Investor protection

August 1, 2014 at 11:16

Finally a body that will protect investors against unscrupulous and power-tripping Philippine government officials and employees who delay the natural flow of the investment process, particularly in providing the requisite approvals from state agencies.

Ombudsman Conchita Carpio Morales has named Deputy Ombudsman Melchor Arthur H. Carandang as the antigraft agency’s Investment Ombudsman and, effective June 1 this year, created a so-called Investment Ombudsman Team (IOT). The conceptual framework for the team was a product of a collaborative effort between the Office of the Ombudsman and the European Chamber of Commerce of the Philippines (ECCP).

The IOT is where businessmen can lodge complaints against any of the agencies that make up the Investment Promotion Network, or that are involved in investment and business promotion, over bureaucratic red tape or delays in the establishment and conduct of business or any related issues. It will also resolve complaints involving “solicitation, demand or request by a government official in exchange for the issuance of licenses, permits and certificates, the release of shipments and cargoes, as well as arbitrary assessment of fees, issuance of licenses, permits and certificates to any person not qualified for or legally entitled thereto, and any delay or refusal to comply with the referral or directive of the Ombudsman emanating from the grievance proceedings.”

The American Chamber of Commerce of the Philippines (Amcham) last week lauded the creation of the IOT, which it said was critical to the task of ensuring and enhancing the integrity of the local business environment. It noted that the IOT was a concrete manifestation of the sincerity of the Aquino administration to pin down corruption in the conduct of business, encourage foreign investments and eventually improve the country’s global competitiveness rankings. “Business should not be disrupted and must continue to operate in a strong, dynamic and competitive environment to generate more decent jobs. There should be no more delays in the delivery of frontline services, issuance of licenses, permits and certificates, solicitation or any form of request in exchange for approval, and arbitrary assessments of fees in shipments and cargoes,” the business group pointed out.

One country with a successful experience in this is South Korea. In October 1999, the Office of the Foreign Investment Ombudsman (OFIO) was created as a nonprofit organization within the Korea Trade-Investment Promotion Agency or Kotra to offer support to foreign companies encountering difficulties during the course of doing business in South Korea. Since its establishment, more than 3,200 grievances have reportedly been brought to that body, with many being resolved through cooperation with government agencies. The OFIO operates a “Home Doctor” system, wherein specialists in fields such as law, taxation, labor, construction and technology are assigned to foreign companies experiencing investment-related grievances. The ombudsman’s grievance resolution system has played a role in improving the Korean business climate and the World Bank group has benchmarked the OFIO as a best-practice example. The grievance resolution activities of the OFIO were highlighted in the 2002 World Investment

Report released by the United Nations Conference on Trade and Development.

Here in the Philippines, the Investment Ombudsman is the latest measure aimed at curbing corruption and red tape, which are major obstacles to the promotion and growth of investment in the country. One other measure that is forthcoming can go a long way as it deals with prevention. The ECCP is reportedly finalizing a proposed legislation to create a Cabinet-level Office for Investor Facilitation and Protection that will assist investors even before conflicts reach the courts.

The government and the private sector are not lacking in ideas on how best to address complaints against red tape. In fact, the Philippines has an Anti-Red Tape Act (Republic Act No. 9485) that was enacted in 2007. The law directs that the public is informed of regulations and receives prompt service from government offices. Sadly, very few are aware of this law five years after the issuance of its implementing rules and regulations in 2009. There seems to be an urgent need to undertake a national campaign to inform the public of the law and, as the Amcham had pointed out, to change gradually the mindset and culture of those in government service so that they become better public servants.