Last May 13, Representative Nicanor Briones delivered a privileged speech on the rampant smuggling that is hampering our agricultural development. He stated that at Manila’s North Harbor, 23 container vans with agricultural products valued at P86.6 million were apprehended from August 2006 to October 2007. At the South Harbor, in June 2007 alone, 14 container vans were caught carrying hot products worth P36.1 million.

Disappearing goods

Briones reported that when the confiscated container vans of smuggled goods were opened, half of the content was gone. This reminds me of the 174 containers of smuggled onions that I reported on at a Sept. 12, 2004 Senate hearing chaired by Senator Mar Roxas. Of these, only 55 were still at the Bureau of Customs (BoC), with no explanation given for the disappearance of the 119 other containers.

At my request, a Senate staff accompanied me to inspect these remaining containers. True enough, we experienced the same phenomenon of opening a container and finding more than half of its contents gone. No one was ever punished for this, except the onion farmers whose livelihood greatly suffered from this smuggling.

In his privileged speech, Briones also reported on what was happening in warehouses outside the customs area, where the smuggled goods should never have reached. The table below shows P473.2 million in smuggled agricultural goods seized only in the last one and a half months.

About P350 million worth of smuggled goods was discovered in just two BoC-accredited warehouses. We wonder how much more in smuggled goods can be found in the 48 remaining cold-storage facilities accredited by the BoC. The impact is not only tax revenue loss but also loss of livelihood and potential damage to our people’s health.

For example, smuggled Peking duck that did not pass through our phytosanitary measures could lead to the spread of the dreaded bird flu in our country.

Anti-smuggling success

How do we put a stop to this ongoing smuggling? We do not have to reinvent the wheel.

In 2003, using government statistics, we brought down the smuggling rate of containerized vans arriving in Metro Manila from 40 percent to one percent.

This was achieved largely through private sector participation, which government welcomed because of its political will to stop smuggling.

Since only the government inspected imports at that time, the Alyansa Agrikultura [Agricultural Alliance] succeeded in having the private sector join these import inspections. In those instances when smuggled goods were caught, the previous practice of compromise tax penalties and disposal of these goods through auction was stopped.

The Alyansa argued that smugglers got back their goods through these practices, anyway, and at way below the market price.

It was then decided that henceforth, smuggled goods could only be disposed of through burning, burial, or donation to the poor. Since no smuggler had been jailed for the last 20 years, punishing them by destroying their goods might be a more effective deterrent to their repeated smuggling.

In addition, the smugglers were easier to catch, because the Department of Agriculture had automatic access to the BoC’s Inward-Forward Manifest, which is a listing of imported goods coming into the country. This kind of access, however, has since been terminated.

But the best anti-smuggling measure was the creation of the Cabinet Oversight Committee on Anti-Smuggling (COCAS). This was chaired by a Cabinet secretary, with different government department officials and three private sector participants coming from Alyansa Agrikultura (agriculture), Federation of Philippine Industries (industry) and Fair Trade Alliance (trade).

Never had we seen such anti-smuggling success, owing largely to private sector involvement. This resulted in transparency and reform recommendations that were on the agenda of COCAS, which met consistently every two weeks. However, COCAS was abolished on August 25, 2004. Though there were other anti-smuggling groups led by the BoC, which had significant accomplishments, there was no check and balance system.

Recommendation

But last April 18, after three years and eight months of absence of a strong anti-smuggling multi-sector group headed by a Cabinet member, the Ports Transparency Alliance (Portal) was formed. It is headed by Finance Secretary Margarito Teves, and has the potential of achieving the same successes as the abolished Cocas.

In light of the findings revealed in Representative Briones’ smuggling scandal speech, it is recommended that Secretary Teves call for a Portal meeting immediately. Furthermore, he should schedule biweekly meetings, as the Cocas did, for the next three months.

This will provide the necessary pressure, transparency, and private sector participation so necessary to address smuggling today.

The author is the chairman of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, former undersecretary of agriculture, and former undersecretary of trade and industry. For inquiries and suggestions, email agriwatchphil@yahoo.com or call or fax +632 8522112.