Fisheries Administrative Order No. 121 of 1976 concerning rules and regulations governing charter contracts; lease or lease-purchase, purchase agreements of fishing boats, or contracts for the assistance with a foreign person, corporation or entity

Republic of the Philippines Ministry of Natural Resources ?-Tj?.EATJ OF FISHERIE'S AND AQUATIC RESOURCES Arcadia Eldg., 860 Quezon Avenue Quezon City FISHE?..IES A.DY~ErrSTRATIV~· OF..DEP.. ::-0. 121 Seric.s of 1976 S3JECT: RULES A.J.\1) a.~GULATIONS GOVEfu'i'ING CHARTER CONTRACTS; LEASE OR LEASE PUBCHASE PUJRCa~SE AG~~~JTS OF FISHING BOA'IS, CR Cm2'R'\CTS FOR ASSISTANCE i/iITH A FOREIGN FERSON, COF.POa<\TIClI OR E}J"TITY. F~suant ~~ the previsions of Sections 7 and 21 of Presidential Decree :To. 7CL, known as the "Fisheries Decree of 1975", the follow ing ~les and regulations governing Charter Contracts for financial, tecz,...rrica L or ether for::s of assistance with any foreign person, corpo ration or enti~y for the production, storage, marketing and processing of fish and fishery/aquatic products, are hereby promulgated: SECTION i. Definitions. - For the purpose of this Order, and unless otherwise indicated or specified, the following shall mean: (a) Coc=e~cial Fishinp. -. Fishing for commercial purposes in waters more than seven fathoms deep with the use of fishing boats of Gcre than three gross tons; (0) Charter Contract - A contract by which a foreign-owned vessel is let by its owner to a Filipino citizen or to a corporation or association with not more than thirty percent (30%) foreign equity participation; (c) Contract for Financial, Tscnnical or Other Forms of Assistance A cc~tract whereby a foreign person, corpo~tion or entity gives financial aid or renders technical or other fo~s of assis~ance to a Filipino citizen, qualified corporation or asscciation fer the production, storage, marketing and pro cessing of fish and fisherJ/aquatic products in consideration of a payment as provided in subpara~Taph (g) of Section 6 l1erecf; ( . \'J, ) (",) \ ~ I (f) L€~se 'Jr lease-P:..lr::::hase ).;:reement - A. lease of a foreign o~1ei vessel to a Filipino citizen, qualified corpo~tion or asscciaticn fer cOwmercial fishing by a foreign persoc, cor;~=~tion ~r entity, or a lease ~ith the option granted to t~e lessee to purch~se the beat leased, payable whether uncer lease agreelT.Gn~ cr under lease-'t;urchase agreement as provi=ed i~ sub;~ragr~~~ (g) of Section 6 hereof; Gu~l~fied CO~C~2t~O~ 0= lS30ciation - One organized lli~dGr Fhili;~ine laNs, seventy per cent (7~!) of the capital steck 'Jf which is owned by citizens of the Philippines and d~ly registered th the Securities ?ond Exohange Com mission and the Eoard cf Invest~ents; ApDlic~tion for Ch~rter Contr~ct, Lease or Lease-Purchase .Agrc~=Gr.t or Ccntr8cts 0f Assistance - Means an application for ?:~proval by the SGc:r:etary of a Contract entered into by a 2 a Fi:ipino citizen, ~~alified cc=por~~ion cr association w~th a foreign ~~rsan, cc~~ration or s~ti~J for the charter, or lease of a foreign-c~~~d fishin~ ba~~ \ri~h ~he option of pur chase, or ~ oontr8ct f0r financ~~l, tecrLi~~l or ether fo~ of assistance; (g) f1.i\RI NA - refers to t1:e ~':ari tise Tndus t ry "~'.::hcrit::; (h) Eure~~ - ref~rs to t~e ~ure~u of ?is~e~ies s:d rt:~a1:ic Resour ces; (i) Director - refers to Resources; e:..r:d .L. ...... -.... ... .= SECTIOI7 2. FersC11S vrno mav ~:::ter in-::· c::~r1:e~ ~:ntr:!c!s. lease Qr ;ease-purchase aFree~~n~s or ~:"-~=?