JPEPA to encourage trade in hazardous and toxic waste

Philippine Center for Investigative Journalism

JPEPA to encourage trade in hazardous and toxic waste

Alecks Pabico

25 October 2006

WHEN Gloria Macapagal-Arroyo signed the Japan-Philippines Economic Partnership Agreement (JPEPA) with then Japanese Prime Minister Junichiro Koizumi in Helsinki during the European leg of her four-nation trip last September, she immediately heralded the fact that Japan has now become an alternative work destination for the country’s nurses and caregivers.

But now that the cat is out of the bag, Arroyo’s bilateral trade and investment commitment with Japan is not only about the export of our healthcare professionals to the Land of the Rising Sun and her government’s dreamt-about windfall from their yen-denominated remittances. As an agreement that commits both countries to remove barriers to investments and the trade of goods and services, the JPEPA actually covers a wide range of trade issues, and which apparently is turning out to be a bad deal for the Philippines.

Described by international trade experts as a “mega-treaty,” the JPEPA is an amalgam of a Bilateral Investment Treaty and a Bilateral Free Trade Agreement that adopts many key features of the North American Free Trade Agreement between the United States, Canada and Mexico. The NAFTA took 10 years of negotiations before it was finally signed.

Download the Japanese-Philippines Economic Partnership Agreement (JPEPA).

Some of the trade issues - trade in goods and services, movement of natural persons, intellectual property, customs procedure, rules of origin, dispute avoidance and settlement - are already covered by the Philippines’s existing commitments under the World Trade Organization (WTO). But a number of these areas, particularly dealing with investment, competition policy, and government procurement, fall under the so-called “Singapore issues” which have not made headway in the WTO talks with developing-country members insisting that the more fundamental and developmental issues (such as subsidies in agriculture and non-agricultural market access) be satisfactorily resolved, taking into account their developmental needs.

Since these issues have been temporarily shelved within the WTO multilateral trading system, a number of developed countries, including Japan, decided to pursue the said issues bilaterally, through preferential trading arrangements such as the JPEPA.

Such a combined treaty as the JPEPA, warned Philippine trade law experts Justice Florentino Feliciano and Prof. Meilou Sereno, would have difficulties that are “twice as large, twice as formidable” than if they were negotiated separately. Prof. Sereno also said that the JPEPA’s implications are “very far-reaching” that it may possibly require full-bodied legislation and/or amendments to existing legislation.

The two have cautioned the Philippine government to be “twice as awake, twice as vigilant” in determining whether the country is indeed ready to undertake a treaty of this nature, and that it should not be rushed into concluding and ratifying the JPEPA. (Testimonies of Feliciano and Sereno during the hearings of the Special Committee on Globalization of the House of Representatives can be accessed here.)

Yet after only two years of negotiations, despite the warnings, and with very little public consultation and information, the Philippine government proceeded to sign the JPEPA. With the full text of the agreement finally made public after its signing, oppositors, foremost of whom are environmentalists, are saying that it has become apparent that the JPEPA is going to be a bad deal for the Philippines, particularly as far as environmental protection is concerned.

For one, the JPEPA, they say, will legalize trade in hazardous and toxic waste. Lawyer Tanya Lat, trade law expert and legal counsel of the Akbayan party-list group, points to Article 29 of JPEPA’s Basic Agreement which provides that waste indeed forms part of the bilateral trade with Japan and are therefore entitled to preferential treatment granted under the agreement. These products include:

  • “(i) articles collected in the Party which can no longer perform their original purpose in the Party nor are capable of being restored or repaired and which are fit only for disposal or for the recovery of parts or raw materials;
  • “(j) scrap and waste derived from manufacturing or processing operations or from consumption in the Party and fit only for disposal or for the recovery of raw materials;
  • “(k) parts or raw materials recovered in the Party from articles which can no longer perform their original purpose nor are capable of being restored or repaired; and
  • “(l) goods obtained or produced in the Party exclusively from the goods referred to in subparagraphs (a) through (k) above.”

Such waste products, Lat says, are granted a preferential tariff rate of zero percent, which will be implemented once the JPEPA comes into force and effect - that is, after 2/3 of the Senate approves it.

