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THE MARITIME LEAGUE

THE COVER

CHAIRMAN'S PAGE CHAIRMAN EMERITUS 5 Hon. Fidel V. Ramos Cleaning the AFP and PNP

HONORARY CHAIRMAN Hon Leandro R. Mendoza MARITIME UPDATE 6

CHAIRMAN AND PRESIDENT SECURITY Commo. Carlos L. Agustin AFP (Ret) 8 Superferry 14 fire 'was sabotage' BOARD OF TRUSTEES Audit for 5 year ISPS certification starts Rep. Plaridel M. Abaya Vicente F. Aldanese VAdm. Napoleon C. Baylon, AFP (Ret) CORPORATE 11 Capt. Alberto Compas, MM Nenaco goes for Private Ownership Herminio S. Esguerra Edgar S. Go Doris Teresa M. Ho COVER STORY 12 VAdm. Reuben S. Lista Deregulation goes full steam Hector E. Miole Carlos C. Salinas Rep. Vicente A. Sandoval CREWING AND TRAINING 14 Philip S. Tuazon Focusing on Language of the Sea PHS encourages promotion Editorial Board Myanmar Seafarers are cheapest Sri Lanka/Normay Seamen Agreement CHAIRMAN Commo. Carlos L. Agustin, AFP (Ret) INTERNATIONAL CONVENTION 16 MEMBERS What hampers the need for technical aid in maritime sector? Edgar S. Go Doris Teresa M. Ho Dante La Jimenez PEOPLE 19 Ernest Villareal The new cast of FAME Philpesta calls on new Marina chief Editorial Staff PORTS 20 EDITOR Andy G. Dalisay Subic tracks vehicle movement CdO port development up for grabs ASSOCIATE EDITOR Batangas Port nears completion Carmela I. Huelar

EDITORIAL ASSISTANT BROKERAGE 22 Let B. Amante-Capatoy What's wrong with Brokers' Law The Philippine Hammonia Shipmanagement Ci"ew LAYOUT Richerly Howard T. Domigo COMMODITY 24 US bounds transhipments on tight watch Fresh fruits watching for holidays

THE MARITIME LEAGUE WORD FROM FVR 2 6 Philippine Navy Procurement Building Moving fast forward the power sector thru privatization and deregulation Gate 7, Molave St. , Bonifacio Naval Station, Fort Bonifacio, Taguig , Metro Manila Email : [email protected] Tel. No. 812-7521 to 28/812-7431 loc. 3987

The Maritime Review is published bimonthly on behalf of the Maritime League and is supplied to members as part of their annual membership package. However, the opinions expressed by the writers do not necessarily reflect those of the Maritime League .

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CLEANSING TH

by: Maritime League Chairman Carlos L. Agustin HE public service goes be enough to have sheer determination. with indifference much more as adver­ yond material and physical The lack of a proper perspective to per­ saries or enemies. comfort, the essence of being form one's duties increases the chances Ta true "vanguard of society" of failure and temptations and there­ The synergy of the people's moral force with willingness to sacrifice as its fore­ fore, could result in betraying the and the legally instituted police power most noble attribute, never for finan­ people's trust and confidence. of public officers can overcome the cial gain and popularity. Such is espe­ worst insidious plans of any organized cially true for the uniformed services Lately, the police and military sectors criminal group. We have the people whose image of late suffer from the have been the focus of public scrutiny and the law. Hence, the legal power consequences of corruption. due to serious image credibility and power of numbers will lead us to A law enforcer is a dedicated public brought about by allegations of corrup­ justice. servant and a model citizen of the com­ tion and other illegal activities. Gain­ munity. Like any other pubic servant, ing pub I ic trust and confidence pre­ As exemplars of society, peace officers a public safety officer must have sev­ sents a serious challenge because their must be the examples of obedience to eral important virtues. Important effectiveness and success are anchored law. This means obeying the rules of among !hese are: intellectual capabil­ on the willingness of people to coop­ behavior for order, living within their ity, technical proficiency, moral integ­ erate with them. Therefore, as respon­ means and being respectable in all their rity and sense of purpose. The first sible members of the society in gen­ actions. The people cannot but sup­ equips him for entry to a demanding eral, and law enforcement community port the government and its law enforc­ profession, the second he develops in in particular, they should impose so­ ers if they see public servants sincere, training and practice, the third he nur­ cial sanctions to caution, correct or re­ honest and dedicated in performing tures from chil.dhood and develops in form the few irresponsible and erring their functions. the course of training and professional comrade-in-arm s absorbed by selfish development and the fourth is that motives. Will it take just a few good men and quality which promotes excellence and wome n to start the domino effect of enhances one's ability to accomplish Delivering public safety is a noble pro­ putting an end to wrongdoing, or will the mission adequately. fession established primarily to serve it need more? That question will have the people- to institute safety, preserve to be answered by the PN P and the Among the four, I place great value on order and confidence and enforce the AFP. moral integrity - the greatest but least fu II extent of the law if necessary, to obvious trait a public officer can pos- all individuals. Therefore, the lawman The time is now for all good men and sess. But it is in' practicing the sense of must gain the people's confidence and women in the uniformed service to purpose that the greatness of a man or serve them with utmost courtesy, de­ cleanse their rank and file of the few woman can be measured. Yet, it is not cency and respect and never treat them rascals and misfits.

5 IMO TO CLEAN UP SHIPBREAKING even brighter days ahead. Beatson said the large, shipping has virtually no image at THE International Maritime Organization recent end of EU/US trade sanctions will all". He finished by rallying the industry to has announced plans for a mandatory ship­ also help spur the market. But in coping arms, saying: "I think that it is time for us breaking regime. In a significant break from with the growth, he said, break-bulk ship­ to take notice and to act". Responding to existing voluntary IMO guidelines, inter­ pers need to focus on solving challenges the call, the Round Table initiated an im­ national delegates attending the 52"d Ses­ from risk management, higher insurance age campaign at the meeting yesterday. As sion of the Marine Environment Protection rates and labour shortages as well. Chris Horrocks, secretary-general of the Committee in London agreed to develop a *** ICS, explains: "The Round Table acts as raft of ' legally binding and gl obally appli­ both a cohesive and anti-wire crossing func­ cable' measures under the authority of a AGENCIES TO tion. The more the industry can speak with new IMO in str ument. Elements already CHALLENGE TOP THREE a single voice, the more that message gets under cons ideration include a reporting SEVEN of the most reputed specialist re­ across". system for vesse ls ready for the scrap-yard, gional shipping agencies haveformed a new *** licensing of shipbreakers, an obligation on global venture, SS Agency World, in a shipowners to use approved recycling yards move aimed at staving off the growing IMO STRENGTHENS MARPOL and the creation of a 'Green Pa ssport' for domination by the three existing global IMO has issued revised regulations on n~w shi ps. Described by one IMO official agencies. The stakeholders in SS include marine and air pollution following as "a turning point" in the campaign to clean Kerr Norton Strachan, Royal Burger Group, October's sitting of the Marine Environ­ up shipbreaking, the plans have won cau­ Euroshipping, Kanoo Group, Sturrock Ship­ ment Protection Committee (MEPC). Ships tious support from both industry represen­ ping, Jardine Shipping Services and carrying oil, chemicals or vegetable oils tatives and environmental groups. While McArthur Shipping. Between them, the will be most affected. The new rules man­ preliminary details of the proposed new seven companies claim combined port date double bottoms for pump rooms on regime have already been hammered out agency business of 40,000 ship calls per oil tankers built after 2006, further protec­ during the week's meeting, the bulk of the year, more than market leaders Barwil, tions against accidental oil outflow follow­ work will now be left to a joint IMO, In­ GAC and ln chcape. However, SS does not ing a stranding or collision and a require­ ternational Labour Organization and United represent a merger of these companies but ment for vegetable oils to be carried in Nations Environment Protection working a platform for its stakeholders to offer glo­ chemical tankers. MEPC has also an­ group schedu led for February 2005. bal and intra-regional port agency services nounced a new four-tier classification sys­ *** to ship operators. "We consider ourselves tem for liquids: so noxious that discharge the strongest of regional players but is prohibited, dangerous substance but lim­ BREAK-BULK FUTURE recogni se the need for a global service ited issue al lowed, liquids that present a DISCUSSIONS while also wanting to retain our individual minor hazard and, lastly, substa nces that LIMITED port capacities and an ageing fleet identities," chairman Win Thurber ex­ may be discharged without restriction. The threaten an otherwise bright future for the plained. SS will deliver port agency, voy­ revised Marpol annex includes a number break-bulk industry, according to execu­ age and financial management servi ces of other revisions made possible by ad­ tives speaking at the 15th annual Breakbulk through a common net based IT platform vances in ship technology. In other devel­ Transportation Conference and Exhibition called Agency World. opment from the MEPC, Western European in New Orleans. Keynote speaker David *** waters have been designated as a 'particu­ Beatson, North American CEO for forward­ larly sensitive sea area', and mandatory ing and logistics corporation Panalpina, INDUSTRY LEADERS measures have been developed on ship­ blamed forecast problems on the priority PROMOTE IMAGE breaking. given to the container industry by both THE image of shipping has been driven to *** ports and the shipbuilding industry. He also the top of the agenda by industry leaders. pointed to limited growth in rail and road IMO secretary-general Efthimios SHIP MANAGERS infrastructures as complicating factors. Gre­ Mitropoulos declared "shipping has an im­ LOOK TO EXPAND gory Rusovich, CEO ofTransOceanic, ech­ age problem" in a display of leadership to THE International Ship Managers' Associa­ oed those concerns, noting that shipyards the members of the industry "Round Table" tion ((SMA) has abandoned its Code of are fully committed over the coming years comprising shipowner bodies Bimco, the Quality Standards in a bid to attract new and have no capacity to replace the ageing International Chamber of Shipping (ICS) , members. "The time has come, " said ISMA bulker fleet. On brighter notes, New Or­ lntercargo and lntertanko the day before president Raj aish Bajpaee, "for ISMA to lean s port director Gary LaGrange said their meeting. Mitropoulos added: "Politi­ move on from only setting standards to a there were excellent indications for the cians often appear to see shipping as a self­ larger role of becoming the voice of the break-bulk future, noting that a "horren­ ish and uncaring industry, little more than industry". Speaking after the association's dous, horrible" year of 2003 gave way to a looming environmental threat," going on AGM, he said that in future any ship or 12 % incr~ase s in 2004, and that he expects to say that "among the general public at crew manager that has ISO 9001 :2000 ac-

