Senate cites in contempt another alleged rice smuggler

MANILA, Philippines – The Senate rejected the denials of an alleged rice financier accused of using farmers’ cooperatives as dummies in an illegal scheme to import rice.

The Senate agriculture committee cited in contempt rice trader Judilyne Lim of DGL Commodities Incorporated for “falsely or evasively” answering senators’ questions on her ties to a rice broker who used the permits of 21 cooperatives.

At the resumption of the Senate hearing into rice smuggling on Monday, February 24, committee chairperson Cynthia Villar asked Lim about her relationship with Leah Echeveria, the woman cooperatives identified as the broker who gave them money to participate in the agriculture department’s Minimum Access Volume (MAV) program.

In its 2012 report, the committee found that big-time traders and financiers participated in the program meant for poor farmers by using farmers organizations and cooperatives as fronts and paying them to bid and transfer their rights to them.

Lim admitted that Echeveria was a human resources employee of her company until 2012 but invoked her right against self-incrimination when asked if DGL Commodities used the permits of the 21 companies.

“I said Echeveria was our former employee, but I don’t know anything about this document,” Lim said, referring to a deed of assignment covering Echeveria’s transactions.

Lim said she did not authorize Echeveria to act on her behalf, and insisted that her company was different from “DGL Commodities Trading.”

Yet Villar said her company and DGL Commodities had offices in the same address in Mandaue, Cebu. Senator JV Ejercito was equally perplexed.

“Since she (Echeveria) was your employee, we assumed she was acting on your behalf. It’s confusing because DGL was also the name used. It’s in the same area, same name and the company is yours so she must be acting on your behalf because you admitted she’s your employee until 2012,” Ejercito said.

Villar ordered Lim to return to the next committee hearing on March 12. She said the committee already decided not to lock up witnesses cited in contempt but merely file perjury cases against them and require their presence in hearings.

Another suspected smuggler warned 

The committee also warned another rice broker, Emmanuel Santos of Jade Brothers Farm and Livestock Incorporated, that it will cite him in contempt for supposedly lying.

Santos denied involvement in smuggling even if 3 companies he worked with – Jade Brothers, Medaglia de Oro Trading, and Silent Royalty Marketing – did not have an import permit from the National Food Authority (NFA).

NFA Deputy Administrator Ludovico Jarina said no import permit was issued to the 3 companies.

Villar told Santos, “You said you imported rice but you had no permit. If you import without a permit, you’re a smuggler…. We feel you are testifying falsely with the committee. We warn you. We will let the court decide on your smuggling case. Next time you answer evasively, we will cite you in contempt.”

The committee is looking into reports about big-time rice financiers using farmers’ cooperatives as fronts besides alleged rice smuggler Davidson Bangayan. Bangayan was not present in the hearing because he was hospitalized supposedly due to a back pain.

‘Customs needs tech upgrade’

The committee also tackled recommendations and policy reforms to address rice smuggling.

Bureau of Customs Commissioner (BOC) Commissioner John Philip Sevilla said his agency needs to upgrade its computer systems to help it detect smuggling. He said the BOC aims to link up all its systems by 2014.

“It comes as a big surprise, but not as many people as I would have thought have access to computer terminals, Internet, within the ports, headquarters so we have a physical-access-to-technology issue. I’m surprised to find that out.”

“You’d be surprised. Half of the BOC headquarters premises and the Port of Manila is Internet dead spots,” Sevilla added.

Sevilla also said that the agency needs to conduct more physical inspections of containers and warehouses, saying it is the only way to detect technical smuggling or the undervaluing of goods. He said this will require a bigger intelligence budget.

Senator Ralph Recto said the Senate will “make investments in BOC” to help minimize smuggling.

Sevilla also reported that the BOC and the NFA began implementing in February the policy barring the issuance of shipments after the arrival of goods. Previously, the NFA issued import permits after the arrival of shipments, a policy that importers and smugglers abused.  

‘Prioritize safety over revenue generation’

Dr Prudenciano Gordoncillo of University of the Philippines Los Baños also delivered a presentation on his study assessing the smuggling of agricultural goods. Gordoncillo is from the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (Searca).

Gordoncillo suggested that the Philippines adopt the practice of Singapore and Indonesia of splitting up the functions of the BOC to other agencies.

He said the BOC should just be in charge of revenue generation while the departments of agriculture and health should be in charge of safety and quarantine, while trade facilitation should be under the Department of Trade and Industry (DTI).

Gordoncillo said the suggestion may “sound radical,” but it will prioritize safety and quarantine, and ensure checks and balances.

“These functions have inherent counter-checking. If you put this in one institution, counter-checking disappears. In other countries, they’re very strict, and have regular checking of accredited importers….  Safety and quarantine should be of interest. Revenue generation can come after,” Gordoncillo said.

Recto and Villar were amenable to the suggestion, but said the issue was feasibility.

Recto also noted that based on Gordoncillo’s study, smuggling spiked from 2010 to 2012. Gordoncillo said this “coincided with political events.” 

“So elections? This sounds like the [pork barrel] scandal. When elections are near, there’s a spike in smuggling,” Recto said. – Rappler.com