Earlier, the PPA informed the joint venture about the amendments to the terms of reference (TOR) for the management of the North Harbor Modernization Project. The bidding is only open to MPIC and Harbour Centre.  Read the article here.

How can two firms belonging to one consortium proceed to participate in the bidding of PPA for the North Harbor? Something strange is brewing when PPA says it will resume the bidding process with only MPIC and HCPTI as the qualified bidders.  There must be a new meaning to the term “public bidding.”

The North Harbor is large enough for two operators. Why not let HCPTI and MPIC each operate one-half of the North Harbor area and let competition reign in order to streamline port operations? Establishing monopolies in port operations has resulted in overly exorbitant cargo handling and other rent-seeking services controlled by the PPA. Why has “cooking” the North Harbor privatization taken PPA more than two decades to implement? The project is so juicy so that major “booty capitalists” would not allow this project to get to the “wrong hands”.

In the meantime, forty percent of end-to-end shipping cost in the Philippines is still traceable to multiple cargo handling of items shipped. And since the returns in port operations and cargo handling is very lucrative for the port authorities and their appointed operators we could still end up having more investments in ports and cargo handling rather than in the floating assets of the maritime industry.

Look at how the government agencies have emaciated one Presidential flagship project – EO 170, the Road-RORO Transport System or RRTS. Some oversight committee ought to go over the implementation of this project in order to determine the culprits behind its complete emaciation.

If the President is not even aware of the failure of RRTS to bring down transport costs, she can only blame herself for having appointed incompetents and ass lickers to such an important undertaking. One is immediately reminded of the king and his new clothes each time the President reports on the RRTS during each SONA.  ;-0

Leo J. Santiago

In the issue of the Philippine Star, dated 22 July 2007, further scrutiny of the Lloyds list of maritime accidents reveals that afterall, Sulpicio Lines is not the topnotch accident prone company in the Philippines.

“A total of 111 sea tragedies involving 84 local commercial vessels have occurred in Philippine waters since 1980, Lloyd’s of London records obtained by The STAR showed.

Surprisingly, it is the Aboitiz Transport Systems Inc. and not the controversial Sulpicio Lines Inc. which posted the highest number of sea accidents – 71 – involving 55 of its vessels.

The report showed SLI was second on the list with 45 accidents. Trans Asia and Lorenzo Shipping followed with 18 and 11 incidents respectively, each involving 10 vessels.” [Read more]

What is the agenda behind the appointment of E M Aboitiz into the MARINA Board?

The MARINA Administrator, instead of clarifying this issue has replied with a libelous statement that the question about the propriety of having a shipowner in the MARINA Board comes from a “malicious and polluted mind.” 

In the absence of any formal reply, we offer the files below as possible leads into why Endika sits in the MARINA Board.

From the records:

03/10/02 Letter to the Distribution Management Association of the Philippines (DMAP)
“The discussions [were] very fruitful and I trust that some miscommunications were clarified. I was particularly interested in the discussion on Roro’s and the misperceptions that exist. Someone is not feeding us with the correct information.”

01/05/03 Endika Aboitiz talks about Corporate Governance
Corporate Governance in the shipping industry would have been unheard of and would not have been talked about until Enrique M. Aboitiz, Jr., president and chief executive officer of WG&A, set the standards and stood steadfastly by it.

04/13/04 Invitation to members of the MARINA Board
ATS invites MARINA Board members to “lunch-dialogue” and Board Secretary includes the MV Superferry 14 incident as an item in the agenda

10/27/06 Letter to the MARINA Board
“Companies that have continuous breakdowns putting at risk lives and the reputation of domestic shipping among our passengers and abroad with insurance companies and industry in general.

May we request the Maritime industry Authority to stand firm when it comes to standards. A poor economic environment and high fuel prices affect profitability.  That affects us all. However, we do not think that is a reason to lower levels of safety. We are all affected when our industry reputation is damaged. It is not just the line involved.”

11/08/07 Minutes of MARINA Board meeting
Shows that EMA is the second Private Sector Representative in the Board

07/02/08 Palace: Sulpicio takeover is still an ‘open option’
Government officials on Wednesday said that the proposal to take over the operations of Sulpicio Lines remains an “open option.”