6 creditation from lACS members, or who is nual meeting in Budapest, Hungary. Rep­ mitted to the MOU Committee next year. committed to achieving it, can become a resentatives from agents' national associa­ *** member. He predicted that "with the tions conducted a I ively debate on how they changed entry criteria the membership will can be remunerated. Agents have had to IMO TO SET UP increase and ISMA become a force to be educate staff and employ more people even SCRAP REPORT SYSTEM recognised ." He described the change as though there is no legal requirement for THE IMO has agreed to develop a report­ "very profound", as it marked a switch from anyone other than ships and ports to have ing system for scrap-ready vessels .. Details defining a process to measuring perfor­ security officers. Ports are already adding of th e reporting system came amid news mance. The ISMA code will be replaced the cost of security measures - and are al­ on Fri day that the UN agency's Marine by ISMA guidelines on the interpretation leged to be occasionally adding more than Environment Protection Committee was of IS09001 :2000, which are expected to is reasonable - but Paul Smith of the trans­ tentatively explori ng the possibility of cre­ be approved by the association's next ex­ port intermediaries club ITIC cautioned that ating a mandatory sh ip-breaking system . ecutive committee meeting in March 2005. agents who charge a security fee leave The new reporting system should be de­ *** themselves open to financial exposure veloped according to several principles in­ should something go wrong. "Insurance cluding transparency, efficacy, uniform ap­ WTO: 2004 STRONG implications are as yet uncertain," he said. plicability and respect for commercially BUT 2005 MAY DROP Another delegate argued that security is a sensitive information. The ME PC said the GLOBAL trade will grow by 8.5% overall function of the state. "Private companies system should carry the minimum ad min­ this year, but may be dampened by high don't pay for the navy or security services, istrative burden possible and take into ac­ oil and commodity prices in 2005, the so why should they pay for security at count the peculiarities of international mari­ WTO predicted yesterday. According to DG ports?" he asked . The meeting agreed to time transport. At the close of the session, Supachai Panitchpakdi, global trade was not consider adding a suitably worded sentence the MEPC had developed an outline of the hit by the sharp rise in oil prices in 2004 to cover remuneration for the extra charge ship-reporting system detailing what, where thanks to counterbalancing gains in trade into the standard liner and general agency and to whom information should be re­ and output in China, Lati n America and agreement, and in the meantime would ported. The International Chamber of Africa. Stronger-than-expected economic cons ult widely as to a way forward. Shipping's representative expressed support recovery in Japan was also cited. WTO sta­ *** for a ship-reporting system, but cautioned tistics also reveal trade trends evident in that the notification procedure should not 2003 . Among the key points were: mer­ PARIS MOU TARGETS lead to a "permit to recycle". In a possibly chandise trade continued to outpace out­ LIVING CONDITIONS contentious decision, IMO envisions that put; the EU enlargement led to imports from THE Paris Memorandum of Understanding the flag and scrapping states will have the 'transition economies' to Northern Europe on Port State Control has announced a primary role for ensuring the ship-report­ exceeding imports from North America for crackdown on substandard living and work­ ing system's proper application. the first time; Latin America registered a ing conditions on board ship. The MOU has *** surplus in merchandise trade in 2003 for begun a new inspection campaign, lasting the first time in 12 years, with China be­ until Dec. 31, 2004, which will examine ARGUMENTS FILED coming a key destination for Latin Ameri­ on-board accommodation, hospital facilities, AGAINST P&l CLUB can exports and chemical trades grew 19% galley supplies and storage, hours of rest' THE P&l court battle over asbestos claims last year. Spurred by pharmaceutical manu­ and working schedules. If the inspecting is heating up, with plaintiffs filing their facturing, chemical trades totalled three port state control officer discovers that con­ e<~ unter-arguments against the American times the global trade in clothing in 2003 ditions do not comply with the standards Club on 8 October. The list of plaintiffs and nearly 15 % of all global trade. High­ set by I LO Conventions then sanctions may now includes seven companies, including lights of the WTO's annual report on Inter­ be imposed. Penalties for non-compliance BP America as well as lead plaintiff Key­ national Trade Statistics were released yes­ vary according to the severity of the defi­ stone Shipping. The American Club has terday, with the full report available online ciency, with sanctions ranging from a re­ asserted that it has the right to discontinue in November. cording of the failing to a detention of a P&l reimbursements for unknown and un­ *** ship until it is brought up to standard. A reserved occupational disease claims on severely non-compliant ship also risks be­ years prior to 1989. It filed for a summary AGENTS SEEK TO · ing exposed in the monthly detention list judgement on the issue on 8 July, seeking RECOUP SECURITY COST issued by the MOU together with follow­ a ruling that: 'its decision should be up­ SHIP agents should be fairly remunerated up inspections by Paris MOU marine ad­ held; if not, it be allowed to re-open closed for work carried out on behalf of a princi­ ministrations. The MOU envisions that years and seek new assessments; and that pal, and this includes additional costs in­ around 4,000 inspections will be carried out if reimbursements must continue, the Club curred with regard to security, the umbrella during the campaign and expects that the should be allowed to apply deductibles paid organisation FONASBA clarified at its an- results will be recorded, analysed and sub- by members over multiple years'.

7 MAKfflMh REVIEW SECURITY NOVEMBER 2004

as sabotaee· TIMELINE: Superferry 14 tragedy ESPITE accusations of or:~-board rated the findings that an incendiary bomb negligence in shi pping circles, had triggered a fire, which trapped passen­ the Philippi ne authorities have gers on the night of February 27 while the October 2003 - Last of three letters sent ruled that the fire aboard the ship was sailing at full steam several hours by the Abu Sayyaf group to Superferry 14's D owners WG&A Philippines (now Aboitiz Superferry 74 in February 2004 was the after departing Manila on its voyage to result of sabotage. More than 100 passen­ Bacolod and Cagayan de Oro. Transport System Corp) warning of an at­ gers lost their lives in the incident.Police tack from the country's Criminal Investigation The filing of murder charges this week ana Detection Group have filed charges of prompted the Department of Transporta­ 27 February 2004 - Superferry 14 catches multiple murder and attempted murder tion and Communications (DoTC) to beef fire near Corregidor island in Bataan and against six men accused of being members up its security arrangements in the capsizes, resulting in the deaths of more of the terrorist group Abu Sayyaf. Two of country's major ports. DoTC secretary than 100 passengers the suspects- Habil Dellosa and Alhamser Leandro Mendoza ordered the office of 11 March 2004 - The 1 O-man Special Manatad Limbong- are in police custody, transport security to dispatch additional sea Board of Marine Inquiry (SBMI) convenes while four others remain at large. President marshals and sniffer dog units to screen to formally look at all aspects of the acci­ Gloria Macapagai-Arroyo, who was present passengers and identify suspect baggage dent, with the Superferry 14's master during the filing of the charges, declared and cargo entering various terminals. Ceferino Manzo first to testify that the ferry incident had been resolved. Mendoza, who earlier stated that "the sabo­ tage angle was not too strong", said other She ordered an intensifying of the manhunt 5 April 2004- The Maritime Industry Au­ measures were being implemented as part for the four fugitives. thority fin ishes its own report on the of the ISPS Code, such as the training of Superferry 14 tragedy, discounting any pos­ However, the charges as filed made no port security officers and verification of port sibility of terrorist involvement mention of a separate probe conducted by facility assessment and plans. He said the the Maritime Industry Authority, which pin­ provisions contained in the ISPS Code 16 April 2004 - the U K's Titan Maritime pointed the origins of the fire in a paint­ would be strictly implemented to prevent secures the contract to carry out the sal­ storage area. The authority's report, which the recurrence of such a tragedy. vage of Superferry 14 was· not "officially released" while the Spe­ cial Board of Marine Inquiry (SBMI) was The Philippine government has previously 19 April 2004- SBMI schedules to hear conducting its criminal inyestigation, said adopted similar precautions when threats Arnie Santiago, the chief of the complaints heat from a fan room was transmitted by of terrorist attacks were made against ships and investigation division of the Maritime convection through a dividing wall, ignit­ operated by Aboitiz Transport Systems Industry Authority, about the authority's ing the paint. Yet on the basis of testimony Corp (owners of the Superferry 74) in own probe from witnesses, forensic experts and its Mindanao. Before Superferry 74 was at­ own anti-arson task force, the SMB I felt able tacked, the owners believed that their ships 21 March 2004- Divers end their search to reach the alternative conclusion that the were at high risk of terrorist attack after the and retrieval operations of the victims in­ on board fire was caused by the detonation company had failed to comply with Abu side the half-submerged Superferry 14 in of an explosive device. A US-trained ex­ Sayyaf's demand for $1M "as payment for Mariveles, Bataan plosives expert from the national police [the] privilege" of "continuously utilising cited the deformity of the thick metal ceil­ our areas unhampered". 03 August 2004- Salvage of Superferry 14 ing above the blast site as evidence that an is completed after it was towed to the dock explosion had ripped open the deck and Aboitiz, which has accepted the conclu­ of a private shipyard in Mariveles other metal plates. sions of the SBMI, has created a new safety and security compliance office with a man­ 11 October 2004 - The Philippine Na­ The expert stressed that the extensive dam­ date to oversee the safety and security of tional Police files formal charges of mul­ . age proved that the 1O,OOOgt Superferry 14 its customers, their property and the tiple murder against suspected members of was bombed. A forensic chemist corrobo- company's assets, whether afloat or ashore. Abu Sayyaf

