The alleged rice smuggling in the Subic Bay Freeport has turned out to be a very big issue which has even involved the Philippine Senate. To provide a better appreciation of what may have transpired, the Subic Chamber aggregated the numerous information from various news media, in a chronological format, into this article.
While I already have my conclusion, I'd rather you form yours... my dear Watson. ;-)
Nov 2011 − Amira C Foods received an order from an Indonesian importer in November 2011. The order consisted of five cargo ships that were to be shipped from India to Indonesia.1
...the shipment was part of a batch of six vessels that were bound for Indonesia, specifically for Indonesian state-owned company Perum BULOG40 [Added: Aug 22 from Senate hearing of the same date]
[Research: Amira C Foods International DMCC is an international office of Amira Foods India Limited in the United Arab Emirates (UAE) 2]
24 Feb 2012 − MV Vinalines Mighty, sailed from India on Feb. 24. MV Vinalines Mighty, the ship subject of this controversy, was one of the ships included in this dispatch.3
[Research: MV Vinalines Mighty was built in 2007 at the Bach Dang Shipyard in Haiphong, Vietnam; it carries the Vietnam flag.4 VesselFinder website confirms that the ship was at the Kandla port in India on February 22, 2012, 16:01 UTC 5 ]
Photo credit: Mick Prendergast, MarineTraffic.com
Mar 8 − MV Vinalines Mighty reached Indonesia on March 8 but was late.6 The shipment’s import permit for Jakarta had already lapsed.7
Mar 19 – Consequently, it was not permitted to unload its cargo in Indonesia, the original port of destination.8 The Indonesian government refused the entry of the goods on March 19, 2012.9
The trader was thus faced with the prospect of either finding another buyer or re-shipping the goods back to India. “There was a need for our client to address the impending problem of perishability of the subject goods in Indonesian waters,” the lawyers of Ongkiko, Manhit, Custodio and Acorda Law Office explained. The trader then explored potential international buyers for the goods.10
Of the many free ports considered by our client, the one free port that presented the most attractive prospect in terms of costs was the SSEZ under the auspices of the SBMA. It had comparably lower operating costs such as unloading and warehousing fees, prompting the trader to inquire with SBMA about transshipment facilities in the Subic SSEZ and retained Metro Eastern Trading Corp., a duly licensed SBMA authorized locator.11
[Metro Eastern Trading is not a member of the Subic Bay Freeport Chamber of Commerce]
Mar 20 − In a statement submitted to the office of SBMA chairman and administrator Roberto V. Garcia, Saño said that, on March 20, Vicente Cuevas, a registered free port investor, invited him to a restaurant inside Subic to meet Indian businessmen who were interested in setting up logistics facilities. He said that when he arrived at the restaurant, he saw Cuevas, Cesar Bulaon of Metro Eastern, and a group of Indian businessmen who introduced themselves as representatives of Amira Foods.
Protik Guha, who introduced himself as the head of the Indian delegation, said Amira was one of the biggest grain traders in India and was interested in investing in Subic. Sano said Guha wanted to know if Metro Eastern was a registered company authorized to handle importations. Guha also inquired about the SBMA’s policies on transshipment and logistics operations, activities that Sano said the SBMA wanted to promote.12
According to Saño, he came in late on the lunch meeting at 2:00 pm.13
[Research: Estefani Saño is the Senior Deputy Administrator (SDA) for Business and Investment of the Subic Bay Metropolitan Authority (SBMA).14 ]
Research: Karan Chanana (left), Chairman of the Amira Group, and Protik Guha (right).
Photo credit: Amira Newsletter Oct-Nov 2010 Issue
Research: CEZA website (as of Aug 16) showing one Vicente Cuevas as an Acting Member of the Cagayan Economic Zone Authority (CEZA) Board of Directors. Jose Mari Ponce is the CEO of CEZA.14b [Added: Aug 16]
Port of Subic Former District Collector Errol B. Albano stressed that contrary to the claims of Metroeastern Trading’s lawyers, the 42,000 bags rice shipment were really destined for delivery at the Port of Subic as evidenced by Bill of Lading No. KDL/VM/01 as the party to notify and consignee at the Port of Subic. Moreover, its Packing List and Commercial Invoice No. 222215, dated March 20, 2012 with Exporters Reference No. 059400014 issued by no less than Amira itself states that Metroeastern Trading was the consignee and that the Port of Subic was the port of discharge.15
[Research: A Commercial Invoice is a bill prepared by the seller for submission to the buyer which details all items bought, together with amounts owed; a Bill of Lading is a receipt that a common carrier gives to the seller for the goods that the carrier will transport and frequently serves as a document of title, giving the person who possesses it ownership of the goods.]