WASTE PRODUCTS GRANTED PREFERENTIAL ZERO-PERCENT TARIFF UNDER THE JPEPA

TARIFF HEADING NO. DESCRIPTION MFN RATE* JPEPA TARIFF RATE
2620.6000 Ash and residues (other than from the manufacture of iron or steel), containing arsenic, mercury, thallium or their mixtures, of a kind used for the extraction of arsenic or those metals or for the manufacture of their chemical compounds 3% 0%
2621.1000 Ash and residues from the incineration of municipal waste 3% 0%
3006.80 (3006.8010, 3006.8090) Waste pharmaceuticals 20% 0%
38.25 (and its subheadings) Residual products of the chemical or allied industries, not elsewhere specified or included; municipal waste; sewage sludge; other wastes specified in Note 6 to this Chapter 30% 0%
3825.1000 Municipal waste 30% 0%
3825.2000 Sewage sludge 30% 0%
3825.3010 Clinical waste - adhesive dressings and other articles having adhesive layer; wadding gauze bandages, surgical gloves 30% 0%
3825.3090 Other clinical waste 30% 0%
3825.4100, 3825.4900 Waste organic solvents - halogenated, and other 30% 0%
3825.6100, 2825.6900 Other wastes from other chemical or allied industries - containing organic constituents, other 30% 0%
3825.5000 Wastes of metal pickling liquors, hydraulic fluids, brake fluids and anti-freeze fluids 30% 0%
6309.00 Worn clothing and other worn articles Prohibited importation under RA 4653 0%
6310.00 Used or new rags, scrap twine, cordage, rope and cables and worn out articles of twine, cordage, rope or cables, of textile materials Prohibited importation under RA 4653 0%

* MFN stands for “most-favored-nation.” The MFN rate is the uniform tariff rate that is accorded by the Philippines to all its other trading partners.

Lat says that the Tariff Commission even previously identified these waste products - most of which are hazardous or toxic - as “goods of social and environmental concerns” whose importation is closely being monitored and controlled.

Thus, reducing tariff to zero percent, she says, is a blanket proposal/invitation to make the Philippines the dumping ground for Japanese waste. (Download Akbayan’s briefing paper on JPEPA.)

Senior Trade Undersecretary Thomas G. Aquino, chief negotiator in the JPEPA talks, admitted that waste - even toxic and hazardous ones - was included because of the nature of the agreement as an “all-trade” pact. He, however, allayed fears that prohibited products under Philippine laws will not be allowed to enter the country.

Demetrio L. Ignacio, undersecretary at the Department of Environment and Natural Resources (DENR) also downplayed the concerns of enviromentalists saying that “it (JPEPA) will not violate our laws in the sense that they (toxic and hazardous waste) will not be coming in because they are banned in the first place.”

Enviromental groups, however, seem the least appeased, pointing to the DENR’s lackluster performance as far as environmental protection is concerned. They also stress that the JPEPA provisions violate and contradict both Philippine laws and an international convention against the illegal dumping of toxic and hazardous wastes, which are as follows:

- Under the Constitution, the State is mandated to promote the people’s right to health (Art. II, Sec. 15) and right to a balanced and healthful ecology (Art. II, Sec. 16).
- Republic Act No. 6969, the Toxic Substance and Hazardous and Nuclear Waste Act of 1990, expressly prohibits the entry of hazardous wastes into and their disposal within the country, for whatever purpose. Mere entry for purposes of transit is expressly prohibited, violation of which is subject to criminal penalties ranging from 12-20 years imprisonment.
- Allowing the entry of the highly toxic incinerator ash under the JPEPA makes a mockery of the Clean Air Act of 1999 (Republic Act No. 8749) which banned the use of incinerators in the country.
- Under Republic Act No. 4653, goods under heading nos. 63.09 (worn clothing and other worn articles) and 63.10 (used or new rags, scrap twine, cordage, rope and cables and worn out articles of twine, cordage, rope or cables, of textile materials) are likewise prohibited from being commercially imported into the Philippines. Violations are subject to imprisonment between 2-5 years.
- The JPEPA also directly conflicts with the country’s commitment under the Basel Convention, which was adopted in 1989 by 133 countries (including the Philippines and Japan) to minimize the production and regulate the trans-boundary movement of hazardous and toxic materials.

source: Inside PCIJ