The Department Administrative Order (DAO) No. 19-05, which sets the new technical regulations and the mandatory product certification for local and imported glass products, was signed and issued on 28 March 2019.
Rationale of DAO 19-05
Glass products have become an integral part of modern architecture and construction. The technical regulation DAO 19-05 was re-issued to protect consumers from substandard glass products (flat, tempered, laminated, laminated safety and bent glass) that have been proliferating in the market. Flat glass is previously covered by mandatory certification prior to its delisting in 2015 due to claims that flat glass is only used as raw material by glass processors, and as such, allegedly does not pose risk to consumers.
Regular DTI monitoring showed, however, that flat glass products are also directly distributed or offered for sale by glass suppliers and/or installers in the retail market.
The DTI then deemed it necessary to implement stricter technical regulations for this particular product in order to protect consumers, together with other construction materials, such as but not limited to, cement, steel bars, BI/GI pipes, steel sheets, plywood and ceramic tiles. Currently, the DTI has already issued new technical regulations for cement, steel bars and glass. On-going consultations are the draft technical regulations for BI/GI pipes and Steel sheets, and for preparation of working drafts are plywood and ceramic tiles.
This is also done in support of the current BUILD, BUILD, BUILD, program of President Rodrigo Duterte to make sure that construction materials, including glass products, are of good quality and compliant with Philippine National Standards. Regulation of construction materials is necessary to ensure the integrity of all construction in the country, whether vertical or horizontal, whether public or private.
With this, insinuations that the recently issued technical regulation is intended to protect industry players are without basis, if not malicious.
On the issue of DTI having no jurisdiction to foreign companies
This claim is partly true insofar as direct legal jurisdiction over foreign companies is concerned. This is the reason why the DTI requires local representatives/offices for purposes of accountability and liability. However, it should be clarified that in the area of product certification, it has no national limits or boundaries. In fact, certification of foreign companies is an internationally accepted practice not only for glass products, but for all other products as well.
Currently, DTI has already certified 866 foreign companies located all over the world manufacturing various regulated products and jurisdiction was never raised as an issue. Emphasis is given to the fact that even the lone Philippine manufacturer of glass products, Pioneer Float Glass Manufacturing, Inc. is also certified by certification bodies from Malaysia (SIRIM) and Indonesia (SNI) for them to be able to export their products to both countries.
On the issue of discrimination, unfair competition and alleged vested interest
The PS licensing scheme is not an invention or creation by the DTI to discriminate nor protect certain manufacturers or importers. The scheme is prescribed by international standards, the (PNS ISO/IEC 17067) and is used as reference by the different certification bodies all over the world. The implementation of the PS licensing scheme for all manufacturers regardless of location (both foreign or local) actually promotes a level playing field since they all required submit to the same certification procedures and requirements.
The scheme likewise ensures better consumer protection considering that the actual manufacturing processes and facilities are audited by qualified auditors against the requirements of international standards before they are allowed to produce or manufacture products intended for distribution in the Philippine market.
For foreign manufactured products, a Statement of Confirmation is required to ensure that the imported products are actually sourced from the licensed manufacturing companies located abroad. This is to protect the interest of importers from unscrupulous traders or consolidators who claim to represent certain manufacturing companies but actually source products from other unlicensed factories and export the same to unsuspecting Philippine importers to maximize profit.
It is important to note that the technical regulation does not require importers to source products from any particular company, be it local or foreign. Supply may come from any foreign or local manufacturer or supplier, provided that they are licensed by the DTI Bureau of Philippine Standards.
The very purpose of the technical regulation is to ensure that all glass products distributed in the local market are safe for use and shall be distributed only by legitimate entities.
On the allegation of absence of due process in implementing DAO 19-05
In the preparation and issuance of technical regulations, the DTI always ensures and observes the required due process. In the case of DAO 19-05, a public consultation was conducted on 04 December 2018 where the draft DAO was presented and lengthily discussed. Many issues were raised and clarified during the consultation attended by representatives of major players and stakeholders in the glass industry.
A copy of the draft DAO was likewise made available for all stakeholders to review. They were provided with sufficient time within which to submit comments and suggestions. DTI received comments and suggestions from fifty one (51) different individual stakeholders, organizations and players in the glass industry.
In addition, part of the transparency requirement is the notification to all WTO members. As such, on 09 January 2019, The World Trade Organization (WTO) member countries were notified of the draft technical regulations to ensure that they could also provide comments to the draft regulation and/or be informed of such.
Even after the issuance of the DAO, the DTI considered the request of some stakeholders and issued Memorandum Circular 19-03 extending the mandatory implementation from 21 April 2019 to 08 August 2019.
On the issue of burdensome requirements
The DTI has been at the forefront of promoting ease in doing business. As such, imposing burdensome requirements is the least that DTI will do. The requirements prescribed in DAO 19-05 are all necessary documents and processes to ensure that the welfare of the consumers, importers and other stakeholders are protected. The same sets of requirements are also prescribed in other products/industries.
The first foreign manufacturer who applied for a PS License under DAO 19-05 was successfully processed and issued a license after thirty-four (34) days, inclusive of factory audit and product testing.
Likewise, from April 2019 to present, BPS received and processed PS applications of eleven (11) foreign manufacturers and seventeen (17) local manufacturers consistent with the DAO 19-05. The submission and processing of twenty-eight (28) PS applications are contrary to the allegations that the requirements are burdensome since many were able to comply.
On the imposition of mandatory minimum capitalization
The minimum capitalization of Twenty Million Pesos (PhP20 Million) is intended to eradicate fly-by-night importers. This requirement is also imposed in the importation of cement and steel products.
Contrary to the allegation that medium and small businesses will close due to this requirement, this is in fact intended to protect them from unscrupulous importers/traders and will benefit them in the long term considering that their importers/suppliers are legitimate and the quality of their raw materials are assured.
DAO 19-05 will even particularly benefit the small and medium glass installers, fabricators or processors who don’t import directly and just source their raw materials locally, either from manufacturers or importers. While the PhP20 Million capitalization requirement will not apply to them, they will be assured of the quality of the raw materials that they use.
On the issue of data privacy and protection
The DTI is committed and bound by the confidentiality agreement between BPS and all of its client. The reason for the submission of the list of distributors and retailers is to simplify the process of market monitoring and surveillance once the PS license is issued.
In this regard, all information provided by the applicant companies relative to the certification process are considered confidential. The same shall not in any way be disclosed by the BPS to any other third party without the consent of the company, except when required by competent authorities.♦
Date: 2 Sept 2019