AFAS & GATS in a nutshell IAPOA-UAP National Convention Thursday, 18 April 2013, 3-4 pm SMX Seminar Room X Ar Arma

1. AFAS & GATS in a nutshell IAPOA-UAP National Convention Thursday, 18 April 2013, 3-4 pm SMX Seminar Room X Ar Armando N. ALLÍ, apecar Resource Person s1

2. A Layman’s Evolving Model of the Hierarchy of Laws (State Policies) and Rules and Regulations Affecting the Distinct Practice of the State-regulated Profession of ARCHITECTURE in the Republic of the Philippines (PH) as of 18 April 2013 State-Ratified International Treaties and International Executive Agreements (with the effect of Law) e.g. 1994 General Agreement on Trade in Services (GATS) and the 1995 ASEAN Framework Agreement on Services (AFAS) 1. The Philippine Legal Framework A Layman’s Appreciation of Philippine Laws and Rules & Regulations [Laws i.e. R.A.s, B.P.s (and the P.D.s and E.O.s promulgated when there was NO functioning Congress) are all Lower than the Philippine Constitution and may also be considered Lower Than International Treaties/ Executive Agreements (such as the 1994 GATS and the 1995 AFAS), which may have the power of Law, only if duly ratified by the Philippine Senate or signed by the duly authorized Executive Agents of the State] The Fundamental LAW of the Land: The 1987 Constitution of the Republic of the Philippines Jurisprudence(Supreme Court Issuances such as Final and Executory Decisions and Resolutions that Have the Overall Effect of Changing the Law) 1. Considered as General LAWS: P.D. No. 1096(The 1977 National Building Code of the Philippines/ NBCP); 2. Considered as Special LAWS: R.A. No. 9266(The Architecture Act of 2004), R.A. No. 9514(The 2008 Fire Code of the Philippines/ FCP); and B.P. No. 344 (The 1983 Law on Access for the Disabled). Executive Orders(EOs), Administrative Orders(AOs)and Department Administrative Orders(DAOs) are other forms of Executive Issuances that are also NOTlaws but are still tools to facilitate the implement-ation and enforcement of law) 1. Implementing Rules and Regulations/ IRRs(which are only Executive Issuances Used to Implement and Enforce the General Laws, but are NOT by themselves regarded as laws): 2004 Revised IRR of P.D. No. 1096(promulgated by the DPWH); 2. IRRs of Special LAWS (also mere Executive Issuances that are NOT laws but are the actual executive tools to implement and enforce the law): IRR of R.A. No. 9266(promulgated by the PRBoA, Lower Court Orders and Decisions(that somehow have the Effect of Amending (or Delaying) the Proper (and/ or Timely) Implementation and Enforcement of the Law through the IRRs and lower regulations promulgated by Executive Offices); however, such Lower Court Issuances DO NOThave the power to change the Law itself Guidelines and Standards (based on IRRs) P.D. No. 1096 Guidelines and DPWH Memoranda Circulars (MCs); Various PRBoA ResolutionsinterpretingR.A. No. 9266 & its IRR; 2010 Standard of Professional Practice (SPP) for Architects Manual/s of Procedure (MoP)

3. 2. The 1995 AFAS The ASEAN Framework Agreement on Services (AFAS) is an Agreement signed at Bangkok, Thailand on 15 December 1995 by The Governments of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Vietnam, joined later by the Union of Myanmar (formerly Burma), Lao People’s Democratic Republic (Laos) and the Kingdom of Cambodia i.e. the Member States of the Association of South East Asian Nations (ASEAN).  s3 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

4. 3. The AFAS Objectives : • The three (3) objectives of the ASEAN Member States signing the 1995 AFAS were: • a) to enhance cooperation in services among the Member States in order to improve efficiency and competitiveness, diversify production capacity and supply and distribution ofservices of their service suppliers (i.e. providers) within and outside ASEAN; and • b) to eliminate substantially restrictionsto trade in servicesamong the Member States; and • c) to liberalize trade in services by expanding the depth and scope of liberalization beyond those undertaken by Member States under the World Trade Organization (WTO) General Agreement on Trade in Services (GATS), with the aim to realize a free trade area in services. s4 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

