Today is Thursday, July 28, 2016

Republic of the Philippines

Congress of the Philippines
Metro Manila

Tenth Congress

Republic Act No. 8550             February 25, 1998

AN ACT PROVIDING FOR THE DEVELOPMENT, MANAGEMENT AND CONSERVATION OF THE

FISHERIES AND AQUATIC RESOURCES, INTEGRATING ALL LAWS PERTINENT THERETO, AND FOR
OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1. Title. - This Act shall be known as "The Philippine Fisheries Code of 1998."

CHAPTER I
Declaration of Policy and Definitions

Section 2. Declaration of Policy. - It is hereby declared the policy of the State:

(a) to achieve food security as the overriding consideration in the utilization, management, development,
conservation and protection of fishery resources in order to provide the food needs of the population. A
flexible policy towards the attainment of food security shall be adopted in response to changes in
demographic trends for fish, emerging trends in the trade of fish and other aquatic products in domestic and
international markets, and the law of supply and demand;lawphi1™

(b) to limit access to the fishery and aquatic resources of the Philippines for the exclusive use and enjoyment
of Filipino citizens;

(c) to ensure the rational and sustainable development, management and conservation of the fishery and
aquatic resources in Philippine waters including the Exclusive Economic Zone (EEZ) and in the adjacent
high seas, consistent with the primordial objective of maintaining a sound ecological balance, protecting and
 enhancing the quality of the environment;

(d) to protect the rights of fisherfolk, especially of the local communities with priority to municipal
fisherfolk, in the preferential use of the municipal waters. Such preferential use, shall be based on, but not
limited to, Maximum Sustainable Yield (MSY) or Total Allowable Catch (TAC) on the basis of resources and
ecological conditions, and shall be consistent with our commitments under international treaties and
agreements;

(e) to provide support to the fishery sector, primarily to the municipal fisherfolk, including women and youth
sectors, through appropriate technology and research, adequate financial, production, construction of post-
harvest facilities, marketing assistance, and other services. The protection of municipal fisherfolk against
foreign intrusion shall extend to offshore fishing grounds. Fishworkers shall receive a just share for their
labor in the utilization of marine and fishery resources;

(f) to manage fishery and aquatic resources, in a manner consistent with the concept of an integrated coastal
area management in specific natural fishery management areas, appropriately supported by research,
technical services and guidance provided by the State; and

(g) to grant the private sector the privilege to utilize fishery resources under the basic concept that the
grantee, licensee or permittee thereof shall not only be a privileged beneficiary of the State but also active
participant and partner of the Government in the sustainable development, management, conservation and
protection of the fishery and aquatic resources of the country.

The state shall ensure the attainment of the following objectives of the fishery sector:

1. Conservation, protection and sustained management of the country's fishery and aquatic resources;

2. Poverty alleviation and the provision of supplementary livelihood among municipal fisherfolk;

3. Improvement of productivity of aquaculture within ecological limits;

4. Optimal utilization of offshore and deep-sea resources; and

5. Upgrading of post-harvest technology.

Section 3. Application of its Provisions. - The provisions of this Code shall be enforced in:

(a) all Philippine waters including other waters over which the Philippines has sovereignty and jurisdiction,
and the country's 200-nautical mile Exclusive Economic Zone (EEZ) and continental shelf;

(b) all aquatic and fishery resources whether inland, coastal or offshore fishing areas, including but not
limited to fishponds, fishpens/cages; and

(c) all lands devoted to aquaculture, or businesses and activities relating to fishery, whether private or public
lands.lawphi1©

Section 4. Definition of Terms. - As used in this Code, the following terms and phrases shall mean as follows:
1. Ancillary Industries - firms or companies related to the supply, construction and maintenance of fishing
vessels, gears, nets and other fishing paraphernalia; fishery machine shops; and other facilities such as
hatcheries, nurseries, feed plants, cold storage and refrigeration, processing plants and other pre-harvest and
post-harvest facilities.

2. Appropriate Fishing Technology - adaptable technology, both in fishing and ancillary industries, that is
ecologically sound, locally source-based and labor intensive.

3. Aquaculture - fishery operations involving all forms of raising and culturing fish and other fishery species
in fresh, brackish and marine water areas.

4. Aquatic Pollution - the introduction by human or machine, directly or indirectly, of substances or energy to
the aquatic environment which result or is likely to result in such deleterious effects as to harm living and
non-living aquatic resources, pose potential and/or real hazard to human health, hindrance to aquatic
activities such as fishing and navigation, including dumping/disposal of waste and other marine litters,
discharge of petroleum or residual products of petroleum or carbonaceous materials/substances, and other,
radioactive, noxious or harmful liquid, gaseous or solid substances, from any water, land or air transport or
other human-made structure. Deforestation, unsound agricultural practices such as the use of banned
chemicals and excessive use of chemicals, intensive use of artificial fish feed, and wetland conversion, which
cause similar hazards and deleterious effects shall also constitute aquatic pollution.

5. Aquatic Resources - includes fish, all other aquatic flora and fauna and other living resources of the aquatic
environment, including, but not limited to, salt and corals.

6. Artificial Reefs - any structure of natural or man-made materials placed on a body of water to serve as
shelter and habitat, source of food, breeding areas for fishery species and shoreline protection.

7. Catch Ceilings - refer to the annual catch limits allowed to be taken, gathered or harvested from any
fishing area in consideration of the need to prevent overfishing and harmful depletion of breeding stocks of
aquatic organisms.

8. Closed Season - the period during which the taking of specified fishery species by a specified fishing gear
is prohibited in a specified area or areas in Philippine waters.

9. Coastal Area/Zone - is a band of dry land and adjacent ocean space (water and submerged land. in which
terrestrial processes and uses directly affect oceanic processes and uses, and vice versa; its geographic extent
may include areas within a landmark limit of one (1. kilometer from the shoreline at high tide to include
mangrove swamps, brackish water ponds, nipa swamps, estuarine rivers, sandy beaches and other areas
within a seaward limit of 200 meters isobath to include coral reefs, algal flats, seagrass beds and other soft-
bottom areas.

10. Commercial Fishing - the taking of fishery species by passive or active gear for trade, business & profit
beyond subsistence or sports fishing, to be further classified as:

(1) Small scale commercial fishing - fishing with passive or active gear utilizing fishing vessels of 3.1
gross tons (GT) up to twenty (20) GT;
 (2) Medium scale commercial fishing - fishing utilizing active gears and vessels of 20.1 GT up to one
hundred fifty (150) GT; and

(3) Large commercial fishing - fishing utilizing active gears and vessels of more than one hundred
fifty (150) GT.

11. Commercial Scale - a scheme of producing a minimum harvest per hectare per year of milkfish or other
species including those raised in pens, cages, and tanks to be determined by the Department in consultation
with the concerned sectors;

12. Coral - the hard calcareous substance made up of the skeleton of marine coelenterate polyps which
include reefs, shelves and atolls or any of the marine coelenterate animals living in colonies where their
skeletons form a stony mass. They include: (a. skeletons of anthozoan coelenterates characterized as having a
rigid axis of compact calcareous or horny spicules, belonging to the genus corallium as represented by the
red, pink, and white corals which are considered precious corals; (b. skeletons of anthozoan coelenterates
characterized by thorny, horny axis such as the antipatharians represented by the black corals which are
considered semi-precious corals; and (c. ordinary corals which are any kind of corals that are not precious nor
semi-precious.

13. Coral Reef - a natural aggregation of coral skeleton, with or without living coral polyps, occurring in
intertidal and subtidal marine waters.

14. Demarcated Areas - boundaries defined by markers and assigned exclusively to specific individuals or
organizations for certain specified and limited uses such as:

(a) Aquaculture, sea ranching and sea farming;

(b) Fish aggregating devices;

(c) Fixed and passive fishing gears; and

(d) Fry and fingerlings gathering.

15. Department - shall mean the Department of Agriculture.

16. Electrofishing - the use of electricity generated by batteries, electric generators and other source of
electric power to kill, stupefy, disable or render unconscious fishery species, whether or not the same are
subsequently recovered.

17. Endangered Rare and/or Threatened Species - aquatic plants, animals, including some varieties of corals
and sea shells in danger of extinction as provided for in existing fishery laws, rules and regulations or in the
Protected Areas and Wildlife Bureau of the Department of Environment and Natural Resources (DENR. and
in the Convention on the International Trade of Endangered Species of Flora and Fauna (CITES).

18. Exclusive Economic Zone (EEZ. - an area beyond and adjacent to the territorial sea which shall not
extend beyond 200 nautical miles from the baselines as defined under existing laws.
19. FARMCs - the Fisheries and Aquatic Resources Management Councils.

20. Farm-to-Market Roads - shall include roads linking the fisheries production sites, coastal landing points
and other post-harvest facilities to major market and arterial roads and highways.

21. Fine Mesh Net - net with mesh size of less than three centimeters (3 cm.. measured between two (2.
opposite knots of a full mesh when stretched or as otherwise determined by the appropriate government
agency.

22. Fish and Fishery/Aquatic Products - include not only finfish but also mollusks, crustaceans, echinoderms,
marine mammals, and all other species of aquatic flora and fauna and all other products of aquatic living
resources in any form.

23. Fish Cage - refers to an enclosure which is either stationary or floating made up of nets or screens sewn or
fastened together and installed in the water with opening at the surface or covered and held in a place by
wooden/bamboo posts or various types of anchors and floats.

24. Fish Corral or "Baklad" - a stationary weir or trap devised to intercept and capture fish consisting of rows
of bamboo stakes, plastic nets and other materials fenced with split blood mattings or wire mattings with one
or more enclosures, usually with easy entrance but difficult exit, and with or without leaders to direct the fish
to the catching chambers, purse or bags.

25. Fish fingerlings - a stage in the life cycle of the fish measuring to about 6-13 cm. depending on the
species.

26. Fish fry - a stage at which a fish has just been hatched usually with sizes from 1-2.5 cm.

27. Fish pen - an artificial enclosure constructed within a body of water for culturing fish and fishery/aquatic
resources made up of poles closely arranged in an enclosure with wooden materials, screen or nylon netting
to prevent escape of fish.

28. Fisherfolk - people directly or personally and physically engaged in taking and/or culturing and
processing fishery and/or aquatic resources.lawphi1™

29. Fisherfolk Cooperative - a duly registered association of fisherfolk with a common bond of interest, who
have voluntarily joined together to achieve a lawful common social or economic end, making equitable
contribution to the capital requirement and accepting a fair share of the risks and benefits of the undertakings
in accordance with universally accepted cooperative principles.

30. Fisherfolk Organization - an organized group, association, federation, alliance or an institution of

fisherfolk which has at least fifteen (15. members, a set of officers, a constitution and by-laws, an
organizational structure and a program of action.

31. Fisheries - refers to all activities relating to the act or business of fishing, culturing, preserving,
processing, marketing, developing, conserving and managing aquatic resources and the fishery areas,
including the privilege to fish or take aquatic resource thereof.
32. Fish Pond - a land-based facility enclosed with earthen or stone material to impound water for growing
fish.

33. Fishing Boat/Gear License - a permit to operate specific types of fishing boat/gear for specific duration in
areas beyond municipal waters for demersal or pelagic fishery resources.

34. Fishery Management Areas - a bay, gulf, lake or any other fishery area which may be delineated for
fishery resource management purposes.

35. Fishery Operator - one who owns and provides the means including land, labor, capital, fishing gears and
vessels, but does not personally engage in fishery.

36. Fishery Refuge and Sanctuaries - a designated area where fishing or other forms of activities which may
damage the ecosystem of the area is prohibited and human access may be restricted.

37. Fishery Reserve - a designated area where activities are regulated and set aside for educational and
research purposes.

38. Fishery Species - all aquatic flora and fauna including, but not restricted to, fish, algae, coelenterates,
mollusks, crustaceans, echinoderms and cetaceans.

39. Fishing - the taking of fishery species from their wild state of habitat, with or without the use of fishing
vessels.

40. Fishing gear - any instrument or device and its accessories utilized in taking fish and other fishery
species.

(a) Active fishing gear - is a fishing device characterized by gear movements, and/or the pursuit of the
target species by towing, lifting, and pushing the gears, surrounding, covering, dredging, pumping and
scaring the target species to impoundments; such as, but not limited to, trawl, purse seines, Danish
seines, bag nets, paaling, drift gill net and tuna longline.

(b) Passive fishing gear - is characterized by the absence of gear movements and/or the pursuit of the
target species; such as, but not limited to, hook and line, fishpots, traps and gill nets across the path of
the fish.

41. Fishing vessel - any boat, ship or other watercraft equipped to be used for taking of fishery species or
aiding or assisting one (1. or more vessels in the performance of any activity relating to fishing, including,
but not limited to, preservation, supply, storage, refrigeration, transportation and/or processing.

42. Fishing with Explosives - the use of the dynamite, other explosives or other chemical compounds that
contain combustible elements or ingredients which upon ignition by friction, concussion, percussion or
detonation of all or parts of the compound, will kill, stupefy, disable or render unconscious any fishery
species. It also refers to the use of any other substance and/or device which causes an explosion that is
capable of producing the said harmful effects on any fishery species and aquatic resources and capable of
damaging and altering the natural habitat.
43. Fishing with Noxious or Poisonous Substances - the use of any substance, plant extracts or juice thereof,
sodium cyanide and/or cyanide compounds or other chemicals either in a raw or processed form, harmful or
harmless to human beings, which will kill, stupefy, disable or render unconscious any fishery species and
aquatic resources and capable of damaging and altering the natural habitat.

44. Fishworker - a person regularly or not regularly employed in commercial fishing and related industries,
whose income is either in wage, profit-sharing or stratified sharing basis, including those working in fish
pens, fish cages, fish corrals/traps, fishponds, prawn farms, sea farms, salt beds, fish ports, fishing boat or
trawlers, or fish processing and/or packing plants. Excluded from this category are administrators, security
guards and overseers.

45. Food Security - refers to any plan, policy or strategy aimed at ensuring adequate supplies of appropriate
food at affordable prices. Food security may be achieved through self-sufficiency (i.e. ensuring adequate food
supplies from domestic production), through self-reliance (i.e. ensuring adequate food supplies through a
combination of domestic production and importation), or through pure importation.

46. Foreshore Land - a string of land margining a body of water; the part of a seashore between the low-water
line usually at the seaward margin of a low tide terrace and the upper limit of wave wash at high tide usually
marked by a beach scarp or berm.

47. Fully-developed Fishpond Area - a clean leveled area enclosed by dikes, at least one foot higher than the
highest floodwater level in the locality and strong enough to resist pressure at the highest flood tide; consists
of at least a nursery pond, a transition pond, a rearing pond or a combination of any or all said classes of
ponds, and a functional water control system and producing in a commercial scale.

48. Gross Tonnage - includes the underdeck tonnage, permanently enclosed spaces above the tonnage deck,
except for certain exemptions. In broad terms, all the vessel's 'closed-in' spaces expressed in volume terms on
the bases of one hundred cubic feet (that equals one gross ton).

49. Inland Fishery - the freshwater fishery and brackishwater fishponds.

50. Lake - an inland body of water, an expanded part of a river, a reservoir formed by a dam, or a lake basin
intermittently or formerly covered by water.

51. Limited Access - a fishery policy by which a system of equitable resource and allocation is established by
law through fishery rights granting and licensing procedure as provided by this Code.

52. Mangroves - a community of intertidal plants including all species of trees, shrubs, vines and herbs found
on coasts, swamps, or border of swamps.

53. Maximum Sustainable Yield (MSY. - is the largest average quantity of fish that can be harvested from a
fish stocks/resource within a period of time (e.g. one year. on a sustainable basis under existing
environmental conditions.

54. Migratory species - refers to any fishery species which in the course of their life could travel from
freshwater to marine water or vice versa, or any marine species which travel over great distances in waters of
the ocean as part of their behavioral adaptation for survival and speciation:

(a) Anadromous species - marine fishes which migrate to freshwater areas to spawn;

(b) Catadromous species - freshwater fishes which migrate to marine areas to spawn.

55. Monitoring, control and surveillance -

(a) Monitoring - the requirement of continuously observing: (1) fishing effort which can be expressed
by the number of days or hours of fishing, number of fishing gears and number of fisherfolk; (2)
characteristics of fishery resources; and (3) resource yields (catch);

(b) Control - the regulatory conditions (legal framework) under which the exploitation, utilization and
disposition of the resources may be conducted; and

(c) Surveillance - the degree and types of observations required to maintain compliance with
regulations.lawphi1™ALF

56. Municipal fisherfolk - persons who are directly or indirectly engaged in municipal fishing and other
related fishing activities.

57. Municipal fishing - refers to fishing within municipal waters using fishing vessels of three (3. gross tons
or less, or fishing not requiring the use of fishing vessels.

58. Municipal waters - include not only streams, lakes, inland bodies of water and tidal waters within the
municipality which are not included within the protected areas as defined under Republic Act No. 7586 (The
NIPAS Law), public forest, timber lands, forest reserves or fishery reserves, but also marine waters included
between two (2. lines drawn perpendicular to the general coastline from points where the boundary lines of
the municipality touch the sea at low tide and a third line parallel with the general coastline including
offshore islands and fifteen (15. kilometers from such coastline. Where two (2. municipalities are so situated
on opposite shores that there is less than thirty (30. kilometers of marine waters between them, the third line
shall be equally distant from opposite shore of the respective municipalities.

