This is a re-posted opinion piece.
Part 2
For the electronics and semi-conductor sector, which operate on a 24/7 basis every minute, every second counts, because of the quick turnaround time required by their customers abroad. Any delay in their export shipment will cause a chain reaction of delays and penalties because finished electronic products move through a manufacturing chain from one country to another.
Hence, it is very crucial to achieve just-in-time deliveries and cost reduction without which, we cannot hope to attract foreign investors in export manufacturing.
We understand that a minute of delay translates to costs to our client-enterprises. For these reasons, and for transparency — which is equally important in all processes — PEZA has implemented a fully electronic processing for export and import permits with the ultimate goal of a complete “paperless transactions” system for the movement of goods by the end of 2012.
PEZA is the first among some 40 import and export permit-issuing agencies in the country to implement a fully automated import permit system.
Still as a non-stop shop, top officials at the head office are likewise on call 24/7.
Third, in PEZA there is no red tape only red carpet treatment to our investors. If you file your completed application today and we have a board meeting tomorrow, the same is calendared and approved the following day.
Our board, by the way, a working board with very little perks, meets twice a month. Chaired by the DTI secretary, 11 out of the 13 members of the board are ex-officio and do not receive honorarium.
Since 1995, our top management holds quarterly workshops to continually review, revise, reduce, and simplify processing requirements — the number of documents, number of data required, number of pages all reduced to the barest minimum for ease and transparency.
PEZA is both an investment promotion agency and a regulatory agency. To serve apparently divergent directions, we regulate with a promotional orientation. We assist investors with rules rather than wait for them to commit infractions and expend our precious time on violators. Of course, violators are penalized.
We have put in place a Quality Management System that was certified to ISO 9001:2008 since 2009. Our stakeholders are therefore assured of a consistent and absolutely transparent implementation of our rules, requirements, and processing time. A very important component of our Quality Management System is our client feedback mechanism, which includes getting feedback from the CEOs of our locator-companies. To date, PEZA is the only government office ISO 9001:2008 Certified for all its processes at all levels in all its sites nationwide.
Fourth, and the most important pillar of the PEZA Brand: In PEZA there is no graft — no corruption. Or maybe if there is, just let us know and KRRRKK, you’re out.
All companies that register with PEZA are required to sign and submit a Notarized Anti-Graft Certificate stating that the applicant-enterprise has not given, will not give or promise to give anything to any PEZA officer or employee.
We have been weeding out the misfits and have since reorganized and restructured our bureaucracy.
When we took over from the old agency the Export Processing Zone Authority (EPZA), there were over 1,000 employees then supporting 334 companies or three staff servicing one company. We have reduced our staff to 532 lean but strong and efficient PEZANs now supporting close to 2,500 companies or one PEZAN servicing 4.6 companies.
Most organizations talk about increasing staff. We talk of reduced staff — a lean organization to service an increasing constituency.
We make sure that the hiring engagements are clear: Corruption is intolerable and unforgivable in PEZA.
We continue to file administrative charges against misfits especially corrupt staff.
It is heart-rending to fire an employee, even a corrupt one, especially when I think of their families. On the other hand, think of the headaches and the heartaches they cause to companies and the consequent hopelessness of the jobless because of corruption.
The reason people wantonly violate the law, the reason corruption breeds is because culprits get away with impunity, thus, corruption pays.
But in PEZA crime does not pay. Criminal cases in courts and cases filed with the ombudsman take time, so we file administrative cases. All those we have administratively charged were ultimately dismissed, most of them permanently disqualified from public service. Many of our decisions were appealed to the Civil Service Commission, the courts even up to the Supreme Court and in all these, PEZA’s decisions were upheld.
We assure investors and stakeholders a level playing field. It is a double no-no for any PEZAN and immediate family members to have any business inside our zones, more especially because we do regulatory functions.
We have inculcated upon our PEZANs to be enablers instead of being a hindrance to business. We have trained them not just to know the processes but also know the underlying policy and objective of those processes.
We have impressed upon them to be proud of their job because they are contributing to our country’s economic development. Even our drivers, messengers, clerks, when asked outside what they do for a living, say that they create jobs and bring investments and promote exports.
Our no graft-no corruption policy is not confined to transactions with our client-enterprises in the PEZA zones. It applies just as importantly to our own internal operations. We practice fiscal restraint and pay our suppliers promptly. For any expense, especially capital expenditure, our guideline is: “If this were my money, would I spend it this way?”
