POSTSCRIPT / September 20, 2012 / Thursday


Philippine STAR Columnist

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We asked for FOI, but got harsher libel law

WIDENED COVERAGE: Advocates of press freedom were asking for the decriminalizing of libel to promote free expression. Instead, President Noynoy Aquino and the Congress (1) widened the scope of the libel law to cover the borderless cyberspace and (2) sat on the long-languishing Freedom of Information bill.

The Cybercrime Prevention Act (RA 10175) signed last Sept. 12 by the President made harsher the libel sections of the Revised Penal Code. Without benefit of consultation and debate, the new law widened the application of criminal libel to cover the entire worldwide web.

In its Chapter II enumerating unlawful or prohibited acts, the cybercrime law included:

“(4) Libel. — The unlawful or prohibited acts of libel as defined in Article 355 of the Revised Penal Code, as amended, committed through a computer system or any other similar means which may be devised in the future.” (Emphasis supplied)

Such vague, all-encompassing description or definition of the expanded criminal act through means that still have to be devised or invented is of doubtful validity. It is almost certain to be challenged.

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STEEL BARS: Local makers of steel angle bars, meanwhile, are complaining that cheaper alternatives, some of them allegedly smuggled, are killing their business and compromising the safety of structures that use them.

What is the correct market balance between locally made steel angle bars and cheaper imported substitutes? To what extent should local manufacturers be protected? Is it true that cheaper and substandard steel bars are being smuggled?

Assuming the quality of both local and imported steel bars are within standards, most users, including those in the construction and the fabrication businesses, are likely to buy the cheaper product.

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REVENUE LOSS: Local manufacturers warned that 40 percent of steel angle bars in the market are smuggled and of doubtful quality, jeopardizing the integrity of structures where they are used.

The government supposedly stands to lose P800 million annually in duties and taxes from the smuggling and sale of Chinese-made bars that are priced near or below the cost of the raw materials of local millers.

The locals said that the smuggling of cheaper and substandard substitutes has undermined the gains made from the safeguards that were put in place by the Department of Trade and Industry for steel angle bars to enable the industry to recover from its near collapse in 2008.

With cheaper imports in the market at that time, many manufacturers scaled down operations. Some of them shut down temporarily to avoid operating at a loss.

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SIMPLY CHEAP: Some businessmen importing cheap Chinese steel angle bars denied, however, that the goods were smuggled.

They explained that because of a glut in steel products in China, much of the excess supply is being exported at very low price.

They said that just because the steel products are brought into the country are low declared costs does not mean they were undervalued and therefore technically smuggled.

As long as the import papers are in order and reflect the true value of the steel bars, they added, there is no smuggling.

They asked local manufacturers to face the reality that their products cost more and find it hard to compete in the market.

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SAFEGUARD DUTY: This is not the first time the steel industry asked for government help. In 2006, the steel market was flooded with cheap imports from China. By 2007, imports captured 57 percent of the market compared with 1-2 percent for years before 2006.

By 2008, only one local manufacturer was producing steel angle bars. To prevent the total collapse of the industry, several manufacturers applied with the DTI for the imposition of safeguards against cheap imports.

After a review, the DTI Secretary issued a department order imposing a definitive general “safeguard duty” on imported steel angle bars.

At the request of the industry for more time to carry out upgrading plans, the Secretary extended the safeguard duty until March 2015.

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PROBLEM PERSISTS: The safeguard duty granted to that sector having proved successful, business recovered. In 2010, the industry accounted for the majority of local sales, and five of the plants that had stopped production resumed operations.

With renewed confidence, the industry embarked on improving operations and becoming globally competitive.

Last November, however, local producers noted that sales volume started to fall in spite of records showing little to zero steel angles being imported.

Their investigation showed that from November 2011 to June this year, 86 out of 211 hardware outlets were selling steel angle bars without any markings in violation of mandatory Philippine National Standards (PNS) 657:2007.

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UNMARKED BARS: The PNS requires locally manufactured and imported steel angle bars to have markings identifying the manufacturer, the grade and size of the angle bar. Those without marking are considered substandard or uncertified and may not be sold.

Industry members said the unmarked angle bars were misdeclared and/or undervalued to evade payment of correct taxes and duties, including the safeguard duty. In some cases, they added, the steel products were misdeclared as something else.

China’s steel industry has a capacity that is more than 100 times larger than the size of the Philippine steel market. Although the growth of the Chinese economy has slowed down, China’s steel mills maintain their production level.

The overproduction has led to excess supply which in turn caused Chinese steel prices to fall significantly. The lower prices make them attractive to Philippine importers.

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(First published in the Philippine STAR of September 20, 2012)

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