~ts f~~ :i~~nci~:. :~c~~i~21 or c~her forms of assistance - :itizens of the Fti~i~pines ~r.i qualified corpora tions engaged in cos=ercial fi2~i~g may, subject tC t~ea~?roval of the Secretary, enter into e c~rter ~2r.tract, lease or le~s~-purchase a€=ee ment of fishing vessels of oontr~:ts for financial, technical cr other forms of assistance 'f or the ~rc~~ction, storsge,' ~ark~t~ng and processing of fish and fishery/a~uatic prcducts with a fcre{~ person, corporation or entity: Provided, ~~at the ~~€regete tc~~~g6 of s~oh fi~hing vessels shall not exceed 4,OCO gro~s to~s in 1976, t,200 B2'CSS ~cns in 1977, and 4,500 gross tens in i976, or a t~tal of 12,700 gross ~cns frcm 1976 to 1978; Provide~, Fur~~er, Tha~ after 1978, c~arter cc~~r2cts, lease or lease-purchase agree=e~ts of s~~~ vessels ~ay be allo~ed by t1:e Secretary, upon the r~cou~endat~o~. of the Iirector, C~ a 0ase tc case 82sis only, depending upon the f~~her needs ~= the f~s~eIJ· ind~st=y for such vessels. SECTIO~Z 3. Empl~YJ1~::1 t 9.f f-::~eiom .'::2G:-~:icians -i:'1e ecpLoytaerrt of foreign tecp..nicie.:::. s s:-211 be gC','e::c:"aa by :·~~o::::and:.:= :~rcuhr l~o. 612 of the Of'f'Lce of +"e ::>""os;den+ ~-"I''''"t'' ·pre-':'::-'''''''':''' ---.,..00 ~"'... 715'..... . \1 •• ,,;,. ..... . "'~ -::.".;. ..... u ::::-:.. ·~e...... ..!..(.4"" ':\,; ...... .1.1'"",. I • Provided, ~nat the a;~~icaticn ::r emplGJ~ent sLal~ ce refe=red to the SecretarJ fer cor.~en: ~no sh~l: ~j2erve ~~e :ollowi~? g~i~elines in recommending ~~:e appz-cva l of the:: ?:J8: 1. The Dep3r~~er.~ of Nat~r~l ~es0~~:=S shall. a~ the ex~pense Cl the amplo: 2r, ?,dve:d:'::e:!1ce E, ~;,=e~ fQr at le?3-: thzse (3) ccnsecuti.ve .....~aeks ir: ::: ~.-=·.'l,Jp8.pe::" :, ge~e~l c i rcuLet i cn for 'the .. . ..sucn :-s":' zr... l~~ar:; 2. The prospe·:::'-;e a Li.sn ~:-?::'oyee .:;::'?-ll posse s s skills and t echm.que s ::::;-: LocaLl.;: ava i LabLe f::r the pcsi tion tc ce filled callin€ for s~ch skills; 3. TI:e er:plo:r::-=!1-:: nus t l:~ ~::'::ll :":1 -;b.e···cp€r~:.:::''";n or "t::= f'Lshery Lncus t ry ; 4. ccn t rac t : :l::.:' 5. In no case s::'e.l1 the ~:~~~~ct of e:Jplo~:r.t exceed t~O (2) years exteni3cle fOT e.r.::her yea~ e.s the ci=sumste.nces may warrant. 3 SECTION 4. Application - Under O~th - Every applicaticn for a charter contract, lease or lease-purchase 82reement ~r contr~~~ for assistance shall be accomplished in such fo~ as may be prescri:ed by the Bureau and shall be subscribed to under oath "c~fore e :T:tary Fublie or any government official aut hori zed to adwinis~er ca:~s. S~CTION 5. Filin2 of AP~li ca ti on - An applicati:~ for c~arter contract, lease or le~se-purchase agree ffient cf forei~-c~ed f~2tL,g boats or contracts for assistance shall be filed wi ..~ t~~ Eureau together with the followin€: (a) Ap91ication fee whieh is net rEfunj~ble of :~e one ~'~~jred pesos (1100.00) in c?sh, postal ~or.ey order :~ check ~ayable to 't he Director or his authorized =e~resen!a..i~e; (b) Project feasibility study which shall, in .~ applica..ion for charter contract, lease or lease-purchase ~gree=en~, state the specific area or areas of fishin€ :per~~~~n, vessel specifications and other pertL~ent cata (6 :c~ies); (c) In case of a corporation or association, s~ (6) cer~ified xerox or true copies of the Articles of Inc:=?oraticn ~nd By-Laws or Articles of Association and !y-Le-,,;s,res;:activaly, duly approved by the Securities and ~xchan€= Co~i~=i~n as well ~s its tax clearance; (d) Verified statement of financi~l capaci~J; ~~ (e) Ten (10) copies of the contract duly execute= by ~e :;:;art ies thereto. SECTION 6. Stipulations to be included in Charter Contrac ..s, Lease or Lease-Purchase Agreements of Fishing ~oats. - ~ cha=~er contract" lease or lease-purchase agreement shall incl~de the follow ing stipulations: (a) The duration of the contract shall not exceec Ilve (5) years from the date of approval by the Secretary, renewable for a period not exceeding five (5) years; (b) The foreign 'cr ew members of 2ach boat shall =~t exceed seventy-five per cent (75%) of the c07<pleffien~ of tee boat; (0) The foreign crew mem bers sh21l be issued fis~er=en'2 license subject to security clearancefroS'l t~e ?hiE;:;:;ine CC2.si: Guard; Upon the commencement of actual o~er':": :;ions·, "tee ?ili :::"::0 seanen and f i shermsn shcl I be-··given instruc ::"::n and :::-the job t!:'s.inine bj- the forsi~~ crE ~. 1 ::s~t·srs ir: ~!:e c~-=~ ~icn of the fishing boa ts ~nd the fishi::~ ~ears :ein€ use~; (e) The fishing boat,subject of the charter cor.:=e.ct, l=~se or lease-purchase agreement, shall net be , s~t-let ane no assigr.