G.R. No.

169752 September 25, 2007

PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS vs. COA

Facts:

The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No.
1285, enacted by the Philippine Commission. The petitioner, at the time it was created, was composed of
animal aficionados and animal propagandists.

The objects of the petitioner as stated in Section 2 of its charter, shall be to enforce laws relating to cruelty
inflicted upon animals or the protection of animals in the Philippine Islands, and generally, to do and
perform all things which may tend in any way to alleviate the suffering of animals and promote their
welfare.3
At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in
existence. Act No. 1285 antedated both the Corporation Law and the constitution of the Securities and
Exchange Commission. Important to note is that the nature of the petitioner as a corporate entity is
distinguished from the sociedad anonimas under the Spanish Code of Commerce.

For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the
protection of animals, the petitioner was initially imbued under its charter with the power to apprehend
violators of animal welfare laws. In addition, the petitioner was to share one-half (1/2) of the fines
imposed and collected through its efforts for violations of the laws related thereto as provided in Sections
4 and 5 of Act No. 1285.

Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the fines
collected for violation of animal-related laws were recalled by virtue of Commonwealth Act No. 148.
Immediately thereafter, then President Manuel L. Quezon issued EO No. 63 dated November 12, 1936,
portions of which provide:

Whereas, during the first regular session of the National Assembly, Commonwealth Act Numbered One
Hundred Forty Eight was enacted depriving the agents of the Society for the Prevention of Cruelty to
Animals of their power to arrest persons who have violated the laws prohibiting cruelty to animals
thereby correcting a serious defect in one of the laws existing in our statute books.

On December 1, 2003, an audit team from respondent COA visited the office of the petitioner to conduct
an audit survey pursuant to COA Office Order No. 2003-051 dated November 18, 2003 addressed to the
petitioner. The petitioner demurred on the ground that it was a private entity not under the jurisdiction of
COA, citing Section 2(1) of Article IX of the Constitution which specifies the general jurisdiction of the
COA.

Petitioner explained thus:

a. Although the petitioner was created by special legislation, this necessarily came about because
in January 1905 there was as yet neither a Corporation Law or any other general law under which
it may be organized and incorporated, nor a Securities and Exchange Commission which would
have passed upon its organization and incorporation.
 b. That Executive Order No. 63, issued during the Commonwealth period, effectively deprived
the petitioner of its power to make arrests, and that the petitioner lost its operational funding,
underscore the fact that it exercises no governmental function. In fine, the government itself, by
its overt acts, confirmed petitioner’s status as a private juridical entity.

The COA General Counsel issued a Memorandum in 2004, asserting that the petitioner was subject to its
audit authority. In a letter, respondent COA informed the petitioner of the result of the evaluation,
furnishing it with a copy of said Memorandum.

Petitioner thereafter filed with the respondent COA a Request for Re-evaluation insisting that it was a
private domestic corporation but the General Counsel of respondent COA, in a Memorandum dated
affirmed her earlier opinion that the petitioner was a government entity that was subject to the audit
jurisdiction of respondent COA and requested an initial conference with the respondents.

In a Memorandum Director Delfin Aguilar reported to COA Assistant Commissioner Espino, Corporate
Government Sector, that the audit survey was not conducted due to the refusal of the petitioner because
the latter maintained that it was a private corporation.

Petitioner received the subject COA Office Order 2005-021 and the Letter.

Petitioner argued that:

1) Even though it was created by special legislation in 1905 as there was no general law then
existing under which it may be organized or incorporated, it exercises no governmental functions
because these have been revoked by C.A. No. 148 and E.O. No.
2) Nowhere in its charter is it indicated that it is a public corporation
3) If it were a government body, there would have been no need for the State to grant it tax
exemptions under Republic Act No. 1178, and the fact that it was so exempted strengthens its
position that it is a private institution;
4) The employees of the petitioner are registered and covered by the SSS at the latter’s initiative and
not through the GSIS
5) The petitioner does not receive any form of financial assistance from the government
6) That C.A. No. 148 effectively deprived the petitioner of its powers to make arrests and serve
processes as these functions were placed in the hands of the police force;
7) No government appointee or representative sits on the board of trustees of the petitioner;
8) A reading of the provisions of its charter (Act No. 1285) fails to show that any act or decision of
the petitioner is subject to the approval of or control by any government agency, except to the
extent that it is governed by the law on private corporations in general; and
9) The Committee on Animal Welfare, under the Animal Welfare Act of 1998, includes members
from both the private and the public sectors.

The respondents, on the other hand contended that since the petitioner is a "body politic" created by virtue
of a special legislation and endowed with a governmental purpose, then, indubitably, the COA may audit
the financial activities of the latter.

Respondents further contends that:

1) The test to determine whether an entity is a government corporation lies in the manner of its
creation, and, since the petitioner was created by virtue of a special charter, it is thus a
government corporation subject to respondents’ auditing power;
 2) The petitioner exercises "sovereign powers," that is, it is tasked to enforce the laws for the
protection and welfare of animals which "ultimately redound to the public good and welfare,"
and, therefore, it is deemed to be a government "instrumentality"
3) By virtue Administrative Code, the Office of the President exercises supervision or control
over the petitioner and the requirement under its special charter for the petitioner to render a
report to the Civil Governor, whose functions have been inherited by the Office of the
President, clearly reflects the nature of the petitioner as a government instrumentality;
4) Despite the passage of the Corporation Code, the law creating the petitioner had not been
abolished, nor had it been re-incorporated under any general corporation law;
5) RA 8485, otherwise known as the "Animal Welfare Act of 1998," designates the petitioner as a
member of its Committee on Animal Welfare which is attached to the Department of Agriculture.

In view of the phrase "One-half of all the fines imposed and collected through the efforts of said
society," the Court required the OSG and the parties to comment on: a) petitioner's authority to impose
fines and the validity of the provisions of Act No. 1285 and CA 148 and b) the effect of the 1935 and
1987 Constitutions on whether petitioner continues to exist or should organize as a private corporation
under the Corporation Code, B.P. Blg. 68 as amended.

The petitioner avers that it does not have the authority to impose fines for violation of animal welfare
laws; it only enjoyed the privilege of sharing in the fines imposed and collected from its efforts in the
enforcement of animal welfare laws; such privilege, however, was subsequently abolished by CA 148;
that it continues to exist as a private corporation since it was created by the Philippine Commission before
the effectivity of the Corporation law, Act No. 1459; and the 1935 and 1987 Constitutions.

The OSG submits that Act No. 1285 and its amendatory laws did not give petitioner the authority to
impose fines for violation of laws relating to the prevention of cruelty to animals and the protection of
animals; that even prior to the amendment of Act No. 1285, petitioner was only entitled to share in the
fines imposed; C.A. No. 148 abolished that privilege to share in the fines collected; that petitioner is a
public corporation and has continued to exist since Act No. 1285; petitioner was not repealed by the 1935
and 1987 Constitutions which contain transitory provisions maintaining all laws issued not inconsistent
therewith until amended, modified or repealed.

Issue Court’s Ruling

Charter test is applicable No. As essentially, the "charter test" as it stands today provides:
The test to determine whether a corporation is government owned or

controlled, or private in nature is simple. Is it created by its own

charter for the exercise of a public function, or by incorporation
under the general corporation law? Those with special charters are
government corporations subject to its provisions, and its employees
are under the jurisdiction of CSC, and are compulsory members of the
GSIS.
And since charter test had been introduced by the 1935 Constitution

and not earlier, it follows that the test cannot apply to the petitioner,
which was incorporated by virtue of Act No. 1285, enacted on January
19, 1905.
Nature of the petitioner as a corporate entity?
What legal regime governs its rights, powers,
and duties?
In a legal regime where the charter test doctrine cannot be applied,
the mere fact that a corporation has been created by virtue of a
special law does not necessarily qualify it as a public corporation.
The amendments introduced by C.A. No. 148 made it clear that
the petitioner was a private corporation and not an agency of the
government. This was evident in Executive Order No. 63, issued by
then President of the Philippines Manuel L. Quezon, declaring that
the revocation of the powers of the petitioner to appoint agents with
powers of arrest "corrected a serious defect" in one of the laws
existing in the statute books.
As a curative statute, and based on the doctrines so far discussed,
C.A. No. 148 has to be given retroactive effect, thereby freeing all
doubt as to which class of corporations the petitioner belongs,
that is, it is a quasi-public corporation, a kind of private domestic
corporation.
As stated, at the time the petitioner was formed, the applicable law
was the Philippine Bill of 1902, when no proscription similar to the
charter test can be found therein and a law antedating the Corporation
Law by a year, and the 1935 Constitution, by thirty years. There being
neither a general law on the formation and organization of private
corporations nor a restriction on the legislature to create private
corporations by direct legislation, the Philippine Commission at that
moment in history was well within its powers in 1905 to constitute the
petitioner as a private juridical entity.1âwphi1
The general principle of prospectivity of the law likewise applies
to the Corporation Law (Act No. 1459), which had been enacted by
virtue of the plenary powers of the Philippine Commission on March
1, 1906, a little over a year after January 19, 1905, the time the
petitioner emerged as a juridical entity. Even the Corporation Law
respects the rights and powers of juridical entities organized
beforehand, viz:
SEC. 75. Any corporation or sociedad anonima formed, organized, and
existing under the laws of the Philippine Islands and lawfully transacting
business in the Philippine Islands on the date of the passage of this Act,
shall be subject to the provisions hereof so far as such provisions may be
applicable and shall be entitled at its option either to continue business
as such corporation or to reform and organize under and by virtue of
the provisions of this Act, transferring all corporate interests to the new
corporation which, if a stock corporation,

It is subject to control or supervision by any
agency of the State
That petitioner is a "body politic" because its
primary purpose is to secure the protection and
welfare of animals which
is authorized to issue its shares of stock at par to the stockholders or
members of the old corporation according to their interests.
Petitioner’s charter shows that it is not subject to control or supervision
by any agency of the State, unlike GOCCs. No government
representative sits on the board of trustees of the petitioner. Like all
private corporations, the successors of its members are determined
voluntarily and solely by the petitioner in accordance with its by-laws,
and may exercise those powers generally accorded to private
corporations, such as the powers to hold property, to sue and be sued, to
use a common seal, and so forth. It may adopt by-laws for its internal
operations: the petitioner shall be managed or operated by its officers "in
accordance with its by-laws in force."
Also, the employees of the petitioner are registered and covered by
the SSS is another indication of petitioner’s nature as a private entity.
The fact that a certain juridical entity is impressed with public
interest does not, by that circumstance alone, make the entity a public
corporation, inasmuch as a corporation may be private although its
charter contains provisions of a public character, incorporated solely
for the public good. This class of corporations may be considered
quasi-public corporations, which are private corporations that
render public service, supply public wants, or pursue other
eleemosynary objectives.
It must be stressed that a quasi-public corporation is a species of
private corporations, but the qualifying factor is the type of
service the former renders to the public: if it performs a public
service, then it becomes a quasi-public corporation.
Authorities are of the view that the purpose alone of the corporation
cannot be taken as a safe guide, for the fact is that almost all
corporations are nowadays created to promote the interest, good, or
convenience of the public. A bank, for example, is a private
corporation; yet, it is created for a public benefit. Private schools and
universities are likewise private corporations; and yet, they are rendering
public service. Private hospitals and wards are charged with heavy social
responsibilities. More so with all common carriers. On the other hand,
there may exist a public corporation even if it is endowed with gifts
or donations from private individuals.
The true criterion, therefore, to determine whether a corporation
is public or private is found in the totality of the relation of the
 corporation to the State. If the corporation is created by the State as
the latter’s own agency or instrumentality to help it in carrying out its
governmental functions, then that corporation is considered public;
otherwise, it is private. Applying the above test, provinces, chartered
cities, and barangays can best exemplify public corporations. They
are created by the State as its own device and agency for the
accomplishment of parts of its own public works.

