PPA stands pat on container monitoring system

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  • The Philippine Ports Authority is standing pat on its controversial container registry and monitoring system
  • The agency insists the system is needed to, among others, address the long-standing issue on return of container deposit
  • This, even if it acknowledges foreign shipping lines will not immediately stop imposing container deposits once the container registry and monitoring system is implemented

The Philippine Ports Authority is standing pat on its controversial container registry and monitoring system, insisting it is needed to, among others, address the long-standing issue on return of container deposit.

The insistence comes even if the agency acknowledged foreign shipping lines, many of which require a container deposit, will not immediately stop imposing container deposits once the system is implemented.

The delayed return of container deposits is a common complaint among shippers and is one of the issues which PPA’s container registry and monitoring system for foreign containers — prescribed under PPA Administrative Order 04-2021 — aims to solve. The order substitutes the container deposit with a container insurance.

AO 04-2021 specifically requires foreign containers to be registered in PPA’s Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS).

Hindi po natin ipapangako sa inyo at magiging kahibangan po siguro kung sabihin namin kapag in-implement natin ito at some point e kinabukasan yung mga shipping lines hindi na mangongolekta ng container deposit…Suntok sa buwan po ‘yun. Kung mangyayari po iyon lahat po tayo matutuwa pero kami mismo naniniwala na hindi kaagad-agad mangyayari,” PPA assistant general manager for finance and administration Elmer Nonnatus Cadano said during the agency’s truckers’ summit on January 16.

(“We can’t promise you and it would perhaps be foolishness on our part if we told you that if we implement this at some point, the shipping lines would stop collecting container deposit the next day…that’s punching the moon. If ever that happens, we’ll all be happy, but we ourselves don’t believe that will happen quickly.”)

Various stakeholders have opposed AO 04-2021 and the TOP-CRMS, which they described as an expensive, non-value-adding regulatory burden that encroaches on the functions of the Bureau of Customs (BOC).

Business groups call anew for scrapping of PPA container monitoring system

Cadano said the AO in fact gives stakeholders a “weapon” to take foreign shipping lines to court or to complain to relevant government agencies against the container deposit.

Once the TOP-CRMS is implemented, he said, it wouldn’t be right for foreign carriers to collect a deposit as this would amount to “double collection”.

In their position papers on the proposed implementing operational guidelines of AO 04-2021, stakeholders pointed out that by requiring container insurance in lieu of container deposit, PPA is arrogating itself as the regulatory body of international shipping lines without the legal authority to do so. There is no government agency exercising oversight and supervision over international shipping lines.

In a statement released on January 16, PPA further debunked allegations put forward by stakeholders against the TOP-CRMS.

PPA said stakeholders’ resistance to TOP-CRMS is “supposedly based on the fear that the program would inflate the cost of logistics far greater than the actual benefits it can bring to the table.”

The agency claimed the program will actually “streamline all the transactions at the ports in support of the Ease of Doing Business Law.”

TOP-CRMS uses technology for up-to-date container tracking, allowing customers, carriers, freight forwarders, and shippers to access the status of their cargoes and containers, and is in keeping with President Ferdinand Marcos, Jr’s directive to digitalize government processes and make them more effective and transparent to end-users, PPA said.

In a meeting with the Private Sector Advisory Council, Marcos gave the go-ahead for TOP-CRMS proceed to “help lower commodity prices, prevent smuggling, and improve revenue collections.”

The ports authority noted that container deposits shipping lines charge range from P10,000 to P30,000 for dry containers and much as P180,000 for refrigerated containers.

With TOP-CRMS, PPA said the amount will be reduced to a P980 (exclusive of value-added tax) per container monitoring fee, inclusive of the container insurance, and P3,408 (exclusive of VAT) per empty container for the use of PPA staging facilities beyond the first three days.

Earlier, stakeholders noted that while the return of container deposits takes time, they eventually get returned as opposed to the container insurance fee, which is a non-returnable cost.

PPA also claimed TOP-CRMS will help alleviate storage problems at ports and prevent port congestion by providing shared staging facilities for empty containers. The shared staging facilities for empty containers, it added, “will likewise address concerns on detention charges, container imbalance charges, peak season charges, and the like.”

Stakeholders questioned how this would work as, under the system, a tablet will be entrusted to truck drivers as monitoring device. “If these devices will be entrusted to truckers, where is the element of control in effective container monitoring especially if the container is separate from the truck?” the Association of International Shipping Lines earlier asked.

In addition, PPA said TOP-CRMS does not encroach on BOC functions, with the latter’s Electronic Tracking of Containerized Cargo (e-TRACC) system performing a different function from the PPA system: e-TRACC monitors what’s inside containers while PPA’s system monitors containers themselves, the port authority said.

It noted that, under Presidential Decree No. 857, it is PPA’s mandate to manage and monitor the entry, exit, re-entry and re-export of containers at PPA-administered ports.

Cadano said an incidental objective of TOP-CRMS is to help curb contraband. He earlier said BOC “appreciates” TOP-CRMS and the data the system can provide Customs to fight smuggling.

“While BOC and PPA have their own respective mandates, sharing of data to provide a whole-of-government approach to solving national problems, such as smuggling, should not be frowned upon but, on the contrary, encouraged,” PPA said in its statement.

“While some business groups are opposing the TOP-CRMS which will help promote transparency and lessen business costs, PPA would like to take a stand for the underprivileged and under-represented segment of the logistics sector, namely, the truckers, brokers, and stakeholders that will benefit from this whole-of-government approach of digitalization through the TOP-CRMS,” it added.

During the summit Maria Zapata, president of the Confederation of Truckers Association of the Philippines, said the group reversed its earlier opposition to TOP-CRMS and now supports the program, noting this is the first time a government agency has “flexed its muscles” on the container deposit problem.

There have been attempts in previous years by other government agencies, such as the Department of Trade and Industry, to address issues such as the container deposit return, considered a local charge imposed by foreign shipping lines. None of these efforts produced positive results as there is no law authorizing a government agency to regulate foreign shipping lines’ local charges.

There is now a bill in Congress that seeks to strengthen the oversight function of relevant government agencies over international shipping lines.

READ: Bill seeking firmer government control on liners’ charges widely supported

Meanwhile, Candano said PPA will not implement the proposed implementing operational guidelines for AO 04-2021 unless approved by the PPA Board and the Anti-Red Tape Authority (ARTA).

ARTA conducts the regulatory impact assessment (RIA), a systematic process that helps ensure existing and proposed government regulations are of good quality. RIA is required by Republic Act 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, when proposing a new regulation or seeking a review of existing regulations for improvement.

PPA has just submitted its regulatory notification to ARTA and is now awaiting ARTA assessment. – Roumina Pablo