8 uditing for the issuance of five­ nationwide to do the auditing. This will be said they see no need to come up with leg­ year compliance certificates to a composite team of representatives from islation. the International Ship and Port the Coast Guard, the Maritime Industry Countries like the US, Australia, Europe and A Facility Security Code starts this Authority, the Philippine Ports Authority other parts of Asia all had its maritime se­ month. The Office for Transportation Secu­ with the OTS as team leader. There are curity laws first before putting ISPS into rity, a Malacafiang-created agency tasked questions though about the Coast Guard's place. But an OTS consultant when asked to implement the ISPS, is dispatching au­ inclusion in the verification team because what is holding back the crafting of a mari­ ~ diting teams in a frenzy game of playing it was stripped of its maritime security func­ time security law merely said legislati on ..{~ catch-up to the December deadline. In less tions with the issuance of Executive Order is unnecessary. In preparation for the issu­ than two months, compliance certificates 311 in April. The Coast Guard nurses reser­ ance of five-year compliance certificates, that the OTS issued to 151 Philippine-reg­ vations that its inclusion in the verification government must set security levels and istered foreign ships and 42 port facilities, team may now be illegal. ensure the provision of security level in­ ~~ including the Cebu International Port will formation to ships operating or entering the .o' expire. Yet there is no word if these facili­ The absence of five-year compliance cer­ territorial sea of the state. But like its non­ j• ties have been working on getting ready tificates cannot be underestimated. The US chalant attitude on maritime legislation, to have its interim certificates renewed to Coast Guard said it will visit 135 countries OTS also finds no need to set security lev­ five years. No word if ISPS training have around the world to find out how far these els. been done, no word if security lapses and cpuntries complied with the ISPS code in­ ~· breach have been rectified and no word if dependent of the auditing done by gov­ What might further short circuit the com­ security infrastructures, systems and proce­ ernments of these ports. Other than check­ pliance process is the absence of param­ dures are in place. ing on port facilities, they will target ves­ eters for accrediting Recognized Security sels where increased boarding is needed. Organizations and training security offic­ In addition to ships and ports, local Recog­ These vessels will be inspected for its per­ ers. There have been strong insinuations nized Security Organizations that were is­ formance, ship management, recognized that RSOs were allegedly accredited with­ sued six-month accreditation must also have security organization and security in its last out parameters for accreditation. But whe]l its certificates ren ewed for it to keep its five ports of call. Vessels are also targeted OTS consultants were asked on the seem­ operation s. for boarding based on intelligence infor­ ing anomalous accreditation procedures, mation on a random basis. they declined comment. Equally silent MISSING REALITY were the RSOs. POCKETS OF PITFALLS Authorities seem to be missing out reality Other live wires that could trip compliance on the ground. For the country's ports and To date many tasks have been left undone are error-ridden entries of Philippine port ships to keep its status as ISPS-compliant, despite the overall optimism on implemen­ facilities on the IMO website. Transporta­ these would have to apply for the renewal tation. There remain pockets of pitfalls tion undersecretary Cecilia Pen ilia assured of its interim certificates to earn permanent where progress has stalled and not as rapid errors will be rectified but did not say when. five-year terms. Without these five year as might be hoped. Even with its nearing Politics, turf-wars and heavy contamination certificates, port faci I ities serving i nterna­ deadline, there remains no enabling legis­ of compliant ships and ports to non-com­ tional voyages may be forced to discon­ lation for ISPS to be implemented in the pliant facilities are eroding security confi­ tinue operations and Philippine-registered country. United Nations maritime watch­ dence in the middle. Systematic screw up, foreign ships can be denied or delayed dog, the International Maritime Organiza­ corruption, plagiarism and stamp compli­ entry in foreign ports. tion, specifically requires that for ISPS to ance has besieged efforts at compliance in be enforced, these must be adopted into July. But as the race to beat the December Because the OTS is the single agency des­ national legi slation. But until now there is deadline kicks off again, the OTS will have ignate~ issue five-year compliance cer­ no word whether maritime security legis­ to be sure it won't get tripped with previ­ tificates, 1t will dispatch verification teams lation has been drafted. OTS consultants ous lapses. (By Ruth Mercado)

9 eXCELLENCE

Manila Bauan, Batangas '(] MARITIM·E1 .• .: 'Y':~~\_ .... CORP\Q_RATE -~; ~ ~O ~E Ya! R~~ ··~ .. n co Private Own hi

IX months after the court finally Nenaco to increase its interest pay­ Also, as part of its compliance with the approved its petition for reha ment to secured lenders to 7.5% a year court approved rehabi litation, Nenaco bilitation, Philippine operator from the fifth up to the 1Oth year of its president Sulficio Tagud jr stepped Negros Navigation Co rehabilitation programme, from 5% in down from his post. Tagu d, whose (Nenaco)S has plunged to the compel­ the first to the fourth year. resignation took effect last month, has ling task of how to turn the company been cited by the court to be rep laced around and stretch debt payment owed Apart from increasing interest rate if the company wants to pursue its re­ to private banks and trade suppliers. charges for its debts, creditors will habilitation. Metro Pacific led by its

The mother unit of the financially troubled Nenaco has chosen to de-list the company from the Philippine Stock Exchange as .part of the reh abilitation programme. Prior to th e move, Metro Pacific has offered to buy out the mi­ nority shareholders by endorsing a ten­ der offer for 2.81% or 85M shares of over 3.0Bn shares that commenced 20 October week and ends in mid-No­ vember this year.

Metro, which owns 97% of Nenaco, said that once a private company it will allow to effect the changes it intends to rebuild its business, stabilize finan­ cial foundation and reposition the com­ pany for future growth. Metro believes Nenaco owners and officers led by Manuel Pangilinan, chair of Metro Pacific the tender offer will give the 3,600 mi­ (second from right) and Sulficio Tagud }r (second from left) nority shareholders "a clear and fair exit mechanism for their investments" gain representation to the Nenaco chair Manuel Pangilinan recently ap­ without waiting for the shipping firm board by electing three new directors pointed Augusto Palisoc as the presi-.. to complete its 10-year rehabilitation. to represent secured and unsecured dent of Nenaco. Tagud, after a two­ Trading of Nenaco's shares has been creditors. Nominees have been sub­ month stint as president, was ap­ suspended since 29 March after the mitted from the state-run Develop­ pointed as chairman. He came under company, which has PhP2.5Bn ment Bank of the Phil ippines and fire when he started to assume the re­ ($44.6M) liabilities, sought a Manila Pilipinas Shell Corp, who will repre­ ceivership last March and as president court approval of its rehabi I itation af­ sent major creditor banks and trade in mid-August for not revea ling to the ter a japanese shipyard sought an at­ suppliers, and a lawyer for unsecured court that he once served as director tachment of Nenaco's vessels due to creditors. The creditor representatives of another Metro subsi diary. This unpaid dry-docking fees. As a compro­ should not be ousted from the Nenaco posed a conflict of interest, according mise with creditors, the court directed board without court approval. to the court.

11 t-t--t:lliW-H;~o ~T~~ COVER STORY ----..::::::::x;::::...---'! NOVEMBER 2004 •,

By Tee-jay Ramos II

ITH the onset of deregula erators Solid Shipping Lines Corporation, All ship operators declared they have not tion following the enact Lorenzo Shipping Corporation, NMC Con­ availed of any upward adjustment of their ment of Republic Act 9295 tainer Lines, Inc. and Oceanic Container rates for the last three months. A TSC and or the Philippine Domestic Lines. The ATSC, the largest domestic op­ Sulpicio Lines are also set to impose up­ Shipping Development Act, a new window erator in the country, covers all its 10 ward passenger rate adjustment averaging of opportunity for coastal shipping opera­ Superferries and the Lady's fleet in the rate 6-12 % later in October. The last passenger tors has opened. A big one, that is . The hike filed. As with the other shipping firms, rate increase was sometime in April this new law does not only jumpstart opportu­ the company proposed an upward adjust­ year . nities for the stakeholders, but al so pu ts the ment by 14.5% on the basis of its Novem­ industry through a whole new perspective ber 2003 freight rates. FACTORS FOR INCREASE by giving local operators the authority to The sh ipping companies stressed they were establish their own shipping rates provided "In consideration of the present economic constrained to amplify th eir fr eight rates, it would foster effective competition. situation that the country is facing, and to mainly due to the continuous increase in cushion the impact on the public, the ap­ fuel costs, which as of September is already However, it must be noted that in the do­ plicant deemed it proper to implement the pegged at $50 per barrel in the world mar­ mestic trade, the steady increase in freight proposed increase in two phases. The first ket. Also prime factors were the increases and shipping costs has long been a fight phase will be 9% ... and the second phase in salaries and wages of sea an land-based between the operators and shippers. And will be the ful l implementation of the personnel including the cost of living al­ now that the industry is moving towards 14.5% increase effective January 1, 2005," lowance, dollar denominated expenses due full deregulation, there is no way the ship­ the company stated in its formal notice. to devaluation of peso, financing costs, in­ ping firms can be prevented from availing surance premiums, repairs and mainte­ ofthis opportunity to make better business. For instance, a Superferry Class A accom­ nance costs; and cost of pier and vessel se­ The operators have announced their inten­ modation from Manila to Cebu with cur­ curity. tion to adopt the upward adjustment of rent rate at PhP857.21 , will be PhP934.36 deregulated freight/cargo and passenger by October 15 and P981.51 by January 1, The shipping operators started submitting rates during the first week of October. Gen­ 2005. ATSC noted the same percentage in­ their formal notices of intention to adopt erally, the freight rate increase would be crease will apply to the current rates per the rate adj ustment to MARINA as ear ly as on a staggered basis, the first half of which lane meter for the ro-ro cargoes . Similarly, September. The fi ling for a formal notice is (at least 7.5%) was implemented during the Sulpicio Lines has declared all its 15 ves­ in compliance with MARINA Memoran­ early part of October, while th e remaining sels covered by the increase, mainly all its dum Circular o. 153, implementing the [half] would be by January 2005. This Princesses in the fleet. deregulation of domestic shipping rates . means that the current rates would be Pri or to the enactment of the law, th e mari­ jacked up by as much as 14.5% next year. Meanwhile, heavily-indebted Nenaco, time agency requires ship operators to pub­ Major operators such as the Aboitiz Tran s­ w hich is currently down to four vessel s, lish its proposed rate in creases two weeks port System Corp. (ATSC), its subsidiary has just submitted its formal notice for the before enforcement. However, the new law Cebu Ferries Corp., Negros Navigation freight rate adjustment. A source from allows operators to increase their rates any Company (Nrnaco) and Sulpicio Lines were Nenaco said the company is still waiting time without prior notice since the indus­ the first to file notices of increase with the for some of its existing "promos" to expire try has been fully deregulated. The mari­ Maritime Industry Authority (MARINA). before it can implement an upward rate time agency stressed the deregulation of Also hiking their rates were pure freight op- adjustment. the shipping rates aims to create an invest-