It is clear that the amendments introduced by C.A. No. 148 revoked

the powers of the petitioner to arrest offenders of animal welfare laws
and the power to serve processes in connection therewith.

The charter of the petitioner requires the latter to
render periodic reports to the Civil Governor,
whose functions have been inherited by the
President, the petitioner is, therefore, a
government instrumentality.
By virtue of the fiction that all corporations owe their very existence
and powers to the State, the reportorial requirement is applicable
to all corporations of whatever nature, whether they are public,
quasi-public, or private corporations—as creatures of the State,
there is a reserved right in the legislature to investigate the
activities of a corporation to determine whether it acted within its
powers. In other words, the reportorial requirement is the principal
means by which the State may see to it that its creature acted
according to the powers and functions conferred upon it.

G.R. Nos. 237938 and 237944-45, December 04, 2018

BAYANI F. FERNANDO vs COA

Facts:

Petitioner was the Chairman of the Executive Committee of MMFF from 2002-2008.

On August 17, 2009, the COA issued an Office Order No. 2009-602 authorizing the Fraud Audit and
Investigation Office to conduct a special audit on the disbursements of the Executive Committee of the
MMFF for the Calendar Years 2002-2008.

Through such investigation, the Fraud Audit and Investigation Office found that petitioner received the
amount of P2,000,000.00 in 2003 from the Executive Commitee of the MMFF for the Special
Projects/Activities of the MMDA sourced from the advertising sponsorship of the MMFF for 2002 and
2003. Also, the COA found that petitioner received the amount of P1,000,000.00 from the Executive
Committee of the MMFF as payment/release of funds for petitioner's cultural projects, which payment
was sourced from non-tax revenues of the said Executive Committee of the MMFF.

Afterwards, the COA issued three Notices of Disallowance against petitioner covering the aforesaid
amounts. In the NDs issued by COA, it made a common observation that:
The amount of P1,000,000.00 paid to Mr. Bayani F. Fernando by the Metro Manila Film Festival
Executive Committee is disallowed in audit for the reason that the check was encashed and was not
issued an Official Receipt by the Collecting officer of the MMDA. This constitutes irregular transaction
as defined under COA Circular No. 85-55A for it violated the provision of Section 77 of the Government
Accounting and Auditing Manual (GAAM) Volume I which states that: "Checks in payment for
indebtedness to the government must be drawn by the payor himself and made payable to the agency or
head or treasurer of agency. In the latter case, only the official title or designation of the official
concerned shall be stated as the payee."

Lastly, original copy of the aforementioned reference documents were not submitted as required by
Section 168, Volume I, Government Accounting Rules and Regulations (GAAM).

On February 27, 2018, petitioner received FAO NFD Nos. 2017-008 to 2017-010 ordering him to pay a
total amount of P3,000,000.00 representing the amounts disallowed by COA.

Aggrieved, petitioner comes before this Court, submitting that the COA committed grave abuse of
discretion in disallowing the aforesaid amounts.

Petitioner further contends that the COA has no jurisdiction over the Executive Committee of the MMFF,
an organization composed of private individuals from the movie industry, and whose funds come from
non-tax revenues and private donations. He claims that the Committee is neither a GOCC, nor a
government instrumentality or agency for it to be subject to COA's audit jurisdiction.

COA, on the other hand, argued that petitioner is not entitled to a Writ of Certiorari considering his
failure to exhaust administrative remedies when it did not appeal before COA proper. COA further
contends that the Executive Committee of the MMFF is a government instrumentality created under
Proclamation No. 1459 performing a public purpose and that its funds are public in nature considering the
public purpose it serves, which is to provide fund assistance to film-related organizations "in recognition
of the value and importance of the local movie industry in the over-all developmental effort for the
country, a fitting celebration to encourage quality film production both in substance and in form, as well
as provide incentives to the performing artists and the technicians in the industry."

Petitioner, in his reply, argued that the case should not be remanded to COA because the government
project has been contracted almost two decades ago, and to bring the case back to COA would greatly
prejudice him.13 He also argues that the questions in the case at bar are purely legal questions which are
within the expertise of this Court.

Issue:

WON COA has jurisdiction authority over MMMF which is not a public office.

Held:

The audit jurisdiction of the Commission on Audit

Section 2, Article IX-D of the 1987 Constitution provides for the COA's audit jurisdiction:
SECTION 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit,
and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions,
agencies, or instrumentalities, including government-owned or controlled corporations with
original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that
have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d)
such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through
the Government, which are required by law or the granting institution to submit to such audit as a
condition of subsidy or equity. However, where the internal control system of the audited agencies is
inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are
necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government
and, for such period as may be provided by law, preserve the vouchers and other supporting papers
pertaining thereto.

The COA was envisioned by our Constitutional framers to be a dynamic, effective, efficient and
independent watchdog of the Government. It granted the COA the authority to determine whether
government entities comply with laws and regulations in disbursing government funds, and to disallow
illegal or irregular disbursements of government funds.

The Court stated that the COA's audit jurisdiction extends to the following entities:

1. The government, or any of its subdivisions, agencies and instrumentalities;

2. GOCCs with original charters;
3. GOCCs without original charters;
4. Constitutional bodies, commissions and offices that have been granted fiscal autonomy under the
Constitution; and
5. Non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the
government, which are required by law or the granting institution to submit to the COA for audit as a
condition of subsidy or equity.18
COA's authority to examine and audit the accounts of government and, to a certain extent, non-
governmental entities, is consistent with Section (Sec.) 29(1) of PD No. 1445 (Auditing Code of the
Philippines) which grants the COA visitorial authority over the following non-governmental entities:

1. Non-governmental entities "subsidized by the government";

2. Non-governmental entities "required to pay levy or government share";
3. Non-governmental entities that have "received counterpart funds from the government"; and
4. Non-governmental entities "partly funded by donations through the Government."

COA's audit jurisdiction is also laid down in Section 11, Chapter 4, Subtitle B, Title I, Book V of the
Administrative Code of 1987:

SECTION 11. General Jurisdiction.—(1) The Commission on Audit shall have the power, authority, and
duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures
or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its
subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with
original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have
been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c)
other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental
entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are
required by law or the granting institution to submit to such audit as a condition of subsidy or equity.
However, where the internal control system of the audited agencies is inadequate, the Commission may
adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct
the deficiencies. It shall keep the general accounts of the Government and, for such period as may be
provided by law, preserve the vouchers and other supporting papers pertaining thereto.

As can be gleaned from the foregoing, the COA's audit jurisdiction generally covers public entities.
However, its authority to audit extends even to non-governmental entities insofar as the latter receives
financial aid from the government. Thus, it is clear that the determination of COA's jurisdiction over a
specific entity does not merely require an examination of the nature of the entity. Should the entity be
found to be non-governmental, further determination must be had as to the source of its funds or the
nature of the account sought to be audited by the COA.

We now proceed to make a determination as to the statutory origin and the operations of the MMFF
Executive Committee.

Nature of the Executive Committee of Manila Film Festival

Considering the establishment and mechanism of the Executive Committee of the MMFF, it is at once
apparent that it is not a government-owned and controlled corporation. The Introductory Provisions of the
Administrative Code of 1987 define GOCCs:

SEC. 2. General Terms Defined. –

(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-
stock corporation, vested with functions relating to public needs whether governmental or
proprietary in nature, and owned by the Government directly, or through its instrumentalities
either wholly, or where applicable as in the case of stock corporations, to the extent of at least fifty-
one (51) percent of its capital stock: Provided, That government-owned or controlled corporations may
be further categorized by the Department of the Budget, the Civil Service Commission, and the
Commission on Audit for purposes of the exercise and discharge of their respective powers, functions and
responsibilities with respect to such corporations.

In this case, there is nothing in the records which establishes that the Executive Committee of the MMFF
is organized as a stock or non-stock corporation. It does not have capital which is to be divided into shares
of stock, nor stockholders and voting shares, as to qualify as a stock corporation.

We cannot also deem it a non-stock corporation. Though undoubtedly organized for cultural purposes, the
Executive Commitee of the MMFF is ostensibly just a group of representatives of various stakeholders m
the Philippine movie industry, it has no other members.

Court found that the Executive Committee is subject to COA jurisdiction, considering its administrative
relationship to the Metro Manila Development Authority, a government agency tasked to perform
administrative, coordinating and policy-setting functions for the local government units in the
Metropolitan Manila area.

The public nature of MMDA is apparent in its charter RA 7924, particularly in the following provision:
Sec. 2. - Creation of the Metropolitan Manila Development Authority. – The affairs of Metropolitan
Manila shall be administered by the Metropolitan Manila Authority, hereinafter referred to as the MMDA,
to replace the Metro Manila Authority (MMA) organized under Executive Order No. 392, series of 1990.

The MMDA shall perform planning, monitoring and coordinative functions, and in the process
exercise regulatory and supervisory authority over the delivery of metrowide services within Metro
Manila without diminution of the autonomy of the local government units concerning purely local
matters.

Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One
of these is transport and traffic management which includes the formulation and monitoring of policies,
standards and projects to rationalize the existing transport operations, infrastructure requirements, the use
of thoroughfares and promotion of the safe movement of persons and goods. It also covers the mass
transport system and the institution of a system of road regulation, the administration of all traffic
enforcement operations, traffic engineering services and traffic education programs, including the
institution of a single ticketing system in Metro Manila for traffic violations. Under the service, the
MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the
implementation of all traffic management programs." In addition, the MMDA may "install and administer
a single ticketing system," fix, impose and collect fines and penalties for all traffic violations.

