Thursday, June 24, 2021

Industry gripes vs. PNP regulation

WHILE they welcomed the move of the Philippine National Police (PNP) to issue temporary permits to import and purchase chemical substances, stakeholders of the shellcraft industry in Cebu want more.

Exporter Elmer Jugalbot said the sector wants the concerned government agencies to revisit the amended policy of controlled chemical substances; involve the academe to come up with a scientific explanation of the regulation of controlled chemicals; and include the export sector in the technical working group.

In an interview with Sun.Star Cebu, Jugalbot, together with his fellow exporters Joy Sharpe and Tony Chua, reported that the sector is facing a supply problem on hydrochloric acid, commonly known as muriatic acid, as local suppliers and importers have ceased retailing the chemical substance due to the tedious documentation processing required by the PNP.

One-time use

The PNP-FEO issued a memorandum last July 22 granting temporary permits to purchase and move explosives, explosive ingredients and controlled chemicals (for local purchases), and for the importation and temporary permit to import and unload, provided companies submit their respective applications for appropriate licenses/permits with the Civil Security Group-FEO.

However, the permit is for one-time use only, valid for three months from the date of issue and subject to the capacity of storage facility (in conformity with the quantity authorized in license if applicable) provided, and that the volume requirements for the permit shall be subject to the capacity of the storage facility of the applicant.

The issuance of the permit is valid from July 24 until Oct. 31 and is not eligible for extension.

Philexport Cebu executive director Fred Escalona, in a separate interview, said they have already transmitted their position paper to the concerned agencies. Philexport will follow-up their appeal through the Department of Trade and Industry (DTI).

“The DTI 7 promised that they will organize a meeting with the local PDEA and PNP officials to discuss the matter, especially that after the issuance of the memorandum from the PNP-FEO, there are still plenty of clarifications/concerns from the exporters, which our local PNP cannot completely respond to,” said Escalona.

Muriatic acid is a staple used for cleaning shells. The industry uses 50 tons of muriatic acid per month.

Muriatic acid is one of the controlled substances being strictly monitored by the PNP, Dangerous Drug Board and the Philippine Drug Enforcement Agency. Under the amended PD 1866, the chemical was reclassified as an ingredient in manufacturing explosives.


Jugalbot said the processing of permits for muriatic acid in the past was manageable because PDEA’s requirements were “fair and straight forward”, not until the PNP came into the picture, which required the same set of documents required by PDEA and other agencies.

Added requirements include the special permit known as Form 6, to be secured personally at the PNP’s Firearms and Explosives Office (FEO) in Camp Crame in Manila, with only one assigned signatory to shall receive and approve the permit. The PNP also requires users to have bunker-type or explosion-proof storage facilities for these chemicals, a higher-type of facility compared to what PDEA has required.

Added fees

Upon the release of chemicals, exporters need to secure a permit to transport and pay escort fee to PNP officials who will transport the chemicals from the origin to their factory. Exporters pay additional export fees if the chemical passes through multiple locations.

“With all these special permits required, it’s like the shellcraft sector is no different with the people making ammunitions or explosives. There is no thin line that separates our industry from them anymore,” said Jugalbot.

He also noted these new procedures which weren’t communicated and consulted to them prior to implementation have already hampered the business operations of the shellcraft industry, which employs thousands of workers nationwide.

Jugalbot said they started to feel the crunch last March when Mabuhay Vinyl, the country’s lone supplier of chemicals, and four retailers in Cebu stopped supplying muriatic acid.

Sharpe said Mabuhay Vinyl has a supply of muriatic acid but could not make deliveries because the traders and retailers lacked the needed permits.

Jugalbot warned this new policy will not only affect the shellcraft sector but other establishments like hotels and restaurants, which have high usage of muriatic acid as cleaning solution.

While waiting for the normalcy of supply, Chua said shellcraft exports have resorted to buying gallons of muriatic acid sold in supermarkets. Others, on the other hand, were being offered to buy in the black market, are priced four times higher.

Twenty kilos of muriatic acid in regular market costs P220.

“While in the past, it is the buyer who cancels orders, now, with this problem, it is the exporter who cancels orders,” said Jugalbot, quoting the sentiment of fellow-exporters.

A shellcraf exporter has reportedly stopped half of his production due to the supply issue. This exporter, according to Jugalbot uses an average of 20,000 kilos of muriatic acid per month. He has 60 rect employees and more than 200 indirect employees.

“He hasn’t completely stopped the operation but pushed back orders on products that require the use of muriatic acid,” said Jugalbot.

He emphasized though, that they have nothing against the PNP and they completely understand the rationale behind the policy. However, they appealed for more seamless and business-friendly procedures, since they are legitimate business operators.

The shells are used in fashion accessories, furniture, home decorations and souvenir items produced to sell in the local and export markets.

The shellcraft industry, established for more than 50 years, has been providing livelihood to coastal and mountain communities nationwide. Cebu, in particular, is known as the seashell capital in the world. Shells from all over the world are sent to Cebu to be cleaned.

“The industry’s economic benefit can’t be quantified. We are an industry that employs ordinary people in the communities, including women and out-of-school youth. We have thousands of indirect employees under our value chain,” said Jugalbot.

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