Three months since its inception, the Investment Ombudsman Team (IOT) is looking into expanding its mandate to include policy mediation and dialogue between the government and private sector, in a bid to improve investor protection in the country.

In an interview, Assistant Investment Ombudsman Rafael G. Hipolito told BusinessWorld that the IOT is keen on conducting interventions between the private sector and government agencies for investor-related concerns.

“In mediation, we are forced to look at win-win solutions... That is where I think the Investment Ombudsman can also be of help to provide a venue where they [the government and investors] can discuss.... We want to make sure that we will be responsive to the issues and concerns of the business sector,” Mr. Hipolito said.

Mr. Hipolito described the IOT’s mandate as being to serve as a grievance desk for delays in the delivery of frontline government services -- and in the investigation of complaints for alleged corrupt practices.

Other concerns covered by the IOT include unwarranted solicitations by public officials -- in plain language, suhol -- in exchange for the issuance of licenses, permits and certificates and for the release of cargoes, as well as the arbitrary assessment of fees and taxes for businesses.

“I think that is well within the mandate of the Ombudsman to serve as protector of the people -- in this case, specialized for the protection of investors against red tape in local government units (LGUs) and even abuse of authority,” Mr. Hipolito said.

REVIVAL

Efforts to create the Investment Ombudsman date back to 1999 under president Joseph E. Estrada. The idea was again revived in 2007, with private lawyer Florecita P. Flores as Investment Ombudsman directly reporting to the Office of the President.

On the watch of former Ombudsman Ma. Merceditas N. Gutierrez, an office was about to be organized for an Investment Ombudsman, but this was sidetracked by the impeachment campaign against her.

The IOT was organized, at length, on June 1 under Ombudsman Order No. 327. Overall Deputy Ombudsman Melchor Arthur H. Carandang was appointed as the Investment Ombudsman, while Mr. Hipolito, acting director of the bureau of resident ombudsman, was chosen as Assistant Investment Ombudsman. The two are currently holding office at the Ombudsman central office in Quezon City.

IOTs were also established for each of the Ombudsman offices in Luzon, Visayas and Mindanao.

Mr. Hipolito said the revival of this idea to establish an IOT was prompted by the Department of Trade and Industry and the Board of Investments.

“It’s actually brought about by the clamor from the business community to have a venue where they can submit grievances and complaints related to investment concerns,” he said.

As of this writing, the IOT has received 14 complaints through phone, e-mail, and walk-in requests. Of this number, eight are under investigation and five have been settled, after a special lane set up for business-related complaints helped speed up the procedures.

Mr. Hipolito said many of these complaints were against LGUs refusing to issue business permits, accreditation, and even official receipts.

HARASSMENT

The Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI) has expressed support for the Investment Ombudsman, but said much still needs to be done to further improve the country’s investment climate.

Mr. Hipolito said their office has received a complaint from a Japanese firm claiming to be harassed by an LGU after the company was assessed with real property taxes despite being located within the Philippine Economic Zone Authority (PEZA).

Under the PEZA charter, businesses operating within special economic zones are exempt from land tax dues.

Other representatives of various chambers of commerce also lauded the creation of the Investment Ombudsman.

“We welcome this decision of the Ombudsman. This is an additional step in supporting integrity as the basis for good ethical business on a level playing field,” Henry J. Schumacher, executive vice-president of the European Chamber of Commerce of the Philippines, said in a text message.

The American Chamber of Commerce in the Philippines, Inc. (AmCham), meanwhile, said lessening bureaucratic delays still remained out of reach of the Investment Ombudsman.

“We welcome the Office and we hope it will gain the confidence of the business community with some successful cases against officials who extort and seek bribes from businesses, both foreign and domestic. But it will not be able to help with bureaucratic delays and judicial decisions that harm the investment environment,” AmCham Senior Adviser John D. Forbes told BusinessWorld in a phone interview.

Mr. Hipolito said the IOT may also seek the authority to summon government agencies and LGUs for policy dialogues, a power that is so far exclusive to the Ombudsman.

These “interventions,” Mr. Hipolito said, could serve as an alternative way to resolve disputes between government and private sector.

“If we can avoid going to expensive court trials, so much the better to make the country attractive to foreign investors,” said Mr. Hipolito, who is himself a seasoned mediator.

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Mr. Hipolito said the IOT’s aim is to replicate the success of South Korea’s Foreign Investment Ombudsman. In particular, the IOT envisions a similar system of specialization for handling investment complaints.

Trained experts under the team will be given sector-specific concerns, ranging from taxation to mining to environmental issues, Mr. Hipolito said.

Alfredo M. Yao, president of the Philippine Chamber of Commerce and Industry, said the creation of the IOT is “definitely a plus factor” for foreign investors, in the light of Southeast Asia’s planned economic integration next year.

“I think it will be a plus, but it’s not only the Investor Ombudsman that will invite the investor. There are more concerns,” Mr. Yao said.

Mr. Yao also recommended that government agencies make a uniform system in the issuance of permits and other incentives to ease bureaucratic processes.

Mr. Hipolito said further steps will be taken as the IOT adapts to the “changing landscape of the business environment” -- including the “very fierce competition” with neighboring countries in the Association of Southeast Asian Nations.

The ultimate goal, he said, is to make the government a vital partner of investors and encourage their participation in our economy.

Source: Business World, 12 September 2014