It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination,
regulation, implementation, preparation, management, monitoring, setting of policies, installation of a
system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let
alone legislative power. Even the Metro Manila Council has not been delegated any legislative power.
Unlike the legislative bodies of the local government units, there is no provision in R.A. No. 7924 that
empowers the MMDA or its Council to "enact ordinances; approve resolutions, and appropriate funds for
the general welfare" of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself,
"development authority." It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people's organizations, non-
governmental organizations and the private sector for the efficient and expeditious delivery of basic
services in the vast metropolitan area. All its functions are administrative in nature and these are
actually summed up in the charter itself.

It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with
legislative power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11,
Article X of the Constitution. The creation of a "special metropolitan political subdivision" requires the
approval by a majority of the votes cast in a plebiscite in the political units directly affected." R. A. No. 7924
was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the
MMDA is not an official elected by the people, but appointed by the President with the rank and
privileges of a cabinet member. In fact, part of his function is to perform such other duties as may
be assigned to him by the President, whereas in local government units, the President merely
exercises supervisory authority. This emphasizes the administrative character of the MMDA.

Going back to the factual circumstances of the instant case, the Executive Committee, having been created
to assist the MMDA in the conduct of the annual Manila Film Festival, cannot be treated separately from
the legal existence and nature of the agency it is tasked to give assistance to.

The link between MMDA and the Executive Committee is likewise evident from the establishment of a
Secretariat within the MMDA, which will assist the committee in the discharge of its function. To recall,
Section 6 of E.O. No. 86-09.
In addition, this Court notes that the multi-sectoral membership of the executive committee mirrors the
network MMDA is authorized to establish under its Charter, viz:

The MMDA shall have a master plan that shall serve as the framework for the local development plans of
the component LGUs.

The MMDA shall submit its development plans and investments programs to the NEDA for integration
into the Medium-Term Philippine Development Plan (MTPDD) and public investment program.

The implementation of the MMDA's plans, programs, and projects shall be undertaken by the LGUs, the
concerned national governments agencies, the Pos, NGOs and the private sector and the MMDA itself
where appropriate. For this purpose, the MMDA may enter into contracts, memoranda of agreement and
other cooperative agreements with these bodies for the delivery of the required services within
Metropolitan Manila.

The MMDA shall, in coordination with the NEDA and the Department of Finance, interface with the
foreign, assistance agencies for purposes of obtaining financing support, grants and donations in support
of its programs and projects.

Based from the aforesaid provisions, this Court cannot accord merit to petitioner's arguments which seek
to treat separately the Executive Committee from the MMDA. Certainly, that would amount to creating
another entity without basis in law and in fact. The records simply establish that the Executive Committee
is an office under the MMDA, a public agency, subject to the audit jurisdiction of the COA.

The funds of the Executive Committee are considered public funds

The Executive Committee has two sources of funds:

1. The donations from the local government units comprising the Metropolitan Manila covering the
period of holding the MMFF from December 25 to January 3; and

2. The non-tax revenues that come in the form of donations from private entities. 34
As a committee under MMDA, a public office, this Court finds that both sources of funds can properly be
subject of COA's audit jurisdiction.

That the Executive Committee of the MMFF administers funds from the government is apparent in the
following portion of Proclamation No. 1459:

The Executive Committee is authorized to engage in fund raising campaign among all sectors of
society including the local governments concerned which may donate their amusement tax shares to
the MOWELFUND during the period of the celebration to make it a success. x x x.

Verily, if non-governmental entities maybe audited by the COA as long as its funds are partly coming
from the government, with more reason should this principle apply to the Executive Committee.
As to the committee's funds coming from non-tax revenues, the fact that such funds come from purported
private sources, do not convert the same to private funds. Such funds must be viewed with the public
purpose for which it was solicited, which is the management of the MMFF.

Furthermore, despite the private source of funds, ownership over the same was already transmitted to the
government by way of donation. As donee, the government had become the owner of the funds, with full
ownership rights and control over the use and disposition of the same, subject only to applicable laws and
COA rules and regulations. Thus, upon donation to the government, the funds became public in character.

This is in contrast to cases where there is no transfer of ownership over the funds from private parties to
the government, such as in the case of cash deposits required in election protests filed before the trial
courts, Commission on Elections, and electoral tribunals. In these cases, the government becomes a mere
depositary of such fund, the use and disposition of which is subject to the conformity of the private party-
depositor who remains to be the owner thereof.

Considering the purpose for which COA was created, this Court finds that any such funds, though coming
from private sources, become public upon receipt by the Executive Committee, for use in the purpose for
which it was created. For all intents and purposes, the Executive Committee, an office under the MMDA
and created pursuant to Presidential Proclamation No. 1459, as donee, has already become the owner of
the funds and may dispose of the same as it deems fit; thus, such funds are considered public funds. Being
public in character, the COA can therefore validly conduct an audit over such funds in accordance with its
auditing rules and regulations.

G.R. No. 210773 January 23, 2019

GSIS FAMILY BANK EMPLOYEES UNION vs. SEC. CESAR L. VILLANUEVA

Facts:

Officers and employees of GOCC without original charters are covered by the Labor Code, not the Civil
Service Law. However, non-chartered GOCC are limited by law in negotiating economic terms with their
employees. This is because the law has provided the Compensation and Position Classification System,
which applies to all GOCC, chartered or non-chartered.

On July 22, 1969, Royal Savings Bank was organized and incorporated as a thrift bank. It began operating
on February 8, 1971, with former Cavite Representative Renato Dragon as its President and Board
Chairman. Royal Savings Bank filed an application with the Central Bank of the Philippines (Central
Bank) for the appointment of a conservator which was denied and prohibited it from doing business, and
placed it under receivership.

Royal Savings Bank filed several complaints against the Central Bank for grave abuse of discretion. To
amicably settle the cases, then Central Bank Governor Jose B. Fernandez, Jr. offered to reopen and
rehabilitate Royal Savings Bank if it would drop all its complaints against the Central Bank and transfer
all its shares of stock to Commercial Bank of Manila, a wholly-owned subsidiary of the GSIS.

Royal Savings Bank and Commercial Bank of Manila entered into a Memorandum of Agreement to
rehabilitate and infuse capital into Royal Savings Bank. Royal Savings Bank was renamed Comsavings
Bank and GSIS transferred its holdings from Commercial Bank of Manila to Boston Bank. Comsavings
Bank was not included in the transfer. Due to Boston Bank's acquisition of Commercial Bank of Manila,
the GSIS took over the control and management of Comsavings Bank.

Comsavings Bank and the Government Service Insurance System executed a Memorandum of Agreement
where the latter committed to infuse an additional capital of P2.5 billion into Comsavings Bank. After the
infusion of funds, the GSIS effectively owned 99.55% of Comsavings Bank's outstanding shares of stock.

Sometime in July 2001, Comsavings Bank changed its name to GSIS Family Bank.

The General Counsel of Bangko Sentral ng Pilipinas opined that GSIS Family Bank could not be
categorized as a government bank because when it was still Royal Savings Bank, it was organized as a
private stock savings and loan association organized under the general corporation law. Thus, at its
inception, the bank was set up for private needs. When GSIS invested in the bank, it was the result of a
business decision on its part to be an equity owner in a thrift bank. The case of [GSIS Family Bank] is
unlike that of government banks, such as Development Bank of the Philippines, the Land Bank of the
Philippines or Al-Amanah Islamic Development Bank[,] the charters of which were enacted by the
lawmaking authority for the purpose of addressing public needs.

On September 8, 2010, then President Benigno S. Aquino III (President Aquino) issued EO No. 7, which
placed an indefinite moratorium on increases in salaries and benefits of employees in GOCC and
government financial institutions.

On June 6, 2011, President Aquino signed into law Republic Act No. 10149,- or the GOCC Governance
Act of 2011. The law created the Governance Commission for Government-Owned or Controlled
Corporations (Governance Commission), defined as "a central advisory, monitoring, and oversight
body with authority to formulate, implement[,] and coordinate policies" in its governed sector.

On May 2, 2012, Emmanuel L. Benitez (Benitez), GSIS Family Bank's president, sought opinion from the
Bangko Sentral ng Pilipinas as to whether GSIS Family Bank may be considered as a government-owned
or controlled corporation or government bank under Republic Act No. 10149.