5. 4. ASEAN MRA resulting from AFAS: In furtherance of the AFAS, the ASEAN Mutual Recognition Arrangement (MRA) on Architectural Serviceswas signed on 19 November 2007 by official representatives of the ASEAN Member States, with the Department of Trade and Industry (DTI) Secretary Peter B. Favila, signing on behalf of the Philippine (PH) Government. Thereafter, the ASEAN Architects Council (AAC) was organized, with each ASEAN Member State tasked to organize their respective Monitoring Committees (MCs) to work with their respective Professional Regulatory Authority (PRA, if applicable). As of 2013, the PH is still organizing its MC to subsequently qualify candidate - registered and licensed Architects (RLAs) for the status of ASEAN Architect (AA), who shall be permitted to undertake architectural services on an initially collaborative basis with the Architect-nationals of the other ASEAN Member States the PH AA may wish to work in. s5 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

6. 5. The PH Monitoring Committee (MC): The PH MC will be composed of five (5) members: one (1) Commissioner of the Professional Regulation Commission (PRC), two (2) from the Professional Regulatory Board of Architecture (PRBoA, to be called the PRB for Architecture), one (1) Commissioner from the Commission on Higher Education (CHED), and the National President of the integrated and accredited professional organization of architects (IAPOA). While year 2015 has been set as the date for the rollout of the ASEAN Architect program (where collaboration with Architect-nationals of Member States is the accepted mode of cross-border architectural practice), the year 2020 is also set as the year for the attainment of full liberalization in the trade in architectural services to meet the WTO GATS target rollout date. s6 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

7. 6. Are There PH AAs at this Time? There are still no PH ASEAN Architects (AAs) to date while 3 ASEAN Member States already have scores of AA-nationals, who, after due accreditation by the PH MC, may soon have the opportunity to practice architecture on PH soil (on an initially collaborative basis from 2015 through 2020). s7 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

8. 7. The 1994 WTO GATS: The General Agreement on Trade in Services (GATS) is the first set of multilateral rules covering international trade in services. It came into effect in 1995 and is continually negotiated under the auspices of World Trade Organization (WTO), based in Switzerland. GATS establishes the trade rules governing cross-border trade in services for WTO Member Countries i.e. rules that are supposed to make it easier for services and service providers to move from one country to another. Failure of any WTO member to adhere to GATS rules may open them up to dispute settlement proceedings in the WTO, or even a trade war with sanctions. s8 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

9. 8. GATS Parts & Service Sectors: The GATS has three (3) main parts: 1) the main text with general principles and obligations; 2) the annexes with rules for specific sectors; and 3) the Member countries' specific commitments to provide access to their markets.  GATS covers twelve (12) service sectors with tradable services: 1) Business(where Professional Services such as Architectural Services fall under); 2) Communication; 3) Construction (and Engineering); 4) Distribution; 5) Education; 6) Environment; 7) Financial; 8) Health; 9) Tourism and Travel; 10) Recreation, Cultural, and Sporting; 11) Transport; and 12) Other. s9 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

10. 9. The 4 Modes of Service under GATS The GATS covers four (4) modes of supply for the delivery of servicesin cross-border trade: Note: From the document MTN.GNS/W/124, available on the World Trade Organization Website, posted courtesy of ISTIA s10 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

11. 10. APEC takes off from WTO: In furtherance of the WTO objectives, the Asia-Pacific Economic Cooperation (APEC) was established in 1989as a forum for twenty one (21) Pacific Rim countries (i.e. formally Member Economies or MEs), that seeks to promote free trade and economic cooperation throughout the Asia-Pacific region. It was created in response to the growing interdependence of Asia-Pacific economies and the advent of regional trade blocs in other parts of the world (EU, NA, etc.). The 21 APEC economies are Australia, Brunei*, Canada, Hong Kong, Indonesia*, Japan, South Korea, Malaysia*, Mexico, New Zealand, PROC (China), Papua New Guinea, Peru, Philippines*, Russia, Singapore*, Taiwan, Thailand*, USA, Vietnam. (*Note: Part of the ASEAN and signatory to AFAS). The countries of Chile, Panama, Costa Rica, Nicaragua, Honduras, El Salvador, Guatemala, Colombia, Ecuador, Cambodia, Macau, North Korea, and the many Pacific island nations are all still excluded from the count.) APEC is a cooperative association of regional economies i.e. not bound by a treaty. Although MEs are guided by APEC objectives and the GATS principles that inform them, decisions taken by the APEC Central Council are reached by consensusi.e. they do not place a mandatory obligation on any Member Economy. s11 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