This was revealed by Executive Secretary Eduardo Ermita and Transportation and Communications Secretary Leandro Mendoza who also defended the government’s decision to lift the suspension on the cargo operations of Sulpicio.

07/07/08 Take over Sulpicio Lines?
Malacañang has floated the idea that it might take over Sulpicio Lines. Will the idea, even if unwise, float, or will it sink even before it can be torpedoed?

07/02/08 Cabinet members discuss proposal to take over Sulpicio
A proposal to take over the Sulpicio Lines was discussed during a Cabinet meeting in Iloilo City, a Palace official said Tuesday. 

This was revealed by Executive Secretary Eduardo Ermita who said that the proposal was first broached to President Gloria Macapagal-Arroyo over the weekend and revived again on Tuesday in Iloilo.

07/06/08 Peers asked to fill void that may be left by Sulpicio Lines
The Department of Transportation and Communications is asking the shipping industry to be ready to fill the void should Sulpicio Lines Inc. be shut down for its history of maritime disasters.

Newsman Elias O. Baquero of Sun*Star Daily insists that he did not misquote Suazo.  “How could he have been misquoted when he was the one who called me on my cellphone, at least on three occasions?”, said Baquero. Central Visayas ship owners described as “unfair and irresponsible” Suazo’s allegations that “Marina 7 officials are in the payroll of several shipping firms, and that this is why all vessels were certified as seaworthy when these should have been grounded.”

Formerly, Suazo was an Assistant General Manager of the Philippine Ports Authority (PPA). He then became the President of Habour Centre Port Terminals, Inc. (HCPTI) before he was appointed as Administrator of MARINA.  As an ex-officio member of the MARINA Board, he is now in a conflict of interest situation because of the pending requests of HCPTI to handle vessels carrying international cargo; the same company that has “accused him of theft” while he was still the President of said company.

A Google search on “Vicente Suazo” today (July 14, 2008) comes up with the following entries:

• 06/19/07 Shipping official accused of theft
  THE Philippine company which transformed a garbage dump into a shipping facility has sued its former president and chief executive officer for several counts of qualified theft.     

  Harbour Centre Port Terminal Inc., which runs a Manila facility of the same name, has accused Vicente T. Suazo Jr., currently the administrator of the Maritime Industry Authority (Marina), for issuing checks to himself worth a total of P1.99 million on six different occasions during 1999 and 2002 without the company’s consent.

• 06/26/08 Sea tragedy exposes ageing ships, dismal Coast Guard budget
  The latest maritime tragedy to strike the country underscores the fatal state of the inter-island ferry system and the inability of Coast Guard authorities to enforce safety at the sea.      

  Most of the country’s inter-island ferries are practically floating coffins, ageing and with questionable seaworthiness, while the Philippine Coast Guard does not have the logistics to enforce maritime safety and regulation.

  Maritime Industry Authority administrator Vicente Suazo Jr. tells abs-cbnNews.com/Newsbreak that many of the ships in the country are second-hand, with an average age of 25 years.

  “Most of the ships are more than 20 years old because most of them are second-hand from Japan,” Suazo said when asked about the status of passenger ships. As the administrative and regulatory body on maritime travel, Marina’s role includes issuing clearances on the seaworthiness of a ship and the competence of her crew.

• 07/11/08 All ships in Central Visayas not qualified to sail: Marina chief
  If maritime laws were followed strictly, no vessel owned by shipping lines in Central Visayas would be allowed to sail because of numerous defects, Maritime Industry Authority (Marina) Administrator Vicente Suazo Jr. said Thursday.
• 07/11/08 CV ships not qualified to sail
  Marinetime Industry Authority (Marina) administrator Vicente Suazo Jr. said that if maritime laws were strictly followed, no vessel owned by shipping lines in Central Visayas would be allowed to sail. Suazo said that he organized an inspection team in Manila and they were able to uncovered a “questionable” approval and granting of Certificates of Public Convenience (CPCs) by Marina 7 officials, thus endangering the lives of passengers.
• 07/12/08 Ships in RP seaworthy: Marina 7
  Suazo said that while he received reports about some Marina 7 personnel who are in the payroll of some shipping companies, he cannot act on it because the ship owners won’t provide evidence.      