On May 14, 2012, Bangko Sentral ng Pilipinas advised GSIS Family Bank to seek the opinion of the
Governance Commission, the implementing agency of Republic Act No. 10149. 17
The Governance Commission clarified that GSIS Family Bank was classified as a government financial
institution under Republic Act No. 10149.
 Hjbor Rchjteofs
Djsc Neicst Dogpehjteof
ITET Ajgehy Bjfk Cgphoyccs Sfeof, Rcprcscftcn by ets
\rcsencft Gs. Munet` Modchyf Gjrtefcz vs. Tcd. Dcsjr H.
Qehhjfucvj (ef `es djpjdety js t`c D`jergjf oa t`c Iovcrfjfdc
Doggesseof aor Iovcrfgcft Owfcn jfn Doftrohhcn Dorporjteof ufncr
t`c Oaaedc oa t`c \rcsencft), ct jh.
IR Fo. 2:<994, Mjfujry 24, 2<:5
Nodtrefc=
Oaaedcrs jfn cgphoyccs oa IODDs wet`out oreiefjh d`jrtcrs jrc
dovcrcn by t`c Hjbor Donc, fot t`c Deveh Tcrvedc Hjw. @owcvcr,
fof-d`jrtcrcn IODDs jrc hegetcn by hjw ef fciotejtefi cdofoged
tcrgs wet` t`cer cgphoyccs. ^`es es bcdjusc t`c hjw `js provencn t`c
Dogpcfsjteof jfn \oseteof Dhjsseaedjteof Tystcg, w`ed` jpphecs
to jhh IODDs, d`jrtcrcn or fof-d`jrtcrcn.
Ajdts=
Royjh Tjveefis Bjfk wjs orijfezcn jfn efdoorpoorjtcn js j t`reeat bjfk.
Royjh Tjvefis Bjfk aehcn jf jpphedjteof wet` t`c Dcftrjh Bjfk oa t`c
\`eheppefcs (Dcftrjh Bjfk) aor t`c jppoeftgcft oa j dofscrvjtor.
Dcftftrjrjh Bjfk ncfecn Royjyjh Tjvvefis Bjfk's jpphpheedjtteof aor
dofscrvjtors`ep, pro`ebetcn et arog noefi busefcss, jfn phjdcn et
ufncr rcdcevcrs`ep.
Royjh Tjvefis Bjfk aehcn scvcrjh dogphjefts jijefst t`c Dcftrjh Bjfk
aor irjvc jbusc oa nesdrcteof. ^o jgedjbhy sctthc t`c djscs, t`cf
Dcfttrjh Bjfk Iovccrfor Mosc B. Acrfjfncz, Mr. oaaccrcn to rcopcf jfn
rc`jbehetjtc Royjh Tjvefis Bjfk ea et wouhn nrop jhh ets dogphjefts
jijefst t`c Dcftrjh Bjfk jfn trjfsacr jhh ets s`jrcs oa
stodk to Doggcrdejh Bjfk oa Gjfehj, j w`ohhy-owfcn subsenejry oa
t`c ITET.
Royjh Tjvefis Bjfk jfn Doggcrdejh Bjfk oa Gjfehj cftcrcn efto j
Gcgorjfnug oa Jirccgcft to rc`jbehetjtc jfn efausc djpetjh efto
Royjyjh Tjvevefifis Bjfk. Royjyjh Tjvevefifis Bjfk wjs rcfjfjgcgcn
Dogsjvefis Bjfk.
Togctegc ef Ncdcgbcr :509, t`c ITET trjfsacrrcn ets `ohnefis arog
Doggcrdejh Bjfk oa Gjfehj to Bostof Bjfk. Dogsjvefis Bjfk wjs
fot efdhuncn ef t`c trjfsacr. Nuc to Bostof Bjfk's jdqueseteof oa
Doggcrdejh Bjfk oa Gjfehj, t`c ITET took ovcr t`c doftroh jfn
gjfjicgcft oa Dogsjvefis Bjfk.
Of Muhyy :5, :554, Dogsjvvefis Bjfk jfn t`c ITET cxcdutcn j & D`jerpcrsof oa t`c BON oa ITET Ajgehy Bjfk, rcspcdtevchy)
Gcgorjfnug oa Jirccgcft w`crc t`c hjttcr doggettcn to efausc jf
jnneteofjh djpetjh oa \2.3 behheof efto Dogsjvefis Bjfk. Jatcr t`c
efauseof oa aufns, t`c ITET caacdtevchy owfcn 55.33% oa Dogsjvefis
Bjfk's outstjfnefi s`jrcs oa stodk.
Dogsjvefis Bjfk d`jficn ets fjgc to ITET Ajgehy Bjfk.
Of Tcptcgbcr 0, 2<:<, t`cf \rcssencft Bcfeifo T. Jquefo EEE
(\rcsencft Jquefo) essucn Cxcdutevc Orncr Fo. 9, w`ed` phjdcn jf
efncaefetc gorjjtorreug of efdrrcjscs ef sjhjjrecs jfn bcfcaets oa
cgphoyccs ef IODDs jfn iovcrfgcft aefjfdejh efstetuteofs.
Of Mufc 1, 2<::, \rcsencft Jquefo seifcn efto hjw Rcpubhed Jdt Fo.
:<:>5, or t`c IODD Iovcrfjfdc Jdt oa 2<::. ^`c hjw drcjtcn t`c
Iovcrfjfdc Doggesseof aor IODDs (Iovcrfjfdc Doggesseof),
ncaefcn js "j dcftrjh jnvesory, gofetorefi, jfn ovcrsei`t bony wet`
jut`orety to aorguhjtc, egphcgcft jfn doornefjtc pohedecs" ef ets
iovcrfcn scdtor.
Cggjfuch H. Bcfeetcz (Bcffetcz), ITET Ajgehy Bjfk's prcssencfcft,
soui`t opefeof oa t`c Iovcrfjfdc Doggesseof js to w`ct`cr ITET
Ajgehy Bjfk gjy bc dofsencrcn js j IODD or iovcrfgcft bjfk
ufncr Rcpubhed Jdt Fo. :<:>5.
Bcfetcz scck aurt`cr dhjreaedjteof of scvcrjh essucs, fjgchy= (:) ITET
Ajgehy Bjfk's egpcfnefi dohhcdtevc bjrijefefi fciotejteofs wet` ets
cgphoyccs; (2) ets jut`orety to cftcr efto j dohhcdtevc bjrijefefi
jirccgcft wet` t`c ITET Sfeofof; jfn (4) ets cgphoyccs' rei`t to
strekc.
:
Bjscn of t`c syhhjbus oa Jtty. Gjrej D`restefj T. Tjiget
Jtcfco Nc Njvjo Sfevcrsety T.U. 2<2<-2<2:
Neicstcn by= Jgpjtujf, Jgpoi,Bjfosjf,Csgjch,Arejs,Gj`usjy,Gjhedjy,\jdhebjr,\c ῁jgjftc,\edot,Tefsujt,Tosobjf,
Iovccrfjfdc Doggessseof dhjreeaecn t`jtt ITET Ajgehy Bjfk wjs
dhjsseaecn js j iovcrfgcft aefjfdejh efstetuteof ufncr Rcpubhed Jdt
Fo. :<:>5 jfn et wjs ufjutt`orezcn to cftcr efto j dohhcdtevc bjrijefefi
jirccgcft wet` ets cgphoyccs "bjscn of t`c prefdephc t`jt t`c
dogpcfsjteof jfn poseteof dhjsseaedjteof systcg es provencn aor by
hjw jfn fot submcdt to prevjtc bjrijefefi."
^`c Iovcrfjfdc Doggesseof aurt`cr dhjreaecn t`jt t`c rei`t to strekc oa
ITET Ajgehy Bjfk's cgphoyccs wjs fot iujrjfftccn by t`c Dofstetuteof,
js t`cy wcrc iovcrfgcft oaaedcrs jfn cgphoyccs.
Of Ncdcgbcr 2<, 2<:4, doufsch aor t`c ITET Ajgehy Bjfk Sfeof
(ITET Sfeof) scft ITET Ajgehy Bjfk j ncgjfn hcttcr aor t`c pjygcft oa D`restgjs
bofus to ets gcgbcrs, js stepuhjtcn ef t`cer
Dohhcdtevc Bjrijefefi Jirccgcft. ITET Sfeof jdduscn ITET Ajgehy Bjfk
oa cvjnnefi ets doftrjdtujh obheijtteof to ets cgphoyccs by efvokefi
t`c Iovcrfjfdc Doggesseof's opefeof t`jt et wjs fo hoficr jut`orezcn to
irjft efdcftevcs jfn ot`cr bcfcaets to ets cgphoyccs, ufhcss
jut`orezcn by t`c \rcsencft oa t`c \`eheppefcs.
Of Mjfujry 4<, 2<:>, ITET Sfeof aehcn bcaorc t`c Dourt j \cteteof aor
Dcrteorjre, jsscrtefi t`jt ITET Ajgehy Bjfk es j prevjtc bjfk; t`us, et es
fot dovcrcn by t`c proveseofs oa Rcpubhed Jdt Fo. :<:>5.
\cteteofcr ITET Sfeof―s Doftcfteofs=
ITET Ajgehy Bjfk nocs fot pcraorg aufdteofs aor pubhed
fccns.
Ncsppetc t`c ITET owfefi t`c gjmorety oa ITET Ajgeehy
Bjfk's s`jrcs oa stodk, t`c bjfk nen fot jutogjtedjhhy ajhh
wet`ef t`c jgbet oa Rcpuubhed Jdt Fo. :<:>5. ^`c hjw's
cfjdtgcft nen fot jutogjtedjhhy dofvcrt et efto j IODD or j
iovcrfgcft aefjfdejh efstetuteof.
ITET Sfeoeof detctcs \`eh. Fjteofjh Oeh Dogpjfy-Cfcriy
Ncv't. Dorp. v. @of. Hcoiijrno, w`ed` stjtcn t`jt t`c
cgphoyccs oa t`c \`eheppefc Fjteofjh Oeh Dogpjfy-Cfcriy
Ncvchopgcft Dorporjteof, j IODD efdorporjtcn ufncr
t`c Dorporjteof Donc, rcgjefcn submcdt to t`c proveseofs
oa t`c Hjbor Donc
Js j prevjtc dorporjteof cstjbhes`cn ufncr t`c Dorporjteof
Donc, ITET Ajgehy Bjfk jfn ets cgphoyccs jrc dovcrcn
by t`c jpphedjbhc proveseofs oa t`c Hjbor Donc, fot t`c
Deveh Tcrrvedc Hjw. ^`usus, t`c Dohhhcdtdtevevc Bjririjejeffefi
Jirccgcft bctwccf ITET Sfeof jfn ITET Ajgehy Bjfk
djffot bc egpjercn by Rcpubhed Jdt Fo. :<:>5.
Rcspofncfts Bcfetcz & Jtty. Bcrbcrjbc-Gcfnozj―s (\rcsencft
Doftcfteofs=
^`cy jnget t`jt jatcr t`c ITET purrd`jscn gjmoorety oa
ITET Ajgehy Bjfk's s`jrcs, t`c bjfk doftefucn to opcrjtc
js j prevjtc bjfk, iovcrfcn by t`c Dorporjteof Donc jfn
t`c Hjbor Donc. @owcvcr, t`cy poeft out t`jt wet` t`c
cfjdtgcft oa Rcpubhed Jdt Fo. :<:>5, ITET Ajgehy Bjfk's
jut`orety to cftcr efto fciotejteofs wet` ets cgphoyccs wjs
rcvokcn, js dofaergcn by t`c Iovcrfjfdc Doggesseof.
^`cy efsest t`jt js j iovcrfgcft-jdquercn bjfk, ITET
Ajgehy Bjfk es j IODD ufncr Rcpubhed Jdt Fo. :<:>5.
^`cy strcss t`jt t`cy gcrchy aohhowcn t`c Iovcrfjfdc
Doggesseof's nercdtevc aorbennefi t`cg arog fciotejtefi
t`c cdofoged tcrgs oa j dohhcdtevc bjrijefefi jirccgcft
wet` ITET Sfeof.
ITET Ajgehy Bjfk, j iovccrfgcft aefjfdejh efstetutteof
dovcrcn by t`c Dogpcfsjteof jfn \oseteof Dhjsseaedjteof
Tystcg, es fot jt hebcrty to fciotejtc cdofoged tcrgs wet`
ets cgphphoyoyccccs jfn djffot sct ets owf sjhjry or
dogpcfsjteof sd`cgc.
Rcspspofofncft Qehhhhjfjfucucvj―s (DD`j`jerergjgjf oa Iovcvcrfrfjfjfdc
Doggesseof) Doftcfteofs=
Rcpupubhed Jdt Fo. :<:>:>5 jegcn to stjfjfnjnjrnrnezezc or
rjteofjhezc t`c dogpcfsjteof arjgcwork oa iovcrfgcft-
owfcn or doftrohhcn dorporjteofs jfn iovcrfgcft aefjfdejh
efstetuteofs to rcgcny t`c "scvcrc pjy egbjhjfdc bctwccf
pcrsoffch oa t`csc spcddejh cfteetecs jfn t`c rcst oa t`c
burcjudrjdy aohhowefi t`c Tjhjry Ttjfnjrnezjteof Hjw."
 Hjbor Rchjteofs
Djsc Neicst Dogpehjteof
Sfncncr Rcpupubhed Jdt Fo. :<::>5, t`c Iovcvcrfrfjfjfdc Rcpubhed Jdt Fo. :<:>5 ncaefcs j fof-d`jrtcrcn IODD js j IODD t`jt wjs
Doggessseof subggettcn j Dogpcfsjtteof jfn \oseeteof orijfezcn jfn es opcrjtefi ufncr t`c Dorporjteof Donc. Et nocs fot
Dhjsseaedjteof Tystcg to \rcsencft Jquefo aor `es neaacrcftejtc bctwccf d`jrtcrcn jfn fof-d`jrtcrcn IODDs; `cfdc, ets
jpprovjh. ^`us, pcfnefi \rcsencft Jquefo's jpprovjh, j proveseofs jpphy cqujhhy to bot`=
gorjtoreug wjs cstjbhes`cn of jfy efdrcjsc ef sjhjrecs jfn
bcfcaets jfn jfy sjhjry efdrcjsc s`jhh bc submcdt to t`c TCD^EOF >. Dovcrjic. „ ^`es Jdt s`jhh bc jpphedjbhc to
\rcsencft's jpprovjh jhh IODDs, IED\\s/IDCs, jfn iovccrfgcft aefjfdejh
Ijhedto v. @.C. \rcsencft Jquefo EEE, ct jh. rcdoifezcn efstetuteofs, efdhunefi t`cer subsenejrecs, but cxdhunefi
t`c \rcssenccft's powcr to provvenc j dogpcfssjteof t`c Bjfiko Tcftftrjrjh fi \ehepepefefjs, stjtjtc ufevcrsetecs jfn
systcg IODDs. dohhcics, doopcrjtevcs, hodjh wjtcr nestredts, cdofogged
zofc jut`oretecs jfn rcscjrd` efstetuteofs= \rovencn, ^`jt ef
Essuc= YOF ITET Ajgehy Bjfk es j IODD --UCT cdofoged zofc jut`oretecs jfn rcscjrd` efstetuteofs, t`c
\rcsencft s`jhh jppopoefeft ofc-t`ern (:/4/4) oa t`c bojjrn
Ruhefi= gcgbcrs arog t`c hest subgettcn by t`c IDI.

