DOC begins probe of consumer prices

The Department of Commerce has begun probing into consumer prices in response to a request from a legislator, but has asked for sufficient time to complete its investigation in view of the scope of the undertaking which will involve government agencies and several commercial establishments.

“As requested, we will initiate an investigation into the matter and provide you with our conclusions,” said Commerce Sec. Frankie B. Villanueva in a letter to Rep. Melvin Faisao.

The representative has prodded DOC as well as the Department of Finance and the Attorney General to investigate shipping companies, wholesalers and retailers who may have a hand in jacking up the cost of goods being sold on the island.

The move is intended to shed light on the apparent wide disparity of consumer prices between the CNMI and Guam even though they are both subjected under U.S. consumer laws.

According to Villanueva, the department will have to discuss the issue with some government agencies like the Commonwealth Ports Authority as well as with private businesses, including shipping and stevedoring companies.

He did not disclose, however, how they will conduct the investigation or when it will be completed, saying only that this will require “ample time for a reply” on Faisao’s request.

In a separate interview, CPA Chairman Roman Palacios said the ports authority would be ready to present its position on the issue, particularly its seaport rates which will go up beginning July 1 by as much as 30 percent.

While conceding the rate hike may affect the shipping charges on the island, he assured that it would only have “minimal impact” on consumer prices.

“Our rates are governed by tariffs, which we share with all the shippers and shipping lines,” Palacios said, adding CPA has not increased its rates for the last 10 years and the new policy is only necessary to meet its debt servicing.

Faisao earlier has underscored the need to clarify the system of pricing in the Commonwealth as his office has received complaints on the expensive products that have pushed the cost of living in the CNMI as one of the highest in the nation.

So far, the AG has responded to the call as it has already assured legislators that its own inquiry has begun on what it claims as excessive shipping charges by carriers serving the CNMI which may have pushed the cost of importing goods on the island.

While filing a lawsuit against shipping companies would greatly help the island government get a fair rate, the AG maintained it would cost CNMI a fortune in taking this route because they need to hire an outside counsel to press the issue with federal authorities.

Recently, government lawyers initiated talks with a law firm, Levinson, Friedman, Vhugen, Duggan & Bland, to represent the CNMI in court actions which the CNMI could lodge against carriers serving the island.

This is the same firm that represented Guam in their lawsuits against these shippers before the Federal Maritime Commission and the Surface Transportation Board.

However, the lawyers disclosed that the CNMI could not take the same legal avenues and suggested that island officials bring the matter to the U.S. Congress which controls shipping rates here.