A PLAN to certify foreign steel plants and treat them as if they are local manufacturers poses safety risks and dangers to consumers, an industry association said on Monday.

In a statement, Philippine Iron and Steel Institute (PISI) said it had written the Bureau of Philippine Standards about the adverse effect of the proposal.

It said the plan “might flood the market with untested steel products that could end up in homes and structures built by small contractors for the poor and the middle class.”

“This is an incongruity that must be addressed by the government since the ultimate customers in the reseller market are the small contractors and poor to middle-class Filipino home builders and owners,” the group said.

PISI describes itself as the premiere organization recognized by the government to represent the country’s steel industry.

“This is the market that is being targeted by importers and traders — the least informed and unguarded sectors of our society,” it added.

PISI said its letter was sent to Ernesto V. Perez, assistant secretary at the Department of Trade and Industry and officer-in-charge of the bureau.

Last year, the country used around 4.7 million metric tons (MT) of steel products that were covered by three quality certifications, it said.

Of this, about three million MT were sold to the reseller market, with corporate customers such as DMCI Holdings, Inc. and EEI Corp. consuming the rest, it added.

The organization said that while corporate users test each truckload of delivery of one sample per size, per grade of steel products, the reseller market does not have the same testing process. It said, “the reseller market does not test at all.”

PISI pointed out that the country’s neighbors Indonesia, Thailand and Vietnam do not certify overseas steels mills. It also cited the experience of Malaysia as an object lesson.

Malaysia granted certification to four Chinese rebar manufacturing companies, it said, but the certification logo was used by other foreign manufacturers that did not undergo the same clearance process. This resulted in the export of substandard steel products to Malaysia, it added.

The organization said it would be difficult to make steel mills overseas accountable as they have neither the staff nor assets in the country that the government and consumers can go after.

“Granting certification to foreign steel manufacturing plants will likewise jeopardize the business viability of local manufacturers,” it said.

PISI also said foreign companies enjoy various forms of state subsidies in their countries. Giving them an opening into the Philippine market “will discourage local and foreign investments in the local steel industry.”

“The overall impact, therefore, is tantamount to exporting jobs abroad, a deplorable situation considering our high unemployment of around 2.4 million and under-employment affecting around 10 million Filipinos,” it said. — Victor V. Saulon

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