59. Non-governmental organization (NGO. - an agency, institution, a foundation or a group of persons whose
purpose is to assist peoples organizations/associations in various ways including, but not limited to,
organizing, education, training, research and/or resource accessing.

60. Payao - a fish aggregating device consisting of a loating raft anchored by a weighted line with suspended
materials such as palm fronds to attract pelagic and schooling species common in deep waters.

61. Pearl Farm Lease - public waters leased for the purpose of producing cultured pearls.

62. People's Organization - a bona fide association of citizens with demonstrated capacity to promote the
public interest and with identifiable leadership, membership and structure. Its members belong to a sector/s
who voluntarily band themselves together to work for and by themselves for their own upliftment,
development and greater good.

63. Person - natural or juridical entities such as individuals, associations, partnership, cooperatives or
corporations.

64. Philippine waters - include all bodies of water within the Philippine territory such as lakes, rivers,
streams, creeks, brooks, ponds, swamps, lagoons, gulfs, bays and seas and other bodies of water now existing
or which may hereafter exist in the provinces, cities, municipalities, and barangays and the waters around,
between and connecting the islands of the archipelago regardless of their breadth and dimensions, the
territorial sea, the sea beds, the insular shelves, and all other waters over which the Philippines has
sovereignty and jurisdiction including the 200-nautical miles Exclusive Economic Zone and the continental
shelf.

65. Post-harvest facilities - these facilities include, but are not limited to, fishport, fishlanding, ice plants and
cold storages, fish processing plants.

66. Purse Seine - a form of encircling net having a line at the bottom passing through rings attached to the
net, which can be drawn or pursed. In general, the net is set from a boat or pair of boats around the school of
fish. The bottom of the net is pulled closed with the purse line. The net is then pulled aboard the fishing boat
or boats until the fish are concentrated in the bunt or fish bag.

67. Resource Rent - the difference between the value of the products produced from harvesting a publicly
owned resource less the cost of producing it, where cost includes the normal return to capital and normal
return to labor.

68. Sea farming - the stocking of natural or hatchery-produced marine plants or animals, under controlled
conditions, for purposes of rearing and harvesting, but not limited to commercially-important fishes, mollusks
(such as pearl and giant clam culture), including seaweeds and seagrasses.

69. Sea ranching - the release of the young of fishery species reared in hatcheries and nurseries into natural
bodies of water for subsequent harvest at maturity or the manipulation of fishery habitat, to encourage the
growth of the wild stocks.

70. Secretary - the Secretary of the Department of Agriculture.

71. Superlight - also called magic light, is a type of light using halogen or metal halide bulb which may be
located above the sea surface or submerged in the water. It consists of a ballast, regulator, electric cable and
socket. The source of energy comes from a generator, battery or dynamo coupled with the main engine.

72. Total Allowable Catch (TAC. - the maximum harvest allowed to be taken during a given period of time
from any fishery area, or from any fishery species or group of fishery species, or a combination of area and
species and normally would not exceed the MSY.

73. Trawl - an active fishing gear consisting of a bag shaped net with or without otter boards to open its
opening which is dragged or towed along the bottom or through the water column to take fishery species by
straining them from the water, including all variations and modifications of trawls (bottom, mid-water, and
baby trawls) and tow nets.

CHAPTER II
 Utilization, Management, Development, Conservation and Allocation System of Fisheries and Aquatic Resources

Section 5. Use of Philippine Waters. - The use and exploitation of the fishery and aquatic resources in Philippine waters
shall be reserved exclusively to Filipinos: Provided, however, That research and survey activities may be allowed under
strict regulations, for purely research, scientific, technological and educational purposes that would also benefit Filipino
citizens.

Section 6. Fees and Other Fishery Charges. - The rentals for fishpond areas covered by the Fishpond Lease Agreement
(FLA) and license fees for Commercial Fishing Boat Licenses (CFBL) shall be set at levels that reflect resource rent
accruing from the utilization of resources and shall be determined by the Department: Provided, That the Department shall
also prescribe fees and other fishery charges and issue the corresponding license or permit for fishing gear, fishing
accessories and other fishery activities beyond the municipal waters: Provided, further, That the license fees of fishery
activity in municipal waters shall be determined by the Local Government Units (LGUs) in consultation with the FARMCs.
The FARMCs may also recommend the appropriate license fees that will be imposed.

Section 7. Access to Fishery Resources. - The Department shall issue such number of licenses and permits for the conduct
of fishery activities subject to the limits of the MSY of the resource as determined by scientific studies or best available
evidence. Preference shall be given to resource users in the local communities adjacent or nearest to the municipal waters.

Section 8. Catch Ceiling Limitations. - The Secretary may prescribe limitations or quota on the total quantity of fish
captured, for a specified period of time and specified area based on the best available evidence. Such a catch ceiling may be
imposed per species of fish whenever necessary and practicable: Provided, however, That in municipal waters and fishery
management areas, and waters under the jurisdiction of special agencies, catch ceilings may be established upon the
concurrence and approval or recommendation of such special agency and the concerned LGU in consultation with the
FARMC for conservation or ecological purposes.

Section 9. Establishment of Closed Season. - The Secretary may declare, through public notice in at least two (2)
newspapers of general circulation or in public service announcements, whichever is applicable, at least five (5) days before
the declaration, a closed season in any or all Philippine waters outside the boundary of municipal waters and in bays, for
conservation and ecological purposes. The Secretary may include waters under the jurisdiction of special agencies,
municipal waters and bays, and/or other areas reserved for the use of the municipal fisherfolk in the area to be covered by
the closed season: Provided, however, That this shall be done only upon the concurrence and approval or recommendation of
such special agency and the concerned LGU and FARMC: Provided, further, That in municipal waters, fishery management
areas and other areas reserved for the use of the municipal fisherfolk, closed season may be established by the concerned
LGU in consultation with the FARMC for conservation or ecological purposes. The FARMCs may also recommend the
establishment of closed seasons in municipal waters, fisheries management and other areas reserved for the use of the
municipal fisherfolk.

Section 10. Introduction of Foreign Aquatic Species. - No foreign finfish, mollusk, crustacean or aquatic plants shall be
introduced in Philippine waters without a sound ecological, biological and environmental justification based on scientific
studies subject to the bio-safety standard as provided for by existing laws: Provided, however, That the Department may
approve the introduction of foreign aquatic species for scientific/research purposes.

Section 11. Protection of Rare, Threatened and Endangered Species. - The Department shall declare closed seasons and
take conservation and rehabilitation measures for rare, threatened and endangered species, as it may determine, and shall ban
the fishing and/or taking of rare, threatened and/or endangered species, including their eggs/offspring as identified by
existing laws in concurrence with concerned government agencies.

Section 12. Environmental Impact Statement (EIS). - All government agencies as well as private corporations, firms and
entities who intend to undertake activities or projects which will affect the quality of the environment shall be required to
prepare a detailed Environmental Impact Statement (EIS) prior to undertaking such development activity. The preparation of
the EIS shall form an integral part of the entire planning process pursuant to the provisions of Presidential Decree No. 1586
as well as its implementing rules and regulations.

Section 13. Environmental Compliance Certificate (ECC). - All Environmental Impact Statements (EIS) shall be submitted
to the Department of Environment and Natural Resources (DENR) for review and evaluation. No person, natural or
juridical, shall undertake any development project without first securing an Environmental Compliance Certificate (ECC)
from the Secretary of the DENR.

Section 14. Monitoring, Control and Surveillance of Philippine Waters. - A monitoring, control and surveillance system
shall be established by the Department in coordination with LGUs, FARMCs, the private sector and other agencies
concerned to ensure that the fisheries and aquatic resources in Philippine waters are judiciously and wisely utilized and
managed on a sustainable basis and conserved for the benefit and enjoyment exclusively of Filipino citizens.

Section 15. Auxiliary Invoices. - All fish and fishery products must have an auxiliary invoice to be issued by the LGUs or
their duly authorized representatives prior to their transport from their point of origin to their point of destination in the
Philippines and/or export purposes upon payment of a fee to be determined by the LGUs to defray administrative costs
therefor.

ARTICLE I
MUNICIPAL FISHERIES

Section 16. Jurisdiction of Municipal/City Government. - The municipal/city government shall have jurisdiction over
municipal waters as defined in this Code. The municipal/city government, in consultation with the FARMC shall be
responsible for the management, conservation, development, protection, utilization, and disposition of all fish and
fishery/aquatic resources within their respective municipal waters.

The municipal/city government may, in consultation with the FARMC, enact appropriate ordinances for this purpose and in
accordance with the National Fisheries Policy. The ordinances enacted by the municipality and component city shall be
reviewed pursuant to Republic Act No. 7160 by the sanggunian of the province which has jurisdiction over the same.

The LGUs shall also enforce all fishery laws, rules and regulations as well as valid fishery ordinances enacted by the
municipal/city council.

The management of contiguous fishery resources such as bays which straddle several municipalities, cities or provinces,
shall be done in an integrated manner, and shall not be based on political subdivisions of municipal waters in order to
facilitate their management as single resource systems. The LGUs which share or border such resources may group
themselves and coordinate with each other to achieve the objectives of integrated fishery resource management. The
Integrated Fisheries and Aquatic Resources Management Councils (FARMCs) established under Section 76 of this Code
shall serve as the venues for close collaboration among LGUs in the management of contiguous resources.
Section 17. Grant of Fishing Privileges in Municipal Waters. - The duly registered fisherfolk organizations/cooperatives
shall have preference in the grant of fishery rights by the Municipal/City Council pursuant to Section 149 of the Local
Government Code: Provided, That in areas where there are special agencies or offices vested with jurisdiction over
municipal waters by virtue of special laws creating these agencies such as, but not limited to, the Laguna Lake Development
Authority and the Palawan Council for Sustainable Development, said offices and agencies shall continue to grant permits
for proper management and implementation of the aforementioned structures.

Section 18. Users of Municipal Waters. - All fishery related activities in municipal waters, as defined in this Code, shall be
utilized by municipal fisherfolk and their cooperatives/organizations who are listed as such in the registry of municipal
fisherfolk.

The municipal or city government, however, may, through its local chief executive and acting pursuant to an appropriate
ordinance, authorize or permit small and medium commercial fishing vessels to operate within the ten point one (10.1) to
fifteen (15) kilometer area from the shoreline in municipal waters as defined herein, provided, that all the following are met:

(a) no commercial fishing in municipal waters with depth less than seven (7) fathoms as certified by the
appropriate agency;

(b) fishing activities utilizing methods and gears that are determined to be consistent with national policies set
by the Department;

(c) prior consultation, through public hearing, with the M/CFARMC has been conducted; and

(d) the applicant vessel as well as the shipowner, employer, captain and crew have been certified by the
appropriate agency as not having violated this Code, environmental laws and related laws.

In no case shall the authorization or permit mentioned above be granted for fishing in bays as determined by the Department
to be in an environmentally critical condition and during closed season as provided for in Section 9 of this Code.

Section 19. Registry of Municipal Fisherfolk. - The LGU shall maintain a registry of municipal fisherfolk, who are fishing
or may desire to fish in municipal waters for the purpose of determining priorities among them, of limiting entry into the
municipal waters, and of monitoring fishing activities an/or other related purposes: Provided, That the FARMC shall submit
to the LGU the list of priorities for its consideration.

Such list or registry shall be updated annually or as may be necessary, and shall be posted in barangay halls or other strategic
locations where it shall be open to public inspection, for the purpose of validating the correctness and completeness of the
list. The LGU, in consultation with the FARMCs, shall formulate the necessary mechanisms for inclusion or exclusion
procedures that shall be most beneficial to the resident municipal fisherfolk. The FARMCs may likewise recommend such
mechanisms.

The LGUs shall also maintain a registry of municipal fishing vessels by type of gear and other boat particulars with the
assistance of the FARMC.

Section 20. Fisherfolk Organizations and/or Cooperatives. - Fisherfolk organizations/cooperatives whose members are
listed in the registry of municipal fisherfolk, may be granted use of demarcated fishery areas to engage in fish capture,
mariculture and/or fish farming: Provided, however, That an organization/cooperative member whose household is already
in possession of a fishery right other than for fish capture cannot enjoy the fishing rights granted to the organization or
cooperative.

Section 21. Priority of Resident Municipal Fisherfolk. - Resident municipal fisherfolk of the municipality concerned and
their organizations/cooperatives shall have priority to exploit municipal and demarcated fishery areas of the said
municipality.

Section 22. Demarcated Fishery Right. - The LGU concerned shall grant demarcated fishery rights to fishery
organizations/cooperatives for mariculture operation in specific areas identified by the Department.

Section 23. Limited Entry Into Overfished Areas. - Whenever it is determined by the LGUs and the Department that a
municipal water is overfished based on available data or information or in danger of being overfished, and that there is a
need to regenerate the fishery resources in that water, the LGU shall prohibit or limit fishery activities in the said waters.

Section 24. Support to Municipal Fisherfolk. - The Department and the LGUs shall provide support to municipal fisherfolk
through appropriate technology and research, credit, production and marketing assistance and other services such as, but not
limited to training for additional/supplementary livelihood.

Section 25. Rights and Privileges of Fishworkers. - The fishworkers shall be entitled to the privileges accorded to other
workers under the Labor Code, Social Security System and other benefits under other laws or social legislation for workers:
Provided, That fishworkers on board any fishing vessels engaged in fishing operations are hereby covered by the Philippine
Labor Code, as amended.

ARTICLE II
COMMERCIAL FISHERIES

Section 26. Commercial Fishing Vessel License and Other Licenses. - No person shall operate a commercial fishing vessel,
pearl fishing vessel or fishing vessel for scientific, research or educational purposes, or engage in any fishery activity, or
seek employment as a fishworker or pearl diver without first securing a license from the Department, the period of which
shall be prescribed by the Department: Provided, That no such license shall be required of a fishing vessel engaged in
scientific, research or educational purposes within Philippine waters pursuant to an international agreement of which the
Philippines is a signatory and which agreement defines the status, privileges and obligations of said vessel and its crew and
the non-Filipino officials of the international agency under which said vessel operates: Provided, further, That members of
the crew of a fishing vessel used for commercial fishing except the duly licensed and/or authorized patrons, marine
engineers, radio operators and cooks shall be considered as fisherfolk: Provided, furthermore, That all skippers/master
fishers shall be required to undertake an orientation training on detection of fish caught by illegal means before they can be
issued their fishworker licenses: Provided, finally, That the large commercial fishing vessels license herein authorized to be
granted shall allow the licensee to operate only in Philippine waters seven (7) or more fathoms deep, the depth to be certified
by the NAMRIA, and subject to the conditions that may be stated therein and the rules and regulations that may be
promulgated by the Department.

Section 27. Persons Eligible for Commercial Fishing Vessel License. - No commercial fishing vessel license shall be
issued except to citizens of the Philippines, partnerships or to associations, cooperatives or corporations duly registered in
the Philippines at least sixty percent (60%) of the capital stock of which is owned by Filipino citizens. No person to whom a
license has been issued shall sell, transfer or assign, directly or indirectly, his stock or interest therein to any person not
qualified to hold a license. Any such transfer, sale or assignment shall be null and void and shall not be registered in the
books of the association, cooperative or corporation.

For purposes of commercial fishing, fishing vessels owned by citizens of the Philippines, partnerships, corporations,
cooperatives or associations qualified under this section shall secure Certificates of Philippine Registry and such other
documents as are necessary for fishing operations from the concerned agencies: Provided, That the commercial fishing
vessel license shall be valid for a period to be determined by the Department.

Section 28. Commercial Fishing Vessel Registration. - The registration, documentation, inspection and manning of the
operation of all types of fishing vessels plying Philippine waters shall be in accordance with laws, rules and regulations.

Section 29. Registration and Licensing of Fishing Gears Used in Commercial Fishing. - Before a commercial fishing
vessel holding a commercial fishing vessel license may begin fishing operations in Philippine waters, the fishing gear it will
utilize in fishing shall be registered and a license granted therefor. The Department shall promulgate guidelines to implement
this provision within sixty (60) days from approval of this Code.

Section 30. Renewal of Commercial Boat License. - The commercial fishing boat license shall be renewed every three (3)
years.

The owner/operator of a fishing vessel has a period of sixty (60) days prior to the expiration of the license within which to
renew the same.

Section 31. Report of Transfer of Ownership. - The owner/operator of a registered fishing vessel shall notify the
Department in writing of the transfer of the ownership of the vessel with a copy of such document within ten (10) days after
its transfer to another person.

Section 32. Fishing by Philippine Commercial Fishing Fleet in International Waters. - Fishing vessels of Philippine
registry may operate in international waters or waters of other countries which allow such fishing operations: Provided, That
they comply with the safety, manning and other requirements of the Philippine Coast Guard, Maritime Industry Authority
and other agencies concerned: Provided, however, That they secure an international fishing permit and certificate of
clearance from the Department: Provided, further, That the fish caught by such vessels shall be considered as caught in
Philippine waters and therefore not subject to all import duties and taxes only when the same is landed in duly designated
fish landings and fish ports in the Philippines: Provided, furthermore, That landing ports established by canneries, seafood
processors and all fish landing sites established prior to the effectivity of this Code shall be considered authorized landing
sites: Provided, finally, That fishworkers on board Philippine registered fishing vessels conducting fishing activities beyond
the Philippine Exclusive Economic Zone are not considered as overseas Filipino workers.

