The order of Transportation Secretary Jaime Bautista for shipping lines to avoid charging container deposits from brokers and importers, and subscribe instead to the Container Ledger Account, or CLA, is “ultra vires” or imposing powers beyond his capacity to do so, a source in the logistics industry said.
“The SoTr (secretary of transportation) cannot validly issue an order adopting the CLA “ultra vires.”
The Office of the Secretary has only direct line supervision and control over the department’s regional offices. The DoTr proper shall be responsible for developing and implementing the department’s policies, plans, programs, and projects,” a source who sought anonymity told Daily Tribune.
The source said Anti-Red Tape Authority chief, Atty. Ernesto V. Perez admitted the CLA did not undergo a Regulatory Impact Assessment by ARTA.
“The CLA is not being imposed by way of regulation by a government agency. But if a stakeholder can show that (the regulation) is being imposed by a government agency-DoTr, then we can ask that it be subjected to an RIA. Otherwise, if it is only an option and the shipping lines are not required to use the CLA, then there is no regulation by DoTr to be subjected to RIA,” the source said.
“The closest agency with authority over shipping lines (other than PPA) is Marina, and it does not have any regulatory power over shipping lines,” the source added.
Moreover, the source revealed, quoting a report from PortCalls, 20 shipping lines are now subscribers of CLA, including COSCO Shipping Lines (Phils.) Inc., Sinotrans (Uni-ship), Hyundai Merchant Marine (Philippines) Co. Inc., and Kyowa Shipping Lines (Skybest Logistics).
He said other shipping lines that are currently subscribed to the CLA include BLPL Singapore, CK Line, Concorde Container, Eagle Express Lines Inc. (RCL South Phils.), Federated Cargo Line, Lancer Container, Macro Ocean Philippines Inc., MBF Carpenters, New Zealand Line, Oceanus Container, OOCL Philippines Inc., Samudera Shipping, Sarjak Container Lines, Southern Star Agencia Maritima Inc. (Namsung Shipping), KMTC (Phils.) Corp., and RCL Feeders Phils. Inc.
CLA subscribers AISL allies? Meanwhile, the source said most of the CLA subscribers have a close alliance with the Association of International Shipping Lines.
“You can check all those shipping lines that signed up with CLA. If not most, all have only one ship agent, AISL President Patrick Ronas. Not all shipping lines are AISL members. With this DoTr directive, they require all shipping lines to adopt the AISL system,” the source added.
CLA is an online system that aims to simplify and speed up container deposit refunds.
“Only 19.86 percent of shipping lines are subscribed to CLA. They want the remaining 80 percent also to subscribe. That’s a regulatory capture,” the source said.
AISL, the source said, had been pushing for the implementation of the CLA since 2021 to contradict the performance of the PPA Administrative Order No. 04-2021 or the Trusted Operator Program- Container Registry and Monitoring System.
The TOP-CRMS, currently deferred for implementation by Philippine Ports Authority Board chaired by Transportation Secretary Bautista, is said to be the answer to the overcharging of container deposits by international shipping lines, which cost the logistics industry roughly P23 billion in 2022 alone.
In his 12 July 2023 letter to Joseph Collantes, operations manager of RCL Feeder Pte. Ltd., and Jesus Sedano, owner’s representative of RCL Feeder Pte. Ltd., Bautista directed shipping line operators to discontinue the container deposit practice, as the issue of delays in refunds of container deposits and unreturned deposits in the millions of pesos continued to burden and create financial difficulties for many importers that have now become an industry problem.
“Discontinue container deposit practice or continue to collect container deposits contingent upon the ability to refund within 14 days and subscribe to container deposit from CLA subscribers or other providers that offer equivalent services. The cooperation and commitment of all parties will address these perennial industry concerns and significantly reduce logistics costs in the Philippines,” Bautista’s letter read.