  “With due respect to our administrator, we pray and hope that he was quoted out of context,” Cabañez said.

• 07/12/08 Regulator to audit all shipping fleets
  All local shipping fleets will undergo a government audit as part of an effort to improve safety standards, officials said Friday.      

  Maritime Industry Authority (MARINA) administrator Vicente Suazo told reporters Friday that all local ships, totalling about 1,500 cargo and passenger vessels, will be audited by the regulator to make sure they conform with international safety standards.

• 07/12/08 House probers to train guns on Sulpicio
  Also on Friday, MARINA Administrator Vicente Suazo said the audit of passenger and cargo ships would be extended to shipping companies other than Sulpicio Lines.      

  Suazo said MARINA had started an audit program when the sinking of the Princess of the Stars drew the audit teams’ full attention.

• 07/13/08 Marina creates audit team to probe allegations vs. vessel inspectorsAN audit team has been created to audit the tasks of Maritime Industry Authority (Marina) inspectors, policies of shipping companies and the state of their vessels, amid allegations that some of the agency’s personnel in Central Visayas are in the payroll of these firms.Marina Administrator Vicente Suazo Jr. said the audit, which he created, will determine who among the inspectors are remiss in their jobs.
• 07/13/08 Malilong: Suazo’s claim
  I NEARLY fell off my seat when I saw the headline in Friday’s issue of Sun.Star quoting no less than the highest official of the Maritime Industry Authority as saying that all ships in Central Visayas are not fit to sail. Stated otherwise, what Marina Administrator Vicente Suazo Jr. was supposed to have said was that not a single ship in the region is seaworthy.
• 07/13/08 Suazo’s claim
  Vic is a prudent man. So unless he was quoted out of context, he must not only have meant everything he said, he also had enough basis to say it. If that were the case, then he should immediately cancel the certificates of public convenience of all, and I repeat all, the ships that are owned by companies that are based in Central Visayas. Failure to do so constitutes nonfeasance at the very least and can render him administratively liable.
• 07/13/08 Suspension stays
  ADMINISTRATOR Vicente Suazo Jr. yesterday said he will submit next week a partial report on the inspection of Sulpicio Lines’ passenger vessels to the Maritime Industry Authority (Marina) board.
• 07/13/08 Marina creates audit team to probe allegations vs. vessel inspectors
  AN audit team has been created to audit the tasks of Maritime Industry Authority (Marina) inspectors, policies of shipping companies and the state of their vessels, amid allegations that some of the agency’s personnel in Central Visayas are in the payroll of these firms.
• 07/14/08 Irresponsible statement
  SHIPPING magnate Chester Cokaliong, founder and owner of Cokaliong Shipping Lines, described as unfair and irresponsible the statement of Maritime Industry Authority (Marina) Administrator Vicente Suazo Jr. Suazo that if they strictly enforce maritime laws, no vessel based in Central Visayas will be qualified to sail. I agree. Suazo, though, claimed he was quoted out of context by a Sun.Star Cebu reporter who interviewed him.
• 07/14/08 Suazo: Shipping firms not liable for cargo that are misdeclaredA shipping company caught with “misdeclared” contraband cargoes is not liable except when it has prior knowledge that the cargoes are illegal in nature, Maritime Authority National Administrator Vicente Suazo said recently.

CEBU CITY — If maritime laws were followed strictly, no vessel owned by shipping lines in Central Visayas would be allowed to sail because of numerous defects, Maritime Industry Authority (Marina) Administrator Vicente Suazo Jr. said Thursday.

Suazo said the inspection team he organized in Manila uncovered what he described as “questionable” approval and granting of Certificates of Public Convenience (CPCs) by Marina 7 officials.

This, he said, endangers the lives of the public.

Marina 7 is authorized to issue CPCs because the task has been deregulated.