\rcsencft Dorjzof D. Jquefo essucn Cxcdutevc Orncr Fo. 252 or t`c Tcdteof 5 oa Rcpubhed Jdt Fo. :<:>5 jhso djtcioredjhhy stjtcs, "Jfy
Jngefestrjtevc Donc oa :509. Tcdteof 2(:4) t`crcoa ncaefcn j IODD. hjw to t`c doftrjry fotwet`stjfnefi, fo IODD s`jhh bc cxcgpt arog t`c
^`jt ncaaefeeteof wjs cd`ocn ef Tcdtteof 4(o) oa Rcpuubhed Jdt dovccrjic oa t`c Dogpcfssjteof jfn \oseeteof Dhjssseaeedjtteof
Fo. :<:>5. Tystcg ncvchopcn by t`c Iovcrfjfdc Doggesseof ufncr t`es Jdt."

^`us, j IODD es= Aurt`crgorc, Rcpubhed Jdt Fo. :<:>5 nercdtcn t`c Iovcrfjfdc
:) cstjtjbhbhees`cn by oreieiefjh d`jrtctcr or t`roui` t`c Doggesseof to ncvchop j Dogpcfsjteof jfn \oseteof Dhjsseaedjteof
icfcrcrjh dorporjteof hjw; Tystcg, to bc subgettcn aor t`c \rcsencft's jpprovjh, w`ed` s`jhh
2) vcstcn wet` aufdteofs rchjtefi to pubhed fccn w`ct`cr jpphy to jhh oaaedcrs jfn cgphoyccs oa IODDs, w`ct`cr d`jrtcrcn or
iovcrfgcftjh or proprectjry ef fjturc; jfn fof-d`jrtcrcn.
4) nerccdthy owfcn by t`c iovcrfgcft or by ets
efsstrugcftjhhety, or w`crcrc t`c iovcvcrfrfgcft owfs j Of Gjrd` 22, 2<:1, \rcsencft Jquefo essucn Cxcdutevc Orncr Fo. 2<4,
gjmomorety oa t`c outstjfnefi djpetjh stodk. w`ed` jpprovcn t`c dogpcfsjteof jfn dhjsseaedjteof stjfnjrns jfn t`c
Efncx oa Oddupjteofjh Tcrvedcs Arjgcwork ncvchopcn jfn
^`crc es fo noubt t`jt ITET Ajgehy Bjfk es j IODD sefdc 55.33% oa subgettcn by t`c Iovcrfjfdc Doggesseof.
ets outstjfnefi djpetjh stodk es owfcn jfn doftrohhcn by t`c ITET.
DBJs jfn DFJ ef t`c IODD Tcdtor
Gorcrcovovcrcr, ITET Sfeoeof es gestjkckcf ef dettefi \`eh. Fjteeofjh Oeh Y`cf et dogcs to dohhcdtevc bjrijefefi jirccgcfts jfn dohhcdtevc
fciioteejteof jirccgccfts ef IODDs, Cxcddutevc Orncr Fo. 2<4
Dogpjfy-Cfcriy Ncv't. Dorp. v. @of. Hcoijrno. ^`c essuc ef t`jt djsc wjs muresnedteof ef
rchjteof to nesgessjh oa cgphoyccs. Et `jn ufcquevodjhhy stjtcn t`jt w`ehc et rcdoifezcn t`c rei`t oa workcrs to
fot`efi to no wet` t`c obheijteof oa t`c IODD to dohhcdtevchy bjrijef orijijfefezczc, bjririjjef, jfn fciiottejtc wet` t`cecer cgphphoycrs, "t`c
ef ioon ajet`. Iovcrfefi Bojrns oa jhh dovcrcn IODDs, w`ct`cr D`jrtcrcn or Fof-
d`jrtcrcn, gjy fot fciotejtc wet` t`cer oaaedcrs jfn cgphoyccs t`c
Essuc= YOF ITET Ajgehy Bjfk gjy fciotejtc wet` t`cer cgphoyccs t`c cdofoged tcrgs oa t`cer dohhcdtevc bjrijefefi jirccgcfts.
cdofoged tcrgs oa t`cer DBJs —FO
^`us, dofsencrefi t`c cxestefi hjw jt t`c tegc, ITET Ajgehy Bjfk douhn
fot bc ajuhtcn aor rcausefi to cftcr efto j fcw dohhcddtevc bjrijefefi
Ruheefi= ITET Ajgehy Bjfk es hegeetcn by hjw ef fciootejjtefi jirccgcft wet` ITET Sfeof js et hjdkcn t`c jut`orety to fciotejtc
cdofoged tcrgs wet` t`cer cgphoyccs cdofoged tcrgs wet` ets cgphoyccs.

^`c rei`t oa workcrs to scha-orijfezjteof, dohhcdtevc bjrijefefi, jfn

fciotejteofs es iujrjftccn by t`c Dofstetuteof ufncr Jrtedhc PEEE,
Tcdteof 4; Jrtedhc EP(B), Tcdteof 2(3); jfn Jrtedhc EEE, Tcdteof 0.

Y`ehc t`c rei`t to scha-orijfjfeezjtteof es jbsosohhutc, t`c rei`i`t oa

iovcrfgcft cgphoyccs to dohhcdtevc bjrijefefi jfn fciotejteof es
submcdt to hegetjteofs.

Dohhhcdtevc bjriijeffefi es j screcs oa fciootejjteofs bctwccf jf

cgphoycr jfn j rcprcscftjtevc oa t`c cgphoyccs to rciuhjtc t`c
vjreous jspcdts oa t`c cgphoycr-cgphoycc rchjteofs`ep sud` js
workefi `ours, workefi dofneteofs, bcfcaets, cdofoged proveseofs,
jfn ot`crs.

Rchjjteofs bctwccf prevjtc cgphhoycrs jfn t`cer cgphhoyccs jrc

submmcdt to t`c gefegug rcquercgcfts oa wjic hjws, hjbor, jfn
wchajrc hcieshjteof. \revjtc cgphoycrs jfn t`cer cgphoyccs jrc jt
hebcrty to cstjbhes` t`c tcrgs jfn dofneteofs oa t`cer cgphoygcft
rchjjteofs``ep. Ef dofttrjst wet` t`c prevvjtc scdttor, t`c tcrgs jfn
dofneteofs oa cgphoygcft oa iovcrfgcft workcrs jrc aexcn by t`c
hcieshjturc; t`us, t`c fciotejbhc gjttcrs ef t`c pubhed scdtor jrc
hegetcn to tcrgs jfn dofneteofs oa cgphoygcft t`jt jrc fot aexcn by
hjw.

Todejh Tcdurety Tystcg Cgphoyccs Jssodejteof v. Dourt oa Jppcjhs

cxphhjefs t`jt efsttcjn oa j dohhhcdtevc bjriijeffefi jirccgcft or
fciotejteof, iovcrfgcft cgphoyccs gust doursc t`cer pcteteofs aor j
d`jfic ef t`c tcrgs jfn dofneteofs oa t`cer cgphoygcft t`roui` t`c
Dofircss aor t`c essujfdc oa fcw hjws, ruhcs, or rciuhjteofs to t`jt
caacdt.

2
Bjscn of t`c syhhjbus oa Jtty. Gjrej D`restefj T. Tjiget
Jtcfco Nc Njvjo Sfevcrsety T.U. 2<2<-2<2:
Neicstcn by= Jgpjtujf, Jgpoi,Bjfosjf,Csgjch,Arejs,Gj`usjy,Gjhedjy,\jdhebjr,\c ῁jgjftc,\edot,Tefsujt,Tosobjf,
 Auob vs. Kboemb Licockei bon Iumturbm Caflil | J.V. Oc. 259>16 | Alfrubry >, 602> | Pcolotl7 PLVLW, G.