Mar 22 − Sano admitted meeting once more with Amira officials at the Edsa Shangri-La in Mandaluyong on March 22 with Cuevas, but not with Bulaon. At that meeting, the Amira officials again expressed interest in setting up operations at the Subic free port, he said. He was accompanied at the meeting by Ivy Alipoon from the SBMA’s logistics department, who was appointed account officer for Amira’s project.16
Mar 26 − On March 26, Amira signed a Memorandum of Agreement (MOA) with Metro Eastern for transshipment, handling, safekeeping, warehousing and unloading of the shipment once it arrives in Subic SSEZ.17 According to BOC Commissioner Biazon, Cuevas was one of the witnesses who signed the MOA.18
Mar 27 − MV Vinalines Mighty stayed in Indonesian waters until March 27. After signing the agreement with Metro Eastern, given the imprimatur of SBMA and its authorized locator, Metro Eastern Trading Corp., MV Vinalines Mighty sailed on March 27 into Philippine waters from Indonesia.19
Mar 29 − The ship, MV Vinalines, that carried the sacks of rice docked in Singapore for bunkering on March 29, 2012 before it sailed to the Philippines.20
[Research: Shipspotting.com website confirms that the ship was at the Singapore-ebga port on 30 March 2012, 07:00:53 UTC 21]
Before Apr 4 – Antonio Camacho Jr, Bulaon’s boss and Metroeastern owner, said he had a pre-arrival meeting with SBMA seaport manager Capt. Perfecto Pascual prior to the arrival of the rice shipment.22
Apr 4 − MV Vinalines Mighty arrived at Subic SSEZ on April 4.23 An E Way bill was filed with BoC upon entry of the vessel on April 4 and has been electronically countersigned by the BoC system on April 4. Additionally, BoC had even boarded the vessel on the same day and post inspection had provided a general permit to discharge the imported cargo. The E Way bill, Record of Vessel Boarded and Import Permit are all documents from the bureau itself. Furthermore, the claim of the BoC that there were 430,000 bags of rice as reported in several newspapers was also belied by documents from three independent entities attesting that there were only 419,422 bags.24
Mid-April − Customs Commissioner Ruffy Biazon said President Aquino himself had informed him of the shipment in mid-April, nearly two weeks after its arrival in Subic in Zambales province.24b [Update: Aug 15]
Apr 19 − The subject cargo was completely unloaded by Metro Eastern under the auspices of SBMA and BoC personnel by April 19.25
May 15 – On May 15, 2012, authorities held the cargoes through a warrant of seizure and detention issued by Subic Port District Collector Errol Albano. The shipper of the rice imports is Amira Foods India Limited, while the consignee is Metroeastern Trading Corporation, a locator at the SBMA, according to data from the Bureau of Customs (BOC). The ship's captain failed to show to the BOC any documents for the imported cargoes, which should have had a valid permit from the Philippine National Food Authority (NFA).26
May 21 − Amira submitted a letter of intent signifying its plan to set up a business inside the Subic free port, and said it was looking for a one-hectare site to set up its logistics facilities.27
Jun 6 − Another document showed that a Memorandum of Undertaking between the NFA and Amira Foods was signed by NFA administrator Angelito Banayo on June 6, 2012. But Banayo denied that Metroeastern had participated in any of the NFA’s open rice importation for 2012.28
Jun 29 − AMIRA later on filed an Appeal memorandum dated June 29, 2012 which is presently under review by the Legal Service.29
Jun end − On or about the end of June, the trader finalized negotiations with an international buyer in the United Arab Emirates.30
Jul 25 − Enrile, in a privileged speech, took to task the committees on commerce and trade, ways and means, agriculture and Blue Ribbon to unmask the culprits behind the P500-million smuggled rice shipment from India seized by the Bureau of Customs last month and abandoned at Subic Bay Freeport.30b [Added: Aug 16]
Jul 31 − On Tuesday, the Bureau of Customs announced the seizure of the shipment.31
Aug 1 – Senate inquiry started.
