Posts Uncategorized

Consumer Group urges DTI to recall Moto Propio Safeguards Duty Petition on Imported Cement

Laban Konsyumer Inc., (LKI) a consumer protection group, had entered its intervention in the moto propio petition filed by the DTI Secretary who initiated a safeguard duty investigation on imported cement sans any application from the local cement industry. LKI is considering elevating the DTI action to the President and the Philippine Competition Commission. The 2 pages LKI intervention was received by the Bureau of Import Services on September 27, 2018, a Bureau reporting directly to the DTI Secretary and acknowledged received by the BIS Director on October 2, 2018.

Dimagiba said that the cement importers cannot commit to the demand of the government B3 projects as well as private developers for long term supply contracts due to the pending petition for the imposition of safeguard duty. The imposition of the safeguard duty is detrimental to the consumers and can create shortages in the supply of cement that can derail private and infrastructure projects and can increase retail prices. Dimagiba added that the DTI should ensure the completion of the expansion of local plant capacities before starting a safeguard duty investigation on imported cement.

Dimagiba himself has a more than 2 year old complaint pending with the Philippine Competition Commission against the members of the Cement Manufacturers Association of the Philippines or Cemap, which earlier determined preliminary findings to proceed to a full investigation. R.A. 10667, or the Philippine Competition Act, was passed in 2015 and the Philippine Competition Commission is tasked to punish anti-competitive conduct against those who practice cartel. In the meantime, Dimagiba says that the Philippine government should freely allow cement imports to protect the greater interest of Filipino consumers.

At the aftermath of the Asian financial crises in 1997, the country’s cement industry fell into the hands of multinationals Cemex, LaFarge-Holcim and CRH. Multinationals control 70% more or less the country’s production capacity.

These companies have been fined or investigated continuously for their involvement in cement cartels worldwide according to Atty. Victorio Mario A. Dimagiba, President of LKI.

In November 2008 and December 2010, the European Commission launched raids and antitrust proceedings against Cemex, Holcim and Heidelberg, among others, for colluding to fix prices in 9 EU countries. In 2012, Mexico’s Antitrust Commission fined CEMEX P10.2 Million for monopolistic practices by blocking importation of cement. From 2007 to 2011, the UK Government reported that the competition between Lafarge, CEMEX and Hanson had caused its consumers £180 Million. In May 2014, Holcim was fined by Brazil’s Antitrust Authority in the sum of $508 Million. Earlier in 2007, Lafarge paid $43 Million in fine after agreeing to cease anti-competitive practices in Brazil. In 2011, the Polish Competition Court slapped CRH with a €21 Million fine for price fixing.

On July 24, 2017, an antitrust lawsuit was filed before the US Federal States’ Atlanta Federal Court against cement cartel group comprising of Argos, Holcim, and Cemex after they agreed to fix prices and conspired to monopolize the market. On August 26, 2017, the Chinese government slapped CRH with an €8 Million fine for cement price fixing.

Recently or on April 6, 2018, the Superintendent of Industry and Commerce of Colombia imposed a fine of P200 Million to Argos, Holcim, and Cemex for cartelizing cement prices in the modality of conscious parallelism.

Just last month or in November 2018, Romania Competition Council conducted raids at the headquarters of Holcim, CRH, and Heidelberg Cement to look for evidence of collusion as part of an investigation into anti-competitive agreement for possible coordination of prices among the three companies since 2010.

“The DTI must implement strict quality standards on local cement to ensure compliance to product standards, and to guard against the use of waste materials, fly ash from coal plants as well as lahar sand. On the other hand, imported cement are subjected to double testing certification, first, at point of origin and second, at the discharge ports. This redounds to the benefit of the consumers in terms of stable, quality and competitive prices as well as a choice of what cement to buy and use ” Dimagiba says.