Section 33. Importation of Fishing Vessels or Construction of New Fishing Boats. - Prior to the importation of fishing
vessels and the construction of new fishing vessels, the approval/clearance of the Department must first be obtained.

Section 34. Incentives for Municipal and Small-Scale Commercial Fisherfolk. - Municipal and small-scale commercial
fisherfolk shall be granted incentives which shall include, but are not limited to, the following:

(a) at least ten percent (10%) of the credit and the guarantee funds of government financing institutions shall
be made available for post-harvest and marketing projects for the purpose of enhancing our fisherfolk
competitiveness by reducing post-harvest losses. Qualified projects shall include, but shall not be limited to,
ice plants, cold storage, canning, warehouse, transport and other related infrastructure projects and facilities;
 and

(b) the Department shall undertake the following programs:

1. a capability-building program for targeted parties shall be developed by the Department to promote
greater bankability and credit worthiness of municipal and small-scale commercial fishers. Such
program shall include organizing activities, technology transfer, and skills training related to
commercial fishing as well as credit management. Groups and cooperatives organized under the
program shall have priority access over credit and guarantee funds established under this Code; and

2. an information campaign shall be conducted to promote the capability building and credit
programs. The campaign shall ensure greater information dissemination and accessibility to targeted
fisherfolk.

Section 35. Incentives for Commercial Fishers to Fish Farther into the Exclusive Economic Zone. - In order to encourage
fishing vessel operators to fish farther in the EEZ and beyond, new incentives for improvement of fishing vessels and
acquisition of fishing equipment shall be granted in addition to incentives already available from the Board of Investments
(BOI). Such incentives shall be granted subject to exhaustive evaluation of resource and exploitation conditions in the
specified areas of fishing operations. The incentive shall include, but not be limited to:

(a) long term loans supported by guarantee facilities to finance the building and acquisition and/or
improvement of fishing vessels and equipment;

(b) commercial fishing vessel operators of Philippine registry shall enjoy a limited period of tax and duty
exemptions on the importation of fishing vessels not more than five (5) years old, equipment and
paraphernalia, the period of exemption and guidelines shall be fixed by the Department within ninety (90)
days from the effectivity of this Code;

(c) commercial fishing operator of Philippine registry engaged in fisheries in the high seas shall be entitled to
duty and tax rebates on fuel consumption for commercial fisheries operations. Guidelines shall be
promulgated within ninety (90) days from the effectivity of this Code by the Department; and

(d) all applicable incentives available under the Omnibus Investment Code of 1987: Provided, That the
fishing operation project is qualified for registration and is duly registered with the BOI.

Section 36. Complement of Fishing Vessels. - Every commercial fishing vessel of Philippine registry when actually
operated, shall be manned in accordance with the requirements of the Philippine Merchant Marine rules and regulations.

Section 37. Medical Supplies and Life-Saving Devices. - All fishing vessels shall be provided with adequate medical
supplies and life-saving devices to be determined by the Occupational Safety and Health Center: Provided, That a fishing
vessel of twenty (20) GT or more shall have as a member of its crew a person qualified as a first aider duly certified by the
Philippine National Red Cross.

Section 38. Reportorial Requirements. - Each commercial fishing vessel shall keep a daily record of fish catch and
spoilage, landing points, and quantity and value of fish caught, and off-loaded for transshipment, sale and/or other disposal.
Detailed information shall be duly certified by the vessel's captain and transmitted monthly to the officer or representative of
the Department, at the nearest designated landing point.

Section 39. Report of Meteorological and Other Data. - All vessels and crafts passing navigational lanes or engaged in
fisheries activity shall be required to contribute to meteorological and other data, and shall assist the Department in
documentation or reporting of information vital to navigation and the fishing industry.

Section 40. Color Code and Radio Frequency. - For administrative efficiency and enforcement of regulations, registered
fishing vessels shall bear a color code as may be determined by the Department and may be assigned a radio frequency
specific and distinct to its area of operation.

Section 41. Passage. - Commercial and other passage not in the regular conduct of fisheries activity shall be made at
designated navigational lanes.

Section 42. Transshipment. - Foreign fishing vessels wishing to avail of land, air and sea facilities available in the
Philippines to transport fishery products which are caught outside Philippine territorial waters to its final destination shall
call only at duly designated government-owned or -controlled regional fishport complexes after securing clearance from the
Department.

Section 43. Operation of Radio Communication Facilities on Board Fishing Vessels. - The Department shall promulgate
guidelines in the operation of radio communication facilities on board fishing vessels and the assignment of radio
frequencies specific and distinct to area of operation in coordination with the National Telecommunications Commission.

Section 44. Use of Superlight. - The number and wattage of superlights used in commercial fishing vessels shall be
regulated by the Department: Provided, That the use of superlights is banned within municipal waters and bays.

ARTICLE III
AQUACULTURE

Section 45. Disposition of Public Lands for Fishery Purposes. - Public lands such as tidal swamps, mangroves, marshes,
foreshore lands and ponds suitable for fishery operations shall not be disposed or alienated. Upon effectivity of this Code,
FLA may be issued for public lands that may be declared available for fishpond development primarily to qualified
fisherfolk cooperatives/associations: Provided, however, That upon the expiration of existing FLAs the current lessees shall
be given priority and be entitled to an extension of twenty-five (25) years in the utilization of their respective leased areas.
Thereafter, such FLAs shall be granted to any Filipino citizen with preference, primarily to qualified fisherfolk
cooperatives/associations as well as small and medium enterprises as defined under Republic Act No. 8289: Provided,
further, That the Department shall declare as reservation, portions of available public lands certified as suitable for fishpond
purposes for fish sanctuary, conservation, and ecological purposes: Provided, finally, That two (2) years after the approval of
this Act, no fish pens or fish cages or fish traps shall be allowed in lakes.

Section 46. Lease of Fishponds. - Fishpond leased to qualified persons and fisherfolk organizations/cooperatives shall be
subject to the following conditions:

(a) Areas leased for fishpond purposes shall be no more than 50 hectares for individuals and 250 hectares for
corporations or fisherfolk organizations;

(b) The lease shall be for a period of twenty-five (25) years and renewable for another twenty-five (25) years:
Provided, That in case of the death of the lessee, his spouse and/or children, as his heirs, shall have
 preemptive rights to the unexpired term of his Fishpond Lease Agreement subject to the same terms and
conditions provided herein provided that the said heirs are qualified;

(c) Lease rates for fishpond areas shall be determined by the Department: Provided, That all fees collected
shall be remitted to the National Fisheries Research and Development Institute and other qualified research
institutions to be used for aquaculture research development;

(d) The area leased shall be developed and producing on a commercial scale within three (3) years from the
approval of the lease contract: Provided, however, That all areas not fully producing within five (5) years
from the date of approval of the lease contract shall automatically revert to the public domain for
reforestation;

(e) The fishpond shall not be subleased, in whole or in part, and failure to comply with this provision shall
mean cancellation of FLA;

(f) The transfer or assignment of rights to FLA shall be allowed only upon prior written approval of the
Department;

(g) The lessee shall undertake reforestation for river banks, bays, streams, and seashore fronting the dike of
his fishpond subject to the rules and regulations to be promulgated thereon; and

(h) The lessee shall provide facilities that will minimize environmental pollution, i.e., settling ponds,
reservoirs, etc: Provided, That failure to comply with this provision shall mean cancellation of FLA.

Section 47. Code of Practice for Aquaculture. - The Department shall establish a code of practice for aquaculture that will
outline general principles and guidelines for environmentally-sound design and operation to promote the sustainable
development of the industry. Such Code shall be developed through a consultative process with the DENR, the fishworkers,
FLA holders, fishpond owners, fisherfolk cooperatives, small-scale operators, research institutions and the academe, and
other potential stakeholders. The Department may consult with specialized international organizations in the formulation of
the code of practice.

Section 48. Incentives and Disincentives for Sustainable Aquaculture Practices. - The Department shall formulate
incentives and disincentives, such as, but not limited to, effluent charges, user fees and negotiable permits, to encourage
compliance with the environmental standards and to promote sustainable management practices.

Section 49. Reversion of All Abandoned, Undeveloped or Underutilized Fishponds. - The DENR, in coordination with the
Department, LGUs, other concerned agencies and FARMCs shall determine which abandoned, underdeveloped or
underutilized fishponds covered by FLAs can be reverted to their original mangrove state and after having made such
determination shall take all steps necessary to restore such areas in their original mangrove state.

Section 50. Absentee Fishpond Lease Agreement Holders. - Holders of fishpond lease agreements who have acquired
citizenship in another country during the existence of the FLA shall have their lease automatically cancelled and the
improvements thereon to be forfeited in favor of the government and disposed of in accordance with rules and regulations
promulgated thereon.

Section 51. License to Operate Fish Pens, Fish Cages, Fish Traps and Other Structures for the Culture of Fish and
Other Fishery Products. - Fish pens, fish cages, fish traps and other structures for the culture of fish and other fishery
products shall be constructed and shall operate only within established zones duly designated by LGUs in consultation with
the FARMCs concerned consistent with national fisheries policies after the corresponding licenses thereof have been
secured. The area to be utilized for this purpose for individual person shall be determined by the LGUs in consultation with
the concerned FARMC: Provided, however, That not over ten percent (10%) of the suitable water surface area of all lakes
and rivers shall be allotted for aquaculture purposes like fish pens, fish cages and fish traps; and the stocking density and
feeding requirement which shall be controlled and determined by its carrying capacity: Provided, further, That fish pens and
fish cages located outside municipal waters shall be constructed and operated only within fish pen and fish cage belts
designated by the Department and after corresponding licenses therefor have been secured and the fees thereof paid.

Section 52. Pearl Farm Leases. - The foregoing provisions notwithstanding, existing pearl farm leases shall be respected
and allowed to operate under the terms thereof. New leases may be granted to qualified persons who possess the necessary
capital and technology, by the LGUs having jurisdiction over the area.

Section 53. Grant of Privileges for Operations of Fish Pens, Cages, Corrals/Traps and Similar Structures. - No new
concessions, licenses, permits, leases and similar privileges for the establishment or operation of fish pens, fish cages, fish
corrals/traps and other similar structures in municipal areas shall be granted except to municipal fisherfolk and their
organizations.

Section 54. Insurance for Fishponds, Fish Cages and Fish Pens. - Inland fishponds, fish cages and fish pens shall be
covered under the insurance program of the Philippine Crop Insurance Corporation for losses caused by force majeure and
fortuitous events.

Section 55. Non-Obstruction to Navigation. - Nothing in the foregoing sections shall be construed as permitting the lessee,
licensee, or permittee to undertake any construction which will obstruct the free navigation in any stream, river, lakes, or
bays flowing through or adjoining the fish pens, fish cages, fish traps and fishponds, or impede the flow of the tide to and
from the area. Any construction made in violation hereof shall be removed upon the order of the Department in coordination
with the other government agencies concerned at the expense of the lessee, licensee, or occupants thereof, whenever
applicable. The Department shall within thirty (30) days after the effectivity of this Code formulate and implement rules and
regulations for the immediate dismantling of existing obstruction to navigation.

Section 56. Non-Obstruction to Defined Migration Paths. - Nothing in the foregoing sections shall be construed as
permitting the lessee, permittee, or licensee to undertake any construction which will obstruct any defined migration path of
migratory fish species such as river mouths and estuaries with a distance determined by the concerned LGUs in consultation
with and upon the recommendation of the FARMCs.

Section 57. Registration of Fish Hatcheries and Private Fishponds, etc. - All fish hatcheries, fish breeding facilities and
private fishponds must be registered with the LGUs which shall prescribe minimum standards for such facilities in
consultation with the Department: Provided, That the Department shall conduct a yearly inventory of all fishponds, fish pens
and fish cages whether in public or private lands: Provided, further, That all fishpond, fish pens and fish cage operators shall
annually report to the Department the type of species and volume of production in areas devoted to aquaculture.

ARTICLE IV
POST-HARVEST FACILITIES, ACTIVITIES AND TRADES

Section 58. Comprehensive Post-harvest and Ancillary Industries Plan. - The Department shall conduct a regular study of
fisheries post-harvest operations and ancillary industries, in the formulation of a comprehensive plan for post-harvest and
ancillary industries. It shall take into account among others, the following:

(a) detailed and clear guidelines on the distribution, construction, maintenance and use of post-harvest
infrastructure facilities;

(b) extension of credit and incentives for post-harvest operations;

(c) promotion and strengthening of semi-processing, processing and handling;

(d) development of domestic fishmeal industry;

(e) development of fisheries ship-building and repair as a viable industry;

(f) development and strengthening of marketing facilities and activities, including the pricing system, with
emphasis on collective marketing and the elimination of middlemen;

(g) increased participation of cooperatives and non-governmental organizations in post-harvest operations

and ancillary industries; and

(h) integration of fisheries post-harvest operations into the national fisheries plan.

Section 59. Establishment of Post-Harvest Facilities for Fishing Communities. - The LGUs shall coordinate with the
private sector and other concerned agencies and FARMCs in the establishment of post-harvest facilities for fishing
communities such as, but not limited to, municipal fish landing sites, fish ports, ice plants and cold storage and other fish
processing establishments to serve primarily the needs of municipal fisherfolk: Provided, That such post-harvest facilities
shall be consistent with the Comprehensive Post-harvest and Ancillary Industries Plan.

Section 60. Registration and Licensing of all Post-Harvest Facilities. - All post-harvest facilities such as fish processing
plants, ice plants, and cold storages, fish ports/landings and other fishery business establishments must register with and be
licensed by the LGUs which shall prescribe minimum standards for such facilities in consultation with the Department.

Section 61. Importation and Exportation of Fishery Products. -

(a) Export of fishery products shall be regulated whenever such exportation affects domestic food security
and production: Provided, That exportation of live fish shall be prohibited except those which are hatched or
propagated in accredited hatcheries and ponds;

(b) To protect and maintain the local biodiversity or ensure the sufficiency of domestic supply, spawners,
breeders, eggs and fry of bangus, prawn and other endemic species, as may be determined by the Department,
shall not be exported or caused to be exported by any person;

(c) Fishery products may be imported only when the importation has been certified as necessary by the
Department in consultation with the FARMC, and all the requirements of this Code, as well as all existing
rules and regulations have been complied with: Provided, That fish imports for canning/processing purposes
only may be allowed without the necessary certification, but within the provisions of Section 61(d) of this
Code; and

(d) No person, shall import and/or export fishery products of whatever size, stage or form for any purpose
 without securing a permit from the Department.

The Department in consultation with the FARMC shall promulgate rules and regulations on importation and exportation of
fish and fishery/aquatic resources with the Government's export/import simplification procedures.

Section 62. Instruments of Weights and Measures, and Quality Grades/Standards. - Standards for weights, volume and
other measurements for all fishery transactions shall be set by the Department.

All fish and fishery products for export, import and domestic consumption shall meet the quality grades/standards as
determined by the Department.

The LGU concerned shall, by appropriate ordinance, penalize fraudulent practices and unlawful possession or use of
instruments of weights and measures.

CHAPTER III
Reconstitution of The Bureau of Fisheries and Aquatic Resources and Creation of Fisheries and Aquatic Resources
Management Councils

ARTICLE I
RECONSTITUTION OF THE BUREAU OF FISHERIES AND AQUATIC RESOURCES

Section 63. Creation of the Position of Undersecretary for Fisheries and Aquatic Resources. - There is hereby created in
the Department of Agriculture the position of Undersecretary for Fisheries and Aquatic Resources, solely for the purpose of
attending to the needs of the fishing industry, to be appointed by the President. Such Undersecretary shall have the following
functions:

(a) set policies and formulate standards for the effective, efficient and economical operations of the fishing
industry in accordance with the programs of the government;

(b) exercise overall supervision over all functions and activities of all offices and instrumentalities and other
offices related to fisheries including its officers;

(c) establish, with the assistance of the director, such regional, provincial and other fishery officers as may be
necessary and appropriate and organize the internal structure of BFAR in such manner as is necessary for the
efficient and effective attainment of its objectives and purposes; and

(d) perform such other functions as may be necessary or proper to attain the objectives of this Code.

Section 64. Reconstitution of the BFAR. - The Bureau of Fisheries and Aquatic Resources (BFAR) is hereby reconstituted
as a line bureau under the Department of Agriculture.