SBMA senior deputy administrator for operations Redentor Tuazon, for his part, explained that it was common practice for freeports to entertain ships that go into their jurisdiction. "It is not sound business policy for us not to allow the discharge of ships that go through Subic because we market our port also as an alternative to Manila," he said. He added that they "believed" the exporter and consignee of the shipment, Amira Foods India Limited and Metroeastern, when it said it was waiting for a permit from the National Food Authority (NFA) to distribute the rice locally.32
During the hearing, Metroeastern representative Cesar Bulaon said the rice shipment was meant for Indonesia but that the country rejected its entry for lack of necessary permits. He later admitted he was contacted by SBMA senior deputy administrator for business and investment development Stefani Saño to extend help to the Amira Foods, which was in need of a consignee and a warehouse. He said he then contacted Amira, who sent its representative named Mr. Protik to transact with him. He said he met with Protik and a supposedly well-known broker named Bong Cuevas, who promised he will be able to secure an import permit for Amira. 33
Aug 2 – The deputy administrator of the Subic Bay Metropolitan Authority on Thursday denied that he acted as a go-between for an Indian company accused of smuggling 420,000 bags of rice into the country and a consignee based in the free port. Stefani Sano said that, contrary to the testimony given at the Senate Wednesday, he did not broker a meeting between Amira C Foods International of India and Metro Eastern Trading Corp., a Subic Bay tenant.34
Aug 6 – The Subic Bay Metropolitan Authority (SBMA) appointed two career officials as officer-in-charge of its business and port operations group as its starts a probe on the controversial P500 million Indian rice shipment confiscated by the government last week. SBMA chairman Robert Garcia, in a text message, said that he appointed John Ruel Kabigting, manager of the Planning and Development Office, to take over the position of senior deputy administrator Stefani Saño. Marcelino Sanqui, deputy administrator of the Public Work group, meanwhile took over the post of senior deputy administrator for port operations Red Tuazon. Both Saño and Tuazon went on voluntary leave to give way to the internal probe.35
Aug 12 – The National Food Authority on Sunday said the 219,000 bags of rice from India tagged as smuggled by the Bureau of Customs could not be considered smuggled because it remained inside the Subic Bay Freeport. ”Legally, as long as the rice remains inside the port and is not sold to local traders, we cannot consider it smuggled,” NFA Chief Lito Banayo said in a statement.36
Aug 13 – Commissioner Biazon said during a radio interview by Noli de Castro that while they respect the opinion of the NFA, the agency that ultimately determines if items are smuggled or not is the Bureau of Customs.37
President Benigno Aquino III was the one who tipped off the Bureau of Customs (BOC) on a recent attempt to smuggle rice into the country, BOC commissioner Ruffy Biazon revealed Monday [during Monday's Senate inquiry]. "It was President Benigno "Noynoy" Aquino who gave me the information," Biazon said during Monday's Senate investigation on the 420,000 sacks of Indian white rice at the Subic Freeport Zone.38
Tuazon argued that the cargo could be unloaded into the country even without a permit from the NFA but the import would be withheld by Subic Bay Freeport authorities until the shipper or importer complies with the documentary requirements. “Under Department Administrative Order No. 93, the cargo can be unloaded into the country and put into a warehouse inside SBMA, pending the processing of documents and completion of requirements particularly the import permit from National Food Authority (NFA),” Tuazon explained to the committee. “They will be given 30 days to comply with the document requirements, during those days the cargo is under the jurisdiction of SBMA," he added. 39
Aug 22 – At Wednesday's Senate hearing on the alleged smuggling of rice into the Subic Freeport Zone, Amira Foods CEO Protik Guha said that the company "never intended" to sell the 420,000 sacks of white Indian rice in the country. He explained that the shipment was part of a batch of six vessels that were bound for Indonesia, specifically for Indonesian state-owned company Perum BULOG, but that they were not able to deliver it because their import permit expired.
