Will we run out of newsprint?

The business community has time and again complained of extremely disruptive decisions of the judiciary that negatively affect the country’s business climate. Well, it seems the Supreme Court has done it again. This time, the decision may adversely affect the press, in the sense that its local newsprint supply could be compromised.

There was this recent decision by a division of the Supreme Court that would make newsprint producer PICOP lose 76,000 hectares of its tree plantation area in Mindanao. The decision will make its remaining area no longer economically viable so as to force the company to cease operations. Some 3,000 regular employees will lose their jobs and the economy of several towns in Surigao del Sur, including Bislig, will be crippled.

PICOP, a publicly listed corporation owned by 11,000 shareholders, is the primary supplier of newsprint to local newspapers including The Philippine Star. If PICOP closes shop, we will have to satisfy ourselves with recycled newsprint whose quality is inferior (and also more expensive) or spend foreign exchange to import. The cost of imported newsprint has gone up through the years as the world’s forest areas dwindled. If forced to import newsprint, local newspapers will either close shop or raise subscription and advertising rates that could hurt their long term viability. PICOP’s viability, like it or not, is a freedom of the press issue.

How did we get into this mess? It happened after a division of the High Court reversed a Court of Appeals decision granting PICOP’s application for an integrated forest management agreement (IFMA) covering an expired 25-year timber licensing agreement (TLA) earlier granted by the government. PICOP is now contesting the reasons cited by the Supreme Court division in its decision.

First of all, PICOP denies the Court’s assertion that PICOP failed to submit a five-year forest protection plan and a seven-year reforestation plan. PICOP claims it had submitted a 10-year protection and reforestation plan that was approved by the DENR. PICOP claims it was the DENR through then Secretary Jun Factoran who specified the need for a 10-year plan. "It defies logic," PICOP asserts, "to submit a five and seven year plan for a TLA that would expire less than a year after the 10 year plan had been implemented."

Secondly, the SC decision blames PICOP for alleged failure to pay forestry charges. Yet, PICOP claims, they submitted evidence by way of a certification from the DENR that no forestry charges are due from PICOP.

Actually, PICOP says, it "is one of the near-extinct type of forestry operator in this country of illegal loggers." PICOP claims it pays 80 percent of all forestry charges in the entire Caraga Region, which translates to 60 percent of all forestry charges collected by DENR for the entire country. PICOP has also been cited here and abroad as an efficient and responsible forestry operator and a responsible corporate citizen.

I am familiar with PICOP’s concession area in Bislig. My first out of town assignment as a young reporter was to visit the PICOP site. PICOP was at that time part of the Andres Soriano group of companies. The company has now been bought by an entrepreneurial group led by businessman Teodoro Bernardino.

The other thing I know about PICOP is that it is the only thing that’s stopping the squatters and illegal loggers from taking over the area. Once PICOP closes shop, it will be goodbye to the forest in that area in the resulting free for all. Even the local communist insurgency will intensify as livelihoods are lost.

Perhaps, given the large impact of PICOP in the economy of the local CARAGA communities and its sensitive role as provider of newsprint for Philippine newspapers, the Supreme Court should review the case on an en banc basis when it submits its motion for reconsideration. The Court must consider the business impact of its decisions because disruptions caused by Court decisions that are at best arguable, do not help the country win business confidence.

In fact, the situation has become such that even the assuring words of the President are no longer of any value to prospective investors. They know from experience that the Supreme Court can nullify everything. In the case of PICOP, there is a presidential warranty that PICOP will retain its area for so long as it is operating. The warranty is the government’s word of honor similar to a sovereign guarantee on loans that creditors require before releasing funds.

A full court review of the motion for reconsideration would do much to reassure the business sector that any decision will be just, fair and hopefully, not disruptive of PICOP’s business and of the local communities. For us, our interest here is of course, maintaining a reliable and stable supply of newsprint (about 80 percent of our needs are supplied by PICOP), without which there can be no freedom of the press.

Abaca

There is a lot of sense in the call of Rep. Luis Villafuerte for government to take the abaca plant more seriously. For one thing, developing the abaca industry is one good way of rehabilitating the devastated Bicol region.

When I was in Germany last year, I was told that Mercedes Benz was considering the use of abaca in its luxury cars. Germany has a strict law that requires car manufacturers to progressively increase the amount of recyclable and biodegradable materials in their car models. If Mercedes Benz is thinking abaca for some of their car components, BMW and VW should be encouraged to do so too.

Used primarily to make twines, ropes and carpets, the abaca fiber also has other applications as raw material for various functional and decorative products. The fiber is used in clothing material and handicraft like bags and baskets. The pulp is processed into tea bags, coffee filter, vacuum cleaner bags, currency notes and other specialty paper.

Abaca-based furniture and fixtures – from settees to lounge chairs, from dividers to coffee tables, and from sofas to loveseats – are also widely recognized for their elegance in Europe and North America. Studies have likewise identified abaca enzymes for use in high-value cosmetic and dietary products.

"Abaca is definitely one of the most fascinating plants in the world. Its fiber alone has an assured future," Villafuerte pointed out. He stressed the need for improved abaca farming as well as fiber processing technologies that would raise both efficiency and product quality.

The country still covers 90 percent of global demand for abaca fiber. However, Villafuerte lamented that annual production growth had been hampered by decreasing yield per hectare, and dwindling land area devoted to cultivating the plant.

"Apart from propagating new, disease-resistant plant varieties, we have to ensure that abaca farmers, processors and exporters have ready access to adequate financial, technical, marketing assistance as well as infrastructure support, " he said.

Taxing matters

I received this e-mail reacting to a previous column on taxes from Dr. GAIUS R. REYES.

After reading DEMAND AND SUPPLY (Dec 15), I couldn’t resist the urge to react.

Perhaps what we, poor Filipinos, need to do is to re-structure our taxes so that the burden of maintaining the government will be on the shoulders of those who are truly able, like the top 40.

A gradual increase in direct taxes simultaneously with a gradual decrease in indirect taxes, say every two years, should give the rich enough time to adapt and give the poor some hope for a better future.   This can be accomplished by the Filipino people by electing to congress politicians who understand taxation, like Rep Suarez.

We really do not need to change our constitution.   We only need to re-structure our taxes.

I am 74 years old, a retired physician.   I had a hearty laugh after reading Dr. Ernie E’s Muscular Contractions.  Thanks a lot for that. More power to you.

Matchmaker

Here’s Dr. Ernie E.

A man goes to the doctor suffering from premature ejaculation. "Can you do anything to help me doc?" said the man.

"No, but I can give you the address of a woman who has a short attention span," replied the doctor.

Boo Chanco’s e-mail address is [email protected]