Section 65. Functions of the Bureau of Fisheries and Aquatic Resources. - As a line bureau, the BFAR shall have the
following functions:

(a) prepare and implement a Comprehensive National Fisheries Industry Development Plan;

(b) issue licenses for the operation of commercial fishing vessels;

(c) issue identification cards free of charge to fishworkers engaged in commercial fishing;

(d) monitor and review joint fishing agreements between Filipino citizens and foreigners who conduct fishing
activities in international waters, and ensure that such agreements are not contrary to Philippine commitment
under international treaties and convention on fishing in the high seas;

(e) formulate and implement a Comprehensive Fishery Research and Development Program, such as, but not
limited to, sea farming, sea ranching, tropical/ornamental fish and seaweed culture, aimed at increasing
resource productivity, improving resource use efficiency, and ensuring the long-term sustainability of the
country's fishery and aquatic resources;

(f) establish and maintain a Comprehensive Fishery Information System;

(g) provide extensive development support services in all aspects of fisheries production, processing and
marketing;

(h) provide advisory services and technical assistance on the improvement of quality of fish from the time it
is caught (i.e. on board fishing vessel, at landing areas, fish markets, to the processing plants and to the
distribution and marketing chain);

(i) coordinate efforts relating to fishery production undertaken by the primary fishery producers, LGUs,
FARMCs, fishery and organizations/cooperatives;

(j) advise and coordinate with LGUs on the maintenance of proper sanitation and hygienic practices in fish
markets and fish landing areas;

(k) establish a corps of specialists in collaboration with the Department of National Defense, Department of
the Interior and Local Government, Department of Foreign Affairs for the efficient monitoring, control and
surveillance of fishing activities within Philippine territorial waters and provide the necessary facilities,
equipment and training therefor;

(l) implement an inspection system for import and export of fishery/aquatic products and fish processing
establishments, consistent with international standards to ensure product quality and safety;

(m) coordinate with LGUs and other concerned agencies for the establishment of productivity enhancing and
market development programs in fishing communities to enable women to engage in other
fisheries/economic activities and contribute significantly to development efforts;

(n) enforce all laws, formulate and enforce all rules and regulations governing the conservation and
management of fishery resources, except in municipal waters, and to settle conflicts of resource use and
allocation in consultation with the NFARMC, LGUs and local FARMCs;

(o) develop value-added fishery-products for domestic consumption and export;lawphi1™

(p) recommend measures for the protection/enhancement of the fishery industries;

(q) assist the LGUs in developing their technical capability in the development, management, regulation,
 conservation, and protection of the fishery resources;

(r) formulate rules and regulations for the conservation and management of straddling fish stocks and highly
migratory fish stocks; and

(s) perform such other related functions which shall promote the development, conservation, management,
protection and utilization of fisheries and aquatic resources.

Section 66. Composition of BFAR. - As a line bureau, the BFAR shall be headed by a Director and assisted by two (2)
Assistant Directors who shall supervise the administrative and technical services of the bureau respectively. It shall establish
regional, provincial and municipal offices as may be appropriate and necessary to carry out effectively and efficiently the
provisions of this Code.

Section 67. Fisheries Inspection and Quarantine Service. - For purposes of monitoring and regulating the importation and
exportation of fish and fishery/aquatic resources, the Fisheries Inspection and Quarantine Service in the BFAR is hereby
strengthened and shall have the following functions:

(a) conduct fisheries quarantine and quality inspection of all fish and fishery/aquatic products coming into
and going out of the country by air or water transport, to detect the presence of fish pest and diseases and if
found to harbor fish pests or diseases shall be confiscated and disposed of in accordance with environmental
standards and practices;

(b) implement international agreements/commitments on bio-safety and bio-diversity as well as prevent the
movement or trade of endemic fishery and aquatic resources to ensure that the same are not taken out of the
country;

(c) quarantine such aquatic animals and other fishery products determined or suspected to be with fishery
pests and diseases and prevent the movement or trade from and/or into the country of these products so
prohibited or regulated under existing laws, rules and regulations as well as international agreements of
which the Philippines is a State Party;

(d) examine all fish and fishery products coming into or going out of the country which may be a source or
medium of fish pests or diseases and/or regulated by existing fishery regulations and ensure that the quality
of fish import and export meet international standards; and

(e) document and authorize the movement or trade of fish and fishery products when found free of fish pests
or diseases and collect necessary fees prescribed by law and regulations.

ARTICLE II
THE FISHERIES AND AQUATIC RESOURCES MANAGEMENT COUNCILS (FARMCs)

Section 68. Development of Fisheries and Aquatic Resources in Municipal Waters and Bays. - Fisherfolk and their
organizations residing within the geographical jurisdiction of the barangays, municipalities or cities with the concerned
LGUs shall develop the fishery/aquatic resources in municipal waters and bays.

Section 69. Creation of Fisheries and Aquatic Resources Management Councils (FARMCs). - FARMCs shall be
established in the national level and in all municipalities/cities abutting municipal waters as defined by this Code. The
FARMCs shall be formed by fisherfolk organizations/cooperatives and NGOs in the locality and be assisted by the LGUs
and other government entities. Before organizing FARMCs, the LGUs, NGOs, fisherfolk, and other concerned POs shall
undergo consultation and orientation on the formation of FARMCs.

Section 70. Creation and Composition of the National Fisheries and Aquatic Resources Management Council
(NFARMC). - There is hereby created a National Fisheries and Aquatic Resources Management Council hereinafter referred
to as NFARMC as an advisory/recommendatory body to the Department. The NFARMC shall be composed of fifteen (15)
members consisting of:

(a) the Undersecretary of Agriculture, as Chairman;

(b) the Undersecretary of the Interior and Local Government;

(c) five (5) members representing the fisherfolk and fishworkers;

(d) five (5) members representing commercial fishing and aquaculture operators and the processing sectors;

(e) two (2) members from the academe; and

(f) one (1) representative of NGOs involved in fisheries.

The members of the NFARMC, except for the Undersecretary of Agriculture and the Undersecretary of the Interior and
Local Government, shall be appointed by the President upon the nomination of their respective organizations.

Section 71. Terms of Office. - The members of NFARMC, except the Undersecretary of Agriculture and the Undersecretary
of the Interior and Local Government, shall serve for a term of three (3) years without reappointment.

Section 72. Functions of the NFARMC. - The NFARMC shall have the following functions:

(a) assist in the formulation of national policies for the protection, sustainable development and management
of fishery and aquatic resources for the approval of the Secretary;

(b) assist the Department in the preparation of the National Fisheries and Industry Development Plan; and

(c) perform such other functions as may be provided by law.

Section 73. The Municipal/City Fisheries and Aquatic Resources Management Councils (M/CFARMCs). - The
M/CFARMCs shall be created in each of the municipalities and cities abutting municipal waters. However, the LGU may
create the Barangay Fisheries and Aquatic Resources Management Councils (BFARMCs) and the Lakewide Fisheries and
Aquatic Resources Management Councils (LFARMCs) whenever necessary. Such BFARMCs and LFARMCs shall serve in
an advisory capacity to the LGUs.

Section 74. Functions of the M/CFARMCs. - The M/CFARMCs shall exercise the following functions:

(a) assist in the preparation of the Municipal Fishery Development Plan and submit such plan to the
Municipal Development Council;

(b) recommend the enactment of municipal fishery ordinances to the sangguniang bayan/sangguniang
 panlungsod through its Committee on Fisheries;

(c) assist in the enforcement of fishery laws, rules and regulations in municipal waters;

(d) advise the sangguniang bayan/panlungsod on fishery matters through its Committee on Fisheries, if such
has been organized; and

(e) perform such other functions which may be assigned by the sangguniang bayan/panlungsod.

Section 75. Composition of the M/CFARMC . - The regular member of the M/CFARMCs shall be composed of:

(a) Municipal/City Planning Development Officer;

(b) Chairperson, Agriculture/Fishery Committee of the Sangguniang Bayan/Panlungsod;

(c) representative of the Municipal/City Development Council;

(d) representative from the accredited non-government organization;

(e) representative from the private sector;

(f) representative from the Department of Agriculture; and

(g) at least eleven (11) fisherfolk representatives (seven (7) municipal fisherfolk, one (1) fishworker and three
(3) commercial fishers) in each municipality/city which include representative from youth and women sector.

The Council shall adopt rules and regulations necessary to govern its proceedings and election.

Section 76. The Integrated Fisheries and Aquatic Resources Management Councils (IFARMCs). - The IFARMCs shall be
created in bays, gulfs, lakes and rivers and dams bounded by two (2) or more municipalities/cities.

Section 77. Functions of the IFARMCs. - The IFARMC shall have the following functions:

(a) assist in the preparation of the Integrated Fishery Development Plan and submit such plan to the
concerned Municipal Development Councils;

(b) recommend the enactment of integrated fishery ordinances to the concerned sangguniang
bayan/panlungsod through its Committee on Fisheries, if such has been organized;

(c) assist in the enforcement of fishery laws, rules and regulations in concerned municipal waters;

(d) advice the concerned sangguniang bayan/panlungsod on fishery matters through its Committee on
Fisheries, if such has been organized; and

(e) perform such other functions which may be assigned by the concerned sangguniang bayan/panlungsod.

Section 78. Composition of the IFARMCs. - The regular members of the IFARMCs shall be composed of the following:

(a) the chairperson of the Committee on Agriculture/Fisheries of the concerned sangguniang

bayan/panlungsod;
 (b) the Municipal/City Fisheries Officers of the concerned municipalities/cities;

(c) the Municipal/City Development Officers of the concerned municipalities/cities;

(d) one (1) representative from NGO;

(e) one (1) representative from private sector; and

(f) at least nine (9) representatives from the fisherfolk sector which include representatives from the youth
and women sector.

The Council shall adopt rules and regulations necessary to govern its proceedings and election.

Section 79. Source of Funds of the FARMCs. - A separate fund for the NFARMC, IFARMCs and M/CFARMCs shall be
established and administered by the Department from the regular annual budgetary appropriations.

CHAPTER IV
Fishery Reserves, Refuge and Sanctuaries

Section 80. Fishing Areas Reserves for Exclusive Use of Government. - The Department may designate area or areas in
Philippine waters beyond fifteen (15) kilometers from shoreline as fishery reservation for the exclusive use of the
government or any of its political subdivisions, agencies or instrumentalities, for propagation, educational, research and
scientific purposes: Provided, That in municipalities or cities, the concerned LGUs in consultation with the FARMCs may
recommend to the Department that portion of the municipal waters be declared as fishery reserves for special or limited use,
for educational, research, and/or special management purposes. The FARMCs may recommend to the Department portions
of the municipal waters which can be declared as fisheries reserves for special or limited use for educational, research and
special management purposes.

Section 81. Fish Refuge and Sanctuaries. - The Department may establish fish refuge and sanctuaries to be administered in
the manner to be prescribed by the BFAR at least twenty-five percent (25%) but not more than forty percent (40%) of bays,
foreshore lands, continental shelf or any fishing ground shall be set aside for the cultivation of mangroves to strengthen the
habitat and the spawning grounds of fish. Within these areas no commercial fishing shall be allowed. All marine fishery
reserves, fish sanctuaries and mangrove swamp reservations already declared or proclaimed by the President or legislated by
the Congress of the Philippines shall be continuously administered and supervised by the concerned agency: Provided,
however, That in municipal waters, the concerned LGU in consultation with the FARMCs may establish fishery refuge and
sanctuaries. The FARMCs may also recommend fishery refuge and sanctuaries: Provided, further, That at least fifteen
percent (15%) where applicable of the total coastal areas in each municipality shall be identified, based on the best available
scientific data and in consultation with the Department, and automatically designated as fish sanctuaries by the LGUs in
consultation with the concerned FARMCs.

CHAPTER V
Fisheries Research and Development

Section 82. Creation of a National Fisheries Research and Development Institute (NFRDI). - In recognition of the
important role of fisheries research in the development, management, conservation and protection of the country's fisheries
and aquatic resources, there is hereby created a National Fisheries Research and Development Institute (NFRDI).
The Institute shall form part of the National Research and Development Network of the Department of Science and
Technology (DOST).

The Institute, which shall be attached to the Department shall serve as the primary research arm of the BFAR. The overall
governance of the Institute shall be vested in the Governing Board which shall formulate policy guidelines for its operation.
The plans, programs and operational budget shall be passed by the Board. The Board may create such committees as it may
deem necessary for the proper and effective performance of its functions. The composition of the Governing Board shall be
as follows:

(a) Undersecretary for Fisheries - Chairman

(b) BFAR Director - Vice Chairman

(c) NFRDI Executive Director - Member

(d) PCAMRD Executive Director - Member

(e) Representative from the academe - Member

(f) four (4) representatives from the private sector who shall come from the following subsectors: - Members
 Municipal Fisherfolk
 Commercial Fishing Operator
 Aquaculture Operator
 Post-Harvest/Processor
The NFRDI shall have a separate budget specific to its manpower requirements and operations to ensure the independent
and objective implementation of its research activities.

Section 83. Qualification Standard. - The Institute shall be headed by an Executive Director to be appointed by the
President of the Philippines upon the recommendation of the governing board. The Executive Director shall hold a
Doctorate degree in fisheries and/or other related disciplines. The organizational structure and staffing pattern shall be
approved by the Department: Provided, however, That the staffing pattern and remunerations for scientific and technical
staff shall be based on the qualification standards for science and technology personnel.

Section 84. Research and Development Objectives. - Researches to be done by the NFRDI are expected to result in the
following:

(a) To raise the income of the fisherfolk and to elevate the Philippines among the top five (5) in the world
ranking in the fish productions;

(b) to make the country's fishing industry in the high seas competitive;

(c) to conduct social research on fisherfolk families for a better understanding of their conditions and needs;
and

(d) to coordinate with the fisheries schools, LGUs and private sectors regarding the maximum utilization of
available technology, including the transfer of such technology to the industry particularly the fisherfolk.
Section 85. Functions of the NFRDI . - As a national institute, the NFRDI shall have the following functions:

(a) establish a national infrastructure unit complete with technologically-advanced features and modern
scientific equipment, which shall facilitate, monitor, and implement various research needs and activities of
the fisheries sector;

(b) provide a venue for intensive training and development of human resources in the field of fisheries, a
repository of all fisheries researches and scientific information;

(c) provide intensive training and development of human resources in the field of fisheries for the maximum
utilization of available technology;

(d) hasten the realization of the economic potential of the fisheries sector by maximizing developmental
research efforts in accordance with the requirements of the national fisheries conservations and development
programs, also possibly through collaborative effort with international institutions; and

(e) formally establish, strengthen and expand the network of fisheries-researching communities through
effective communication linkages nationwide.

CHAPTER VI
Prohibitions and Penalties

Section 86. Unauthorized Fishing or Engaging in Other Unauthorized Fisheries Activities. - No person shall exploit,
occupy, produce, breed, culture, capture or gather fish, fry or fingerlings of any fishery species or fishery products, or
engage in any fishery activity in Philippine waters without a license, lease or permit.

Discovery of any person in an area where he has no permit or registration papers for a fishing vessel shall constitute a prima
facie presumption that the person and/or vessel is engaged in unauthorized fishing: Provided, That fishing for daily food
sustenance or for leisure which is not for commercial, occupation or livelihood purposes may be allowed.

It shall be unlawful for any commercial fishing vessel to fish in bays and in such other fishery management areas which may
hereinafter be declared as over-exploited.

Any commercial fishing boat captain or the three (3) highest officers of the boat who commit any of the above prohibited
acts upon conviction shall be punished by a fine equivalent to the value of catch or Ten thousand pesos (P10,000.00)
whichever is higher, and imprisonment of six (6) months, confiscation of catch and fishing gears, and automatic revocation
of license.

It shall be unlawful for any person not listed in the registry of municipal fisherfolk to engage in any commercial fishing
activity in municipal waters. Any municipal fisherfolk who commits such violation shall be punished by confiscation of
catch and a fine of Five hundred pesos (500.00).

Section 87. Poaching in Philippine Waters. - It shall be unlawful for any foreign person, corporation or entity to fish or
operate any fishing vessel in Philippine waters.

The entry of any foreign fishing vessel in Philippine waters shall constitute a prima facie evidence that the vessel is engaged
in fishing in Philippine waters.
Violation of the above shall be punished by a fine of One hundred thousand U.S. Dollars (US$100,000.00), in addition to the
confiscation of its catch, fishing equipment and fishing vessel: Provided, That the Department is empowered to impose an
administrative fine of not less than Fifty thousand U.S. Dollars (US$50,000.00) but not more than Two hundred thousand
U.S. Dollars (US$200,000.00) or its equivalent in the Philippine Currency.

Section 88. Fishing Through Explosives, Noxious or Poisonous Substance, and/or Electricity. -

(1) It shall be unlawful for any person to catch, take or gather or cause to be caught, taken or gathered, fish or
any fishery species in Philippine waters with the use of electricity, explosives, noxious or poisonous
substance such as sodium cyanide in the Philippine fishery areas, which will kill, stupefy, disable or render
unconscious fish or fishery species: Provided, That the Department, subject to such safeguards and conditions
deemed necessary and endorsement from the concerned LGUs, may allow, for research, educational or
scientific purposes only, the use of electricity, poisonous or noxious substances to catch, take or gather fish or
fishery species: Provided, further, That the use of poisonous or noxious substances to eradicate predators in
fishponds in accordance with accepted scientific practices and without causing adverse environmental impact
in neighboring waters and grounds shall not be construed as illegal fishing.

It will likewise be unlawful for any person, corporation or entity to possess, deal in, sell or in any manner
dispose of, any fish or fishery species which have been illegally caught, taken or gathered.

The discovery of dynamite, other explosives and chemical compounds which contain combustible elements,
or noxious or poisonous substances, or equipment or device for electro-fishing in any fishing vessel or in the
possession of any fisherfolk, operator, fishing boat official or fishworker shall constitute prima facie
evidence, that the same was used for fishing in violation of this Code. The discovery in any fishing vessel of
fish caught or killed with the use of explosive, noxious or poisonous substances or by electricity shall
constitute prima facie evidence that the fisherfolk, operator, boat official or fishworker is fishing with the use
thereof.

(2) Mere possession of explosive, noxious or poisonous substances or electrofishing devices for illegal
fishing shall be punishable by imprisonment ranging from six (6) months to two (2) years.

