On usual afternoons, the hallways of the Department of Agriculture (DA) central office in Quezon City would only be home to familiar sounds: sudden brakes of officials’ cars driving by, squeaks of leather shoes and chitchats of janitorial personnel taking a break.
The usual eerie quietness in the decades-old building wouldn’t break, even if the agency’s chief would walk along the hallways.
But one November Monday afternoon was different.
Agriculture Secretary Emmanuel F. Piñol walked along the corridors of the fourth floor of the building, only to be welcomed with scrutinizing stares from people sitting nearby the stairs, while a queue of people in the middle slowly forms a sort of barricade to bar the DA chief from walking.
“Sec! I’ve been here since last week. I’m still waiting for some import permits. I thought it would only take a day sir,” a female representative of an importing company greets Piñol. “Some of our documents have been misplaced by your staff,” she added.
Piñol huddled his staff inside one of the offices on the fourth floor. “Why is there a long queue? And why are some papers being misplaced?” Piñol asked his staff, including an undersecretary and assistant secretary. “Add more people,” he ordered.
Six days earlier, Piñol pronounced an order that took the trade and agriculture industries by storm. That order was the start of his first wave of assault against technical smugglers of agriculture products.
“I issued instructions for an immediate cancellation of all import permits, both for meat and plant products, because of persistent reports of permit recycling and technical smuggling,” he said during a November 22 morning press briefing.
From thereon, traders in the agriculture sector were taken aback by Piñol’s pronouncement, which surely created a buzz among their ranks.
So much buzz, that even the US Department of Agriculture’s Foreign Agricultural Service (FAS) in Manila advised US exporters to “exercise caution” in planning their shipments to the Philippines because of the new rules in securing sanitary and phytosanitary import clearances (SPS-ICs).
“Although the process [of securing SPS-ICs] is becoming more refined, further changes and consequent disruptions are likely,” according to the FAS Global Agricultural Information Report published on December 2.
The FAS in Manila noted that the rules for securing SPS-ICs have been changing “almost daily.”
Confusion
On November 23 Memorandum Circular 5 (MC 5), which authorized the DA on the basis of the Food Safety Act of 2013 to revalidate—and not revoke—all SPS-ICs issued before November 23, was signed.
Under the MC 5, the DA would create two technical working groups (TWGs): SPS Inspection Group and SPS Monitoring and Evaluation Group.
The SPS Inspection Group shall be responsible for conducting a mandatory inspection of all inbound shipments prior to the assessment for tariffication of the concerned Bureau of Customs (BOC) personnel. The measure would be done to avoid misdeclaration of goods contained in the shipments, Piñol said.
Meanwhile, the SPS Monitoring and Evaluation group shall spearhead the “revalidation” process of all SPS-ICs in the country, which would be done manually, meaning, all affected importers shall present their SPS-ICs physically to the TWG in the DA central office that would validate and authenticate the permits manually.
The revalidation process of SPS-ICs started on November 23, per Piñol’s order that upon the signing of MC 5, it shall be effective immediately.
However, the circular has an “effectivity clause”, which stated that its content shall only take effect 15 days after its publication in the official gazette or in two newspapers of general circulation. This means MC 5 shall only take into place on December 9 if the circular was published on November 24. A copy of the MC 5 shows that the order was under “for publication” status on November 23.
“We did it to surprise them. Why, is there something wrong with that?” Piñol said when asked by reporters if there would be legal repercussions, given that the imposition of MC 5 bypassed the 15-day effectivity clause during a November 28 interview. “If there’s something wrong with that, then go ahead question us,” he added.
Piñol admitted that the procedures of the revalidation process are being refined from time to time to come up with the most efficient and better way of doing it.
Changes
Upon being notified by the MC 5, importers belonging to established groups, such as the Philippine Association of Meat Processors Inc. (Pampi) and the Meat Importers and Traders Association (Mita), expressed concerns over the said order.
Pampi Executive President Francisco Buencamino earlier told the BusinessMirror that the new procedures would cause delays in shipments and additional costs in production, which, in turn, would be shouldered by consumers.
For Mita President Jesus Cham, the legitimate importers would be the ones greatly affected by the MC 5, more than those who are into smuggling.
