Highly questionable multimillion-peso per container insurance collection exposed

A group of port stakeholders has exposed the highly questionable multimillion-peso per container insurance collection by the Association of International Shipping Lines Inc. (AISL) and its attendant inflationary effect on the Philippine economy.

Primarily, who is AISL? Based on Internet verification, AISL is an association composed of international shipping lines that are calling at Philippine ports.

Incontrovertible pieces of evidence and other information gathered by this writer from various sources showed that AISL has, since the early part of 1990s, been collecting from concerned port stakeholders more or less P25 per container, which amount now increased to P30 per container collected through a highly digitized system to avoid a paper trail.

This is how it happens: Before an importer, broker or concerned port stakeholder can pull out from container yards his cargo loaded on the AISL-member shipping line container, he must pay  the said amount to AISL.

Upon payment of the P30, AISL will issue to the payor a receipt with the following printed words: “Equipment Insurance Clearance.” According to port stakeholders who used containers belonging to AISL-member line, this amount will be used to ensure the return of the container used by a port stakeholder.

According to my sources, the justification for the AISL collection is that there is a need to ensure a subject container from the time when a container leaves any port of the Philippines and terminates when the same is returned at any of the international seaports of the Philippines or to a duly designated place of return.

But such an activity requires the authority of a regulatory agency, in this case, the Philippine Insurance Commission. The Commission, acting on numerous complaints from stakeholders, set a hearing on this matter on January 10, 2019, to determine the legality of AISL insurance premium collection.

This irregular practice has been a source of irritation for port stakeholders who are complaining about the need for them to pay the insurance premiums of shipping containers that they do not own. For them, it is the obligation of AISL member-lines who owned the containers to pay for the insurance premiums of said containers.

Besides, concerned port stakeholders are in doubt as to the personality of AISL to mandatorily impose and collect from them the said amount. For these port stakeholders, they are questioning the authority of AISL to impose and collect the said insurance premiums.

Based on port stakeholders’ conservative estimate,  AISL has already collected since 1995 about P396 million from stakeholders from the Ports of Manila and the Manila International Container Port.

The same practice is also being done in other ports, such as Subic, Batangas, Dagupan, Cagayan, Cebu, Cagayan de Oro, Zamboanga City and other major ports, and the amount could run to billions of pesos considering the number of containers and the length of time that it has been going on.

With these doubts continuously raised by port stakeholders on the personality and authority of AISL to implement this practice, it is high time for our concerned government agencies to look into this matter and live up to the mantra of this administration to root out corruption and abuses.

Reacting on my previous stories on ports irregularities, Atty. Ferdinand A. Naque, national president of the Chamber of Customs Brokers Inc., and Samuel C. Bautista, chief learning officer of the Academy of Developmental Logistics, invited me to a breakfast meeting last  Saturday at the Marriott Hotel in Pasay City and promised to provide me with more information about logistics and the movements of containers and its impact on the worsening traffic condition in the metropolis.

Bautista had a lot of information but was not ready to provide me with details on the various issues I raised in my column, while Naque, after introducing himself, just seated himself at another table with his family but did not offer any comment on the issues I raised.

Based on my preliminary research, I discovered the names of powerful personalities actively involved in numerous activities in practically all major ports of the country, particularly on trade facilitation and logistics.

They have intricate connections in various departments of the government, including finance, tax collections agencies, trade and agriculture, mining and others.

Earlier, Department of Trade and Industry Secretary Ramon M. Lopez has requested the Bureau of Internal Revenue (BIR) to assess and collect the tax liabilities of these unscrupulous violators.

At the same time, Lopez asked the Philippine Competition Commission (PCC) to conduct a separate probe based on a joint study by the DTI-Export Development Council, the National Competitive Council and numerous complaints by ports stakeholders who discovered the unlawful practice of some shipping lines.

Ports stakeholders discovered the unlawful practice of some shipping lines that makes freight cost less transparent in order to benefit the exporters in some countries at the expense of our importers, costing the Philippine economy huge losses annually.

Since I started writing irregularities in the ports, I received seven threatening calls warning me to keep my mouth shut. I contacted the deputy NBI director and reported the threats, apart from other threats I received earlier as a result of my hard-hitting articles and the series of books I authored that exposed corruption and other venalities in the previous governments.

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