12. 11. The APEC Architect Project The APEC Architect Project was an initiative of the APEC Human Resources Development Working Group (HRDWG), one of a number of sectoral groups established to implement APEC programs. The Project was endorsed by the HRDWG at its year 2000 meeting in Brunei as a direct response to the Group’s strategic priority of facilitating mobility of qualified persons by developing a means for the mutual recognition of skills and qualifications. The participating APEC Member Economies were thereafter tasked to organize their respective Monitoring Committees (MCs), and in the case of the Philippines (PH), to qualify candidate - registered and licensed Architects (RLAs) for the status of APEC Architect, who shall be permitted to undertake architectural services on an initially collaborative basiswith the Architect-nationals of the other APEC Member Economies the PH APEC Architect may wish to work in. Collaboration, which is a function of local regulation by a Member Economy such as the PH, is viewed as an interim modificationof Modes 2, 3 and 4, and therefore does not yet represent full trade liberalization. The year 2020 is set as the year for the attainment of full liberalization in the trade in architectural services. s12 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

13. 12. 44 PH APEC Architects (apecars) There are already forty four (44) PH APEC Architects to date, with the rest of the APEC Member Economies already having scores (if not hundreds) of APEC Architect-nationals, who, after due accreditations by the PH MC, may soon have the opportunity to practice architecture in the PH on a collaborative basis. If given sufficient National Government support, the 44 PH APEC Architects may also be given similar opportunities to penetrate the markets of thirteen (13) other participating APEC Member Economies i.e. Australia, Canada, People’s Republic of China (PROC), Hong Kong (China), Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Singapore, Chinese Taipei, Thailand and the USA. As of 2012, other bilateral and multilateral agreements pertaining to cross-border architectural services are being considered between the PH Government and the European Community (EC), as well as parts of Oceania (mainly Australia and New Zealand). s13 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

14. 13.R.A. No. 9266 and Foreign Architects (FAs) s14 • Sec. 38 of R.A. No. 9266 (The Architecture Act of 2004) mandates that FAs doing projects on Philippine soil must secure a temporary/ special permit (TSP); the same section also states that a PH-registered and licensed Architect (RLA) must partner with a FA if the FA is to work on an architectural project on Philippine soili.e. collaboration; • PRBoA already promulgated a 2007 Resolutiondetailing the procedure for FAs to secure such a TSP from the PRC; • all FAs now doing projects on Philippine soil without a TSP may thus be illegally practicing architecture, and may have incurred criminal liabilities, together with their Filipino employers, clients and RLAs working with them; and • all of the above will need to changeto accommodate AFAS/ ASEAN MRA and the WTO GATS in the next 7 years. Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

15. 14. Present Local Practice by Foreign Architects (FAs) s15 a.APEC Architect Register, initially via a collaborative mode (whereby a Filipino registered and licensed Architect (RLA) must partner with a FA (APEC Architect) if the FA is to work on an architectural project on Philippine soil); b.ASEAN Mutual Recognition Arrangement (MRA), alsovia collaboration; c.Reciprocityon the basis of absolute terms of equality in academic and/or training credential evaluation, licensure and certification i.e. as provided by the pertinent laws; d. Other Modes (including electronic or virtual practices subject to the application of Philippine laws such as the Electronic Commerce Act and R.A. No. 9266, and other practice modes by/ for FAs still to be discovered, proposed, developed or agreed upon by the countries concerned); under this category falls theillegal practice of FAs collaborating with non-RLAs such as the concerned CEs and other RLPs/ entities (non-registered persons); e. Only FAs as as natural persons, and NOT as firms or juridical entities are issued Temporary/ Special Permits (TSPs) to work in the Philippines; and f. Duly-qualified BPO or KPO firms engaged in the provision of architecturalservices must be registered with the DTI/ SEC and with the PRC/ PRBoA as mandated under law. Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

16. 15. What Could RLAs Do Between Now and 2020? s16 a. Specialize and diversify RLA Practices i.e. through voluntary Continuing Professional Education (CPE),specialization training and certification, graduate and post-graduate studies (possibly through the CHED ETEEAP and open learning), research, service or product development and the like; b. Collaborate with FAs on work either in the PH or overseas; c. Market RLA services using various cost-efficient media e.g. internet, phone, SMS, market collateral, trade expositions, trade magazine features and the like; and d. Engage in advocacy work and cooperate with the Government to develop and strengthen safety nets for RLAs i.e. GATS-compliant (and possibly not protectionist), but also in full compliance with the Philippine Constitution and other applicable international and PH law. These may include the passage of new laws and regulations that may not deal directly with professional architectural services e.g. procurement, taxation, immigration, etc. Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