Both Pampi and Mita sent letters addressed to Piñol to express their concerns over MC 5 during the week since the circular was released.
On November 29 the DA released a memorandum instructing the facilitation of the release of highly perishable items.
The perishable items covered by the memorandum are live items, chilled items, dairy products and fresh fruits; vegetable and flowers, except onions and garlic; hatching eggs; live plants and orchids; and veterinary products and nutritional products.
“Importers issued with SPS import permits covering said items/products may directly process their documents at the respective quarantine offices of the port,” the memo read. “Validation of SPS import clearance shall be done directly at the Quarantine Office at the port of entry by authorized DA officers under the SPS technical working group,” it added.
On December 1 Piñol told reporters that the DA will tweak its earlier proposal to inspect all shipments before the BOC evaluates the contents for tariffs.
“We have a problem with that [AFTFU]. We cannot implement that because there’s no cold-storage facilities within the Customs compound, therefore, we cannot open each container, because it might spoil the goods inside,” he said.
“So, what will happen now is that we are just going to conduct a random checkup and follow the selected container up to the Customs-bonded warehouse for inspection,” Piñol added.
The DA yet again issued new procedures in the revalidation process of SPS-ICs on December 5.
In a notice posted in front of the DA Central Office, the agency announced that starting on December 5, all importers and brokers should abide by the prescribed schedule for the revalidation process of SPS-ICs.
The DA said it will entertain requests for validation of SPS-ICs from Monday to Saturday, from 8 to 11 a.m., according to the notice. It added that the DA will release validated SPS-ICs only from Monday to Friday, from 2 to 5 p.m.
“Releasing date [of validated SPS-ICs]: one to two working days after receipt of the request,” the notice read. Earlier, Piñol said the revalidation process will take less than 24 hours.
The DA said they had to set a specific schedule for the revalidation process of SPS-ICs so that applicants would have a “uniform timetable” to follow.
“This was done because the number of applicants for validation and authentication of SPS-ICs per day is not constant,” Agriculture Undersecretary Ariel T. Cayanan told reporters in an interview.
“I think it will not have so much effect if there’s an additional [processing] day. But as much as possible, we try to finish everything within the day, within 24 hours,” Cayanan added. He said there is no backlog in terms of the SPS-ICs being revalidated and said the agency remains “on target”.
Piñol earlier said the TWG created to revalidate the SPS-ICs worked until 4 in the morning in the first week of entertaining importers.
Clearer?
In between the changes in procedures and releases of memorandums, Piñol has been open for dialogues with industry stakeholders.
In fact, after meeting the members of Pampi, Piñol ordered that members of Pampi will be under a “green lane”, or will be given priority in the revalidation process. Meaning, the qualified members in the green lane will not anymore undergo the “tedious” process of revalidating their SPS-ICs.
The same has been given for the members of Mita. Cham said their group will be given a green lane in terms of applying new SPS-ICs.
Cayanan pointed out that there’s “no discrimination” in terms of the green-lane privilege being awarded to compliant importers.
“The green lane is not only for Pampi, but for those compliant importers. Those who don’t have any bad record are given priority,” Cayanan said. “The compliant ones take that privilege and that reward of priority. They are not just Pampi, but also from other groups.”
The DA chief has repeatedly assured consumers that the price and supply of holiday goods will be stable, despite the more stringent trade measures rolled out by the DA to stop the smuggling of agricultural products.
And with the creation of green lanes, the looming shortage and price hike of meat products next year would be averted, Pampi said.
However, one thing remains for sure: the constant changes in procedures resulted in unwanted consequences.
Pampi noted that an increase in the price of processed meat products is still possible due to some of their shipments that were delayed.
Pampi said the price hike would only be necessary if the processors couldn’t shoulder the added costs they incurred from delayed shipments.
However, the group said they can only quantify the additional costs once all the measures imposed by the DA are done.
“Trade reports that all agricultural cargoes are now affected, including feed ingredients, dairy products, frozen potatoes, and fresh and highly perishable cargoes,” according to the Gain report.
“Industry sources report that new import-permit applications are being processed; however, no new permits have yet been issued,” it added.
Image credits: Alysa Salen