Republic Act No. 6839

H. No. 10787 S. No. 485 [REPUBLIC ACT No. 6839J AN ACT CREATING THE COO~RATIVE DEVELOP MENT AUTHORITY TO PROMOTE THE VIABI LITY AND GROWTH OF COOPERATIVES AS INSTRUMENTS OF EQUITY, SOCIAL .JUSTICE AND ECONOMIC DEViELOPMENT, DEFINING ITS POWERS, FUNCTIONS AND RESPONSIBILI· TIES, RATIONALIZING GOVERNMENT POLICIES AND AGENCIES WITH COOPERATIVE FUNC TIONS, SUPPORTING -COOPERATIVE DEVELOP MENT, TRANSFERRING' THE RlEGISTRATION AND REGULATION FUNCTIONS OF EXISTING GOVERNMENT AGENCIES ON COOPERATIVES AS SUCH AND CONSOLIDATING THE SAME WITH THE AUTHORITY, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPO SES. Be it enacted by the Senate and House of Representatives of the PhilipPines in Congress' assembled: SECTION 1~ Declaration Of Policy.-It is hereby decla red the policy" of the State to promote the yiability and growth of cooperatives as instruments of equity, social justice and economic development and to create an agency, in fulfillment of the mandate in Section 15, Article XII of the Constitution. Toward this end, the State shall MAy 28, 1990 OFFICIAL GAZETTE 3815 recognize cooperatives as associations organized for the economic and social betterment of their members, operating business enterprises based on mutual aid, and founded upon Internationally accepted cooperative .principles and practices. In furtherance of this policy, the appropriate national economic planning· agency' shall include the -,-~omotion of growth and expansion of cooperatives as a malor-and . indispensable component of national development plans. All "departments, 'branches, subdivisions and instrument alities of the .Government shall promote the formation of cooperatives under their respective programs by pro viding them with appropriate and suitable incentives. .•. -- . The State recognizes the cooperative sector as primarily responsible for the institutional development of coopera tives. Accordingly, the State recognizes the rights of the cooperative sector to initiate and foster within its own ranks cooperative promotion, organization, training, information gathering, audit and support services, with government assistance where nec~ssary.. ' Government assistance to cooperatives shall be free from any restriction and conditionality that may in any manner infringe upon the objectivES and character of cooperatives as provided in this Act. The State shall, except as pro vided in this Act, maintain the-poiicy-:Q"i noninterference . in the management and operation Of-c~oPeI:a~v~s~· .... SEC. 2. Creation of the Cooperative Development Au thority.-The -Cooperative Development 'Authority is hereby creared'under tlie "(lffice- of·thePresidenffO- earry out the 'provislons of this Act. . SEC. 3. Pouiers., Functions and iiesponsibtiiUes.-The Authority.shall have the following powers~functions and responsibilities.: (a) Formulate, adopt and implement integrated and comprehensive plans and programs oncooperative develop ment consisteIit ~th the .nallonaf"'poUCY ·on··cooperatives and the overall socio-economic development plan of the Gov ernment; (b) Develop and conduct management .and training ~ro~~ upon request of COOperatIVeS -that·WiiI·proVide members of cooperatives with the entrepreneurial capabill ties, managerial expertise, and technical sId11s required for the efficient operation of their cooperatives and incul cate in them the true spirit of cooperativism and provide, when necessary,~cbI!i£3l and professional assistance to ensure the viability and grOWth of cooperatives with -spe cial concern for agrarian reform, flsheryand economically ~~p~e~ed sectOrs; ... -- ... .." ..----..-.. ... 3816 OFFICIAL GAZETTE VOL. 86, No. 22 (c) Support the voluntary organization. and consensual development of activities that promote cooperative move ments and 'provide assistance towards upgrading manage. rial and technical expertise upon request of the cooperatives concerned; (d) Coordinate the effects of the local government units and the--private·sector in the promotion, organization, and development of cooperatives; (e) Register all cooperatives and their federations and unions;Including their division, merger, consolidation, dissolution or liquidation. It shall also register the transfer of all or substantially all of their assets and lia bilities and such -other matters as may be required by the Authority; (f) Require all cooperatives, their federations and unions -to submit their annual financial statements, duly audited by certified public accountants, and general