17. 16. PH RLA Practice Scenario Under GATS s17 a. GATS is widely perceived by RLAs to be able to complement the Local Practice of FAs under theAPEC Architect Register, ASEAN MRA, reciprocity and other modes of cross-border service supply; b. Many RLAs shall offer various forms of architectural services to foreign clients by doing the work right here in the Philippines; c. More knowledge process outsourcing(KPO) firmsengaged in the provision ofarchitecturalservices for overseas projects are expected to base in the Philippines; RLAs must preferably oversee such operations; d. since a FA may practice under GATS without an RLA, such FAs, in their individual/ personal capacities must assume the requisite responsibilities, undertakings and liabilities as a natural person(and NOT as a juridical person)under Philippine civil law(for a period of from 15 to 25 years); and e. Locally-secured Professional Liability Insurance (PLI) can only cover FA professional responsibility and possible civil liability up to a certain extent. Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

18. Current International Architectural Practice Opportunities Outside AFAS and GATS • Consulting opportunities as Architect or as Physical Planner for projects of the ADB, WB, USAID, EU, AA, CA, UN, etc.; • Consulting opportunities as Architect or as Physical Planner for projects under bilateral or multilateral agreements of the PH with other countries, etc.; • Consulting opportunities as Architect or as Physical Planner for projects of private enterprises/ ventures, collaborations, etc.; and • Projects out of international archl competitions. s18 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

19. 18. Comparative Compensation Expectations for Work Done Outside of AFAS and GATS • Possibly from USD 2,500.00 up to 6,500.00 (PhP102,500.00 to 266,500.00 per person-month of 22 work days) for international agency architectural consulting work done in the PH by a duly qualified and sufficiently/ suitably experienced RLA as an international Architect and/or Physical Planner; these rates can increase by 1.5 to 1.7 times for a foreign posting/ stay of the RLA (consulting work done in another country); • Up to USD 10,000.00 (PhP410,000.00) per month for a senior teaching position for tertiary instruction (baccalaureate) for an architecture program in the Middle East; • Possibly from 50% to 75% of above rates for in-house architectural work done for international private firms under a service contract (PH or foreign posting); and • Possibly up to USD36,500.00 (PhP1.5 M) as Architect-of-record (Aor) for an international project on PH soil, for every USD24.4M (PhP1.0B) Project cost of the architectural project i.e. without an international professional liability insurance (PLI) coverage for the PH RLA; this shall be considerably lower if PLI is made available for the PH RLA. s19 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

20. What Must Happen to R.A. No. 9266 with (before) the AFAS and GATS Rollouts? Certain provisions of R.A. No. 9266 (specifically Sec. 38) must be amended to reflect specific agreements/ arrangements entered into by the PH Government under AFAS and GATS. Reciprocity arrangements/ standards may become the premier mode of establishing equivalencies among FAs (and between RLAS and FAs). To further protect RLAs, immigration policies (particularly by countries such as the USA) must be reciprocally applied i.e. USA and PH immigration requirements must be equal (and applied equally). s20 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

21. 20. What Can Happen if the Matter of the Signing/ Sealing of Architectural Documents is Not Resolved with Finality by the Supreme Court and the AFAS and GATS are rolled out? • Unregistered persons (UPs) defined under R.A. No. 9266, such as other registered and licensed professionals (RLPs), specifically the concerned civil engineers (CEs) will continue to ply their nefarious practices/ trade and some unscrupulous RLPs/ concerned CEs may even attempt to enter into architectural collaborations with FAs and AAs (both ASEAN Architects and APEC Architects from other countries); and • As penalties apply for the FAs and AAs who will succumb to these entreaties, the FAs/AAs shall be drawn into the legal controversy between RLAs and the concerned CEs. s21 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

22. 2015 and 2020 are the years to watch out for. RLAs must prepare for the coming of more FAs and must now take immediate steps to try to penetrate the markets of said FAs. Good luck to us all. s22 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013

23. Thank Youand aPleasant Afternoon to All s23 Ar Armando N. ALLI, apecarfor the 2013 UAP National Convention AFAS & GATS in a nutshell, 18 April 2013