(3) Actual use of explosives, noxious or poisonous substances or electrofishing devices for illegal fishing
shall be punishable by imprisonment ranging from five (5) years to ten (10) years without prejudice to the
filing of separate criminal cases when the use of the same result to physical injury or loss of human life.

(4) Dealing in, selling, or in any manner disposing of, for profit, illegally caught/gathered fisheries species
shall be punished by imprisonment ranging from six (6) months to two (2) years.

(5) In all cases enumerated above, the explosives, noxious or poisonous substances and/or electrical devices,
as well as the fishing vessels, fishing equipment and catch shall be forfeited.

Section 89. Use of Fine Mesh Net. - It shall be unlawful to engage in fishing using nets with mesh smaller than that which
may be fixed by the Department: Provided, That the prohibition on the use of fine mesh net shall not apply to the gathering
of fry, glass eels, elvers, tabios, and alamang and such species which by their nature are small but already mature to be
identified in the implementing rules and regulations by the Department.
Violation of the above shall subject the offender to a fine from Two thousand pesos (P2,000.00) to Twenty thousand pesos
(P20,000.00) or imprisonment from six (6) months to two (2) years or both such fine and imprisonment at the discretion of
the court: Provided, That if the offense is committed by a commercial fishing vessel, the boat captain and the master
fisherman shall also be subject to the penalties provided herein: Provided, further, That the owner/operator of the
commercial fishing vessel who violates this provision shall be subjected to the same penalties provided herein: Provided,
finally, That the Department is hereby empowered to impose upon the offender an administrative fine and/or cancel his
permit or license or both.

Section 90. Use of Active Gear in the Municipal Waters and Bays and Other Fishery Management Areas. - It shall be
unlawful to engage in fishing in municipal waters and in all bays as well as other fishery management areas using active
fishing gears as defined in this Code.

Violators of the above prohibitions shall suffer the following penalties:

(1) The boat captain and master fisherman of the vessels who participated in the violation shall suffer the
penalty of imprisonment from two (2) years to six (6) years;

(2) The owner/operator of the vessel shall be fined from Two thousand pesos (P2,000.00) to Twenty thousand
pesos (20,000.00) upon the discretion of the court.

If the owner/operator is a corporation, the penalty shall be imposed on the chief executive officer of the
Corporation.

If the owner/operator is a partnership the penalty shall be imposed on the managing partner.

(3) The catch shall be confiscated and forfeited.

Section 91. Ban on Coral Exploitation and Exportation. - It shall be unlawful for any person or corporation to gather,
possess, sell or export ordinary precious and semi-precious corals, whether raw or in processed form, except for scientific or
research purposes.

Violations of this provision shall be punished by imprisonment from six (6) months to two (2) years and a fine from Two
thousand pesos (P2,000.00) to Twenty thousand pesos (20,000.00), or both such fine and imprisonment, at the discretion of
the court, and forfeiture of the subject corals, including the vessel and its proper disposition.

The confiscated corals shall either be returned to the sea or donated to schools and museums for educational or scientific
purposes or disposed through other means.

Section 92. Ban on Muro-Ami Other Methods and Gear Destructive to Coral Reefs and Other Marine Habitat. - It shall
be unlawful for any person, natural or juridical, to fish with gear method that destroys coral reefs, seagrass beds, and other
fishery marine life habitat as may be determined by the Department. "Muro-Ami" and any of its variation, and such similar
gear and methods that require diving, other physical or mechanical acts to pound the coral reefs and other habitat to entrap,
gather or catch fish and other fishery species are also prohibited.

The operator, boat captain, master fisherman, and recruiter or organizer of fishworkers who violate this provision shall suffer
a penalty of two (2) years to ten (10) years imprisonment and a fine of not less than One hundred thousand pesos
(P100,000.00) to Five hundred thousand pesos (P500,000.00) or both such fine and imprisonment, at the discretion of the
court. The catch and gear used shall be confiscated.

It shall likewise be unlawful for any person or corporation to gather, sell or export white sand, silica, pebbles and any other
substances which make up any marine habitat.

The person or corporation who violates this provision shall suffer a penalty of two (2) years to ten (10) years imprisonment
and a fine of not less than One hundred thousand pesos (P100,000.00) to Five hundred thousand pesos (P500,000.00) or
both such fine and imprisonment, at the discretion of the court. The substance taken from its marine habitat shall be
confiscated.

Section 93. Illegal Use of Superlights. - It shall be unlawful to engage in fishing with the use of superlights in municipal
waters or in violation of the rules and regulations which may be promulgated by the Department on the use of superlights
outside municipal waters.

Violations of this provision shall be punished by imprisonment from six (6) months to two (2) years or a fine of Five
thousand pesos (P5,000.00) per superlight, or both such fine and imprisonment at the discretion of the courts. The superlight,
fishing gears and vessel shall be confiscated.

Section 94. Conversion of Mangroves. - It shall be unlawful for any person to convert mangroves into fishponds or for any
other purposes.

Violation of the provision of this section shall be punished by imprisonment of six (6) years and one (1) day to twelve (12)
years and/or a fine of Eighty thousand pesos (P80,000.00): Provided, That if the area requires rehabilitation or restoration as
determined by the court, the offender should also be required to restore or compensate for the restoration of the damage.

Section 95. Fishing in Overfished Area and During Closed Season. - It shall be unlawful to fish in overfished area and
during closed season.

Violation of the provision of this section shall be punished by imprisonment of six (6) months and one (1) day to six (6)
years and/or fine of Six thousand pesos (P6,000.00) and by forfeiture of the catch and cancellation of fishing permit or
license.

Section 96. Fishing in Fishery Reserves, Refuge and Sanctuaries. - It shall be unlawful to fish in fishery areas declared by
the Department as fishery reserves, refuge and sanctuaries.

Violation of the provision of this section shall be punished by imprisonment of two (2) years to six (6) years and/or fine of
Two thousand pesos (P2,000.00) to Twenty thousand pesos (P20,000.00) and by forfeiture of the catch and the cancellation
of fishing permit or license.

Section 97. Fishing Or Taking of Rare, Threatened or Endangered Species. - It shall be unlawful to fish or take rare,
threatened or endangered species as listed in the CITES and as determined by the Department.

Violation of the provision of this section shall be punished by imprisonment of twelve (12) years to twenty (20) years and/or
a fine of One hundred and twenty thousand pesos (P120,000.00) and forfeiture of the catch, and the cancellation of fishing
permit.

Section 98. Capture of Sabalo and Other Breeders/Spawners. - It shall be unlawful for any person to catch, gather, capture
or possess mature milkfish or "sabalo" and such other breeders or spawners of other fishery species as may be determined by
the Department: Provided, That catching of "sabalo" and other breeders/spawners for local breeding purposes or scientific or
research purposes may be allowed subject to guidelines to be promulgated by the Department.

Violation of the provision of this section shall be punished by imprisonment of six (6) months and one (1) day to eight (8)
years and/or a fine of Eighty thousand pesos (P80,000.00) and forfeiture of the catch, and fishing equipment used and
revocation of license.

Section 99. Exportation of Breeders, Spawners, Eggs or Fry. - Exportation of breeders, spawners, eggs or fry as prohibited
in this Code shall be punished by imprisonment of eight (8) years, confiscation of the same or a fine equivalent to double the
value of the same, and revocation of the fishing and/or export license/permit.

Section 100. Importation or Exportation of Fish or Fishery Species. - Any importation or exportation of fish or fisheries
species in violation of this Code shall be punished by eight (8) years of imprisonment, a fine of Eighty thousand pesos
(P80,000.00) and destruction of live fishery species or forfeiture of non-live fishery species in favor of the department for its
proper disposition: Provided, That violator of this provision shall be banned from being members or stock holders of
companies currently engaged in fisheries or companies to be created in the future, the guidelines for which shall be
promulgated by the Department.

Section 101. Violation of Catch Ceilings. - It shall be unlawful for any person to fish in violation of catch ceilings as
determined by the Department. Violation of the provision of this section shall be punished by imprisonment of six (6)
months and one (1) day to six (6) years and/or a fine of Fifty thousand pesos (P50,000.00) and forfeiture of the catch, and
fishing equipment used and revocation of license.

Section 102. Aquatic Pollution. - Aquatic pollution, as defined in this Code shall be unlawful.

Violation of the provision of this section shall be punished by imprisonment of six (6) years and one (1) day to twelve (12)
years and/or a fine of Eighty thousand pesos (P80,000.00) plus an additional fine of Eight thousand pesos (P8,000.00) per
day until such violation ceases and the fines paid.

Section 103. Other Violations. - The following fisheries activities shall also be considered as a violation of this Code:

(a) Failure to Comply with Minimum Safety Standards. - The owner and captain of a commercial fishing
vessel engaged in fishing who, upon demand by proper authorities, fails to exhibit or show proof of
compliance with the safety standards provided in this Code, shall be immediately prevented from continuing
with his fishing activity and escorted to the nearest port or landing point. The license to operate the
commercial fishing vessel shall be suspended until the safety standard has been complied with.

(b) Failure to Conduct a Yearly Report on all Fishponds, Fish Pens and Fish Cages. - The FLA of the holder
who fails to render a yearly report shall be immediately cancelled: Provided, That if the offender be the
owner of the fishpond, fish pen or fish cage, he shall be subjected to the following penalties: (1) first offense,
a fine of Five hundred pesos (P500.00) per unreported hectare; (2) subsequent offenses, a fine of One
thousand pesos (1,000.00) per unreported hectare.

(c) Gathering and Marketing of Shell Fishes. - It shall be unlawful for any person to take, sell, transfer, or
have in possession for any purpose any shell fish which is sexually mature or below the minimum size or
 above the maximum quantities prescribed for the particular species.

(d) Obstruction to Navigation or Flow and Ebb of Tide in any Stream, River, Lake or Bay. - It shall be
unlawful for any person who causes obstruction to navigation or flow or ebb of tide.

(e) Construction and Operation of Fish Corrals/Traps, Fish Pens and Fish Cages. - It shall be unlawful to
construct and operate fish corrals/traps, fish pens and fish cages without a license/permit.

Subject to the provision of subparagraph (b) of this section, violation of the above-enumerated prohibited acts shall subject
the offender to a fine ranging from Two thousand pesos (P2,000.00) to Ten thousand pesos (P10,000.00) or imprisonment
from one (1) month and one (1) day to six (6) months, or both such fine and imprisonment, upon the discretion of the court:
Provided, That the Secretary is hereby empowered to impose upon the offender an administrative fine of not more than Ten
thousand pesos (P10,000.00) or to cancel his permit or license, or to impose such fine and to cancel his permit or license, in
the discretion of the Secretary: Provided, further, That the Secretary, or his duly authorized representative, and law
enforcement agents are hereby empowered to impound with the assistance of the Philippine Coast Guard, PNP-Maritime
Command: Provided, finally, That any person who unlawfully obstructs or delays the inspection and/or movement of fish
and fishery/aquatic products when such inspection and/or movement is authorized under this Code, shall be subject to a fine
of not more than Ten thousand pesos (P10,000.00) or imprisonment of not more than two (2) years, or both such fine and
imprisonment, upon the discretion of the court.

Every penalty imposed for the commission of an offense shall carry with it the forfeiture of the proceeds of such offense and
the instruments or tools with which it was committed.

Such proceeds and instruments or tools shall be confiscated and forfeited in favor of the Government, unless they be the
property of a third person not liable for the offense, but those articles which are not subject of lawful commerce shall be
destroyed.

Section 104. Commercial Fishing Vessel Operators Employing Unlicensed Fisherfolk or Fishworker or Crew. - The
owner/operator of a commercial fishing vessel employing unlicensed fisherfolk or fishworker shall be fined Five hundred
pesos (P500.00) each for every month that the same has been employed and/or One thousand pesos (P1,000.00) for every
month for each unlicensed crew member who has been employed.

Section 105. Obstruction of Defined Migration Paths. - Obstruction of any defined migration paths of anadromous,
catadromous and other migratory species, in areas including, but not limited to river mouths and estuaries within a distance
determined by the concerned FARMCs shall be punished by imprisonment of seven (7) years to twelve (12) years or a fine
from Fifty thousand pesos (P50,000.00) to One hundred thousand pesos (P100,000.00)or both imprisonment and fine at the
discretion of the court, and cancellation of permit/license, if any, and dismantling of obstruction shall be at his own expense
and confiscation of same.

Section 106. Obstruction to Fishery Law Enforcement Officer. - The boat owner, master or operator or any person acting
on his behalf of any fishing vessel who evades, obstructs or hinders any fishery law enforcement officer of the Department
to perform his duty, shall be fined Ten thousand pesos (P10,000.00). In addition, the registration, permit and/or license of the
vessel including the license of the master fisherman shall be canceled.

Section 107. Promulgation of Administrative Orders. - For purposes of fishery regulation or other fishery adjustments, the
Department in consultation with the LGUs and local FARMCs, shall issue Fishery Administrative Orders or regulations for
the conservation, preservation, management and sustainable development of fishery and aquatic resources.

CHAPTER VII
General Provisions

Section 108. Fisherfolk Settlement Areas. - The Department shall establish and create fisherfolk settlement areas in
coordination with concerned agencies of the government, where certain areas of the public domain, specifically near the
fishing grounds, shall be reserved for the settlement of the municipal fisherfolk. Nothing in this section shall be construed to
vest ownership of any resettlement area to a municipal fisherfolk for whom said areas may have been reserved for or had
been actually granted to.

Section 109. Municipal Fisheries Grant Fund. - For the development, management and conservation of the municipal
resources, there is hereby created a Fishery Grant Fund to finance fishery projects of the LGUs primarily for the upliftment
of the municipal fisherfolk. The amount of One hundred million pesos (P100,000,000.00) is hereby appropriated out of the
Department's allocation in the General Appropriations Act (GAA) to support the Grant Fund.

For this purpose, the Department may seek financial assistance from any source and may receive any donation therefore.

Section 110. Fishery Loan and Guarantee Fund. - Pursuant to Section 7, Article XIII of the Constitution, there is hereby
created a Fishery Loan and Guarantee Fund with an initial of One hundred million pesos (P100,000,000.00), which shall be
administered by the Land Bank of the Philippines. The fund shall be made available for lending to qualified borrowers to
finance the development of the fishery industry under a program to be prescribed by the Department.

For the same purpose, the Department may seek financial assistance from any source and may receive any donation
therefrom.

Section 111. Fishing Vessels Development Fund. - There is hereby created a Fishing Vessels Development Fund to enhance
the building and/or acquisition of fishing vessels. This shall be a long-term loan facility that shall be administered by the
Development Bank of the Philippines. The amount of Two hundred and fifty million pesos (P250,000,000.00) per year for
five (5) years is hereby appropriated out of the Department's allocation in the GAA to support this Development Fund.

Section 112. Special Fisheries Science and Approfishtech Fund. - The Department shall provide subsidy for full technical
and financial support to the development of appropriate technology, both in fishery and ancillary industries, that are
ecologically sound, locally source-based and labor intensive, based on the requirement and needs of the FARMCs. An initial
amount of One hundred million pesos (100,000,000.00) shall be authorized for the purpose of a Special Fisheries Science
and Approfishtech Fund, and thereafter shall be included in the GAA.

Section 113. Aquaculture Investment Fund. - An Aquaculture Investment Fund in the minimum amount of Fifty million
pesos (P50,000,000.00) shall be established for soft loans which shall be extended to municipal fisherfolk and their
organization who will engage in aquaculture, and for the development of underdeveloped or underutilized inland fishponds.

Section 114. Other Fisheries Financing Facilities. - In addition to fisheries credit guarantee, grant and other similar
facilities granted under this Code, qualified Filipino fisherfolk and fisheries enterprises shall enjoy such other facilities
granted them under existing and/or new laws, specially as to rural credit, with preference being given to fisheries
cooperatives.

Section 115. Professionalization of Fisheries Graduates. - There is hereby created a Fisheries Board of Examiners in the
Professional Regulation Commission to upgrade the Fisheries Profession: Provided, however, That those who have passed
the Civil Service Examination for Fisheries shall automatically be granted eligibility by the Fisheries Board of Examiners:
Provided, further, That they have served the industry in either public or private capacity for not less than five (5) years:
Provided, finally, That the first Board Examination for B.S. Fisheries Graduates shall be conducted within one (1) year from
the approval of this Code.

Section 116. Upgrading of State Fisheries Schools/Colleges. - The Department, in coordination with the Commission on
Higher Education (CHED), Department of Education, Culture and Sports (DECS), and Technical Education and Skills
Development Authority (TESDA), shall upgrade State Fisheries Schools/Colleges which provide both formal and non-
formal education: Provided, however, That the CHED shall incorporate Approfishtech in the curricula of fisheries
schools/colleges.

The Department and the CHED shall jointly formulate standards to upgrade all fisheries schools/colleges. Fisheries
schools/colleges that do not meet minimum standards shall be closed.

Section 117. Inclusion of Fisheries Conservation Subjects in School Curriculum. - Fisheries conservation subjects shall
be incorporated in the curricula of elementary and secondary schools both private and public.

Section 118. Educational campaign at all levels. - The Department, the CHED, the DECS and the Philippine Information
Agency shall launch and pursue a nationwide educational campaign to:

(a) help realize the policies and implement the provisions of this Code;

(b) promote the development, management, conservation and proper use of the environment;

(c) promote the principle of sustainable development; and

(d) promote the development of truly Filipino-oriented fishing and ancillary industries.

