Another American squeeze play?

The inclusion of Philippine carrageenan in this year’s US Generalized System of Preferences (GSP) would definitely help expand market access for the country’s seaweed industry since the tariff, currently pegged at about five percent, would be lifted.

As I discussed earlier (A Bit of Sunshine in Our Midst, Philippine STAR Feb. 14, 2003), the seaweed industry sector is a bit of sunshine peeking through the overcast skies of our economic landscape. Ever since the early 70s when the country woke up to the potential of local seaweeds as a source of carrageenan for the world’s industrial giants, Filipinos have feverishly taken advantage of the opportunity to build up what is now regarded as one of the biggest export earners of the Philippines.

However, in the ongoing US GSP negotiations, it is reported that the seaweeds industry maybe in the middle of a squeeze play that would jeopardize the phenomenal growth of this industry and the expected earnings of billions of dollars on exports.

A big American seaweed processing company with operations in Cebu reportedly refuses to comply with local anti-pollution laws, and lately has been rumored to enlist the aid of influential embassy officials to leverage the current US GSP discussions.

Adjudged guilty by DENR

FMC Marine Colloids, which produces processed seaweed or carrageenan in the Looc district in Mandaue City, was adjudged guilty of several environment violations after the Pollution Adjudication Board (PAB) of the Department of Environment and Natural Resources (DENR) conducted a series of testimonies, manifestations and hearings.

Last December, the FMC was directed to dredge black mounds found in the vicinity of its submarine discharge pipe in the Mactan Channel, Cebu’s main waterway, within a year from the approval of a rehabilitation plan by the DENR’s Environmental Management Bureau (EMB).

At the same time, FMC was ordered last May by the PAB to replace the existing submarine pipe to comply with specifications determined by the EMB regional office, and to relocate its discharge point to a more accessible area to allow groups to take effluent samples for analysis.

Other recommendations included the creation of a multi-partite monitoring team (MMT) to decide on a new site for the effluent discharges, and the engagement of the University of the Philippines to conduct an impartial study to further validate the cause and effect of the murky black mounds.

Harassment, says firm

FMC, however, is crying harassment. It claims that its competitor, the Seaweed Industry Association of the Philippines (SIAP), is concocting allegations of environmental damage and making it difficult – and more expensive – to comply with local regulations.

It is also accusing SIAP of reinforcing the protest of certain feisty Barangay Looc residents, including subsistence fishermen who claim that they are being adversely affected by the deteriorating conditions in the Mactan Channel caused by FMC’s environmental "crimes."

FMC vehemently denies it ever consented to cut off its underwater discharge pipe, and has therefore threatened to elevate the issue to the Court of Appeals.

Is FMC bullying its way?

FMC prides itself with being an active member of Responsible Care, the world chemical industry’s voluntary environmental, health, and safety performance improvement program.

On the other hand, hard facts tell their own story. Supposedly, data by the EMB points out that among several seaweed companies doing business in Cebu, FMC has the lowest investment in wastewater treatment, amounting to just a measly P3.9 million.

In contrast, other international firms like the American-owned Genu Phils/CP Kelco, have put in P50-million facility. Locally owned Shemberg Marketing Corp. also has a P50-million facility, while its sister firm Shemberg Biotech Corp. has invested P70 million.

The question is whether FMC is really guilty as charged (and therefore employing bully tactics to avoid compliance to local laws), or is otherwise a victim of the "local boys" play?

The search for a solution is currently underway, with no less than the President issuing a directive during a recent visit to Cebu City for DENR Secretary Elisea Gozun and Trade and Industry Undersecretary Thomas Aquino to meet with FMC and SIAP to come up with a win-win formula.

I believe, however, that an acceptable solution for all parties does not mean a guilty FMC will get away for their violation of our environmental rules.

Squeeze plays and other ploys

Negotiations with the US for local carrageenan’s inclusion in the GSP list this year are already coloring the investigation. History shows that it is not unlikely for economic attaches to try and use country-to-country talks as leverage for the interest of its locally operating American affiliates.

There are other tricks in the bag that could also be used, as gleaned by the FMC head honcho’s closed-door meeting with the DTI (not the DENR!) during a recent visit to the Philippines. This move could – rightly or wrongly – be interpreted as a deliberate wedge driven between the two agencies.

And this is where the Philippine government especially the two concerned government departments must keep its vigilance and prudence in resolving the issue.

Gaining economic benefits at the expense of the environment’s irretrievable degradation and social dislocation is not acceptable under the principle of sustainable development. We hope our government officials and negotiators adhere to this despite the squeeze play and other antics employed by big brother bullies.

Cheatings in the LPG industry on TV

"Isyung Kalakalan at Iba Pa" on IBC-13 News (4:30 p.m. and 10:30 p.m., Monday to Friday) ends today the presentation of the various practices in the LPG industry where the consumer is not only cheated of a high-priced cooking fuel, but is also exposed to safety risks right in the kitchen area. Watch it.

‘Isulong Ang Pinoy Chess Foundation’ update

Visit the foundation website at http://www.IsulongPinoyChess.com and see the latest book by Filipino Grandmaster Eugene Torre entitled, "The New Wave: Rising Stars of Philippine Chess."

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero St., Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. If you wish to view the previous columns or telecasts of "Isyung Kalakalan at Iba Pa," you may visit my website at http://bizlinks.linkedge.biz,