Despite their issuance of CPCs, Marina 7 inspectors and auditors failed or intentionally did not attach a copy of inspection reports of vessels to the CPC forwarded to the Marina central office, Suazo said.

He said he wanted a copy of the inspection reports because he will compare these with the report of the inspection team he organized after the m/v Princess of the Stars sank last month in stormy weather.

Suazo said he received reports that Marina 7 officials are in the payroll of several shipping firms, and that this is why all vessels were certified as seaworthy when these should have been grounded.

Suazo also said he already ordered an investigation on allegations that Marina 7 allowed Rolly Shipping Corporation to operate “dilapidated” vessels for three years, even if the shipping firm allegedly failed to meet the requirements.

Suazo said he received reports that Rolly Shipping was able to continue operating because Marina 7 extended its franchise for three years.
Rolly Shipping vessels operate in the Cebu-Leyte route.

Sun.Star Cebu failed to locate Rolly Shipping president Virgilio Alcaraz for comment Thursday.

When asked for his side, Marina 7 Director Glenn Cabañez refused to comment on Suazo’s allegation. But, he said, he will look into the allegations raised.

Cabañez said it would be better if Suazo will also present proof to back his allegations so that those linked to it can be investigated.

Cabañez also refused to comment on the issue raised against Rolly Shipping, saying he will discuss it first with his subordinates. (EOB)

Perhaps, by answering some questions on the matter, the public will be made aware of the reasons behind the questioned appointment. Suazo can easily answer the following questions, if he cares to clear the issues:

Has there been any amendment to the MARINA CHARTER?
 
Section 7 of PD 474 states that: Composition and Organization. The Board shall be composed of eight members as follows: The Secretary of Trade, the Secretary of Public Works, Transportation and Communications, the Secretary of National Defense, the Executive Secretary, the Chairman of the Board of Investments, the Chairman of the Development Bank of the Philippines, the Chairman of the Board of Transportation and the Maritime Administrator. The Chairman of the Board shall be appointed by the President of the Philippines from among its members.

The officials next in rank to the regular members shall serve as permanent alternate members, except that, in the absence of the Chairman, the Board shall elect a temporary presiding officer. The alternate members shall attend meetings of the Board and committees assigned to their principals and receive the corresponding per diems whenever their principal is absent or the said position is vacant.

The Board shall meet regularly once a month and may hold special meetings to consider urgent matters upon call of the Chairman or any three members thereof. A majority shall constitute a quorum for the transaction of business.

Each member shall receive a monthly commutable allowance of five hundred pesos and per diem of one hundred for every meeting of the Board or committee thereof actually attended: Provided, That the total amount of per diems which each may receive shall not exceed five hundred pesos a month.

Has Carlos Salinas been replaced as the private sector representative to the MARINA Board?

Certainly, if the answer to the previous question is in “no”, the next logical question that can be asked would be on the nature and legal basis for said appointment. What was the basis for the Presidential appointment of this shipping company CEO into the MARINA Board?

Do the permanent alternate ex-officio members attending the Board meetings occupy positions in government that qualify them to do so according to Section 7 of PD 474?

Lastly, what caused the Administrator to accuse the source of the news article written by Elias Baquero of Sun*Star Daily of having a “malicious and polluted mind.”

“TRANSPORTATION Secretary Leandro Mendoza yesterday said the Board of Marine Inquiry will be impartial in its investigation on the condition of the vessels of Sulpicio Lines which accounts for 40 percent of the shipping operations in the country.” More..

What kind of assurance is this coming from the DOTC Secretary that has been haled to court for charges of graft and corruption in connection with the conclusions made after the investigations into the Superferry 14 accident that sank the vessel? Let’s revisit that case filed with the Ombudsman in 2004 against the Secretaries of the DOJ and DOTC.  According to the complainant when contacted last Monday, she has never been afforded with any kind of reply regarding the status or disposition of the case that she filed with the Ombudsman.

Partly, the case was filed due to the failure of the BMI to even acknowledge the existence of a MARINA report on the Superferry 14 accident which gave a different version to that which blamed the fire as the handiwork of terrorists.