Obturl ca Ibsl7 Icostetutecobm Ickkessecos7 Oco-jcvlroklot caflil wetd jcvlroklotbm auoitecos

Pltetecolrs(s)7 Nlooes Auob
Vlspconlot(s)7 Kboemb Licockei bon Iumturbm Caflil (KLIC), Ickkesseco co Bunet (ICB)

Y\KKBVU7 Pltetecolr slot b mlttlr tc tdl ICB rlqulsteoj acr b icpy ca tdl mbtlst floboiebm bon bunet rlpcrt ca KLIC. Pltetecolr kbnl tdl rlqulst co
tdl flmela tdbt KLIC, fleoj uonlr tdl "cplrbtecobm suplrveseco" ca tdl Nlpbrtklot ca ^rbnl bon Eonustry (N^E), es b jcvlroklot cwoln bon
icotrcmmln icrpcrbteco (JCII) bon tdus sufglit tc tdl bunet guresneiteco ca ICB. Bssestbot Ickkessecolr Obrbogc essuln b klkcrbonuk
rlvlbmeoj tdbt tdl KLIC wbs oct bkcoj tdl bjloiels bunetln fy boy ca tdl tdrll Imustlrs ca tdl Icrpcrbtl Jcvlroklot Ylitcr. Dloil, pltetecolr flmln tdl
eostbot plteteco acr kbonbkus ickplmeoj ICB tc bunet bon lxbkeol tdl auons ca KLIC bon acr KLIC tc sufket tc suid bunet bon lxbkeobteco.
Icurt pbrtebmmy jrbotln tdl plteteco. KLIC es nlimbrln b oco-jcvlroklotbm lotety. ^dl biicuots ca KLIC plrtbeoeoj tc vlreflibteco alls bon
icosumbr alls brl sufglit tc tdl bunet guresneiteco ca tdl ICB.

ABI^Y
• Plteteco acr kbonbkus tc ickplm7
2. ICB tc bunet bon lxbkeol tdl auons ca KLIC
6. KLIC sufket tc suid bunet bon lxbkeobteco
• batlr tdl Ideolsl ievem wbr, twc jcvlroklots ickpltln acr scvlrlejoty7
- ickkuoest Plcpml―s Vlpufmei ca Ideob (PVCI) „ icotrcms tdl kbeombon tlrretcrels
- obtecobmest Vlpufmei ca Ideob (VCI) „ icotrcms tdl esmbon ca ^bewbo
• fctd bndlrln tc b pcmeiy ca ”Col Ideob‛ (velw tdbt tdlrl es comy col mljetekbtl jcvlroklot eo Ideob) fut neaalrln eo tdler
rlsplitevl eotlrprltbteco bs tc wdeid tdbt jcvlroklot es (letdlr PVCI cr VCI)
• VCI usln tc logcy nepmckbtei rlicjoeteco arck b kbgcrety ca tdl wcrmn―s stbtls, pbrtmy nul tc fleoj b acuoneoj klkflr
ca tdl \oetln Obtecos (\O)
- batlr tdl \O Jlolrbm Bsslkfmy bncptln Vlscmuteco 6:<4 eo 25:2, b oukflr ca stbtls wdc rlicjoezl PVCI―s vlrseco
ca tdl Col Ideob pcmeiy jrbnubmmy eoirlbsln eo tdl 2510s bon :0s
- bon sc, tdcsl wdc prlvecusmy rlicjoezl VCI bs tdl mljetekbtl jcvlroklot ca Ideob, tlrkeobtln tdler cafliebm
rlmbtecos wetd tdl sben jcvlroklot, eo abvcr ca lstbfmesdeoj nepmckbtei rlmbtecos wetd tdl PVCI
• Pdemeppeols (PD) acrkbmmy lonln ets cafliebm nepmckbtei rlmbtecos wetd tdl jcvlroklot eo ^bewbo co 5 Guol 25:<
- PD bon tdl PVCI lxprlssln kutubm rlicjoeteco tdru tdl Gceot Ickkuoequå ca tdl Jcvlroklot ca tdl Vlpufmei ca tdl
Pdemeppeols bon tdl Jcvlroklot ca tdl Plcpml―s Vlpufmei ca Ideob (Gceot Ickkuoequå)
- tdes nen oct klbo dcwlvlr, tdbt et wcumn stcp PD arck hllpeoj ets uocafliebm rlmbtecos wetd ^bewbo co b
”plcpml-tc-plcpml fbses‛
• bs mcoj bs et es plrkessefml fy tdl tlrks ca tdl Gceot Ickkuoequå, klboeoj, tdbt et wcumn icursl boy suid
rlmbteco tdru caflils cutsenl ca tdl cafliebm cr jcvlroklotbm crjbos
• tdl plcpml ca ^bewbo bon ca tdl PD kbeotbeoln bo uocafliebm rlmbtecosdep abiemetbtln fy tdl caflils ca tdl ^beple
Licockei bon Iumturbm Caflil, acr tdl acrklr, bon tdl KLIC, acr tdl mbttlr
• KLIC wbs crjboezln co 21 Nlilkflr 255: bs b oco-stcih, oco-prcflt icrpcrbteco uonlr Fbtbs Pbkfbosb Fmj. 14 cr tdl
Icrpcrbteco Icnl
- P\VPCYL (tdlrl brl acur fut tdes es tdl kcst ekpcrtbot)7 tc lstbfmesd bon nlvlmcp tdl ickklriebm bon eonustrebm
eotlrlsts ca Aemepeoc obtecobms dlrl bon bfrcbn, bon bssest co bmm klbsurls nlsejoln tc prckctl bon
kbeotbeo tdl trbnl rlmbtecos ca tdl icuotry wetd tdl ietezlos ca ctdlr acrlejo icuotrels
• KLIC flibkl tdl icrpcrbtl lotety "lotrustln" fy tdl PD jcvlroklot wetd tdl rlspcosefemety ca acstlreoj "arelonmy" bon
"uocafliebm" rlmbtecos wetd tdl plcpml ca ^bewbo, pbrteiumbrmy eo tdl brlbs ca trbnl, licockei iccplrbteco,
eovlstklot, iumturbm, sielotefli bon lnuibtecobm lxidbojls
- wbs "butdcrezln" fy tdl jcvlroklot tc plracrk ilrtbeo "icosumbr bon ctdlr auoitecos" tdbt rlmbtls tc tdl prckcteco,
prctliteco bon abiemetbteco ca Pdemeppeol eotlrlsts eo ^bewbo
• KLIC cvlrslls tdl rejdts bon eotlrlsts ca Cvlrslbs Aemepeoc Zcrhlrs (CAZs) eo ^bewbo8 prckctls tdl Pdemeppeols bs
b tcurest bon eovlstklot nlsteobteco acr tdl ^bewbolsl8 bon abiemetbtls tdl trbvlm ca Aemepeocs bon ^bewbolsl
arck ^bewbo tc tdl Pdemeppeols, bon veil vlrsb

Kbonbkus plteteco
• pltetecolr slot b mlttlr tc tdl ICB rlqulsteoj acr b icpy ca tdl mbtlst floboiebm bon bunet rlpcrt ca KLIC eovcheoj des
icostetutecobm rejdt tc eoacrkbteco co kbttlrs ca pufmei icoilro
- dl flmelvls tdbt KLIC, fleoj uonlr tdl "cplrbtecobm suplrveseco" ca tdl Nlpbrtklot ca ^rbnl bon Eonustry (N^E),
es b jcvlroklot cwoln bon icotrcmmln icrpcrbteco (JCII) bon tdus sufglit tc tdl bunet guresneiteco ca ICB
- Bssestbot Ickkessecolr Obrbogc essuln b klkcrbonuk rlvlbmeoj tdbt KLIC wbs oct bkcoj tdl bjloiels bunetln fy
boy ca tdl tdrll Imustlrs ca tdl Icrpcrbtl Jcvlroklot Ylitcr
• ^bheoj tdl klkcrbonuk bs bo bnkesseco tdbt tdl ICB dbn olvlr bunetln bon lxbkeoln tdl biicuots ca tdl KLIC, tdl pltetecolr flmln tdl
eostbot plteteco acr kbonbkus
- ibpbietels bs tbxpbylr, icoilroln ietezlo, b klkflr ca tdl Pdemeppeol Fbr bon mbw fcch butdcr
• Pltetecolr pcsets tdbt fy abemeoj tc bunet tdl biicuots ca tdl KLIC, tdl ICB es oljmliteoj ets nuty uonlr Yliteco 6(2),
Brteiml ET-N ca tdl Icostetuteco tc bunet tdl biicuots ca bo ctdlrwesl fcob flnl JCII cr jcvlroklot eostruklotbmety

2 ca <
 - pltetecolr imbeks tdbt KLIC es b JCII wetdcut bo crejeobm idbrtlr cr, bt mlbst, b jcvlroklot eostruklotbmety, tdl
auons ca wdeid pbrtbhl tdl obturl ca pufmei auons
• Biicrneoj tc pltetecolr, KLIC pcsslssls bmm tdl lsslotebm idbrbitlresteis ca b JCII bon bo eostruklotbmety uonlr tdl
LC Oc. 656 cr tdl Bnkeoestrbtevl Icnl „
2. KLIC es vlstln wetd jcvlroklot auoittecos
- plracrks auoitecos tdbt brl lquevbmlot tc tdcsl ca bo lkfbssy cr b icosumbtl ca tdl Pdemeppeol jcvlroklot
- butdcrezln auoitecos ca tdl KLIC rlvlbms tdbt tdly brl sufstbotebmmy tdl sbkl auoitecos plracrkln fy tdl
Nlpbrtklot ca Acrlejo Baabers (NAB)
6. KLIC es icotrrcmmln fy tdl jcvlroklot
- Prlsenlot ca tdl Pdemeppeols bitubmmy eonerlitmy bppceots tdl nerlitcrs ca tdl KLIC fy wby ca "nlserl
mlttlrs" bnnrlssln tc tdl KLIC―s fcbrn ca nerlitcrs
9. KLIC es uonlr tdl cplrbtecobm bon pcmeiy suplrveseco ca tdl N^E
- wbs pmbiln uonlr tdl cplrbtecobm suplrveseco ca tdl N^E fy LC Oc. 964, slrels ca 600>, bon bjbeo uonlr tdl
pcmeiy suplrveseco ca tdl sbkl nlpbrtklot fy LC Oc. >61, slrels ca 600<
• tdl Bklreibo Eostetutl eo ^bewbo (BE^) „ tdl icuotlrpbrt lotety ca tdl KLIC eo \YB „ es suppcslnmy bunetln fy tdbt
icuotry―s Ickptrcmmlr Jlolrbm

Pcseteco ca KLIC
• KLIC nloels tdbt et es b JCII cr b jcvlroklot eostruklotbmety
- et es oct cwoln cr icotrcmmln fy tdl jcvlroklot
- ets auons brl prevbtl auons
- tdl jcvlroklot klrlmy dbs pcmeiy suplrveseco cvlr et (jcvlroklot―s cvlrsejdt es meketln comy tc losureoj tdbt tdl
icrpcrbteco―s bitevetels brl eo tuol wetd tdl icuotry―s ickketklots uonlr tdl Col Ideob pcmeiy ca tdl PVCI)