~ent or transfer of rights arising Jut of said contract or agreement shall be made; (f) After two (2) years from the date of ~9proval oy the 360 retar'J, t hG forei ;::;n cre'.' ,G1(::!m'ber3 shall be =e;lsced ::: an 9.11 Filipino crew ~ho were troined by them; and 4 (g) All pa~ents by the charterer, ~essee or lessee-purchaser to the forei€n person, corporation or entity shall be made in kind, i.e., in export items of fish ~nd fishery/aquatic pro ducts: ?rovided, That if the p.li:3D equity holder furnished or obtai~s all the required fin?~cing for the whole project, the Filipino corporation or partners can commit to pay such funds, if borrowed, with fifty per cent (5~) of the procuct ion of the corporaticn valued at wo r-Ld marke t prices: Frc vided, F:.:rthe!:, That if for any re?:son the a Li sn equity ho Lder does not p~roh9.se the producticn at world market prices then tlH:: Filipi!1o corporation or po r tners may sell the same to other b:..:yers. The stipulations required in paragr3.phs (b), (c), Cd) and (f) shall net be i~cluded in the contract wheD the chartered vessell vessels under lease or lease-purchasE a~reement are not sanne~ oy a forei€n crs·u , SECTICN 7. ~rccessing and evaluRtion of 9.oplication - L~e apP~2­ cation together Hit:: the project f'e as i bili ty study, the ccrrtrac t and other pertinent docunents shall be p!:ocessed and evaluated by the Bureau within Thirty (30) working days from receipt thereof after which it shall be submitted to the Secretary with the Bureau's recommendation for appro priate action. SECTION 8. Referral of the contract to the proper government agency by the SecretarJ after its qpp!:oval - Upon approval of the con tract by the Secre~zry, three (3) copies trereof shall be transrr~tted to the If:ARINA and t~e Central Bank of the Fhilippines for appropriate action, in case of c~arter contract, lease o!: lease-purchase agreement; to the Central Bank in case of f i.nancaat as sa tance; and to the National Economic Developme~t Authority if it is for any other fo'rm of assistance. A copy of the contr~ct fo!: technical assista~ce duly approved by the Office of the Pre s i.den t and/or the Departmerrt of Just i.ce shall be fur nished the Bureau accordingly for record purposes. . S~CTION 9. Reouirements for the CDE!:2.ticn of Fishin~ B03ts under a Ch8rter Ccntr<>c: t, I.e? se or L02psE:.J'urche.sE ,:;',zreement - 'll':e follo'.oJ'ing shall be acccmplished before the actual oper:tion of the fishing boat or boats under charter contract, lease or le2.3e-purchase agreement: (a) A te~pJr~ry certificate of Fhilir~ir.e Registry of the fishing bo~t under the chart~r contr2.~t, lease or lease-purchase agree men t shall be secured from the ;·I:,2IYA.'I'he charterer, lessee or lessee-;~rcha2er shall submit to the Eureau,c8rtified co pies of 211 regi3trnticn 2nd dcc~~e~t~tion papers, certificates, Li.ce nse s c r other c ccunen ts neCCS22:ry or Lnc i dcn te l to such re€i3trs.tic-~ and d oc utnsn t» t i cn ; O!: ==:.:~=-::. t i cn ~~:. De~,c=-r.:;. t i cn f'~=-:c:. c cmpIy ·,..;i tho such r€ol..:i :-e sa~t3 ~3 =~y b~ ~nde by the s~ij Ccc2ission; (c) 'lbe fcrei.'~:::;::'€'..... :::e:7lbe:rs st8.11 se cure sccuri ty c Lca rance f'rcm ttl"; ?hili;;~i!1e Coast GU8.rd<J.r.d f i she rmsn I s license from the Bursau , ar.c (d) The ch~rterer, lessee or lessee-purchaser shall secure a special co~mercial fishing bost licenso from the3ureau. 5 SECTION 10. Application for Special Commercial Fishing Boat Li ~~ - An application for a speci~l cc~mercial fishing boat license shall be filed with the Bureau accompanied by the following: (a) Application fee of one hundred pesos (t10C.00) either in c2sh, postal 'iloney order or check payable to the Director or his authorized represent2tive; (b) Six (6) copies of the charter contract, lease or lease purchase agreement, as apprcved by the Secretary; and (c) Certificate of registratior. snd dccument~tion issued by the ~~L~INA for the fishing boat. SECTImr 11. FStos'1r.d other chaz-ze s - The annua Llfcerise fee for the operation of a