Sugar smuggling by government?

The reply of Malacañang and the Department of Agriculture (DA) regarding the exposé made by Sen. Risa Hontiveros last week that a shipment of sugar from Thailand had entered the country without a permit has left many other questions unanswered. The lawmaker has implicated ranking officials for involvement in what she termed “government-sponsored smuggling,” something that the administration tried to immediately clarify, but in so doing fueled further suspicions from the public.

Hontiveros claimed in a media briefing that the shipment arrived at the Port of Batangas a week before the Sugar Regulatory Administration (SRA) approved on Feb. 15 Sugar Order (SO) No. 6, which allowed the importation of 440,000 metric tons (MT) of the agricultural commodity, but stipulating that the initial batch should arrive no earlier than March 1. Hontiveros surmised that the imported sugar was connected with a draft and undated memorandum supposedly issued by Agriculture Undersecretary Domingo Panganiban, informing the SRA to “allocate” the importation to three companies — All Asian Countertrade Inc. (250,000 MT), Sucden Philippines Inc. (100,000 MT), and Edison Lee Marketing Corp. (100,000 MT) — allegedly “upon the instructions” of the President “thru” Executive Secretary Lucas Bersamin.

At a media briefing in Malacañang last week, Panganiban insisted there were no irregularities in the importation, pointing out that he considered the memorandum issued by Bersamin dated Jan. 13 as a “sugar order” to proceed with the importation to augment the country’s tightening supply of the commodity and bring down prices. “In response to the directive of the President to address inflation and create a buffer stock and given that sugar is one of the components of most commodities that drives the consistently high inflation rate, I acted with haste and interpreted the memorandum issued by the Office of the Executive Secretary as an approval to proceed with the importation,” Panganiban explained. This is baffling since last April the President even sacked DA officials for greenlighting a sugar import order without the President’s approval. Panganiban even admitted he picked the three companies from a list and instructed them to “proceed with the importation of sugar, provided that they agree to reduce the prices of sugar.’’ He added that the President was aware and “properly informed” when the imported sugar arrived last Feb. 9.

Several questions now beg for answers. Is a memorandum from the executive secretary as good as an actual sugar order from the SRA board? And as Hontiveros also pointed out, “can a sugar order be retroactive to cover shipments that arrived before its effectivity date and before the notice of award allocation?” If not, then the sugar shipments that arrived in Batangas were technically smuggled and must be confiscated, and its importer blacklisted and criminally charged with violation of the Anti-Agricultural Smuggling Act. Besides, SO 6 provided that the first shipment should come in not earlier than March 1. Isn’t its early arrival a clear violation of the sugar order? Secondly, what role does the executive secretary have in the sugar importation process? Under the law, the SRA board has the sole authority to approve importation plans, including the players to be allowed to import.

Were the three companies picked by Panganiban to import the entire 440,000 MT under SO 6 unduly favored by the government? National Federation of Sugarcane Planters (NFSP) president Enrique Rojas had said that his group received reports as early as two weeks ago about the arrival at the Batangas port of “5,000 MT of imported sugar from Thailand” before SO 6 was released. “The importer seems to have advance information on the signing of the sugar order, and this importer seems certain that he will receive an allocation from the importation under [SO] No. 6. Perhaps this importer is one of the rumored favored traders who will corner the allocation for the 440,000 MT importation,” Rojas lamented.

Sugar industry leaders have already called on Congress to conduct another full-blown investigation into the alleged smuggling. In a joint statement released on Feb. 22 by the NFSP, the Confederation of Sugar Producers Association, the Philippine Sugar Millers Association, and the Panay Federation of Sugarcane Farmers, they said the public deserves to know who is responsible, and what actions will be taken by the concerned government agencies to address the issue. A Senate resolution has also been filed by Hontiveros calling for an investigation. Given the questions that remain hanging after the administration’s reply to Hontiveros’ allegation, a congressional probe may be the best option to clarify the remaining issues. Failing in this will only make the public conclude that what happened was pure and simple smuggling by a favored company, initiated or sponsored by the government at that.