Section 119. Infrastructure Support. - The Department in cooperation with concerned agencies shall:

(a) prepare and implement a nationwide plan for the development of municipal fishing ports and markets;

(b) prioritize the construction of farm-to-market roads linking the fisheries production sites, coastal landing
points and other post-harvest facilities to major market and arterial roads/highways;

(c) identity community infrastructure facilities such as fish landing ports, ice plant and cold storage facilities
in consultation with fishery cooperatives/associations and prepare plans and designs for their construction
that would be consistent with international environmental impact;

(d) establish and maintain quality laboratories in major fish ports and prescribe the highest standards for the
operation and maintenance of such post-harvest facilities;

(e) arrange and make representations with appropriate funding institutions to finance such facilities for the
use of the fishery cooperatives/associations;

(f) develop and strengthen marketing facilities and promote cooperative marketing systems; and
 (g) promote and strengthen local fisheries ship-building and repair industry.

Section 120. Extension Services. - The Department shall develop cost-effective, practical and efficient extension services on
a sustained basis, in addition to those provided by state educational institutions, especially to municipal fisherfolk in
undeveloped areas, utilizing practicable and indigenous resources and government agencies available, and based upon a
system of self-reliance and self-help.

Section 121. Protection of Sensitive Technical Information. - The Department shall take such measures as may be
necessary in order to protect trade, industrial and policy information of Filipino fisherfolk, fisheries owners/operators,
entrepreneurs, manufacturers and researchers, when disclosure of such information will injure the competitiveness or
viability of domestic fisheries.

Section 122. Assistance in Collecting Information. - The Department, in coordination with other government entities
concerned, may require Filipino representatives abroad and foreign-based personnel to assist in the collection of fisheries
data and information.

Section 123. Charting of Navigational Lanes and Delineation of Municipal Waters. - The Department shall authorize the
National Mapping and Resource Information Authority (NAMRIA) for the designation and charting of navigational lanes in
fishery areas and delineation of municipal waters. The Philippine Coast Guard shall exercise control and supervision over
such designated navigational lanes.

Section 124. Persons and Deputies Authorized to Enforce this Code and Other Fishery Laws, Rules and Regulations. -
The law enforcement officers of the Department, the Philippine Navy, Philippine Coast Guard, Philippine National Police
(PNP), PNP-Maritime Command, law enforcement officers of the LGUs and other government enforcement agencies, are
hereby authorized to enforce this Code and other fishery laws, rules and regulations. Other competent government officials
and employees, punong barangays and officers and members of fisherfolk associations who have undergone training on law
enforcement may be designated in writing by the Department as deputy fish wardens in the enforcement of this Code and
other fishery laws, rules and regulations.

Section 125. Strengthening Prosecution and Conviction of Violators of Fishery Laws. - The Department of Justice (DOJ)
shall embark on a program to strengthen the prosecution and conviction aspects of fishery law enforcement through
augmentation of the current complement of state prosecutors and through their continuous training and reorientation on
fishery laws, rules and regulations.

Section 126. Foreign Grants and Aids. - All foreign grants, aids, exchange programs, loans, researches and the like shall be
evaluated and regulated by the Department to ensure that such are consistent with the Filipinization, democratization and
industrialization of fishing industry and the development of the entire country.

Section 127. Mandatory Review. - The Congress of the Philippines shall undertake a mandatory review of this Code at least
once every five (5) years and as often as it may deem necessary, to ensure that fisheries policies and guidelines remain
responsive to changing circumstances.

CHAPTER VIII
Transitory Provisions

Section 128. Moratoria. - The Department shall, upon the recommendation of the Bureau, have the power to declare a
moratorium on the issuance of licenses for commercial fishing vessels to operate in specified area or areas in Philippine
waters for a limited period of time if there are indications of overfishing brought about by a decrease in the volume and sizes
of fish caught therein or for conservation or ecological purposes.

No new licenses and similar privileges on exploitation of specific fishery areas in Philippine waters and aquaculture
production areas shall be issued in accordance with this Code. Such moratoria shall not exceed five (5) years from the
effectivity of this Code.

Section 129. Formulation of Implementing Rules and Regulations. - An Inter-agency Committee is hereby created to
formulate rules and regulations for the full implementation of this Code within ninety (90) days of its effectivity: Provided,
however, That the formulated rules and regulations shall be submitted to both Houses of Congress for information and
guidance. Such rules and regulations shall take effect upon publication in a newspaper of general circulation.

The Inter-agency Committee shall be composed of the following:

(a) Secretary of Agriculture as Chairman;

(b) Secretary of the Interior and Local Government;

(c) Secretary of Environment and Natural Resources;

(d) Secretary of Justice;

(e) Secretary of Finance;

(f) Secretary of Budget and Management;

(g) Secretary of Labor and Employment;

(h) Secretary of National Defense;

(i) Commissioner of Civil Service Commission;

(j) Director of BFAR;

(k) Executive Director of PCAMRD;

(l) General Manager of PFDA;

(m) One (1) representative from each of the following:

(a.1) The League of Provinces;

(a.2) The League of Cities;

(a.3) The League of Municipalities;

(a.4) The Liga ng mga Barangay;

(n) Representative of the municipal fisherfolk;lawphi1™

 (o) Representative of the commercial fishers;

(p) Representative of the non-government organizations involved in fishing concerns; and

(q) A representative from the academe coming from the specialized fisheries institution.

CHAPTER IX
Final Provisions

Section 130. Appropriation. - The sum necessary to effectively carry out the provisions of this Act during the first year of
implementation shall be sourced from the budget of the DA/BFAR and other agencies performing fisheries-related
functions: Provided, however, That such amount as may be necessary to carry out the provisions of Sections 79, 109, 110,
111, 112, 113 are hereby appropriated out of the unappropriated funds of the National Treasury. The Congress of the
Philippines shall provide for the appropriations of the Department, the NFRDI and the Fisheries Scholarship Program for the
succeeding years to be included in the annual GAA.

Section 131. Repealing Clause. - Presidential Decree No. 704, as amended by Presidential Decree Nos. 1015 and 1058,
Presidential Decree No. 977, as amended, Executive Order No. 967, Series of 1984, Executive Order No. 116, Series of
1987, Executive Order No. 292, Series of 1987, Executive Order No. 473, Series of 1991 and other existing laws except
Republic Act No. 7611, decrees, executive orders, and rules and regulations or parts thereof, which are inconsistent with this
Code, are hereby repealed or modified accordingly.

Section 132. Separability Clause. - If any portion or provision of this Code is declared unconstitutional or invalid, the other
portions or provisions hereof, which are not affected thereby, shall continue in full force and effect.

Section 133. Effectivity. - This Code shall take effect fifteen (15) days after its publication in the Official Gazette or in two
(2) newspapers of general publication.

