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Govt failed to file charges against big steel suppliers, risking people’s lives, thwarting investment in integrated mills

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A consumer-industry group has stuck out in expressing dissatisfaction over government’s failure to file charges against big suppliers trading cheap but substandard steel that pup people’s lives at risk and thwart investments in integrated mills.

   The Department of Trade and Industry (DTI) has failed to exhaustively police the distribution of substandard steel and other construction materials as violators scamper away scot free with the abject and deliberate violation.

   The Philippine Product Safety and Quality Foundation (PPSQF) has reiterated calls for DTI to respond to  filed written complaint against the remaining 25 percent of unscrupulous steel suppliers despite earlier crackdown on them.

   “I want names of manufacturers. I have 12. But no one is charged,” said PPSQF Chairman Ernesto M. Ordonez.

   “At least tell us what you do.  We want a response. We tell government ‘You must get the head.  When you get the retailer, you should get the head as those you caught are just tentacles of the octopus.”

   Meneleo Carlos, PPSQF chairman emeritus, said there used to be a quality standards on construction materials used to be strictly enforced by DTI and its attached Bureau of Product Standards (BPS).

   “The standards are there, but manufacturers are not mandatorily inspected.  Or the policy may be if there are violations, you (complainants) can go to court.  But inspection is not mandatory,” said Carlos.

      In a letter to DTI Secretary Ramon Lopez last January 29, Ordonez said DTI committed to implement in 2019 two policy rules on product quality standards.  But has so far DTI failed to comply despite filed complaints.

   The first policy commitment was for DTI to respond to written complaints (with evidences).

   The second promise by DTI was to run after big manufacturers of substandard materials—once the retailers are caught.

   “If a complaint is submitted to DTI with proof, it should be responded to in writing as to what action was taken.  We know of several complaints with proof (test results) that have no response at all,” he said in the letter to Lopez.

   Despite the many retailers found guilt with many names publicized, “no manufacturer has ever been given a formal charge.”

   With government’s extensive trade liberalization policy, enforcement of the quality standards has apparently eroded.

   Local steel manufacturers Steel Asia and Philsteel both expressed disappointment that government’s failure to fully stop distribution of substandard steel is derailing potential huge investments in an integrated steel mill in the country.

   “The sector is in a very bad state.  We can only do best if we have an integrated steel mill. That’s been our dream in the country.  But we should have mandatory standards on quality,” said Abeto A. Uy, said Philsteel Holdings Corp. chairman.

   Steel Asia similarly hopes investments in capital-intensive integrated mill will come in.

   “(But) who in the right mind will invest millions in dollars on a serious integrated steel mill if they can’t participate in 40 percent of the market (filled with cheap, substandard supplies),” said Steel Chairman Benjamin O. Yao.

   “There’s no confidence for Philippines.  We are so-called steel industry.  But we’re just converters.  Almost 100 percent of our materials are imported.  We produce rebars, outside of that, everything is imported.”

   Experts in minerals  for an integrated steel mill believes such steel manufacturing facility will be a major factor for industrialization of the Philippines.

   “An integrated iron and steel processing industry is a backbone of the economy.  If you go to China, all provinces in China has at least one integrated iron and steel mill.  (Fortunately) we have all the raw materials here. There are other countries that don’t have the raw materials, but they were able to put up downstream processing industries,” said former Department of Environment and Natural Resources Secretary Horacio C. Ramos.

   Philsteel warns consumers to check on Total Coated Thickness (TCT) of GI sheets before buying. TCT is the combined thickness of the steel and the metallic coating of zinc and aluminum of the GI sheet.  It protects the GI sheet from rust and has high heat reflectivity, cutting electricity cost.

   In the same way, Steel Asia warns the public:

   “Unscrupulous manufacturers will deliberate roll a rebar with a minus 10 percent or more variance!These lightweight products are unsafe, and will not perform to the design specification and standard.”

   A rebar is a reinforcement steel used as the foundation of houses and buildings. Unfortunately, consumers are not knowledgeable and are unsuspecting of materials sold in hardware.

   Other consumer groups have earlier warned that the use of substandard steel are believed to have contributed to the collapse of building structures in places hit by earthquake.

Build Build Build

   The use of substandard steel materials are even feared to cause more disasters as unscrupulous manufacturers take advantage of government’s massive Build Build Build to distribute the poor quality materials.

   “Some of the buildings that collapsed during the recent earthquakes are government projects with contractors—public schools, public markets, barangay hall.  In Taal, many government structures collapsed because contractors are doing a short-cut,” said Philippine Iron and Steel Institute (PISI) President Roberto M. Cola.

Evidences

   PISI has been waiting for DTI’s punitive action against manufacturers of substandard steel that were found to be of poor quality through local hardware.

   It has filed with DTI evidences on the violation based on its own market monitoring under which it caught 41 out of 63 hardware stores selling poor quality steel materials. Almost 40 percent or 62 retailers were found selling substandard rebar out a total of 164 hardware inspected.

   It secured evidences of the violations after conducting “test buys” of the material.  The materials were then examined for quality and safety by the Metals Industry Research and Development Council (MIRDC).

   The rebars were found to be  underweight,  undersized or failed to have the needed specifications in tensile strength, elongation ,and lug height.

   The poor quality rebars were found nationwide-  La Union, Ilocos Sur, Ilocos Norte, Cagayan, Nueva Ecija, Tarlac, Bataan, Zambales, Pangasinan, Mindoro, Batangas, Laguna, Cavite, Cagayan de Oro, Lanao del Norte, Agusan del Norte, Davao, Cotabato and Zamboanga.

Induction furnace

   Specifically, PISI has asked government to ban the importation from China and use of induction furnaces.  Nearly 100 percent of steel rebar found failing in quality based on the MIRDC test were produced from induction furnaces which were banned since 2017 for use in China. The Association of Southeast Asian Nations Iron and Steel Council (AISC) also recommended banning of the induction furnace.

   These furnaces were prohibited from use in China as the process does not allow for removal of impurities from the steel  made from melting scrap metals.  This makes the rebar brittle, risking collapse during disasters as landslides and earthquakes.

   But products of these induction furnaces are now used by local small scale steel makers and label them construction grade without consumers’ knowledge.

   The products are also imported as these are preferred for cheapness compared to those rebar produced from the now standard electric arc furnace used by big contractors and developers.

   Induction furnaces from China have long been used, therefore, are second-hand  However, these appear to be much cheaper by at least 10 percent for investing in.

   The operation of induction furnaces are even reported to be hazardous to laborers due to emission of chemicals  from melting scrap materials they are exposed to.  End (Melody Mendoza, Growth Publishing)

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