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Duterte’s clean-up of Customs will be epoch-making

But Task Force needed, as in Boracay

I’M not exaggerating with the title of this piece.

The Bureau of Customs ever since Corazon Aquino captured power in 1986 has become the country’s Augean stables of the Hercules legend, so filled with the feces of corruption of decades that it looked impossible to clean up.

Because Cory Aquino appointed a known communist sympathizer as Customs commissioner, the New People’s Army managed to smuggle in AK-47s during that time. During her son Benigno Aquino 3rd’s regime, and with the flood of imports from China, the value of smuggled goods totaled an astronomical P4 trillion, four times that in the previous Gloria Macapagal administration. (Google my column in 2015: “Smuggling utterly out of control under Aquino regime: P4 trillion in last five years.”)

That the two military men that President Duterte trusted to clean up Customs — Nicanor Faeldon and Isidro Lapeña — failed in their marching orders may have its silver lining. Because of it, Duterte blew his top and announced that he would order the military to take over the graft-ridden bureau.

That may be the equivalent of Hercules in that legend building trenches so that water from a nearby river flowed into the shit-filled stables to clean them out in one day.

In their usual knee-jerk reaction to Duterte’s reform initiatives (as when Bam Aquino and Rissa Hontiveros shrieked that Boracay cannot just be closed down), the Yellows are now shouting that it is unconstitutional to order the military to run Customs.

Haven’t they heard of the concept called “secondment,” when men in uniform are assigned to civilian tasks on a temporary basis without giving up their military posts? It has been routine for military and police officers to be seconded to the Office of the President (and even to other departments) as aides to the president.

Such secondment made headline news recently when Duterte appointed Police Senior Inspector Sofia Loren Deliu, a former beauty pageant contestant, as aide-de-camp to take over the routine jobs of his Special Assistant Christopher Go, who have resigned to run for senator. That is unconstitutional? 

Supreme Court
All Duterte has to do is put key Customs officials on a floating basis —that is, remove them from their posts and assign them to whatever office, without being in charge of anything — and assign, on secondment, trusted military officers to replace them.

At the end of the day of course, the matter will be settled if a case is brought before the Supreme Court to question Duterte’s move to have military men run Customs. Will those noisy senators and Yellow leaders be willing to do that, and be branded as protectors of smugglers whose rackets will be stopped?

But that constitutional issue is the least of Duterte’s problems, if one really understands the work of the Bureau of Customs.

The bureau’s work is so much unlike that of other revenue-generating agencies of government. Its task is not just to collect the right duties from imports. As important as collecting taxes is making sure that while there is no smuggling, technical or outright, imports are being processed and released as soon as possible. This is obviously critical for an economy: a shipment of the raw materials delayed because Customs people are so strict in checking if it is paying the right taxes could be financially disastrous for a company. One reason for instance why Singapore became developed is that its customs was so efficient yet graft-free.

The daily need to balance these two tasks of Customs is the key to understanding why it has persisted as the epitome of corruption in the country.

After an initial surge of enthusiasm in ridding the agency of corruption, Customs heads faced the reality: one of the most important measures of their performance is if there are no complaints from industry that their shipments are being delayed so much that it is affecting their profits, and therefore, ultimately the economy.

The entrenched syndicates in Customs — who are linked to the so-called “big players,” or the big brokers — set about convincing the Customs chief that his strictness about checking that the right duties are paid is counter-productive, and that he should be pragmatic: He should just loosen controls and focus on revenue generation. It turns out later that with the loosening of controls, smuggling gets worse after a few years, even after a year.

Smiling and crying money
There have been these two categories of graft money in Customs — “smiling money” and “crying money “ — which lead to some kind of weird ethics in the agency. “Smiling money” are bribes importers are willing to pay corrupt customs staff in order for their shipments to be released as soon as possible. “Crying money” occurs when corrupt Customs people demand bribes in order for their shipments to be released.

One situation in Customs is that many importers rely on a small stable of brokers, usually those who are known to shelve out “smiling money.” The problem is that a portion of the shipments that manage to get released fast by Customs through smiling money turn out to have been charged the wrong, small duties.

Worse, the really big bucks now are in getting shabu to pass through Customs, as was the case that resulted in over P11 billion worth of shabu hidden in magnetic lifters passing through the agency. Customs officials were obviously willing to clear that innocuous-looking shipment needed by industry, especially if they were given” smiling money.”

Our analogy that Duterte’s clampdown on Customs is like Hercules cleaning out the Augean stables isn’t too accurate though. Customs is not a building but really a complex machine that is supposed to collect the right duties, while not delaying the release of shipments that pay the right taxes.

It requires a staff sufficiently trained to run the machine, and the right equipment — such as the most-up-to-date computers and more X-ray machines. It’s not just a matter of getting honest people to run it, but honest people who have the expertise to run Customs.

Duterte should study how he cleaned up Boracay: It was a task force beaded by the Environment department and consisting of the Departments of public works, local government, tourism, and the Philippine National Police, all of which mobilized their particular expertise to save Boracay. Former customs officials who have demonstrated their integrity should be recruited to the task force as consultants.

Simply sending out the military solely to clean up Customs won’t work. It could even be disastrous, if imports aren’t released as soon as they should be.

Duterte should, as he did for Boracay, set up an inter-departmental task force to clean up Customs, which has a bigger role in the economy than Boracay.

And why do I say cleaning up Customs is epochal?

Many nations in the world have had periods in which government corruption was rampant. This sorry situation changed when governments cleaned up certain agencies that became the precedent for ridding the entire government of corruption. In the US, the reform of the agriculture department in the 1930s was the start of such a program; in Hong Kong it was the notoriously corrupt police department in the 1970s.

Duterte’s move is bold but risky, fraught with danger. But if successful, it will be the precedent for finally ridding our bureaucracy of its century-old culture of corruption. Wouldn’t that be epochal?


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