Approved: February 25, 1998lawphi1™

The Lawphil Project - Arellano Law Foundation

 G.R. No. 174158 : June 27, 2011 WILLIAM ENDELISEO BARROGA, Petitioner, v. DATA
CENTER COLLEGE OF THE PHILIPPINES and WILFRED BACTAD, Respondents. DEL
CASTILLO, J.: FACTS: On November 11, 1991, William Barroga was employed as an
Instructor in Data Center College Laoag City branch in Ilocos Norte. On June 6, 1992, he was
transferred University of Northern Philippines (UNP) in Vigan, Ilocos Sur where the school had a
tie-up program. Petitioner was informed that in addition to his monthly salary, a P1,200.00
allowance for board and lodging during his stint as instructor in UNP-Vigan would be given. In
1994, he was recalled to Laoag campus. On October 3, 2003, petitioner he was again
transferred to Data Center College Bangued, Abra branch as Head for Education/Instructor due
to an urgent need for an experienced officer and computer instructor thereat. Petitioner declined
to accept his transfer to Abra citing the deteriorating health condition of his father and the
absence of additional remuneration to defray expenses for board and lodging. On November 10,
2003, petitioner filed a Complaint for constructive dismissal against respondents. Petitioner
alleged that his proposed transfer to Abra constitutes a demotion in rank and diminution in pay
and would cause personal inconvenience and hardship. He argued that although he was being
transferred to Abra branch supposedly with the same position he was then holding in Laoag
branch as Head for Education, he later learned through a Memorandumfrom the administrator of
Abra branch that he will be re-assigned merely as an instructor, thereby relegating him from an
administrative officer to a rank-and-file employee. Moreover, the elimination of his allowance for
board and lodging will result to an indirect reduction of his salary which is prohibited by labor
laws. For their part, respondents claimed that they were merely exercising their management
prerogative to transfer employees for the purpose of advancing the school interests. They
argued that petitioner refusal to be transferred to Abra constitutes insubordination. They claimed
that petitioner appointment as instructor carries a proviso of possible re-assignments to any
branch or tie-up schools as the school necessity demands. Respondents argued that petitioner
designation as Head for Education in Laoag branch was merely temporary and that he would
still occupy his original plantilla item as instructor at his proposed assignment in Abra branch.
Respondents denied liability to petitioner monetary claims. The Labor Arbiter rendered a
Decision dismissing the Complaint for lack of merit. The NLRC affirmed the LA decision but it
found petitioner to be entitled to overload honorarium and ordered Data Center College of the
Philippines, to pay the complainant the sum of P73,730.39 representing overload honorarium.
Both parties eventually filed petitions for certiorari before the CA. Respondentspetition for
certiorari was docketed as CA-G.R. SP No. 94205, which is not subject of the instant review. On
the other hand, petitioner filed on April 7, 2006, a Petition for Certiorari with the CA docketed as
CA-G.R. SP No. 93991 assailing the NLRC finding that no constructive dismissal existed.
Realizing his failure to attach the requisite affidavit of service of the petition upon respondents,
petitioner filed on April 27, 2006, an Ex-Parte Manifestation and Motion to admit the attached
affidavit of service and registry receipt in compliance with the rules. On May 15, 2006, the CA
dismissed the petition in CA-G.R. SP No. 93991 for failure to state material dates as to when
the petitioner received the assailed decision dated August 25, 2005 and when he filed a Motion
for Reconsideration thereof and for failing to attach the initiatory pleadings and the
respondentsMotion for Reconsideration of the Decision dated August 25, 2005. Petitioner
motion for reconsideration was likewise dismissed. ISSUE: Whether or not the Court of Appeals
committed grave abuse of discretion in not giving due course to the petition despite petitioner
substantial compliance with the requisite formalities?
HELD: The decision of the Court of Appeal is set aside. LABOR LAW Despite the mistake
of the CA in instantly dismissing the case, herein instant petition still merits dismissal based on
substantial grounds. After a careful review of the records and the arguments of the parties, there
is no sufficient basis to conclude that petitioner re-assignment amounted to constructive
dismissal. Constructive dismissal is quitting because continued employment is rendered
impossible, unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It
exists when there is a clear act of discrimination, insensibility or disdain by an employer which
becomes unbearable for the employee to continue his employment.Petitioner alleges that the
real purpose of his transfer is to demote him. Petitioner further argues that his re-assignment
will entail an indirect reduction of his salary or diminution of pay considering that no additional
allowance will be given to cover for board and lodging expenses. He claims that such additional
allowance was given in the past and therefore cannot be discontinued and withdrawn without
violating the prohibition against non-diminution of benefits. These allegations are bereft of
merit. Petitioner was originally appointed as instructor in 1991 and was given additional
administrative functions as Head for Education during his stint in Laoag branch. He did not deny
having been designated as Head for Education in a temporary capacity for which he cannot
invoke any tenurial security. Hence, being temporary in character, such designation is
terminable at the pleasure of respondents who made such appointment.Moreover,
respondentsright to transfer petitioner rests not only on contractual stipulation but also on
jurisprudential authorities. The Labor Arbiter and the NLRC both relied on the condition laid
down in petitioner employment contract that respondents have the prerogative to assign
petitioner in any of its branches or tie-up schools as the necessity demands. In any event, it is
management prerogative for employers to transfer employees on just and valid grounds such as
genuine business necessity. Petitioner contention that his re-assignment was tainted with bad
faith cannot be given credit. As a matter of fact, respondents suggested that petitioner take an
indefinite leave of absence to attend to his ailing father. Also, during the time when respondents
directed all its administrative officers to submit courtesy resignations, petitioner letter of
resignation was not accepted. This bolsters the fact that respondents never intended to get rid
of petitioner. In fine, petitioner assertions of bad faith on the part of respondents are purely
unsubstantiated conjectures. The Court agrees with the Labor Arbiter that there was no violation
of the prohibition on diminution of benefits. Indeed, any benefit and perks being enjoyed by
employees cannot be reduced and discontinued, otherwise, the constitutional mandate to afford
full protection to labor shall be offended. But the rule against diminution of benefits is applicable
only if the grant or benefit is founded on an express policy or has ripened into a practice over a
long period which is consistent and deliberate. Petitioner failed to present any other evidence
that respondents committed to provide the additional allowance or that they were consistently
granting such benefit as to have ripened into a practice which cannot be peremptorily
withdrawn. Moreover, there is no conclusive proof that petitioner basic salary will be reduced as
it was not shown that such allowance is part of petitioner basic salary. Hence, there will be no
violation of the rule against diminution of pay enunciated under Article 100 of the Labor Code.
Source: http://thelawph.blogspot.com/2015/11/case-digest-barroga-v-data-center.html
CEBU AUTOBUS CO., petitioner vs UNITED CEBU AUTOBUS EMPLOYEES ASSN.,
respondent
GR. No. L-9742 Oct. 27, 1955
FACTS: The company used to pay to its drivers and conductors, who were assigned outside of
the City limits, aside from their regular salary, a certain percentage of their daily wage, as
allowance for food. Upon the effectivity of the Minimum Wage Law, however, that privilege was
stopped by the company. The order of CIR to the company to continue granting this privilege,
was upheld by this Court.
The shipping company argue that the furnishing of meals to the crew before the effectivity of
Rep. Act No. 602, is of no moment, because such circumstance was already taken into
consideration by Congress, when it stated that “wage” includes the fair and reasonable value of
boards customarily furnished by the employer to the employees.
ISSUE: WON “wage” includes the fair and reasonable value of boards customarily furnished by
the employer to the employees.
HELD: No. If We are to follow the theory of the herein petitioners, then a crew member, who
used to receive a monthly wage of P100.00, before August 4, 1951, with no deduction for meals,
after said date, would receive only P86.00 monthly (after deducting the cost of his meals at P.40
per meal), which would be very much less than the P122.00 monthly minimum wage, fixed in
accordance with the Minimum Wage Law. Instead of benefiting him, the law will adversely affect
said crew member. Such interpretation does not conform with the avowed intention of Congress
in enacting the said law
TSPI, INCORPORATION VS. TSPIC EMPLOYEES UNION
G.R No. 163419. February 13, 2008
FACTS: TSPI Corporation entered into a Collective Bargaining Agreement with the corporation
Union for the increase of salary for the latter’s members for the year 2000 to 2002 starting from
January 2000. thus, the increased in salary was materialized on January 1, 2000. However, on
October 6, 2000, the Regional Tripartite Wage and production Board raised daily minimum wage
from P 223.50 to P 250.00 starting November 1, 2000. Conformably, the wages of the 17
probationary employees were increased to P250.00 and became regular employees therefore
receiving another 10% increase in salary. In January 2001, TSPIC implemented the new wage
rates as mandated by the CBA. As a result, the nine employees who were senior to the 17
recently regularized employees, received less wages. On January 19, 2001, TSPIC’s HRD
notified the 24 employees who are private respondents, that due to an error in the automated
payroll system, they were overpaid and the overpayment would be deducted from their salaries
starting February 2001. The Union on the other hand, asserted that there was no error and the
deduction of the alleged overpayment constituted diminution of pay.
ISSUE: Whether the alleged overpayment constitutes diminution of pay as alleged by the Union.
RULING: Yes, because it is considered that Collective Bargaining Agreement entered into by
unions and their employers are binding upon the parties and be acted in strict compliance
therewith. Thus, the CBA in this case is the law between the employers and their employees.
Therefore, there was no overpayment when there was an increase of salary for the members of
the union simultaneous with the increasing of minimum wage for workers in the National Capital
Region. The CBA should be followed thus, the senior employees who were first promoted as
regular employees shall be entitled for the increase in their salaries and the same with lower
rank workers.
PRUBANKERS ASSOC. VS. PRUDENTIAL BANK AND TRUST CO.
The RTWPB Region V issued Wage Order No. RB 05 - 03 which provided for a Cost of Living
Allowance (COLA)to workers in the private sector who had rendered service for at least three
(3) months before its effectivity, and for the same period thereafter, in the following categories:
P17.50 in the cities of Naga and Legaspi; P15.50 in the municipalities of Tabaco, Daraga, Pili
and the city of Iriga; andP10.00 for all other areas in the Bicol Region
On November 1993, RTWPB Region VII issued Wage Order No. RB VII-03, which directed the
integration of the COLA mandated pursuant to Wage Order No. RO VII-02-Ainto the basic pay of
all workers. It also established an increase in the minimum wage rates for all workers and
employees in the private sector as follows: by Ten Pesos (P10.00) in the cities of Cebu,
Mandaue and Lapulapu; Five Pesos (P5.00) in the municipalities of Compostela, Liloan,
Consolacion, Cordova, Talisay, Minglanilla, Naga and the cities of Davao,Toledo, Dumaguete,
Bais, Canlaon, and Tagbilaran. The bank granted a COLA of P17.50 to its employees at itsNaga
Branch, the only branch covered by Wage Order No. RB 5 -03, and integrated the P150.00 per
month COLA into the basic pay of its rank -and-file employees at its Cebu, Mabolo and P. del
Rosario branches, thebranches covered by Wage Order No. RB V II- 03.
On June 7, 1994, Prubankers Association wrote the petitioner requesting that the Labor
Management Committee be immediately convened to discuss and resolve the alleged wage
distortion created in the salary structure upon the implementation of the said wage orders. It
demanded in the Labor Management Committee meetings that the petitioner extend the
application of the wage orders to its employees outside Regions V and VII, claiming that the
regional implementation of the said orders created a wage distortion in the wage rates of
petitioner's employees nationwide.
As the grievance could not be settled in the said meetings, the parties agreed to submit the
matter to voluntary arbitration.
Issue:
WON a wage distortion resulted from respondent's implementation of the Wage Orders.
Held:
WHEREFORE, the petition is DENIED and the assailed Decision is AFFIRMED. Costs against
petitioner.
Ratio:
The court ruled that there is no wage distortion since the wage order implementation covers all
the branches of the bank.
The hierarchy of positions was still preserved. The levels of different pay classes was not
eliminated. The statutory definition of wage distortion is found in Article 124 of the Labor Code,
as amended by Republic ActNo. 6727, which reads:
Standards/ Criteria for Minimum Wage Fixing . . ." As used herein, a wage distortion shall mean
a situation where an increase in prescribed wage results in the elimination or severe contraction
of intentional quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of differentiation."
Wage distortion involves four elements: (1) An existing hierarchy of positions with corresponding
salary rates; (2) A significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of a higher one; (3)The elimination of the distinction
between the two levels and (4) The existence of the distortion in the same region of the country.
A disparity in wages between employees holding similar positions but in different regions does
not constitute wage distortion as contemplated by law. As stated, it is the hierarchy of positions
and the disparity of their corresponding wages and other emoluments that are sought to be
preserved by the concept of wage distortion.
SAN MIGUEL CORPORATION v. PROSPERO ABALLA
G.R. No. 149011 June 28, 2005
Ponente: CARPIO-MORALES, J.:
FACTS: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose Cooperative
(Sunflower) entered into a one-year Contract of Service and such contract is renewed on a
monthly basis until terminated. Pursuant to this, respondent Prospero Aballa rendered services
to SMC.
After one year of service, Aballa filed a complaint before NLRC praying that they be declared as
regular employees of SMC. On the other hand, SMC filed before the DOLE a Notice of Closure
due to serious business losses. Hence, the labor arbiter dismissed the complaint and ruled in
favor of SMC. Aballa then appealed before the NLRC. The NLRC dismissed the appeal finding
that Sunflower is an independent contractor.
On appeal, the Court of Appeals reversed NLRC·s decision on the ground that the agreement
between SMC and Sunflower showed a clear intent to abstain from establishing an employer-
employee relationship.
ISSUE: Whether or not Aballa and other employees of Sunflower are employees of SMC?
HELD: The test to determine the existence of independent contractorship is whether one
claiming to be an independent contractor has contracted to do the work according to his own
methods and without being subject to the control of the employer, except only as to the results
of the work. In legitimate labor contracting, the law creates an employer-employee relationship
for a limited purpose, to ensure that the employees are paid their wages. The principal employer
becomes jointly and severally liable with the job contractor, only for the payment of the
employees wages whenever the contractor fails to pay the same. Other than that, the principal
employer is not responsible for any claim made by the employees. In labor-only contracting, the
statute creates an employer-employee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer.
The Contract of Services between SMC and Sunflower shows that the parties clearly disavowed
the existence of an employer-employee relationship between SMC and private respondents.
The language of a contract is not, however, determinative of the parties· relationship; rather it is
the totality of the facts and surrounding circumstances of the case. A party cannot dictate, by the
mere expedient of a unilateral declaration in a contract, the character of its business, whether as
labor-only contractor or job contractor, it being crucial that its character be measured in terms of
and determined by the criteria set by statute. What appears is that Sunflower does not have
substantial capitalization or investment in the form of tools, equipment, machineries, work
premises and other materials to qualify it as an independent contractor. On the other hand, it is
gathered that the lot, building, machineries and all other working tools utilized by Aballa et al. in
carrying out their tasks were owned and provided by SMC.
And from the job description provided by SMC itself, the work assigned to Aballa et al. was
directly related to the aquaculture operations of SMC. As for janitorial and messengerial
services, that they are considered directly related to the principal business of the employer has
been jurisprudentially recognized. Furthermore, Sunflower did not carry on an independent
business or undertake the performance of its service contract according to its own manner and
method, free from the control and supervision of its principal, SMC, its apparent role having
been merely to recruit persons to work for SMC.
All the foregoing considerations affirm by more than substantial evidence the existence of an
employer- employee relationship between SMC and Aballa. Since Aballa who were engaged in
shrimp processing performed tasks usually necessary or desirable in the aquaculture business
of SMC, they should be deemed regular employees of the latter and as such are entitled to all
the benefits and rights appurtenant to regular employment. They should thus be awarded
differential pay corresponding to the difference between the wages and benefits given them and
those accorded SMC·s other regular employees.
Republic vs Asiapro Cooperative (2007) G.R. 172101
Facts:
Respondent Asiapro, as a cooperative, is composed of owners-members.Under its by-laws,
owners-members are of two categories, to wit: (1) regular member, who is entitled to all the
rights and privileges of membership; and (2) associate member, who has no right to vote and be
voted upon and shall be entitled only to such rights and privileges provided in its by-laws, Its
primary objectives are to provide savings and credit facilities and to develop other livelihood
services for its owners-members.In the discharge of the aforesaid primary objectives,
respondent cooperative entered into several Service Contracts with Stanfilco - a division of
DOLE Philippines, Inc. and a company based in Bukidnon.The owners-members do not receive
compensation or wages from the respondent cooperative.Instead, they receive a share in the
service surplus which the respondent cooperative earns from different areas of trade it engages
in, such as the income derived from the said Service Contracts with Stanfilco. The owners-
members get their income from the service surplus generated by the quality and amount of
services they rendered, which is determined by the Board of Directors of the respondent
cooperative.
In order to enjoy the benefits under the Social Security Law of 1997, the owners-members of the
respondent cooperative, who were assigned to Stanfilco requested the services of the latter to
register them with petitioner SSS as self-employed and to remit their contributions as such.
Also, to comply with Section 19-A of Republic Act No. 1161, as amended by Republic Act No.
8282, the SSS contributions of the said owners-members were equal to the share of both the
employer and the employee.
On 26 September 2002, however, petitioner SSS through its Vice-President for Mindanao
Division, Atty. Eddie A. Jara, sent a letter to the respondent cooperative, addressed to its Chief
Executive Officer (CEO) and General Manager Leo G. Parma, informing the latter that based on
the Service Contracts it executed with Stanfilco, respondent cooperative is actually a manpower
contractor supplying employees to Stanfilco and for that reason, it is an employer of its owners-
members working with Stanfilco.Thus, respondent cooperative should register itself with
petitioner SSS as an employer and make the corresponding report and remittance of premium
contributions in accordance with the Social Security Law of 1997.On 9 October 2002,
respondent cooperative, through its counsel, sent a reply to petitioner SSSs letter asserting that
it is not an employer because its owners-members are the cooperative itself; hence, it cannot be
its own employer.Again, on 21 October 2002 petitioner SSS sent a letter to respondent
cooperative ordering the latter to register as an employer and report its owners-members as
employees for compulsory coverage with the petitioner SSS.Respondent cooperative
continuously ignored the demand of petitioner SSS.
Accordingly, petitioner SSS, on 12 June 2003, filed a Petition before petitioner SSC against the
respondent cooperative and Stanfilco praying that the respondent cooperative or, in the
alternative, Stanfilco be directed to register as an employer and to report respondent
cooperatives owners-members as covered employees under the compulsory coverage of SSS
and to remit the necessary contributions in accordance with the Social Security Law of
1997.The same was docketed as SSC Case No. 6-15507-03. Respondent cooperative filed its
Answer with Motion to Dismiss alleging that no employer-employee relationship exists between
it and its owners-members, thus, petitioner SSC has no jurisdiction over the respondent
cooperative.Stanfilco, on the other hand, filed an Answer with Cross-claim against the
respondent cooperative.
Issue: Whether the petitioner SSC has jurisdiction over the petition-complaint filed before it by
petitioner SSS against the respondent cooperative.
Held: Petitioner SSCs jurisdiction is clearly stated in Section 5 of Republic Act No. 8282 as well
as in Section 1, Rule III of the 1997 SSS Revised Rules of Procedure.
Section 5 of Republic Act No. 8282 provides:
SEC. 5. Settlement of Disputes. (a) Any dispute arising under this Act with respect to
coverage, benefits, contributions and penalties thereon or any other matter related thereto,
shall be cognizable by the Commission, x x x.(Emphasis supplied.)
Similarly, Section 1, Rule III of the 1997 SSS Revised Rules of Procedure states:
Section 1.Jurisdiction. Any dispute arising under the Social Security Act with respect to
coverage, entitlement of benefits, collection and settlement of contributions and penalties
thereon, or any other matter related thereto, shall be cognizable by the Commission after
the SSS through its President, Manager or Officer-in-charge of the
Department/Branch/Representative Office concerned had first taken action thereon in writing.
(Emphasis supplied.)
It is clear then from the aforesaid provisions that any issue regarding the compulsory coverage
of the SSS is well within the exclusive domain of the petitioner SSC.It is important to note,
though, that the mandatory coverage under the SSS Law is premised on the existence of an
employer-employee relationship except in cases of compulsory coverage of the self-employed.
It is axiomatic that the allegations in the complaint, not the defenses set up in the Answer
or in the Motion to Dismiss, determine which court has jurisdiction over an action;
otherwise, the question of jurisdiction would depend almost entirely upon the defendant.
Moreover, it is well-settled that once jurisdiction is acquired by the court, it remains with it until
the full termination of the case. The said principle may be applied even to quasi-judicial bodies.
In this case, the petition-complaint filed by the petitioner SSS before the petitioner SSC against
the respondent cooperative and Stanfilco alleges that the owners-members of the respondent
cooperative are subject to the compulsory coverage of the SSS because they are employees of
the respondent cooperative.Consequently, the respondent cooperative being the employer of its
owners-members must register as employer and report its owners-members as covered
members of the SSS and remit the necessary premium contributions in accordance with the
Social Security Law of 1997. Accordingly, based on the aforesaid allegations in the petition-
complaint filed before the petitioner SSC, the case clearly falls within its jurisdiction.Although the
Answer with Motion to Dismiss filed by the respondent cooperative challenged the jurisdiction of
the petitioner SSC on the alleged lack of employer-employee relationship between itself and its
owners-members, the same is not enough to deprive the petitioner SSC of its jurisdiction over
the petition-complaint filed before it.Thus, the petitioner SSC cannot be faulted for initially
assuming jurisdiction over the petition-complaint of the petitioner SSS.
Nonetheless, since the existence of an employer-employee relationship between the
respondent cooperative and its owners-members was put in issue and considering that the
compulsory coverage of the SSS Law is predicated on the existence of such relationship, it
behooves the petitioner SSC to determine if there is really an employer-employee relationship
that exists between the respondent cooperative and its owners-members.
The question on the existence of an employer-employee relationship is not within the exclusive
jurisdiction of the National Labor Relations Commission (NLRC).Article 217 of the Labor Code
enumerating the jurisdiction of the Labor Arbiters and the NLRC provides that:
ART. 217.JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. - (a) x x
6.Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of persons
in domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement.
Although the aforesaid provision speaks merely of claims for Social Security, it would
necessarily include issues on the coverage thereof, because claims are undeniably rooted in the
coverage by the system.Hence, the question on the existence of an employer-employee
relationship for the purpose of determining the coverage of the Social Security System is
explicitly excluded from the jurisdiction of the NLRC and falls within the jurisdiction of the SSC
which is primarily charged with the duty of settling disputes arising under the Social Security