"Whilst at anchorage in the Indonesian port, to cut its losses from demurrage as soon as possible, Amira was now faced with the prospect of either finding temporary storage facilities or re-shipping the goods back to India. After researching various alternatives, Amira decided to explore the Subic Economic Zone as a potential temporary warehousing and transhipment site for the goods," he said.
Guha said he then came to the Philippines and met with Kerry-ATS Logistics Inc., Prudential Customs Brokerage Services Inc., and Container Bridge Corporation, who reportedly introduced him to their consignee Metro Eastern Trading Corporation, an authorized locator of the Subic Bay Metropolitan Authority (SBMA).
He likewise said that they amended their bill of lading to indicate Metro Eastern as their consignee and Subic as a port of discharge. "Because of the revision of the bill of lading and all other pre-arrival documents...the Philippine authorities came to the misguided conclusion that the goods were really intended for the Philippines," he said. As additional proof that it was inteded for Indonesia, Guha said that the sacks of rice bear the mark "Perum BULOG."40
During Wednesday's Senate hearing, the Senate committees on agriculture, ways and means, and accountability of public officers and investigations asked the following to explain in writing why they should not be cited for contempt:
- Protik Guha (CEO of Indian firm Amira Foods)
- Cesar Ramirez (of Purok Malakas, Gen. Santos CIty)
- Cesar Bulaon (vice president of Metroeastern Trading Corp. - consignee of Amira)
- Stefani Saño (SDA for business and investment development of the SBMA)
- Vicente "Bong" Cuevas III (broker and president of CAMJ Construction Inc.)41
1 Pulta, Benjamin B., Trader’s lawyers dispute BoC’s account on seized 420,000 bags of rice from India (The Daily Tribune, 3 Aug 2012), http://www.tribune.net.ph/index.php/metro-section/item/2382-trader’s-lawyers-dispute-boc’s-account-on-seized-420000-bags-of-rice-from-india
2 Amira Foods website, Contact Us, http://www.amirafoods.com/index/contactus
3 Ibid. 1
4 Shipspotting website, Photos, http://www.shipspotting.com/gallery/photo.php?lid=1122562
5 VesselFinder website, Vessels, http://www.vesselfinder.com/vessels/VINALINES-MIGHTY-IMO-9335458
6 Ibid. 1
7 DOFWeb, BOC posts biggest smuggled rice haul (Department of Finance website, 31 July 2012), http://www.dof.gov.ph/?p=4437
8 Ibid. 1
9 Reyes, Karl John, SBMA execs had a hand in smuggling of rice from India - Senate panel (Interaksyon website, 1 August 2012), http://www.interaksyon.com/article/39158/sbma-execs-had-a-hand-in-smuggling-of-rice-from-india---senate-panel
10 Ibid. 1
11 Ibid. 1
12 Capulong, Willie E., et al., Subic exec denies role as broker in rice fiasco (Manila Standard, 2 August 2012), http://manilastandardtoday.com/2012/08/02/subic-exec-denies-role-as-broker-in-rice-fiasco/
13 Boses ng Balita, Panayam kay Mr. Stef Sano (DZBB Radio, 4 August 2012, 9:56 am)
14 SBMA Website, http://www.sbma.com/index.php?module=pagemaster&PAGE_user_op=view_page&PAGE_id=248
14b CEZA Website, http://ceza.gov.ph/about-us/board-of-directors (read Aug 16)
15 Ibid. 8
16 Ibid. 13
17 Ibid. 1
18 Ito ang Radyo Patrol, Panayam kay BOC Comm Ruffy Biazon (DZMM Radio, 4 August 2012, 12:34 pm)
19 Ibid. 1
20 Ibid. 10
21 Ibid. 4