foreign fishing bca t shall be based at": the .gross tonnage of the boat, as follows: (a) (b) (c) (d) For each foreign For each fishing For each fishing 250 gross tons . For each fishing fisherman's license ... boat below 100 ~ross tons . boat 100 gross tons to boat over 250 gross tons 20.00 1,000.00 3,000.00 5,000.00 SECTION 12. Obligations bf charterer. lessee or vendee - The charterer, lessee anj!or vendee shall: . (a) Comply with all existini fishe~c laws, rules and regul~tions and those which may hereinafter be promulgated; (b) Assume responsibility for any and all acts of his agents, employees or laborers in the cper~tion of the fishing boat covered by the. charter cont~?ct or lease; (c) Submit to th€ Bureau a report of the catch every month within the first ten days of the ensuing month; (d) Pay ~he fees, (e) Secure a te~por8~J Certific8te of Philippine Registry for the foreign fishin~ vessel ~ith the MARTI;A. SECTION 13. Grounds fer be· cancellation of the special cO!Il.'1lercial fishi~~ h08t license - The special cC~3e~ci2l fishing boat liCEnse ~ay be cancelled by the Director for gny of the following grounds: (a) Non-use of the s~ecial co~mErcial fishing bo~t license within three (3)- months f~cs the date of approval of the contract or agreement; (b) Sub-letting the fishing b02t and/or assignment of rights arising cut of the ch~rter c~ntYact, lease or lease-purchase a€rGC'TIsnt; (c) Failure to comply wit~ the obligaticns set forth in the next preceding sectior.; (d) ViolRtion of the terms and conditions of the charter con tract, lease or lease-purchase agree~ent; (8) Violation of fishery La:.....s , decrees, rules and regulations; and (f) When public intGr~st so rsquires. 6 SECTION 14. Penal Provisions Any violation of the prOV1Sl0ns of this Administrative urder shall subject the offender to the penalty im posed under Section 38 (d) of Fresidential Decree No. 704, herein quoted as follows: lIViolation of any other prevision of this Decree, or of any rule or regulation already existing, or which may be pro T.ulgated pursuant to this Decree, shall subject the offender to a fine of from five hundred pesos (I"SOO.OO) to five thou sand pesos (pS,OOO.OO) or im~risonDent fron six (6) months to four (d) years, or both such fine ~nd i~prisonment, in the discretion of the Court: Provided, 'mo.t the Director of Fish eries and Aquatic R?sources is hereby empowered to impose upon the offender o.n administrative fine of not more thpx five thou sand pesos (PS,OOO.OO) or to cancel his permit or license, or to impose such fine and to cancel his permit or license", in ihediscretion of the Director: Provided, Further, That the Director, or his duly authorized re~resentative, and law en forcement agents are hereby e~powered to impound with the a3sistance of the Philippine Coast Guard, if necessarJ, the fishing boat including the dynamite, blasting caps and other explosives, obnoxious or poisonous substances, and apparatus used in electric fishing, and other apparatus used in illegal fishing pending the termination of the criminal case by com petent courts: Provided, Finally, That any person who unlaw fully obstructs or delays the inspection and/or movement is authorized under this Decree, shall be subject to a fine of not more than two tbaueand ~e80s (~,OOO.OO) or imprisonment of not more than two (2) years, or both such fine and impri sonment, in the discretion of the Court." SECTIOK 1S. RepeFlling Clause. - All orders, rules and regulations or parts thereof, inconsistent with the provisions of this Administra tive Order are hereby repealed or modified accordingly. SECTION 16. Effectivity. - This Ad~inistrative Order shall take effect fifteen (1S) days after its publication in the Official Gazette and/or two (2) newspapers of general circulation. (sef.) J0SE J. LEIDO, JR. Secretary and CcncJrrently Chair:::ant. FIDC (SGD .. ) P:::1:IX R.. GOrV..LE"S Director ~7C7L: Thi s ~o"i'~!S puc Li shcd i!i the 'I'ises :cu=:onal, 3aturday, J1..ugus t 21, 1976; ~E ::'le!"".:i.~? Po s t , ~':..Ui;,jst 2-;, 1976.