QuestionsQuestions (EXECUTIVE ORDER NO. 185)
It invokes the State’s authority to regulate or prohibit monopolies when public interest so requires, and the prohibition of combinations in restraint of trade or unfair competition. It is relevant because EO 185 aims to liberalize entry in domestic water transport to enhance competition and prevent monopolistic/cartelized practices.
It is to open the domestic water transport industry to new operators and investors, leveling the playing field to enhance competition, improve service quality, and ensure reasonable rates.
EO 185 requires that all routes/links have a minimum of two (2) operators.
They must be opened for entry to additional operators.
They are opened for entry to additional operators without limit.
“Developmental routes” are routes determined by MARINA. Entry is encouraged because a pioneer operator introducing a certain technological level/type of service may charge market-accepted freight and passage rates differing from the authorized “fork-tariff,” subject to MARINA application and approval.
When the operator pioneers the provision of a technological level/type of shipping service in the developmental route, applies with MARINA, and receives approval for the adjustment/adoption of such rates.
After five (5) years of operation with the authorization for the differing rates, the continued authorization (or adjustments) depends on an evaluation by MARINA.
An existing or new operator who acquires a vessel via importation, bareboat charter with option to purchase, lease-purchase, or local construction is granted a CPC/Provisional Authority to operate in any route even if served by existing franchised operators for less than five (5) years, including developmental routes.
The presumption of public need is accorded in favor of the applicant upon filing of the CPC application, especially when certain conditions are shown (e.g., innovative/advanced service, improved quality, vessel improvements, cost-effective service, priority tourist links, additional services needed due to public clamor, or abandonment by existing operators).
Any oppositor must bear the burden of proving that there is no need for the proposed service.
Upon issuance of the CPC, the vessel shall continuously serve its franchised route for at least one (1) year.
Allowed changes include: (1) omission/deletion of port(s); (2) addition of port(s); (3) omission and subsequent addition of port(s); (4) changing the sequence of port calls; and (5) retaining the authorized routing pattern but with addition of one or more ports.
Approval is granted provided: (a) no conflict in sailing schedules with other affected operators results (otherwise MARINA prescribes schedules motu proprio); (b) no route/link is left unserviced unless a substitute vessel from the applicant will be deployed or vessels from other existing authorized operators will remain serving; and (c) the previous route/link service has been continuously rendered by the vessel for at least one (1) year from CPC issuance.
The policy of liberalized entry into any route under Section 1.3 applies.
If no newly-acquired vessel is involved and the application seeks rerouting/route amendment where an entirely new route or link will be served, a new CPC application must be filed. Entry depends on proof of conditions/circumstances enumerated in Section 1.3; priority is given to newly-acquired vessels brought into the fleet subject to Section 1.3.