in formation sheets; (g) Order the cancellation after due notice and hearing of the cooperative's certificate of registration for non compliance with administrative requirements and in cases of voluntary dissolution; (h) Assist cooperatives in arranging for financial and other fo~n-s or- assistance under such terms -nnd·conditions as are calculated to·shenthen their viability- and autonomy; (i) Establish extension offices as· may be necessary and financially viable to implement this Act. Initially, there shall be extension offices in the Cities of Dagupan, Manila, Naga, Iloilo, -Cebu, Cagayan de Oro and Davao; (j) Impose and collect reasonable fees and charges in connection with the registration of cooperatives; (k) Administer all grants and donations coursed through the Government for cooperative development, without prejudice to the right of cooperatives to directly receive and administer such grants and donations upon agree ment with the grantors and donors thereof; (1) Formulate and adopt continuing policy initiatives consultation with the cooperative sector through public hearing; (m) Adopt rules and regulations for the conduct of its internal operations; (n) Submit an annual report to the President and Congress on the state of the cooperative movement; and (0) Exercise such other functions as may be necessary to. implement the provisions of cooperative laws and, in the performance thereof, the Authority may summarily punish for direct contempt any person guilty of misconduct in the presence of the Authority which seriously interrupts any hearing or inquiry with a fine of not more than Five hundred pesos ("500.00) or imprisonment of not more than MAy 28, 1990 OFFICIAL GAZETTE 3817' . ten (10) days, or both. Acts constituting indirect contempt as defined' under Ru1e 71 of the Ru1es of Court shall be punished in accordance with the said Rule. SEC. 4. Governing Body.-The Authority shall be gov erned by, a Board of Administrators consisting of a Chairman and-siX"r6r-members;"te;' bi- appointed by the ,Presiaerit,alI -o{wnom 'shall be -'chosen from among the nominees of the cooperative sector with ~o-(2frepresen:' 'tatives each from Luzon,Visayas and Mindanao. They shall serve for a term of six (6) years wi~l1out reappoint ment: Provided;" That 'among' -thOse-fuSt appointed, the Chairman shall serve for a term of six (6) years, three (3) members to serve for a term of four (4) years, and three (3) members to serve for a term of two (2) years: Provided, further, That there s.hall,be,f9,~.!: J1Lex offi~o members, one (1) each from the: (a) Department of AgTfCiiffiire, (b) Department of Transportation and Com munications, (c) National" EIl:!~trificat'ion -Administration and (d) Sugar Regulatory Administration. Said repre sentation status for the agencies is on a'nonvoting basis and terminates one (1)' year from the "operation of the Author ity, but said ex officio members shall not be holding any other board position in any government entity. ' The Chair man and members shall serve on a full-time, basis. Any vacancy in the Board shall be filed by appointment by the President in accordance with the membership allocation set forth in this section: Provided, That a memBer so appointed shall serve only for the unexpired term. SEC. 5. Qualifications of Me";'bera of the Gov~rning Board.-No person shall be appointed Chairman or mem ber of the Board of Administrators unliss he possesses the following' qualifications:' ,' , (a) A natural-born Filipino citizen of legal age; (b) A Bachelor's Degree in Cooperatives, Economics, Finance, Agricu1ture, Fisheries, Veterinary Medicine, Business, Social Science, Law; 'Management, or in similar fields of study and five (5) years of experience as an official or officer of' a cooperative, 'government agency, or non-government": orgamzation'engaged: in -cooperative development or, in the absence of a BaeheIor's Degree, at least ten (10), years of experience in cooperatives either as an officer of a, cooperative or a government agency or non-government organization engaged in co operative development; and . (c) Must be a, resident of the region he represents ,for at least five' (5) years. Any person appointed as Chairman' or regular member of the Board of Administrators shall divest himself of any 3818 OFFICIAL GAZETTE VOL. 86, No. 2~ director indirect pecuniary interest in or dealings with cooperatives upon his appointment. SEC. 6. Board 'Of Administrators Meeting.