This refusal to hear formally the complaint without any valid or understandable reason speaks loudly about the “rule of law” that this Administration loudly proclaims as an assurance that it talks and deals straight as an arrow.  But things are not what they sound to be; and so, why could this new BMI investigation be different from the last one?

Secretary Mendoza was briefed for two days when he assumed the leadership at the DOTC in 2002.  He said he learned a lot out of those two days, however, we were wrong in expecting that he would correct the practices that were brought to his attention.  Most of the objectionable practices from the previous Administration were simply carried over to the new one and with the same players easily jumping from the Erap gravy train to Gloria’s.

The Secretary’s words of assurance mean nothing to those that have clearly seen that he is able to act only in the interest of the people close to the President and not for the rest of the citizens of the Republic.

Once the media has lost interest on the matter, everything dies down and it is back to normal again…… at least, until the next tragedy.

Take a look at the headlines since the ill-fated MV Princess of the Stars capsized near the Sibuyan islands.

• 062308 Biazon seeks Senate probe on MV Princess of the Stars tragedy
• 062308 Marina, Coast Guard chief pinagbibitiw ni Jinggoy
• 062308 DOTC pins blame on Sulpicio Lines over sea mishap
• 062408 Marina to open inquiry
• 062408 Inquiry board subpoenas Sulpicio, Marina officials
• 062408 Gov’t grounds Sulpicio ships; inquiries set
• 062408 Govt grounds Sulpicio
• 062408 Sulpicio ships grounded
• 062408 Sulpicio fleet grounded; company may lose franchise
• 062408 DOTC orders grounding of all Sulpicio Lines vessels
• 062408 DOTC orders grounding of all Sulpicio Lines vessels
• 062408 Biazon seeks Senate probe on MV Princess of the Stars tragedy
• 062408 Press release – Office of Sen. Zubiri (use MDI reader from Microsoft)
• 062408 Sulpicio Lines and maritime safety: An often woeful, tragic tale
  TWENTY one years since the sinking of the M/V Doña Paz between Mindoro and Marinduque after colliding with an oil tanker, considered as the world’s worst ferry disaster and the worst peace-time maritime disaster in history, it would seem that implementing safety standards at sea in the Philippines continues to be spotty and beset with problems. 
• 062508 Senate probes on maritime disasters have yielded no laws
  For the nth time, Congress is set to investigate another maritime disaster in an effort to determine what happened, pinpoint those accountable and propose laws to prevent such accidents from recurring.
  Lawmakers announced they will initiate a probe on the sinking of Princess of the Stars which has resulted in the deaths of hundreds of passengers.
• 062508 Arroyo wants Sulpicio to be held accountable for tragedy
  WASHINGTON D.C.–After ordering an investigation, President Gloria Macapagal-Arroyo wants the Sulpicio Lines Inc., owner of the capsized MV Princess of the Stars, to be held accountable for the tragedy.
• 062508 Arroyo demands thorough probe of ferry tragedy
  WASHINGTON D.C–A “deeply saddened” and “angry” President Gloria Macapagal-Arroyo demanded a thorough investigation on the capsizing of the MV Princess of the Stars off Sibuyan Island in Romblon province that killed a number of people, including children.
• 062608 House to probe ferry disaster–solon
  “This is an emergency. This is the biggest boat tragedy after so many years,” said Puentevella, who was ampng several legislators that joined President Gloria Macapagal-Arroyo on her trip here.
  “The public is asking for it so we are forced to have this hearing,” he said.

An investigation in a sea mishap is initiated when a marine protest is filed with the Board of Marine Inquiry (BMI).   Jurisdiction, therefore, rests with the BMI to conduct a most expeditious examination into the cause or causes of the tragedy. The BMI findings would be the basis of the resolution of legal claims expected to arise from the tragedy.  It would also provide legislators and administrators with enough technical considerations to form a basis for whatever remedial laws or practices may be needed to correct wrong practices, if any.

But why are there so many that want to jump into the investigative aspect of the tragedy?  Media attention set aside, is it perhaps that the BMI has lost its credibility as far as the conduct of a thorough investigation is concerned? 