22 Manalo, Charlie V., Collusion in foiled smuggle of P500M worth of rice seen (The Daily Tribune, 2 August 2012), http://www.tribune.net.ph/index.php/headlines/item/2354-collusion-in-foiled-smuggle-of-p500m-worth-of-rice-seen
23 Ibid. 1
24 Pulta, Benjamin B., BoC docus show Indian rice unloaded legally (The Daily Tribune, 6 August 2012), http://www.tribune.net.ph/index.php/metro-section/item/2514-%E2%80%98boc-docus-show-indian-rice-unloaded-legally%E2%80%99
24b Yamsuan, Cathy C., SBMA exec admits using Enrile’s name (Philippine Daily Inquirer, 14 August 2012), http://newsinfo.inquirer.net/249253/sbma-exec-admits-using-enriles-name
25 Ibid. 1
26 Ibid. 9
27 Ibid. 12
28 Ibid. 9
29 Ibid. 7
30 Ibid. 1
30b Lopez, JP, Enrile wants probe of rice smuggling (Malaya Business Insight, 26 July 2012), http://www.malaya.com.ph/~malayaco/index.php/news/nation/9363-enrile-wants-probe-of-rice-smuggling
31 Bordadora, Norman, Senate told SBMA execs in on rice smuggling (Philippine Daily Inquirer, 2 August 2012), http://newsinfo.inquirer.net/241149/senate-told-sbma-execs-in-on-rice-smuggling
32 Tan, Kimberly Jane T., Senators: Exporter-SBMA collusion in rice smuggling possible (GMA News, 1 August 2012), http://www.gmanetwork.com/news/story/267790/economy/companies/senators-exporter-sbma-collusion-in-rice-smuggling-possible
33 Ibid. 31
34 Ibid. 12
35 SubicUpdater website, SBMA appoints officers vice Saño and Tuazon, rice probe starts (6 August 2012), http://subicupdater.com/?p=1828
36 Manila Standard, Rice stored in Subic not ‘smuggled’ (Manila Standard Today website, 13 August 2012), http://manilastandardtoday.com/2012/08/13/rice-stored-in-subic-not-smuggled/
37 Kabayan, Panayam kay BOC Comm Biazon (DZMM TV, 13 August 2012, 7:53 am)
38 Tan, Kimberly Jan, Customs chief to senators: PNoy tipped BOC on Subic rice smuggling (GMA Network, 13 August 2012 12:36pm), http://www.gmanetwork.com/news/story/269496/economy/finance/customs-chief-to-senators-pnoy-tipped-boc-on-subic-rice-smuggling
39 Reyes, Karl John, SBMA exec linked to rice smuggling try defends self before Senate (Interaksyon website, 13 August 2012 3:55pm), http://www.interaksyon.com/article/40300/sbma-exec-linked-to-rice-smuggling-try-defends-self-before-senate
40 Tan, Kimberly Jane T., Indian exporter denies rice smuggling, says local buyers threatened them (GMA News, 22 August 2012), http://www.gmanetwork.com/news/story/270705/economy/business/indian-exporter-denies-rice-smuggling-says-local-buyers-threatened-them
41 Tan, Kimberly Jane T., Senate panels issue show cause orders vs Indian rice exporter, 4 others (GMA News, 22 August 2012), http://www.gmanetwork.com/news/story/270713/news/nation/senate-panels-issue-show-cause-orders-vs-indian-rice-exporter-4-others
2 Amira Foods website, Contact Us, http://www.amirafoods.com/index/contactus
3 Ibid. 1
4 Shipspotting website, Photos, http://www.shipspotting.com/gallery/photo.php?lid=1122562
5 VesselFinder website, Vessels, http://www.vesselfinder.com/vessels/VINALINES-MIGHTY-IMO-9335458
6 Ibid. 1
7 DOFWeb, BOC posts biggest smuggled rice haul (Department of Finance website, 31 July 2012), http://www.dof.gov.ph/?p=4437
8 Ibid. 1
9 Reyes, Karl John, SBMA execs had a hand in smuggling of rice from India - Senate panel (Interaksyon website, 1 August 2012), http://www.interaksyon.com/article/39158/sbma-execs-had-a-hand-in-smuggling-of-rice-from-india---senate-panel
10 Ibid. 1
11 Ibid. 1
