Shipowners warn penalty hike to shut down small operators

CEBU, Philippines — Philippine shipping operators are urging regulators to suspend a sweeping overhaul of maritime penalties, warning that proposed fines running into the tens of thousands of percent above current levels risk shutting down small operators and destabilizing the domestic shipping sector.

The Philippine Coastwise Shipping Association (PCSA), which represents Filipino shipowners and operators, said in a position paper submitted to the Maritime Industry Authority (MARINA) that the draft schedule of administrative fines is “excessive and confiscatory” and far out of proportion with inflation or the scale of violations.

The dispute points to growing tension between regulators seeking tighter compliance and an industry that moves most inter-island cargo and passengers across an archipelago of more than 7,000 islands, where shipping is a critical economic lifeline.

Under the proposal, certain penalties tied to expired accreditations and operating authorities would rise by as much as 19,900 percent from existing circulars, according to the association.

PCSA said a small provincial vessel operator that misses a renewal deadline could face fines of about P150,000 ($2,600), an amount it claims can exceed a vessel’s monthly net income.

The group argues that MARINA’s justification — updating decades-old penalties and accounting for inflation — does not align with official data. It cited Philippine Statistics Authority (PSA) figures showing the peso’s purchasing power has fallen about 22% since 2018, far below the magnitude of the proposed increases.

Industry leaders are also challenging provisions that would allow penalties to stack, impose additional sanctions after a primary fine and suspend company accreditation for document violations. Such measures, PCSA said, could effectively halt entire operations even when infractions involve a single vessel or paperwork lapse.

Particular concern centers on rules that presume companies responsible for falsified documents found in their possession and clauses that penalize “inappropriate” behavior in MARINA offices.

The association said vague language grants excessive discretion to enforcers and could chill legitimate disputes over safety findings or permits.

The group is calling for the immediate suspension of the draft circular and the creation of a joint technical working group between regulators and industry to recalibrate the penalties. It wants adjustments tied more closely to economic indicators and a shift toward what it describes as a global regulatory trend favoring corrective rather than punitive enforcement.

MARINA has not publicly responded to the filing. The regulator has been under pressure to modernize oversight after a series of maritime safety reviews and to align domestic rules with international standards, even as operators grapple with rising fuel costs, aging fleets and volatile weather patterns.

For shipowners, the stakes extend beyond compliance. PCSA said fines that function as “death sentences” for small carriers could reduce investment in safety upgrades and technology, ultimately weakening the resilience of the country’s maritime backbone.