Putting out the stink

A putrid stench lingered in the air when Customs Commissioner Ruffy Biazon dropped by The STAR office in Manila’s Port Area Friday night.

Ten of 14 shipping containers filled with poultry products from China had been disposed of, Biazon explained to us, so the stink was considerably less during his visit.

The poultry shipment – 20-foot containers of mostly frozen duck and pigeon headed for Philippine restaurants – was banned because of the new strain of avian flu detected in China.

Since the products were banned for fear of pathogenic contamination, they could not be donated to the needy. So the shipments were left to decompose in the summer heat, with the stench borne by strong sea breezes fouling up the Port Area for days.

Once declared unfit for human consumption, the shipments were sent to a rendering plant at the North Harbor, treated with enzymes and then buried in a landfill.

For seized products that are not banned, the Bureau of Customs (BOC) is required by law to sell them at auction to the highest bidder. Biazon explained that this was why seized smuggled rice could not be sold to the National Food Authority, which is required by law to buy at the lowest price.

The BOC can donate seized items to the Department of Social Welfare and Development or approve a negotiated sale if there are two failed bids.

There are reports of seized items ending up with the smugglers themselves through rigged bids at the BOC, but Biazon said this didn’t make financial sense for smugglers.

Besides, he told us, “we have to follow the law; we have to bid it out.”

Consignees of seized shipments usually turn out to be shell companies, Biazon said. Does anyone remember any smuggler going to prison in this country? We have periodic rice smuggling scandals but no smuggler has ended up behind bars. In case of conviction, the maximum prison time is only six years. The fine depends on the value of the contraband.

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Rewriting the 1957 Tariff and Customs Code as well as full automation of Customs procedures are two reforms we can expect in the second half of the Aquino administration to plug opportunities for corruption in the BOC, according to Biazon.

Good luck on that, and good luck to Biazon, whose hold on his post, according to the rumor mill, is precarious. Sen. Panfilo Lacson is said to be after the top post in the BOC, where no one, it seems, can make a dent in stamping out corruption.

“All those who want me to resign are politicians,” Biazon said without naming names.

Biazon, a University of Santo Tomas graduate of medical technology, admits that after 19 months on the job, he is still “struggling.”

“You’re going against a system that’s been ingrained for generations,” he told us, adding that the auction process alone is “entirely another racket by itself.”

One Customs commissioner in the recent past quit after only a few weeks on the job after a presidential son reportedly invited him to a private gathering attended by several notorious smugglers and was made to understand that all were untouchable.

The head of an anti-smuggling task force also once griped to us that a shipment of motorcycles smuggled through the porous ports of the Ilocos Region was traced to a political kingpin with close ties to Malacañang. The task force chief was shunted to another position weeks later.

Asked about reports that some politicians are resorting to smuggling for campaign fund-raising, Biazon said, “I can’t prove it but I’ve heard about it.”

In addition to corruption, BOC operations are hampered by acutely limited facilities and resources. Often with the blessings of crooked public officials, practically anything can be smuggled through the country’s extensive coastlines, from agricultural products to guns and drugs.

A well-known restaurant operator, for example, reportedly made a fortune by allowing his boat to be used to bring to shore prohibited drugs unloaded from larger vessels in the high seas. Karma appears to have caught up with him; his legit business is no longer thriving.

The BOC’s presence is limited to developed ports. The bureau, for example, operates in the ports of Zamboanga City and Jolo, Sulu. But how, Biazon asks, does one impose Customs regulations in the barter trade culture in that area? Freeport zones are also notoriously porous areas.

Biazon’s hold on his post is endangered by BOC collection shortfalls, amounting to P1.9 billion last month. He blames the decline on the country’s free trade agreements. Forgone BOC collections due to FTAs amounted to P40 billion in 2010, P50 billion in 2011 and over P60 billion last year. Biazon expects the trend to continue.

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After 19 months on the job, the 44-year-old father of four thinks he’s seen enough at the BOC to propose long-term reforms.

Biazon is banking on his experience in the House of Representatives, where he befriended his colleague Benigno Simeon Aquino III, to bring drastic reforms in an agency that is perceived (as indicated in surveys) to be one of the most corrupt.

The reforms, starting with the Customs Modernization bill, call for Congress’ support. Full automation entails funding that requires congressional approval. Another proposal – to let the BOC use its own collections for its operations and a multi-year modernization program – also needs lawmakers’ nod.

 A key area of reform is the system of valuation, which Biazon said is no longer compliant with global Customs standards. He cited as an example the furor over meat imports. Local hog producers complained that meat importers undervalued their products and posed unfair competition. The BOC used as value reference the prevailing world market prices as submitted by the Department of Agriculture. But the Tariff and Customs Code requires application of the older transactional system, in which duties are based on BOC assessment of the value declared by the importer using sales invoices, which Biazon said could be easily faked.

He said the local hog raisers “won in the publicity war.” But he noted that during the visit of Canadian Prime Minister Stephen Harper in November last year, concern was raised that the BOC was imposing its own values under the transactional system, which was contrary to the world practice using reference values.

Biazon has been criticized for being a square peg in a round hole. It is said that BOC crooks are running rings around him – pinaiikutan.

“That’s the perception,” Biazon admitted to us, but added, “Modesty aside, I’m a quick learner.”