Curbing the regulatory mindset

Why is it that we Filipinos seem to be masters at making things more difficult for ourselves than they need to be?

I find myself constantly asking this question, not only when dealing with government, but occasionally also when trying to get something done with a private entity. Recently, I asked it again upon encountering a front-line employee of a real property company where I was trying to obtain a simple clearance to vacate an apartment I had decided to stop renting. I had accomplished the cumbersome form they required, and had the necessary signature of the owner. But the lady asked for another signature that I found redundant and unnecessary. It was not before so much back-and-forth and time wasted on my part that she finally relented and gave the clearance. I told her she made me feel like I was dealing with government.

Government bureaucrats are experts at this art of making things more difficult than they need to be. And one gets the feeling it’s more particularly so in the Philippines (if not only in the Philippines). Anyone who has had to transact with any government office in the country knows this, as in obtaining a simple document like a permit, license or clearance. From the smallest to the largest transactions, one sees a seeming mindset among typical government bureaucrats that nothing should come easy. We see it in the number of signatures one has to hunt for to get something done with government.

For many, there’s an ulterior motive behind all this, which is to extract illicit income from the transaction, be it in the form of bribes or commissions. But even for seemingly honest government officials and functionaries, there appears to be a “regulatory culture” that leads them to design processes, procedures and requirements to exact maximum discomfort on us citizens.

A particular area known to those in business is on the matter of import permits, clearances and licenses that need to be obtained from various agencies before one can clear shipments of certain products through the Bureau of Customs. Former Customs commissioner Sunny Sevilla sought help last year from USAID to catalog all such import regulations—and there turned out to be more than 7,400 products requiring these. He wanted this comprehensive listing to keep his front-line officers from guessing about (or worse, concocting) such permits, clearances or licenses that must be produced by importers prior to release of their goods. Surprisingly, no such official comprehensive listing had ever been produced before, leaving the matter to the complete discretion of customs officers. The resulting Customs Regulated Imports List (CRIL), a helpful reference for customs officers and importers alike, can now be readily downloaded by anyone from the Bureau of Customs website (customs.gov.ph).

Apart from promoting transparency, the very compilation of the CRIL led to another important benefit. It called attention to the problem of multiple permits needed for the same product in numerous cases. Commissioner Sevilla’s favorite example was Toblerone chocolate bars, which as a food product requires a clearance from the Food and Drug Administration. But because it contains milk, it also needs a permit from the Bureau of Animal Industry. And because it contains nuts as well, it needs a permit from the Bureau of Plant Industry as well.

Color printers similarly require multiple permits. As an appliance, they need clearance from the Bureau of Product Standards. A license is also required from the National Bureau of Investigation, because color printers might possibly be used for counterfeiting money. And if the printer is Wi-Fi-enabled, it would need a clearance from the National Telecommunications Commission as well.

Current Customs Commissioner Bert Lina recently convened officials from some 50 agencies that require these various import permits, with the objective of securing their commitment to ensure that the listing is kept updated, accurate and complete. More importantly, he wants to work towards making things easier for importers by addressing cases where such permits overlap or duplicate one another, or even no longer needed. Why, after all, do we have to make things harder for importers than they need to be? The next objective, then, is to get the agencies to work together to consolidate and even revoke such requirements for permits and clearances wherever possible.

The United Kingdom, Canada and Australia have shown the way in their war against red tape. Canada recently legislated a cap on regulation, with the enactment of the Red Tape Reduction Act last April. The law requires the federal government to eliminate at least one regulation for every new one introduced. The United Kingdom’s red tape reduction policy is more aggressive, requiring “one in, three out”—that is, removing three regulations for every new one introduced. Australia does it even better; it does not need introduction of a new regulation as an impetus for reducing them. Twice a year, it declares a “Repeal Day,” when government announces dozens of repealed regulations across various ministries and offices. Since they started in 2013, they estimate 4.5 billion Australian dollars in regulatory costs has been saved.

Just last week, our own Department of Trade and Industry announced that it had cut to half the number of active department administrative orders, down to 124 from the previous 257. Motivated by the goal of making doing business in the country easier, the DTI sets the example in revoking rules and regulations that have either outlived their usefulness, or only prove counterproductive.

It’s about time that regulatory repeal be made a sustained government-wide effort.

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