Shipping lines and the Philippine Ports Authority (PPA) are supporting bills seeking to liberalize harbor pilotage and create a regulating body for harbor pilots in the country.
Stakeholders manifested their support for the bills during a Lower House Committee on Transportation (COTr) hearing on August 15.
Philippine Inter-island Shipping Association (PISA) executive director Atty. Pedro Aguilar and Association of International Shipping Lines (AISL) president Patrick Ronas both said their groups back House Bill No. 497 and HB No. 1278.
Aguilar noted particular support for HB 1278, which calls for optional pilotage for domestic shipping vessels.
Angkla Partylist Rep. Jesulito Manalo’s HB 1278 provides for open pilotage and creation of a pilotage board. It also wants to enhance the powers of the PPA and other regulatory bodies in regulating pilot services and harbor pilots’ conduct.
On the other hand, HB 497, authored by Davao City 1st District Rep. Karlo Nograles and PBA Partylist Jericho Jonas Nograles, seeks to create a pilotage commission to regulate the services and conduct of harbor pilots nationwide.
PPA general manager Atty. Jay Daniel Santiago, during the COTr hearing on August 15, manifested the port authority’s support for HB 1278, “subject only to the recommendations for purposes of rationalization and identification of certain official functions in the proposed bill.”
A monopoly?
Manalo, in an explanation during the hearing, said the country’s pilotage environment “appears to be a monopoly of some sort where only selected people can become harbor pilots and thus depriving equally capable and experienced personnel to be harbor pilots.”
In his bill’s explanatory note, Manalo said that for more than 40 years, pilotage services were provided only by harbor pilots who belong to organizations affiliated with the United Harbor Pilots Association of the Philippines (UHPAP).
“For decades, too, there has been nagging demand to liberalize pilotage service in the country, by allowing other individual pilots or pilotage organizations to likewise render services, especially in critical or busy ports,” Manalo added.
Liberalization is expected to improve pilotage services, prevent maritime accidents, and regulate pilotage fees.
AISL’s Ronas, in a phone interview with PortCalls, said they agree with the liberalization to “take away the monopoly” and spur competition, and professionalize the pilotage industry, as well as to address allegations that pilots are coercing carriers and ship agents.
PISA’s Aguilar, during the hearing, said the group supports the bills for several reasons, including that not all ports in the Philippines have readily available pilots. He cited a Department of Justice-Office for Competition study that states 35 public ports and 553 private ports in the country have no pilots, making ship docking in these ports a violation of the policy.
He added that in some instances, this allegedly becomes “a source of some sort of a corruption between the pilots and our (shipping lines) ship captain.”
“Oftentimes, ship captains will sign the document that will say the vessel was under pilotage and yet there was no pilot. Of course, I am not saying that that is always the case. There are certain cases like that,” Aguilar explained.
Another reason PISA supports the bills is that they are seen to bring down the cost of domestic shipping. “One of the cause(s) of high domestic shipping cost” is pilotage, he noted.
He said that even though PPA prescribes rates for pilots, PISA members, especially those engaged in the tanker sector, are supposedly charged as high as 1,000% more than the actual rates. He said charges in some ports could be as much as P90,000 (Davao), P50,000 (Tacloban), and P30,000 (Iloilo), when under Executive Order (EO) No. 1088, they should only be P300.
EO 1088, which was issued in 1986, provides for uniform and modified rates for pilotage services. Aguilar said PISA has documents that allegedly prove that high rates are being imposed by harbor pilots in outports. One is said to be a receipt from a San Fernando Pilot Association company for a tanker with gross revenue tonnage of 1,060 that was supposed to pay only P139.20 under EO 1088 but paid P27,304.
“All these costs eventually will be borne by the consumer,” Aguilar said.
Conflict of interest resolution
PISA also supports Manalo’s bill because it will address the issue of conflict of interest for harbor pilots engaged in tug boat services, said Aguilar.
He noted that PISA has information and documents that can show how harbor pilots now own tugboats and tugboat companies. While acknowledging free enterprise, Aguilar said that with compulsory pilotage, “oftentimes our members will be pressured by the pilots to use their own tugboats.”
He added that this takes away competition as well as shipping lines’ right to choose their own tugboat provider.
Aguilar said UHPAP might have the “mistaken idea” of having exclusive right to render pilotage service because the group’s name is mentioned in EO 1088, which was issued in 1986 due to the clamor by UHPAP to rationalize pilots’ charges, as echoed by other associations.
In response to an observation by Cebu 3rd District Rep. Gwendolyn Garcia, who noted that EO 1088 does not contain a provision allowing UHPAP to be the only pilot organization, PPA’s Santiago said he also did not see any provision for such. He said, however, that a Supreme Court ruling in June 1992 recognizes the exclusive right of UHPAP to render pilotage services nationwide.
Asked if pilots need to join a pilot organization to render services, Santiago said no.
Turning down appointees
PPA was also asked to clarify reports that while PPA accredits and appoints pilots, UHPAP can reject these appointments.
Santiago said that when he assumed office, “that was the feedback.” That is why PPA had engaged with the pilots’ association and, to a certain extent, “facilitated and helped certain pilots to be able to provide pilotage services in certain districts,” according to Santiago.
But whether or not district associations object to appointments or assignments of pilots, Santiago said that “that is beyond me” because “as far as PPA is concerned…if the pilots have completed the requirements and are qualified, and there is a need for pilotage services in those particular districts, we give them the appointments.”
Manalo also raised the issue that pilots have to allegedly “pay a substantial amount” to become a member of UHPAP and render pilotage services. He said his father, who was a harbor pilot, “paid money to become a harbor pilot in the association.”
He also brought up reports of old harbor pilots who had to be lifted up by ropes because they were “not too strong to board the vessel.”
UHPAP clarification
UHPAP’s representative during the hearing, former president Capt. Romulo Salle, said “there is no such thing as (only) selected people” becoming a pilot because a qualified person can become one.
He also denied reports that “incapacitated pilots” still go on board ships because pilots abide by the retirement age of 70 years old.
As for monopoly of service, Salle said there are 18 pilot districts with 123 pilots. He noted that it is PPA that dictates the required number of pilots in a district, and not UHPAP.
On excessive rates, Salle said pilots’ tariff for domestic vessels is already 30 years old and has not been increased even as vessels have grown larger.
He added that fees of pilots for passenger ships are the same as the prescribed rates, but fees in outports, especially for tankers, can be costlier because their ports are farther with no proper docks.
He also acknowledged corruption in harbor pilotage, but countered that captains of shipping lines are corrupt as well. He also claimed that pilots do not force shipping lines to get the service of tugs of pilots.
COTr will create a technical working group to discuss the two bills and their conflicting provisions. – Roumina Pablo
Image courtesy of Bill Longshaw at FreeDigitalPhotos.net
