EXECUTIVE ORDER NO. 662
EXECUTIVE ORDER NO. 662 - CREATING
THE NATIONAL DENDRO DEVELOPMENT CORPORATION, PRESCRIBING ITS POWERS AND
FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR
WHEREAS, indigenous and renewable
energy sources are now necessary to provide adequate, reliable, cheap
sources of energy for economic development;
WHEREAS, tree farms and dendro thermal power plants can now serve as a
substantive fuel source for electric power, for industry, and
ultimately for transportation;
WHEREAS, the farming of trees for energy purposes on land denuded of
forest can likewise also achieve major ecological benefits, can expand
the arable area of the country, allow landless farmers to have their
farms, create new, income, thereby significantly alleviate the problems
of the rural landless poor.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and direct the following:
1.
There is hereby created a National Dendro Development Corporation
(NDDC) to plan and implement a national dendro development program to
attain national objectives in energy production, reforestation and
rural employment.
2. The purpose
of the Corporation shall be as follows:
a.
establishment of fast growing tree farms utilizing for the purpose,
lands currently unused or severely underutilized,
b. development
of transportation systems to move the three products to processing
plants and consumers,
c. development
of processing plants and industries to convert the tree products to
fuels and other products desired by the consumers,
d. development
and implementation of a marketing system to stabilize supply and prices
and to interface between consumers and tree producers and processors,
e. research
and development on process to convert tree products into forms most
suitable for use by consumers and on the agronomic aspects of improved
tree farming techniques and improved tree varieties.
3.
The Corporation shall have the following powers and functions:
a.
To prepare, plan and implement a national dendro development program to
carry out the above purposes.
b. To promote,
encourage and assist public services and private entities and
government agencies and corporations having related functions and
purposes, in planning, developing, coordinating, establishing,
operating, maintaining, repairing, and renovating facilities and
systems for production, and for such purpose to furnish, to the extent
possible and without charge therefore, technical and professional
assistance and guidance, information, data and the results of any
investigation, study, or report conducted or made by it.
c. To invest
and/or grant loans to public service and private entities for tree
farms, the construction or acquisition, operation and maintenance of
tree processing, marketing and transportation equipment plant,
facilities and related properties, equipment machinery, fixtures and
materials for the purpose of production and processing of trees into
more readily marketed products to include conversion to coal,
electricity, methanol and associated by-product chemicals, and
thereafter to make loans for the restoration, improvement or
enlargement of such facilities; Provided, That the entity applying for
a loan, must support the objectives of this Order.
d. To approve
or disapprove any loan and advances of loans from other lenders to
entities which at time are borrowers from the Corporation.
e. To organize
wholly or partly owned companies and subsidiaries for the purposes of:
i)
operating a tree product transportation system of operating a tree
processing plant, and other related activities.
ii)
manufacturing equipment and materials to supply any of the
organizations involved in the production, processing and transport of
the products under this Order.
iii) providing
marketing and market stabilization services for the entities engaged in
production under this Order. The subsidiary so established may be
authorized to purchase and store tree products as required to assure
stable and attractive prices for both producer and consumer.
f.
To acquire, by purchase or otherwise, real and physical properties,
together with all appurtenant rights, easements, licenses and
privileges, upon its determination that such acquisition is necessary
to accomplish the purposes of this Order and, if such properties be in
areas designated as reserved for fast growing tree production and said
properties of at the same time of acquisition not producing a product
valued at least 50% of that found on lands already under the fast
growing tree program: Provided, That the power herein granted shall be
exercised by the Corporation solely as agent for and on behalf of one
or more public service entities which shall timely receive, own and
utilize or replace such properties for the purpose of growing fast
growing trees, which entity or entities shall then be, or in connection
with the acquisition shall become, borrowers from the Corporation and
provided, further, that the costs of such acquisition including the
cost of any eminent domain proceedings, shall be borne either directly
or by reimbursement to the Corporation, whichever the Corporation shall
elect, by the public service entity or entities on whose behalf the
acquisition in undertaken; and otherwise to acquire, improve, hold,
transfer, sell, lease, rent, mortgage, encumber and otherwise dispose
of property incident to, or necessary, convenient or proper to carry
out the purposes of which the Corporation is created.