-The Board of Administrators shall meet at least once a month for the transaction of its regular business. Special meetings may he called by the Chairman or majority of the members to consider specific matters. A majority vote by the entire Board shall be required for a decision. All meetings of the Board shall be 'held at the head office in Metro Manila or at any other place as may be determined by the Board. .The Board of Administrators 'shall appoint an Exe cutive Director who 'shall be the chief 'operating officer of the Authority -whose 'compensation shall be "fixed by the Board of Administrators. SEC. 7. Organization of the Authority.-The Authority shall be organized within one hundred twenty (120) days from the effectivity of this Act. SEC. 8. Mediation and Conciliation.-Upon request of either or both' parties, the Authority shall "mediate 'and conciliate disputes with a cooperative or between"eo~per~­ tlves:- .Provided, That if no mediation or conclliation succeeds within .three (3) months from request thereof, a certificate of non-resolution shall be issued by the com mission' prior to the filing of appropriate action before the proper courts. SEC. 9. Power to Register Cooperatives.-The power to register cooperatives .shall be vested solely on the Authority. The. functions of the following .departments 'ana agencies .rebitiIigto 'the. registration of cooperatlves aasncb 'are 'hereby -~n~~ ~~ -to .the.Authority: (a) .The Department of Agriculture; .(b)The Bureau '.of Agricultural Cooperatives Develop ment; ,(e) The Department :of .Transportation .-and ,Commu nications;' . (d) .:The .Sugar .Regulatory Administration; (e.).' Dle National Electrification Administration; and (t:) .Any .other pertinent .government agency. "The 'Bureau of Agricultural 'Cooperatives Development ~rea'tea under ExectitiveOrder No. 116, Series of '1987, is hereby abolished ana ~its qualified employees are hereby absorbed by the Cooperative Development Authority, in accordance with 'its staffing pattern, subject to Civil Ser vice rules and regulations and 'rules of the Office of Com 'pensation -and 'Position -'Classification:, Provided,' 'That the -Regional Cooperative 'Development Assistance Offices :vL\.y 28, 1990 OFFIC~L GAZETTE 3819. of Regions IX and XII, created, under' Exeeutive Order No. 634, are also hereby abolished and their employees shall be given preference for employment with the C0ope rative Development Authority in accordance with its staff ing' pattern, subject to Civil Service rules and regulations: Prouided jinal'!y, That those who are not absorbed shall be given separation pay computed 'at one and one' fourth (11/4) months salary for every year of service. Service orsix (6) months or more shall be considered as one (1) year in computing the years 'of service for severance pay and, whenever applicable, other retirement benefits under existing laws. SEc; 10. Transfer of Funds, a.nd Program8.-The' C<> operative Development Loan Fund created nnderPreslden tiaT Decree No. 170, as' amended, is hereby transferred' from the Department of Agric~ture to, tEe Authority. , The function, of the: Fund for Management Training and Assistance Program granted to: the Department of Agriculture by Presidential Decree No.. 17.5" aaamended; is likewise hereby transferred to the Authority. The fund provided for' the- Management Training "and Assistance: Program. under ,Presidential. Deeree No. 175~ as amended, is, hereby converted into a fund for the' deve lopment of cooperatives and may be used for such purpose upon the request of the cooperatives; concerned: Provided; That .duly registered cooperatives: shan have the right. to establish their own private training centers. or federations for. purposes, of cooperanve: deveIopD1en~ In addition', the Cooperative,' Marketing Project as created underIcan agreements which are .now numaged by the Department of Agriculture is likewise' hereby trans ferred t<J the Authority. SEC. 11. Cooperatives in the. Ed'llcation System.-The historv; philosophy; principles and practices of coopera tives and their: 'role as. a factor' in the national' eeonoIDY' shall' be, dissemfnated both. 