While investigations are ongoing, the owner of the sunken tanker that is the source of the toxic substance spreading on Manila Bay has denied allegations it is involved in oil smuggling.

Motor Tanker Terranova’s owner, Porta Vaga Ship Management, said it “categorically denies the allegations of smuggling and involvement in ‘pa-ihi’ (urination) oil smuggling operations.”

The disclaimer has not put to rest suspicions of the foul trade since the area is frequented by vessels involved in oil smuggling.

The Department of Justice (DoJ) indicated that it will soon release findings of its probe into the incident that is gripping the nation in the aftermath of typhoon “Carina.”

Among the incriminating circumstances is the fact that the three ships were out on the open seas during the onslaught of the typhoon.

“Pa-ihi” involves transferring oil from large vessels to smaller craft while at sea in a bid to avoid paying taxes and, thus, is smuggling.

Porta Vaga issued the statement after Justice Secretary Jesus Crispin Remulla floated the possibility the three tankers developed trouble during and after the heavy rains from the combination of the typhoon and the southwest monsoon or habagat.

Remulla appears convinced a criminal act was committed, adding that the government will assist fishermen in filing a class suit against those involved in the environmental disaster.

Cavite, Bataan and Bulacan communities are suffering from the effects of the oil leak, which the Philippine Coast Guard claimed has been contained but which is disputed by the daily reports of an increasing number of affected areas.

Under the Tax Reform for Acceleration and Inclusion Law, which was the first of a series of policy changes under the Comprehensive Tax Reform Program, importers must mark their fuel as a deterrent to smuggling.

The absence of quality dye is considered an indication that the fuel may be smuggled.

The fuel marking scheme is under the supervision of the Swiss port inspection provider Societe Generale de Surveillance (SGS) under a five-year contract worth P5 billion that ends this year.

Some groups are lobbying for an extension of the SGS but senators are against stretching the deal as it failed to stop the crime on the high seas.

There are three types of smuggling: technical, outright and leaks through the economic zones.

Technical smuggling occurs when there is misdeclaration of cargo regarding the quantity, quality, valuation and other information.

Outright smuggling, which is suspected here, is the worst of the heinous act. The government estimates P26.87 billion in missed collections yearly from oil smuggling.

Aside from lost income, oil companies also lose heavily from lost sales since smuggled oil is sold cheaper and pose unfair competition.

Republic Act 8479, or the Oil Industry Deregulation Law of 1998, did not have a smooth start as the original law, RA 8180, was invalidated by the Supreme Court a year earlier.

Remulla said the hearing was conducted in light of the BIR memorandum effectively overriding Department of Finance Joint Circular 001.2021, which vested upon the BIR’s Large Taxpayers Service–Field Inspection Unit the authority to conduct jointly with the Bureau of Customs random field and confirmatory testing on fuel products.

The vessels in the Manila Bay tragedy have some large, influential interests behind them, including the owner of the cargo that was able to evade responsibility in the Princess Empress sinking in February last year that leaked 900,000 liters of industrial oil in the waters off Naujan, Oriental Mindoro.

The MT Terranova threatens to spill 1.4 million liters in Manila Bay which potentially makes its sinking the biggest ecological disaster ever for the country.

Several indicators point to a criminal act, based on initial DoJ findings, which must be pursued as thousands of families have been affected by the monstrous racket.