g. To borrow
funds from any source, private or government, foreign or domestic, and,
to issue bonds or other evidences of indebtedness therefor and to
secure the lenders thereof by pledging, sharing or subordinating one or
more of its own loan securities.
h. To so
cooperate, coordinate and exchange such information, studies and
reports with, and to seek such cooperation and coordination from other
departments, agencies and instrumentalities of the National Government,
as will most effectively conduce to the achievement of the purposes of
the Corporation.
i. To report
at least annually to the Prime Minister and the National Assembly, on
the status of the Dendro Development Program of the Philippines,
including a comprehensive reporting of loans made, loan funds advanced,
loans secured from other sources and the advances thereof, the names
and locations of the borrowers, the number of hectares planted, amount
of wood produced, number of processing plants established and the value
of product as well as the energy produced in oil equivalent and other
activities programmed for the ensuing year, and all such other
information and data as will accurately reveal the progress being made
toward the achievement of the purposes of this Order; and to publish
such report for dissemination to and use by other interested
departments, agencies and instrumentalities of the National Government
and by borrowers under this Order.
j. To have a
continuous succession under its corporate name until otherwise provided
by law; prescribe and thereafter to amend and repeal its laws not
inconsistent with this Order; adopt and use a seal and alter it as its
pleasure; sue and be sued in any court, Provided, That NDDC shall,
unless it consents otherwise, be immune to suits for acts ex delicti;
and make contract of every name and nature and to execute all
instrument necessary or convenient for the carrying on of its business.
k. To exercise
such powers and do such things as may be necessary to carry out the
business and purposes for which the Corporation was established, or
which from time to time may be declared by the Board of Directors to be
necessary, useful, incidental or auxiliary to accomplish such purposes;
and generally, to exercise all the powers of a corporation under the
Corporation Law insofar as they are not inconsistent with the provision
of this Order.
4.
The Corporation shall be governed by a Board of Directors consisting
of:
a.
Minister of Human Settlements, as Chairman
b. The General
Manager of the Corporation, as Vice Chairman
c. Minister of
Industry
d. Minister of
Natural Resources
e. Governor of
the Central Bank
f. President
of the National Development Company
g. General
Manager of the Human Settlements Development Corporation
h.
Administrator of the Farm Systems Development Corporation
i.
Administrator of the National Electrification Administration.
5.
The Board shall, have the following specific powers and duties:
a.
to implement the provisions and purposes of this order;
b. to
formulate and adopt policies and plans and to promulgate rules and
regulations, for the management, operation and conduct of the
Corporation;
c. to adopt
and, as may be necessary from time to time, to amend annual budgets for
the Corporation’s borrowing and lending programs and for its
administration;
d. to fix the
compensation of the General Manager and to the Deputy General Manager,
subject to the approval of the President of the Philippines; and,
e. to
establish policies and guidelines for employment on the basis of merit,
technical competence and moral character, and upon the recommendation
of the General Manager to organize or reorganize the Corporation’s
staffing structure, to fix the salaries of personnel and to define
their powers and duties.
6.
The management of the Corporation shall be vested in the General
Manager, who shall be appointed by the President of the Philippines and
shall not be removed except for cause.
The
General Manager shall have the following powers and duties:
a.
to execute and administer policies, plans and programs, and the rules
and regulations, approved or promulgated by the Board of Directors;
b. to submit
for the consideration of the Board of Directors such policies, plans
and programs as he deems necessary to carry out the provisions and
purposes of this Order;
c. to direct
and supervise the operation and internal administration of the
Corporation and, for this purpose, to delegate same of any of this
powers and duties to subordinate officials of the Corporation;
d. subject to
the guidelines and policies established by the Board of Directors, to
appoint and fix the number and compensation of subordinate officials
and employees of the Corporation: Provided, however, The provisions of
the Civil Service Law and the Wage and Position Classification Law
shall not apply to the appointment and compensation of any such
subordinate official or employee;
e. For cause,
to remove, suspend, or otherwise discipline any subordinate official or
employee;
f. to prepare
an annual report on the activities of the Corporation at the close of
each fiscal year and submit a copy thereof to the Prime Minister;
g. to exercise
such other powers and duties as may be vested in him by the Board of
Directors.
In the case of absence or
disability of the General Manager, he shall designate any of the Deputy
General Managers to act in his place.