Pcseteco ca ICB
• ICB brjuls tdbt tdl eostbot plteteco bmrlbny flibkl kcct wdlo ICB Idberplrsco Kbreb Jrbieb K. Pumenc-^bo essuln
Caflil Crnlr Oc. 6022-154 co 1 Citcflr 6022
- Pumenc-^bo bmrlbny nerlitln b tlbk ca bunetcrs tc prcilln tc ^bewbo, splieflibmmy acr tdl purpcsl ca buneteoj
tdl biicuots ca, bkcoj ctdlr jcvlroklot bjloiels fbsln tdlrleo, tdl KLIC
• icoilnls tdbt et dbs bunet guresneiteco cvlr tdl biicuots ca tdl KLIC, dcwlvlr, tdl ICB imbreflls tdbt et ncls oct icosenlr
tdl acrklr bs b JCII cr b jcvlroklot eostruklotbmety (ICB kbeotbeos tdbt tdl KLIC es b oco-jcvlroklotbm lotety)

• ICB brjuls tdbt, nlspetl fleoj b oco-jcvlroklotbm lotety, KLIC kby stemm fl bunetln wetd rlsplit tc tdl "vlreflibteco alls"
acr cvlrslbs lkpmcyklot nciuklots tdbt et icmmlits arck ^bewbolsl lkpmcylrs co fldbma ca tdl NCML
- ICB imbsseflls tdl KLIC bs b oco-jcvlroklotbm lotety "rlquerln tc pby xxx jcvlroklot sdbrl" sufglit tc b pbrtebm
bunet ca ets biicuots uonlr Yliteco 61 ca tdl Prlsenlotebm Nlirll Oc. 2>>< cr tdl Ytbtl Bunet Icnl ca tdl
Pdemeppeols

EYY\L(Y) + V\MEOJ
Prcilnurbm
2. ZCO plteteco dbs bmrlbny flickl kcct wdlo tdl ICB Idberplrsco essuln Caflil Crnlr Oc. 6022-154 „ OC
• tdl essuboil fy tdl ICB ca Caflil Crnlr Oc. 6022-154 wcumn dbvl rlonlrln tdl plteteco kcct fut tdl essuls rbesln eovcmvl
tdl ickkesseco ca b jrbvl vecmbteco ca tdl Icostetuteco bon ca pbrbkcuot pufmei eotlrlst
b. plteteco kbhls b slrecus bmmljbteco tdbt tdl ICB dbn fllo rlkess eo ets icostetutecobm cr mljbm nuty tc bunet bon
lxbkeol tdl biicuots ca bo ctdlrwesl bunetbfml lotety eo tdl KLIC
f. tdlrl es pbrbkcuot pufmei eotlrlst eo tdl rlscmuteco ca tdl essul icoilroeoj tdl abemurl ca tdl ICB tc bunet tdl
biicuots ca tdl KLIC „ wdltdlr ICB wbs bfml tc abetdaummy aumflmm ets icostetutecobm rcml bs tdl jubrnebo
ca tdl pufmei trlbsury, eo wdeid boy ietezlo dbs bo eotlrlst
i. tdlrl es bmsc pbrbkcuot pufmei eotlrlst eo tdl rlscmuteco ca tdl essul rljbrneoj tdl mljbm stbtus ca tdl KLIC
„ wdltdlr et kby fl icosenlrln bs b jcvlroklot bjloiy cr oct, dbs b nerlit flbreoj co tdl icuotry―s ickketklot tc tdl Col
Ideob pcmeiy ca tdl PVCI
• Icurt wcumn bmsc mehl tc ruml co tdl ibsl bt fbr acr tdl acrkumbteco ca icotrcmmeoj preoiepmls acr tdl lnuibteco ca
tdl floid, fbr bon tdl pufmei eo jlolrbm
• Bssukeoj tdbt tdl bmmljbtecos ca oljmlit co tdl pbrt ca tdl ICB wlrl trul, Caflil Crnlr Oc. 6022-154 ncls oct caalr tdl
strcojlst ilrtbeoty tdbt tdly wcumn oct fl rlpmeibtln eo tdl auturl

- Caflil Crnlr Oc. 6022-154 nen oct stbtl boy mljbm gusteflibteco bs tc wdy, batlr nlibnls ca oct buneteoj tdl
biicuots ca tdl KLIC, tdl ICB sunnlomy nlienln tc nc sc

- tdl eoimuseco ca tdl KLIC eo Caflil Crnlr Oc. 6022-154 bpplbrs tc fl loterlmy nlplonlot upco tdl gunjklot ca tdl
eoiukflot idberplrsco ca tdl ICB8 susilptefml ca fleoj uoncol, wetd cr wetdcut rlbsco, fy dlr cr lvlo dlr
- suiilsscr
tdl ibsl ocw flacrl tdes Icurt es nbojlrcusmy ibpbfml ca fleoj rlplbtln ylt lvbneoj rlvelw

6. ZCO pltettecolr dbs stboneoj „ ULY

• ^dl ibsl bt fbr rbesls essuls ca trbosilonlotbm ekpcrtboil bs tdly eovcmvl tdl plracrkboil ca b icostetutecobm nuty,
bmmljlnmy oljmlitln, fy ICB

6 ca <
 - pltetecolr, bs b icoilroln ietezlo, dbs tdl rlquesetl mljbm stboneoj tc flml tdl eostbot kbonbkus plteteco

9. ZCO pltetecolr vecmbtln tdl preoiepml ca delrbridy ca icurts suid tdbt et icumn dbvl flrst flmln bt tdl IB cr tdl V^I „
OC
• Eo velw ca tdl trbosilonlotbm ekpcrtboil ca tdl essuls rbesln eo tdl kbonbkus plteteco, bs lbrmelr klotecoln, tdes
Icurt wbevls tdes mbst prcilnurbm essul eo abvcr ca b rlscmuteco co tdl klrets

Yufstbotevl
Eotrcnuiteco flacrl tdl essuls
• Yli 6 (2) ca Brteiml ET-N ca tdl Icostetuteco vlsts ICB wetd tdl pcwlr, butdcrety bon nuty tc lxbkeol, bunet bon slttml
tdl biicuots ca tdl acmmcweoj lotetels7
2. Jcvlroklot, cr boy ca ets sufnevesecos, bjloiels bon eostruklotbmetels
6. JCIIs wetd crrejeobm idbrtlrs
9. JCIIs weetdcut crejeobm idbrtlrs
>. Icostetutecobm fcnels, ickkessecos bon caflils tdbt dbvl fllo jrbotln flsibm butcocky uonlr tdl Icostetuteco
< Oco-jcvlroklotbm lotetels rlileveoj sufseny cr lquety, nerlitmy cr eonerlitmy, arck cr tdrcujd tdl jcvlroklot, wdeid
brl rlquerln fy mbw cr tdl jrboteoj eostetuteco tc sufket tc tdl ICB acr bunet bs b iconeteco ca sufseny cr lquety

• ”Biicuots‛ plrtbeos tc tdl "rlvloul," "rlilepts," "lxploneturls" bon "usls ca auons bon prcplrty" ca suid lotetels
• pcwlr ca tdl ICB tc bunet biicuots ca ”oco-jcvlroklotbm lotetels rlileveoj sufseny cr lquety xxx arck cr tdrcujd tdl
jcvlroklot" es Yliteco 65(2) ca tdl Bunet Icnl, wdeid jrbots tdl ICB vesetcrebm butdcrety cvlr tdl acmmcweoj oco-
jcvlroklotbm lotetels7
2. Oco-jcvlroklotbm lotetels "sufsenezln fy tdl jcvlroklot"
6. Oco-jcvlroklotbm lotetels "rlquerln tc pby mlvy cr jcvlroklot sdbrl‛
9. Oco-jcvlroklotbm lotetels tdbt dbvl "rlilevln icuotlrpbrt auons arck tdl jcvlroklot‛
> Oco-jcvlroklotbm lotetels "pbrtmy auonln fy ncobtecos tdrcujd tdl jcvlroklot‛
- mekets tdl bunet ca tdl acrljceoj oco-jcvlroklotbm lotetels comy tc "auons xxx ickeoj arck cr tdrcujd tdl
jcvlroklot‛
• fctd pltetecolr bon tdl ICB imbek tdbt tdl biicuots ca tdl KLIC brl wetdeo tdl bunet guresneiteco ca tdl ICB, fut vbry co
tdl lxtlot ca tdl bunet bon co wdbt typl ca bunetbfml lotety tdl KLIC es

2. ZCO KLIC es b JCII cr b jcvlroklot eostrulotbmety „ OC

• Jcvlroklot eostruklotbmetels brl bjloiels ca tdl obtecobm jcvlroklot tdbt, fy rlbsco ca sckl "spliebm auoiteco cr
guresneiteco" tdly plracrk cr lxlriesl, brl bmmcttln "cplrbtecobm butcocky" bon brl "oct eotljrbtln wetdeo tdl
nlpbrtklot arbklwcrh‛8 tdly brl „
2. rljujumbmbtcry bjloloieiels
6. idbrbrtlrln eosostetettutececos
9. jcvlroklot icrpcrbtl lotetels cr jcvlroklot eostruklotbmetels wetd icrpcrbtl pcwlrs (JIL/JEIP)
> JCCIIIIs
• Bnkeoestrbtevl Icnl nlflols b JCII „"stcih cr oco-stcih" icrpcrbtecos "vlstln wetd auoitecos rlmbteoj tc pufmei ollns"
tdbt brl "cwoln fy tdl Jcvlroklot nerlitmy cr tdrcujd ets eostruklotbmetels‛
- pcsslsseco ca bmm tdrll bttrefutls es olilssbry tc nllk bo lotety b JCII
- KLIC pcsslssls tdl flrst bon slicon bttrefutls, et es tdl tdern bttrefutl wdeid KLIC mbihs „ dloil, KLIC es oct b
JCII

B. ZCO KLIC es crjboezln bs b oco-stcih icrpcrbteco „ ULY

• rlicrns nesimcsl tdbt KLIC wbs eoicrpcrbtln bs b oco-stcih icrpcrbteco uonlr tdl Icrpcrbteco Icnl co 21 Nlilkflr 25::

• purpcsls acr wdeid tdl KLIC wbs crjboezln bmsc lstbfmesdls ets oco-prcflt idbrbitlr
- ets purpcsls brl scklwdbt bobmcjcus tc tdcsl ca b trbnl, fuseolss cr eonustry idbkflr, fut comy co b kuid mbrjlr
sibml „ KLIC sllhs tc prckctl tdl jlolrbm eotlrlsts ca tdl Aemepeoc plcpml eo b acrlejo mbon
• ocol ca tdl eoickl nlrevln fy KLIC es nestrefutbfml bs nevenlons tc boy ca ets klkflrs, nerlitcrs cr caflilrs