12 ment climate designed to attract more and from the association said there has been no spiraling fuel costs and peso deva luation. new players in the domestic shipping in­ consultation with the shippers group. "We There is a need for ship owners and opera­ dustry under the environment of free com­ are not expecting them to divulge all their tors to present the basi s or justifications of petition. Under the new set up MARINA plans with regards to rates but we are ex­ any proposed rate adjustment to the ship­ can only interfere should there be a mo­ pecting them to at least warn us so we cou ld pers associations to ensure that the inter­ nopoly, cartel or lack of effective com­ prepare, " he stressed. He said the increase ests of shippers are protected against over­ petition in a certain route/link; or if pas­ is very unpopular considering the country's chargi ng and poor servi ce standards, he sengers and/or shippers file a complaint present economic condition, on top of the added. against the rates and services of the opera­ tors provided sufficient justification is sub­ mitted.

SHIPPERS PROTEST Earlier, a group of shippers in Mindanao DOTC endorses owners have expressed fears that R.A. 9295 will spike current shipping rates because it eliminated current 'reporting' practices in request to shift in FOB terms price increases. They stressed the new law perpetuates the alleged cartel of domestic shipping companies which presently im­ DEPARTM ENT of Transportation and revenue to the government but will serve pose uniform rates . Edgar Lim, president Co mmt•nications secretary Leand ro as cata lysts for the expan sion and mod­ of the Zamboanga City Shipper's Associa­ Mendoza has favourably endorsed the re­ ernization of the country's merchant ma­ tion, also sai d the new law would be very quest of Fi lipino sh ipowners for a shift in rine fleet. unfavorable for exporters as its proposed trading terms when negotiating for the Implementing Rul es and Regulations would government's imports and exports. He It will also result in more job opportuni­ allow shipping companies to increase its wants to start on coal shipments. ties and better salaries to Filipino seafar­ freight and passage rates at least four times In his letter to Energy secretary Vincent ers which in turn will translate into addi­ a year with the additional fees going as high Perez, Mendoza endorsed for consider­ tional foreign exchange earnings for the as 30%. ation the suggestion made by the Filipino government in the form of foreign ex­ Shipowners Association (FSA) that the change remittances. The social and eco­ "Rate increases four times a year is uncon­ county's coal imports must be put to auc­ nomic upliftment of Filipino families scionable. How can shipping companies tion on a FOB basis so that separate bids would be a necessary consequence justify this to the general public?" he for the cargo and freight can be con­ thereof. It will likewise lead to the revi­ pointed out during the 4th Mindanao Ship­ ducted. talization of Philippine shipyard s and the, pers' Conference organized by the creation of other ancillary services like, · Socksargen Shippers' Association, Depart­ This will allow Filipino shipowners the manning, ship management, chandling, ment ofTrade and Industry and the Growth opportunity to participate in the carriage ship agency and banking, among others. w ith Equity in Mindanao (GEM) Program. of the coal requirements of National Lim also noted that amid government poli­ Power Corporation for the operation of More government revenue will be real­ cies, the pre-supposed competition is miss­ its power plants. Secretary Mendoza said ized from an increase in the number of ing among domestic shipping lines. All op­ that the desire of the shipowners to par­ ships in the form of: a) Company regis­ erators charge almost similar rates regard­ ticipate in th e carriage of government tration and license fees; b) Vessel regis­ less of the quality of their service. This cargo will help boost DOTC's efforts to tration fees and related charges such as "cartelization" undermines development help modernize the Ph ilippine overseas inspection fee, and measurement fee, etc; and cripples free and fair trade initiatives merchant fleet and stimulate private sec­ c) Income taxes from incremental business of both the government and private sector, tor investment in the overseas shipping generated by companies/sectors doing he noted. industry. The opportunity to carry gov­ busi ness with Phil. shipping companies; ernment cargo will likewise resu lt to for­ c) Port charges and berthing fees; d) Pro­ Meanwhi le, the Distribution Management eign exchange savings as freight pay­ cessing fees for all seamen's documents Association of the Philippines (DMAP) re­ me.nts will now be made to Phi lippine and travel papers; e) Various fees paid by cently expressed strong opposition regard­ overseas shipping companies. In turn, the a shipping company for various applica­ ing the current passenger and freight rate income generated by these overseas ship­ tions such as vessel importation, bareboat upward adjustment. A dismayed official ping companies not only mean additional chartering and company accreditation.

13 MARl'l'lM.E Ai-=l-t--t'1111H-1£.t" R E V I E W CREWING AND TRAINING NOVEMBER 2004

F there is one immediate problem trai ners in the maritime sector have to look into concerning competence of IFilipi no seafarers, it is communication ski ll that warrants an immediate attention . Both afloat and ashore, comm unication By Carmela Huelar skills and the capability to interact with a mixed crew play the most vital important aspect. That explains why th ere is a uni­ land, France, Germany, Iran, the Nether­ some maritime terms in English", he added. versal language that can be easi ly under­ lands, New Zealand, PRC China, the Phil­ stood by the crewmembers onboard . With ippines, Poland, Ru ss ia, Sri Lanka, Santos further said that knowing how to human error accounts for most of the acci­ Myanmar and the United Kingdom. speak English is not enough. He stressed, dents that has occurred, comm unication "Maritime English is most definitely needed skil ls have played the key role. W ith the Th e co untries are members of the Interna­ to be universal and the SMCP attempts to theme "Safer Shipping and Cleaner Oceans ti onal Maritime Lecturers Association bridge the gap between races in a mixed through Maritime English Proficiency", the (IM LA). Hosted by the Maritime Academy crew environment". Santos disclosed that 16'h International Mariti me English Confer­ of As ia and the Pacific (MAAP), the IMEC the industry has been aware of the rising in Manila brought in more than a hun­ ~nce foru m also brought into attention the need incidents of Fi lipino crews and even offic­ dred participants representing 15 different to train and update maritime lecturers all ers slowly lag behind in English proficiency, co untries and the World Maritime Univer­ over the world, the Ph ili ppines included, which spells disaster. What more in some sity. The 15 countries include Croatia, Fin- on the Standard Maritime Communication common maritime English usage that is an Phrases (SMC P). important component of saving lives and properties at sea? Vice Admiral Eduardo Santos, The forum discussed some issues like the MAAP pres ident, SMCP closer to home, and MAAP be ing sa id "familiariz­ the host, will most definitely start re-edu­ ing our lecturers cating its lecturers in SMCP for them to and educators on impart to its graduating cadets. IMEC chair­ the universal lan­ man Peter Trenkner for his part lauded PHILIPPINE REGISTER OF SHIPPING, INC. guage of the sea MAAP for sponsoring the event in Manila. will definitely put A Filipilfo Ship CIIJHI.fiutUm Soda, He said that the IMEC fel 'AAP was a most into proper per­ appropriate place to discuss the various spective the hu­ problems and solutions concerning Mari­ man error factor time Engli sh as a subject of in struction and and its drastic p~~: research "as the Philippines is the mighti­ contribution to est supplier of seafarers to the world mer­ • Vessels' structural integrity accidents at sea chant fleet". He pointed out that approxi­ • Reliability of machinery and equipment that has for some mately six out of 10 ratings in the passe n­ • Prevention and control of marine pollution years, caused ger fleet of the world are recruited from • Statutory Surveys losses of life and the Asian region, most of them from the damage of prop­ Philippines. "And almost all established Eu­ erties." He said ropean shipping companies gladly hire Fi li­ that it is ad istress­ pino deck and engineer officers because ISO 9001 CERTIFIED ing fact to know they are known to be diligent, well quali­ that most of these fied, loyal and reliable." Trenkner stressed CERT. NO. AJA 00/2200 errors could have that the forum would somehow find an ap­ been avoided if propriate method and means to improve the crews language communication at sea an d in onboard and ports for the sake of safer shipping and those involved cleaner oceans. He asked the participants Rm. 315 PPL Bldg., cor. San Marcelino St., United Nations Ave., Manila Tel.Nos. 524-79-79, 338-20-75 speak the same to keep in view that Maritime Engli sh lec­ Fax/Phone: 522-3640 E-Mail: [email protected] language. "By this turers bear a considerate responsibility for we mean, proper the welfare of the students and cadets as know ledge of the future ship officers.