There might be something to this angle if we revisit the BMI’s failure to accept the MARINA report in a previous investigation.  Such bias caused the filing of a case of graft and corruption with the Ombudsman on July 21, 2004 against Sec. of Justice Raul Gonzales, Sec. Leadro Mendoza of the Dept of Transportation and Communications , and Captain Manzano  for “changing the facts” – a criminal act punishable under the  Art.171 of the Revised Penal Code, aside from Art.183 and Art.184 of the same Code. And, you guessed it right, that case has been sleeping the sleep of the dead since it was filed by Atty. Fatimah Remedios Balbin.

Aside from the regular “whipping boys” that become a center for remedial considerations – the shipowner, Coast Guard, Marina and sometimes the PPA or NTC; its about time the leadership in the maritime affairs of this archipelagic country be subjected to some scrutiny.  The government has spent a lot in training the career executives of the MARINA by sending them to various European universities to learn specific aspects of maritime administration.  But what about the people that run the whole MARINA organization?  What are the qualifications of the MARINA administrators; all of whom are appointees of the President?  What about those that sit on the MARINA Board and those that oversee the MARINA which is an attached agency to the DOTC?  How can the career personnel of MARINA do an efficient job at administering the maritime affairs of the country when all they do is safely toe the line and just wait for their retirements to fall due?

Romy Neri has mentioned that the MARINA is an agency prone to “regulatory capture.”  Should there not be an effort to release or free this agency from patronage politics? Surely, an investigation on this aspect would offer some clues for strengthening the maritime administration in an archipelago. Hint: Check the attendance at MARINA Board meetings.

Since these sea tragedies always involve the senseless loss of lives, safety becomes a major consideration.  But safety does not come as free as the air that we breathe.  The government has relied too much on the services of international classification societies as a source for highly qualified assessments on the safety aspects of vessels operated within our waters.  For the larger companies that can operate equally larger vessels, they have no choice but to get the services of certified classification societies.  Otherwise, the insurance premiums on their large vessels could be very prohibitive.

A few years back, MARINA “opened the market” for classification societies run by local practitioners.  Affordability was the biggest consideration, and relying on competition as a price regulator, a handful of private companies were allowed to operate where there was only one.  These local companies may be technically competent, since most of them were organized by people working for and representing the international classification societies for client ships in the Philippines.  There can be very little question about their competence.  However, their performance and abilities are largely unknown by the marine insurers.  This situation can only lead to the operation of ships of much lower tonnages than those currently relied upon to do most of our national trade and passenger facilities.  Subsequently, insurance coverage of such vessels can only be acquired at higher than normal premiums.

There is a middle ground that has been offered to the Philppines, but our administrators have frowned on the idea of allowing the Japanese to train us to adopt the Japanese Government (JG) standard.  Our rules allow us to buy second hand vessels from Japan, but would not accept the JG certificate for its operation in the Philippines.  What are acceptable are certificates from societies local and foreign that are ”recognized” by the government.

What kind of arrogance is that?  We buy ships from Japan but doubt their JG standards for vessel safety assessments.  But then, we allow local classification societies to issue the same certificates notwithstanding the fact that those certificates mean nothing to the banks or the insurers.

Please spare the maritime industry from the band aid solutions that have been the style of this government.  Maritime administration is not as easy as ordering the planting of more rice, spending more on fertilizers or spreading swine in the countryside.  Neither is it the same as ordering providers of oil and electricity to lower their prices.  Efficient maritime administration requires POLITICAL WILL to implement the necessary reforms — starting from the top.

 

Hopefully, this trend will continue and perhaps accelerate so that port performance, which impacts immediately on the local economy is no longer determined by bureaucrats sitting in their offices far away from where the action is.  Also, we hope that CPA is finally also be weaned from over-influence from PPA policies and actions.

Already, Mayor Osmena of Cebu City has put forward his initial recommendations on CPA’s priority moves and concerns.  He is correct when he says that the local officers would be in a better position to look into port operational matters which affect the general public, especially the consumers that eventually bear the brunt of port inefficiency.

Read more…