MARITIME WATCHKEEPER

Did you ever wonder how directors of a captured agency conduct their business?  In this example, we have a precedent-setting meeting where an ex-officio director designated by the PPA Charter actually attends the board meeting.  So, the discussion becomes lively because there is at least one director present that tries to take up concerns from the side of people that pay for the port services.

This happened on March 22, 2007 where the issue being discussed was the proposal to allow MICT to handle domestic containerized cargo in order to reduce transport cost of imports and exports.  After some sloppy presentation of facts on the cargo volume affected, the rationale for the proposal was roundly accepted.  No one was concerned about the imbalance in the import and export volumes and its implications.  Neither was any question raised about the kind vessels and operating costs might be encountered in chartering domestic vessels for the purpose of addressing an annual volume of 100,000 TEU’s coming from the south.

In a very competitive industry such as shipping, any opportunity to reduce cost and attract cargo would already have been considered by the domestic operators, and definitely operating cargo vessels to ferry import and export cargo between MICT and the southern ports would not fly.  But then, the suggestion is for domestic cargo mixed with international cargo be also allowed at the MICT.  In effect, in order to ‘level the playing field’ MICT would be allowed to handle all kinds of containerized cargo – foreign or domestic.

Whoa!  If smuggling can flourish in seggregated and dedicated berthing areas, just how easy would it be to increase the illegal transactions where domestic and foreign cargo are handled at the same area?  They must be kidding, right?

Anyway, everyone thought it was such a brilliant idea which would make the importers and exporters in the country happy.  With the mention of levelling the ‘playing field’ the concern about exclusivity of handling containerized foreign cargo by ICTSI came about.  The discussion defending and justifying the PPA reluctance to allow a third party to handle containerized cargo anywhere else in the Port of Manila is both funny and pathetic.

Instead of referring to the contract of ICTSI, the PPA GM relies more on what verbal discussions might have taken place more than 20 years ago and what they meant.  Funnier though is for a lawyer that says he is afraid to be sued if he takes a particular stance when he cannot even show a contract provision that says he will indeed be in trouble if he does so.

To appreciate how consumers are being screwed in these meetings, click here for a copy of the Minutes of Board Meeting #329 if the PPA.

Has the condition of regulatory capture spilled over to include the Office of the President?  Do we have now a fourth branch of government working behind the scenes?

As some personalities mentioned in the NBN scandal have started to surface and relationships and events are slowly painting the nature of Philippine governance, the issue of high sea transport rates emerges as an example of what has been happening.  Two issues from the maritime sector are presented here to show that indeed, some reforms have to be undertaken, as emphasized by Mr. Neri when he says “We need to reform the political economy by controlling vested interest groups, by having mechanisms to assure integrity of policies and eventually, by having constitutional reforms.” (more…)