As a result — even as we do not get any budget from the national government and have not increased processing fees which we charge for various transactions — we have remitted to the National Treasury over 12.9 billion pesos consisting of 50% of our income as dividends and payment of loans incurred by our predecessor agency and payment of the regular corporate income tax (ironically, we grant income tax holidays to economic zone enterprises, while PEZA itself is subject to all national taxes).
With these reforms, investors in time realized that we are on their side and that they can trust us.
The results are palpable; middle to high-end subdivisions have mushroomed in the CALABARZON area, our mini-Silicon and Mini-Detroit where most electronics and car and car parts manufacturers are located. In Metro Manila, day and night have become seamless because of IT Parks and Centers scattered throughout the metropolis. These are now being replicated in other urban areas like Cebu and other cities.
I am very pleased that the PEZA Brand, the hallmark of our corporate culture of “absolute honesty and integrity and utmost service” which we have built through the years is now acknowledged not only by all our stakeholders but even outside the Philippines.
We advise prospective investors and others to visit our Web site: www.peza.gov.ph and read what our investors say about PEZA.
DTI Secretary Gregory Domingo and myself have complained that the reason the Philippines ranks very low in most foreign competitiveness surveys is because they never survey PEZA companies. If they did, we are certain that the Philippines would have ranked much higher. (Well, last week, the Philippines went up 10 notches. I hope, partly because this time they surveyed some electronics companies in PEZA zones).
In a paper on Special Economic Zones Worldwide written by Mr. GOHKAN AKINCI of the Foreign Investment Advisory Services (FIAS) of the World Bank’s International Finance Corporation (IFC), Mr. Akinci cited only the Philippines for best practices in special economic zones. Mr. Akinci stated in particular that “under PEZA, Philippines has shown dramatic improvements in Investment Competitiveness,” and that, as an “End Result-PEZA is a shining example of successful regulatory reform improving overall investment climate in the country.”
While we are now reaping the fruits of more than a decade of developing the PEZA Brand, it was not an easy journey. Indeed in the beginning, it was an arduous Passage.
My take-home messages:
First and foremost, we must walk the talk. Generally, employees will follow where their leader will lead them.
It is important that as early as the hiring stage, employees must know the rules and it must be made emphatically clear to them that if you catch them, you throw the book without exception. Once you make an exception you lose credibility.
We also encourage regular feedbacks from stakeholders and set a dedicated fax number 551-3449, especially for complaints. This fax machine is right beside my desk, and our constituents know this. Also, regular surveys are sent out to gauge the satisfaction level of the PEZA companies.
Still on corruption, it is very important to look-out for your people’s lifestyles. Employees who live the lifestyle of a Mercedes-Benz on a pedicab salary will immediately tell you something is utterly wrong. Once these people have adopted a certain lifestyle, no amount of salary raises can appease their appetite.
Very importantly, have the will of steel and determination to fight corruption.
And this I did when at the start with one full sweep I restructured the bureaucracy and reduced the staff by more than half. The political patrons of the affected staff went after me, threw everything at me including the kitchen sink. It was an arduous, agonizing, and emotionally draining journey, the most bruising experience in my public career. But it had to be done. Heads must roll on the side of the good. With that experience I knew what political will to fight corruption meant.
I believe that good must triumph over evil and if in this world the righteous must cower before the rouges — then this is not a world worth living in.
What investors look for are consistency and transparency of rules. From my experience, investors are much averse to interventions that give the effect and impression of changing the rules in the middle of the game. You see, these investors are here for the long haul — they invest heavily, construct buildings and permanent structures and they cannot just pull out that easy. So, when the rules are changed, they are dismayed.
However, all indications point to a bright future under this reformist administration with assurances from President Benigno Simeon Aquino III that he will make the country attractive to investors by making government an enabler, not a hindrance, to business. He is a true advocate for a level playing field and investors love that. With government behind business and business behind government, we will succeed.
*Conclusion of the speech delivered by Lilia B. De Lima during the 9th MAP International CEO Conference at the Makati Shangri-La. Ms. De Lima is the director-general of the Philippine Economic Zone Authority, and the first female recipient of the “MAP Management Man of the Year” award. Feedback at [email protected].
For previous articles, please visit <map.org.ph>.
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By: Lilia B. De Lima – Map Insights
Source: Business World, Oct. 3, 2011
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