14 MYANMAR SEAFARERS ARE CHEAPEST

SEAFARERS from Myanmar have been fou nd to be the most cost competitive, a ~ffiilf~~im~ma~ml~Jili8 l Smi~.a~eQcy study into new sources of crews by the Korean Shipowners' Association has re­ vealed. The study is based on information encourages promotion gathered first hand by a team of experts that visited Myanmar, Vietnam, Poland, JUNIOR deck and engineer officers are career of many Filipino seafarers. Dr. Rob­ Ukraine and Croatia. While Ukrainian sea­ being encouraged to push for promotion ert Lim, medical coordinator, of Marine farers had an edge in terms of quality, a to senior levels as a way to partially fill Medical Services, gave an enlightening drawback in recruiting them was that they the shortage of qualified personnel. presentation on the subject, which left are available for only six months in a year. the participants with plenty of food for Myanmar seafarers are the cheapest and, Philippine Hammonia Shipagency took the thought. together with Vietnamese crews, are avail­ the initiative by holding the first of a able on easy employment term s. Ukraine series of full day 'junior officers' meet­ Capt. George Pimentel of the Philippine and Polish seafarers are ahead in terms of ings' with 34 deck and engine officers Maritime Education and Training Foun­ training and competence. The associ ation in attendance last September. The morn­ dation gave a very interesting talk on the will release the final report after another ing session was spent motivating the jun­ proposed Management Level Courses inspection in November this year. Employ­ ior officers, encouraging them to dem­ that may soon become a pre-requisite ing foreign crew is restricted in South Ko­ onstrate their leadership potential, un­ before takmg the PRC Board exams at rea, but a number of ships owned by Ko­ dertake the necessary management management level. Pimentel 's subject rean owners are flagged in Panama and courses and find ways to cover the cost matter generated a great deal of interest other flags of convenience registers. of training. amongst the participants and a lively dis­ cussion ensued. Philippine Hammonia director and em­ SRI LANKNNORWAY ployers' representative John Wood said To round off the afternoon, the partici­ SEAMEN AGREEMENT that the world-wide shortage of senior pants were treated to a presentation from officers made it clear that "home-grown the PHS training manager with the pur­ SRI Lanka is preparing to sign an agree­ talent will be required to fill the vacan­ pose of reminding them of the impor­ ment with Norway that would help its sea­ cies of tomorrow." He said most of the tance of continuously upgrading their farers get jobs on Norwegian-flagged ves­ company's owner and manager clients knowledge and skills. They were also sels. The move follows talks between ship­ would like to see their young Filipino reminded of their responsibility to attend ping industry officials of the two countries officers and engineers promoted to mana­ courses that have been reserved for them that are expected to result in a Memora!l­ gerial level. as well as cooperation with PHS and staff dum of Understanding (MoU) between the in situations when they find themselves Merchant Shipping Division of Sri Lanka's "Therefore, it our job to ensure that not unable to attend. Ministry of Ports and the Norwegian Mari­ only do they have the appropriate cer­ time Directorate. The MoU will enable tificate of competency and recommen­ Finally, an open forum session wherein certificates of competence issued by the dation for promotion but also the aware­ the seafarers threw questions at PHS man­ Merchant Shipping Division to be ness, maturity, leadership and attitude agement and staff with the hope of com­ recognised by Norwegian shipowners, to make the grade at senior level." A ing to a better understanding of how the without which Sri Lankan seafarers have group workshop followed by an interac­ company works and in return, the needs been unable to find employment on Nor­ tive presentation was held on the traits of the seafarers. Throughout the event, wegian-registered vessels. Presently, about required to be a senior officer, reference the strength of the "team" was continu­ 25,000 seafarers are registered with the was also made to some of the negative ally emphasized, not only onboard, but Merchant Shipping Division but only traits that is damaging the reputation of within PHS. Officers onboard must work 11,000 are believed to have regular work. Fil ipino seafarers on the international together to achieve the desired results, Sri Lanka is keen to promote seafaring as a stage. Following a buffet lunch, the af­ likewise ashore, officers must work career as it helps to earn foreign exchange, ternoon was comprised of presentation closely with the agency staff to ensure a Ports Ministry official said. Sri Lanka has on "Lifestyle Illnesses" such as hyper­ that training, documentation and the fi­ also held talks with Belgium for a similar tension and diabetes which they noticed nal boarding is carried out properly. agreement that would enable its seamen as the leading causes of cutting short the to get jobs on Belgian-flagged vessels.

15 MARITIME H-t-:1!1H-i9,-.. R E V I E W INTERNATIONAL CONVENTION NOVEMBER 2004

'1me e By Brenda Pimentel

OES the Philippines need to of assisting developing countries build up ample is the national administration and implement IMO Conventions? their human institutional capacities to com­ the port terminal. This became most pro­ To this question, the general ply with IMO regulations and standards, nounced in a way when the ISPS Code was D response is yes. As to the why, The modalities in delivering the ITCP take adopted. Up to now we ask, does every­ the responses vary. Most would say be­ the form of needs assessment, training, body know why the OTS (Office of Trans­ cause the Philippines is an archipelago and assistance in drafting legislations and advi­ portation Security) exist and its role in the therefore dependent on sea transportation. sory missions. I hope you still remember implementation of the ISPS Code? Others and probably most would say, be­ that quite a number of IMO technical as­ cause we play an important role as the top sistance relative to the Philippines' imple­ * Lack of funding for infrastructure - in supplier of shipboard labor to the world mentation of the STCW Convention were the Philippines, this problem exists, despite merchant fleet. Still some would say, and delivered during the period when we were the foreign assisted projects and grants on I used to say it too when I was with gov­ trying to be included in the white list. These the development, maintenance and upgrad­ ernment, oh because we wish to be a re­ were all undertaken under the ITCP of the ing of national maritime infra ·ructure, in­ sponsible member of the International IMO. cluding training institutions, search and res­ · maritme community, which really sounds cue services aids to navigation, port facili­ like a new years resolution. When asked the question "do you need ties. Let me at this juncture to inform you technical cooperation and external assis­ that IMO does not have the funds for put­ IMO is not only into the drafting of con­ tance" developing countries surely will ting up infrastructure, we just make mem­ ventions and regulation s. The Organization acknowledge these needs. In trying to de­ ber government realize the importance of acknowledges that not all member govern­ termine the reason s why countries would infrastructure in place. ments are able to give full and complete need technical assistance, IMO was able effect to IMO instruments. The Philippines to collate the following rationale for the * Inability to provide adequate training ­ for example has ratified only eleven out of ITCP: we have a number of training institutions more than forty IMO conventions, I be­ for seafaring but we do not have the nec­ lieve the reason for non-ratification of the * Lack of cooperation between national essary facilities to provide practical train­ Conventions is basically the lack of under­ agencies - there are national agencies ing relating to technical requirements of the standing of what the rules are and what which by reason of their areas if concern various IMO instruments like ship surveys, benefits accrue to the country that choose would have to relate with shipping, for audits, inspections and the like. to implement them. In some instance, a example trade and industry, fisheries and country may have ratified but not imple­ customs. They seem to be doing their re­ * Inability to provide qualified human re­ mented a convention because of spective activities independent of each sources - put bluntly, the experts would government's failure to translate them into other which in the long run adversely im­ always go where the pasture is greener, national rules and regulations. pact on the economic development of the where one can get the highest returns. country. Shipboard work is more attractive than It is for this purpose that the IMO Inte­ teaching ashore, isn't it? Being a manager grated Technical Co-operation Programme * Lack of clear responsibility between the is better than being an academician. (ITCP) was established: for the sole purpose public and private sector- cited as an ex-