Law of 1997.
On the basis thereof, considering that the petition-complaint of the petitioner SSS involved the
issue of compulsory coverage of the owners-members of the respondent cooperative, this Court
agrees with the petitioner SSC when it declared in its Order dated 17 February 2004 that as an
incident to the issue of compulsory coverage, it may inquire into the presence or absence of an
employer-employee relationship without need of waiting for a prior pronouncement or submitting
the issue to the NLRC for prior determination.Since both the petitioner SSC and the NLRC are
independent bodies and their jurisdiction are well-defined by the separate statutes creating
them, petitioner SSC has the authority to inquire into the relationship existing between the
worker and the person or entity to whom he renders service to determine if the employment,
indeed, is one that is excepted by the Social Security Law of 1997 from compulsory coverage.
In determining the existence of an employer-employee relationship, the following elements are
considered: (1) the selection and engagement of the workers; (2) the payment of wages by
whatever means; (3) the power of dismissal; and (4) the power to control the workers conduct,
with the latter assuming primacy in the overall consideration. The most important element is
the employers control of the employees conduct, not only as to the result of the work to
be done, but also as to the means and methods to accomplish. The power of control refers
to the existence of the power and not necessarily to the actual exercise thereof.It is not essential
for the employer to actually supervise the performance of duties of the employee; it is enough
that the employer has the right to wield that power. All the aforesaid elements are present in this
case.
First.It is expressly provided in the Service Contracts that it is the respondent cooperative which
has the exclusive discretion in the selection and engagement of the owners-members as
well as its team leaders who will be assigned at Stanfilco. Second.Wages are defined as
remuneration or earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained, on a time, task, piece or commission basis, or other
method of calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for service
rendered or to be rendered. In this case, the weekly stipends or the so-called shares in the
service surplus given by the respondent cooperative to its owners-members were in reality
wages, as the same were equivalent to an amount not lower than that prescribed by existing
labor laws, rules and regulations, including the wage order applicable to the area and industry;
or the same shall not be lower than the prevailing rates of wages. It cannot be doubted then that
those stipends or shares in the service surplus are indeed wages, because these are given to
the owners-members as compensation in rendering services to respondent cooperatives client,
Stanfilco.Third.It is also stated in the above-mentioned Service Contracts that it is the
respondent cooperative which has the power to investigate, discipline and remove the
owners-members and its team leaders who were rendering services at Stanfilco. Fourth.As
earlier opined, of the four elements of the employer-employee relationship, the control test is the
most important.In the case at bar, it is the respondent cooperative which has the sole
control over the manner and means of performing the services under the Service
Contracts with Stanfilco as well as the means and methods of work. Also, the respondent
cooperative is solely and entirely responsible for its owners-members, team leaders and other
representatives at Stanfilco. All these clearly prove that, indeed, there is an employer-employee
relationship between the respondent cooperative and its owners-members.
It is true that the Service Contracts executed between the respondent cooperative and Stanfilco
expressly provide that there shall be no employer-employee relationship between the
respondent cooperative and its owners-members. This Court, however, cannot give the said
provision force and effect.
As previously pointed out by this Court, an employee-employer relationship actually exists
between the respondent cooperative and its owners-members.The four elements in the four-fold
test for the existence of an employment relationship have been complied with.The respondent
cooperative must not be allowed to deny its employment relationship with its owners-members
by invoking the questionable Service Contracts provision, when in actuality, it does exist.The
existence of an employer-employee relationship cannot be negated by expressly
repudiating it in a contract, when the terms and surrounding circumstances show
otherwise.The employment status of a person is defined and prescribed by law and not
by what the parties say it should be.
It is settled that the contracting parties may establish such stipulations, clauses, terms and
conditions as they want, and their agreement would have the force of law between
them.However, the agreed terms and conditions must not be contrary to law, morals,
customs, public policy or public order. The Service Contract provision in question must be
struck down for being contrary to law and public policy since it is apparently being used by the
respondent cooperative merely to circumvent the compulsory coverage of its employees, who
are also its owners-members, by the Social Security Law.
This Court is not unmindful of the pronouncement it made in Cooperative Rural Bank of Davao
City, Inc. v. Ferrer-Calleja wherein it held that:
A cooperative, therefore, is by its nature different from an ordinary business concern, being run
either by persons, partnerships, or corporations. Its owners and/or members are the ones who
run and operate the business while the others are its employees x x x.
An employee therefore of such a cooperative who is a member and co-owner thereof
cannot invoke the right to collective bargaining for certainly an owner cannot bargain
with himself or his co-owners. In the opinion of August 14, 1981 of the Solicitor General he
correctly opined that employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes of collective
bargaining for being themselves co-owners of the cooperative.
However, in so far as it involves cooperatives with employees who are not members or co-
owners thereof, certainly such employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as are enshrined in the Constitution
and existing laws of the country.
The situation in the aforesaid case is very much different from the present case.The declaration
made by the Court in the aforesaid case was made in the context of whether an employee who
is also an owner-member of a cooperative can exercise the right to bargain collectively with the
employer who is the cooperative wherein he is an owner-member. Obviously, an owner-member
cannot bargain collectively with the cooperative of which he is also the owner because an owner
cannot bargain with himself.In the instant case, there is no issue regarding an owner-members
right to bargain collectively with the cooperative.The question involved here is whether an
employer-employee relationship can exist between the cooperative and an owner-member.In
fact, a closer look at Cooperative Rural Bank of Davao City, Inc. will show that it actually
recognized that an owner-member of a cooperative can be its own employee.
It bears stressing, too, that a cooperative acquires juridical personality upon its registration with
the Cooperative Development Authority. It has its Board of Directors, which directs and
supervises its business; meaning, its Board of Directors is the one in charge in the conduct and
management of its
affairs. With that, a cooperative can be likened to a corporation with a personality separate and
distinct from its owners-members.Consequently, an owner-member of a cooperative can be an
employee of the latter and an employer-employee relationship can exist between them.
In the present case, it is not disputed that the respondent cooperative had registered itself with
the Cooperative Development Authority, as evidenced by its Certificate of Registration No. 0-
623-2460. In its by-laws, its Board of Directors directs, controls, and supervises the business
and manages the property of the respondent cooperative. Clearly then, the management of the
affairs of the respondent cooperative is vested in its Board of Directors and not in its owners-
members as a whole.Therefore, it is completely logical that the respondent cooperative, as a
juridical person represented by its Board of Directors, can enter into an employment with its
owners-members.
In sum, having declared that there is an employer-employee relationship between the
respondent cooperative and its owners-member, we conclude that the petitioner SSC has
jurisdiction over the petition-complaint filed before it by the petitioner SSS.
Tabas et al VS. California Manufacturing Company
G.R. No. L-80680 January 26, 1989
Facts:
Petitioners filed a petition in the NLRC for reinstatement and payment of various benefits
against California Manufacturing Company. The respondent company then denied the existence
of an employer-employee relationship between the company and the petitioners.
Pursuant to a manpower supply agreement, it appears that the petitioners prior their
involvement with California Manufacturing Company were employees of Livi Manpower service,
an independent contractor, which assigned them to work as "promotional merchandisers." The
agreement provides that:
California "has no control or supervisions whatsoever over [Livi's] workers with respect to how
they accomplish their work or perform [Californias] obligation" It was further expressly stipulated
that the assignment of workers to California shall be on a "seasonal and contractual basis"; that
"[c]ost of living allowance and the 10 legal holidays will be charged directly to [California] at cost
"; and that "[p]ayroll for the preceeding [sic] week [shall] be delivered by [Livi] at [California's]
premises."
Issue:
Whether the petitioners are California's or Livi's employees?
Held:
There is no doubt that in the case at bar, Livi performs "manpower services", meaning to say, it
contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims
to the contrary, and notwithstanding the provision of the contract that it is "an independent
contractor." The nature of one's business is not determined by self-serving appellations one
attaches thereto but by the tests provided by statute and prevailing case law. The bare fact that
Livi maintains a separate line of business does not extinguish the equal fact that it has provided
California with workers to pursue the latter's own business. In this connection, we do not agree
that the petitioners had been made to perform activities 'which are not directly related to the
general business of manufacturing," California's purported "principal operation activity. " The
petitioner's had been charged with "merchandizing [sic] promotion or sale of the products of
[California] in the different sales outlets in Metro Manila including task and occational [sic] price
tagging," an activity that is doubtless, an integral part of the manufacturing business. It is not,
then, as if Livi had served as its (California's) promotions or sales arm or agent, or otherwise,
rendered a piece of work it (California) could not have itself done; Livi, as a placement agency,
had simply supplied it with the manpower necessary to carry out its (California's) merchandising
activities, using its (California's) premises and equipment.
Neither Livi nor California can therefore escape liability, that is, assuming one exists.
Petition granted.
G.R. No. 88538 April 25, 1990
ABOITIZ SHIPPING CORPORATION, petitioner, vs. HON. DIONISIO C. DELA SERNA, IN HIS
CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT; HON. LUNA C.
PIEZAS IN HIS CAPACITY AS DIRECTOR, NATIONAL CAPITAL REGION, DEPARTMENT
OF LABOR AND EMPLOYMENT; and, ABOITIZ SHIPPING EMPLOYEES ASSOCIATION,
respondents.
Alejandro B. Cinco for petitioner. Rogelio B. De Guzman for private respondent.
PADILLA, J.:
The principal issue in this special civil action for certiorari is whether the respondent Regional
Director, National Capital Region, Department of Labor and Employment (Regional Director, for
short) correctly assumed jurisdiction over the money claims filed with him by the complainants
(members of herein private respondent).
Assailed specifically in this petition is the Order dated 9 February 1989 of the respondent
Undersecretary of Labor and Employment affirming the Order dated 13 October 1988 of the
Regional Director, ordering petitioner company to pay the seven hundred seventeen (717)
complainants a total amount of P1,350,828.00., orP1,884.00 each, representing underpayment
of an allowance of P2.00 per day, reckoned from 16 February 1982 to 15 February 1985.
The facts of the case, as found by respondent Undersecretary, are as follows:
. . . a complaint was filed by the Aboitiz Shipping Employees Association against Aboitiz
Shipping Corporation for non-compliance of the mandated minimum wage rates and allowances
pursuant to P.D. Nos. 1713, 1751, Wage Order Nos. 1, 2, 3, 4, 5 and 6. Accordingly, the Labor
Regulation Officers of the Regional Office a quo inspected the respondent's employment
records.
On the other hand, the respondent filed a Motion to Dismiss contending that the complainant-
union has no legal capacity to sue because a representation issue is still pending with Med-
Arbiter Edgardo Cruz in LRD CASE NO. M-001-85.
Series of hearings were conducted whereby the Office a quo repeatedly directed the respondent
to present and submit all its pertinent papers/employment records covered by the investigation.
However, on several occasions, the respondent failed to appear. Likewise, despite repeated
notices, the respondent failed to present any of the documents due for inspection evidencing
correct payments of salaries and allowances.
On December 28, 1987, the hearing officer submitted his report and recommended for the
payment to the union's members amounting to an aggregate sum of P16,200,877.47.
On January 20, 1988, the Office a quo formally issued subpoena duces tecum, requiring the
presentation by the respondent of its employees' payrolls and vouchers covering the period
from February 16, 1982 to December 31, 1985. This, the respondent ignored. In lieu thereof, it
filed a second Motion to Dismiss alleging that on July 24, 1986, the parties entered into a
compromise agreement whereby they agreed that all cases filed against and by respondent
would be dropped and/or dismissed, including the above entitled case; that pursuant to and by
virtue of the compromise agreement, cases filed against the Aboitiz Shipping Corporation and
its officers were dropped and/or
withdrawn and/or dismissed; and that similarly, cases filed by Aboitiz Shipping Corporation and
its officers against the union and its officers were dropped, withdrawn and/or dismissed.
In the subsequent hearing of February 16, 1988 however, the parties agreed that on March 4,
1988, the respondent shall submit to the Office a quo the required payrolls/vouchers for wages
and salaries covering the period from February 16, 1982 to December 31, 1985. On that date,
the respondent again failed to make good its commitment. Nevertheless, it agreed to submit the
payrolls of its Manila-based employees for the period from January 1982 to December 1982.
Together with the submission of the photocopies of the payrolls of the Manila-based employees,
the respondent also filed a Manifestation of Compliance stating that the following should be
taken into consideration:
Annex 1. Which is a BWF/ISM Form No. 5 an advance notice dated October 1987 issued by the
DOLE Regional Office No. 7 notifying respondent of their intent to check payrolls etc. . . .
Annex 2. Which is the notice of inspection results no. 05598 dated October 23, 1987 stating that
the respondent (company-wide payrolls, etc.) has no violation insofar as wages, salaries, etc.
are concerned as well as the benefits. Its indicated in the CBA. . . .
Annex 3. Which is the certification of the ASEA Union President based in Cebu City and the
Union Vice President that company records inspected coveting the period 1984-1987 were true
correct and in order, and in compliance with the Labor and Standard Laws;
Annex 4. Which is the existing CBA between the respondent and complainant ASEA employees
Union;
Annex 5. Which is the letter of Bureau of Working Conditions dated July 17, 1987 signed by
Director Augusto Sanchez sustaining and validating respondent's use of 314 as divisor in the
computation of wages and COLA for land based employees of respondent.
Again, on July 5, 1988, the respondent filed a supplemental Motion to Dismiss, questioning this
time the jurisdiction of the Office a quo. The motion alleged that ". . . considering the complaint
involves money claims, the original and exclusive jurisdiction rests not before the Honorable
Director but before the labor Arbiter . . ."
xxxxxxxxx
Another hearing was conducted on August 17, 1988, whereby the respondent was required to
submit its payrolls for the year 1984. The respondent manifested however, that its Motion to
Dismiss be resolved first by the Office a quo. Further, the respondent averred that the payroll for
1984 need not be submitted, and thus moved for the resolution of this case based on the
available records and motions submitted.1
Subsequently, respondent Regional Director issued the now assailed Order dated 13 October
1988, the dispositive portion of which reads:
WHEREFORE, premises considered, the Aboitiz Shipping Corporation is hereby Ordered to pay
the herein listed complainants the total amount of ONE MILLION THREE HUNDRED FIFTY
THOUSAND EIGHT HUNDRED TWENTY EIGHT and 00/100 PESOS (P1,350,828.00.)
representing underpayment of daily allowance of TWO (P2.00) PESOS per day reckoned from
16 February 1982 to 15 February 1985.
FURTHER, the Aboitiz Shipping Corporation is hereby Ordered to pay each and every one of its
employees the deficiency in allowance of two (P2.00) PESOS per day from 16 February 1985
onward until this Order is fully complied with.2
On appeal to the Office of the Secretary of Labor and Employment, in which petitioner
questioned, among others, the jurisdiction of respondent Regional Director over the instant
claims, respondent Undersecretary issued the Order dated 9 February 1989 dismissing
petitioner's appeal and affirming the Order dated 13 October 1988 of the respondent Director.
The motion for reconsideration of the order dated 9 February 1989 having been denied by
respondent Undersecretary in the Order dated 2 June 1989, petitioner interposed this present
petition.
Petitioner contends that it is the Labor Arbiter, not the Regional Director who has jurisdiction
over money claims, citing Article 217 of the Labor Code, and invoking this Court's ruling in
Zambales Base Metals, Inc. vs. Minister of Labor.3
We rule against petitioner's contention.
Pertinent to the issue at bar are Articles 129 and 217 of the Labor Code, as amended by
Sections 2 and 9 of Republic Act 6715 approved on 2 March 1989 which read as follows:
Article 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of
any interested party, the Regional Director of the Department of Labor and Employment or any
of the duly authorized hearing officers of the Department is empowered, through summary
proceeding and other monetary claims and benefits, including legal interest, owing to an
employee or person employed in domestic or household service or househelper under this
Code, arising from employer-employee relations:Provided, that such complaint does not include
a claim for reinstatement: Provided, further That the aggregate money claims of each employee
of househelper do not exceed five thousand pesos (P5,000.00). The Regional Director hearing
officer shall decide to resolve the complaint within thirty (30) calendar days from the date of the
filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant
to this Article shall be held in a special deposit account, and shall be paid, on order of the
Secretary of Labor and Employment or the Regional Director directly to the employee or
househelper concerned. Any such sum not paid to the employee or househelper, because he
cannot be located after diligent and reasonable effort to locate him within a period of three (3)
years, shall be held as a special fund of the Department of Labor and Employment to be used
exclusively for the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision
may be appealed on the same grounds provided in Article 223 of this Code, within five (5)
calendar days from receipt of a copy of said decision or resolution, to the National Labor
Relations Commission which shall resolve the appeal within ten (10) calendar days from the
submission of the last pleading required or allowed under its rules.
The Secretary of Labor and Employment or his duly authorized representative may supervise
the payment of unpaid wages and other monetary claims and benefits, including legal interest,
found owing to any employee or househelper under this Code.
xxxxxxxxx
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of persons
in domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) whether or not accompanies with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
It should be pointed out that, following the ruling in Briad Agro vs. Dela Cerna, and L.M. Camus
Engineering vs.Secretary of Labor, 4 the above-cited amendments, being curative in nature,
have retroactive effect and, thus, find application in the instant case.
Under the foregoing provisions of Articles 129 and 217 of the Labor Code, as amended, the
Regional Director is empowered, through summary proceeding and after due notice, to hear and
decide cases involving recovery of wages and other monetary claims and benefits, including
legal interest, provided the following requisites are present, 5 to wit:
1) the claim is presented by an employee or person employed in domestic or household service,
or househelper;
2) the claim arises from employer-employee relations;
3) the claimant does not seek reinstatement; and
4) the aggregate money claim of each employee or househelper does not exceed P5,000.00
(Art. 129, Labor Code, as amended by R.A. 6715).
In the absence of any of the requisites above enumerated, it is the Labor Arbiter who shall have
exclusive original jurisdiction over claims arising from employer-employee relations, except
claims for employees' compensation, social security, medicare and maternity benefits, all these
pursuant to Article 217 of the Labor Code, particularly paragraph six (6) thereof.
This power of the Regional Directors qualified under R.A. 6715 is recognized in the modificatory
resolution dated 9 November 1989 in said Briad Agro vs. Dela Cerna which modified the earlier
decision therein dated 29 June 1989. 6
In view of the enactment of R.A. 6715, and the modificatory resolution in the Briad Agro case,
the ruling inZambales Base Metals, Inc. vs. Minister of Labor, supra, is no longer applicable.
In the case at bar, it is noted that in the Order dated 13 October 1988 of the Regional Director,
the latter foundeach of the seven hundred seventeen (717) complainants entitled to a uniform
amount of P1,884.00.
(Rollo, pp. 11 7-131,). All the other requisites for the exercise of the power of the Regional
Director under Article 129 of the Labor Code, as amended by R.A. 6715, are present. It follows
that the respondent Regional Director properly took cognizance of the claims, subject of this
petition.
To the petitioner's contention that it was denied due process of law as it was not afforded time
and opportunity to present its evidence, the records show that on several occasions despite due
notice, petitioner failed to either appear at the scheduled hearings, or to present its employees'
payrolls and vouchers for wages and salaries, particularly, those covering the period from 16
February 1982 to 31 December 1985. Therefore, petitioner was not denied due process of law.
We also do not agree with the petitioner's allegation that it was improper for the respondent
Regional Director to order in the questioned Order dated 13 October 1988, compliance with P.D.
1678 7 as the issue on the said decree was never raised by private respondent in its complaint
filed before the Regional Director. While it may be true that P.D. 1678 is not one of the laws
where non-compliance therewith was complained of, still, the Regional Director correctly acted
in ordering petitioner to comply therewith, as he (Regional Director) has such power under his
visitorial and enforcement authority provided under Article 128(a) of the Labor Code, which
provides:
Art. 128. Visitorial and enforcement power. — (a) The Secretary of Labor or his duly authorized
representatives, including labor regulation officers, shall have access to employers' records and
premises at any time of the day or night whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee and investigate any fact, condition or matter
which may be necessary to determine violations or which may aid in the enforcement of this
Code and of any labor law, wage order or rules and regulations issued pursuant thereto.
Petitioner also claims that the complaint filed against it should have been dismissed outright,
considering the compromise agreement dated 24 July 1986, which purportedly contains the
agreement of the parties therein to dismiss the cases filed by one against the other. 8
We find no merit in said contention, in the light of the Regional Director's finding that the said
agreement can not bind the complainant-union vis-a-vis the instant claims, for the reason that it
was entered into by one Mr. Elizardo Manuel 9 in his personal capacity, one Luis M. Moro, Jr.
representing Aboitiz Shipping Corporation, and Atty. Luis D. Flores in his capacity as legal
counsel of ASEA-CLO, 10 which finding is supported by the records of the case before us. Such
records show that the compromise agreement primarily binds only the said Mr. Manuel, and
that, therefore, it has nothing to do with the rest of the other complainant-union
members.1âwphi1 The said agreement 11reads:
COMPROMISE AGREEMENT
This Agreement, entered into by and among Mr. ELIZARDO MANUEL in his personal capacity,
LUIS M. MORO, JR. representing Aboitiz Shipping Corporation and Atty. LUIS D. FLORES in
his capacity as Legal Counsel of ASEA-CLO.
Based on a compromise agreement Mr. Elizardo Manuel is requesting Aboitiz Shipping
Corporation for payment of P70,000.00 in full settlement of all monetary claims for back wages
and benefits he has, including the settlement decided by the NLRC which presently is under
appeal.
For and in consideration of the above stated amount Mr. Elizardo Manuel and Aboitiz Shipping
Corporation mutually agree that:
— Mr. Elizardo Manuel is deemed resigned from Aboitiz Shipping Corporation upon payment of
the above stated amount;
xxxxxxxxx
— Aboitiz Shipping Corporation will furnish Mr. E. Manuel a certificate of good moral character;
— All pending cases as attested by our Legal Counsel that are related on filed by E. Manuel
against the Officers of Aboitiz Shipping Corporation and Aboitiz Shipping Corporation itself will
be immediately dropped;
— Aboitiz Shipping Corporation also agrees to drop all pending cases related to and filed
against Mr. E. Manuel and Officers of the Union.
(SGD) LUIS M. MORO, JR.
Done this 24th day of July, 1986
in Metro Manila, Philippines.
(SGD) ELIZARDO MANUEL