PCC includes DTI DAO in cement ‘cartel’ probe

The revised cement importation rules of the Department of Trade and Industry (DTI) has been included as one of important documents in the ongoing full probe by the Philippine Competition Commission (PCC) on alleged cartel operation of the local cement industry.

PCC Commissioners Stella A. Quimbo and Johannes Bernabe told reporters covering the “Kapihan sa Manila Bay” that Department Administrative Order (DAO) 17-02 of the DTI already formed part of the investigation conducted by the Competition Enforcement Bureau under PCC.

“The DAO is included in the current investigation because it is an important shaper of industry practices,” stressed Quimbo.

DAO 17-02, which the DTI issued in May this year, effectively created two sets of rules for the importation of cement, one for importers with local cement manufacturing operation and one for pure or direct traders.

Paragraph 4 of the DAO exempts importation by cement manufacturers with operating integrated cement plants in the Philippines from seeking Import Commodity Certificate (ICC) provided they use the brand name as authorized in the local market. Consumer groups vehemently opposed the DAO saying it discriminates pure traders of cement with no domestic manufacturing operations in the country.

For his part, Bernabe said the Competition Enforcement Office is conducting their full administrative investigation order after PCC ruled in January this year that there is reasonable ground to believe the industry is engaged in anti-competitive practices based on results of the preliminary inquiry.

The enforcement bureau will have to firm up their findings and recommendations and elevate to the Commissioners for judgment, said Bernabe.

He explained that concerted anti-competitive practices means respondents may not have formal agreements among themselves but there are circumstantial evidence like in their bidding patterns and price behaviors.

“Mostly, cartels operate through gentleman’s agreement. In other countries they are traced through e-mail exchanges,” he said.

“So we need to review data to establish concerted action, we need lawyers and economists to determine this.” In other countries, he noted, competition bodies look into disk mirroring system to trace communication exchanges among parties. Already, PCC is discussing with the Department of Justice and the National Bureau of Investigation for resource-sharing. The PCC has no idea yet as to when they can come up with the decision but Quimbo said that cement is one of the three formal