7.
The auditor General shall be ex officio Auditor of the
Corporation.
8. The
Corporation shall have an authorized capital stock of TWO BILLION PESOS
(P2,000,000,000.00) divided into 20 million shares having a par value
of ONE HUNDRED Pesos (P100.00) per share to be subscribed and paid for
by the Government of the Republic of the Philippines and its
instrumentalities as follows: Government of the Republic of the
Philippines, SIX HUNDRED AND EIGHTY MILLION PESOS (P680,000,000.00);
Human Settlements Development Corporation, EIGHTY MILLION PESOS
(P80,000,000.00); National Development Company; EIGHTY MILLION PESOS
(P80,000,000.00); Farm Systems Development Corporation, EIGHTY MILLION
PESOS (P80,000,000.00), and National Electrification Administration,
EIGHTY MILLION PESOS (P80,000,000.00).
9. With the
approval of the Ministry of Finance, the Monetary Board and the
President of the Philippines, the Corporation may borrow from foreign
public or private financial institutions such amounts as may from time
to time be required for its operations or issue bonds, promissory
notes, debentures, certificates of indebtedness and other instrument.
With respect to domestic
indebtedness to be incurred by the Corporation, the terms and
conditions to be contained in such other evidences of indebtedness and
other conditions privileges exemptions and guarantees attaching
thereto, shall include the following:
a.
such bonds or other evidences of indebtedness shall be in registered
form and transferable at the Central Bank of the Philippines; shall not
be sold at less than par; shall be payable ten years of more from date
of issue, as may be determined by the Minister of Finance, before their
issuance, but shall be redeemable, upon the election of the Board of
Directors, after five years from such date of issue; and shall bear
interest at an annual rate to be determined before their issuance by
the Minister of Finance in consultation with the Monetary Board of the
Central Bank of the Philippines before date of issuance, and both the
principal and interest shall be payable in legal tender of the
Philippines.
b. such bonds
or other evidences of indebtedness shall be exempt from the payment of
all taxes by the Republic of the Philippines, or by any authority,
branch, division or political subdivision thereof, which facts shall be
stated upon their face; and they shall be receivable as security in any
transaction with the National Government or any of its branches,
subdivisions, instrumentalities and its owned or controlled
corporations in which a security is required.
c. a sinking
funds shall be established by the Corporation in such manner that the
total annual contributions thereto, accrued at such rate of interest as
may be determined by the Minister of Finance in consultation with the
Monetary Board, shall be sufficient to redeem at maturity the bonds
issued under this subsection. This sinking fund shall be under the
custody of the Central Bank of the Philippines, which shall invest the
same, subject to the approval of the Board of Directors and the
Minister of Finance in consultation with the Monetary Board: Provided,
That the proceeds thereof shall accrue to the Corporation.
d. the
Republic of the Philippines hereby guarantee the payment by the
Corporation of both the principal and the interest of the bonds or
other evidences of indebtedness, and shall pay such principal and the
interest in case the Corporation fails to do so; and there is hereby
made a standing appropriation out of the general funds in the National
Treasury not otherwise appropriated, the sums necessary to make the
payment so guaranteed; Provided, That the sums so paid by the Republic
of the Philippines shall be refunded by the Corporation, and provided,
further, that the Corporation, to assure such refunding, shall
establish such reserves or sinking funds and comply with such other
restrictions and conditions as the Minister of Finance may prescribe
and establish for that purpose.
With
respect to foreign indebtedness to be incurred by the Corporation such
as may be contracted, in the form of loans, credits convertible to
foreign currencies, or other forms of indebtedness, from foreign
government or any international financial institution or fund source,
including foreign private lenders the terms and conditions shall
include the following:
a.