16 * Insufficient priority to maritime issues ­ of the Convention regulations into deta iled a needs assessment- in order to get a good the Philippines, national planning has al­ circulars, instructions and advisories. understanding of a country is requesting. ways been biased for land base activities - MARPOL which we have ratified in 2001 * Lack of coordination between national never marine which contradicts the affir­ became effective for the Philippines after agencies. mation that ours is a maritime nation. one year. Up to now there is no law that translates the Convention into national * No follow-up to the assistance given train­ * Insufficient appreciation of the benefits regulations although there are several ees nom inated for training. of shipping- perhaps the reason we have agency issuances by Marina, PCG, PPA and trained our planning exercise towards the DENR as they relate to the MARPOL re­ *Trainees nominated for the training failed land is because we have not really appre­ quirements. to meet "entry req uirements" Please let us ciated the benefits of shipping- to the maxi­ not squander th e be nefits of training by mum. Look at Singapore - everything The ITCP does not intend nor is it man­ sending nominees who are not fit based seems to revolve on the maritime sector dated to play a substantial role in enforce­ on the qualifications set by IMO. You know and yet it is but a dot in the ASEAN map. ment. It has no regular budget for techni­ what we are most guilty of when some­ They have established the infrastructure cal assistance and it relies mainly on the one says he goes to say Beijing beca use it and all the necessary support mechanism generosity of member governments which is one city he has not visited yet. The train­ to make it a premier maritime hub in Asia. either provides financial or in kind contri­ ees are not there as tourists. And agai n It is because they appreciate the benefits butions for the delivery of the programme. please, send those who wi II be ablea to p­ of shipping. In no time at all, Singapore Complicating this is the fact that ITCP re­ ply what had been learned . I remem ber will become the London of Asia. ceives increasingly and on much diversi­ one official of a government agency who fied issues, request for technical assistance. attended all the training which are meant * Insufficient appreciation of the impact of These, plu :-. the fact that there can never be for the technical staff and then when he global maritime standard s -for STCW 1978 fo und a uniform solution to various en­ was replaced, he left the agency ignorant as amended this does not hold true. I know forcement problems, make the delivery of of the issues subject of the training which that FAME membership appreciate the im­ the ITCP even more challenging. he attended. So if training is for training pact of non-compliance with the STCW, simulator instructors, let us send somebody that's why you have worked hard to get The ITCP was, since 1996 up to Decem­ who is into simulator training. the Philippines to the white list. ber 2003, able to undertake in Asia 161MO regional projects, two GEF funded regional * Identification, availability and acceptance In all these, IMO through the ITCP tries to projects. Asia was also included in the of qualified experts- have you noticed that bridge the gap. Make no mistake though, delivery of the maritime security and bal­ every time IMO conducts training in the IMO has no funds for putting up maritime last water management under the global Philippines the consultants most of the time infrastructure. technical cooperation. come from Europe or from Canada, the United States or South America. It is not The other obstacle that hinders ratification The notable achievements of the ITCP in because of bias, rather, it is because vye and implementation of IMO instruments recent years include improvement of mari­ have a dearth of experts in the region, es­ are: time training standards, establishment of pecially in the ASEAN region. Singapore is the maritime safety management systems, of course an exemption. And one of my * Lack of adequate national maritime ad­ development of oil contingency plans and tasks is to help identify experts who IMO ministrations -I do not think this applies to increase number of trained personnel in the can tap for delivery of the ITCP in the re­ the Philippines. We have at least minimum maritime sector. A total of 4,700 nationals gion. of 10 to 15 government agencies involve in Asia were trained through the ITCP. Prior in the maritime sector, each exercising to 1996, the number of Asian acceptance * Non=-ava ilability of updated and suitable functions of regulatory, policy or enforce­ of the IMO instruments totaled 280. By training materials- again this is a problem ment nature. I suppose for the Philippines 31 July 2003, this rose to 425, an increase related somehow to the difficulty of get­ this should be one of inability to consoli­ of 52% in the number of acceptance. ting experts who can helping developing date maritime functions in one agency. training material s. The difficulties encountered by the IMO * Lack of updated national maritime legis­ in the delivery of technical assistance in­ In September last year, the IMO Regional lations - This applies not only to those pro­ clude: Presence for Technical Cooperation in East mulgated by Congress but also by the mari­ Asia was established in the Philippines. In time agencies, IMO conventions as what * Inadequate information provided by the words of the IMO Secretary General, you have seen in the implementation of states requesting assistance - this is the Admiral Efthimios Mitropoulos, who inau­ the STCW Conventions required translation reason why we sometimes have to conduct gurated the office, "it is quite appropriate

17 •> MARITIME ' /'Ft-t---e~~ R E V I E W INTERNATIONAL CONVENTION --....::::::::;x~---~ NOVEMBER 2004 J:F .

that seafarers' supply to the world' merchant How do you make the most out of techni­ you can identify real and priority needs and fleet." It is therefore in recognition of the cal cooperation? Political will or political find practical solutions. country's contribution to world shipping, comm itment: through the Filipino seafarers, that IMO In co nclusion, I wish to reiterate what ev­ consciously decided to make the Phil ip­ * to give sufficient attention to maritime erybody has been saying - the Philippines pines the base of its regi onal presen ce in safety, security and marine environment is a maritime nation and therefore it must the East Asian region. iss ues; endeavor to adopt and implement interna­ *to ensure effective dissemination of IMO tional maritime conventions. If it has to The East Asian region, in the geographical documentation; and most probably it must, the Philippines context of IMO, consists of fifteen coun­ * to ensure effective participation at meet­ ca n seek ITCP to assist it in complying with tries, namely, the Republic of Korea, Demo­ ings of IMO; IMO instruments. cratic People's Republic of Korea, Chine * to designate qualified trainees; including Hongkon g, Japan, the Philip­ * to ensure adeq uate use of personnel Remember, the effectiveness of technical pines, Vietnam, Thailand, Cambodia, trained; assistance is a challenging task for all of Myanmar, Lao PDR, Mongolia, Brunei *to undertake follow-through activities on us . . Daru ssal am, Singapore, Malaysia and In­ the assistance received. donesia. *** At the regional level make use of existing (Speech delivered by Brenda Pimentel, The regional coordinator serves as the link regional arrangements such as ASEAN , IMO regional coordinator for Asia, during of the Member Governments to a ready BIMP-EAGA, APEC, etc, to promote re­ the recent general membership meeting of source of technical assistance that are avail­ gional self help. Also come up with a pool the Filipino Association for Mariners' Em­ ab le at the IMO. of experts from the region. Discuss how ployment)

my team! cal me! el. 536 0863

The New Generation in Ship Management

18 - REVIEW PEOPLE NOVEMBER 2004

new c t~t.st p esta calls on new arina ehief THE Philippines' leading group of ship managers and crewing agents has undergone a leadership change dur­ WITH the recent appointment of Vicente Suazo Jr. to the he I m of ing its recent elections. Maritime Industry Authority, the Officers and Board of Trustees of Philippine Petroleum Sea Transport Association called on the administrator last 28 September 2004. Suazo outlined that his The Filipino Association for Mariners Employment administration will focus on improving the viability of the ship­ (FAME) elected josephine j Francisco, president of NYK­ ping industry towards more customer-oriented and service-ori­ Fil Shipmanagement, as its new president, replacing ented sea transport to support a strong economy. He clearly em­ Vicente Aldanese jr of ASP Crew Management Services, phasized the need for accurate and reliable databa se to guide who led the association for 16 years. The FAME board him in the day-to-day operations of MARINA, a project cu rrently also elected Capt Adonis Donato, president of OSM being undertaken by the MIS department. Maritime Services, as VP for internal affairs; Capt Reynaldo Casareo, president of Cargo Safeway, as VP In the long term, the major shift to e-commerce will benefit the constituents of the maritime sector in increasing efficiency. for external affairs; Marion Ro fio of Magsays ~y Maritime Shortly, Marina wi II also present its six-year program to the pri­ Corp, as board secretary; and james Nicoll of Wallem vate sector and together, MARINA and the private sector will draw Maritime Services as treasurer. out policies and regulations to support these programs.

Other elected members of the board of directors are Considering also that the newly enacted R.A. 9295 has been signed Vicente Aldanese, Michael j. Estaniel, Capt. Lou Atienza, into law, Suazo is aware that Marina is mandated by law to come Capt Vicente j. Brillantes, Capt. VictorS. De Prado, Capt. up with the Implementing Rules and Regulations. He asked for Angel j. Osefia, Capt. Teodoro B. Quijano, Capt. Helmut some more time to review the inputs made by several groups in the series of consultations undertaken by the previous adminis­ Sallaba, Capt. Amador P. Servillon and Capt. Alfonso R. tration. For its part, Philpesta reassured the new administrator of Del Castillo. its full support and knowing that Suazo has both public and pri­ vate office experience before assuming the post, it will not be surprising that he will achieve what he has planned to achieve Jardine's Duburg maiden call at MICT. A with his new mandate. vessel of Jardine Davies Transport Services, Inc. recently had its maiden ca ll at the Ma­ nila International Container Terminal (MICT), International Container Terminal Services, Inc. (ICTSI) flagship operation. Coming from Kaoshiung, Taiwan, the 1,700-vessel capac­ ity MV Duburg docked at Berth 5, loading 1,142 TEUs and discharging 872 TEUs. Af­ ter the MICT, the vessel sailed to Laemchabang, Thailand. William Gutierrez (2"d fr left), ICTSI customer relations manager, awarded a commemorative certificate to Captain Franciszek Nowak, vessel master (3'd fr left). Also present were Jardine Davies Transport Services officers (left to right): Arman R. Federigan, port agency manager; Rene Vargas, general manager; and George Maghirang, operations assistant.

19 allowed to exit the freeport gates. Besides being online, the MVTIS is real-time and web-based system and will become a ma­ jor component of the SBMA's e-government system through the CyberSubic Project. Payumo has been advocating a "paperless c system" to prevent falsification of docu­ ments and even "human intervention" that - induce graft and corruption. The bar-code UBIC Bay Freeport has developed tory system will provide information on all system using an A TM-type identification a computerized tracki ng and inven imported vehicles, including import docu­ card will be issued for security and access tory system to check the movement mentation and tax and duties payments. It control of the MVTIS. This system will cover Sof imported vehicles in the will be backed with an online computer not just taxable vehicles and tax-exempt Freeport, where car smuggling frequently system, which will be placed at all sentry vehicles but also regular and transient and occurs. posts, to provide information about the government vehicles coming in and out of vehicle's engine and chassis number, digi­ the freeport. The Sub ic Bay Metropolitan Authority tal photographs taken upon its entry to the (S BMA) be lieves the system would ensure Freeport and the taxes and duties paid for One of the main capabilities of this system payment of customs duties and taxes due the vehicle. The system will be integrated is the digital imaging facility. Once the on the shipments and at the same time and made available to the Bureau of Cus­ motor vehicle enters the freeport premises, check tax-exempt vehicle owned by toms, SBMA Seaport Department and the a digital image or picture of the motor ve­ Freeport investors and residents. SBMA Import-Export Documentation Center which hicle will be captured using a digital cam­ chair Fe licito Payumo says the newly de­ will all provide permits and clearance to era. The photo will be recorded in the veloped motor vehicle tracking and inven- the sentry before an imported vehicle is MVTIS database. Once the vehicle ap-

€dC!Jpo de~'t up for grabs

MAERSK ·FILIPINAS CREWING INC. CAGA YAN de Oro (CdO) port is to undergo an expansion pro­ gram to relieve the facility of its worsening congestion.

