Enhancement measures/safety nets — ASEAN mutual recognition arrangements on engineering services

The ASEAN economic integration will be implemented in 2015. Mutual recognition agreements (MRAs) affecting seven professions, including engineering services, have been agreed. MRAs could be an opportunity or a curse. The purpose of this paper is to recommend enhancement measures/safety nets to optimize benefits to the Philippines. 

The MRAs will be implemented by the ASEAN Chartered Professional Engineer Coordinating Committee (ACPECC) through monitoring committees (MCs) in each ASEAN country. The ACPECC will be comprised of one representative from the MCs of ASEAN member-countries. The Philippine MC is composed of the Professional Regulation Commission (PRC), Commission for Higher Education (CHED) and Philippine Technological Council (PTC). An ASEAN Chartered Professional Engineers Register will be developed, processed and maintained by each MC.

The Philippines will be in a very disadvantageous position if it looks upon the MRA primarily as a vehicle for practice by individuals. The real competition is professional practice through companies/firms. Optimization of benefits is not in “cross-border supply,” “consumption abroad” or “natural persons” but in “commercial presence.” In this paper, the term “professionals” refers to both individuals and companies/firms, unless otherwise stated.

Implementation is a two-way process. The first is outgoing: Filipinos practicing in other ASEAN countries. The second is incoming: Citizens of other ASEAN countries practicing in the Philippines. The outgoing process starts with conferment of the title ASEAN Chartered Professional Engineer (ACPE) to qualified Filipino professionals followed by application to and authorization by the Professional Regulatory Authority (PRA) of the host country to be a Registered Foreign Professional Engineer (RFPE) in the host country, not in independent practice, but in collaboration with designated professional engineers in the host country. To date, the title of ACPE has been conferred on one Filipino engineer. The incoming process involves conferment of title of ACPE to qualified professionals in another ASEAN country by their PRA and application to and authorization by the PRC for the ACPE to be a RFPE in the Philippines, in collaboration with designated Philippine professional engineers.

The following enhancement measures/safety nets are recommended for the outgoing process:  (1) maximization of the number of Filipino ACPEs; (2) identification of opportunities for Filipino ACPEs in other ASEAN countries; (3) identification of local professional partners in other ASEAN countries; (4) support to Filipino ACPEs in their professional practice in other ASEAN countries; (5) introduction of Filipino professionals to stakeholders in other ASEAN countries, and (6) study of opportunities for multi-disciplinary, integrated projects,

While quality is important, a country with more ACPEs would have a big advantage. The following are recommended to maximize the number of Filipino ACPEs, without sacrificing quality: (1) eliminate requirements not in MRA; (2) accept e-mailed and snail-mailed application forms; (3) “grandfather” or automatically award ACPE title to professionals who have been awarded the title of APEC Engineer or ASEAN Engineer, upon application; (4) conduct an information campaign; and (5) reduce fees for ACPER from the current processing fee of P2,000, registration fee of P5,000, and renewal fee of P5,000 (every three years) to registration and renewal fees of P1,000 (eliminate processing fee).

Article 3.1 of the MRA requires only the following items: (1) an accredited engineering degree; (2) a current and valid professional registration or licensing certificate; (3) practical and diversified experience of not less than seven years after graduation, at least two years of which shall be in responsible charge of significant engineering work; (4) compliance with Continuing Professional Development Policy; and (5) PRC certification of no record of serious violations.

The application form issued by the Philippine MC contains additional requirements which should be eliminated: (1) letter of intent; (2) certificates of employment and certificates of project completion (difficult to obtain, particularly for older and overseas projects); (3) address of the CPE/CPD accredited provider, the inclusive dates and the number of credit units earned (title, description, number of hours and year of the course/program should be sufficient); (4) transcript of record (difficult to obtain if applicant is abroad or in the provinces, diploma should be sufficient); (5) professional ID (difficult to obtain if applicant is abroad or in the provinces, PRC certificate of registration should be sufficient and easily secured by the MC based in the PRC); (6) certificate of good standing from the accredited professional organization (difficult to obtain for qualified individuals not in good standing with their APO); (7) notarized signed statement of compliance with the Code of Ethics (certificate of no pending administrative case issued by the PRC should be sufficient and easily secured by the MC based in the PRC); (8) interview (difficult if applicant is abroad or in the provinces); and (9) NBI clearance.

Philippine embassies/consulates should assist in the identification and following up of opportunities (individual and companies/firms) for Philippine ACPEs through: (1) monitoring project opportunities through newspaper advertisements, Internet announcements (websites) and liaison with local government agencies and the private sector; (2) informing the Confederation of Filipino Consulting Organizations (COFILCO), the umbrella organization recognized by the government to represent Filipino consultants, of the project opportunities; and (3) CIFILCO informing its members. 