the total outstanding amount of such indebtedness, exclusive of
interest, shall not exceed TWO BILLION PESOS (P2,000,000,000) or the
equivalent thereof in other currencies;
b. the
President of the Philippines, by himself or through his duly authorized
representative, is hereby authorized to negotiate and to so contract
with foreign governments or any international financial institution or
fund source in the name and on behalf of the Corporation; and is
further authorized to guarantee, absolutely and unconditionally, as
primary obligor and not merely as a surety, in the name and or in
behalf of the Republic of the Philippines, the repayment of any
indebtedness thereby contracted and the payment thereof of any due
interest charge, up to the limited amount authorized by the foregoing,
which shall be over and above the amounts which the President is
authorized to guarantee under R.A. 6152, and also to guarantee the
performance of all or any of the obligations undertaken by the
Corporation in the territory of the Republic of the Philippines
pursuant to loan agreements entered into pursuant to this provision;
c. any
indebtedness contracted under this provision and the payment of the
principal thereof and of any interest of other charges thereon, as well
as the importation of machinery, equipment, materials, supplies and
services by the Corporation, paid from the proceeds of any such
contracted indebtedness, shall also be exempt from all direct and
indirect taxes, fees, imposts, other charges and restrictions,
including import restrictions, by the Republic of the Philippines, or
by any authority, branch, division or political subdivision thereof.
10.
The Corporation shall execute all dendro projects that may be
authorized in any Public Works Acts.
11. The
Corporation shall devote all its returns from its capital investments
as well as excess revenues from its operation to attain its objectives.
To enable the Corporation to pay its indebtedness and obligations and
in furtherance and effective implementation of its programs and
projects, the Corporation is hereby declared exempt;
a.
from the payment of all taxes, duties, fees imposts, charges, costs and
restrictions to the Republic of the Philippines, its provinces, cities,
municipalities and other charges provided for under the Tariff and
Custom Code of the Philippines, R.A. 1937, as amended by Presidential
Decree No. 34 dated October 27, 1972, and Presidential Decree No. 69
dated November 24, 1972, and filing and service fees and other charges
or costs in any court or administrative proceedings in which it may be
a party;
b. from all
income taxes, franchise taxes and realty taxes to be paid to the
National Government, its provinces, cities, municipalities and other
government agencies and instrumentalities;
c. from all
import duties, compensating taxes and advance sale tax, wharfage fees
on import of foreign goods required for its operations and projects;
and,
d. from all
taxes, duties, fees, imposts and all other charges imposed directly or
indirectly by the Republic of the Philippines, its provinces, cities
and municipalities and other government agencies and instrumentalities
on all petroleum products used by the Corporation in the production,
processing and sale of its tree products.
12.
For the purpose of organizing tree farms into units large enough for
efficient production and transportation of trees, non-stock, non-profit
member owned corporations (hereafter referred to as tree farmer
association) or tree farmer corporation shall be encouraged by the
Corporation and formed for registration with the Farms System
Development Corporation.
a.
Guiding principles in organizing such corporations will be the
attaining of low cost, reliable tree production while assuring that the
income earned for tree production be received in fair measure by the
tree farmers. Furthermore, no family shall receive the return from more
than 20 hectares of tree land.
b. A
corporation for the purpose of tree production will be vested with all
powers necessary or convenient for the accomplishment of its corporate
purpose.
c. The name of
a corporation shall include the words “Dendro and Energy” and the
abbreviation “Inc.” The name of a corporation organized under this
Order shall be distinct from the name of any other corporation already
organized or converted under this Order.
d. Five or
more persons may organize a corporation in the manner hereinafter
provided.
e. Articles of
Incorporation. Each corporation will be organized under the rules of
the Farms Systems Development Corporation with the appropriate formal
incorporation.
f. The
corporation so formed will adopt a written set of by-laws which will
guide their operations.
13.
The corporation shall have the authority in consultation with the
Bureau of Forest Management and the Bureau of Lands to designate
certain lands as suitable for dendro production, provided, that such
designation be approved by the President. The NDDC shall have the sole
authority to approve application for the use of land so designated for
use in dendro production. Trees, charcoal and other products harvest
from tree plantations or processed from the products of tree plantation
shall be treated as farm products and shall specifically be exempted
from the requirements for timber licenses, from forestry charges and
from all other regulations and impositions normally applied by the
government or its agencies on forest products.
14. The
Corporation shall promulgate rules and regulations to accomplish the
objectives and purposes of this Order, particularly on the approval of
applications for the use of land designated for dendro production, on
the formation of tree farmer corporations, and on the granting of loans
for the development of tree farms, construction, operation and
acquisition of plants and equipment and production and processing of
tree farm products.
This Order shall take effect immediately.
Signed in the City of Manila,
this 12th day of March, in the year of Our Lord, nineteen hundred and
eighty one.
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