The Philippine Ports Authority said it is due to seek tender for the construction of the portthat includes extension of reinforced concrete wharf, installation of fender and mooring systems, water supply and port lighting systems. Scheduled for completion within 10 months, the PPA said it would source the budget for the extension project within the port agency's corporate fund .

"The Cagayan de Oro port is actually nearing saturation. We are finding ways to make its operations more efficient and the turn­ around of cargoes and vessels faster," said PPA assistant general MAERSK manager for engineering Medardo M. Melicor. CdO handles almost 3 million tonnes or nearly 200,000 TEU of cargo every year. Around 2,500 vessels dock at the port each year while 1.4 million passengers use it. QUALITY SERVICE ALL THE WAY For your professional and Due to lack of berthing space at CdO, some foreign and domes­ competent seafarer requirements. tic lines plan to divert their operations at the newly constructed Mindanao Container Terminal in Misamis Oriental. Meanwhile, 51st!F PBCOM Tower the PPA has opened the first phase of its Cagayan de Oro Pas­ 6795 Ayala Avenue cor. Herrera St., senger Terminal Complex at the Macabalan wharf. The PPA Makati City said the PhP25 million facility is already 50 per cent complete Tel. No.: 841-9000 /849-3012/8E*1300 and expected to be finished by the end of the year. Fax No.: 815-8307

}() proaches the SBMA gates for exit, the ac­ inside the Freeport. The SBMA inspector around 400,000 TEU a year and ease traf­ tual physical appearance of the motor ve­ will conduct an ocular inspection to locate fic congestion in the nearby port of Manila hicle will be compared visually with the each vehicle in the list. Report on the sta­ as an alternative port. picture in the database. An inventory is tus of these vehicles has to be logged in provided by the system to audit and ac­ the system. The MVTIS also covers the pro­ t present, Batangas covers a base port of . count all vehicles entering SBMA. It is also cedural work flow within the manual por­ 22 .60 ha constructed under phase 1 devel- • SMS (short messagi ng system) and GPRS­ tion of the system to blend with the com­ opment project at a cost of PhP1.60 bi l­ ready in order for the system to be avail­ puterized system. This is to simplify work lion. An additional 128 ha that is being able over the cell phones and the new por­ flow and ease document processing. constructed has been added into phase II, table pocket digital adopters. This feature making up an operational area of the facil­ is available for SBMA law enforcement ac­ A logging facility will be part of the sys­ ity to a total of more than 160 ha. The port tivities. tem. This report will help monitor irregu­ is equipped with a foreign general cargo larities within the system. This is in com­ berth, 185m long and 1Om deep; one multi­ Reports can be generated by the system pliance with ISO, an international standard purpose berth, 230m long and 1Om deep; such as the management reports with sum­ of service maintained by the SBMA as a one domestic general cargo berth, 120m maries and statistical updates; inventory global competitive freeport. With the long and 1Om deep. reports with listings of motor vehicle clas­ implementation of such systems, the SBMA sified by group or by identified criteria; and would assure that all vehicles entering the Being a pas se nger hub in the domestic tracking reports with periodic aging report freeport are all accounted for and to en­ trade, Batangas maintains its own fac ilities that is specially provided by the system to sure that all government tax requirements for ferri es. They include four ro-ro berths identify and track down lost or pilfered have been complied with and the assu r­ (pier-type), two ro-ro berths (wharf-type) at motor vehicles in the SBMA. The tracking ance that the motor vehicle is roadworthy five metres dee p each, seven fast craft system would provide a list of motor ve­ upon leaving the freeport Zone berths and six ro-ro ramps. These facilities hicles with duration of 60 to 80 days stay are complemented by three terminal build­ ings to accommodate passengers that em­ bark and disembark from the ferries. Phase II of the Batangas port consists of three pack­ ages: the civil and marine works, supply and installation of pa ss enger boarding bridges, and construction of access road :Batangas p

21 MARITIME - REVIEW BROKERAGE · NOVEMBER 2004

but serve as a protector of all industry stake­ holders. The PUC is objecting to the imple­ Wl'ilat's mentation of five specific provisions of RA 9280 since it will not only cause many of their jobs but also slows down traffic in the forwarding business.

br Atty. Romeo Sto. Tomas, director of the Philippine International Seafreight For­ By Christopher Paringit warders Association, one of the 26 mem­ bers of the PUC that opposes the law, ex­ HE full implementation of Repub pay port dues such as storage, stevedoring plained that the law, specifically Sec. 6, lie Act o. 9280 or the Customs and other port charges before getting their will cause unemployment of customs Brokers Act of 2004 will result to shipment released. The group further clerks, customs representatives, proces­ Tbu sin ess inefficiencies, higher stressed that al lowing brokers to sign ex­ sors, checkers, including expert lawyers manufacturing cost and slower turnaround port declarations would only add to the red and teachers of customs and tariff admin­ time of materials and finished products, tape instead of streamlining and simplify­ istration since it requires that all of these accordi ng to the Semiconductor and Elec­ ing operations. positions should be filled by a professional tronics Industries in the Philippines, Inc. customs broker. "Unless you are a profes­ (SEIPI). Prior to the enactment of the law, non-li­ sional customs broker, then you are not censed customs brokers or their represen­ qualified to perform the duties of any of In its position paper submitted to the Phil­ tatives are allowed to do the job as well as these positions," Sto. Tomas said, adding ippine Regulation Commission (PRC), the permitted to finance and advance pay­ that the law also barred non-customs bro­ group stressed its opposition to the imple­ ments, in behalf of their clients, to facili­ kers and lawyers from providing cons ulta­ mentation of the law si nce the act will re­ tate the turnaround time. But with the ap­ tion and rendering other professional ser­ verse the industry back to manual process­ proval of the law, it eliminates all of these, vices on customs and tariff laws as well as ing, which is costly and will delay cycle the group said . Earlier, the PRC planned to represent their clients before the Bureau time, countering the industry's efforts in suspend the implementation of five provi­ of Customs and other government and pri­ promoting competitiveness of its opera­ sions of RA 9280 or after receiving strong vate entities. tions. SEIPI explained that the new law opposition from the Port Users Confedera­ would do away with automated and tion (PUC) claiming that it would leave On the hotly contested prohibition against paperless processing of export declarations majority of its personnel unemployed. the corporate practice of customs broker­ under the Automated Export Documenta­ age, the Chamber of Customs Brokers Inc. tion System (AE DS) for Philippine Eco­ However, the PRC said the other uncon­ (CCBI) stressed the provision does not dis­ nomic Zone Authority-registered compa­ tested provisions of the Act should not be allow freight forwarding firms from fully nies. affected but implemented immediately to operating. "It does not mean they will be beat the deadline set for the implementa­ out of business, " assured Customs collec­ The group added that these inefficiencies tion of the law. Former PRC chair Antonieta tor Rogelio Villagarcia, also a member of would further dampen investment growth, Fortuna-lbe, in a public hearing, said that CCBI. According to him, forwarders offer hamper continuous progress in electronics this way, the majority of the provisions of many services including shipping, air and commerce, and aggravate bureaucratic red the law could already be implemented sea consolidation, warehousing, packing tape. The association further explained that while discussions on the contested provi­ and crating, stuffing, export documentation a semiconductor company processes about sions would continue until an amicable and processing. "The law only asks them 24,000 import entries and 20,800 export solution in its full implementation is to hand over the customs clearance ser­ entries per month and if the new law is reached. "We have a deadline. The law will vice to those properly trained to perform followed, companies will have to hire li­ be left hanging if we do not act swiftly. I the task . Only that and the rest is theirs," censed customs brokers to work on 44,800 suggest we delay the full implementation he said. import and export entries on a daily basis of the specific provisions, especially if these since the law require s that only licensed would affect majority of the persons in­ Villagarcia, however, admitted pure bro­ brokers shou ld process these entries. volved in the industry," lbe pointed out. kerage firms would have to close shop. Un­ She said that the agency is willing to sit der the law's proposed implementing rules SEIPI argued that in this set-up cycle time down with the group to discuss the issues and regulations (IRR), companies are given would be longer adding the possible de­ on hindsight. She added the law shou ld not only up to December 31, 2004 to file an lays resulting from importers having to first only benefit the professionals using the law entry with customs, he said.

22 North StarPort Development Corporation

Cargo Terminal Operator for Piers 2,4 & 1 0 North Harbor, Manila

Head Office: Pier 4, North Harbor, Tondo Manila, Philippines Telephones: 245-2843 ; 245-2975/ Fax: 245-2843 MARITIME REVIEW NOVEMBER 2004

US b rn(J Presli fruit watching transh · ents orn for liofidays

IMPORTERS and cargo brokers of fresh t· t wateh fruits have urged to be vigi Iant in the up­ surge of smuggling activities in anticipa­ tion of the entry of the commodity that usually floods the market every holiday With garments quota to expire season .