12 Capulong, Willie E., et al., Subic exec denies role as broker in rice fiasco (Manila Standard, 2 August 2012), http://manilastandardtoday.com/2012/08/02/subic-exec-denies-role-as-broker-in-rice-fiasco/
13 Boses ng Balita, Panayam kay Mr. Stef Sano (DZBB Radio, 4 August 2012, 9:56 am)
14 SBMA Website, http://www.sbma.com/index.php?module=pagemaster&PAGE_user_op=view_page&PAGE_id=248
14b CEZA Website, http://ceza.gov.ph/about-us/board-of-directors (read Aug 16)
15 Ibid. 8
16 Ibid. 13
17 Ibid. 1
18 Ito ang Radyo Patrol, Panayam kay BOC Comm Ruffy Biazon (DZMM Radio, 4 August 2012, 12:34 pm)
19 Ibid. 1
20 Ibid. 10
21 Ibid. 4
22 Manalo, Charlie V., Collusion in foiled smuggle of P500M worth of rice seen (The Daily Tribune, 2 August 2012), http://www.tribune.net.ph/index.php/headlines/item/2354-collusion-in-foiled-smuggle-of-p500m-worth-of-rice-seen
23 Ibid. 1
24 Pulta, Benjamin B., BoC docus show Indian rice unloaded legally (The Daily Tribune, 6 August 2012), http://www.tribune.net.ph/index.php/metro-section/item/2514-%E2%80%98boc-docus-show-indian-rice-unloaded-legally%E2%80%99
24b Yamsuan, Cathy C., SBMA exec admits using Enrile’s name (Philippine Daily Inquirer, 14 August 2012), http://newsinfo.inquirer.net/249253/sbma-exec-admits-using-enriles-name
25 Ibid. 1
26 Ibid. 9
27 Ibid. 12
28 Ibid. 9
29 Ibid. 7
30 Ibid. 1
30b Lopez, JP, Enrile wants probe of rice smuggling (Malaya Business Insight, 26 July 2012), http://www.malaya.com.ph/~malayaco/index.php/news/nation/9363-enrile-wants-probe-of-rice-smuggling
31 Bordadora, Norman, Senate told SBMA execs in on rice smuggling (Philippine Daily Inquirer, 2 August 2012), http://newsinfo.inquirer.net/241149/senate-told-sbma-execs-in-on-rice-smuggling
32 Tan, Kimberly Jane T., Senators: Exporter-SBMA collusion in rice smuggling possible (GMA News, 1 August 2012), http://www.gmanetwork.com/news/story/267790/economy/companies/senators-exporter-sbma-collusion-in-rice-smuggling-possible
33 Ibid. 31
34 Ibid. 12
35 SubicUpdater website, SBMA appoints officers vice Saño and Tuazon, rice probe starts (6 August 2012), http://subicupdater.com/?p=1828
36 Manila Standard, Rice stored in Subic not ‘smuggled’ (Manila Standard Today website, 13 August 2012), http://manilastandardtoday.com/2012/08/13/rice-stored-in-subic-not-smuggled/
37 Kabayan, Panayam kay BOC Comm Biazon (DZMM TV, 13 August 2012, 7:53 am)
38 Tan, Kimberly Jan, Customs chief to senators: PNoy tipped BOC on Subic rice smuggling (GMA Network, 13 August 2012 12:36pm), http://www.gmanetwork.com/news/story/269496/economy/finance/customs-chief-to-senators-pnoy-tipped-boc-on-subic-rice-smuggling
39 Reyes, Karl John, SBMA exec linked to rice smuggling try defends self before Senate (Interaksyon website, 13 August 2012 3:55pm), http://www.interaksyon.com/article/40300/sbma-exec-linked-to-rice-smuggling-try-defends-self-before-senate
40 Tan, Kimberly Jane T., Indian exporter denies rice smuggling, says local buyers threatened them (GMA News, 22 August 2012), http://www.gmanetwork.com/news/story/270705/economy/business/indian-exporter-denies-rice-smuggling-says-local-buyers-threatened-them
41 Tan, Kimberly Jane T., Senate panels issue show cause orders vs Indian rice exporter, 4 others (GMA News, 22 August 2012), http://www.gmanetwork.com/news/story/270713/news/nation/senate-panels-issue-show-cause-orders-vs-indian-rice-exporter-4-others
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