Customs Commissioner Ruffy Biazon on Thursday ordered customs personnel in Port Irene to stop the release of more than 200 used cars and vans that arrived on Monday at the free port in Sta. Ana, Cagayan province.
The importation of the vehicles into the free port for resale in the country, apparently in defiance of a Supreme Court ruling, gave Sen. Miriam Defensor-Santiago the opportunity to draft a resolution seeking to investigate what she called “contumacious” operations in the Cagayan Special Economic Zone and Freeport (CSEZF).
The CSEZF was created by a 1995 law authored by Senate President Juan Ponce Enrile, with whom Santiago has been feuding over the “misuse” of Senate funds, when he was a member of the House of Representatives.
Biazon said the Bureau of Customs (BOC) would respect the Supreme Court decision affirming the validity of Executive Order No. 156 banning the importation of used vehicles, except for trucks, buses and special purpose vehicles.
“We’re just enforcing the law …. I have instructed all BOC officials assigned at the [CSEZF] not to process any vehicle importation pending the clarification on the finality of the Supreme Court’s decision affirming the constitutionality of EO 156,” Biazon said.
He said investors in the CSEZF could import vehicles for their use within the special economic zone and free port but these could not be taken out of the zone.
Certificate of finality
“We will seek a certificate of finality on the Supreme Court ruling on EO 156, and we will enforce whatever provisions and implementing rules the EO provides,” Biazon said.
Nilo Aldeguer, senior deputy administrator of the Cagayan Economic Zone Authority (Ceza), said on Wednesday that the shipment of more than 200 vehicles came from Incheon, South Korea.
Aldeguer said the shipment was covered by an import permit that was issued before the Supreme Court issued its decision.
He said it would be up to the BOC and the Land Transportation Office (LTO) if the Ceza, which runs the free port, would be allowed to process the papers for the vehicles.
Slump in sales
Then President Gloria Macapagal-Arroyo issued EO 156 in 2002 after members of the local car manufacturing industry complained of a slump in sales due to the importation of used cars at free-port zones like the CSEZF.
Claiming that the EO was unconstitutional, the Automotive Rebuilding Industry of Cagayan (Aric) obtained a temporary restraining order (TRO) from a regional trial court (RTC) in Cagayan but the RTC in Aparri later affirmed the ban.
The case reached the Court of Appeals, which decided in September 2010 to lift the ban on the importation of used cars.
But in January 2013, the Supreme Court Second Division set aside the appellate court decision and affirmed the ruling of the Aparri court.
“The continued importation of used cars at Port Irene constitutes an open defiance of a decision of the Supreme Court,” Santiago said.
Santiago said the Supreme Court ruled that vehicles imported from abroad “may only be stored, used or traded, or exported out of Philippine territory, but cannot be imported into the Philippines outside of the secured fenced-in former Subic Naval Base area.”
“In effect, the Supreme Court ruling barred the importation of vehicles by the Cagayan Special Economic Zone,” Santiago said.
Santiago cited reports claiming that the Ceza refused to abide by the Supreme Court’s order because the permits were issued before the decision.
Santiago, in response, said that the date when the receipts were issued was immaterial since the constitutionality of EO 156 banning the importation of used cars was sustained by the Supreme Court in its decision in the Southwing case in 2006.
“It is absurd for the Cagayan Economic Zone Authority to claim that it could still import used vehicles for permits prior to the decision of the Supreme Court last Jan. 7,” Santiago said.
“Ceza has no authority to process import permits whether issued prior to the decision of the court last Jan. 7 or thereafter, since the court already upheld the constitutionality of EO 156 as early as 2006,” she added.
Santiago said she would call for a Senate probe to include Senator Enrile’s role in the importation of used cars in Cagayan.
“Mr. Enrile was the prime mover behind the CSEZF. Several years ago, he even arrogantly claimed that President Arroyo’s ban on the importation of used vehicles was unconstitutional, and with constant hubris, he also sharply criticized the Supreme Court for upholding the ban,” Santiago said.
Culture of impunity
Santiago said Enrile’s actions concerning the Cagayan port “seeks to bolster the culture of impunity,” or exemption from punishment.
Malacañang is ascertaining whether Ceza officials could be held liable for allowing the entry of the 200 second-hand vehicles on Monday into the free-port zone.