The Fruit Importers and Brokers Asso­ HE Philippines plans to inten year uncovered $2M worth of illegal ciation of the Philippines (FI BAP) ap­ sify its campaign against ille transshipments by 33 garments firms pealed for the extension of the working gal transshipment of garments to the US and various countries in the hours of officers and men of National to the United States after a re­ European Union. Charges have been Anti-Smuggling Task Force (NASTF) to cent crackdown as the abo I ition of filed against nine. render overtime work beyond 1700hrs worldwide quota ends this year. and on Saturdays. The extension is in GTEB's monitoring system includes the light of the late arrival of vessels bearing The regulatory body Garments and inspection of goods at point of produc­ the reefer container shi pments such as Textile Board (GTEB) says many ship­ tion and prior to sh ipment. Once the apples, oranges, pears, among others. pers wi II attempt to skirt inspections origin of the goods is established, only FIBAP has expressed intention to shoul­ now that the quota is about to expire then will the agency release the Tex­ der the overtime pay of the men and in January 2005. Transhipment occurs tile Export Clearance (TEC) to the ex­ women who will render the extra work­ when a local exporter uses the porter. ing hours. FIBAP fears that cargoes could country's quota for goods made in an­ be taken out of the pier zone right after other country and makes it appears that The GTEB also conducts post-shipment having cleared by Customs Bureau even the goods were produced locally. verification of export documents such without approval by the NASTF. as bills of lading (Bls) and airway bills GTEB executive director Serafin Juliano (AWBs) submitted by garment firms. If The group, in a separate request, also warned erring garments exporters that these are found fraudulent, the agency appealed to the members of the Asso­ "the intensive campaign against tran­ holds the release or transmittal of the ciation of International Shipping Lines to submit cargo manifests at least a day shipment continues," saying that regu­ export licenses to the importing coun­ before the expected arrival of the vessel latory mechanisms to stop the illegal try. to avoid delay in the release of imported activity were still in place among im­ fruits. FIBAP also proposed the establish­ porting countries. The GTEB said the Juliano said exporters engaged in trans­ ment of a priority lane for reefers and to US Customs and Border Protection shipment face stiff sanctions and pen­ allow examination of containers at the (CBP) has released another list of gar­ alties, including closure of factory and 'reefer area'. ment firms that were convicted, penal­ the cancellation of quotas and I icen ses ized and/or excluded from entry to the and disqualification to engage in ex­ US after they have been transshipping porting garments. The activity has been transshipments as part of their stepped exports. traced to unscrupulous brokers who up drive against this illegal activity encourage and teach willing compa­ During its investigation, GTEB foun1 The list included six Hong Kong facto­ nies to fabricate fraudulent documents. substantial evidences- including altere' ries convicted for transhipping textile trading documents and fake export I and textile products to the US. Though A number of shipping and forwarding censes that could convict the garmer no Filipino garments exporter has been companies have fired some of their firms that have been associated wit included in the CBP list, the GTEB last employees for alleged participation in tran ss hipments.

24 ~J.~ l

From page 26 ... Moving fast fQrward the p wer sector... its efforts, began earlier in the Arroyo ad­ planners need more foresight and greater power distribution . An objecti ve compara­ min istration, to renegotiate power produc­ ability to anticipate problems- more than tive study of the EPIC bill as originally pro­ tion contracts in the strategists in other sectors, because power posed by th e Ramos administration and the light of new external forces impacting plants, transmission lines, and connective EPIRA passed by the 111h congress, indi­ negatively on the domestic economy. Un­ inter-island power cables cannot be built cates that the intent and implementation less we put these problems behind us, and overnight. Government and the citizenry framework of the or igi nal vers ion was sig­ move forward faster, we will continue to must face up to the problem. nificantly altered for the pu rpose- if reports suffer fr om a downward spiral in the power are to be believed- of protecting a few but industry-a spiral that may lead once again Our pressing need is for government and powerful private interests to the disadvan­ to another power crisis more damaging than the concerned citizenry to grapple with this tage of th e consumers and the general pub­ that of 14 years ago. looming disaster before it crashes down on lic. us. Right now, we can still talk about some Outages already hitting the Vi sayas and choices and alternatives, although we re­ Amendments to th e EPIRA law are there­ Mindanao in fad, sporadic brownouts al­ ally have very little lei sure left to carry out fore neces sary to eliminate cross-owner­ ready afflict many parts of the country­ our power-.... quation strategies- choices, ship, enhance competition, prevent mar­ foreshadowing what could be in store for alternatives and prec ious time that, no ket abuse and collusion among related sec­ the power industry, in two-to-three years ' matter how limited now, were not avail­ tors (by the creation of new monopolies), time. In both Cebu and Negros island s, able during the energy crisis of the early transform the energy regulatory commis­ peak demand already exceeds supply. 1990s. All too often, these facts were con­ sion into a more e{fective regulating Energy for these two regional economic ve niently forgotten whenever the policy agency, and to create a more attractive in­ hubs are already being augmented by sur­ initiatives taken by the Ramos administra­ vestment regime in th e electri c power in­ pluses from the Luzon and the Samar-Leyte tion to address that particular crisis are dis­ dustry. In my view, eventual deregulation grids which, fortunately, have been inter­ cussed nowadays. is the best answer to our looming power connected since 199/. crisis. Of course, government should ap­ proach deregulation ca utiously and judi­ Meanwhile, Mindanao continues to be Summi ng up, the overriding call is first for ciously. plagued by erratic power supply. With government to remove or remedy-by con­ water level s seasonally low in both Lake gressional amendment- the monopolistic But, if deregul ation fails, we will fall far­ Lanao and the Pu langui River, the generat­ features of the Epira law and then, forth­ ther and farth er behind our vigorous neigh­ ing capacity of the island 's hydroelectric with, carry out the policy reform measures bors in w hat has become the world's fast­ plants is steadily declining. spelled out therein, and thereby, faci I itate est growing and most power-hungry regi on. the orivatization of those components of One fin al caution: as correctly observed by Couple this with the ever-present threat of the Napocor which should be privatized. several level-headed leaders-the most stra­ transmi ss ion towers being blasted down by The original Omnibus Electric Power In­ tegi c element of the electric power train­ commun ist insurgents, MILF lost com­ dustry Code (EPIC) submitted by th e Ramos which is transmission-must remain under mands, and Abu Sayyaf band its and you wi II administration to both the Senate and the government control, even if a minority realize how Mindanao, too, is vulnerable House in late 1997 to mandate, among oth­ portion of it is privatized for th e sake of to a new round of outages. ers, the privatization of certain components financial viability. of the Napocor, had been mangled beyond We need not belabor here the increasing recognition after two and one-half years of cost of oi I and gas in the face of the fren­ debate, maneuvering and lobbying within (Message of former president Fidel V. Ramos, zi ed global competition for energy re­ the Estrada-controlled 11 th Congress. chairman of Ramos Peace and Development Foundation (RPDev) and the BOAO Forum for sources, especially among the heavy­ Asia Book launching on "Surviving a power weights- China, Japan, the US and EU . But, The key principle in the original EPIC bill crisis: The Philippine experience" by Myrna M . like it or not, these new factors beyond our was the absolute prohibition of cross-own­ Velasco at Manila Polo Club, Makati City, control w il l affect the Philippine power ers hip among the three components of 1900h 07 October 2004) equation for years to come. Thus, energy power generation, power transmission, and

25 MARITIME REVIEW NOVEMBER 200 4

N mid-1992, when I became president, did not perform their oversight functions regulation-as the key to assuring a con­ our nation faced a I iterally dark future. under the joint Congressional power com­ stant supply plus reserves ahead of increas­ and it took all our political will to light mission as provided by law, particularly in ing demand, and bringing down electric­ Iup our homes and factories again. Now regard to the annual review of our 30-year ity rates. But getting there requires some we find ourselves wondering whether his­ (1996-2025) Philippine energy plan. pre-conditions. tory might repeat itself. Withou.t substan­ tial new investments being made in power On the part of th e failed Estrada adm inis­ Among the lessons that could be drawn plants-despite rising demand for electric­ tration, there was the continuing serious from our experience during the 1990-1993 ity- renewed power outages, which had error of not balancing electric power de­ power crisis is that providing quality ser­ extended for as long as ten-to-twelve hours mands with power supply in the wake of vice has costs; ard this should be reflected at a time in 1990-1991-1992- do seem to the disastrous effects of the East Asian fi­ in the tariffs paid for by consumers. We indicate a clear and Present danger. nancial crisis, the depreciation of the peso, should also take as a key consideration the the decline of Philippine credit ratings, the truism that any entity-whether public or Certainly the signs of crisis are mounting: loss of investor confidence, and the conse­ private-facing a financial deficit, cannot demand overtaking supply in many key quent deterioration of our economy dur­ deliver quality service to its customers. areas-only a few investments for new ca­ ing the years 1999 and 2000. Another aspect of the power crisis comes pacity being firmed up, despite from investor nervousness over the uncer­ government's admission of a near-term Right now, government heavily subsidizes tainties in our country's macro-playing field shortfall in the power supply-and pro­ power rates. Bureaucratic complacency, and market rules. Yet it is manifest that tracted delays and/or scant interest in the legislative inaction and populist policies companies will invest only if the rules of privatization of the power plants; transmis­ have not only plunged several of our gov­ the game are clear. Investors will enter a sion systems, and distribution facilities of ernment corporations into disarray. They market only if they know what to expect the National Power Corporation (Napocor). have also left the nation suffocating in a from it. All these signs are ominous. Is our future mountain of debt and budgetary deficit. In going to be darkened once again? order to return all of us back to the path of Today, this kind of market certainty seems sustainable development, and to bring out to have become elusive in our country. For The undeniable fact is that our country's the facts and the realities, allow me to instance, incessant calls to investigate on­ electricity system is in a precarious state­ clarify oft-repeated misconceptions, un­ going contracts already made with private and this our energy planners realize and founded fabrications, pure self-serving pro­ power producers have not been helping our businesspeople admit. And things have paganda and outright lies about the IPP­ government's effort to attract new invest­ been turning from bad to worse because PPA issues coming from various sources ments to meet the need for new capacity, our policy-makers, both in congress and during the rece nt past. especially in our still unconnected islands. the executive branch, have focused on sat­ These calls to reopen deal s already signed isfying the immediate needs of the mass Privatization and deregulation will bring and delivered merely add even more un­ electorate-regardless of the long-term down power rates . The experts and plan­ certainty into an already-uncertain market. consequences. ners agree that the long-range solution is Certainly, government now must intensify For instance, the 11th and 121h Congress the power industry's privatization and de- turn to page 25... From research and design to -maintenance services, technical support and training ... we provide a total technology package to our customers.

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