'in fOl'lllal and non-formal education. The role of nongovernment organizations, not registered as' cooperativesbtrt duly registered under Philippine laws and engaged .in cooperative ProD1otion~ orgaDization, research JLnd' education, shall be 'recopized. The Authority may accredit such nongovernment, orpnizations' as non acad'emic training organiZations~,'The.,training , courses offered ~y them may be eIi~ble as eredits for 'the purposes of academic, professional and career advancements of their trainees. Existing, training~centerS for cooperatives may qualify as nongovernment organizations under this ACt. 3820 OFFICIAL GAZETTE VOL. 86, No. 22 State colleges and universities shall provide technical assistance and guidance to cooperatives in the communities wherein they operate, upon request. SEC. 12. Cooperatives in the Banking System.-The promotion and development of cooperative banks as part of. the Philippine banking system shall be a major concern of the Authority which shall undertake the necessary prog ram towards this end in collaboration with the Central Bank of the Philippines and the cooperative sector con cerned. SEC. 13. Rule-Making Authority.-The Authority is hereby authorized to promulgate, after due public hearing and 'upon approval of the President, such rules and regula. tions es may be necessary . to implement the. provisions of this Act. Such implementing rules and regulations shall take effect within fifteen (15) days' after' publication thereof in the Official Gazette or in two (2) newspapers of 'general circulation. All .suhsequent amendments to the implementing rules and regulations shall undergo the same process• . SEC. 14. Prohibition.-No organization shall be allowed to lise the title "cooperative" in its name unless it follows all generally . accepted cooperative principles, applicable cooperative laws, and is duly registered under this Act: Provided, That organizations which have used the word "cooperative" as part of their nomenclature but which do not qualify as cooperatives under the provisions of this Act shall have three (3) years within which. to. qualify a~.4 to 'reiister with the Authority. If at the end of the " three-year'period provlded" herein, the said organizations still do not qualify, it shall be unlawful for the organiza tiOIi~ . to continue using the word "cooperative" in their names. SEC. 15. Information Campaign.-The Cooperative Development Authority is mandated to conduct a six (6) months information campaign on the provisions of this Act,"beginning three (3) months from the effectivity of this Act. SEC. 16. Appropriations.-The funds needed to carry out th~ provisions of this Act shall be. charged to the appropriations of the Bureau of Agricultural Cooperatives Development and the Regional Cooperative Development Assistance Offices of Regions IX and XII under the current General Appropriations Act in addition to the appropria tionsof other departments/agencies/funds whose functions programs are transferred to the Authority: Provided, That in its initial year of operations, and additional amount MAY 28, 1990 OFFICIAL GAZETTE 3821 of not exceeding Sixty million pesos (P60,000,000.00) may be requested and drawn by the Authority from the Contingent Fund of the President. Thereafter, such sums as may be necessary for its continued implementation shall be included in the annual General Appropriations Act. .SEC. 17. Transitory Provisions.-All cooperatives regis tered under Presidential Decree Nos. 175 and 775, and Executive Order No. 898 shall be deemed registered with the Cooperative Development (Authority: Provided, however, That they shall submit to the nearest Cooperative Development Authority office their certificates of registra tion, copies of their articles of incorporation and bylaws, and their latest duly audited financial statements within one (1) year from effectivity of this Act, otherwise, their registration shall be cancelled: Provided, jurther, That cooperatives created under Presidential Decree No. 269, as amended by Presidential Decree No. 1645, shall be given three (3) years within which to qualify and register with the Authority: . Provided, finally, That after these cooperatives shall have qualified and registered, the pro visions of Sections 3 and 5 of Presidential Decree No. 1645 shall no longer be applicable to the said cooperatives. SEC. 18. Repeals.-All acts, general orders, executive orders, letters of implementation, letters of instructions, regulations or circulars, or parts thereof, inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly. In case of doubt, the same shall be resolved in favor of the cooperatives. SEC. 19. Separability.-If for any cause any part of this Act is declared unconstitutional, the rest ·of the provisions shall remain in force and effect. . . . SEC- 20. Effectivity.-This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation. Approved, March 10, 1990.