Philippine embassies/consulates should also assist: (1) in identification of the local professional partner; (2) during the application of the Filipino ACPE to be RFPE; (3) during rendering of the services by the Filipino RFPE (remittance of foreign currency, tax requirements and payments, securing permits, satisfying local regulations, communications, liaison with local authorities, etc.); and (4) in organizing fora and missions in other ASEAN countries where Filipinos can meet and explore opportunities with stakeholders.

The government should conduct a study/survey of multi-disciplinary project opportunities in ASEAN and to proactively organize, mobilize and enable appropriate stakeholders in the Philippines toward an integrated approach.  Examples are turnkey projects, design-build projects, build-operate-transfer projects, concessions, public-private partnerships, and others. The Filipino ACPE would be just one component. Others could include developers, contractors, banks, financial managers, construction managers, suppliers, utility companies, etc.

The following enhancement measures/safety nets are recommended for the incoming process: (1) the PRC not impose restrictions, additional requirements or supplementary assessment on ACPEs from other ASEAN countries; (2) should other ASEAN countries impose restrictions, additional requirements or supplementary assessment on Filipino ACPEs, reciprocal/equivalent measures also be imposed by the PRC on foreign ACPEs; (3) companies/firms seeking projects in the Philippines be 100 percent owned by citizens of the country of the RFPE (many developed countries have formed “pseudo-domestic” consulting firms in ASEAN countries and allowing them to get projects through the ASEAN MRA mechanism will defeat the purpose of MRA); (4) companies/firms seeking to be a Filipino local professional partner be 100 percent owned by Philippine citizens (the Philippines has its share of “pseudo-Filipino” consulting firms); and (5) procurement criteria of the Philippine government that discriminate against Filipinos be revised (with or without ASEAN integration, the Filipino must be competitive in his own country).

The recommended revisions to government procurement criteria are (it is possible that some of the recommendations below are no longer being imposed by some agencies): (1) experience of Filipinos in the Philippines be given full credit (there have been instances where only international experience was given credit which is disadvantageous to Filipinos, whose international experience may be limited); (2) experience of Filipinos as associated consultants/subconsultants be given full credit (there have been instances where only experience as lead consultant was given credit); (3) all (and not just the latest) experience of Filipinos be given full credit (there have been instances where only the experience of the last 10 years was given credit); (4) experience thresholds be set for both individuals and companies/firms (for example, if 10 years’ experience is deemed adequate for a certain position or project, all individuals or companies/firms with 10 or more years experience will be given full credit); (5) Filipino professionals be eligible for all positions (there have been instances where certain positions were reserved for foreigners); (6) at least one slot in short lists be reserved for 100 percent Filipino companies/firms; (7) the Philippine government only accept funding which do not include oppressive terms and conditions; (8) the Filipino local partner be a signatory to any contract (so that he will be able to claim credit for the project); (9) technical assistance projects be studied (most technical assistance projects are foreign funded and done by foreign consultants, and are configured to insure that foreign consultants will be engaged); (10) a negotiation strategy with funding institutions be developed to maximize the participation of Filipinos (representatives of the government attending negotiations should be trained regarding this strategy); and (11) a monitoring and audit system for consultants be set up by a third party without any conflict of interest.

Procurement policies by the Philippine government discriminate against Filipinos because they do not take into account the following handicaps Filipino professionals need to carry: (1) the consultancy industry in the Philippines is relatively young, about 50 years; (2) some Filipino professionals have limited experience outside the Philippines; (3) many individual Filipino professionals with experience outside the Philippines are either abroad or working for “pseudo-Filipino” consulting firms; (4) because of the discriminatory policies of the government, Filipino professionals have been forced to accept secondary roles to foreign professionals as associates/subconsultants; (5) the “Golden Rule (whoever has the gold, rules)” Syndrome, referring to real or imagined loan/grant conditions favoring foreigners, which is related to the “Beggars Cannot Be Choosers” Syndrome; (6) the “Colonial Mentality” Syndrome referring to the perception that foreign products/services are superior, which is related to the “Inferiority Complex” Syndrome; and (7) the “Filipinos are Corrupt” Syndrome (corruption is not a monopoly of Filipinos).

The author believes that the Philippines has the advantage in the implementation of the MRAs because the Filipino professional is better than professionals in most ASEAN countries, and is at worst at par with the others. However, if the Philippine government does not give its full support, the Filipino professional will come out on the short end. Almost all of the recommended enhancement measures/safety nets are immediately doable. The personnel, facilities, equipment and funding necessary to carry them out are in place. The appropriate government agencies have the authority to decide whether to adopt them or not. There is no reason why these cannot be in place before the implementation of the ASEAN economic integration in 2015. None of the enhancement measures/safety nets are inconsistent with any provision in the MRA. None are directed against any ASEAN member-country. The Philippines will not have any problems with other ASEAN countries if it adopts them. In fact, the Philippines will have problems if other ASEAN countries adopt them and the Philippines does not.