In a phone interview, presidential spokesman Edwin Lacierda said the Department of Justice had taken notice of these smuggling allegations at Port Irene.
A government-owned and -controlled corporation, Ceza was created by virtue of Republic Act No. 7922, otherwise known as the “Cagayan Special Economic Zone Act of 1995,” during the Ramos administration.
Ceza is headed by Jose Mari B. Ponce, a relative of the Senate President.
Ceza’s website said Ponce was a career executive service professional with more than 20 years “of solid experience in the government service with expertise in resource mobilization and negotiations for Official Development Assistance, project development and management, agribusiness, integrated area development and rural development.”
Ponce previously served as acting agrarian reform secretary during the Arroyo administration.
Lacierda did not talk much about the implications of Ceza’s defying a Jan. 7 Supreme Court order that affirmed the constitutionality of EO 156 banning the importation of used vehicles.
Lacierda, however, forwarded a text message from Justice Secretary Leila de Lima.
De Lima’s take
“The issue involved is a legal issue. From the limited facts as reported in PDI’s (Philippine Daily Inquirer) banner story (Thursday), the issue appears to be this—whether or not the imported vehicles whose papers have allegedly been completed prior to the SC decision are covered by such a decision,” De Lima said.
“But then again, we need to get more facts/information on this, including a study of the SC decision itself,” De Lima added in the text message.
Biazon said the car importation issue at the CSEZF was “complicated” but the BOC would be guided by the final Supreme Court ruling.
“We will uphold the recent Supreme Court ruling and enforce all the provisions of EO 156 regarding restrictions on the importation of used cars,” he said.
“I advise car buyers to be sure of the vehicles they are buying and to get them only from legitimate sources and dealers,” he added.
The LTO will wait for its own formal copy of the Supreme Court decision before it implements any policy changes, agency chief Virginia Torres said.
“We haven’t received any formal communications from the court. We are waiting for that,” Torres said in an interview on Thursday. “We cannot make an official memo yet. We want to know if there are any exemptions,” Torres said.
She said that once the agency received a copy of the decision, the LTO would refer the matter to the Department of Transportation and Communications.
“We will forward the decision to them and they will advise us on what to do,” she said.
Jack: Follow SC ruling
Cagayan Rep. Juan “Jack” Ponce Enrile Jr., the son and namesake of the Senate President, said the Supreme Court order banning the importation of used cars in the country must be followed.
Those who have a problem with the Supreme Court ruling can contest it, but any such importation must stop in the meantime, said Enrile, a senatorial candidate of the United Nationalist Alliance.
“The Supreme Court has already issued an order, now it is up to the locators to find legal remedies. But since the order is already in effect, that must stop,” he told reporters in an ambush interview at the Tagbilaran airport, before his flight to Manila.
He said those found to be defying the order not to import used cars must be arrested.
Asked if he thought the importers were being bold because of possible protection from high officials, Enrile said he did not think that was the case.
If there were instances of importations in defiance of the ban, backed with documentary proof, such matters should be taken directly to the customs officials, to the mayor or to the governor, he said.
“If there is any documentation, I myself would have that stopped,” he said.
A leader of the regional automotive industry and a lawyer for the car importation firm involved in the case said no defiance of the Supreme Court happened when more than 200 motor vehicles arrived early this week in Port Irene.
Jaime Vicente, president of Aric, said the shipment that came in was not imported by Forerunner Multi Resources Inc., the party to the case for which the high court lifted the TRO on EO 156.
Vicente, former president of Forerunner, said the cars were imported by another company, Fenix International, under the provisions of EO 418 that supposedly allowed the entry of second-hand motor vehicles.
“At no point in time did any company defy a Supreme Court ruling. When we were allowed to import, we imported. When we were disallowed, we stopped,” Vicente said in an interview in Makati City.
Marforth Fua, one of the legal counsels for Forerunner, added in the same interview that the Jan. 7 ruling of the Supreme Court had yet to decide on EO 156’s constitutionality.
“If you read the dispositive portion, it only rules on the issue of the injunction [on the EO] issued by the Court of Appeals. The main issue on the constitutionality is still with the RTC,” Fua said.—With a report from Paolo Montecillo