F. ZCO KLIC plracrks auoitecos wetd b pufmei bsplit „ ULY

• tc b ilrtbeo nljrll, tdl auoitecos ca tdl KLIC ibo fl sben tc pbrtbhl ca tdl obturl ca jcvlroklotbm auoitecos „ et es KLIC tdbt,
co fldbma ca tdl plcpml ca tdl Pdemeppeols, iurrlotmy abiemetbtls uocafliebm rlmbtecos wetd tdl plcpml eo ^bewbo
• KLIC wbs "butdcrezln" fy tdl Pdemeppeol jcvlroklot tc plracrk ilrtbeo "icosumbr bon ctdlr auoitecos" rlmbteoj tc tdl
prckcteco, prctliteco bon abiemetbteco ca Pdemeppeol eotlrlsts eo ^bewbo bs acuon eo Ylis 2 bon 6 ca LC Oc. 2<, slrels
ca 6002
- ets auoitecos brl sekembr tc sckl ca tdl auoitecos plracrkln fy tdl NAB etslma, tdrcujd tdl mbttlr―s nepmckbtei
bon icosumbr kessecos

I. ZCO KLIC es cwoln cr icotrcmmln fy tdl Jcvlroklot „ OC

• Jcvlroklot cwos b stcih cr oco-stcih icrpcrbteco ea et dbs icotrcmmeoj eotlrlst eo tdl icrpcrbteco
9 ca <
 - eo b stcih icrpcrbteco, tdl icotrcmmeoj eotlrlst ca tdl jcvlroklot es bssurln fy ets cwolrsdep ca bt mlbst flaty-col
plrilot (<2%) ca tdl icrpcrbtl ibpetbm stcih
- eo b oco-stcih icrpcrbteco, mehl tdl KLIC, tdl icotrcmmeoj eotlrlst ca tdl jcvlroklot es baflrkln wdlo "bt mlbst
kbgcrety ca tdl klkflrs brl jcvlroklot cafliebms dcmneoj suid klkflrsdep fy bppceotklot cr nlsejobteco‛ cr tdlrl es
ctdlrwesl "sufstbotebm pbrteiepbteco ca tdl jcvlroklot eo tdl slmliteco" ca tdl icrpcrbteco―s jcvlroeoj fcbrn‛

• KLIC, bs b icrpcrbteco crjboezln uonlr tdl Icrpcrbteco Icnl, es jcvlroln fy tdl bpprcprebtl prcvesecos ca tdl sben icnl,
ets brteimls ca eoicrpcrbteco, bon ets fy-mbws.
- eo tdes ibsl, et es tdl fy-mbws ca tdl KLIC tdbt stepumbtls tdbt ets nerlitcrs brl lmlitln fy ets klkflrs8 ets caflilrs
brl lmlitln fy ets nerlitcrs8 bon ets klkflrs, ctdlr tdbo tdl crejeobm eoicrpcrbtcrs, brl bnkettln fy wby ca b
uoboekcus fcbrn rlscmuteco
• ocol ca tdl crejeobm eoicrpcrbtcrs ca tdl KLIC wlrl sdcwo tc fl jcvlroklot cafliebms bt tdl tekl ca tdl icrpcrbteco―s
crjboezbteco
- ocol ca tdl klkflrs, caflilrs cr fcbrn ca nerlitcrs ca tdl KLIC, arck ets eoicrpcrbteco up tc tdl prlslot nby, wlrl
lstbfmesdln bs jcvlroklot bppceotlls cr pufmei caflilrs nlsejobtln fy rlbsco ca tdler caflil
- oc mbw cr lxliutevl crnlr tdbt butdcrezls suid bo bppceotklot cr nlsejobteco
• et bpplbrs tdbt tdl prlsenlotebm "nlserl mlttlrs" pceotln cut fy pltetecolr„ea suid mlttlrs lvlo lxest cutsenl ca tdl ibsl ca
Kr. Fbsemec„brl, oc kbttlr dcw strcoj ets plrsubsevl laalit kby fl, klrlmy rlickklonbtcry

KLIC es oct b jcvlroklot eostruklotbmety7 et es b sue jlolres lotety

• tdl ctdlr jcvlroklot eostruklotbmetels e.l., tdl rljumbtcry bjloiels, idbrtlrln eostetutecos, bon JIL/JEIP brl bmm, fy
lxpmeiet cr ekpmeiet nlfloeteco, irlbturls ca tdl mbw „ KLIC ibooct fl boy ctdlr eostruklotbmety flibusl et wbs
eoicrpcrbtln uonlr tdl Icrpcrbteco Icnl
• et es olilssbry acr tdl lxliutevl frboid tc pmbil KLIC uonlr tdl pcmeiy suplrveseco ca tdl N^E
- KLIC wbs oct eotlonln tc cplrbtl bs boy ctdlr crneobry icrpcrbteco
- nlspetl ets prevbtl crejeos, KLIC wbs lotrustln fy tdl jcvlroklot wetd tdl nlmeibtl bon prlibrecus rlspcosefemety
ca pursueoj uocafliebm rlmbtecos wetd tdl plcpml ca b acrlejo mbon wdcsl jcvlroklot tdl PD es fcuon oct tc
rlicjoezl
• tc bvcen eoienlots wdlrleo KLIC kejdt lojbjl eo nlbmeojs cr bitevetels tdbt ibo nerlitmy icotrbneit tdl
Pdemeppeols― ickketklot tc tdl Col Ideob pcmeiy ca tdl PVCI, et es ekpcrtbot tdbt tdl lxliutevl nlpbrtklot
lxlriesls sckl acrk ca cvlrsejdt, oc kbttlr dcw meketln, cvlr tdl cplrbtecos ca tdes ctdlrwesl prevbtl lotety
• et es imlbr tdbt KLIC es uoequlmy setubtln bs ickpbrln wetd ctdlr prevbtl icrpcrbtecos
- arck ets cvlr-rlbideoj icrpcrbtl cfglitevls, ets spliebm nuty bon butdcrety tc lxlriesl ilrtbeo icosumbr auoitecos,
up tc tdl cvlrsejdt fy tdl lxliutevl nlpbrtklot cvlr ets cplrbtecos „ bmm tdl wdeml kbeotbeoeoj ets mljbm stbtus
bs b oco-jcvlroklotbm lotety „ tdl KLIC es, acr bmm eotlots bon purpcsls, sue jlolres

6. ZCO KLIC kby fl bunnetln fy ICB „ ULY

• nlspetl fleoj b oco-jcvlroklotbm lotety, KLIC kby stemm fl bunetln wetd rlsplit tc tdl „
2. biicuots ca KLIC plrtbeoeoj tc ets icmmliteco ca "vlreflibteco alls‛
- rlalrs tc tdl slrveil all acr tdl vlreflibteco ca cvlrslbs lkpmcyklot icotrbits, rliruetklot bjrllklot cr spliebm pcwlrs
ca bttcroly tdbt NCML wbs butdcrezln tc icmmlit uonlr Yliteco : ca LC Oc. 2066
- Yeoil tdl Pdemeppeols ncls oct kbeotbeo bo cafliebm pcst eo ^bewbo, NCML lotlrln eotc b slrels ca
Klkcrbonuk ca Bjrllklots wetd KLIC, wdeid kbnl tdl mbttlr tdl acrklr―s icmmliteoj bjlot wetd rlsplit tc tdl
vlreflibteco alls tdbt kby fl nul arck ^bewbolsl lkpmcylrs ca CAZs
- tdl loterl vlreflibteco alls fleoj icmmlitln fy KLIC brl rlilevbfmls ca tdl NCML fy vertul ca Yliteco : ca LC

6. biicuots ca KLIC plrtbeoeoj tc icosumbr alls et wbs butdcrezln tc icmmlit uonlr Yliteco 6(1) ca LC Oc. 2<, slrels
ca 6002 (alls et icmmlits arck tdl lxlriesl ca ets nlmljbtln icosumbr auoitecos)
- Yli 6 (1) ca LC Oc. 2<, slrels ca 6002 butdcrezls tdl KLIC tc icmmlit "rlbscobfml alls" acr tdl plracrkboil ca ets
icosumbr auoitecos
- gust mehl tdl pliumebrety tdbt bttlons tdl NCML "vlreflibteco alls," tdlrl es oc icosumbr caflil acr tdl
icmmliteco ca tdl "icosumbr alls‛
- ”icosumbr alls," bmtdcujd dlmn bon lxplonln fy KLIC fy vertul ca LC Oc. 2<, s. 6002, brl, wetdcut qulsteco,
nlrevln arck tdl lxlriesl fy tdl KLIC ca icosumbr auoitecos „ auoitecos et plracrks fy bon comy tdrcujd
spliebm butdcrety arck tdl jcvlroklot
- alls rlilevln fy tdl KLIC brl usln streitmy acr tdl purpcsl slt cut uonlr LC Oc. 2<, s. 6002
• kust fl rlbscobfml bs tdl butdcrezbteco rlquerls
• et es tdl jcvlroklot tdbt dbs umtekbtl icotrcm cvlr tdl nespcseteco ca tdl "icosumbr alls‛
• Yliteco 2>(2), Fcch Q ca tdl Bnkeoestrbtevl Icnl butdcrezls ICB tc bunet biicuots ca oco-jcvlroklotbm lotetels

"rlquerln tc pby xxx cr dbvl jcvlroklot sdbrl" fut comy wetd rlsplit tc "auons xxx ickeoj arck cr tdrcujd tdl jcvlroklot"
b. KLIC rlilevls tdl "vlreflibteco alls" fy rlbsco ca et fleoj tdl icmmliteco bjlot ca tdl NCML„b jcvlroklot bjloiy

- KLIC es rlquerln, fy bjrllklot, tc rlket b pcrteco tdlrlca tc tdl NCML „ dloil, KLIC es biicuotbfml tc tdl jcvlroklot
acr ets icmmlitecos ca suid "vlreflibteco alls" bon, acr tdbt purpcsl, kby fl bunetln fy tdl ICB

> ca <
 f. "icosumbr alls" brl bmsc rlilevln fy tdl KLIC tdrcujd tdl jcvlroklot
- KLIC rlkbeos biicuotbfml tc tdl jcvlroklot acr ets icmmlitecos ca "icosumbr alls" bon, acr tdbt purpcsl, kby fl
bunetln fy tdl ICB

Plteteco es PBV^EBMMU JVBO^LN.

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