Development of the Philippine merchant fleet takes the backseat

Development of the Philippine merchant fleet takes the backseat
Brenda V. Pimentel December 2, 2020 https://www.manilatimes.net/2020/12/02/business/maritime-business/develo...

Last of two parts

Presidential Decree 474 transformed the maritime industry from merely an accessory to the government’s customs and trade responsibilities to become a key contributor towards achieving economic progress for the archipelagic Philippines. The law undoubtedly refers to the indispensable role of the country’s merchant fleet in developing the maritime industry considered essential in attaining the national objectives laid down in PD 474. To date, those national objectives remain compelling.

The Maritime Industry Authority (Marina) was created to realize the national objectives cited by PD 474, the clear targets of which were acknowledged and upheld by the agency as manifested by its policies and programs thereafter formulated and implemented. The law unequivocally pointed to the merchant fleet as the backbone of the maritime industry as it caters to the country’s need for domestic and overseas maritime transport that is safe, secure, economical, dependable, and environment friendly.

Then and now, priority is accorded to improving the safety record of the domestic merchant fleet through the introduction of programs aimed at encouraging ship upgrading and modernization. Further re-alignment of governmental functions pertaining to ship safety requirements on ship construction and equipment, crewing i.e. manning level and seafarer’s qualification was legislated. Aids to navigation in the territorial and coastal waters and improvement in port facilities are continuously being pursued. All these form part of the support to the integrated development of the maritime industry with the national merchant fleet at the center.

On the international front, attention was given to the development of the Philippine overseas merchant fleet. Industry clamored for legislative reforms in overseas shipping in order to attract investment in the sector. The call was for the restoration of the incentives granted to overseas shipping such as exemption on duties and taxes on the importation of ships and spare parts for the repair of ships and from payment of taxes derived from income by Philippine overseas shipping enterprises. Likewise, several attempts were made to amend the Ship Mortgage Law and the Public Service Act, the latter to effectively exclude the sector from the Constitutional prescription on the limit of foreign equity in public service.

On top of the proposed legislative agenda, a range of recommendations to encourage local shipowners to participate in overseas shipping operations was put forward but failed to get government support. These included negotiating for better terms with trade partners in the carriage of government-funded cargoes and strengthening bilateral and regional maritime transport arrangements. These recommendations were relegated to oblivion.

Unlike in the domestic shipping sector, the overseas shipping fleet took a detour. In 2010, the number of overseas Philippine-flagged ships stood at 169, five years later in 2015, it was 51 ships less at 118. In October 2020, the Philippines has 104 ships in its merchant fleet. There is only vague optimism this number will pick up in the next five years considering the sweeping reforms which have to be introduced.

Lest it is forgotten, the Philippines’ active participation in the international shipping community such as membership in the International Maritime Organization (IMO), International Labor Organization (ILO), and other regional arrangements are founded on the country’s commitment to becoming a responsible flag State. This is consistent with the pledge the country took when it ratified the United Nations Convention on the Law of the Sea (Unclos) which under Article 94 thereof stipulates: “every State shall effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag”. This provision of the Law of the Sea Convention lays down the groundwork upon which international maritime regulations and standards are founded. IMO, the UN specialized agency on maritime matters formulated and adopted international instruments that provide the benchmark in the exercise of flag State obligations.

The International Convention on the Safety of Life at Sea (Solas), the International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers (STCW), International Convention on the Prevention of Pollution from Ships (Marpol), and the Maritime Labour Convention (MLC) considered as the four pillars of the international regulatory framework are all flag State conventions. This means that member states must ensure that ships flying their respective flags comply with the requirements of these conventions.

Having a merchant fleet engaged in international trade therefore lends credence to the Philippines’ membership in the international maritime community. Deploying competent seafarers pursuant to the International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers (STCW) and granting seafarers’ rights and welfare onboard as provided under the Maritime Labor Convention (MLC) are to be guaranteed by the Philippines in all ships flying the national flag trading in international waters. These obligations the Philippines must never ignore.

It is easy to say that the Philippines is doing its level best in bringing the country’s international merchant fleet up to standard. A simple way to assess success in this endeavor is to match the motivation for implementing international standards with concrete outputs in terms of policies, legislation, and regulations. A good template in this regard is the implementation of the STCW convention: efforts to train and certify Filipino seafarers are driven by the desire to deploy them on foreign-flagged ships, hardly citing maritime safety considerations much less for Philippine-flagged ships. In Congress, the thousands of dollar remittances of Filipino seafarers warrants the enactment of seafaring-related laws; and no reference is made on the flag State obligations of the country of keeping its international merchant fleet safe, the primary reason for ratifying and implementing the STCW convention. The same is true with the implementation of the MLC.

Make no mistake though, abandoning the seafaring sector with all the benefits accruing to the country is not proposed; rather, a change in perspective is suggested to help build confidence towards realizing optimum benefits for the maritime Philippines.

Read Part 1- (https://www.manilatimes.net/2020/11/25/business/maritime-business/develo...) https://seafarertimes.com/2018-19/node/5081