargo questioned

The source said North Harbor “is owned by PPA and MNHPI is only the cargo-handling operator. Any operation not stipulated in the 25-year contract is a direct violation which will merit cancellation of (the MNHPI) contract with PPA even if they are armed with a BOC permit.”

PPA handed down its June 21 ruling following the issuance of BOC Customs Memorandum Order (CMO) No. 11-2016 dated June 2 and signed by outgoing Customs Commissioner Alberto Lina, which allowed foreign vessels to dock at North Harbor, and an MNHPI letter dated June 8 expressing the port operator’s readiness to provide services to foreign vessels and cargoes.

Another BOC CMO, 12-2016, laid down rules for handling foreign cargo at North Harbor. Signed June 2, the CMO describes North Harbor as a sub-port of entry of the Manila International Container Port (MICP), giving North Port the legal authority to handle foreign cargoes. This description, CMO 12-2016 added, is supported by Executive Order No. 127 issued in 1987, which reorganized the then Ministry of Finance, and upheld by Customs Administrative Order No. 04-79 dated May 24. 1979 (Activation of the MICP and the Realignment of the North Harbor Branch into a Sub-Port of Entry, Customs District II).

READ: BOC lays out North Port rules for handling foreign cargo

The CMO added that under Section 3519 of the Tariff and Customs Code of the Philippines (TCCP), “a port of entry, which includes a principal port of entry and a sub-port of entry, is open to both foreign and coastwise trade.”

CMOs 11-2016 and 12-2016 were preceded by a December 2015 BOC order that awarded MNHPI a certificate of authority to operate as an authorized customs facility (ACF). As ACF, MNHPI can handle and store imported goods that are immediately discharged from an arriving airplane, vessel and other means of international transport.

READ: Manila North Port can now handle international cargoes

In CMOs 11-2016 and 12-2016, BOC also cited as legal basis Section 608 of the TCCP, as amended, and Republic Act No. 10668 or the Foreign Ships Co-loading Act, and its implementing rules and regulations, for giving MNHPI the authority to handle foreign cargo.

Section 608 of the TCCP states that the Customs Commissioner shall, subject to the approval of the department head, make all rules and regulations necessary to enforce provisions of TCCP.

Sections 4 and 5 of RA 10668, meanwhile, grants the Customs Commissioner the power to authorize any foreign vessel to take or convey import or export cargoes at any Philippine port authorized by a government contract to handle domestic, import, or export cargo. – Text and photo by Roumina Pablo